"The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if— (a) it considers that— (i) that claimant has no real prospect of succeeding on the claim or issue; or (ii) that defendant has no real prospect of successfully defending the claim or issue; and (b) there is no other compelling reason why the case or issue should be disposed of at a trial. (Rule 3.4 makes provision for the court to strike out a statement of case or part of a statement of case if it appears that it discloses no reasonable grounds for bringing or defending a claim.)"
"15. As Ms Anderson QC rightly reminded me, the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows: i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman[2001] 2 All ER 91 ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8] iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10] v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550 ; vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd[2007] FSR 63 ; vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd[2007] EWCA Civ 725 ."
"21. The authorities therefore make clear that in the context of summary judgment the court is by no means barred from evaluating the evidence, and concluding that on the evidence there is no real (as opposed to fanciful) prospect of success. It will of course be cautious in doing so. It will bear in mind the clarity of the evidence available and the potential for other evidence to be available at trial which is likely to bear on the issues. It will avoid conducting a mini-trial. But there will be cases where the Court will be entitled to draw a line and say that -even bearing well in mind all of those points - it would be contrary to principle for a case to proceed to trial. 22. So, when faced with a summary judgment application it is not enough to say, with Mr Micawber, that something may turn up."
"23. I should deal specifically with the law on summary judgment and claims in fraud, not least because it was at least implicit in the submissions for the Kings that such serious allegations were not suitable for summary determination. 24. The reality is that while the court will be very cautious about granting summary judgment in fraud cases, it will do so in suitable circumstances, and there are numerous cases of the court doing so. This is particularly the case where there is a point of law; but summary judgment may be granted in a fraud case even on the facts. I have done so in a case heard very close in time to this application: Foglia v The Family Officer and others[2021] EWHC 650 (Comm) , where at [14] I gave some examples of other cases in which this course was also followed. In other cases, such as AAI Consulting Ltd v FCA[2016] EWHC 2812 (Comm) and Cunningham v Ellis[2018] EWHC 3188 (Comm) fraud claims were struck out on the basis that the particulars of claim were inadequate in themselves to support the claims being made."
"At one point Imperial Law advised me that a little over£500K (I cannot recall the exact amount) remained. Coincidentally this coincided with a long-term refurbishment project my Aunt was undertaking on her property in Pakistan. Rather than have those funds refunded to me I asked that those funds be transferred to her as a loan to enable her to complete her works. My aunt is Shabnam Sarfaraz. Her phone number is [not included in quotation] and her address is [not included in quotation] Pakistan." (3) Included in the exhibits to Ms. Brittain's witness statement are two witness statements of Ieva Bogdanova, who describes herself as the manager of Imperial Law Legal Services Ltd. Imperial Law Legal Services Limited ("
"38 The remedy that is provided bysection 212 of the Insolvency Act 1986 may be sought only against persons to whom that section applies, as described in section 212(1). The description that applies to this case is that set out in para (a) of the subsection: "is or has been an officer of the company."
"31 In Secretary of State for Trade and Industry v Tjolle[1998] 1 BCLC 333 Jacob J was referred to what was said in In re Hydrodam (Corby) Ltd[1994] 2 BCLC 180 , including a passage at p 182 where Millett J pointed to the purpose of any test as being to impose liability for wrongful trading on those persons who were in a position to prevent damage to creditors by taking steps to protect their interests, and to In re Richborough Furniture Ltd[1996] 1 BCLC 507 . He said[1998] 1 BCLC 333 , 343—344: "
"There is undoubtedly force in Mr Chaisty's submissions. It is a serious matter for a person to be found liable on the basis that he was a de facto director. Taken on its own, the fact that Zafar dealt with local authorities or with the occasional supplier did not make him a director as opposed to a manager. The fact his status in his tax return was changed did not, of itself, amount to an admission that he regarded himself as a director. The fact was that the judge was satisfied, looking at the evidence as a whole (including, no doubt, the evidence that he had a company credit card, which he was able to use for his own purposes and the fact that, unlike an ordinary employee, he had left moneys with the company for investment by him in his own properties at a later date), that he was also part of the corporate governance structure of the company. He was (and these are my words) one of the nerve centres from which the activities of the company radiated. The judge clearly drew inferences from the absence of documentation which he has not articulated in detail. In my judgment, he was entitled to come to his conclusion on the totality of his findings as to how the company's affairs were run. He was not bound to accept Zafar's denials which were not corroborated by other independent evidence."
