Official Receiver & Anor v Nadeem (Re Bodystretch (UK) Ltd – Insolvency Act 1986) [2023] EWHC 2735 (Ch)

Mr Ben Channer (direct access) for the Respondents

ICC Judge Mullen :

By his application notice dated 9th March 2021 the first applicant, the Official Receiver, as liquidator of Bodystretch (UK) Limited (“Bodystretch” or “the Company”), brought proceedings against the respondent, Mr Omar Shahzaad Nadeem, pursuant to sections 212, 238 and 239 of the Insolvency Act 1986 (“IA 1986”). The proceedings concern payments made to Mr Nadeem prior to September 2015 and the disposition of the proceeds of sale of the Company’s principal asset, its trading premises at Unit 1, Genesis Business Park, Rainsford Road, London NW10 7RG (“the Property”), in September 2015.

Bodystretch was incorporated on 7th June 2002 and manufactured and sold women’s clothing to well-known high street retailers, including C&A and the Arcadia Group. Mr Nadeem was the Company’s sole director and was its sole shareholder until June 2011 when his wife became the holder of one half of its issued share capital. A petition was presented for its winding up on 2nd March 2016 and Bodystretch was placed into compulsory liquidation on 10th May 2016. The Company had however ceased trading at around the end of September 2015, shortly after selling the Property for £725,000, receiving £426,382.82 by way of net proceeds of sale on 21st September 2015.

The application notice was supported by the witness statement of the Deputy Official Receiver, Mr Peter Joicey, dated 8th March 2021, which exhibited draft points of claim. On 10th June 2021 an order by consent was made by Deputy ICC Judge Frith directing the filing and service of points of claim in the form of the draft, followed by points of defence and points of reply. The same order provided for disclosure, a stay for alternative dispute resolution and, if attempts at settlement were unsuccessful, exchange of witness evidence. In the event, Mr Nadeem did not disclose any documents or file or serve any witness statements. He has said that he has had insufficient access to the Company’s documents to defend the application.

The Official Receiver’s complaint is in four parts. First, he says that Bodystretch was insolvent in the two years prior to the presentation of the winding up petition, having suffered the loss of at least two important clients. During this period payments (“the Pre-September Payments”) were made to Mr Nadeem as follows:

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