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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Bhundia v Dhar (Re Five Delta Ltd - Insolvency Act 1986) [2025] EWHC 1227 (Ch) (23 May 2025)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/2025/1227.html
Cite as: [2025] EWHC 1227 (Ch)

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Neutral Citation Number: [2025] EWHC 1227 (Ch)
CR 2023 007278

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST
IN THE MATTER OF FIVE DELTA LIMITED - IN CREDITORS' VOLUNTARY LIQUIDATION
AND IN THE MATTER OF THE INSOLVENCY ACT 1986

Royal Courts of Justice
7 The Rolls Building
Fetter Lane
London
EC4A 1NL
23/05/2025

B e f o r e :

ICC JUDGE BARBER
____________________

Between:
SUNDEEP KANJI BHUNDIA
Applicant
and –

SANJAI DHAR
Respondent

____________________

Amit Gupta (instructed by Ashfords LLP) for the Applicant
Samuel McNeil (instructed by Hugh Cartwright & Amin) for the Respondent

Hearing dates: 26- 27 February 2025, 4 and 7 April 2025

____________________

HTML VERSION OF APPROVED JUDGMENT
____________________

Crown Copyright ©

    This judgment was handed down remotely by email and MS Teams. It will also be sent to The National Archives for publication. The date and time for
    hand-down is 9.00 a.m. on 23 May 2025.

    ICC Judge Barber

  1. This application is concerned with creditors' voting rights in the context of a creditors' voluntary liquidation. By Application Notice dated 22 December 2023, the Applicant, as a creditor of Five Delta Limited ('the Company') appeals the decisions of the Respondent (1) to only admit the Applicant's proof of debt for voting purposes in the sum of £104,426.19, rather than £393,423.98 and (2) to admit proofs of debt from (i) the Respondent, for £16,434.98; (ii) Reliable Housing Ltd ('Reliable Housing'), for £94,800 plus VAT: and (iii) Kajaine Accountants Limited ('Kajaine Accountants') for £11,700 for voting purposes, at a creditors' meeting held on 12 December 2023.
  2. The application is brought against Mr Dhar (the sole director of the Company), as chair of the creditors' meeting.
  3. The Applicant maintains that, had the Respondent dealt correctly with the proofs lodged, the Applicant would have enjoyed more than 50% of the vote and the Applicant's choice of liquidators (Mr Wood and Mr Haskew of Begbies Traynor (Central) LLP) would have been appointed at the meeting.
  4. The liquidator in fact appointed, Andreas Arakapiotis of Kallis Insolvency Practitioners, is not a party to the application and has played no part in these proceedings since his attendance through counsel at the first directions hearing. Reliable Housing and Kajaine Accountants have each filed evidence.
  5. There is no cross-appeal against the admission to proof of the Applicant in respect of the sum of £104,426.19.
  6. Background

  7. The Company was incorporated on 19 April 2019 with a view to trading in property development and construction. The Respondent is sole director and shareholder of the Company. The Respondent had previously worked in the financial services industry and later (acting through various corporate vehicles) moved into property development.
  8. The Company remained dormant initially. It filed dormant accounts for the year ending 30 April 2020 and its accounts for the year ending 30 April 2021 show minimal activity, with assets reported as £677 and creditors as £2,052. It opened two bank accounts with Tide bank numbered 15765837 ('the main account') and 16160343 in or about 2021. As at 7 April 2021, the main account had a credit balance of £8.00.
  9. The Applicant is a solicitor. It is common ground that one of his areas of practice is construction law. He has known the Respondent since 2012 and has worked on several renovation projects with him. The Applicant would usually source the funding whilst the Respondent (acting through various corporate vehicles) would manage the renovation projects with the aid of subcontractors.
  10. In early April 2021, the Respondent became aware of a property known as 4 Princess Gate Mews, London SW7 2PS ('the Property'). The Property had renovation opportunity and was on sale for £2.4m. He raised the matter with the Applicant, who then purchased the Property with assistance from funders.
  11. On 7 September 2021, the Applicant entered into a JCT contract ('the Contract') with the Company for significant renovations of the Property ('the Project'). The original timeline for the Project ran to the end of September 2022. The Contract was 'open book', with materials, subcontractors and labour to be passed on at cost, but with agreed additional lump-sum payments to be paid to the Company as certain milestones were reached in the Project, as set out in 'Addendum A' to the Contract.
  12. Addendum A to the Contract provided for the following lump sum payments to be made:
  13. '£50k on completion of one month of earth moving equipment on site and ready to go.
    £50k on completion of the concrete shell and ground floor slab and upper floors completely stripped and bare.
    £50k on completion of the install of the new roof and roof terrace
    £40k upon receipt of the Completion Certificate
    £10k retention after 12 months or on completion of the sale of the house if earlier'.
  14. Addendum A also recorded payment of a sum of £20,000 (paid at the end of May 2021) and provided for a further sum of £20,000 to be paid upon receipt of the Completion Certificate for the Project. As explained in evidence, these were sums which the Respondent considered remained due from the Applicant under an earlier project called 'Ethos' that the parties had undertaken together. The Applicant had contested these at the time but, as a quid pro quo for taking on the Project, the Respondent had wanted them paid. The parties had accordingly agreed that one tranche of £20,000 would be paid 'up front' (ie in May 2021) and that the other tranche of £20,000 would be paid on receipt of the Completion Certificate for the Project.
  15. Reliable Housing was the subcontractor on the Project. Mr Allaraj, the sole director and shareholder of Reliable Housing, has known the Respondent since 2013. He is a tenant of a property owned by the Respondent's family known as 51 Charlton Church Lane London SE7 7AE, which for some time was also the address of the Company's registered office and its billing address. He has worked with the Respondent and various of his companies on a number of projects. His evidence was that the projects always followed a similar pattern, with the Respondent identifying a renovation opportunity and then orally engaging Reliable Housing to source the staff and undertake the day-to-day construction and managerial work of the proposed development.
  16. The Company instructed Reliable Housing to act as the subcontractor on the Project in May 2021, although substantive works did not commence until much later. Mr Allaraj's evidence was that the Company and Reliable Housing reached an oral agreement pursuant to which Reliable Housing would provide the construction work at cost to the Company and in return would receive payment for such work at cost together with a £75,000 management fee. To track incurred wage costs, Reliable Housing maintained a weekly attendance report setting out the workers retained and the wages payable for each week. Reliable would then invoice from time to time. The invoices for the Project bore the subject heading '4 Princess Gate Mews' or '4PGM'.
  17. Planning permission for the works to the Property was not granted until December 2021. At that stage party wall awards were still outstanding. In March 2022, the necessary party wall awards were obtained. It was not until early April 2022 that substantive notifiable works on the Property could commence: Dhar (1) paragraph 32.
  18. The scope of the works to be carried out were sufficiently substantial to qualify for 'new build' classification for VAT purposes. This meant that the Applicant was billed at 0% VAT by the Company. Whilst, in theory, this should mean that all suppliers billed the Company at 0% VAT for works on the Property, this did not work in practice; many suppliers and contractors did charge the Company VAT, which the Company would have to pay from existing cash resources and then reclaim from HMRC. This caused the Company cashflow difficulties.
  19. The Applicant made the first Addendum A payment of £50,000 due to the Company under the Contract on 31 October 2022. No invoice was issued by the Company to the Respondent in respect of this sum. At the request of the Company, acting by its sole director the Respondent, this sum was not paid into either of the Company's bank accounts but was instead paid into the bank account of the Respondent's father. When asked about this in oral testimony, the Respondent confirmed that the Company did not pay him a salary and that no dividends were declared. This was borne out by the Company's filed accounts. When asked why, in such circumstances, the first Addendum A tranche payment of £50,000 due to the Company under the Contract was paid into his father's bank account rather than one of the Company's bank accounts, the Respondent stated that he had treated the £50,000 as 'compensation' for his own time. The Respondent's evidence was that 'no dividends were called, it was sort of informal'.
  20. The Project did not run smoothly. It did not run to budget (each side blames the other for that) or to time. The Company made no payments from its bank accounts to Reliable Housing from 3 August 2022 to 2 May 2023. Mr Allaraj's evidence was that there came a point at which the Respondent asked him not to invoice; the Respondent told him that the Company could not afford to pay him.
  21. In February 2023, the parties fell out and all work on the Project was suspended. In March 2023, the Applicant and the Company agreed to vary the Contract. On or about 13 March 2023, it was agreed (inter alia):
  22. (1) that the Applicant would pay the Company the sum of £349,000 (including £205,500 for an invoice for the works and £50,000 for the second Addendum A payment due to the Company, the latter of which was, at the request of the Company acting by the Respondent, to be paid directly to Mr Allaraj) ('the Payment');

    (2) that, once the Payment was made, the Company would return to the Property to complete the remaining works, with a new completion date of 12 May 2023;

    (3) that the Company would pay liquidated delay damages of £1,000 per day to the Applicant if it failed to complete the works by the new completion date of 12 May 2023. The revised completion date was later pushed back by agreement to 23 May 2023, but little turns on that.

  23. Pursuant to the agreement reached in March 2023, the Applicant paid the second 'tranche' payment of £50,000 (payable to the Company under Addendum A) directly to Mr Allaraj on 31 March 2023. The Applicant also arranged through one of his lenders a payment into the Company's main bank account of £299,783 on 3 April 2023. At some point (it is unclear precisely when), Mr Allaraj was also paid a further £25,000 by the Respondent or the Company. Mr Allaraj maintains that the £50,000 and £25,000 payments together represent the £75,000 management fee payable by the Company to Reliable Housing for the Project under the terms of the oral agreement reached at the outset (see [14] above). Reliable Housing had not invoiced the Company for the management fee; as explained by the Respondent in his oral testimony, payment of the management fee to Mr Allaraj was dealt with 'informally'.
  24. Work on the Project resumed in April 2023. The Respondent and Mr Allaraj maintained that by that point (April 2023), the Company owed Reliable Housing a considerable sum for unpaid wages for labour on the Project. Mr Allaraj's evidence was that in light of the long-standing professional relationship which he had with the Respondent and the fact that the Respondent and his various companies had always paid him on past projects, he agreed to defer payment of the sum owed for past wages on condition that any future wages on the Project (from early April 2023 onwards) would be paid promptly. His evidence was that the Respondent agreed to this and assured him that he would pay the historic wages balance once the Company had received a VAT refund. The Respondent gave evidence broadly supportive of that given by Mr Allaraj in these respects.
  25. The revised completion date of 23 May 2023 was not met. Whilst Mr Allaraj stayed on a little longer to address some snagging items, the Company and the builders left the Property on or about 26 May 2023 and did not return until 25 August 2023.
  26. In the meantime, in June 2023, the Applicant asked his personal accountant, Mr Akram, to review the costings for the Project. This was an open book, at cost project and the Applicant wanted to check that the money he had arranged to be paid into the Project was all properly accounted for. Among other things, Mr Akram was asked to undertake a review and reconciliation of the Company's bank statements, invoices and timesheets relating to the Project. Over the course of the next six months, Mr Akram made repeated requests to the Respondent for provision of the information and documentation (including a full set of bank statements) required to undertake the review. Whilst promising to cooperate on several occasions, the Respondent did not fully engage with Mr Akram's requests.
  27. As a result of the Company's failure to carry out the works under the Contract, by letter dated 25 August 2023, the Applicant terminated the Contract with immediate effect. The letter confirmed that the Applicant would instruct an alternative contractor to complete the works and make good the defects, warned that he would be seeking damages, and required the Company to 'provide copies of all documentation and information relating to the Property, works and installations', reserving fully all rights and remedies.
  28. Shortly thereafter, the Applicant commenced an adjudication against the Company. The remit of the adjudication was extremely narrow; it was simply for liquidated delay damages at a rate of £1,000 per day for the period 24 May 2023 (the agreed completion date) to 25 August 2023 (the date of termination of the Contract) plus interest. The Company contested the adjudication on various grounds, including jurisdiction. The adjudicator (among other things) found (at [69]) that the Project was not completed as per the Contract as on 23 May 2023 (the agreed revised completion date) and that the Company's failure to achieve Practical Completion was a breach of the Contract. The adjudicator further found (at [86]) that the Company was in breach of the Contract by leaving the Property after 26 May 2023. The Applicant was awarded £104,426.19 on 1 November 2023, payable on or before 8 November 2023. This sum simply comprised liquidated delay damages for 94 days from 24 May 2023 (the agreed completion date) to 25 August 2023 (the date of termination of the Contract) at the agreed rate of £1,000 per day, plus interest and costs.
  29. In November 2023, shortly after the Adjudicator's decision, the Respondent contacted the Company's accountants, Kajaine Accountants, who recommended the Company be placed into liquidation.
  30. On 24 November 2023, the Company instructed Kallis & Company Limited ('Kallis'), a firm recommended by Kajaine Accountants, to assist in the liquidation of the Company, including convening a meeting of the Company's creditors.
  31. On 4 December 2023, Kallis wrote to all creditors giving notice of a proposed meeting to take place on 12 December 2023 and requested that all creditors submit a proof of debt form 'no later than 4 PM on the business day before 12 December 2023'.
  32. In the run up to lodging a proof, the Applicant asked his accountant, Mr Akram, to write up a provisional analysis of the sums paid by or on behalf of the Applicant to the Company in respect of the Project and the sums spent by the Company on the Project. The analysis was expressly provisional as it was based on incomplete information; the Respondent having failed to provide the documentation and information requested for the 'open book' Project, notwithstanding repeated requests. The results of that analysis were summarised in a letter from Mr Akram dated 8 December 2023.
  33. Mr Akram's letter of 8 December 2023 confirmed the review that he had been instructed by the Applicant in June 2023 to undertake and outlined his provisional conclusions in appropriately caveated form. The letter stated that the Respondent had been asked for the missing information 'on several occasions over the past 6 months' and that, whilst the Respondent had 'verbally agreed to cooperate', he had 'never actually assisted with any of the queries or provided any missing documents in relation to the financial review'.
  34. Under a sub-heading of 'Information Still Missing and Required to be Produced', the letter of 8 December 2023 listed several items still required, including (at 5.3) missing supplier invoices for payments totalling £102,471.64 made from the Company's bank accounts for which no supporting documents or invoices could be traced. The list also included a request for a complete set of all relevant bank statements for the Company's accounts.
  35. Annexed as Appendix B to Mr Akram's letter of 8 December 2023, under the heading 'Supplies paid without invoices' was a detailed list of the sums paid to given suppliers for whom no invoices or supporting documents had been provided to vouch that the payments in question were legitimate payments which related to the Project. The list ran to over 2 A4 pages and totalled £102,471.64.
  36. The Applicant's solicitors, Ashfords LLP, sent Mr Akram's letter of 8 December 2023 to Kallis via email on 11 December 2023, together with the Applicant's proof of debt and other supporting documents contained in a 111-page bundle. Also included were liquidator consents for the Applicant's chosen office-holders, Mr Wood and Mr Haskew of Begbies Traynor (Central) LLP.
  37. The Applicant's proof of debt dated 11 December 2023 claimed the sum of £439,589.38, made up of the following sums:
  38. (1) the adjudication sum of £104,426.19 ('the adjudication award');

    (2) interest and fees under a loan facility in the sum of £46,165.40 ('the post-termination delay loss claim');

    (3) overpayments to the Company calculated at £266,456.43 ('the overpayments');

    (4) additional losses in the sum of £20,621.36 ('additional losses'), comprising:

    (a) £5,940 paid to Camerich UK Limited for furniture which was never delivered to the Property;

    (b) £7,930.86 for replacement Gaggenau appliances which were never delivered to the Applicant or the Property; and

    (c) £6,750.50 for snagging costs.

