Bhundia v Dhar (Re Five Delta Ltd – Insolvency Act 1986) [2025] EWHC 1227 (Ch)

Samuel McNeil (instructed by Hugh Cartwright & Amin) for the Respondent

ICC Judge Barber

• This application is concerned with creditors’ voting rights in the context of a creditors’ voluntary liquidation. By Application Notice dated 22 December 2023, the Applicant, as a creditor of Five Delta Limited (‘the Company’) appeals the decisions of the Respondent (1) to only admit the Applicant’s proof of debt for voting purposes in the sum of £104,426.19, rather than £393,423.98 and (2) to admit proofs of debt from (i) the Respondent, for £16,434.98; (ii) Reliable Housing Ltd (‘Reliable Housing’), for £94,800 plus VAT: and (iii) Kajaine Accountants Limited (‘Kajaine Accountants’) for £11,700 for voting purposes, at a creditors’ meeting held on 12 December 2023.

• The application is brought against Mr Dhar (the sole director of the Company), as chair of the creditors’ meeting.

• The Applicant maintains that, had the Respondent dealt correctly with the proofs lodged, the Applicant would have enjoyed more than 50% of the vote and the Applicant’s choice of liquidators (Mr Wood and Mr Haskew of Begbies Traynor (Central) LLP) would have been appointed at the meeting.

• The liquidator in fact appointed, Andreas Arakapiotis of Kallis Insolvency Practitioners, is not a party to the application and has played no part in these proceedings since his attendance through counsel at the first directions hearing. Reliable Housing and Kajaine Accountants have each filed evidence.

• There is no cross-appeal against the admission to proof of the Applicant in respect of the sum of £104,426.19.

Background

• The Company was incorporated on 19 April 2019 with a view to trading in property development and construction. The Respondent is sole director and shareholder of the Company. The Respondent had previously worked in the financial services industry and later (acting through various corporate vehicles) moved into property development.

• The Company remained dormant initially. It filed dormant accounts for the year ending 30 April 2020 and its accounts for the year ending 30 April 2021 show minimal activity, with assets reported as £677 and creditors as £2,052. It opened two bank accounts with Tide bank numbered 15765837 (‘the main account’) and 16160343 in or about 2021. As at 7 April 2021, the main account had a credit balance of £8.00.

• The Applicant is a solicitor. It is common ground that one of his areas of practice is construction law. He has known the Respondent since 2012 and has worked on several renovation projects with him. The Applicant would usually source the funding whilst the Respondent (acting through various corporate vehicles) would manage the renovation projects with the aid of subcontractors.

• In early April 2021, the Respondent became aware of a property known as 4 Princess Gate Mews, London SW7 2PS (‘the Property’). The Property had renovation opportunity and was on sale for £2.4m. He raised the matter with the Applicant, who then purchased the Property with assistance from funders.

• On 7 September 2021, the Applicant entered into a JCT contract (‘the Contract’) with the Company for significant renovations of the Property (‘the Project’). The original timeline for the Project ran to the end of September 2022. The Contract was ‘open book’, with materials, subcontractors and labour to be passed on at cost, but with agreed additional lump-sum payments to be paid to the Company as certain milestones were reached in the Project, as set out in ‘Addendum A’ to the Contract.

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