Mo-Musa Nico Consari & Anor v Bensport Limited [2025] EWHC 1310 (KB)

[2025] EWHC 1310 (KB)Case No KB-2025-001215
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 29/05/2025
Before
HHJ SIDDIQUE(Sitting as a Deputy High Court Judge)
Between
BENSPORT LIMITEDRespondent/
Thomas West, Solicitor Advocate (instructed by Richard Slade & Partners LLP) for ApplicantsConnor Jones (instructed by Porter Dodson LLP) for RespondentHearing Hearing dates: 14 April 2025 and 7 May 2025
Approved JudgmentThis judgment was handed down remotely at 10.30am on 29/05/2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................

HHJ Siddique (sitting as a Deputy High Court Judge):

[1]This is an application for an interim injunction requiring the Defendant to deliver up possession of 11 vehicles, two engines and one car bonnet (the “vehicles”) to the value of approximately £485,500. The application was sought urgently on informal notice to the Defendant, although at the hearings before me both parties were represented, the Claimants by a Solicitor Advocate and the Defendant by counsel. It was resisted by the Defendant, who seeks to exercise a lien over the vehicles for monies owed due to breach of contract and / or unjust enrichment.[2]There were two hearings for this application. This came about as follows. Having heard from both parties on 14 April 2025, I refused an application for the delivery up of the vehicles, but made a restraint order prohibiting the Defendant’s disposal of the vehicles. I subsequently discovered that some of the facts had been inaccurately represented in the Defendant’s skeleton argument. I then directed that a second hearing should take place before me on 7 May 2025. The Facts The vehicles

The Facts

[3]The vehicles were transported to the Defendant’s premises from Woodham Mortimer Limited (WM), a firm of vintage car restorers and dealers, wholly owned by the Second Claimant. WM was placed in administration on or about 17 May 2024. Its directors include the First Claimant and his brother, Mr Ali Khansari. Mr Khansari is also a director of the Second Claimant and both the First Claimant and his brother Mr Khansari hold shares in the Second Claimant.[4]The First Claimant claims ownership of all vehicles, other than vehicle 11 (a Ford GT40), in respect of which the Second Claimant asserts ownership. According to the First Claimant, on 6 and 10 May 2023, WM transferred ownership of the vehicles to the First Claimant as part re-payment of personal loans he made to WM, between November 2021 and October 2022, amounting to £1,363,204.04.[5]Documents in support of the First Claimant’s title to those vehicles were produced in evidence, although it was also brought to my attention that a Mr Shahid Malik has claimed ownership of three of the vehicles. I was further shown a copy of a Restraint Order issued by His Honour Judge Gibson at Bradford Crown Court prohibiting Mr Malik from the disposal of assets. Additionally, Mr Jones, on behalf of the Defendant brought to my attention DVLA V5 registration documents for the vehicles. Some of these registration documents were in the name of a company similar to the name of the Second Claimant, namely JD Classics Motors Ltd and were registered after 7 February 2024, when HMRC filed a winding up petition against WM.

Vehicle 11 (the Ford GT40)

[6]In respect of vehicle 11, a Ford GT40, both the Second Claimant and Defendant claim a proprietary right. The Second Claimant contends that the GT40 was received as part payment of the sale of a PXL965 La Sarthe car (along with £100,000), which belonged to Second Claimant following a “Company and Sales Purchase Agreement” (the C&SP Agreement) dated 19 July 2023, between the Second Claimant and the Defendant. Under the C&SP Agreement, the Second Claimant purchased shares in the Defendant along with the Defendant’s business. The C&SP Agreement[7]There are a number of different iterations of the C&SP Agreement, which was drafted by the First Claimant and who signed on behalf of the Second Claimant (despite only being a shareholder and not a director of the Second Claimant).[8]There is at least one copy of the C&SP Agreement that supports the Claimants’ case that the Second Claimant purchased the La Sarthe car under that agreement. There is also at least one copy that supports the Defendant’s case that the La Sarthe car was excluded from the C&SP Agreement.