  39. Three other proofs of debt were circulated for consideration at the remote creditors meeting, comprising
  40. (1) the Respondent's proof (£16,434.95), claimed in respect of a director's loan account;

    (2) Reliable Housing's proof (£113,760), claimed in respect of labour during the course of the Project; and

    (3) Kajaine Accountants' proof (£11,700), claimed in respect of work done as the Company's accountant. Kajaine Accountants' proof was lodged after the deadline, following chasing from Kallis.

  41. At the creditors' meeting of 12 December 2023, most of the Applicant's proof of debt was rejected for voting purposes; the only sum admitted to proof was the adjudication award. The proofs of debt lodged in respect of the Respondent, Reliable Housing and Kajaine Accountants were all admitted in full.
  42. The summary of the voting position in respect of the appointment of Andreas Arakapiotis, based on the Respondent's decisions on the proofs lodged, was as follows:
  43. For (3 alleged creditors) £141,894.95: 57.60%

    Against (the Applicant) £104,426.19: 42.40%

  44. The Applicant maintains that, as a matter of arithmetic, to succeed on his appeal, such that his proof carries at least 50% of the votes, the Applicant needs simply (i) an increase in his voting rights by £37,465.77; or (ii) a reduction on the votes in favour in the sum of £37,465.77; or (iii) a combination of both.
  45. Procedural History

  46. The application was issued on 22 December 2023, supported by the witness statement of Mr Bhundia dated 22 December 2023. By his original application notice, the Applicant maintained (among other things) that his proof should have been admitted in the sum of £439,589.38 rather than £104,426.19. The figure of £439,589.38 was later reduced by amendment.
  47. At the time of issue, the application was allocated an initial directions hearing date of 19 April 2024.
  48. Shortly before the first directions hearing, the Applicant filed and served an updating witness statement, dated 12 April 2024.
  49. At the first directions hearing on 19 April 2024, Deputy ICCJ Schaffer granted the Applicant permission to amend the application and dispensed with formal re-service. He also directed that Reliable Housing and Kajaine Accountants be given notice of the application and gave permission for each to be joined as parties on an application to be filed by 4pm on 10 June 2024. Directions were given for the filing of evidence in response and reply by 24 June 2024 and 8 July 2024 respectively. The matter was listed for a non-attendance pre-trial review on 15 July 2024.
  50. The timetabling for evidence was subsequently varied in minor respects by one or two consent orders, but nothing turns on that.
  51. Neither Reliable Housing nor Kajaine Accountants applied to be joined as parties. Both Mr Allaraj of Reliable Housing and Mr Shah of Kajaine Accountants filed witness statements, however. Mr Shah's witness statement dated 10 May 2024 and Mr Allaraj's witness statement dated 24 June 2024 were both filed at court by the Respondent's solicitors on 26 June 2024. The Respondent's own witness statement dated 26 June 2024 was filed on the same date.
  52. The Applicant filed a further witness statement dated 10 July 2024. On 12 July 2024, the Applicant also filed a witness statement of Mr Akram, his accountant, dated 12 July 2024.
  53. In the run-up to the non-attendance pre-trial review fixed for 15 July 2024, the Applicant's solicitors and the Respondent's solicitors each filed listing certificates. Both certificates certified that the matter was ready for hearing.
  54. At the non-attendance pre-trial review of the application which took place on 15 July 2024, the matter was listed for trial on 25 and 26 February 2025. The sealed order dated 15 July 2024, confirming the trial dates set of 25 and 26 February 2025, was sent by the Court to the parties on 22 July 2024. The parties therefore knew the trial dates allocated by the end of July 2024.
  55. On 12 February 2025, however, very shortly before trial, the Respondent issued an application for specific disclosure. The specific disclosure application was mainly targeted at documents relating to one portion of the Applicant's proof (approximately £46,165.40) relating to the post-termination delay loss claim. It also, however, sought disclosure of 'all documents' spanning the calendar month of December 2023 relating to legal advice given to the Applicant 'concerning the nature and conduct of the creditor's meeting' on the basis that (i) at paragraph 15 of Bhundia 1, the Applicant had mentioned having been advised by his solicitors that 'it is unusual for a virtual meeting to be convened without a request from creditors' and that (ii) at paragraph 18 of Bhundia 1, the Applicant had mentioned 'a note' provided by his solicitors which set out the basis upon which claims should and should not be admitted to vote at a creditors meeting. The specific disclosure application was supported by a witness statement of the Respondent dated 12 February 2025. This was listed for hearing in the ICC Judge Interim Applications list on Thursday 20 February 2025 with a time estimate of 2 hours. Trial was due to start on the following Tuesday (25 February).
  56. The Applicant initially opposed the specific disclosure application and instructed Mr Gupta of Counsel to prepare a skeleton argument. In readiness for the 20 February hearing, Mr Gupta lodged a 12-page skeleton argument dated 19 February ('the Disclosure Skeleton'). I was not referred at trial to any skeleton argument prepared by the Respondent for his specific disclosure application. From reviewing the court file, it does not appear that the Respondent filed a skeleton argument for the 20 February hearing.
  57. By paragraph 8 of his Disclosure Skeleton, Mr Gupta maintained that the specific disclosure application had been made 'unacceptably late', contending that (1) the main application was issued in December 2023 (2) it would have been patently obvious to the Respondent, if he had wanted further documents, that he could and should have sought them at the beginning of January 2024 (3) there had been a directions hearing in April 2024 at which no request had been made for the documents, notwithstanding that the Respondent had had the Applicant's evidence for over 3 months by that date (4) even allowing the Respondent 'a wide berth', he should have known that he wanted disclosure by June 2024 at the latest (when he served his statement in response to the substantive application) and (5) that evidence had closed in July 2024.
  58. Mr Gupta also referred in his Disclosure Skeleton to commentary in the 2024 White Book at paragraph 31.12.1.1, in which it is observed that 'The lateness of an application may undermine its claim that the documents are in fact necessary for the proceedings', citing Harris v The Society of Lloyds [2008] EWHC 1433 (Comm) at [9] and [10].
  59. Mr Gupta maintained that there was insufficient time for the Respondent to conduct a search for any documents in any event, given that in the intervening time, the Respondent had to travel from Dubai in readiness for the forthcoming trial. Mr Gupta (at paragraph 13 of his Disclosure Skeleton) went on to express concern that the Respondent was using the specific disclosure application to 'derail' the trial fixed for the following week.
  60. Mr Gupta argued in his Disclosure Skeleton that the specific disclosure application fell to be dismissed on grounds of delay alone but went on to address the substantive merits of the said application in some detail. In the interests of brevity, I will not repeat or summarise those aspects here. Suffice it to state that, having addressed the same, Mr Gupta confirmed (at paragraph 22 of his Disclosure Skeleton) that 'in order to avoid the extra costs associated with the [specific disclosure application] and the unnecessary distraction it would cause' the Respondent had offered to drop the post-termination delay loss claim of £59,000 at the forthcoming trial. At paragraph 28 of his skeleton, he also confirmed that a full copy of the note referred to at [48(ii)] above, (which was in any event in completely anodyne terms, simply setting out the basic rules applying to ruling on voting at a creditors' meeting) had been supplied to the Respondent's solicitors.
  61. Shortly thereafter, the parties agreed to vacate the 20 February hearing. By consent order dated 19 February 2025, the Applicant agreed to the dismissal of his post termination delay loss claim and the hearing of the specific disclosure application listed for 20 February 2025 was vacated, with costs reserved to the trial judge.
  62. In the meantime, a potential problem had arisen with a witness. By letter dated 14 February 2025 from the Respondent's solicitors to the court listing office, the Respondent's solicitors had notified the court of his intention to seek permission for one of the witnesses, Mr Allaraj, to give evidence remotely from Albania. A consent order was lodged on 18 February 2025 on this aspect for the court's approval. On 24 February 2025 the consent order was deemed by the court to be unsuitable for approval on paper, on the basis that submissions were required; guidance on the relevant government website indicating that giving evidence remotely from Albania for the purposes of anything other than immigration tribunal proceedings required permission from Albania, and there being no evidence before the court that such permission had been obtained. Directions were given for supplemental skeletons to be lodged on that issue by 9.30am on the first day of trial.
  63. In the event, following consideration of written and oral submissions on the first morning of trial, the court rejected the Respondent's application for permission for Mr Allaraj to give evidence remotely, on grounds that permission from Albania was required and had not been obtained. The trial was put on hold until midday on day one whilst this was relayed to Mr Allaraj. At midday on day one it was confirmed to the court that Mr Allaraj had booked a flight and would attend court in person to give evidence on day two of the trial.
  64. Evidence closed on the afternoon of day two but, by then, there was insufficient time to hear closing submissions. The application was then adjourned to Friday 4 April 2025 for closing submissions. In order to allow both parties adequate time in closing, a further half day of court time was allocated on 7 April 2025.
  65. The Law

  66. The law governing this matter was uncontroversial.
  67. Votes in respect of a liquidator's appointment are calculated according to the amount of each creditor's claim as set out in the creditor's proof to the extent that it has been admitted: rule 15.31(1)(c) IR 2016.
  68. Rule 15.33 IR 2016 states:
  69. (1) The convener or chair in respect of a decision procedure must ascertain entitlement to vote and admit or reject claims accordingly.

    (2) The convener or chair may admit or reject a claim in whole or in part.

    (3) If the convener or chair is in any doubt whether a claim should be admitted or rejected, the convener or chair must mark it as objected to and allow votes to be cast in respect of it, subject to such votes being subsequently declared invalid if the objection to the claim is sustained.

  70. Rule 15.31 (2) provides that a creditor may vote in respect of a debt of an un-liquidated or ascertained amount if the convener or chair decides to put upon it and estimated minimum value for the purpose of entitlement to vote and admits the claim for that purpose.
  71. Rule 15.31(3) provides that, in relation to a decision procedure in respect of a proposed CVA, a debt of an unliquidated or un-ascertained amount is to be valued at £1 for the purposes of voting unless the convener or chair decides to put a higher value on it.
  72. Insofar as material, rule 15.35(1)-(3) provide:
  73. (1) A decision of the convener or chair under this Chapter is subject to appeal to the court by a creditor….
    …..
    (3) In respect of a decision, … if that decision is reversed or varied, or votes are declared invalid, the court may order another decision procedure to be initiated or make such order as it thinks just…..
  74. Rule 15.35(6) provides that the person who made the decision is not personally liable for costs incurred by any person in relation to an appeal under this rule unless the court makes an order to that effect.
  75. A judge hearing the appeal under r 15.35(1) should form his or her own view, based on the evidence and arguments advanced in court, and not merely review the decision of the chair of the decision procedure: Revenue and Customs Commissioners v Maxwell [2010] EWCA Civ 1379 at [42].
  76. The test to be applied by the court is whether the indebtedness is owed on a balance of probabilities: Re McNally [2013] EWHC 1685 (Ch) per HHJ Purle QC at [22]:
  77. 'The test on an appeal against a voting decision is whether the challenge debt this is, on balance, owed. The legal burden must, in my judgment, be on the creditor… to establish the claimed indebtedness. Where the creditor has made a bona fide assessment of the unsecured element of a debt based on a respectable professional valuation, the evidential burden shifts to the debtor, though the legal burden remains on the creditor throughout. Once, therefore, the debtor puts in respectable evidence the other way, the question the court must ask is whether the creditor has on balance satisfied the court that the unsecured element of its debt is established in the amount claimed.'
  78. In Karapetian v Duffy [2022] EWHC 1053 (Ch), ICC Judge Mullen said at [27]-[28]:
  79. '27….. The burden is on the creditor to prove his or her debt on the balance of probabilities. If the creditor has a clear prima facie case, or 'respectable' case as Judge Purle put it, it will succeed in the absence of opposition from the debtor or other opposing party. If that other party meets the creditor's case with a case of his or her own, at least one that would survive summary judgment, the debt must be proven on the ordinary civil standard.
    28. In summary then, the chair of a meeting must consider the claims presented to him or her. If the chair is satisfied that the claim is good at the time, it is admitted. If the chair is satisfied that the claim is bad, it is rejected. If there is doubt, it is admitted and marked that it is objected to and the creditor will be allowed to vote. Where the claim admitted is for an unascertained or unliquidated amount it will be valued at £1 unless the chair can safely place a higher minimum value on it. He or she does not need to investigate the claim but must consider the evidence provided to determine whether it is established. It is clear from the wording of the rules that it is for the creditor to make a claim and substantiate it to the chair's satisfaction. On an appeal by a dissatisfied creditor the court will consider whether, on the balance of probabilities, the debt is established and is not limited to reviewing the decision of chair. The legal burden of proving the existence of the debt is on the creditor.'
  80. Where an applicant seeks an order excluding a proof already admitted, the twofold question for the court is (i) whether the proof has been improperly admitted; and (ii) whether the court should exercise its discretion to expunge or reduce the proof: Re Globe Legal Services Ltd [2002] BCC 858.
  81. I was also referred to the well-known guidance given by Harman J in Re a Debtor (222 of 1990) [1992] BCLC 137 at 144 and by Blackburne J in Re a Company (No 004539 of 1993) [1995] 1 BCLC 459.
  82. On the distinction between unfair prejudice and material irregularity, I was referred to the guidance given by HHJ Davis White KC, sitting as a judge of the High Court, in Richmondshire DC v Dealmaster Ltd [2021] EWHC 2892 (Ch) at [5]:
  83. 'As a generality …, it seems to me that unfair prejudice is directed at the effect of the scheme on the relevant creditor(s) whereas material irregularity is directed at some problem in the procedure by which the CVA becomes in force, usually with process of the creditor's meeting. Examples of material irregularity might include misleading or incomplete information to those voting at the meeting, and other defects in procedure at about the meeting (such as a person being admitted to vote who should not have been or in the correct amount).'
  84. Where material irregularity is relied upon, the irregularity must be material in the sense of more than de minimis or irrelevant: Narandas-Girdhar and another v Bradstock [2016] EWCA Civ 88.
  85. I take all such guidance into account.
  86. Agreed List of Issues

  87. The agreed list of issues before me was as follows:
  88. (1) Should the Applicant's claim for overpayments of £266,456.43 (or any part thereof) have been admitted for voting purposes?

    (2) Should the Applicant's claim for £5,940 that was paid to Camerich UK Limited for furniture have been admitted for voting purposes?

    (3) Should the Applicant's claim for £7,930.86 for replacement Gaggenau appliances have been admitted for voting purposes?

    (4) Should the Applicant's claim for £6,750.50 for snagging costs have been admitted for voting purposes?

    (5) Should the Respondent's own claim for £16,434.95 or any part thereof have been admitted for voting purposes?

    (6) Should Reliable Housing's claim for £113,760 or any part thereof have been admitted for voting purposes?

    (7) Should Kajaine Accountants' claim the amount for £11,700 or any part thereof have been admitted for voting purposes, given that it was submitted after the deadline?

    (8) In consequence of the findings above,

    (a) was there unfair prejudice and/or material irregularity within the meaning of r15.35(3B) (a) IR 2016; and

    (b) if yes, what order should be made?

    (9) What is the appropriate costs order to make on the Respondent's disclosure application dated 12 February 2025?

