Liquidator’s claim dismissed over alleged fraudulent payments (Instant Access Properties Ltd v Rosser; Murphy v Rosser)

Liquidator’s claim dismissed over alleged fraudulent payments (Instant Access Properties Ltd v Rosser; Murphy v Rosser)

The High Court has dismissed a claim brought by a liquidator to recover payments made by an insolvent company. The liquidators claimed that payments to corporate property developers had been made fraudulently. Elliot Green, licensed insolvency practitioner of Oury Clark, London and Slough, considers some of the potential practical implications from this judgment and considers the wider implications for these types of cases.

Instant Access Properties Ltd (in liquidation) v Rosser and others; Murphy and another (as joint Liquidators of Instant Access Properties Ltd) v Rosser and others [2018] EWHC 756 (Ch), [2018] All ER (D) 48 (Apr)

What are the practical implications of this case?

Although the application, pleadings and evidence have not been available for review, there seem to be a number of implications for practitioners which may fall out of the decision in this case:

  • a claimant seems to have to prove the loss if claiming any failure of consideration
  • the case appears to be an illustration of how pleadings, which many Insolvency Act claims may as a matter of procedure bypass, can influence progression of litigation
  • it appears helpful if submissions can be matched to the evidence as well as to the application
  • it seems that suggestion of some other alleged complaint or irregularity might not improve the prospects of an application succeeding, even if it appears to compliment the pleaded case
  • practitioners may wish to consider if a pleading founded on some element of fraud (a) is attractive generally in view of its high evidential threshold, and (b) will enable them to overcome a limitation hurdle
  • the self-dealing rule appears to require detailed reference to and analysis of the facts of the case

What was the background?

Instant Access Properties Ltd brought a claim against various defendants, alleging that they had perpetrated a fraud through commission-sharing arrangements with other companies. The company claimed that Mr Rosser, who had interests in the other companies, was a de facto or shadow director of the company because of his involvement in such activities

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About the author:

Anna joined the Restructuring and Insolvency team at Lexis®PSL in August 2013 from Berwin Leighton Paisner where she was a senior associate in the Restructuring Team.

Anna has worked on a number of large scale restructurings primarily in the UK market acting on behalf of lending institutions.

Recent transactions include the restructuring of a UK hotel chain and the administration sale of part of the Connaught group. Anna has also spent time on secondment at The Royal Bank of Scotland and trained at Clifford Chance qualifying in 2007.