The court was asked to consider the application of voting rights in the creditors’ voluntary liquidation (CVL) of Five Delta Ltd, a property development company. The applicant, Mr Bhundia, a solicitor and creditor, challenged the chair’s (Mr Dhar) decision to admit only part of his proof of debt (£104,426.19) and to admit other creditors’ proofs in full, thereby affecting the appointment of the liquidator.
The dispute arose from a renovation project at 4 Princess Gate Mews, London. Bhundia claimed he overpaid the company by £110,643.36, and also sought to include claims for undelivered furniture (£5,940) and appliances (£4,277.71), which he alleged were misappropriated. He also challenged the validity of claims by Dhar, Reliable Housing Ltd (a subcontractor), and Kajaine Accountants.
The court found that Bhundia had substantiated his overpayment and the misappropriation claims, and that Dhar’s own claim lacked evidence. Reliable Housing’s and Kajaine’s claims were upheld (even where the latter was submitted late).
The court rejected Dhar’s argument that Bhundia’s claims were barred by merger or res judicata (due to a prior adjudication, finding that adjudication awards are not final and do not preclude further claims).
The court held that Bhundia’s proof should have been admitted in the sum of £225,287.26, and that the voting outcome was materially irregular. The matter was adjourned for directions on the appropriate remedy.
This judgment reinforces the importance of procedural integrity and evidential rigour in CVL decision-making.
Key takeaways include:
- Chairs must carefully assess proofs and exercise discretion transparently
- Late proofs may be admitted if discretion is retained and circumstances justify
- Adjudication awards do not bar further claims unless finalised by judgment
- Clear documentation and contemporaneous records are critical in proving debts
- Material irregularity in voting can invalidate meeting outcomes
Bhundia v Dhar [2025] EWHC 1227 (Ch)
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