• Re UKCloud Ltd (in liquidation) [2024] EWHC 1259 (Ch)

    Internet Protocol Addresses - fixed or floating charge? The question which arose in this case, and on which the liquidator required the court's direction, was whether the security granted by UKCloud Limited was a fixed charge or a floating charge. Play The reason that the liquidator felt he needed assistance on this question was probably because the label used in a debenture to describe the nature of the charge created over an asset, or class of assets, is a guide to the security the parties intended to create, but it is not conclusive. To attempt to answer this question, the court was fundamentally concerned with the nature of the rights and obligations the parties had intended to create. To come to a conclusion, it considered the essential difference between a fixed charge and a floating charge. The case law indicates that under a fixed charge the assets charged as security are permanently appropriated to the payment of the sum charged, in such a way as to give the chargee a proprietary interest in the assets. For as long as the fixed charge remains unredeemed, the assets can be realised from the charge, though only with the agreement of the chargee. The chargee might have good commercial reasons for agreeing to a partial release. Under a fixed charge, that will be a matter for the chargee to decide for itself. A floating charge contrasts with a fixed charge, however, because in the case of a floating charge the chargee does not have the same power to control the security for its own benefit. In this case, the chargee does have a proprietary interest, but its interest is in a fund of circulating capital. Unless and until the chargee intervenes (by crystallisation of the charge), it is for the trader, not the bank, to decide how to run its business.

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    Purkiss v Kennedy & Ors [2024] EWHC 1081 (Ch)

    This case featured another judgment in a group of cases which arose out of schemes which were designed to enable self-employed individuals to avoid the obligation to pay income tax and national insurance on their remuneration. Play The company's problems began with HMRC assessing it for income tax and NIC for around £2.2 million. The company went into creditors' voluntary liquidation without making payment or appealing. The judge in the High Court accepted that “HMRC undoubtedly has a duty to collect tax which is due,” but questioned whether HMRC could have ‘interests’ for the purposes of section 423(3)(b) Insolvency Act 1986 which were affected by arrangements which lawfully reduced or prevented tax arising.

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    Boris Franz Becker v Ford & Ors [2024] EWHC 1001 (Ch)

    This case is an unfortunate reminder of the fate in bankruptcy of an extremely well-known professional tennis player; yet he, as a bankrupt, was ultimately able to convince the court that his compliance with his Trustees in Bankruptcy was consistent with the obligations imposed by the Insolvency Act 1986, and sufficient for his suspension to be lifted. Play In this case, just as the court had to be satisfied that there had been non-compliance by a bankrupt to suspend the bankrupt's automatic discharge, the court also had to be satisfied that the bankrupt had co-operated with the Official Receiver or his Trustee in Bankruptcy to obtain a finding that there had been co-operation which was consistent with his Insolvency Act 1986 obligations. It was noted that the legislation did not impose a requirement that discharge was conditional upon full compliance. Rather, it was enough if Mr Becker could demonstrate that he had done all that he could reasonably do in the circumstances in fulfilling any outstanding obligations which had been previously identified.

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    JSC BTA Bank v Ablyazov & Anor [2018] EWCA Civ 1176

    Where a transaction challenged under s 423 IA can be said to have had more than one purpose, there is no requirement that the prohibited statutory purpose of putting assets beyond the reach of claimants must have been a ‘substantial’ purpose of the transaction before relief will be granted. The relevant enquiry is simply whether the transaction was entered into for the prohibited purpose at all. Play There is no rule of law that states that if a debtor knows, at the time of entering into the relevant transaction, that he was facing claims, the court must find, unless the debtor provides evidence to the contrary, that the transaction was entered into for the prohibited purpose. The Insolvency Act 1986 contains no presumption to that effect and the court held here that there was no reason for the courts to invent one. At best, such knowledge on the part of the debtor may, depending on all the circumstances of the case, support an inference that the transaction was entered into for the prohibited purpose. With regard to whether the claim under s.423 was statute-barred, the court held that the limitation period which applied here was six years, as it was a sum recoverable by statute and therefore fell within s.9(1) of the Limitation Act 1980. The six year period began to run from the date of the transfer on 26 February 2009. This being the case the claim was statute-barred on the face of it, as it had been issued in December 2015.  Nevertheless, the bank had relied upon s.32 of the 1980 Act, and this provides for postponement of the limitation period in certain cases of fraud, concealment or mistake. However, although the bank's case was that Mr Ablyazov snr had been guilty of fraud or concealment, the bank did not allege that Madyar Ablyazov (his son) was also guilty. Because of that, and although the bank’s case at trial was that Mr Ablyazov snr had been guilty of fraud or concealment, it was not alleged that his son was so guilty. So, the issue became whether the limitation period was postponed as against Madiyar Ablyazov on the basis that he was “claiming through” Mr Ablyazov snr. The court held that he was and that the claim (if it had been well founded) would not have been time barred.