Mark Grahame Tailby & Tyrone Shuan Courtman (as joint administrators of TPS Investments (UK) Ltd v Hutchinson Telecom FZCO
| Jurisdiction | England & Wales |
| Judge | Stephen Davies |
| Judgment Date | 26 February 2018 |
| Neutral Citation | [2018] EWHC 360 (Ch) |
| Court | Chancery Division |
| Docket Number | Case Nos: 3007, 3008 and 3009 of 2016 |
| Date | 26 February 2018 |
[2018] EWHC 360 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS & PROPERTY COURTS IN MANCHESTER
INSOLVENCY AND COMPANIES LIST (Ch D)
Manchester Civil Justice Centre,
1 Bridge Street West, Manchester M60 9DJ
HIS HONOUR JUDGE Stephen Davies
SITTING AS A JUDGE OF THE HIGH COURT
Case Nos: 3007, 3008 and 3009 of 2016
In the Matter of TPS Investments (UK) Limited (In Administration)
And in the Matter of the Insolvency Act 1986
and
James Morgan QC (instructed by Howes Percival Solicitors, Leicester) for the Applicants
Avtar Khangure QC (instructed by Moore & Tibbitts Solicitors, Warwick) for the Respondent
Katie Longstaff (instructed by Nelsons Solicitors, Nottingham) for the Interested Parties
Hearing dates: 29 – 31 January 2018
Draft judgment circulated: 9 February 2018
His Honour Judge Stephen Davies
Contents
A. Introduction
B. Parties and Background
C. The relevant legal principles
D. The joint administrators' permission application and Hutchinson's permission application
E. The removal application
F. Conclusions
A. Introduction
This case was listed for hearing over three days to determine four applications arising from the administration of the above-named company, TPS Investments (UK) Ltd (“ TPS”) and one application arising from the administration of two connected companies, ABC Prop Co Holdings Ltd (“ ABC”) and CP Investment Holdings Limited (“ CP”). The nature of those applications and the position as regards each application as at the present date is as follows.
The first application in time is the application of the joint administrators of TPS (“ the joint administrators”) under paragraph 71 of Schedule B1 to the Insolvency Act 1986 for permission to dispose of a property which is subject to security in favour of the respondent Hutchinson Telecom FZCO (“ Hutchinson”), that property being commercial premises in Seaham known as Lighthouse View (“ the joint administrators permission application”). This application is no longer pursued because the joint administrators and Hutchinson have very recently agreed that Hutchinson will appoint a fixed charge receiver under its security over Lighthouse View, in circumstances to which I shall refer. However, the costs of that application are very much in issue and it is agreed that I should determine the question of those costs, insofar as I am able, in this judgment.
The second application in time is an application by the joint administrators in their capacity as administrators of ABC for declarations that charges granted by ABC in favour of Hutchinson over two further commercial promises, Caroline House in Bolton and Prospect House in Oldham are void for non-registration at Companies House (“ the declaration application”). This application was substantively determined by HHJ Pelling QC on 21 July 2017 when he also largely disposed of the resulting costs issues, so that the only remaining issue relates to the basis of assessment of those costs and to the costs of the hearing itself. The parties are sensibly agreed that these relatively minor costs issues should be left over until after this judgment has been handed down.
The third application in time is Hutchinson's application under paragraph 43 of Schedule B1 for permission to enforce its security over Lighthouse View and another commercial property, Turnhouse Road in Edinburgh (“ the Hutchinson permission application”). This application so far as relates to Lighthouse View has been compromised as above, but it is still live as regards Turnhouse Road and again the question of costs as regards Lighthouse View remains live.
The fourth application in time is Hutchinson's application under paragraph 88 of Schedule B1 for an order for the removal of the joint administrators (“ the Hutchinson removal application”). This is also very much live.
The fifth and final application in time is an application by the interested parties, being the administrators of a company known as ABC Alpha Business Centres UK Limited (“ Alpha”) and two other associated companies seeking permission to be heard in these proceedings (“ the Alpha permission application”) in order to support the joint administrators. This application was disposed of by consent on day 1 of the hearing on the basis of Hutchinson giving an undertaking to give 21 days' notice to the Alpha administrators of any proposed sale of Lighthouse View and/or Turnhouse Road for a period of 3 months, with costs being reserved.
