Paper Mache Tiger Limited v Lee Mathews Workroom Pty Ltd (in Liquidation)
[2023] EWHC 338 (Comm)
Peter Mark Arnstein v Coplexia Collaborative LLP & Anor
31 March 2023
[2023] EWHC 714 (Ch)
High Court
A company was being wound up. The owner, Mr. Khodaparast, fought back, claiming the pandemic was to blame, even though the company's problems started long before. The court found him to be responsible, ordering him to pay the legal fees caused by his actions.
Key Facts
- •Peter Arnstein (Petitioner) presented a winding-up petition against Coplexia Collaborative LLP (LLP) based on unpaid costs.
- •The petition was subject to the coronavirus test under Schedule 10 of the Corporate Insolvency and Governance Act 2020 (CIGA 2020).
- •Amir Khodaparast (Second Respondent), managing director of the LLP's designated member, controlled the LLP's defense.
- •The LLP argued coronavirus impacted its finances, a claim the court rejected.
- •The court found the LLP's financial difficulties predated the pandemic and were due to other factors.
- •The Petitioner sought a non-party costs order against Mr. Khodaparast for the costs of the coronavirus test and the non-party costs application.
Legal Principles
Court's discretionary power to order a non-party to pay costs.
Section 51 of the Senior Courts Act
Principles for non-party costs orders, considering control, funding, and personal benefit.
Grizzly Business Ltd v Stena Drilling Ltd [2017] EWCA Civ 94 at [51]
Coronavirus test under Schedule 10 CIGA 2020; burden of proof on the company to show coronavirus had a financial effect.
Schedule 10 CIGA 2020
Outcomes
Mr. Khodaparast to pay Petitioner's costs related to the coronavirus issue and the non-party costs application.
Mr. Khodaparast controlled the LLP's defense, acted in his own interest, not the LLP's, and presented misleading evidence in bad faith. His actions were causally linked to the Petitioner's costs.
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