    Evidence: Approach

  89. The court's approach to assessment of witness evidence has been the subject of numerous explanations and comments in the authorities. For present purposes, I will employ the following summary, taken from my judgment in Reynolds v Stanbury [2021] EWHC 2506 at [10]-[13]:
  90. '10. In Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm), Leggatt J opined (i) (at [18]) that memory is especially unreliable when it comes to recalling past beliefs, which are revised to make them more consistent with our present beliefs (ii) (at [19]) that the process of civil litigation itself subject the memories of witnesses to powerful biases because witnesses often have a stake in a particular version of events; and 9iii) (at [20]) that the process of preparing for trial can of itself interfere with memory, the effect of the process of preparing being to establish in the mind of the witness the matters recorded in his or her own statement and other material and to cause the witness's memory of events to be based increasingly on this material rather than on the original experience of the events.
    11. These observations caused Leggatt J to conclude in Gestmin (at [22]) that:
    "… the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose - though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of the witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth".
    12. The Court of Appeal made related observations in the case of Simetra Global Assets Ltd v Ikon Finance Ltd [2019] 4 WLR 112. At [48] Males LJ said:
    "[48] In this regard I would say something about the importance of contemporary document as a means of getting at the truth, not only of what was going on, but also as to the motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party's internal documents including emails and instant messaging. Those tend to be the documents where a witness's guard is down and their true thoughts are plain to see. Indeed, it has become a commonplace of judgements in commercial cases where there is often extensive disclosure to emphasise the importance of the contemporary documents. Although this cannot be regarded as a rule of law, those documents are generally regarded as far more reliable than the oral evidence of witnesses, still less dead demeanour when giving evidence."
    13. I pause briefly to note that the observations of both Leggatt J and Males LJ arose in the context of commercial cases. In Martin v Kogan [202] FSR 3, the Court of Appeal again addressed the issue of witness evidence. At [88] Floyd LJ said this:
    "[48] Gestmin is not to be taken as laying down any general principle for the assessment of evidence. It is one of a line of distinguished judicial observations that emphasise the fallibility of human memory and the need to assess witness evidence in its proper place alongside contemporaneous documentary evidence and evidence upon which undoubted or probable reliance can be placed.. But a proper awareness of the fallibility of memory does not relieve judges of the task of making findings of fact based upon all of the evidence. Heuristics or mental shortcuts are no substitute for this essential judicial function. In particular, where a party's sworn evidence is disbelieved, the court must say why that is; it cannot simply ignore the evidence."
  91. I was also taken to the guidance given by Arden LJ in Re Mumtaz Properties Ltd [2011] EWCA Civ 610, where she said:
  92. '14. In my judgment, contemporaneous written documentation is of the very greatest importance in assessing credibility. Moreover, it can be significant not only where it is present and the oral evidence can then be checked against it. It can also be significant if written documentation is absent. For instance, if the judge is satisfied that certain contemporaneous documentation is likely to have existed were the oral evidence correct, and that the party using oral evidence is responsible for its nonproduction, then the documentation may be conspicuous by its absence and the judge may be able to draw inferences from its absence.'

    Written Evidence

  93. For the purposes of the trial, I have read the First, Second and Third Witness Statements of the Applicant, dated 22 December 2023, 12 April 2024 and 10 July 2024 respectively, the Witness Statement of Mr Akram, the Applicant's accountant, dated 12 July 2024, the First and Second Witness Statements of the Respondent, dated 26 June 2024 and 12 February 2025, the Witness Statement of Mr Allaraj, a director of Reliable Housing, dated 24 June 2024, and the Witness Statement of Mr Kartik Shah, of Kajaine Accountants, dated 10 May 2024, together with their respective exhibits. I also read other documents contained in bundles prepared for use at the hearing, to which reference will be made where appropriate.
  94. The Witnesses

  95. The court heard oral evidence from Mr Akram, the Applicant, the Respondent, Mr Shah, and Mr Allaraj.
  96. Mr Akram

  97. Mr Akram was an entirely straightforward witness. He listened to questions put to him and took care to answer them accurately. When invited by the court to run through, on a 'net of VAT' basis, the sums set out in his summary at Akram(1) para 13.5 relevant to the claimed overpayment figure, for example, he very properly reminded the court of a vouched sum of £13,671.48 paid out from the Company's second Tide account which fell to be deducted from the overpayment figure. This was a point against the Applicant, yet he volunteered it. As rightly observed by Mr Gupta in closing, this was a straightforward, unprompted and honest concession, demonstrating that the witness had no agenda.
  98. Mr Akram was also at pains to make clear the limits of his own knowledge. When asked about the Addendum A sums payable under the Contract, for example, he was quick to respond that these were 'not in [his] knowledge'. Again, when he was shown a building control certificate in the bundle, he was quick to confirm that he did not know what a completion certificate was supposed to look like and so would not recognise one if shown.
  99. In areas which fell within his sphere of knowledge and recollection, however, he responded readily and fully, often backing up his answers by accurate and relevant reference to the court bundles.
  100. Mr McNeil argued that Mr Akram was being used as a 'quasi-expert'. I reject that suggestion. Although an accountant, Mr Akram was simply a witness of fact.
  101. It was common ground that the total sum paid by or on behalf of the Applicant into the Company's bank accounts for the Project was £1,003,238.
  102. Mr Akram's evidence, which I accept, was that the Company had not provided him with a full set of the Company's bank statements for both Tide accounts at any time prior to entering liquidation, notwithstanding that he had made repeated requests for the same to the Respondent from June to December 2023. He said that it was not until after the Company had entered liquidation that he was able to get a full set of the bank statements, which the liquidator had provided to him at his request. Mr Akram's evidence in this respect is supported by contemporaneous correspondence, including his letter of 8 December 2023 referred to at [29]-[33] above. This was evidence of fact.
  103. Mr Akram also gave evidence, which I accept, that, having received the complete set of bank statements for the Company's Tide accounts, he had then run through those bank statements and had cross checked them against the supplier invoices and other supporting documents provided to him by the Company and said to relate to the Project. He summarised the results of that exercise at paragraph 13.5 of his witness statement. Mr Akram's evidence, which I accept, was that having run through the Company's bank statements, he had noted sums totalling £101,980.61 which had been paid to suppliers out of the Company's main bank account but for which he had not been provided with any invoices or supporting documentation linking the payments to the Project. He produced a schedule listing the payments in question; a schedule exhibited to his witness statement dated 12 July 2024 (appearing at page 818 of the hearing bundle). He also noted that a further payment (of £10,000) had been to a payee described in the bank statements as 'RIU Management'; this was one of the Respondent's other companies, which had nothing to do with the Project. Again, this was evidence of fact.
  104. Mr McNeil argued that Mr Akram had made 'unsafe assumptions' about how monies paid into the Company's bank accounts for the Project had been used. I reject that argument. Working from the complete set of relevant bank statements supplied by the liquidator in 2024, Mr Akram had simply recorded how many of the payments made out of the Company's bank accounts he could (and could not) match to invoices and supporting documentation relating to the Project. It was at all times open to the Respondent to produce any missing invoices and supporting documentation relating to the Project and said to account for the said £101,980.61 if such invoices and documentation existed. The Respondent failed to produce the same, notwithstanding the fact that Mr Akram had been asking for them for months prior to the Company entering liquidation: see Mr Akram's letter dated 8 December 2023 referred to at [29]-[33] above.
  105. Overall, I find Mr McNeil's criticisms of Mr Akram misplaced and unpersuasive. In my judgment Mr Akram was a straightforward and honest witness who did his best to assist the court to the best of his knowledge and ability. I have every confidence in the veracity of his testimony.
  106. Mr Bhundia

  107. The Applicant was again an entirely straightforward witness. He listened to questions put to him and took care to answer the question put. His answers were a model of clarity. I have every confidence in the veracity of his testimony.
  108. When asked whether he accepted that the Project was zero-rated for VAT purposes for example, rendering it VAT neutral, he answered 'it is, but the total amount paid still needs to be accounted for'. When it was then put to him that as the Project was zero-rated for VAT, any VAT rebates obtained by the Company for VAT paid to Project suppliers had 'zero' effect on him, he responded simply:
  109. 'No, no. Say we've had – an invoice has been paid for, say, £10,000. For argument's sake, £2,000 of that is VAT. Yes? When that VAT is then reclaimed by the company, that £2,000 needs to be spent on my project otherwise it is not a net zero effect.'

  110. The Applicant weathered in good spirit questions put to him in cross-examination which were based on a false premise, including the suggestion that there was nothing in his first witness statement about the Company having a separate bank account for the Project, when there was (see Bhundia(1) at para 5) and the suggestion that at no time prior to these proceedings had he felt the need to go through the Company's bank statements, when he had (see Mr Akram's letter dated 8 December 2023 referred to at [29]-[33] in this judgment).
  111. The Applicant was resolute that the Respondent had told him that he would set up a separate bank account for the Project, notwithstanding being pressed in cross-examination several times on this issue. In the event, the Respondent himself later accepted in cross-examination that he (the Respondent) had initially intended that one bank account would be used for the Project alone. This was a clear example of the Applicant's credibility.
  112. Mr McNeil argued that the Applicant was 'evasive' in some of his answers. I reject that suggestion. He maintained that the Applicant had 'refused to answer straight questions' regarding his abandoned post-termination delay loss damages claim of £59,000 and his snagging claim. In my judgment, that is not a fair or accurate representation of the Applicant's responses on those issues.
  113. When it was put to the Applicant, for example, that he had abandoned the post termination delay loss damages claim because 'it could not be attributed to the project', the Applicant had readily and firmly rejected that suggestion, stating: 'It could be and it can be'. When it was then put to him that if he had 'genuinely believed that the loan was a loss attributable to the project', he 'would not have dropped it just before litigation', he responded: 'Well, I have nothing to say to that.'
  114. In my judgment, the follow up question was less of a question and more of a comment by counsel. Counsel already had a clear answer to his first question on this topic. The Applicant's response to the follow up question was in my judgment both reasonable and proportionate when considered in context. As a lawyer who had just faced a last-minute specific disclosure application before trial based partly on alleged waiver of privilege (see [48] above) the Applicant's decision not to engage in debate during his oral testimony as to what the precise thinking was and what the discussions were that led to his decision to drop the £59,000 claim for current purposes is entirely understandable. In my judgment it is not indicative of evasiveness on his part. The Applicant's Disclosure Skeleton at [22] spoke for itself in any event: see [53] above.
  115. Similarly, the Applicant's responses in cross examination on the issue of his snagging claim did not in my judgment demonstrate any evasiveness on his part. He readily accepted that he had not adduced evidence of payment.
  116. Mr McNeil also argued that the Applicant had displayed a 'pattern of exaggerating claims' in his evidence. I reject that argument. It is correct that when it was put to the Applicant that the snagging list considered with Mr Allaraj (at page 471 of the bundle) had not indicated any serious issues, he had explained that some issues had only been discovered later, such as the fact that 'no warranty' on the roof or the basement had been provided, with the result that 'no one will insure it or buy it'. He also mentioned having had to pay that morning for a drain survey to be undertaken. Such evidence of ongoing discoveries of other matters which needed addressing was entirely in keeping, however, with a construction project which had not gone to plan and which had then involved a second set of contractors. The Applicant was plainly not seeking to inflate his own claims within the proceedings by such evidence of further problems encountered since lodging his proof; the sums forming the subject matter of his proof had in fact been reduced rather than increased during the course of proceedings: see [39] above.
  117. I would add that, in answer to a question from the bench regarding the overpayment claim, the Applicant readily accepted that the third Addendum A tranche payment of £50,000 (for the roof) should be treated as having been paid out of one of the larger sums paid by or on behalf of the Applicant into the Company's bank accounts, volunteering, as he thought it through in the witness box, that 'there was probably, I would have to look, but in a larger – in a larger payment that was made to FDL [the Company] on account, there would have been also the 50,000, the third 50,000'. At a slightly later stage, in answer to a further query from the bench, 'You have just said in your evidence that a further payment of £50,000 would have been paid …', the Applicant stated: 'Yes. I mean, I assume, because otherwise I'm sure Mr Dhar [the Respondent] would have been on my back for the payment.' This volunteered information reduced the Applicant's overpayment claim by £50,000. This is not the conduct of a litigant seeking to 'talk up' or exaggerate their claim; quite the contrary.
  118. In short, Mr McNeil's criticisms of the Applicant as a witness were misplaced and unpersuasive. In my judgment the Applicant was an honest, straightforward and reliable witness.
  119. Mr Shah

  120. Mr Shah of Kajaine Accountants was more guarded in his oral testimony. He had had witness training for the trial and corrected his own answers several times as he went along. This was, however, his first time giving evidence in court and I take that into account. Overall, I am satisfied that he did his best to answer questions put to him truthfully to the best of his knowledge and recollection.
  121. Mr Dhar

  122. The Applicant had had witness training for the trial. He told the court that he had never been in a courtroom before and that it caused him anxiety.
  123. I take into account that this was the Respondent's first time giving evidence in court. I also take into account that the Respondent may have been anxious about giving evidence in court. Whilst taking such matters into account, however, having considered his written and oral testimony with some care, I have come to the conclusion that, save where admitted or supported by context or contemporaneous documentation, his evidence should be treated with caution. In this regard I take into account in particular the following:
  124. (1) by paragraph 44 of his first witness statement, the Respondent stated that the Camerich furniture had been 'purchased by [the Company] for a different client', and that the Applicant's money had not been used for the purchase. In cross-examination, however, the Respondent launched into a completely different explanation for the payment in question, which had not been heralded in his witness statement at all;

    (2) by paragraph 44 of his first witness statement, the Respondent also stated that the Gaggenau appliances had been 'purchased by [the Company] for a different client'. When challenged in cross-examination, however, he admitted that the appliances had originally been purchased for the Project but said that by the time that they were delivered the Contract had been terminated and he 'took the decision not to have them delivered to the Applicant' but instead to use them on a different project;

    (3) by paragraph 11 of his first witness statement, the Respondent stated or implied that the completion certificate agreed by Addendum A to trigger entitlement to the fourth stage payment (of £40,000) was a 'completion certificate from the Building Inspector' (ie a 'building control' certificate of the sort usually issued by the local authority, rather than a certificate of practical completion, which would be issued by the Company). This was at odds with what was said in the CVL statement of affairs, which the Respondent had signed. In the 'history' section of the statement of affairs, expressly produced 'from statements provided by the Director, Mr Sanjai Dhar', was stated (with emphasis added): 'Although the project was substantially completed, the Company did not issue a completion certificate due to concerns about receiving the final payment, as a result of the disputes.' When pressed in cross-examination to explain the difference, the Respondent sought to put it down to 'poor drafting' of the statement of affairs;

    (4) by paragraphs 59-60 of his first witness statement, the Respondent maintained that he had admitted for voting purposes a debt of £15,027.20 claimed by him in respect of his director's loan account 'on review of the invoices that substantiated the debt'. No such invoices were exhibited to his witness statement, however; and the two-page petty cash print-out relied upon in support of the debt showed a closing balance as at 27 November 2023 of zero.