The SOR Agreement

[9]The Defendant claims its proprietary right over the GT40 arises from the sale of the La Sarthe car (said to sell in the region of £475,000), under a Sale or Return Agreement (the SOR Agreement) dated 27 March 2023, between the Defendant and WM. The Defendant contends that it remains unpaid for the sale of the La Sarthe car and therefore asserts a proprietary right over the GT40, which was handed over as part payment for the La Sarthe car.

Administration of WM

[10]WM was placed into administration on or about 17 May 2024, following which the First Claimant purchased the remaining business and assets of WM (in which the First Claimant was a director) from the administrators using a wholly owned company, JD Classics Autos Limited (again a name similar to the Second Claimant’s name up until 24 June 2024, namely JD Classics Automotive Limited). JD Classics Autos Limited was placed into administration on 27 January 2025.[11]Upon WM being placed into administration, the First Claimant arranged for vehicles to be transported from WM’s location in Chelmsford to the Defendant’s premises, according to the Claimants so that the Defendant could inspect them with a view to an onward sale. The Defendant avers that the Claimants began storing vehicles on the Defendant’s premises over time as a result of the C&SP Agreement in which the Second Claimant was seeking to take over the Defendant’s business.

Monies owed

[12]It is not in dispute that the Second Claimant has failed to pay consideration in full to the Defendant under the C&SP Agreement. Mr West’s skeleton argument states, “The SPA has not been fully completed. By a further (oral) agreement with D’s shareholders, principally Mr Bob Perry, C1 paid the first £95,000 of the price. He has also paid the running expenses since 2023, including all salaries, which totals more than £150,000.” Similarly, it is not in dispute that the Second Claimant has not paid any consideration to the Defendant for the sale of the La Sarthe car, in respect of which vehicle 11, the GT40, was part-exchanged (because, say the Claimants, the ownership of the La Sarthe car was transferred to the Second Claimant under the C&SP Agreement, although full consideration under the C&SP Agreement remains unpaid).

The Lien

[13]In those circumstances, the Defendant seeks to exercise a lien over the vehicles as a result of the Second Claimant failing to pay to the Defendant monies due to the Defendant under the C&SP Agreement and for monies owing to the Defendant from the sale of the La Sarthe car. The Second Claimant claims ownership of one of the vehicles in the Defendant’s possession, namely the GT40, and so a lien over that vehicle is a coherent claim. However, there is no suggestion that the other 10 vehicles in the Defendant’s possession are owned by the Second Claimant; instead the First Claimant (and another) claims their ownership. Additionally, the First Claimant is not a party to either the C&SP Agreement or the SOR Agreement. Nevertheless, the Defendant contends the vehicles ostensibly held by the First Claimant can be employed in satisfaction of their claim against WM under the SOR Agreement, on the basis that some of the vehicles transferred from WM to the First Claimant may have been transferred to avoid liability to creditors under WM’s liquidation.[14]Where WM’s legal obligation or liability to the Defendant has been deliberately evaded by the use of the corporate veil, the Defendant contends it may be appropriate to pierce the veil (perPetrodel Resources Ltd v Prest [2013] UKSC 34, [2013] 2 AC 415). In support, the Defendant relies on a number of alleged peculiarities, including that the sale of some of the vehicles used the same invoice number, that the invoicesbore the signature of someone who has since been removed as a director of WM, that some of the V5 registration documents were in the name of a company that bore similarity to the Second Claimant, JD Classics Motors Ltd, and with registration dates after 7 February 2024, which was when HMRC filed a winding up petition against WM.[15]Additionally, the Defendant contends that there may be unconscionable conduct that would allow the administrators of WM to apply to restore the position to what it would have been had this conduct not occurred, and in turn assign their cause of action to the Defendant under s.246ZD Insolvency Act 1986. The potentially unconscionable conduct is said to be the transfer of some of the vehicles from WM to the First Claimant at an undervalue (within the meaning of s.238 Insolvency Act 1986) and / or in circumstances that amounted to a preference (within the meaning of s.239 Insolvency Act 1986).[16]The First Claimant refutes the above and maintains that the vehicles were legitimately transferred to him by way of part payment of loans he made to WM in a personal capacity, between November 2021 and October 2022, amounting to £1,363,204.04. He maintains that he is still owed about £500,000 from WM. However, it is noteworthy that the parties were in agreement at the oral hearing before me on 7 May 2025 that this was inconsistent with the most recent report from WM’s administrators.

