Clydesdale Financial Services Ltd & Ors v Smailes & Ors [2009] EWHC 3190 (Ch) (08 December 2009)

Clydesdale Financial Services Ltd & Ors v Smailes & Ors [2009] EWHC 3190 (Ch) (08 December 2009)

Focus does not have a real prospect of success in establishing it is a creditor of LLP for unpaid FGI premiums where no loan was made, nor for audit fees except possibly for the March 2009 audit. Any claim is extinguished by set-off of commissions owed to LLP. Focus is not entitled to amend its particulars of claim to pursue these claims. However, Focus has a real prospect of establishing it is a 'victim' of the sale for the purposes of ss.423-425 Insolvency Act 1986, as it is capable of being prejudiced by the transaction due to its contingent liability under assigned FGI policies.

Citation
[2009] EWHC 3190 (Ch)
Parties
Claimant: Clydesdale Financial Services Limited; Claimant: Justice Capital Limited; Claimant: Focus Insurance Company Limited; Defendant: Robert Smailes; Defendant: Steven Ryman; Defendant: Jiva Solicitors LLP; Defendant: Alexander Samuel & Co (A Firm); Defendant: Alexander Samuel LLP
Jurisdiction
England and Wales
Judgment Date
08 December 2009
Procedural Posture
Chancery Division Civil Claim / Interlocutory Applications (application to Amend, Strike Out, Summary Judgment)
Outcome
Application to amend by Focus refused; claim under paragraph 75 struck out; Jiva's application to strike out/dismiss Focus's claim under ss.423-425 dismissed.
Legal Topics
Litigation Funding, After the Event Insurance, Financial Guarantee Insurance, Set Off, Assignment of Contractual Rights, Transaction at Undervalue, Victim Status Under Insolvency Act, Summary Judgment, Amendment of Pleadings
Insolvency Contract Insurance Litigation Funding After the Event Insurance Financial Guarantee Insurance Set Off Assignment of Contractual Rights +4 more

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Parties

Clydesdale Financial Services Limited

Claimant

Justice Capital Limited

Claimant

Focus Insurance Company Limited

Claimant

Robert Smailes

Defendant

Steven Ryman

Defendant

Jiva Solicitors LLP

Defendant

Alexander Samuel & Co (A Firm)

Defendant

Alexander Samuel LLP

Defendant

Procedural Posture

Chancery Division Civil Claim / Interlocutory Applications (application to Amend, Strike Out, Summary Judgment)

Legal Issues

  1. 1 Whether Focus Insurance Company Limited has a real prospect of success in its claim to be a creditor of Alexander Samuel LLP
  2. 2 Whether Focus is a 'victim' of the sale of LLP's business for the purposes of ss.423-425 Insolvency Act 1986
  3. 3 Whether Focus should be permitted to amend its particulars of claim

Ratio Decidendi

Focus does not have a real prospect of success in establishing it is a creditor of LLP for unpaid FGI premiums where no loan was made, nor for audit fees except possibly for the March 2009 audit. Any claim is extinguished by set-off of commissions owed to LLP. Focus is not entitled to amend its particulars of claim to pursue these claims. However, Focus has a real prospect of establishing it is a 'victim' of the sale for the purposes of ss.423-425 Insolvency Act 1986, as it is capable of being prejudiced by the transaction due to its contingent liability under assigned FGI policies.

Court Disposition

Application to amend by Focus refused; claim under paragraph 75 struck out; Jiva's application to strike out/dismiss Focus's claim under ss.423-425 dismissed.

Orders

  • Focus's application for permission to amend particulars of claim refused.
  • Focus's claim against former administrators under paragraph 75 of Schedule B1 struck out.