Cavendish IP Solutions Ltd v on and on Consultants Ltd

Hearing dates: 9, 10, 22 July 2026

APPROVED JUDGMENT

(circulated in draft on 20 August 2026)

This judgment was handed down via remotely at 10.00 am on 28 August 2026 by circulation to the parties or their representatives and by release to the National Archives.

Introduction

This is a judgment on a consolidated claim by a litigation funder, Cavendish IP Solutions Ltd. It took an assignment from the liquidator of One Property Group (UK) Limited (“the Company”) of all the Company's claims against the Defendants.

The litigation began on 17 November 2021 with an insolvency application for a declaration that various payments by the Company to the First Defendant (“On and On”) or to or for the benefit of the Second Defendant (“NM”) were transactions at an undervalue (TUVs) or preferences in favour of a connected person, made within 2 years prior to the (CVL) liquidation of the Company on 18 November 2015. That claim under the Insolvency Act 1986 (“Act of 1986”) is pursued against both Defendants.

The Claimant then issued a Part 7 claim against NM only, on 12 June 2023, seeking damages or equitable compensation for breaches of statutory duties owed by NM to the Company, and relief against NM as a constructive trustee of the Company's property.

On and On is a company ostensibly owned and controlled by NM's wife, Susanne (“SM”). The Claimant's case is that it was in fact controlled by NM and used as a vehicle for his benefit.

NM was not and is not a de jure director of the Company or the First Defendant, but the Claimant's case is that he was a de facto director of both, concealing his involvement and interest in both companies, hiding behind a Mr Darren Bradbury, who was the sole named director and shareholder of the Company, and behind his wife as the sole named director and shareholder of On and On.

The Claimant's application and claim were consolidated as a single claim under the above case number in the Insolvency and Companies List by order made on 16 June 2023, without prejudice to any limitation argument arising.

The limitation issue arises only in the Part 7 claim, which was issued more than six years after the start of the liquidation of the Company. Mr Deacock on behalf of the Claimant therefore accepted that the defence of limitation to the breach of duty claim (originally pleaded by NM, albeit later struck out) will succeed unless the claims come within s.21 of the Limitation Act 1980 (fraud and recovery of trust property) (“the Act of 1980”).

Following the making of an unless order on 14 January 2026, the Defendants were debarred from defending the claim and their defences were struck out, pursuant to a further order made by ICC Judge Mullen on 16 March 2026. This was in consequence of serious failures of the Defendants to comply with their disclosure obligations.

At the start of the hearing, the Defendants applied for permission to appeal out of time against the 16 March 2026 Order, but I refused permission, for reasons given in an ex tempore judgment on 9 July 2026 that do not need to be repeated here.

The consequences for the Defendants are serious, in that their main defence to claims for over £1 million was a factual version of the Company's business and On and On's and NM's roles that is directly contradicted by the account of Darren Bradbury and other witnesses, who gave evidence to me at the trial. Although I can see the Defendants' pleaded defence and witness statements, no oral evidence in support of it was given at the trial.

I must therefore decide the issues raised based on one side's oral evidence, tested to some extent by questions that I asked the witnesses, the documents available (it being clear that swathes of relevant documents that must exist, or have existed, have not been disclosed by the Defendants) and, in that light, the inherent probability (or improbability) of the Claimant's allegations being true. I have tried to bear in mind throughout that the Defendants, though debarred from defending, are entitled to a critical appraisal of the evidence against them and a fair evaluation of whether the case against them is sufficiently proved.

The claims that are pursued may be summarised in this way.

i) First, payments made to On and On in the 2 years prior to the liquidation of the Company are TUVs, or, if there was any liability to make any such payment, preferences, because On and On was a connected person of the Company, and the payments should therefore be ordered to be repaid;

ii) Second, other payments made to entities associated with NM in the 2 years prior to the liquidation were TUVs because they were gratuitous payments made for the benefit of NM, and NM should accordingly be ordered to repay them;

iii) Third, other payments made to On and On and, in one case, a person associated with NM, which were made more than two years before the start of the liquidation, are breaches of NM's statutory duties owed to the Company as a director, and damages or equitable compensation should be ordered against NM in the amount of those payments;

iv) Fourth, the business model of the Company, which NM operated, was one that was bound to leave it insolvent, and so its operation was a continuous breach of those same duties and resulted in a shortfall to the Company's creditors of £1,098,093.20, which sum NM should be ordered to pay by way of damages or equitable compensation.

The limitation issue arises under (iii) and (iv) above. The claims under (i) and (ii) above are alternatively brought as claims for breach of duty, and as such the limitation defence also arises in those alternative claims.

In order to determine these claims, I must address and decide the following questions:

i) Whether NM was a de facto director or a shadow director of the Company, or both. If he was not, he owed no statutory duties as a director and the claims under (iii) and (iv) above cannot succeed.

ii) Whether the Company was insolvent at the time of making each of the payments that is challenged. It is presumed to be insolvent in connection with any TUV if the payment was made to a connected person (s.240(2) Act of 1986). If the Company was not insolvent, the payment in question cannot be a TUV or a preference.

iii) Whether On and On was a person connected with the Company, either as being an associate of the Company, or as being an associate of NM, if he was a director of the Company (see s.249 Act of 1986).

iv) For what reason the payments to On and On, or to those associated with NM, were made.

v) Whether the payments were breaches of duty, and if so whether they were fraudulent breaches within s.21(1) of the Act of 1980.

vi) Alternatively, whether NM is liable as a constructive trustee in relation to any of the payments.

vii) Whether the conduct of the Company's business by NM was a fraudulent breach of duty.

Before turning to those questions, I will consider first the nature, ownership and business of the Company itself, and of On and On.

The nature of the Company's business operations

There is no doubt that the true owner of the Company was not Mr Bradbury, despite the issued shares of the Company having been registered in his name. It was common ground on the parties' pleaded cases that the Company was in reality owned by one Richard Goddard, a mysterious figure who operated as an off-shore based, wealthy entrepreneur. Mr Bradbury's ownership of the issued shares of the Company was as nominee for Mr Goddard.

Mr Bradbury's account of his involvement was that he did not really act as director of the Company either, but only as the manager of the property construction part of its business, with NM being the effective director of the Company, who ran the investment and financial side. Mr Bradbury did, in one sense, act as the director, because, on his own account, he was given documents by NM to sign as director of the Company, which only a director can sign, and which he did sign. However, his evidence, which was supported by the other witnesses that I heard from, was the Company was effectively run by NM on behalf of Mr Goddard, and that he, Mr Bradbury, simply did what he was told to do by NM.

The most reliable documentary evidence of what the Company did is probably the account of the Company's history and business provided to its liquidator on 18 November 2015 (“the liquidation statement”). It was signed and provided by Mr Bradbury. He says that it was written by NM and given to him to sign. It portrays the Company as being owned and controlled by Mr Bradbury, which he says is false, and it conceals the identity of Mr Goddard and NM, but Mr Bradbury accepts that the description of the Company's business activity is otherwise reasonably accurate. It describes how the Company would seek out residential property development opportunities and then carry out developments (or obtain planning permission) on behalf of external clients, doing the project management work, with the costs being charged to the underlying client, and with a commission for the Company from any profit obtained. That description accords with the description of the various witnesses, all former employees of the Company, from whom I heard evidence.

In truth, there was only one client, Mr Goddard, who provided (or caused other companies controlled by him to provide) to the Company the funds needed to buy the...