Re Frazer Nash technology Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 11 June 2010 |
| Neutral Citation | [2010] EWHC 1317 (Ch) |
| Docket Number | Case Nos: 11024 of 2008 and 12686 of 2009 |
| Court | Chancery Division |
| Date | 11 June 2010 |
[2010] EWHC 1317 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
COMPANIES COURT
Before : MR. PHILIP MARSHALL QC (SITTING AS A DEPUTY JUDGE OF THE HIGH COURT
Case Nos: 11024 of 2008 and 12686 of 2009
In The Matter Of Metrocab Limited
And In The Matter Of The Insolvency Act 1986
In The Matter Of Frazer Nash Technology Limited
And In The Matter Of The Insolvency Act 1986
Mr. William Willson (instructed by Messrs. Pitmans) for the Applicants
Mr. Andrew Westwood (instructed by Her Majesty's Revenue & Customs) for the Second Respondent
Ms. Sandra Bristoll (instructed by Messrs. Martineau) for the Third and Fourth Respondents
Ms. Hilary Stonefrost (instructed by Pinsent Masons) for Mr. Nasser Kazeminy, Triomphe Investments I LLC, Triomphe Investments II LLC, Triomphe Investments III LLC, Triomphe Investments IV LLC
Mr. Jeremy Richmond (instructed by Kennedy & Co.) for Sibson Mill Properties Limited
Hearing dates: 20–21 May 2010
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
MR. PHILIP MARSHALL QC (SITTING AS A DEPUTY JUDGE OF THE HIGH COURT)
Mr. Philip Marshall QC (sitting as a Deputy Judge of the High Court):
Introduction
I have before me two applications to rescind winding-up orders made in relation to Metrocab Limited (“Metrocab”) and Frazer Nash Technology Limited (“FNT”). The applications are made by each of the companies concerned and by Mr. Kamal Siddiqi (“the Applicants”). Mr. Siddiqi is the sole director of both Metrocab and FNT. He also owns 90% of the issued share capital of Metrocab and 90% of the issued share capital of the parent company of FNT, Kamkorp Limited.
The winding-up order in relation to Metrocab was made by Mr. Registrar Jaques on 17 June 2009, on the petition of Her Majesty's Revenue & Customs (“HMRC”), presented on the basis of outstanding national insurance contributions and PAYE payments amounting to £159,665.06. That in relation to FNT was made by the same Registrar on 1 July 2009 and was also based on a HMRC petition relating to outstanding national insurance and PAYE payments, this time amounting to £90,208.58. It is accepted by the Applicants that both of the winding-up orders were made regularly.
Under rule 7.47(4) of the Insolvency Rules 1986 any application to rescind a winding-up order must be made within 7 days after the date on which the order was made. In this case the applications are both out of time. That in relation to Metrocab was made on 14 October 2009, some four months after the making of the order. The FNT application was also made on 14 October 2009, some three and half months after the relevant date. The Applicants therefore apply for an extension of time pursuant to rule 4.3 of the 1986 Rules.
The applications are opposed by persons who claim to be creditors. The applications of both Metrocab and FNT are opposed by Mr. Nasser Kazeminy and four companies with very similar names who have been described as his investment vehicles, Triomphe Investments I LLC, Triomphe Investments II LLC, Triomphe Investments III LLC and Triomphe Investments IV LLC ( collectively referred to hereafter as “the Triomphe Parties”). They hold promissory notes and have made advances in respect of which they claim Metrocab and FNT are liable. The application of Metrocab is also opposed by Sibson Mill Properties Limited (“SMP”), the landlord under a lease of premises formerly occupied by Metrocab as tenant. The claims of the Triomphe Parties and SMP are contested by the Applicants. It is said that they are not creditors at all. Although objection was taken in evidence to the standing of at least the Triomphe Parties in the applications, no objection to their appearance was taken in submissions at the hearing (and nor was any objection taken to their appearance when these applications were before Ms. Registrar Derrett on 16 December 2009 when she gave directions for SMP to serve evidence). In so far as they required permission to appear and be heard I was and am willing to grant it. It is important for the court to take into account the views of creditors in an application of this kind (see Re Dollar Land (Feltham) Ltd. (1995) BCC 740) and this must include the views of those who claim to be creditors where their status is one of the very matters the court is being asked to determine in the course of the application, as in this case.
