CR-2024-000675 - [2025] EWHC 2069 (Ch)

The payments in Categories B-D and F-M are all payments out of the Company. In the Particulars of Claim, as I mentioned, these are all alleged to be “Diversions”.

Category B contains payments to Mr Rizvi which total £384,776.47. Most of the payments are round figures - £10k, £15k, £20k, £50k etc and most are described as either Director Salary or Director Withdrawal. The Respondents have admitted that all these payments were made to Mr Rizvi.

On the morning of the hearing I received Mr Dennis’ second witness statement which provided an update on three matters. The first concerned the Preliminary Information Questionnaire which Mr Rizvi completed on 10 May 2024. The Official Receiver supplied a copy to the Liquidators on 30 July 2025 and it discloses that Mr Rizvi’s gross remuneration from the Company in 2022 was £6,629.64 and in 2023 was £9,074.66, figures which the Liquidators accept and which they contrast, naturally enough, with the Category B total. Counsel made it clear that those payments had already been accepted so that the claim is net of those figures.

Category C contains payments to Ms Dubylovska which total £186,545.84. Again, most are round figures, and most are described as either Director Salary or Director Withdrawal. Again, the Respondents have admitted that all these payments were made to Ms Dubylovska.

The payments in Category D were paid by the Company to various third parties and total £1,767,251.63. It is the Liquidators case that they constitute unexplained payments that do not appear to be for the benefit of the Company. The Respondents have admitted in correspondence that the Category D payments were for Mr Rizvi’s personal benefit.

The payments in Category F were paid by the Company to various third parties and total £51,261.49. It is the Liquidators’ case that they constitute unexplained payments that do not appear to be for the benefit of the Company. The Respondents have admitted in correspondence that the Category F payments “are payments applicable to Mr. Rizvi’s DLA and that the Rizvi DLA account is reduced by an equal amount”.

The payments in Category G were paid by the Company to various third parties and total £1,005,941.16. It is the Liquidators case that they constitute unexplained payments that do not appear to be for the benefit of the Company. The Respondents have admitted in correspondence that some £520,921.00 of the Category G payments “are payments which Mr. Rizvi agrees should be set of against the Rizvi DLA”.

The position for the payments in Category H, which total £267,059.06, is the same as for Category F.

For the Category I payments in the net sum of £201,090.87, the Liquidators’ case is the same as for Categories D, F, G and H. The Respondents have admitted in correspondence that the sum of £136,090.87 “should be applied to reduce the balance of the Rizvi DLA”.

The Category J payments, in the net sum of £125,531.87, are alleged to have been paid by the Company for personal assistance to directors who did not undertake work for the benefit of the Company. The Liquidators say that there are no employment or engagement contracts in records that have been identified in respect of these payees and/or the associated PAYE and pension costs.

The Category K payments, in the net sum of £138,794.13, were paid by the Company to various third parties. They constitute unexplained payments that do not appear to be for the benefit of the Company. The Respondents have admitted in the Letter of Response that the sum of £73,564.70 contained within the Category K payments: “must be deducted from the Rizvi DLA”.

The Category L payments, in the net sum of £8,338.00, were paid by the Company and relate to payroll costs related to the Second Respondent. It was confirmed by the Respondents under cover of a document supplied by email on 31 May 2024 that the Second Respondent: “has not worked formally in the business since December 2019. She has been a full-time mother to 4 children since the birth of her first child in February 2020”. On that basis, the Liquidators contend that these payments do not constitute legitimate business expenditure and constitute costs relating to personal payments to the Second Respondent.

Finally, the Category M payments, in the net sum of £118,962.49, were paid by the Company and are non-business-related payroll costs in respect of the employees paid by the Company who did not do work for the benefit of the Company. On this basis, the payments do not constitute legitimate business expenditure.

Overall, it appeared to me to be strongly arguable that the Particulars of Claim reveal a wide range of random personal expenditure and round sum withdrawals.

The total of all the Diversions pleaded in the Particulars of Claim is £4,255,553.01, a figure which I understand is to be revised down slightly to the figure I identified in the summary above of £4,143,419.26.

It can be seen from the above that there is no dispute as to the position of nearly all the payments out. The justification for them is that they have to be set off against the payments into the Company made by Mr Rizvi. His case is that these were all shareholder loans to the Company.