B. Parties and Background
There are a number of different companies which feature in this case, some incorporated in the UK and others in Dubai, and the inter-relationship between some of them is neither completely clear nor free from dispute. For present purposes I can summarise as follows, assisted by the structure chart helpfully produced by Mr James Morgan QC, counsel for the joint administrators with his written opening, albeit that it is not – as Mr Avtar Khangure QC counsel for Hutchinson emphasised – an agreed document.
The starting point is that TPS is a UK registered and a wholly owned subsidiary of a Dubai registered company known as The Property Store FZE. It was incorporated on 16 August 2013 and went into administration on 11 November 2016, its administrators being Mr Mark Tailby of MT Insolvency and Mr Tyrone Courtman of PKF Cooper Parry. Its director at the point of administration was Mr Abdulrahim Mohammed (“Mr Mohammed”). It was said in the joint administrators' statement of proposals that it was one of several associated companies which carried out the business of purchasing, renovating, letting and selling UK properties to manage funds for investors who had invested in a series of UK issued investment bonds, where the funds were provided to companies in the UAE associated to TPS.
TPS was the owner of the 4 properties referred to above which are material to this case and remains the owner of 2 of those properties, namely Lighthouse View and Turnhouse Road. Prospect House and Caroline House were transferred by TPS to ABC and the car park at Caroline House was transferred by TPS to CP, all in circumstances which are in dispute.
Hutchinson contends that it advanced the funds to TPS which were used to acquire those 4 properties and that it was given all monies legal charges over those 4 properties to secure that lending. That basic proposition is not disputed by the joint administrators, however there are issues which the joint administrators say that they are reasonably unable currently to determine as to the source of the funds advanced by Hutchinson and also as to the amount still due to Hutchinson. The joint administrators also do not accept that Hutchinson has shown that TPS gave it legal charges over Prospect House or Caroline House.
As to the former, it is the case of the Alpha administrators that the funds were provided by Alpha to Hutchinson. In their statement of proposals they say that TPS was incorporated for the purpose of holding investment property in the UK using funds provided by Alpha from bonds which Alpha had issued to a number of individual investors. They say that Alpha was a joint venture between TPS Investments Ltd (“ TPS Dubai”), another Dubai registered company a director of whom was a Mr Mohammed Yusuf (“ Mr Yusuf”) and Best Group Ltd, a UK registered company engaged in the investment business, the directors of whom were Mr Jeff Hankin and Mr James Bradley. They say that Alpha advanced funds to its Dubai registered parent company, Alpha LLC, for Alpha LLC to invest in property in Dubai and, subsequently, in the UK. They say that those funds were used to enable TPS to acquire the 4 properties in question.
Having been transferred to ABC and CP, Caroline House and Prospect House and the Caroline House car parks were ultimately sold by the joint administrators in their capacity as administrators of those companies. Prospect House was sold for £875,000; Caroline House was sold for £350,000 and the Caroline House car park was sold for £100,000. It is common ground that although ABC and CP gave Hutchinson charges over the properties as part of the transaction in question those charges were void for non-registration with Companies House. There remain however issues as to the consequence of these events. In particular there are issues as to whether or not the joint administrators may be entitled to have the transfers set aside as transactions at an undervalue (“ the TUV claims”), whether or not the effect of those transactions was to novate any liability which TPS might have had to Hutchinson for the monies originally advanced to TPS to acquire those properties to ABC, and whether or not in such circumstances Hutchinson could claim to be an unsecured creditor as against ABC. By the time of the hearing it was rightly accepted by both parties that these are issues of some factual and legal complexity which cannot be determined without further factual investigation and, if necessary, judicial determination.
As already foreshadowed, it is common ground that the funds which were actually used by TPS to acquire these properties were advanced to TPS by solicitors who had been placed in funds for that purpose by Hutchinson, which is a Dubai registered company whose director is also Mr Karim. It is also not disputed that TPS gave Hutchinson charges over Lighthouse View and Turnhouse Road and it is this security which Hutchinson seeks to enforce as against TPS in its permission application.
However it is asserted by the Alpha...
To continue reading
Request your trial
-
Sportsdirect.com Retail Limited For Orders Under Paragraphs 88 And 95(b) Of Schedule B1 To The Insolvency Act 1986 To Remove Robert James Harding And Gavin George Scott Park As Joint Administrators Of Goals Soccer Centres Plc
...one case there was a criticism that the paragraph 88 application was precipitate (see TPS Investments (UK) Ltd (In administration) [2018] EWHC 360 (Ch)); although that could hardly be said here, where the administration is due to come to an end, and where the noter has made extensive attemp......