Business Mortgage Finance 4 Plc & Ors v Rizwan Hussain & Ors

The court held that the principal defendants never validly acquired any of the offices or rights they claimed in relation to the BMFH securitisation structures and that their subsequent filings, announcements and purported transfers were invalid and of no effect. The judge granted declaratory relief that the Original Directors (Ms Bidel, Mr Speight and Mr Surnam) remain the only directors of the Issuers, that BNY Mellon is the sole trustee under the transaction deeds, that Sanne Group Secretaries (UK) Limited remains the company secretary and that Target remains Special Servicer and Cash/Bond Administrator. The court ordered rectification of Companies House entries under section 1096 and rectification of the PSC registers under section 790V of the Companies Act 2006, and granted wide final injunctions restraining the defendants from holding themselves out as officers, trustees, servicers, noteholders or shareholders of the Issuers or from making further Companies House filings or public announcements.

The judge relied on prior rulings (including those of Zacaroli J, Nugee J and Birss J) and applied ss.1096 and 790V Companies Act 2006 and the principles governing quia timet injunctions. He refused an adjournment sought by the first defendant, Mr Hussain, as his absence was voluntary and the defendants had had ample notice and opportunity to participate. The relief was tailored to prevent further irreparable confusion and damage to the securitisation structures and noteholders.

Background and parties. The Issuers (BMF4, BMF5, BMF6 and BMF7) are note-issuing special purpose vehicles in a group of securitisations (the BMFH securitisations). The Claimants included those Issuers and their majority shareholder, BMF Holdings Limited. The principal defendants (including Mr Hussain, Mr Oyekoya, Mr Kalia, CSEL, Callon Capital and others) were alleged to have conducted a sustained campaign since 2019 to assume offices (directors, trustees, receivers, servicers and the like), to make Companies House filings, to make RNS market announcements and to purport to sell assets or forfeit and sell the Issuers' shares.

Procedural posture and relief sought. Two Part 8 claims were tried together: the Injunctions Claim (seeking declarations and wide final injunctions) and the BMFH Claim (seeking rectification of Companies House registers). The Claimants relied on earlier judgments (notably of Zacaroli J, Nugee J and Birss J) and sought (inter alia) orders under s.1096 Companies Act 2006 to remove inaccurate register entries, rectification of PSC registers under s.790V Companies Act 2006, declarations as to the true directors, trustee, company secretary and servicer, and quia timet injunctions restraining further unlawful acts by the defendants.

Issues framed by the court. The central question was whether the defendants had ever been validly appointed as directors (or otherwise validly assumed other roles) of the Issuers; related issues were whether Companies House filings and RNS announcements made by or on behalf of the defendants were valid, whether any purported sales or forfeitures of shares or of securitised assets had valid effect, and whether final declarations, rectification and injunctive relief were appropriate and proportionate.

Court’s findings and reasoning. The court concluded that the defendants were never validly appointed as directors of the Issuers: neither shareholders’ ordinary resolutions under Article 70 nor appointments by the board under Article 71 had taken place in a valid form. The judge accepted and applied the reasoning of earlier decisions (Zacaroli J, Nugee J and Birss J) that parallel steps purporting to appoint trustees, receivers or purchasers were ineffective and that Roundstone and Highbury had not obtained good title. The Companies Act remedies were engaged: the Shelton Street registered office filings, the TM02/AP04/AP01/AP02 filings, the purported noteholder resolution filed for BMF6, and the PSC entries were factually inaccurate or derived from invalid acts and warranted removal or rectification under ss.1096 and 790V. The court found a real and substantial risk of further uncompensable damage (confusion to investors, misdirected service, continued litigation costs) if the defendants were not restrained and therefore granted quia timet injunctions carefully tailored to prevent further unlawful holding out, filings, announcements and interference with accounts or assets. The judge considered and rejected the first defendant’s application to adjourn the trial on fairness grounds, finding that he had full notice and opportunities to participate and that an adjournment would prejudice the Claimants and the noteholders.

Subsidiary findings. The court addressed and upheld determinations that: (a) Mr Oyekoya was not and never was a trustee under the Deeds; (b) Roundstone did not acquire the legal estate and could not establish ostensible or actual authority of those who purported to act for BMF6; (c) Highbury never validly acquired shares and could not rely on purported forfeitures or retrospective ratification; and (d) earlier costs orders awarded to the Claimants remain unpaid.

This first-instance court allowed the Claimants’ claims. The court declared that the defendants had no authority and that the contested appointments, terminations, filings, RNS announcements and purported transfers were invalid and of no effect; it ordered rectification of Companies House entries under section 1096 and of the PSC registers under section 790V of the Companies Act 2006; and it granted wide final injunctions restraining the defendants from holding themselves out as officers, trustees, noteholders, servicers or shareholders of the Issuers or from making further Companies House filings, RNS announcements or interfering with the Issuers’ bank accounts or assets. The rationale was that the defendants were strangers to the securitisations, prior judicial rulings established the invalidity of their asserted roles, and there was a real risk of further irreparable confusion and damage that justified quia timet relief.