  125. Overall, the Respondent's written evidence was not prepared with the candour and care required of formal evidence bearing a statement of truth.
  126. The Respondent's oral evidence was also inaccurate in certain material respects, a number of which are addressed where appropriate in this judgment. Whilst his oral testimony was undoubtedly truthful in some respects, he was prepared to deviate from the truth when it suited his purposes. At times I am satisfied that he told deliberate untruths. One such example was his elaborate explanation for the Camerich payment, addressed in more detail at a later stage of this judgment. At other times in his oral testimony, it appeared that he had simply closed his mind to the realities and had persuaded himself of an alternative narrative. His insistence that a 'different client' had paid for given items of expenditure, for example, simply did not bear close scrutiny when compared to the underlying bank statements in evidence, yet he clung to that narrative throughout, whilst at the same time accepting that he could not point to any relevant payments from the 'different client' in the bank statements.
  127. Overall, having considered the evidence as a whole, I have concluded that save where admitted or supported by context or contemporaneous documentation, the Respondent's evidence should be treated with caution.
  128. Mr Allaraj

  129. Mr Allaraj's written evidence was lacking in certain respects. His explanation for not invoicing the Company periodically for several months (that the Respondent had told him that the Company could not afford to pay him) seemed odd in context; there was no persuasive explanation why Reliable Housing could not simply invoice specifying a longer payment date, or invoice and agree to defer payment. He also failed to exhibit to his witness statement the 'Schedule A' referred to in the global invoice dated 15 May 2023 said to relate to the sum claimed in Reliable Housing's proof of debt. No persuasive explanation was volunteered for this omission.
  130. In oral testimony, however, I am satisfied that he did his best to answer questions put to him truthfully to the best of his knowledge and recollection.
  131. Discussion

  132. For the approach to be adopted, I refer to [58]-[72] and [74]-[75] of this judgment. The Applicant bears the legal burden of proof in relation to his own proof of debt. The legal burden of proof in relation to the other proofs forming the subject matter of the appeal is in each case on the creditor who lodged the proof in question.
  133. I shall deal with the Applicant's proof first. My conclusions on his proof, set out at [108] to [150] below, should be read together with my conclusions on the Respondent's 'merger/res judicata' argument, set out at [151] to [204] below.
  134. The Applicant's proof

    Issue 1 – the overpayments claim

  135. On the evidence before me, for reasons addressed below, I am satisfied on the balance of probabilities that the Applicant has made out his overpayments claim in the sum of £110,643.36.
  136. The Project was an open book, at cost project. It was common ground that the Applicant (with the aid of funders) paid into the Company's bank accounts a total of £1,003,238. It was also common ground by the conclusion of trial that as the Project was zero rated for VAT purposes, VAT should be left out of account when determining the existence and amount of any overpayment. Mr Akram's evidence (which in this regard, with one caveat, I accept) was that (i) he had worked through the Company's bank statements and the invoices/related documentation provided by the Company (ii) he had matched payments (net of VAT) totalling £848,923.16 from the Company's main bank account numbered 15765837 to invoices related to the Project and (iii) he had matched payments (net of VAT) totalling £13,671.48 from the Company's bank account numbered 16160343 to invoices related to the Project. The one 'caveat' referred to is as follows: on the evidence as a whole, I am satisfied that Mr Akram mistakenly included in the total of £848,923.16 a payment (net of VAT) of £20,000 to Reliable Housing in respect of an invoice referred to in evidence as Invoice 17 when in fact that invoice related to a different project. I so find. Taking all such matters into account, on the evidence as a whole I am satisfied that the purchase invoices supplied by the Company to the Applicant which relate to the Project account for only £842,594.64 net of VAT. The sum of £842,594.64 comprises the total of (i) payments from the Company's main bank account numbered 15765837 totalling £848,923.16 matched by Mr Akram to invoices related to the Project and (ii) the payments from the Company's bank account numbered 16160343 totalling £13,671.48 matched by Mr Akram to invoices related to the Project, reduced by £20,000 to allow for Invoice 17 from Reliable, which related to a different project and was included in error. On the evidence which I have heard and read, I am also satisfied that the conceded sum of £50,000 (for completion of the roof: see [96] above) must then be added to the sum of £842,594.64 and treated as accounted for, bringing the total accounted for to £892,594.64. Whilst the third Addendum A tranche sum of £50,000 was not invoiced, it was accepted by the Applicant in oral testimony that this sum must have been paid out of one of the larger sums paid by or on behalf of the Applicant into the Company's bank accounts. On the evidence before me, a total sum of £892,594.64 is therefore accounted for as expenditure on the Project. I so find. Deducting £892,594.64 from the agreed total of £1,003,238 paid into the Company's bank accounts by or on behalf of the Applicant for the Project leaves a balance unaccounted for of £110,643.36. I so find.
  137. As a cross-check, I note the total of payments made to suppliers for which no invoices were provided. Mr Akram's evidence (which I accept) was that when undertaking the bank reconciliation exercise in respect of the Company's bank accounts he identified payments totalling £101,980.61 made to suppliers for which no invoices relating to the Project had been provided. Mr Akram also noted a payment to RIU of £10,000. Both ways on, therefore, one arrives at a figure of £110,000- £111,000 odd.
  138. The lack of documentary evidence in relation to the supplier payments totalling £101,980.61 was of particular significance in light of the fact that the Project was not run by the Company from a separate project bank account; the Company ran other projects for other clients through the same bank accounts and so it cannot simply be assumed that any invoices paid from those accounts related to the Project. In cross-examination the Respondent's evidence (which in this regard I accept) was that most of the activity on the bank accounts was related to the Project but that '10% was work elsewhere'. It does not escape the court's attention that the sum of £101,980.61 identified by Mr Akram in respect of 'payments made to suppliers without invoices' roughly equates to 10% of the overall sum of £1,003,238 paid by or on behalf of the Applicant into the Company's bank accounts.
  139. Mr McNeil invited the court to dismiss this as a coincidence. I decline that invitation. This was an open book contract with labour and materials to be supplied at cost. It was common ground that the sums paid by or on behalf of the Applicant into the Company's bank accounts for the Project totalled £1,003,238. In light of that common ground, taken together with Mr Akram's evidence on what could and could not be matched to invoices supplied by the Company relating to the Project, the evidential burden plainly shifts to the Company acting by its sole director, the Respondent, to adduce documentary evidence to demonstrate that the unvouched sums totalling £110,643.36 (which include payments to suppliers totalling £101,980.61 for which no invoices had been produced) were legitimately spent on labour and supplies for the Project. The Respondent has failed to adduce such documentary evidence.
  140. The Respondent maintained in his evidence that the Applicant had been provided with all relevant documentation relating to expenditure on the Project by various methods including Quickbooks, Dext and email. To the extent that the Respondent was seeking to suggest that, whether ahead of or during the course of these proceedings, the Applicant has already been provided with documentation vouching legitimate expenditure on the Project in the total sum of £1,003,238, I reject the Respondent's evidence. He has adduced no persuasive documentary evidence in support of such a contention and the contemporaneous correspondence, including Mr Akram's letter of 8 December 2023, supports the contrary conclusion. Kajaine Accountants' 'offer', by their letter dated 12 May 2024, to provide access to Quickbooks online and Dext, was plainly too little too late; by then these proceedings had been on foot for over 5 months and it was for the Respondent to set out his own case in evidence: it was not for the Applicant, who by that stage had been asking through Mr Akram for missing information and documentation for the best part of a year, to seek to 'second-guess' what the Respondent's explanations for the shortfall might be.
  141. For similar reasons, I reject the Respondent's protestations in cross-examination that he could 'find' the missing documents for payments to suppliers totalling £101,980.61 for which no invoices had been produced if they were needed, that such payments were made to 'bona fide suppliers' for the Project, that he could provide a precise list if given an opportunity 'to go and work it out', and that he was 'more than ok' with a forensic accountant being appointed and 'craved the court's indulgence' to allow the appointment of an expert to look into it. The need to produce in his evidence missing invoices and related documentation to vouch for any payments said to have been made on this 'at cost' Project which the Applicant and Mr Akram could not match to invoices supplied should have come as no surprise to the Respondent. Mr Akram's letter of 8 December 2024, which was itself a culmination of months of fruitless requests for proper engagement from the Respondent, made the position clear: see [29]-[33] above. When asked in cross-examination about his failure to engage with Mr Akram's enquiries in the run-up to liquidation, the Respondent had no persuasive explanation.
  142. Within the context of these proceedings, Mr Akram's witness statement had been served in July 2024, some 7 months prior to the trial of this matter in February 2025. The Respondent has had ample time in which to collate any missing documentation relevant to this matter and to seek permission to file further evidence had he wished to do so. This is not a case in which the Respondent has at any stage suggested that he does not have ready access to the Company's books and records. Indeed, it is plain from Kajaine Accountants' letter of 12 May 2024 that, notwithstanding the Company's entry into liquidation, the Respondent and Kajaine Accountants still have access to the Company's books and records. The Respondent also confirmed this in his oral testimony.
  143. The 2 page 'report' set out in Kajaine Accountants' letter dated 12 May 2024 exhibited to the Respondent's first witness statement ('the Kajaine report') was of very limited utility or probative value on the issue of the sums spent on the Project. The author of the report was not named in it, did not file a witness statement and was not called as a witness. Mr Shah, of Kajaine Accountants, filed a witness statement but notably did not exhibit a copy of the Kajaine report to his own witness statement, or even refer to it in his statement. The Kajaine report was not put to the Applicant or Mr Akram in cross-examination. The bare, three-entry, 'profit and loss' summary set out in the Kajaine report purported to show simply (i) total income of £1,003,300 on the Project, (ii) total expenses of £1,053,795.48 and (iii) an overall loss of £50,495.48. Even putting to one side the troubling fact that the income figure of £1,003,300 plainly did not include the two 'tranche fee' payments of £50,000 paid directly to the Respondent's father and to Mr Allaraj at the Respondent's request, this snapshot summary was of no utility in the absence of documentary evidence to show what expenses had been taken into account. I also note that the total 'expenditure' figure given in the Kajaine report was in any event a figure expressly stated in the report to have been arrived at 'after adjusting for the costs claimed as a result of the adjudicator's verdict'.
  144. In short, no adequate or persuasive explanation has been provided for the Respondent's failure to produce the missing invoices and other documentation relating to the unexplained payments. To adopt a phrase employed by Arden LJ in Mumtaz, this is a case of documentation 'conspicuous by its absence' and it is in my judgment legitimate for the court to draw inferences from its absence.
  145. Mr McNeil's attempts to set out a competing bank analysis in a series of schedules produced on day two of the trial were ultimately of little assistance to the court. As noted by Mr Gupta, these schedules were more of an attempt to 'balance the books' rather than to identify legitimate expenditure demonstrably attributable to the Project. By way of example only, Mr McNeil's schedules included in the reckoning, (with a view to demonstrating arithmetically an overall shortfall on the Project rather than a refundable overpayment) (i) the sum of £101,980.61 in respect of 'payments made to suppliers without invoices' referred to above; (ii) a payment of £10,000 'to RIU' (another client of the Company and nothing to do with the Project); (iii) a payment of £10,000 to Kallis (the liquidator's firm) on account of liquidator's fees; and (iv) a payment of £73,813.20 which occurred after the Company entered CVL, when the liquidator transferred the cash balance in the Company's bank accounts (of £73,813.20) to the Insolvency Service account. This exercise served no purpose in context.
  146. Mr McNeil also argued that the overpayments claim took no account of the stage payments provided under Addendum A. The first two Addendum A stage payments, however, totalling £100,000, were on top of the agreed sum of £1,003,238 paid into the Company's bank accounts. It is common ground that those first two Addendum A payments of £50,000 each were paid by or on behalf of the Applicant to the Respondent's father and Mr Allaraj respectively at the request of the Company acting by the Respondent. They rightly form no part of the overpayment calculation. The third tranche payment of £50,000, payable on completion of the roof, is, I accept, relevant to the overpayment calculation. I have made appropriate adjustments to cater for this: see [109] above.
  147. In my judgment there can be no question of entitlement on the part of the Company to the further sums of £20,000 (Ethos) and £40,000 (the Project) which would have been payable 'upon receipt of the Completion Certificate', had the Contract continued. In my judgment on a true construction of the Contract, the reference to a completion certificate in Addendum A is a reference to a certificate of practical completion and not, as the Respondent contended, a reference to a building control final certificate. It is clear from the Applicant's evidence (which in this regard I accept) that when entering into the Contract he understood the reference to a completion certificate in Addendum A to be a reference to a certificate of practical completion. Notwithstanding his claims in evidence to the contrary, I am satisfied that this was at all material times the Respondent's understanding as well. I am fortified in this conclusion by the history section of the statement of affairs for the Company, which bears a statement of truth and was signed by the Respondent in the run up to the Company's entry into CVL. As will be recalled, the history section was stated to have 'been produced from statements provided by the Director, Mr Sanjai Dhar' and provided (inter alia, with emphasis added) '…disputes arose between the Company and [the Applicant] regarding the delays and the additional expenses, and the relationship eventually broke down. Although the project was substantially completed, the Company did not issue a completion certificate due to concerns about receiving the final payment, as a result of the disputes'. I reject the Respondent's attempts in cross-examination to explain this away as 'poor drafting'. The true meaning of the passage quoted from the history section of the statement of affairs speaks for itself.
  148. I would add that, even if the reference to a completion certificate in Addendum A had been a reference to a building control certificate, the Contract was terminated by the Applicant for repudiatory breach in August 2023. This was months before a building control certificate was issued; and on the evidence which I have heard and read, I am satisfied that the certificate was only issued after further works were undertaken by a different contractor.
  149. For all these reasons, there can be no question, in my judgment, of entitlement on the part of the Company to the said sums of £20,000 (Ethos) and £40,000 (the Project) which would have been payable upon receipt of the completion certificate had the Contract continued.
  150. The overpayments claim therefore stands in the sum of £110,643.36. I so find.
  151. On issue one therefore I conclude that the Applicant's claim for overpayments should have been admitted in the sum of £110,643.36 for voting purposes.
  152. Issue 2: furniture ordered from Camerich UK Limited: £5,940

