Service permitted on English solicitors where foreign creditor avoiding service

Administrators were permitted to serve an application on a foreign company, via the foreign company’s English solicitors, where it had deliberately avoided providing an address at which it could be served directly in its jurisdiction.

This case concerned a special purpose vehicle (“SPV”) incorporated to develop a property scheme comprising 127 units (“Properties”). The SPV was funded by secured loans from a company (“Topland”) totalling £14.8 million.

Following the appointment of administrators, and without notification, a Dubai company (“Actua”) applied to enter a unilateral notice at the Land Registry in respect of a purported equitable charge over the Properties alleging that it had lent the SPV £2.1 million. This action prevented the progress of sales and was prejudicing the progress of the administration.

Following Actua’s failure to engage pre-action, the administrators made an application seeking (among other relief) a declaration that the equitable charge was void for non-registration. While Actua’s English solicitors said they had no instructions to accept service, the administrators did provide a copy of its application to Actua’s English solicitors prior to the hearing date.

The Court permitted service out of the jurisdiction, however concluded that Actua had deliberately avoided providing an address at which it may be served directly. The Court therefore made a retrospective order confirming service on Actua’s English solicitors. Actua was not in attendance at the hearing however the Court proceeded to deal with the substantive application as it was satisfied that Actua had been afforded ample opportunity to engage with the administrators and had failed to do so. It was also essential that urgent relief was granted to ensure that the administration was not further prejudiced.

The Court determined that Actua’s equitable charge was void for non-registration within 21 days of creation under s.859A Companies Act 2006. The Court therefore ordered that Actua’s application for a unilateral notice should be immediately cancelled by the Chief Land Registrar.

Graham Paul Bushby and Nicholas John Edwards (as Joint Administrators of Rodus Developments Ltd ) v Actua Investment LLC

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