The Law

[17]Section 4(2) of the Torts (Interference with Goods) Act 1977 permits a party to seek an interim order for delivery up of any goods. The jurisdiction is confirmed by CPR rule 25.1(1)(e). Additionally, under s.37(1) and (2) of the Senior Courts Act 1981, the Court may order an injunction in all cases in which it appears to the Court “just and convenient” to do so. It is well established that the test to be applied when hearing an application for an interlocutory injunction was laid down in American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL). In exercising its discretion, the following questions ought to be considered by the Court:(1) Is there a serious question to be tried?(2) If yes, would damages be an adequate remedy for a party injured by the Court’s grant of, or its failure to grant, an injunction?(3) If not, where does the ‘balance of convenience’ lie? Findings Whether there is a serious question to be tried

Findings

[18]It is agreed that the dispute between the parties is sufficient to meet this threshold.

Whether damages would an adequate remedy

[19]In Fellowes & Son v Fisher [1976] 1 QB 122 (CA), Browne LJ set out the following principles [at 137]:
“(1) The governing principle is that the court should first consider whether, if the claimant succeeds at the trial, they would be adequately compensated by damages for any loss caused by the refusal to grant an interlocutory injunction. If damages would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the claimant’s claim appeared to be at that stage. (2) If, on the other hand, damages would not be an adequate remedy, the court should then consider whether, if the injunction were granted, the defendant would be adequately compensated under the claimant’s undertaking as to damages. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the claimant would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction. (3) It is where there is doubt as to the adequacy of the respective remedies in damages that the question of balance of convenience arises…”
[20]Both parties acknowledge that there is no direct evidence available to me in respect of either party’s means and ability to pay damages. Whilst the Defendant submitted that the vehicles were covered by an insurance policy, the policy was not served in evidence and in any event, it does not follow that the Defendant would be in a financial position to pay damages simply because a policy of insurance is in place. First, there is no evidence available to me in respect of the terms and conditions of the policy. Second, a policy of insurance would not prevent the Defendant from disposing of the vehicles. I am not, therefore, satisfied that the Claimants would be adequately compensated by damages for any loss caused by the refusal to grant interlocutory relief.[21]Turning to whether the Defendant would be adequately compensated under the Claimants’ undertaking as to damages, the First Claimant accepts he was served with a statutory demand by the administrators of WM. At the hearing of 7 May 2025, I was told that this has since been withdrawn, but in any event it is clear from the statements served that the First Claimant requires the return of the vehicles in order to generate funds to pay off creditors.[22]In respect of the Second Claimant, it was conceded that at least £265,000 was owing to the Defendant, which remains unpaid. The Second Claimant’s Balance Sheet as of 31 October 2023 showed its Capital and Reserves at £1,250. In those circumstances, I am not satisfied that the Defendant would be adequately compensated by the Claimants’ undertaking as to damages.

The balance of convenience

[23]The grant of interlocutory relief therefore turns on the balance of convenience. The Claimants ask for an order for the delivery up of vehicles. If I was to make such an order, and subsequently it transpired that it should not have been made as the Defendant’s claimed lien was good in law, the prejudice to the Defendant may be irredeemable in circumstances where I am not satisfied of the Claimants’ ability to be faithful to its undertaking as to damages.[24]Conversely, if I was to refuse an order for the delivery up of the vehicles, and it subsequently transpired that it should have been made as the Defendant’s claimed lien was without merit, equally the prejudice to the Claimants may be irredeemable in circumstances where I am not satisfied of the Defendant’s ability to pay damages. In those circumstances, in my judgment, the only just and convenient course is to maintain the status quo but with the imposition of a restraint order to ensure that the vehicles are not disposed of. My erroneous understanding following the first hearing on 14 April 2025 that the Second Claimant purchased WM’s assets after WM went into liquidation, does not impact upon this decision, and that is therefore the order I make.