"104. In the present case, only one of the three tests identified by Lord Collins at [91] of his judgment is directly relevant. That, it seems to me, is the first of those tests. Here, there was never any holding out by the company of Surjit as a director, and he never used the title. However, I find that that is explicable by reference to Surjit's past criminal convictions and disqualification from acting as a company director. Here, there was no formal corporate governing structure. Mrs Basi was only ever a director in name only. After6 June 2011 , MSD had no director at all, and there was no corporate governing structure. The focus upon participation in corporate governance is understandable in Holland, where the relevant defendant had done no more than discharge his duties and responsibilities as a director of the corporate director. The facts of the Holland case are very different from those of the instant case. 105. In the context of the present case, where there was never any observed formal corporate governing structure, and where, after6 June 2011 , there were no directors at all for MSD, I find a focus on corporate governance to be of less relevance and assistance. I find some assistance from Arden LJ's focus in the Mumtaz case upon the identification of one or more "nerve centres" from which "the activities of the company radiated"."
"6. Day-to-day, I am a stay-at-home mother to our four children. I do not speak or read English. My native language is Urdu. I have never been actively involved in, nor have any knowledge of, the companies for which I am, or have been, named a shareholder or director. 7. From time-to-time, my husband would place documents before me and ask me to sign them. I was never aware of their content or objective(s) and followed my husband's direction at all times."
"I also set out below the assets held by wife, Mrs Khair Un Nisa, pursuant to paragraph 12(1) of the Order. This is because in reality I manage and control the assets of our family and the business of the companies in which she is a shareholder or director. Please also consider this affidavit as a reply on behalf of the other limited company defendants to the best of my recall given my limited and restricted access to the relevant data."
"Each of Mrs Nisa, Mr Raja and Mr Cervenak has when a de jure director of UCL (and in the case of Mrs Nisa and Mr Raja, a shadow and/or de facto director) owed UCL the general duties specified in sections 171 to 175 of theCompanies Act 2006 including: (a) Fiduciary duties to: (i) Only exercise his/her powers for the purposes for which they were conferred; (ii) Act in the way he/she considered in good faith would be most likely to promote the success of UCL for the benefit of its members; (iii) Consider or act in the interests of creditors of UCL; (iv) Exercise independent judgment; (v) Avoid a situation in which he/she had or could have a direct or indirect interest that conflicted or may possibly have conflicted with the interest of UCL; (b) A duty to exercise the reasonable care, skill and diligence that would be exercised by a reasonably diligent person with: (i) The general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions they each carried out in relation to UCL; and (ii) The general knowledge, skill and experience that each of them had."
"144. There are two key aspects of fiduciary duties, which are reflected in this summary, which may be described as the no-conflict and no-profit rules. As Lord Neuberger stated in FHR European Ventures v Cedar Capital Partners LLC[2015] AC 250 , a fiduciary '"must not make a profit out of his trust" and "must not place himself in a position in which his duty and his interest may conflict"-and, as Lord Upjohn pointed out in Phipps v Boardman[1967] 2 AC 46 , 123, the former proposition is "part of the [latter] wider rule"
"(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to– (a) the likely consequences of any decision in the long term, (b) the interests of the company's employees, (c) the need to foster the company's business relationships with suppliers, customers and others, (d) the impact of the company's operations on the community and the environment, (e) the desirability of the company maintaining a reputation for high standards of business conduct, and (f) the need to act fairly as between members of the company. (2) Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes. (3) The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company."
"The question is not whether, viewed objectively by the court, the particular act or omission which is challenged was in fact in the interests of the company; still less is the question whether the court, had it been in the position of the director at the relevant time, might have acted differently. Rather, the question is whether the director honestly believed that his act or omission was in the interests of the company. The issue is as to the director's state of mind. No doubt, where it is clear that the act or omission under challenge resulted in substantial detriment to the company, the director will have a harder task persuading the court that he honestly believed it to be in the company's interest; but that does not detract from the subjective nature of the test."