In addition, I have heard submissions on behalf of HMRC, the Second Respondent to each application. Subject to payment of the outstanding debts of each of Metrocab and FNT to HMRC, in cleared funds, and payment of their costs of the petition and of these proceedings, HMRC does not oppose the applications.
Finally, I also heard submissions on behalf of the Third and Fourth Respondents to each application, Mr. Matthew Cowlishaw and Mr. Christopher Farrington, two partners in Deloitte LLP. They are the joint liquidators of both Metrocab and FNT (“the Liquidators”) having been appointed on 5 October 2009 by the Secretary of State under section 137 of the Insolvency Act. They are neutral in connection with the applications but have filed a report pursuant to the order of Mr. Registrar Simmonds dated 21 October 2009 and have thereafter served and filed evidence in order to assist the court.
Background
As set out in the judgment of Mr. Justice Teare of 9 December 2009 (“the First Judgment”) in proceedings in the Commercial Court brought by the Triomphe Parties against the Applicants and related parties ( [2009] EWHC 3297 (Comm)) (“the Commercial Court Proceedings”), to which I will return in due course, Mr. Siddiqi is an automotive engineer, technologist and entrepreneur in the field of innovative design and development of, amongst other things, electric and hybrid electric transportation technology.
As also described in that judgment, Mr. Siddiqi has close connections with a number of companies including, apart from Metrocab and FNT and its parent company, Kamkorp Limited, Frazer-Nash Research Limited (“FNR”), a company engaged in research, design, and engineering of environmentally friendly and energy efficient systems for the transportation and industrial markets.
According to the evidence of Mr. Siddiqi, Metrocab was engaged in the business of the assembly, sales and after sales support of diesel taxis. It is one of the two approved manufacturers of purpose-built taxis in the United Kingdom. In 2005, however, it was decided that diesel taxis had a limited future commercially and in June 2005 Metrocab stopped producing them, the last diesel taxi being manufactured and sold in August 2005. Instead the company embarked on a programme to introduce environmentally friendly “hybrid” electric/fuel taxis into the UK market. It commenced the design of the chassis, body styling and interior of a new hybrid taxi around a more advanced, environmentally friendly and efficient powertrain. In doing so it was assisted by FNR which participated in the customisation of its hybrid drivetrains for use in some prototype hybrid taxis in addition to the design and development of a new chassis and body.
Metrocab conducted its business from industrial premises at Units 19–23 Darwell Park, Tamworth (“the Premises”). It leased the Premises from SMP. As a result of alleged arrears of rent SMP changed the locks at the Premises on 24 April 2009 and subsequently sold assets located there. The extent and true market value of the assets disposed of is in dispute. They were sold by SMP to a third party for £5,000.
According to the evidence of Mr. Siddiqi, FNT was engaged in the business of engineering, layout and manufacture of motor and generator controllers for low speed electric vehicles and the provision of engineering services. The company had also developed some capabilities in the assembly of prototype electric and hybrid electric vehicles and the production of low volume electric and electronic modules. It provided engineering services to one of its associated companies. From the First Judgment it appears that this associated company was FNR.
Both Metrocab and FNT are alleged to have a joint and several liability to the Triomphe Parties in respect of various promissory notes and loans details of which are contained in a schedule to the judgment of Mr. Justice Teare. The sums advanced were made to enable Mr. Siddiqi and the companies with which he is associated to develop one or more environmentally friendly forms of transport. The Triomphe Parties have submitted proofs of debt in the Metrocab liquidation amounting to US$25,426,271 and in the FNT liquidation amounting to US$21,666,413. The position in connection with these proofs of debt awaits the outcome of the Commercial Court Proceedings in which the claims of the Triomphe Parties in respect of these promissory notes and loans are contested. The Triomphe Parties did apply for summary judgment in respect of their claims. In the First Judgment Mr. Justice Teare refused to grant summary judgment but, having regard to the weakness of the defence, required the defendants to pay US$25m. into court failing which judgment would be entered against...
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