Apex Global Management Ltd & Anor v Fi Call Ltd & Ors

In exceptional circumstances, the court may determine an issue in continued section 994 proceedings where that determination is necessary to give effective relief under section 996 and to establish rights in a company’s liquidation. A default judgment does not prevent such a determination where the issue concerns the company’s creditors and the result may otherwise produce double recovery. The ordinary standard at trial is the balance of probabilities. Repeat applications are ordinarily barred by finality and proportionality, but may proceed where materially changed circumstances and newly established facts make that necessary in the interests of justice. A fraud challenge which cannot be summarily established must generally be pursued in separate proceedings.

This supplemental first-instance judgment concerned continuing proceedings arising from a petition under section 994 of the Companies Act 2006 and the winding up of Fi Call Limited. The dispute concerned whether payments made by Prince Abdulaziz into Fi Call’s accounts represented loans or contributions by him, or payments made on behalf of the Apex parties which discharged his obligation to account for share-sale proceeds.

The court considered whether Global Torch could obtain determination of that issue in the Counterclaim, whether Prince Abdulaziz could set aside an existing default judgment, whether a repeat application was procedurally permissible, and what should happen to money held as security following the Supreme Court proceedings.

1. Determination in the Counterclaim. The issue could properly be determined in the continuing trial. Global Torch had a direct shareholder interest in identifying Fi Call Limited’s creditors, and determination was necessary to give effective relief for failures to keep proper accounting records and to establish rights in the liquidation. The court relied on its powers under sections 994 and 996 of the Companies Act 2006, including the power to grant relief not specifically sought, as recognised in Re Neath Rugby Ltd (No 2) [2009] EWCA Civ 291.
2. The appropriate standard for disputed facts was the balance of probabilities. The Liquidator’s investigation and the newly admitted banking documents were admissible in the exceptional procedural circumstances. The evidence showed that the payments were made pursuant to the share transaction, became company money, and were accepted by Mr Almhairat as an accretion to Fi Call’s funds. They therefore discharged the Prince’s obligation to account, although it was unnecessary to decide whether the contribution was legally a loan or capital subscription.
3. The default judgment had to be set aside because its enforcement would produce double recovery. The Prince’s repeat application was permitted despite the ordinary rule of finality. That rule, supported by Thevarajah v Riordan [2015] UKSC 76 and Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 WLR 485, yields only in wholly exceptional circumstances. Here, the procedural context had changed, material evidence had emerged, and refusing reconsideration risked injustice.
4. The fraud issue did not arise. If the earlier conclusions had been wrong, any fraud challenge would have required separate proceedings and a trial. The approach in Gentry v Miller [2016] EWCA Civ 141 supported leaving such a claim to a fresh action rather than determining fraud summarily.
5. The security was to be released to Prince Abdulaziz. The court provisionally considered that there should be no order for costs in the Supreme Court, with final costs directions to follow further submissions.

The judgment records earlier proceedings, including a main judgment of the High Court at [2015] EWHC 3269 (Ch) and an appeal culminating in the Supreme Court decision in Prince Abdulaziz v Apex Global Management Ltd & Anor [2014] UKSC 64. This supplemental judgment determined the issues left for the High Court.