"(a) Where the duty extends to consideration of the interests of creditors, their interests must be considered as "paramount" when taken into account in the directors' exercise of discretion (per Mr Leslie Kosmin QC in the Colin Gwyer case (above) at [74]). Although I note the contrary view expressed by Owen J. in the Supreme Court of Western Australia that although "the directors must 'take into account' the interests of creditors [i]t does not necessarily follow from this that the interests of creditors are determinative" (Bell Group Ltd v Westpac Banking Corp [2008] WASC 239 at [4438]–[4439], applying the judgment of Mason J. in Walker v Wimborne [1976] HCA 7; (1976) 137 C.L.R. 1), so far as English law is concerned I respectfully agree with Mr Kosmin QC that his use of "paramount" was consistent with the judgment of Nourse L.J. in Brady v Brady (1987) 3 B.C.C. 535 (CA) at 552, where he observed that "where the company is insolvent, or even doubtfully solvent, the interests of the company are in reality the interests of existing creditors alone"
"(1) A director of a company must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company. (2) This applies in particular to the exploitation of any property, information or opportunity (and it is immaterial whether the company could take advantage of the property, information or opportunity). (3) This duty does not apply to a conflict of interest arising in relation to a transaction or arrangement with the company. (4) This duty is not infringed– (a) if the situation cannot reasonably be regarded as likely to give rise to a conflict of interest; or (b) if the matter has been authorised by the directors. (5) Authorisation may be given by the directors– (a) where the company is a private company and nothing in the company's constitution invalidates such authorisation, by the matter being proposed to and authorised by the directors; or (b) where the company is a public company and its constitution includes provision enabling the directors to authorise the matter, by the matter being proposed to and authorised by them in accordance with the constitution. (6) The authorisation is effective only if– (a) any requirement as to the quorum at the meeting at which the matter is considered is met without counting the director in question or any other interested director, and (b) the matter was agreed to without their voting or would have been agreed to if their votes had not been counted. (7) Any reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties."
"25. I start with four propositions which may be regarded as beyond argument: (i) that a company incorporated under the Companies Acts is not trustee of its own property; it is both legal and beneficial owner of that property; (ii) that the property of a company so incorporated cannot lawfully be disposed of other than in accordance with the provisions of its memorandum and articles of association; (iii) that the powers to dispose of the company's property, conferred upon the directors by the articles of association, must be exercised by the directors for the purposes, and in the interests, of the company; and (iv) that, in that sense, the directors owe fiduciary duties to the company in relation to those powers and a breach of those duties is treated as a breach of trust. If authority for those propositions is required it can be found in In re Lands Allotment Company[1894] 1 Ch 616 — see the judgments of Lord Justice Lindley, at page 631, and Lord Justice Kay, at page 638 — Cook v Deeks[1916] AC 555 — see the advice of the Privy Council delivered by Lord Buckmaster, Lord Chancellor, at page 564 — and Belmont Finance Corporation v Williams Furniture Ltd and others (No 2)[1980] 1 All ER 393 — see the judgment of Lord Justice Buckley (with whom the other members of the Court agreed), at page 405c–f."
"Tracing in equity depends upon the existence of a fiduciary duty, a condition that is necessarily satisfied in the case of directors where the company seeks to trace property transferred away as a consequence of the director's breach of fiduciary duty. Although often referred to as a proprietary claim or remedy, tracing properly so-called is neither a claim nor a remedy, but a process for identifying what has happened to the claimant's property. There are three aspects to the process of tracing; first, identifying the property belonging to the company in the hands of the wrongdoer; secondly following the asset into the hands of subsequent recipients of it; and thirdly, tracing into the proceeds of the misappropriated property which remain in the hands of the wrongdoer after the property has been transferred on. So far as the second of these aspects is concerned, the company may follow its property into the hands of subsequent recipients unless and until the property is acquired by a bona fide purchaser for value without notice of the company's claim."
