Top Brands & Anor v Sharma
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- LORD JUSTICE VOS
- SIR STEPHEN SEDLEY
Areas of Law
- Civil Procedure
- Corporate Law
- Insolvency Law
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
This case is an appeal by Mrs. Gagen Sharma, former liquidator of Mama Milla Limited (MML), against a decision that refused to adjourn a trial and determined she had no standing to challenge a Consent Order. It involves the legal principles of standing to challenge proofs of debt under insolvency law, the court's inherent jurisdiction to set aside judgments obtained by fraud, and procedural aspects of insolvency proceedings. The Court of Appeal upheld the lower court's decision, concluding that only the current liquidator or creditors had the jurisdiction to challenge the companies' proofs and refused adjournment.
J U D G M E N T
LORD JUSTICE VOS:
Introduction
This is an appeal from the order of HHJ Simon Barker QC dated 16 May 2014, now only a week ago, refusing to adjourn the trial of this misfeasance application made under section 212 of the Insolvency Act 1986 ("section 212").
The Appellant is the erstwhile liquidator of Mama Milla Limited ("MML"), MrsGagen Sharma ("the Appellant"). The Applicants in the substantive misfeasance proceedings, Top Brands Limited which is incorporated in Malta and Lemione Services Limited which is incorporated in Cyprus(together the “companies” or the “Respondents”), seek an order that the Appellant repays MML some £548,074.56 ("the Sum") allegedly paid away as a result of misfeasance. The companies are both controlled by a MrDildar Singh and his manager, MrPardeepHeer.
The Appellant seeks to appeal from the judge's decision on two substantive grounds. First, that the judge was wrong to hold that the Appellant had no standing to challenge a Consent Order that she had entered into on 28 September 2012 as liquidator of MML accepting that the companies were creditors of MML ("the Consent Order"). The judge says the Appellant ought to have held that she had sufficient interest to challenge the Consent Order under the court's inherent jurisdiction as having been brought about by fraud. Secondly, the Appellant contends that the judge was wrong to refuse to adjourn the trial so that her challenge to the Consent Order could be heard at the same time as the substantive misfeasance proceedings.
The Court of Appeal will not normally interfere with trial management decisions made by first instance judges. It is almost always better to leave such matters to the trial judge. As will appear, however, the reason for this appeal is really because matters have developed so fast that some technical legal questions have become intertwined with purely procedural ones.
I should deal first with the somewhat complex chronological background to this appeal, but before doing so it is useful to understand the statutory foundation to the applications that have been made to the court.
Misfeasance Proceedings
The misfeasance proceedings were brought under section 212 of the Insolvency Act 1986 which provides as follows:
"(1)This section applies if in the course of the winding up of a company it appears that a person who -
(a) is or has been an officer of the company
(b) has acted as liquidator or administrative receiver of the company, or
(c) not be