CVL and assignment disputes block summary judgment

The High Court has dismissed a summary judgment application brought by Henderson & Jones Limited, a purchaser of claims from insolvent estates, in proceedings concerning The Priors Group Limited, holding that the respondents have realistic prospects of defending the claims and that the case should proceed to trial.

The decision arose from proceedings brought by Henderson & Jones after it acquired, or purported to acquire, claims from the company’s liquidator. The company had been placed into creditors’ voluntary liquidation in July 2020, but that process is itself disputed by Stephanie and Alastair Chambers, the husband-and-wife respondents.

The Priors Group was incorporated by Mrs Chambers in 2017 and later used by the couple to carry out commercial and domestic construction projects. Its main project was a roughly £1.2 million refurbishment in Cheltenham known as Buskers Court, involving conversion of a former nightclub into 14 apartments. Practical completion was achieved in May 2019, but the company later encountered financial difficulties, partly due to the pandemic and partly due to Mr Chambers’ serious health issues.

In April 2020, Abeds Design and Engineering Limited presented a winding-up petition against the company for £8,378.74, based on what appeared to be a default judgment. The respondents say the debt was disputed on workmanship grounds and that the judgment was obtained opportunistically while Mr Chambers was hampered by ill health. A second creditor, Plasline Dry Lining Limited, later supported the petition for £15,300.

The company was then placed into CVL on 30 July 2020, with Kieran Bourne of Cromwell Insolvency appointed as liquidator. Mrs Chambers, the company’s sole member, maintains that she did not consent to or vote for the CVL and that her signature on key documents was forged. She says she did not learn of the CVL for 2 years. ICC Judge Barber stressed that references to the CVL and the liquidator were subject to that caveat.

On 25 May 2022, the liquidator entered into an assignment agreement with Henderson & Jones, purporting to assign claims belonging to the company and the liquidator against the respondents for £10,000 plus 50% of net recoveries. The respondents challenge both the liquidation and the assignment, and do not accept Henderson & Jones as a legitimate applicant.

The substantive application, issued in January 2023, concerns payments totalling £1.09 million made from the company’s bank account between February 2018 and June 2020. Henderson & Jones alleges that the respondents have not shown the payments were legitimate company expenditure and claims they involved breaches of trust, breaches of fiduciary or other duties, transactions at an undervalue, or preferences.

The respondents deny wrongdoing and say the payments were made for bona fide business purposes. They point to the completion of the Buskers Court project and say that while some payments may appear personal in isolation, the wider picture includes numerous payments made by them from personal accounts on behalf of the company. They argue that a full reconciliation will show the company owes them money, rather than the reverse.

The case had already been adjourned twice on medical grounds connected with Mr Chambers’ health. The first trial date in May 2024 was adjourned after medical evidence showed serious health conditions affecting his memory and concentration. A second trial date in June 2025 was also adjourned after Mr Chambers was admitted to an NHS facility shortly before trial.

Henderson & Jones then issued a summary judgment application in September 2025, seeking judgment on the company claims. The respondents filed evidence in December 2025 in response, including witness statements and exhibits running to 1,906 pages. Henderson & Jones objected to that evidence and argued it was too late, too broad and an abuse of process.

The Court rejected that objection. ICC Judge Barber held that Henderson & Jones had chosen to issue and pursue the summary judgment application, and CPR 24.5 gave the respondents a right to file evidence in answer. Excluding the evidence would be unjust, particularly given Mr Chambers’ status as a vulnerable litigant and the fact that Mrs Chambers had been preparing a separate evidence application before receiving the summary judgment application.

Once the December 2025 evidence was admitted, Henderson & Jones applied to adjourn the trial so it could analyse the new material, assess its impact on the claim and update its payment analysis. The Court granted that adjournment, accepting that the volume and nature of the evidence meant the applicant reasonably needed more time. The judge said the adjournment would also allow Henderson & Jones to reassess its case and could narrow issues or improve settlement prospects.

Despite seeking the adjournment, Henderson & Jones continued to press the summary judgment application. ICC Judge Barber described that stance as “hopeless” in context. The application originally sought judgment for £860,207.21 against both respondents jointly and severally, later adjusted to £858,818.61, plus £55,281.86 against Mr Chambers alone. After failing to exclude the December evidence, Henderson & Jones advanced an alternative claim for £104,134.77 based on selected payments said to be personal or unexplained.

The Court held that the alternative summary judgment case was procedurally unfair because it was only raised in skeleton argument shortly before the hearing. The respondents were entitled to know the case they had to meet, especially given Mr Chambers’ vulnerability. Henderson & Jones had seen details of the personal payments in earlier material months before issuing the application, but had not set out the alternative case in its evidence.

The Court also rejected the argument that personal expenditure from the company account was “necessarily misfeasant”. The respondents had not admitted misfeasance and had not been found to be misfeasant. Their case was that the payments needed to be assessed alongside payments they made from personal accounts for company purposes, which the Court described as not unusual in a small family-run company.

A central reason for refusing summary judgment was the challenge to the validity of the CVL. Mrs Chambers says she did not vote for or know about the company entering CVL, putting in issue the liquidator’s appointment and the later assignment of claims to Henderson & Jones. ICC Judge Barber held that this was not a procedural irregularity that could simply be brushed aside. On the evidence, the issue required trial and cross-examination of material witnesses, including the respondents and the liquidator.

That challenge matters because, if the CVL was invalid, the liquidator’s assignment may also be affected. The Court noted that the assignment of company claims was made by the liquidator as purported agent of the company, while the assignment of liquidator claims was made by him as principal. No ratification process had been undertaken, and even if ratification were possible, it could create further problems if the consideration for company claims and liquidator claims was not severable.

The Court concluded that the respondents have realistic prospects of defending the company claims in their entirety, and that there are other compelling reasons for the whole case, including both company and liquidator claims, to be determined at trial. Summary judgment was dismissed, and the trial was adjourned.

Read the decision here.