"What then, in the context of knowing receipt, is the purpose to be served by a categorisation of knowledge? It can only be to enable the court to determine whether, in the words of Buckley LJ in Belmont Finance Corpn Ltd v Williams Furniture Ltd (No 2)[1980] 1 All ER 393 , 405, the recipient can "conscientiously retain [the] funds against the company" or, in the words of Sir Robert Megarry V-C in In re Montagu's Settlement Trusts[1987] Ch 264 , 273, "[the recipient's] conscience is sufficiently affected for it to be right to bind him by the obligations of a constructive trustee"
"82. In this area, too, the law was not seriously in issue. The ingredients of liability in dishonest assistance are: i) There must be a trust or fiduciary obligation owed by the trustee/fiduciary to the claimant. It suffices if the trust in question is a constructive or resulting trust: McGrath, Commercial Fraud in Civil Practice (2nd ed.) at [9.34]. ii) Because dishonest assistance is a type of accessory liability, there must be a breach by the trustee/fiduciary: Royal Brunei Airlines v Tan[1995] 2 AC 378 , 382, Novoship (UK) Ltd v Mikhaylyuk[2014] EWCA Civ 908 ;[2015] QB 499 . That is common ground for the purposes of my decision. However, I should note that Mr Ohmura reserves the right to argue, if this matter were to go to a higher court, that liability for dishonest assistance would not arise in relation to a breach of the kind that is alleged in this case. iii) The breach by the trustee/fiduciary need not be dishonest: because liability of the third party is fault-based, what matters is the nature of their fault, not that of the trustee/fiduciary: Royal Brunei Airlines , 384-5, 392, Twinsectra Ltd v Yardley[2002] UKHL 12 ;[2002] 2 AC 164 at [109]. iv) The third party must have assisted in, induced or procured the breach. It is necessary to show that the relevant assistance played more than a minimal role in the breach being carried out, but there is no requirement to show that the assistance provided would inevitably have resulted in the beneficiary suffering a loss: Baden v Société General pour Favoriser le Development du Commerce et de l'Industrie en France SA[1993] 1 WLR 509 at [246]. v) The third party must have acted dishonestly in providing the assistance. The test in its modern incarnation derives from Royal Brunei Airlines at 386-7 and is now set out in Ivey v Genting Casinos (UK) t/a Crockfords[2017] UKSC 67 at [74]: "
"(1) The court may only make an order for an interim payment where any of the following conditions are satisfied— (a) the defendant against whom the order is sought has admitted liability to pay damages or some other sum of money to the claimant; (b) the claimant has obtained judgment against that defendant for damages to be assessed or for a sum of money (other than costs) to be assessed; (c) it is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money (other than costs) against the defendant from whom he is seeking an order for an interim payment whether or not that defendant is the only defendant or one of a number of defendants to the claim;"
"Conclusion 9. As explained above, I do not consider there to be any realistic grounds [o] n which liquidator would be entitled to making the summary judgment. Evidence obtained by several third parties clearly evidences that liquidator and HM Revenue & Customs has failed to properly account for HMRC VAT, PAYE & NIC. Further it has been proven that profits of Umbrella Care Ltd were invested to grow the company as all assets were bought inside the UK. Recent evidence confirms that Mr Saunders have lost the important evidence and in fact trying to rebuild computers. Against this background it is essential for the summary judgment to be dismissed and discuss this complex case involving 14 defendants and large sums to be discussed in full trial."
"66. In the premises, Mrs Nisa and Mr Raja were each in breach of the fiduciary, statutory and common law duties set out at paragraph 58 above and/or in breach of trust in causing or permitting: (a) The Known Transfers referred to above, which amounted to the misappropriation and misapplication of at least£16,270,427.43 of the UCL Funds; (b) The Unknown Transfers made by UCL, which amounted to the misappropriation and misapplication of at least£ 10,788,058.09 10,662,409.76 of the UCL Funds." "68. Further or alternatively, Mrs Nisa and Mr Raja at all material times, and Mr Cervenak when he was a de jure director, were each in breach of the fiduciary, statutory and common law duties pleaded at paragraph 58 above, in that they: (a) failed to account to HMRC for the tax that UCL owes HMRC; and/or (b) caused or permitted UCL to trade without making provision for such tax liabilities to HMRC, as set out above."
"72. Dynamic holds on constructive trust for UCL all money misappropriated from UCL or any assets acquired directly or indirectly with such money, or is liable to account to UCL for all such money or assets: (a) Dynamic has received the UCL Funds as a result of breaches of fiduciary duty or breaches of trust by Mrs Nisa, Mr Raja and Mr Cervenak (or one or some of them); (b) Dynamic knew or has blind eye knowledge (through its controlling mind(s)), that the UCL Funds received by it resulted from the aforesaid breaches; (c) In the premises, it would be unconscionable for Dynamic to retain those benefits." "74. In breach of the trusts referred to at paragraphs 72 and 73 above, Dynamic made the payments referred to at paragraph 33 above." "75. Further or alternatively, Dynamic has by receiving and dealing with the monies paid to it by UCL in breach of fiduciary duty and/or breach of trust (as set out at paragraphs 66 and 67 above), dishonestly assisted those breaches."
"76. Each of Universal Real, and Universal Total , Luminous, New Spring, United Care, FI Holdings, Synergy and First Response (together the "