Mohamed Hassan El Haddad v Khulood Abdulla Hassan Al Rostamani & Ors

A bankruptcy court may look behind a judgment debt where there is a coherent allegation that the judgment was obtained by fraud. Permission to appeal should nevertheless be refused where the alleged fraud is unsupported, the relevant evidence was previously available, and the lower court properly exercised its discretion.

A matter already considered on an application concerning a statutory demand cannot ordinarily be reopened at the bankruptcy hearing unless there has been a material change of circumstances. Cross-claims against one petitioning creditor do not constitute a defence to petitions brought by different creditors without mutuality of claims. The bankruptcy scheme’s removal of assets from the bankrupt’s control is not, without more, an abuse intended to stifle separate litigation.

This was an oral renewal application for permission to appeal a bankruptcy order made by ICC Judge Greenwood on 31 July 2025. Permission had previously been refused on the papers by Leech J.

The applicant relied on four reformulated grounds concerning alleged fraud affecting costs orders, cross-claims raised in separate proceedings, the absence of claims against certain petitioning creditors, and an alleged improper purpose of stifling those proceedings. The court considered whether any ground had a real prospect of success or whether there was a compelling reason for an appeal.

1. Permission refused. None of the four grounds had a real prospect of success, and no compelling reason justified an appeal.
2. The bankruptcy court had jurisdiction and discretion to look behind judgment debts allegedly obtained by fraud. That discretion was not wrongly exercised. The applicant advanced no coherent case that the three costs orders were procured by fraud. The largest order followed an accepted deliberate failure to give full and frank disclosure, and the other orders were likewise unsupported by a coherent fraud case.
3. The report of Dr Khrais was not fresh evidence. It had previously been relied on in an appeal in the Partnership Proceedings and had been considered by Fancourt J in the Fraud Proceedings. The court therefore saw no basis for a different assessment of its relevance.
4. Under the Turner principle, matters considered when the statutory demand was challenged could not be revisited at the petition hearing absent a material change of circumstances. The KBD Proceedings and the Profit Letter had already been before ICC Judge Mullen. The necessary change had therefore not been established.
5. Cross-claims against the first respondent did not provide a defence to petitions brought by the second to seventh respondents. There was no mutuality of claims, and the alleged claims against those respondents remained inadequately articulated. Although the merits threshold was low, it had not been met.
6. The petitioning creditors’ recovery of long-outstanding costs, together with the bankruptcy estate’s value, undermined the alleged stifling purpose. Removal of assets from the bankrupt’s control was an intended consequence of the statutory scheme, leaving the trustee to decide what should happen to the separate proceedings. That did not amount to an abuse or a compelling reason for an appeal. The respondents’ costs were ordered to be paid as expenses in the bankruptcy.

• Chancery Appeals: Oral renewal application for permission to appeal refused on all four grounds.
• High Court: Leech J refused permission to appeal on the papers on 11 March 2026.
• Bankruptcy Court: ICC Judge Greenwood made the Bankruptcy Order on 31 July 2025.
• Statutory demand proceedings: ICC Judge Mullen refused to set aside the statutory demand; permission was later refused by ICC Judge Mullen and Rajah J.