Charging order made final following successful fraudulent trading claim (Re Courtside Recycling Ltd (in liquidation))

Taylor v Crabb and Crabb; Crabb v (1) Crabb and (2) Taylor and Czerwinke as joint liquidators of Courtside Recycling Limited (in liquidation) [2025] EWHC 3512 (Ch)

What are the practical implications of this case?

This judgment highlights the balance which is often to be struck between the rights of judgment creditors to enforce regular judgments they have obtained, and the rights of third parties impacted by those enforcement procedures.

The court noted here that the judgment creditor’s wife, by reason of enforcement action taken against the joint matrimonial home of the judgment creditor, went from a position of financial security to one in which she was financially exposed to her husband’s creditors.

This is the latest in a long line of cases which tends to emphasise the rights of those creditors over the interests of family members, particularly in circumstances where, as here, no dependants were living in the property at the time the enforcement action was taken.

What was the background?

Mr Crabb was the director of Courtside Recycling Ltd (CRL).

CRL entered liquidation and its joint liquidators successfully brought a claim against Mr Crabb for fraudulent trading, arising out of the deliberate and persistent under declaration by CRL of its VAT liability. The joint liquidators were awarded judgment in their favour against Mr Crabb in the sum of £2,927,429.43.

The joint liquidators were granted an interim charging order over the joint matrimonial home of Mr and Mrs Crabb and then applied for the charging order to be made final.

Pursuant to the terms of a TR1 made when the property was purchased in 2001, the beneficial interest in the property was said to be held by Mr and Mrs Crabb in equal shares. However, Mrs Crabb argued that when she and Mr Crabb separated in 2019 an agreement was made by which Mr Crabb was to retain 100% of the beneficial interest in a London property and Mrs Crabb was to hold 100% of the beneficial interest in the matrimonial home. She, therefore, applied for declarations to that effect and to resist the granting of a charging order.

What did the court decide?

Mrs Crabb’s claim failed and the interim charging order was made final.

The court noted that the joint liquidators as substantial judgment creditors were entitled both to have their interests accounted for in relation to any application of proprietary estoppel principles and to an expectation that an interim charging order, once made, would in due course be made final. The court noted, ‘an express declaration of trust defining parties’ respective interests in a property (such as that contained in a TR1 form) is conclusive as to those interests, such that there is no room for the doctrine of resulting or constructive trusts to arise, unless and until the conveyance is set aside or rectified. The reason for that provision is to ensure that the integrity of the principles regarding the recognition of trusts in the Law of Property is maintained’.

Case details

• Court: Business and Property Courts of England and Wales, Insolvency and Companies List (ChD)
• Judge: Deputy Insolvency and Companies Court Judge Frith
• Date of judgment: 6 June 2025

Article by Phillip Patterson

First published by LexisNexis