  153. The Applicant's evidence, which in this regard I accept, was that the reconciliation exercise undertaken by Mr Akram on his instructions (matching payments from the Company's bank accounts to invoices relating to the Project supplied by the Company to the Applicant) had revealed that £5,940 had been paid to Camerich UK Limited ('Camerich') from the Company's bank accounts for furniture on 29 March 2022: Bhundia (1) at 19.4 and email dated 12 October 2023 from the Applicant to Camerich exhibited thereto. The Applicant's evidence on this issue is supported by the Company's bank statements, which show a payment of £5,940 made from the Company's bank account on 29 March 2022 bearing the reference 'Camerich UK Limited ref: 4PGM FurnitureRent'. No such furniture had ever been delivered to the Property. When the Applicant made enquiries of Camerich by email in October 2023, Camerich confirmed that furniture had been delivered to a different address on 2 April 2022. The delivery address was 13A Atherstone Mews London SW7 5BX and was confirmed in an invoice, dated 29 March 2022 and bearing the invoice number SO-054977, provided by Camerich to the Applicant in response to his enquiries. As is clear from the Respondent's first witness statement, the Respondent's home address is 9 Atherstone Mews. The Applicant's evidence, which in this regard I accept, was that the Respondent's family also owned another property in Atherstone Mews which they rented out. On the evidence as a whole, I consider it legitimate to conclude on a balance of probabilities that the delivery address for the Camerich furniture, 13A Atherstone Mews, was the other property in Atherstone Mews owned by the Respondent's family. I so find.
  154. The Camerich invoice dated 29 March 2022 was issued to 'RIU Management Ltd'. RIU Management Ltd no longer exists; according to Companies House filings, it is a company of which the Respondent used to be a director but which was dissolved in 2012. The Respondent is however currently a director of another company with a similar name, RIU Management (UK) Limited, incorporated in 2018.
  155. By his first witness statement, the Respondent stated (at [44]) that the Company 'undertook construction work for multiple clients'. He maintained that 'the Furniture Costs' (in context the £5,940 paid to Camerich in respect of furniture) was 'purchased by [the Company] for a different client' and that the Applicant's money was not used.
  156. This explanation did not accord with the reference '4PGM' on the bank statement however: see [125] above. When taken to the bank statement entry in cross-examination, the Respondent launched into a lengthy explanation. He said that he had asked Camerich to 'do a design' for the Property. Previously, he explained, Camerich had provided design services for free, but on this occasion they had said they no longer provided this service free of charge. Instead, they would require a design deposit. The £5,940 paid on 29 March 2022, he said, was the design deposit. I pause here to note that this explanation does not accord with the explanation given by the Respondent in his witness statement: see [127] above.
  157. The design consultant, the Respondent claimed in cross-examination, had 'spent over half a day' at the Property. He said that she had done a design package (which was not in evidence) and that the £5,940 was for that. His evidence was that the Applicant had 'subsequently' decided that he did not want the Property staged. The Respondent said that he would then have gone back to Camerich to negotiate a return of the deposit, which would ordinarily have involved a 'haircut'. His evidence was that he then ordered some furniture from Camerich (implicitly out of the £5,940 deposit) for another project, at a cost of '£2,900 roughly'. I pause here to note that the Camerich invoice dated 29 March 2022 relates to two tables, a bed and a mattress, totalling £2,910.84 plus VAT. He claimed that the balance of the deposit was then paid back into the Company's bank account. I pause here to note that a refund from Camerich of £2,447 is shown in the Company's bank statements on 29 November 2023 bearing a reference 'SO 054977 Refund'. He said that no haircut had been applied in the end as he had used some of the deposit to buy furniture, but that he had 'allocated' the purchase of the bed and the tables to 'another property'.
  158. Camerich confirmed by email to the Applicant dated 27 October 2023 that the items delivered to 13A Atherstone Mews on 2 April 2022 were 'delivered against the refundable deposit paid… with a view that the clients would require more items later in the year'.
  159. When pressed about this in cross-examination, the Respondent maintained that monies for different projects were 'co-mingled' in the Company's bank accounts and that it would simply involve 'an entry' for him to move the outlay from the Project to other expenses. He said that his intention was that when a 'formal reconciliation' was undertaken, he would 'allocate expenses accordingly'.
  160. When it was put to him that, in the events which had occurred, the Applicant was entitled to a full refund of £5,940, the Respondent first answered 'correct'. When it was then put that he should have accepted this head of the Applicant's proof, however, he said 'no' and embarked on a muddled and entirely unpersuasive explanation. The nub of it appeared to be that if the Addendum A stage payments paid under the Contract were left out of the equation, the Company had spent more on the Project that it received. He also again insisted that the furniture had been 'purchased for a different client that's for sure' and when pressed to say who, gave the name 'RIU Ltd', explaining that the Company only had two clients at the time, the Applicant and RIU Ltd. He said that he was a director of RIU Management (UK) Ltd but that members of his family were beneficial owners of the Company's other client, RIU Ltd. I pause here to note that there appears to be no extant company known as 'RIU Ltd' registered at Companies House. As this point was not explored with the Respondent in cross examination, however, I shall proceed on the footing that the Respondent's reference to 'RIU Ltd' was intended to be a reference to another limited company of a different name of which members of his family were beneficial owners. For the sake of simplicity, as its true name was not given in evidence, I shall refer to that company as 'RIU'.
  161. The Respondent's explanation simply did not make sense on a number of levels. On the evidence which I have heard and read, I am satisfied that the Property was in no fit state for a 'design visit' in March/April 2022. The Respondent had confirmed in cross-examination that by March/April 2022, the Company had 'started non-notifiable works' which included 'soft stripping, knocking down partitions' and 'taking out floors', some of which had then been put back. He stated in evidence that at the time of the alleged 'design visit', the basement had yet to be dug, there was 'no ground floor' and 'all of the internal walls were gone – the walls were just stud walls'. Yet when it was put to him that as at late March/early April 2022, it was far too early for a 'design visit', he insisted that it wasn't, claiming that the principal work was 'working out the spaces on the upper floors'. When it was put to him that any designer would have to come back again once the basement was in place, he volunteered that 'they did a lot of that design work on paper', implying that a second design visit would not necessarily be required.
  162. The timing did not work on other levels either. The Respondent had confirmed in cross examination that the Camerich designer had attended the Property after payment of £5,940 was made on 29 March 2022. It is legitimate to conclude that any designs produced by the designer (none have been produced in evidence) would have post-dated the visit. The Respondent's evidence was that 'subsequently' (ie after the visit and presumably after the designs) the Applicant had said he did not want the Property to be staged. Only at the point of rejection would there have been any consideration of 'reallocation' of the deposit by putting it to use purchasing or hiring furniture for a different client. Yet the Camerich invoice issued to 'RIU Management Ltd' in respect of the bed, mattress and two tables delivered to 13A Atherstone Mews was dated 29 March 2022; the same day as the payment from the Company's account under the reference '4PGM'.
  163. The Respondent was also in considerable difficulty in identifying from the Company's bank statements in evidence any payment into the Company's bank accounts from RIU Management (UK) Ltd (or RIU, or any other relevant company) in respect of the invoice dated 29 March 2022. Whilst claiming that 'RIU Management made several payments' and that 'there were funds other than the Applicant's in the Company's bank accounts', he could not identify from the bank statements in evidence when 'RIU Management' (or RIU, or any other relevant third party) was said to have paid in sums sufficient to cover the invoice dated 29 March 2022. Counsel for the Applicant's own review of the bank statements in evidence (and my own thereafter) did not identify any relevant payments from RIU or any other third party either. To the contrary, the bank statements revealed payments out of the Company's bank accounts to RIU Management (UK) Limited, rather than the other way round. The Respondent was taken to one such payment entry in cross-examination, a payment of £10,000 from the Company's bank account to RIU Management (UK) Limited on 15 November 2022. The Respondent stated that he had 'had a cashflow issue' and 'took that money out and paid it back later'. Mr Akram's review of the Company's bank accounts however, and my own thereafter, found no evidence of the sum of £10,000 paid out to RIU Management (UK) Limited in November 2022 being returned at any subsequent stage. In cross examination, the Respondent accepted that he had adduced no documentary evidence of any 'tranche payments' he claimed to have been made by the Company's other client at the time, 'RIU', nor any reconciliation of sums said to have been paid into or out of the Company's bank accounts in respect of that client.
  164. I am entirely unpersuaded by the Respondent's explanations for the Camerich payment. On the evidence as a whole, I am satisfied on a balance of probabilities that the sum of £5940 paid out of the Company's main bank account to Camerich was paid from funds paid into the account for the (open book, at cost) Project by or on behalf of the Applicant and was not applied for purposes relating to the Project. I reject the Respondent's evidence that the furniture was paid for by another client. He did not stand up to cross-examination on this issue. Whilst the Respondent claimed that this sum had been paid for or reimbursed by another client, no documentary evidence to that effect has been produced and the bank statements for the Company in evidence support the contrary conclusion.
  165. In my judgment the Applicant's claim in respect of the sum of £5,940 paid to Camerich in respect of furniture not delivered to the Property should have been admitted for voting purposes. Whether it is treated as a claim in its own right or as serving simply to swell the overpayment claim by £5,940 makes no material difference on present facts. I am satisfied that this would not involve any 'double-counting' in relation to the overpayment claim as Mr Akram's list of sums paid out but not matched to invoices relating to the Project does not include the Camerich payment.
  166. On issue 2, therefore, I conclude that the sum of £5,940 in respect of the Camerich furniture should have been admitted for voting purposes
  167. Issue 3: the Gaggenau appliances

  168. The Applicant's evidence was that as part of the Project, the Company was supposed to fit out the Property with Gaggenau appliances. These were ordered by the Company but were never delivered to the Property. As a result, the Applicant had to order replacement Gaggenau appliances at a cost of £7,930.86.
  169. Again, the Respondent's written evidence on this was that the Gaggenau appliances 'were purchased by [the Company] for a different client'. He claimed that 'The funds used to purchase these items were that client's money'.
  170. In cross-examination, however, the Respondent admitted that the Gaggenau appliances had been purchased by the Company for the Project and that his witness statement had been inaccurate in that regard. He also admitted that the appliances in question had been used by the Company on a different project for another client. He said that the appliances had 'massive lead times' and that 'by the time they came, our contract had been terminated and I took the decision not to have them delivered to the Applicant'.
  171. When it was put to the Respondent that the Applicant had already paid for the appliances and then had to buy them again, the Respondent denied this, however.
  172. The Respondent claimed that the Applicant 'didn't pay for them [the Gaggenau appliances] in the first place' as the Company 'had extinguished all the funds he had provided'. He did not refer to the Company's bank statements in evidence to substantiate this contention, however. A brief review of the bank statements shows, by way of example, a sum of £2,295 paid on 2 May 2023 to Simpli Smart Ltd with a reference 'Gaggenau Fridge', leaving a credit balance on the Company's bank account ended 837 of £285,053.08, a credit balance derived almost entirely (save for a few trade refunds in minimal sums) from a lump sum payment of £299,783 paid into the Company's bank account on the Applicant's behalf on 3 April 2023. Given the timing of this purchase and the Company's small client base (the Respondent admitted that the Company had only one other client at the time), I consider it legitimate to conclude that the 2 May 2023 entry in the Company's bank statements related to the purchase of a Gaggenau appliance originally intended for the Project. A further payment, of £1,982.71, to Robert Timmons Furniture is referenced in the Company's bank statements on 11 August 2023, leaving a credit balance of £35,218.82. The Applicant had later purchased his replacement Gaggenau appliances from the same supplier, Robert Timmons Furniture. One of the two invoices in evidence from that supplier, dated 15 September 2023 and issued to the Applicant for his replacement purchases, is in exactly the same sum (£1,982.71) as that appearing in the Company's bank statements for 11 August 2023. I consider it legitimate to conclude in such circumstances that the 11 August 2023 entry in the Company's bank statements related to the purchase of Gaggenau appliances originally intended for the Project.
  173. The Respondent also said that the funds in the Company's bank accounts were the Company's and were 'not allocated' or 'divided' between clients. His intention, he said, was to 'allocate to the right clients' 'when the final reconciliation was done'.
  174. It was put to the Respondent in cross examination that he had not identified in the bank statements payments from any other client in respect of the Gaggenau appliances. He again maintained that the 'other client' 'doesn't make specific payments, just tranche payments'. Again, however, he could not identify in the bank statements, any tranche payments from another source claimed to cover the Gaggenau purchases. He also accepted that he had not exhibited any bank reconciliation demonstrating how and when the other client was said to have paid for such purchases.
  175. I am unpersuaded by the Respondent's explanations on this issue. On the evidence as a whole, I am satisfied on a balance of probabilities that sums totalling at least £4,277.71 (comprising the payments of £2,295 and £1,982.71 on 2 May 2023 and 11 August 2023 readily identifiable in the Company's bank statements) were paid by the Company in respect of the Gaggenau appliances from funds paid into the Company's main bank account for the (open book, at cost) Project by or on behalf of the Applicant. The Respondent has admitted that those Gaggenau appliances were not provided to the Applicant for use on the Project but were instead used by the Company on a different project for another client. I reject the Respondent's evidence that another client has paid or reimbursed these sums to the Company in respect of the Gaggenau appliances. No documentary evidence to that effect has been produced and the bank statements for the Company in evidence support the contrary conclusion.
  176. In my judgment the Applicant's claim in respect of the Gaggenau appliances should have been allowed for voting purposes in the sum of £4,277.71 (comprising the sums of £2,295 and £1,982.71 readily apparent from the Company's bank statements). Whether that sum is treated as a claim in its own right or as serving simply to swell the overpayment claim by £4,277.71 makes no material difference on present facts. Again, I am satisfied that this would not involve any 'double-counting' in relation to the overpayment claim as Mr Akram's list of payments shown in the bank statements but not matched to invoices relating to the Project does not include the Gaggenau payments.
  177. In relation to issue three, therefore, I am satisfied that the sum of £4,277.71 should have been admitted for voting purposes.
  178. Issue 4 - £6,750.50 snagging costs

  179. The Applicant has adduced in evidence a written summary of sums said to have been spent on snagging. He has not, however, produced in evidence any of the invoices or documentation required to establish on a balance of probabilities (i) that he paid for the same; (ii) that the same related to snagging on the Project; or (iii) that the same related to snagging on the Project for which the Company (rather than any subsequent contractor) should be held responsible.
  180. For these reasons I conclude that the £6,750.50 should not be admitted for voting purposes.
  181. Merger/Res Judicata

