Scenic International Group Limited v Richard Adenaike & Ors

5 November 2024

[2024] EWHC 2791 (Ch)

High Court

A company was used for tax fraud. The people involved tried to get the court to cancel the punishments, but the judge said they were guilty. However, figuring out exactly how much money they owe is tricky, so the judge will decide that later.

Key Facts

•Claim based on alleged large-scale labour supply fraud.
•Default judgments entered against several defendants.
•Defendants applied to set aside default judgments.
•Claimant alleges fraudulent evasion of VAT and PAYE/NIC.
•Approximately £9 million passed through the Claimant's bank accounts.
•HMRC investigation revealed significant underpayment of tax.
•Claimant alleges dishonest assistance by several defendants.
•Defendants deny wrongdoing and claim funds were used for legitimate business purposes.

Legal Principles

Setting aside default judgments: CPR 13.3(1)

CPR 13.3(1)

Real prospect of defending the claim

Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)

Caution in resolving fraud claims summarily

King v Stiefel [2021] EWHC 1045 (Comm)

Attribution of director's knowledge to company

Lebon v Aqua Salt Co [2009] BCC 425

Director's duty to act in good faith to promote company success: s.172, Companies Act 2006

s.172, Companies Act 2006

Equitable compensation for breach of trust: AIB Group (UK) plc v Mark Redler & Co Solicitors [2014] UKSC 58

AIB Group (UK) plc v Mark Redler & Co Solicitors [2014] UKSC 58

Dishonest assistance: FM Marino Capital Partners Limited v Marino & Co [2018] EWHC 1768 (Comm)

FM Marino Capital Partners Limited v Marino & Co [2018] EWHC 1768 (Comm)

Knowing receipt: FM Capital Partners Limited v Marino & Co [2018] EWHC 1768 (Comm)

FM Marino Capital Partners Limited v Marino & Co [2018] EWHC 1768 (Comm)

Liability for dishonest assistance even when acting as company officer

Central Bank of Ecuador v Conticorp SA [2015] UKPC 11

Outcomes

Application to set aside default judgments refused.

Applicants have no real prospect of defending the claims on liability.

Default judgments against D1, ELHR, and Ms Ezed varied to liability only; damages to be assessed.

Issues regarding calculation of damages require further investigation.

Default judgment against BCUK requires further consideration.

Issues regarding calculation of damages and liability require further investigation.

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