Liquidator’s Assignment Challenged On The Basis Of Validity Of Appointment

The case of Henderson & Jones Ltd v Chambers & Anor (Re Priors Group Ltd) [2026] EWHC 1152 (Ch) involved dismissal of a summary judgment application issued by the applicant who had taken an assignment of various claims from the liquidator.

The respondents were at times each director of the company The Priors Group Limited. Mrs Chambers was always the shareholder. Both respondents do not accept the validity of the liquidator’s appointment:

On 25 May 2022 the liquidator entered into an assignment agreement (on behalf of himself and the Company) with the Applicant, purporting to assign all the Company’s and the liquidator’s claims against the Respondents to the Applicant for an initial consideration of £10,000 plus 50% of net recoveries. The Respondents do not accept the legitimacy or validity of the assignment.

…

The Respondents, who are litigants in person, do not recognise the Applicant as a legitimate party to the Application. They challenge the validity of the liquidation and the validity of the Assignment.

In relation to the validity of the liquidation, the Respondents deny that Mrs Chambers, as the Company’s sole member, resolved by special resolution to place the Company into voluntary liquidation. 

Mrs Chambers says that she did not vote for the liquidation and was unaware of the steps taken by Mr Chambers to place the company into Creditors Voluntary Liquidation:

It is a fundamental part of the Respondents’ defence that, as sole member of the Company, Mrs Chambers did not vote in favour of placing the Company into CVL and was not aware of the steps being taken by Mr Chambers to place the Company into CVL until long after Mr Bourne’s purported appointment as liquidator. This puts in issue the validity of the liquidation process and subsequent assignment of claims to the Applicant.

The Court highlighted the issue at large:

A successful challenge of the validity of the CVL would in turn impact on the validity of the assignment by which the Applicant claims entitlement to bring these proceedings. The assignment of the Company claims was made by Mr Bourne purportedly as agent for the Company. The assignment of the Liquidator claims was made by Mr Bourne purportedly as principal. Whilst I was not taken in submissions to the assignment itself, the consideration payable by the Applicant under the assignment appears to have been consideration payable in respect of all the claims purportedly assigned; no separate consideration for the Company and Liquidator claims respectively is mentioned in the evidence.

…

In my judgment, on the pleadings and evidence as they stand, the Respondents’ challenge to the validity of the CVL and the assignment would of itself warrant a dismissal of the SJ application. Having heard full submissions on the other grounds relied upon, however, I do not base my decision to dismiss the SJ application on the validity challenge alone. I base it also on the conclusions reached at [100] to [104] below.