  182. On behalf of the Respondent, Mr McNeil submitted that the Applicant was estopped by merger and res judicata from claiming the sums in his proof forming the subject matter of this appeal by virtue of the adjudication award on 1 November 2023. This was a point heralded for the first time in Mr McNeil's skeleton argument; it had not been raised in the evidence or in any party-party correspondence at any time prior to exchange of skeletons. For this reason it was not an issue addressed by Mr Gupta in his skeleton argument. Mr Gupta did however address the point in oral submissions.
  183. Mr McNeil submitted that any person in whose favour a judicial tribunal of competent jurisdiction has pronounced a final judgment is precluded from recovering before any English tribunal a second judgment on the same cause of action. Mr McNeil argued that the principle extended to awards by competent tribunals, citing Alexander Brothers Ltd (Hong Kong SAR) v Alstom Transport SA [2020] EWHC 1584 (Comm), a case concerning an foreign arbitration award in which Cockerill J held at [104] to [105] that where an arbitral tribunal had jurisdiction to determine an issue of illegality and had determined there was no illegality on the facts, there was almost no scope for the court to reopen that issue on enforcement of the award. Cockerill J further held that, where an allegation of bribery could with reasonable diligence have been brought before the arbitral tribunal, and there was no explanation why that was not done, raising the issue again was prima facie an abuse of process and that on the facts of the case, there were no special circumstances which would make it unjust for the defendant to be debarred from raising the point on enforcement.
  184. Mr McNeil contended that under the doctrine of merger, any cause of action for which judgment is given by an English judicial tribunal merges in that judgment, such that the cause of action ceases to exist and cannot support a second action. The modern articulation of this principle, he said, was given by Lord Ellenborough CJ in Drake v Mitchell (1803) 3 East 251:
  185. 'I have always understood the principle of transit in rem judicatam to relate only to the particular cause of action in which the judgement is recovered operating as a change of remedy from its being of a higher nature than before'.
  186. Mr McNeil also referred me to the case of Clark v In Focus Asset Management & Tax Solutions Ltd [2014] EWCA Civ 118. This case concerned an award issued by the financial ombudsman pursuant to the scheme provided in Part XVI of the Financial Services and Markets Act 2000 ('the 2000 Act'). Section 229 of the 2000 Act gives the ombudsman power to award compensation up to a set financial limit. A defining feature of the ombudsman service is that a complainant can choose whether to accept the decision of the ombudsman, but if he accepts the determination within the time limit, it is final and binding on both parties: section 228(5) of the 2000 Act, as amended by paragraph 4 of Schedule 11 to the Financial Services Act 2012. If accepted within the time limit, such an award can be enforced as a county court judgment: section 229(8)(b) Financial Services and Markets Act 2000, paragraph 16 of Schedule 17; Clark at [25]. In Clark, the claimants had accepted the ombudsman's maximum award of £100,000 against their financial adviser and had then sought to bring proceedings against that adviser regarding the same complaints with a view to claiming more. The Court of Appeal concluded that the doctrine of res judicata applied and that it was not open to the claimants to 'litigate the same grievances again in the court': Clark at [2], [93] and [121].
  187. At [3]-[12] of Clark, Arden LJ gave the following helpful guidance on the doctrines of merger and res judicata:
  188. '3. Common law doctrines preclude a person who has obtained a decision from one court or tribunal from bringing a claim before another court or tribunal for the same complaint. These rules are referred to as res judicata and merger.
    4. To understand merger, it is necessary to understand the meaning of 'a cause of action'. It is not a legal construct. The term 'cause of action' is used to 'describe the various categories of factual situations which entitle[d] one person to obtain from the court a remedy against another' (per Diplock LJ in Letang v Cooper [1965] 1 QB 232, 243). A complaint to the ombudsman need not be a cause of action but (as further discussed below) it may involve consideration of an underlying cause of action and the facts on which a complaint is based may be or include facts constituting a cause of action.
    5. Merger explains what happens to a cause of action when a court or tribunal gives judgment. If a court or tribunal gives judgment on a cause of action, it is extinguished. The claimant, if successful, is then able to enforce the judgment, but only the judgment. The effect of merger is that a claimant cannot bring a second set of proceedings to enforce his cause of action even if the first tribunal awarded him less than he was entitled to (see, for example, Wright v London General Omnibus Co (1877) 2 QBD 271 and Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878). As Mummery LJ held in Fraser v HLMAD Ltd [2006] ICR 1395, para 29, a single cause of action cannot be split into two causes of action.
    6. Res judicata principally means that a court or tribunal has already adjudicated on the matter and precludes a party from bringing another set of proceedings (see generally Lemas v Williams [2013] EWCA Civ 1433). The doctrine also covers abuse by a litigant of the court's process by bringing a second set of proceedings to pursue new claims which the claimant ought to have brought in the first set of proceedings (this is known as the rule in Henderson v Henderson (1843) 3 Hare 100).
    7. The requirements of res judicata are different from those of merger. All that is necessary to bring merger into operation is that there should be a judgment on a cause of action. Res judicata may apply either because an issue has already been decided or because a cause of action has already been decided. We are concerned on this appeal with res judicata of the latter kind, known as cause of action estoppel.
    8. I take as the requirements of cause of action estoppel the summary from Spencer Bower & Handley, Res Judicata, 4th ed (2009) cited with approval by Lord Clark … in the recent case of R (Coke-Wallis) v Institute of Chartered Accountants in England and Wales [2011] 2 AC 146, para 34:
    'In para 1.02 Spencer Bower & Handley, Res Judicata, 4th ed makes it clear that there are a number of constituent elements in a case based on cause of action estoppel. They are: '(i) the decision, whether domestic or foreign, was judicial in the relevant sense; (ii) it was in fact pronounced; (iii) the tribunal had jurisdiction over the parties and the subject matter; (iv) the decision was – (a) final; (b) on the merits; (v) it determined a question raised in the later litigation; and (vi) the parties are the same or their privies, or the earlier decision was in rem.'
    9. If the requirements of res judicata are fulfilled, they constitute an absolute bar and the court has no discretion to hold that res judicata should not apply in any particular case.
    10. If the requirements of merger are fulfilled, it is unnecessary to see if the requirements of res judicata are fulfilled, and vice-versa.
    11. There is a powerful twofold rationale in the doctrines of merger and res judicata. The first rationale is 'the public interest in finality of litigation …'
    12. Secondly, there is the private interest. As Sir Nicholas Browne-Wilkinson V-C put it in Arnold v National Westminster Bank plc 63, 69, 'it is unjust for a man to be vexed twice with litigation on the same subject matter'.
  189. At [73], Arden LJ concluded that an award of an ombudsman under the scheme can give rise to res judicata. As put by Arden LJ at [74]: 'a complaint may consist of or include facts which constitute a cause of action. In my judgment, that is enough to show that a complaint may be, or include, a cause of action: see Letang v Cooper [1965] 1 QB 232.' The fact that the ombudsman was required by the 2000 Act to resolve a dispute by reference to what in his judgment is fair and reasonable and not by reference to legal principles was found not to be an impediment to the application of res judicata: [76]-[77].
  190. At [77] of the judgment in Clark, Arden LJ said:
  191. 'For the purposes of [the doctrine of res judicata], it is sufficient as I see it that the ombudsman decides the question posed by facts constituting a cause of action. The rationale of res judicata would apply in those circumstances and none of the authorities shown to us require that the decision in terms decides whether or not a cause of action has been shown or what the parties' legal rights or obligations were. In my judgment, it is sufficient that he decides whether the facts underlying a cause of action give rise to any claim is between the complainant and the adviser and whether the claimant has any remedy against the adviser relative to those facts. The fact that the remedy is not the same as would be awarded in a court of law is also not a requirement of res judicata: otherwise, res judicata would not be available if the first decision is that of a foreign court in which different remedies are available from those available in our courts. Again no authorities cited to us goes that far. That conclusion means that if the complainant were (unwisely) to accept an award offering him only an apology, res judicata would apply if he chose to bring court proceedings. His wiser course would be to reject the award altogether in those circumstances.'
  192. At [81], Arden LJ continued in Clark:
  193. '… the burden of showing that the facts constituting a cause of action forms the basis of an award and that the same cause of action is relied on in the court proceedings lies on the adviser. If the court is not satisfied, there will be no res judicata. In short, the complainant has the benefit of any doubt.'
  194. At [82], the judge concluded that the ombudsman's award is a judicial decision for the purposes of the requirements of res judicata.
  195. At [111], Arden LJ noted the principle of statutory interpretation that where Parliament is silent on an issue, the common law still applies unless it has been excluded expressly or by implication: Bennion, Statutory Interpretation, 4th ed (2002) at p887.
  196. Mr McNeil also made reference to the summary of the rule in Henderson v Henderson set out in the White Book at volume 3.4.6. Among other things this refers to the guidance given in the speech of Lord Bingham in Johnson v Gore Wood & Co [2002] 2 AC 1 at 30-31, where he said:
  197. 'The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the public interest in the current emphasis on efficiency and economy in the conduct of litigations, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits based judgement which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. '
  198. At paragraph 72 of his skeleton argument, Mr McNeil argued that the Applicant had 'extinguished his causes of action under the JCT Building Contract following the Adjudication Award on 1 November 2023'. He argued that 'the circumstances required of cause of action estoppel, explained in Clark, apply to the Adjudication Award in the JCT Dispute', contending that:
  199. (1) The adjudication was a judicial, as opposed to an 'administrative' decision;

    (2) It was in fact pronounced;

    (3) The adjudicator had jurisdiction over the parties and the subject matter. In this regard, he invited the court to consider the adjudicator's own views as to his jurisdiction at paragraphs 29-30 of his decision;

    (4) The decision was (a) 'final' and (b) on the merits;

    (5) The Applicant is subsequently attempting to mount a claim under the same cause of action (which Mr McNeil described as 'breach of the JCT Building Contract');

    (6) The parties are the same.

  200. Mr McNeil went on to argue that the key policy considerations behind merger and res judicata were applicable to the facts of this case, contending that it would be unjust for the Company to be 'vexed twice' with litigation on the same subject matter and that there was a public interest in the finality of litigation.
  201. The fact that the Applicant chose to limit the specific issues put to adjudication, seeking only liquidated delay damages, was, he argued, immaterial; the alleged losses now raised and said to be a result of breaches of the Contract could, with reasonable diligence, have been put to the adjudicator for adjudication.
  202. Mr McNeil went on to remind the court that res judicata is not a question of the court's discretion, quoting Clark at [19], which provided:
  203. 'If the requirements of res judicata are fulfilled, they constitute an absolute bar and the court has no discretion to hold that res judicata should not apply in any particular case'.
  204. On behalf of the Applicant, Mr Gupta argued that the Respondent was wrong on this issue. He maintained that the doctrines of merger and res judicata were not engaged by the mere making of an adjudication award, observing that the Respondent had adduced no authority in support of such a contention. He further submitted that even if the doctrines of merger and res judicata did in principle apply, the Respondent had referred to no authority to suggest that those doctrines would operate in the manner contended for by the Respondent by virtue of a single adjudication award on such a discrete, narrow issue.
  205. Mr Gupta observed that the adjudication process was designed for speed and that multiple referrals on discrete issues were commonplace. He took the court by way of example to Exyte Hargreaves Limited v NG Bailey Limited [2023] EWHC 94 (TCC) and Beck Interiors Ltd v Eros Ltd [2024] EWHC 2084 (TCC), two authorities concerning adjudication which, he submitted, of themselves show the way in which the adjudication process is designed to operate. He argued that both cases demonstrated that parties to a JCT contract are at liberty to commence multiple adjudications regarding the same contract. Exyte was a case involving 10 adjudications in the space of one month. The court gave summary judgment in respect of three adjudication awards between the same parties [1], [71]. All the adjudications arose as a result of variations to the same subcontract: see [4]. In Beck, upwards of 6 adjudications were already at play between the same parties in relation to the same contract: see [4] – [40]. As put by Mrs Justice Jefford at [64], 'That is the product of the right to commence an adjudication at any time'; a reference to the wording of section 108 of the Housing Grants Construction and Regeneration Act 1996.
  206. Mr Gupta observed that on the facts of Beck, which involved an application for an injunction restraining the respondent from commencing further adjudications, it would have been a stellar position for leading counsel for the applicant to take if the principles contended for by Mr McNeil applied; multiple adjudications had taken place between the same parties and more were in the pipeline.
  207. Mr Gupta argued that whilst adjudications are quasi judicial, they are not judicial. He reminded the court that if a successful party wished to enforce an award, it was necessary to get a court order.
  208. Mr Gupta also relied on the fact that in the context of the adjudication in this case, the Applicant had expressly reserved his rights in respect of other losses. This had been recorded in the adjudicator's decision at [17].
  209. In addition, Mr Gupta maintained that the causes of action were different. The adjudication related simply to a claim under the Contract for liquidated delay damages for the period between the contractual completion date and termination of the Contract. In contrast, he argued, the bulk of the Applicant's proof, insofar as the subject of this appeal, related to a claim for overpayment, which was essentially a restitutionary claim. This claim, he argued, was an entirely distinct claim and so there could be no question of merger or res judicata.
  210. Addressing these points, Mr McNeil sought to distinguish Beck on the basis that the issue of res judicata was not considered. There were simply 'vague allegations', as he put it, of abuse of process in relation to parallel claims.
  211. Mr McNeil also sought to distinguish Beck and Exyte as cases involving parallel proceedings regarding ongoing building works. The case of Exyte, he argued, demonstrated the reluctance of the court to involving itself in ongoing adjudications. In contrast, in this case the Contract had been terminated and the adjudication had concluded. The Respondent's present complaint, he argued, was that the Applicant was 'trying to reopen an adjudication that has already been settled'. He stressed the policy considerations of achieving finality in litigation and for litigants not to be vexed twice in the same matter.
  212. He argued that the suggestion by the Applicant in oral testimony that he would need to bring several adjudications 'did not make sense' and was 'plainly wrong'. He reminded the court that when challenged in cross examination as to whether he could with reasonable diligence have brought all his claims against the Company in the same adjudication process, the Applicant had responded 'I have no comment'. He submitted that the only inference from this response was that he could with reasonable diligence have brought all such claims within the same adjudication.
  213. Mr McNeil submitted that the Applicant had failed to show that the doctrine of res judicata (including Henderson) uniquely did not apply to adjudications when it does apply to 'non-judicial tribunals and even to an ombudsman who is subject to a financial limit'.
  214. Merger/Res Judicata: Discussion and conclusions

  215. As I have already concluded that the Applicant's claim for snagging costs of £6,750.50 should not have been admitted for voting purposes, the conclusions set out in this section of my judgment relate solely to the Applicant's remaining claims in issue in these proceedings, which comprise the overpayment claim, the Camerich UK claim and the Gaggenau claim ('the Remaining Claims').
  216. I shall begin by considering statutory context. Adjudication is governed by the Housing Grants, Construction and Regeneration Act 1996 ('the 1996 Act'). It is an unusual, sui generis procedure, quite distinct from arbitration.
  217. Section 108 of the 1996 Act provides:
  218. (1) A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.

    For this purpose "dispute" includes any difference.

    (2) The contract shall –

    a) Enable a party to give notice at any time of his intention to refer a dispute to adjudication;
    b) provide a timetable with the object of securing the appointment of the adjudicator and referral of the dispute to him within 7 days of such notice;
    c) require the adjudicator to reach a decision within 28 days of referral or such longer period as is agreed by the parties after the dispute has been referred to;
    d) allow the adjudicator to extend the period of 28 days by up to 14 days, with the consent of the party by whom the dispute was referred;
    e) impose a duty on the adjudicator to act impartially; and
    f) enable the adjudicator to take the initiative in ascertaining the facts and the law.

    (3) The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement….

    (4) ….

    (5) If the contract does not comply with the requirements of subsections (1) to (4), the adjudication provisions of the Scheme for Construction Contacts apply.'

  219. On present facts, as the Contract did not provide a scheme-compliant written procedure for adjudication (clause K of the Contract only providing an adjudication provision applicable if the Property was owned or occupied as a residence, which the adjudicator found was not applicable on the facts of the case), the Scheme for Construction Contracts (England and Wales) Regulations 1998 as amended by the Scheme for Construction Contract (England and Wales) Regulations 1998 (Amendment) (England) Regulations 2011 ('the Scheme') applied to the adjudication pursuant to section 108(5) of the 1996 Act.
  220. Paragraph 1 of the Scheme (as amended) provides:
  221. 1(1) Any party to a construction contract ('the referring party') may give written notice (the 'notice of adjudication') at any time of his intention to refer any dispute arising under the contract to adjudication.

    (2) The notice of adjudication shall be given to every other party to the contract.

    (3) The notice of adjudication shall set out briefly –

    a) the nature and a brief description of the dispute and of the parties involved,

    b) details of where and when the dispute has arisen,

    c) the nature of the redress which is sought, and

    d) the names and addresses of the parties to the contract ..

  222. Paragraph 7 of the Scheme provides:
  223. '7(1) Where an adjudicator has been selected in accordance with paragraphs 2,5 or 6, the referring party shall, not later than seven days from the date of the notice of adjudication, refer the dispute in writing (the 'referral notice') to the adjudicator.

    (2) A referral notice shall be accompanied by copies of, or relevant extracts from, the construction contract and such other documents as the referring party intends to rely upon.

    (3) The referring party shall, at the same time as he sends to the adjudicator the documents referred to in paragraphs (1) and (2), send copies of those documents to every other party to the dispute.

    Upon receipt of the referral notice, the adjudicator must inform every party of the date that it was received.'

  224. Paragraph 8(1) of the Scheme provides:
  225. 'The adjudicator may, with the consent of all the parties to those disputes, adjudicate at the same time on more than one dispute under the same contract.'
  226. Paragraph 19(1) of the Scheme provides:
  227. 'The adjudicator shall reach his decision not later than –
    a) twenty eight days after receipt of the referral notice mentioned in paragraph 7(1), or
    b) forty two days after receipt of the referral notice if the referring party so consents, or
    c) such period exceeding twenty eight days after receipt of the referral notice as the parties to the dispute may, after the giving of that notice, agree…'
  228. Paragraph 23(2) of the Scheme provides:
  229. 'The decision of the adjudicator shall be binding on the parties, and they shall comply with it until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement between the parties.'

