The Deposit Guarantee Fund for Individuals v Bank Frick & Co AG & Anor [2022] EWHC 2221 (Ch) (25 August 2022)

The Deposit Guarantee Fund for Individuals v Bank Frick & Co AG & Anor [2022] EWHC 2221 (Ch) (25 August 2022)

The pleaded facts, even if assumed true, do not justify the inference that the directors acted with the statutory purpose required by section 423 Insolvency Act 1986. The pleadings and evidence show a purpose of self-enrichment and knowledge of prejudice to creditors, but do not establish that prejudicing creditors was a purpose rather than a consequence or by-product. The claim does not disclose a reasonable ground for bringing the claim under section 423 and has no real prospect of success. Accordingly, the application to strike out and for summary judgment succeeds.

Citation
[2022] EWHC 2221 (Ch)
Parties
Claimant: The Deposit Guarantee Fund for Individuals (as liquidator of National Credit Bank PJSC); First Defendant: Bank Frick & Co AG; Second Defendant: Eastmond Sales LLP
Jurisdiction
England and Wales
Judgment Date
25 August 2022
Procedural Posture
Strike Out and Summary Judgment Application / Pre Defence, Interlocutory
Outcome
claim struck out and summary judgment granted for first defendant
Legal Topics
Transactions Defrauding Creditors, Section 423 Insolvency Act 1986, Pleading Requirements, Summary Judgment, Strike Out Applications
Insolvency Law Banking Law Civil Procedure Transactions Defrauding Creditors Section 423 Insolvency Act 1986 Pleading Requirements Summary Judgment Strike Out Applications

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Parties

The Deposit Guarantee Fund for Individuals (as liquidator of National Credit Bank PJSC)

Claimant

Bank Frick & Co AG

First Defendant

Eastmond Sales LLP

Second Defendant

Procedural Posture

Strike Out and Summary Judgment Application / Pre Defence, Interlocutory

Legal Issues

  1. 1 Whether the pleaded facts disclose a reasonable ground for bringing a claim under section 423 Insolvency Act 1986
  2. 2 Whether the claimant has a real prospect of succeeding in establishing the requisite 'purpose' under section 423
  3. 3 Whether the pleaded purpose is more than a mere consequence of the directors' actions

Ratio Decidendi

The pleaded facts, even if assumed true, do not justify the inference that the directors acted with the statutory purpose required by section 423 Insolvency Act 1986. The pleadings and evidence show a purpose of self-enrichment and knowledge of prejudice to creditors, but do not establish that prejudicing creditors was a purpose rather than a consequence or by-product. The claim does not disclose a reasonable ground for bringing the claim under section 423 and has no real prospect of success. Accordingly, the application to strike out and for summary judgment succeeds.

Court Disposition

claim struck out and summary judgment granted for first defendant

Orders

  • Claim under section 423 Insolvency Act 1986 struck out against Bank Frick & Co AG
  • Summary judgment entered for Bank Frick & Co AG