  230. Adjudication is designed to be a quick and inexpensive method of arriving at a temporary result in a construction dispute. As is readily apparent from Paragraph 23(2) of the Scheme, the decision of an adjudicator is not final. A successful party wishing to enforce an adjudication award must first get a court order. The appropriate procedural route for enforcement is by summary judgment.
  231. It follows that the doctrine of merger is not engaged on the making of the adjudication award itself; the successful party to an adjudication must first apply for summary judgment. It is only on obtaining summary judgment that the doctrine of merger is engaged.
  232. The status of a financial award made by an ombudsman pursuant to the Financial Services and Markets Act 2000, such as that considered in Clark, is quite different; by operation of section 229(8)(b) of the 2000 Act and paragraph 16 of Schedule 17, such an award, if accepted, 'leads to the creation of a legal right, namely the right to receive the sum awarded and this right is enforceable as if it were a judgment of the court': Clark at [26], with emphasis added.
  233. The provisional, temporary nature of an adjudication award has other consequences. An adjudication award fails to meet the requirements of cause of action estoppel as summarised in Spencer Bower & Handley, Res Judicata, 4th ed (2009) and cited with approval in Clark, as (even putting any debate on the other requirements to one side) it is not 'final': see Clark at [8] and the Scheme at 23(2). Whilst not an authority referred to me in submissions, I am fortified in my own construction of Paragraph 23(2) of the Scheme by the reasoning of Dyson J in the case of Herschel Engineering Ltd v Breen Property Ltd 2000 BLR 272 at [16] and [17]. The Scheme contains its own protections against repeat referrals on matters which are the same or substantially the same as matters which have already been dealt with in adjudication; paragraph 9(2) of the Scheme requires the adjudicator to resign if the dispute is the same or substantially the same as one already dealt with in adjudication.
  234. For these reasons, in my judgment Mr Gupta is correct in submitting that the doctrines of merger and res judicata are not engaged on the mere making of an adjudication award.
  235. Moreover even if I am wrong in concluding, for the reasons set out above, that the doctrines of merger and res judicata are not engaged by the mere making of an adjudication award, the burden rests on the Respondent to demonstrate that the extremely narrow adjudication award made in this case has the effect of extinguishing by operation of the doctrine of merger or barring by operation of the doctrine of res judicata the Applicant's cause (or causes) of action in relation to the Remaining Claims: Clark at [81].
  236. In my judgment the Respondent has failed to discharge that burden. He has failed to satisfy the court, to adapt the words of Arden LJ in Clark at [81], that facts constituting a cause of action formed the basis of the referral/adjudication award and that the same cause of action is relied on in relation to the Remaining Claims.
  237. The Respondent did not adduce in evidence the notice of adjudication, the referral, or any of the other documentation filed in connection with the adjudication. The only documentation relating to the adjudication to which I was referred was the adjudicator's 15-page decision, which was exhibited to the Applicant's witness statement. The adjudicator's decision does not make any mention of the facts underlying the Remaining Claims. It does not refer to the Gaggenau appliances, the Camerich furniture, overpayments or sums paid by the Applicant to the Company which had not been accounted for. In my judgment, the adjudicator's decision plainly relates to an entirely different matter.
  238. I am also entirely unpersuaded that by limiting the scope of the adjudication to liquidated delay damages, the Applicant has fallen foul of the Henderson principle and is now precluded from proving for the Remaining Claims in the liquidation.
  239. In this regard I again remind myself that the burden rests on the Respondent to demonstrate that the Henderson principle is engaged: Johnson at 30-31. On the evidence before me, he has failed to discharge that burden.
  240. As confirmed in Johnson, with emphasis added
  241. 'It is … wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before'.
  242. As rightly submitted by Mr Gupta, the question whether, in any given case, a party 'should' have raised multiple matters in one set of proceedings must be considered contextually.
  243. In the context of an adjudication, it is generally accepted that, unless otherwise agreed by the parties, a referring party must refer a single dispute arising out of a single contract but may make as many distinct referrals as it wishes: see by way of example, Keating on Construction at 18-097, Beck at [76]-[77]. The Applicant's oral testimony reflected this approach. When asked why he had limited the scope of the adjudication to the liquidated damages claim, his evidence (which in this regard I accept) was that his understanding was that 'each adjudication relates to a specific claim' and that 'we had to file separate adjudications for each head of claim'. He also gave evidence (which I accept) that his solicitors were working on another aspect (for a separate adjudication) at the time that the Company went into liquidation.
  244. I reject Mr McNeil's submission in closing that it 'simply made no sense' for separate heads of claim under the Contract to be addressed in separate adjudications. This submission demonstrates a lack of understanding of the way adjudications are designed to work.
  245. Whilst the Scheme does allow the disputing parties to agree to extend the reference to cover 'more than one dispute under the same contract' and 'related disputes under different contracts', serial adjudications remain commonplace. I would add that I was taken to no evidence to support the contention that the Respondent would have agreed to more than one dispute being dealt with in the context of the adjudication in any event. Quite the contrary; the Respondent was contesting jurisdiction.
  246. As demonstrated by cases such as Beck and Exyte, the schematic in adjudications in quite different from ordinary court proceedings. It is commonplace for single issues to be resolved in separate adjudications.
  247. I reject Mr McNeil's attempts to distinguish between adjudications taking place during the course of ongoing construction contracts and adjudications which have taken place after a building contract has been concluded. I was taken to no authority to support any such distinction. Section 108(2) and paragraph 1 of the Scheme (as amended) each provide that adjudications can be brought 'at any time'. Multiple adjudications on the same building contract can and often do take place long after the building contract in question has concluded.
  248. I also reject Mr McNeil's attempts to distinguish cases such as Beck and Exyte on the ground that they concerned ongoing adjudications rather than adjudications which had been concluded. Again, I was taken to no authority to support any such distinction.
  249. I would add that it is questionable whether the Remaining Claims would fall within the remit of an adjudicator in any event.
  250. For all these reasons, on the evidence before me the Respondent has failed to discharge the burden of proving that the Applicant is precluded by the doctrines of merger and/or res judicata (including the Henderson principle) from pursuing the Remaining Claims.
  251. Conclusions on the Applicant's proof

  252. In my judgment, for the reasons set out in paragraphs [108] to [204] of this judgment, the Applicant's proof should have been admitted in the total sum of £225,287.26, comprising:
  253. (1) £104,426.19 (adjudication award);

    (2) £110,643.36 (overpayment claim);

    (3) £5,940.00 (Camerich claim, or additional overpayment); and

    (4) £4,277.71 (Gaggenau claim, or additional overpayment).

  254. I would observe that, even if (3) and (4) were left out of account completely, the Applicant would still comfortably clear the voting threshold for the appointment of his chosen liquidators by reason simply of the adjudication award at (1) and the overpayment claim at (2).
  255. Issue 5: the Respondent's DLA Claim of £16,434.95

  256. In my judgment the Respondent has not discharged his burden of proof on this item. There is no board minute in evidence to confirm that a director's loan account was even authorised and the only documentary evidence produced in support of the Respondent's claim was a three-page petty cash printout running from 3 June 2021 to 27 November 2023. I was taken to no documentary evidence establishing on a balance of probabilities that the Respondent personally paid any of the petty cash items. At paragraph 59 of his witness statement, the Respondent had claimed that 'There were receipts that I produced for expenses that I paid when there was a shortfall in the sums advanced by the Funders'. At paragraph 60 of his statement, the Respondent continued: 'This debt was admitted on review of the invoices that substantiated the debt'. Yet none of these invoices and receipts have been produced in evidence, still less any documentary evidence to support the Respondent's claim to have paid them himself from his own funds.
  257. The Respondent also proffered no persuasive explanation regarding why a petty cash summary would span a period of two and a half years when professionally prepared accounts were filed for the Company for given accounting years in the meantime. His explanation that he was waiting to reimburse himself from a VAT rebate did not make any sense, given that a number of VAT rebates were made along the way within the two and a half year period, including, by way of example, a VAT rebate on 3 March 2023 of £95,788.71, which brought the balance sitting in the Company's main bank account ending 837 to £123,857.21. At that stage the petty cash summary records a balance outstanding of £5,782.54. Shortly thereafter, on 3 April 2023, the Company's bank balance on the same account had increased to £363,109.39 following a payment into the account on the Applicant's behalf of £299,783. At or about that stage (as at 4 April 2023), the petty cash summary records a balance owing of £9,211.66.
  258. Moreover, the petty cash printout relied upon by the Respondent ends on 27 November 2023 with a balance of zero. The balance as at 31 October 2023 was £15,027.20 but the final entry, dated 27 November 2023, bears a reference 'Petty Cash Jnl to DCA', records a 'deposit' of £15,027.20 and brings the balance to nil. In this regard I note that notices went out to creditors for the decision procedure in early December 2023, very shortly after this credit entry.
  259. The Respondent had no good answer in cross-examination for the final balance of zero on the spreadsheet which he relied upon. He said that it was 'obviously some accounting entry'. He said that he 'didn't receive these funds' and was 'not sure where the netting off came from'. When pressed further, he said that he could not 'provide illumination'.
  260. In submissions Mr McNeil argued that there could be a number of reasons for the 'zero-ing out' of the petty cash summary. I accept that. The difficulty for the Respondent however is that he has adduced no evidence of what the reason was in this case. If the balance was simply moved to another journal, that does not assist, as the journal in question has not been produced in evidence.
  261. On the evidence as a whole, the Respondent has failed to satisfy me on the balance of probabilities that he is owed the sum of £16,434.94 on his director's loan account. I conclude that the Respondent's own claim of £16,434.94 should not have been admitted for voting purposes. The Respondent's decision to admit that proof shall be reversed and the Respondent's votes based on that proof shall be declared invalid.
  262. Issue 6: Reliable Housing's claim of £113,760 (£94,800 + VAT)

  263. Mr Gupta argued that Kajaine Accountants and Reliable Housing could not discharge their respective burdens of proof, as they were not parties to these proceedings. I reject this argument. In the context of an appeal against proof such as this, the proceedings are in my judgment adequately constituted if they include the appellant and the chair of the decision procedure as parties.
  264. The invoices adduced in evidence in respect of work undertaken by Reliable Housing for the Company came to an arithmetical total agreed between Counsel of £247,941.96. The Company's payments to Reliable Housing as evidenced in the Company's bank statements came to an arithmetical total agreed between Counsel of £134,181.96. The difference between those two figures was £113,760. This was the figure claimed in Reliable Housing's proof of debt.
  265. In the section of Reliable Housing's proof of debt requiring details of how and when the debt was occurred was written 'Cost of labour during the course of the project starting September 2021'. In the absence of any evidence to suggest the contrary, it is in my judgment legitimate to conclude that the reference to 'the project starting September 2021' was a reference to the Project (as defined), which had started in September 2021. In the section of the proof requiring 'details of any document by reference to which the debt can be substantiated' was written 'Timesheet in the form of excel spreadsheet, which was updated and furnished to the debtor from time to time during the course of the project'. No reference was made in the proof to any invoice or invoices relating to the debt claimed.
  266. An invoice relating to the exact sum of £113,760 was adduced, however, in evidence in answer to these proceedings. It was exhibited to Mr Allaraj's witness statement dated 24 June 2024 and to the Respondent's first witness statement dated 26 June 2024. From the font and presentation of the witness statements, I consider it legitimate to conclude that (from an administrative perspective) both statements were prepared by the Respondent's solicitors. The invoice adduced in evidence in support of Reliable Housing's proof of debt was numbered 'INV-18 Schedule A' and dated 15 May 2023. The 'subject' line of the invoice referred to 4 Princes Gate Mews (the Property). In the body of the invoice, under the heading 'item and description', however, was stated simply 'Kindly refer to 230401 Schedule A'. No schedule of that description was adduced in evidence. The invoiced sum was a single entry of £94,800 plus £18,960 VAT. The sum was stated in the invoice to be 'Due on Receipt'.
  267. The invoice headed 'INV-18 Schedule A' dated 15 May 2023 had not been produced to the Applicant or Mr Akram prior to issue of proceedings and as noted above was not referred to in Reliable Housing's proof of debt. Mr Akram's evidence (which in this regard I accept) was that the invoices initially provided by the Respondent to the Applicant for Reliable Housing in June 2023 in response to Mr Akram's request totalled £90,009.13 plus VAT (a total of £108,006.96). The invoices produced in June 2023 had included an invoice numbered simply 'INV-18', dated 29 April 2023, in the sum of £32,085 (£26,737.50 plus £5347.50 VAT) but not 'INV-18 Schedule A' dated 15 May 2023. The total of invoices for Reliable Housing produced to Mr Akram in June 2023 of £90,009.13 was in marked contrast to the invoices exhibited to Mr Allaraj's witness statement, which totalled £247,941.96, a variance of £139,935.
  268. Mr Akram's evidence, which I accept, was that the variance of £139,935 was as a result of three invoices, numbered 17, 18 and 19. He addresses these invoices at paragraphs 16.2 to 16.6 of his witness statement.
  269. In relation to Invoice 18, he states at 16.5 of his witness statement:
  270. '16.5 When invoice #18 was initially produced [in] June 2023, the figure stated was £26,737.50 plus VAT, totalling £32,085. When the same invoice was exhibited in SA1 [to Mr Allaraj's statement] dated 24 June 2024, the invoice attached an additional invoice 18 Schedule A which contained a description "Kindly refer to 230401 Schedule A". The figure provided in [INV-18] Schedule A of £94,800 plus VAT (being £113,760) was in addition to Invoice 18 of £32,085, taking the total amount for Invoice 18 and Invoice 18 Schedule A to £145,845'.

  271. Mr Akram also referred in his evidence to Invoice 19. His evidence, which in this regard I accept, was that when Invoice 19, dated 26 May 2023, was initially provided in June 2023, the figure stated in the invoice was £20,444 plus VAT, totalling £24,529.81. When an invoice bearing the same date and number was exhibited in 'SA1' (to Mr Allaraj's statement) in June 2024, however, the sum claimed by the invoice was £22,257.34 plus VAT, totalling £26,704.81.
  272. The alterations made to Invoice 19 do suggest a degree of fluidity or informality in invoicing practice; the better practice in the event of an undercharge being either a cancellation and reissue (of which there was no evidence), or a further invoice for the balance, bearing its own invoice number. Given the fairly modest differential, however, little turns on the changes made to Invoice 19 itself in the present context.
  273. Mr Akram's evidence also addressed Invoice 17. His evidence, which I accept, was that Invoice 17, dated 3 April 2023, had first been provided to the Applicant by the liquidator in June 2024, in response to a query regarding an apparent double payment for Invoice 19 spotted on a review of bank statements. The backdrop was that there had been two payments to Reliable Housing on 18 July 2023 and 20 October 2023 in the respective sums of £26,704.81 and £24,000 bearing the reference 'Inv19'. The liquidator replied on 14 June 2024 stating that 'The Reliable Housing reference for the £24k should be for invoice 17, not 19'. Shortly thereafter, on 20 June 2024, the liquidator had forwarded on to the Applicant a copy of Invoice 17. This invoice was in the sum of £20,000 plus VAT, totalling £24,000. The difficulty with this was that the description in the invoice stated "Labour 27 Feb-2 April 2023"; and both the Respondent and Mr Allaraj had confirmed in evidence that no work was carried out on the Project over this period. It also bore a reference number for a different project: '51CCL'.
  274. Against that backdrop, Mr Gupta submitted that even putting to one side any other reservations regarding Reliable Housing's proof, Reliable Housing had failed to make out, at the very least, £24,000 of the total sum of £113,760 claimed by the proof.
  275. His alternative position is that if the sum of £24,000 did not come off Reliable Housing's proof, it must swell the Applicant's overpayment claim by £20,000 (on a net of VAT basis), as it is clear from the evidence (including the bank statements and the liquidator's explanation summarised at [222] above) that the Applicant's funds have been used to pay Invoice 17, which did not relate to the Project.
  276. Mr Gupta further submitted that the sum of £75,000 paid to Mr Allaraj personally should be treated as reducing Reliable Housing's proof. Mr Allaraj's evidence, however, was that this was an additional sum payable to the Company in respect of management fees, on top of labour at cost.
  277. Mr Gupta also referred the court to the filed accounts for Reliable Housing, which make no mention of work in progress relating to the Project or any relevant debt owed by the Company to Reliable Housing in the material years. This point was, however, raised very late in the day, shortly before trial. Mr Allaraj was also not asked about Reliable Housing's filed accounts in cross-examination. The absence of a full explanation for the omissions in Reliable Housing's filed accounts must therefore be considered in that context.
  278. On behalf of the Respondent, Mr McNeil accepted that Invoice 17 was not attributable to the Project. He said that his instructions were that a different invoice of the same value should have been included in the evidence.
  279. Mr McNeil also referred the court to the timesheets for Reliable Housing in evidence. He submitted that these demonstrated what sum remained owed to Reliable. He also argued that Mr Allaraj's evidence made clear that the £75,000 payment made to him personally was an additional sum on top of the sum due for labour at cost.
  280. Conclusions on Issue 6

  281. Whilst I have considerable reservations as to the accuracy of Reliable Housing's filed accounts and the provenance and timing of Invoice INV-18- Schedule A dated 15 May 2023, and whilst the document referred to in that invoice as '230401 Schedule A' has never been produced in evidence, on the evidence as a whole I am satisfied on a balance of probabilities that the sum of £113,760 (£94,800 plus £18,960 VAT) claimed in Reliable's proof is due and owing to it by the Company and was correctly admitted for voting purposes.
  282. In this regard I accept Mr McNeil's submission that the detailed weekly timesheets for the Project adduced in evidence by Reliable Housing, considered in the context of the total payment figure agreed between Counsel, lend considerable support to its claim. The Company's payments to Reliable Housing, as evidenced in the Company's bank statements, come to an arithmetical total agreed between Counsel of £134,181.96. Whilst Counsel for the Applicant and the Respondent did not provide the court with an agreed arithmetical total for the timesheets in evidence, it is clear from the evidence of Mr Akram, who had reviewed the timesheets exhibited to Mr Allaraj's witness statement, that, arithmetically, the total comes to a sum in the region of £249,749.50: Akram (1) at 15.3. Deducting £134,181.96 from £249,749.50 leaves a balance of £115,567.54. Whilst not identical to the sum of £113,760 claimed in the proof, it is sufficiently close to lend considerable credence to Reliable Housing's claim.
  283. The evidence of Mr Allaraj and the Respondent on the substantial sums outstanding to Reliable Housing for unpaid wages by February 2023 is supported by a comparison of the Company's bank statements and Reliable Housing's timesheets for the Project. The bank statements show a gap in payments from 2 August 2022 to 2 May 2023. The weekly timesheets in evidence show that Reliable Housing continued to work on the Project until 12 February 2023 nonetheless. There was then a period from February 2023 to April 2023 when Reliable Housing stopped working on the Project. Mr Allaraj's evidence, which in this regard I accept, was that the Respondent had taken a note of what was owed 'up to the stop' (ie up to February 2023) and had promised that the Company would pay it when it could. The Respondent's evidence was that he was hoping to pay the outstanding sum from a VAT rebate. (This did not explain why the Company had not paid the outstanding sum to Reliable Housing following receipt of funds of £299,783 paid into the Company's bank account on 3 April 2023 on behalf of the Applicant, but in fairness to the Respondent, he was not asked that question). Mr Allaraj's evidence (which again I accept) was that when Reliable Housing started working again on the Project in April 2023, this was on the agreed footing that any invoices for future work on the Project would be paid promptly. His evidence was that future work (ie from April 2023 onwards) was paid for promptly. It was only the historic sum, representing unpaid work 'up to the stop' (ie up to February 2023) which remained outstanding and was claimed in the proof.
  284. I accept Mr Allaraj's evidence that the £75,000 paid to him personally represented management fees payable by the Company to Reliable Housing on top of labour at cost. In my judgment the payment of this sum does not serve to reduce the sum which Reliable Housing can legitimately claim in its proof.
  285. I leave out of account Mr McNeil's submission on instruction that a different invoice of the same value as Invoice 17 should have been included in the evidence. Such a submission is plainly of no probative value. Mr Akram's witness statement, dated 12 July 2024, had referred to Invoice 17. The Respondent filed evidence after that point, included in the agreed bundles before me, in the form of his second witness statement dated 12 February 2025. Whilst this was expressed to be in support of a specific disclosure application which thereafter settled, it also included a section at paragraph 13 on Reliable Housing's proof. Notably, it did not exhibit any alternative invoice in place of Invoice 17 dated 3 April 2023. Mr Allaraj did not file a second witness statement addressing this issue either. Nor did he suggest in cross-examination or re-examination that there were any further invoices upon which, if given the opportunity, he might wish to rely in place of Invoice 17.
  286. That said, in my judgment the sum of £20,000 plus £4000 VAT paid to Reliable Housing in respect of Invoice 17 51CCL does not serve to reduce the sum which Reliable Housing can legitimately claim in its proof. The reason for this is that the total payment figure agreed between Counsel (working from the bank statements) and the total timesheet figure provided by Mr Akram (whose evidence on this issue I accept) remain the same: see [230] above.
  287. As confirmed at [109] above, however, in my judgment, it is right that the net sum of £20,000 paid to Reliable Housing in respect of Invoice 17 is reflected in the Applicant's overpayment claim. The calculation of the overpayment claim as totalling £110,643.36 thus takes the sum of £20,000 paid to Reliable in respect of Invoice 17 into account: see generally [109] above. On the evidence which I have heard and read, including but not limited to the bank statements in evidence and also the liquidator's explanation referred to at [222] above, I am satisfied on a balance of probabilities that Reliable's Invoice 17 51 CCL (of £20,000 + VAT) was paid from funds paid by or on behalf of the Applicant into the Company's bank accounts for the Project, when in fact that invoice related to a different project for another client. I am fortified in that conclusion by the fact that I was taken to no entry in the bank statements in evidence or any other documentary evidence to demonstrate (or even suggest) payment of that invoice by another client or from another source. I am satisfied that inclusion of this sum in the overpayment calculation does not involve any 'double-counting', as Invoice 17 is not included in Mr Akram's list of payments which could not be matched to invoices relating to the Project.
  288. Issue 7: £11,700 Kajaine Accountants

  289. My conclusions on whether it is necessary to be a party to these proceedings in order to discharge a burden of proof set out at [213] above are repeated.
  290. No issue is taken on the quantum of Kajaine Accountants' proof. The only issue taken by the Applicant is that the proof was lodged past the deadline. It is on that ground that the Applicant contends that Kajaine Accountants' proof should not have been admitted for voting.
  291. The letter from Kallis dated 4 December 2023 sent out to creditors enclosing Notice of Virtual Meeting and Notice of Invitation to form a Liquidation Committee stated: 'Your vote at the meeting on the resolutions will not count unless you have lodged proof of your debt by no later than 4 p.m. on the business day before 12 December 2023, the Decision Date.'
  292. The Notice of Virtual Meeting dated 1 December 2023, signed by the Respondent as sole director of the Company and enclosed with Kallis's letter to all creditors dated 4 December 2023, stated at [15]:
  293. 'Creditors entitled to attend and vote at the virtual meeting may do so personally or by proxy. A creditor can attend the virtual meeting and vote, and is entitled to vote if they have submitted proof of their debt by no later than 4 p.m. on the business day before the meeting. Failure to do so may lead to their vote(s) being disregarded.'
  294. The Notice of Invitation to form a Liquidation Committee dated 1 December 2023 and signed by the Respondent stated at [2]:
  295. 'Creditors entitled to attend and vote at the meeting may do so personally or by proxy. A creditor can attend the virtual meeting and vote, and is entitled to vote if they have submitted proof of their debt by no later than 4 p.m. on the business day before the meeting. Failure to do so will lead to their vote(s) being disregarded.'
  296. Kajaine Accountants' proof of £11,700 (£9,750 plus VAT of £1,950) ('the Debt') was based on an invoice dated 1 November 2023 for services provided between 1 May 2022 and 31 October 2023. Mr Shah's evidence was that the invoice was sent to the Company on 24 November 2023. His witness statement addresses the work done and charged for by that invoice. I accept his evidence in this regard.
  297. It is common ground that the proof was lodged late, after the 4pm deadline. It was not lodged until 12 December 2023, the date of the virtual meeting.
  298. Mr Shah's evidence, which in this regard I accept, was that his firm had received the letter from Kallis dated 4 December 2023 on 5 December 2023 and that, in accordance with his firm's usual practice, the letter had been placed on his desk. Mr Shah was however on paternity leave in India from 30 November 2023 and so did not see the letter, which was only sent in hard copy at this stage. Mr Shah became a father on 9 December 2023 and did not return to the UK until 28 December 2023. On 12 December 2023 at 13.25pm, very shortly before the virtual meeting was due to take place, Mr Arakapiotis of Kallis had emailed Mr Shah (and others at Kajaine Accountants) stating that he understood that the Company owed the Debt and advising that Kajaine Accountants had to submit a proof of debt to have the debt included in the liquidation process.
  299. Mr Shah's evidence (which again I accept) was that on learning of this, he immediately telephoned and emailed a work colleague, Mr Pankaj Shah, and instructed him to complete and send off the proof together with the appropriate accompanying documents. Mr Pankaj Shah did so by 13.52 on 12 December 2023.
  300. The Respondent's evidence, which in this regard I accept, was that, having consulted Mr Arakapiotis, the Respondent had concluded at the time that, in light of the extenuating circumstances, it was appropriate to admit the proof late, in the exercise of his discretion.
  301. Mr Gupta submitted that the wording (and therefore the binding terms of the meeting being convened) was very clear 'i.e. unless the proof of debt was lodged in time, it would not count and would be disregarded'. He argued that there was no retained discretion. As put at paragraph 47 of his skeleton argument:
  302. '47.1 There was a predefined and strict deadline, which was plain from the documents;
    47.2 There was therefore no discretion for any longer to be permitted to Kajaine Accountants – if longer was permissible (or there was to be a retained discretion), the wording of the notice had to state that. Instead, the sanction is clear: the vote will be disregarded; and
    47.3 Since the Kajaine claim was submitted outside of that strict time limit, it had to be disregarded such that it could not be admitted for voting purposes.'
  303. Mr McNeil submitted that the Respondent was entitled under rule 14.32(2) IR 2016 to admit a proof of debt delivered after the last date for proving.
  304. Discussion and conclusions on Issue 7

  305. I have accepted Mr Shah's written evidence on the work done and charged for by the invoice. In any event no point is taken on quantum. The only point taken by the Applicant is that the proof was lodged past the deadline.
  306. In my judgment, the Respondent did have a discretion to admit Kajaine Accountants' proof for voting purposes, notwithstanding its late arrival. This discretion was not, as Mr McNeil submitted, conferred by rule 14.32(2) IR 2016. Rule 14.32(2) applies in the context of proofs lodged for dividend and accordingly is of no relevance in this case. Instead, the discretion was retained by the Respondent by virtue of paragraph 15 of the Notice of Virtual Meeting itself. In this regard I reject Mr Gupta's submissions on construction, as summarised at paragraph 47 of his skeleton argument. Whilst the covering letter from Kallis used different language, and the Notice of Invitation to form a Liquidation Committee used different language, in my judgment it is the language of the Notice of Virtual Meeting itself which must prevail in this context. The covering letter merely inaccurately summarised the contents of the Notice of Virtual Meeting. On a true construction of that Notice, and in particular, the inclusion of the word 'may' in paragraph 15 of the same, it is in my judgment clear that the Respondent did retain a discretion to allow a late proof to vote. In my judgment it was an entirely appropriate use of that discretion to allow Kajaine Accountants' proof in late, in light of the extenuating circumstances.
  307. I reach these conclusions on Issue 7 notwithstanding the concessions made in cross-examination by the Respondent and Mr Shah, who each (when put) accepted in oral testimony that the proof should not have been allowed in late. The Respondent and Mr Shah were each witnesses of fact. The issue of whether on a true construction of the Notice of Virtual Meeting and in the events which have occurred the Respondent retained a discretion to allow in a late proof is a point of construction/legal principle for the court.
  308. For all these reasons Kajaine Accountants has discharged its burden of proof on the evidence before me. It has made out its claim to be a creditor of the Company in the sum of £11,700 and was properly admitted to vote in that sum, notwithstanding the late arrival of its proof.
  309. Issue 8.1: was there unfair prejudice and/or material irregularity within the meaning of rule 15.35(3B)(a) IR 2016

  310. In my judgment the reference to rule 15.35(3B)(a) IR 2016 in the list of agreed issues is an error, as rule 15.35(3B)(a) IR 2016 applies to appeals taken or required under Part A1 of the Act. The present appeal is governed by 15.35(3) and, as the appeal does not concern a CVA or IVA, strictly speaking rule 15.35(3) does not require the court to be satisfied that the circumstances which led to the appeal give rise to unfair prejudice or material irregularity. Notwithstanding the absence of such a requirement, however, in light of my findings and conclusions as set in this judgment, I confirm that I am in any event satisfied that the circumstances which led to this appeal do give rise to material irregularity. As I have found, the Applicant was not admitted to vote in the correct sum and the Respondent was admitted to vote when he should not have been. In light of my findings, the Applicant enjoyed significantly more than 50% in value of the vote and the outcome of the creditors' meeting ought to have been that his choice of liquidator was appointed. In such circumstances, the circumstances which led to the appeal plainly do in my judgment give rise to a material irregularity.
  311. Summary of conclusions

  312. For the reasons which I have given, I find that:
  313. (1) The Applicant's claim for overpayments should have been admitted in the sum of £110,643.36;

    (2) The Applicant's claim for £5,940 that was paid to Camerich UK Limited for furniture should have been admitted for voting purposes; alternatively, should have been treated as increasing the overpayment claim by £5,940;

    (3) The Applicant's claim for replacement Gaggenau appliances should have been admitted in the sum of £4,277.71 for voting purposes; alternatively, should have been treated as increasing the overpayment claim by £4,277.71;

    (4) The Applicant's claim for £6,750.50 for snagging costs should not have been admitted for voting purposes;

    (5) The Respondent's own claim for £16,434.95 should not have been admitted for voting purposes;

    (6) Reliable Housing's claim for £113,760 should have been admitted for voting purposes;

    (7) Kajaine Accountants claim for £11,700 should have been admitted for voting purposes;

    (8) The circumstances which led to the appeal do, in my judgment, give rise to a material irregularity.

    The Way Forward

  314. I shall hear submissions on the handing down of this judgment on the issue whether the court should direct another decision procedure or make such other order as it thinks just. Whilst Mr Gupta addressed this aspect in his written and oral submissions, Mr McNeil's written and oral submissions did not address this aspect. The court will accordingly hear further submissions on this issue at the handing down of judgment. Costs (including reserved costs) will either be dealt with at the handing down, time permitting, or at a later hearing for which directions will be given at the handing down hearing. Parties are encouraged to agree a minute of order if possible.
  315. ICC Judge Barber

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