Claim No: CR-2024-004856 - [2025] EWHC 2304 (Ch)

STRIKE-OUT APPLICATIONS

The Application seeks, as an alternative to summary judgment, the striking out of the Points of Defence of both Mr Ipek and of Koza Ltd, claiming, in the alternative:

“2.

That Koza Ltd's Points of Defence be struck out in their entirety pursuant to CPR r.3.4(2)(a) and / or CPR r.3.4(2)(b)

3.

That Mr Ipek's Points of Defence be struck out in their entirety / in part pursuant to CPR r.3.4(2)(a) and / or CPR r.3.4(2)(b).”

The reasons why I am refusing to give summary judgment against Mr Ipek are also good reasons why I am refusing to strike out Mr Ipek’s Points of Defence, in their entirety. I discuss below why I’m not proposing to strike out Mr Ipek’s Points of Defence in part.

As put in the Application, the alternative remedy sought to that of summary judgment was the striking out of both Mr Ipek’s and Koza Ltd’s Points of Defence, and therefore, as I had determined not to strike out Mr Ipek’s Points of Defence this alternative remedy was not available and I did not deal with this point in the original draft of this Judgment that was circulated to the parties for corrections.

However, Koza Altin, has asked me to deal separately with the application to strike out Koza Ltd’s Points of Defence, and I can see that Koza Altin has raised separate grounds as to why I should strikeout these Points of Defence. Whilst it is not entirely clear on the drafting of the Application that the alternative remedy may be addressed in part rather than only as a whole, I will give the Applicant the benefit of the doubt on this point and will I address these arguments.

Koza Altin is asking for these Points of Defence to be struck out in their entirety pursuant to CPR r.3.4(2)(a) and/or CPR r. 3.4(2)(b).

CPR r.3.4 relevantly provides as follows:

“3.4

-(1) In this rule and rule 3.5, reference to a statement of case includes reference to part of a statement of case.

(2)

The court may strike out a statement of case if it appears to the court -

(a)

that the statement of case discloses no reasonable grounds for bringing or defending the claim;

(b)

that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings; ...

Koza Altin deploys essentially two arguments as to why Koza Ltd’s Points of Defence should be struck out:

The argument that Koza Ltd’s Points of Defence are an abuse of process is essentially based on the proposition that a company is merely a nominal respondent to a just and equitable winding up petition and should accordingly remain neutral. Koza Altin cites as authority for this proposition Re a Company No. 004502 of 1988, ex p Johnson [1991] BCC 234 where Harman J indeed did support this proposition and found on the basis of it that the company’s money is should not be spent in dealing with the matters as a contentious party. Koza Altin supported this proposition also with a quote from Joffe, Minority Shareholders: Law, Practice and Procedure (7^th ed) at paragraph 8.146 to the effect that a

“just and equitable winding up petition “is essentially a dispute between shareholders and does not affect the company as such”.

However, the mere fact that a company should not be using its money to take a partisan position in a dispute that is essentially one between shareholders does not automatically make its pleadings an abuse of process. No case has been cited to me where the court found a defence by a company in relation to a winding-up petition to amount to an abuse of process, and this proposition is not obviously analogous with any of the grounds on which the court has found an abuse of process in the past. Based on this ground alone, I would not determine to strike out Koza Ltd’s Points of Defence, particularly as this point was not discussed in any detail in oral argument and Koza Ltd was not represented.

Koza Altin argues that Koza Ltd’s Points of Defence disclose no reasonable basis for resisting the Petition ( so that CPR 3.4(2)(a) applies). It argues that:

The first point is largely correct. Koza Ltd’s Points of Defence have nothing to say about the reasons put forward by Koza Altin for seeking a winding-up. They focus entirely on the EPA, making the argument that Koza Altin through the EPA has attempted to bring about the sale of the Company’s principal asset at what the Company alleges to be an undervalue and in circumstances whereby the consideration was to be diverted away from the Company straight to its shareholder. They invite the court to infer that the EPA is part of an overall strategy to deprive the Company of its assets and to act otherwise than in accordance with the Company’s best interests in order to further a collateral, improper and unlawful purpose of Koza Altin. It is pleaded that accordingly Koza Altin is not coming to the court with clean hands.

Koza Altin argues that the concentration on the EPA is irrelevant, inchoate and/or hopeless in the basis that, if Koza Ltd is wound up, what will happen to the EPA (if anything) will be in the hands of a liquidator. It will be for a liquidator to decide whether to pursue it, seek to modify it, or not proceed with it. Whether the EPA is a good or bad deal is not a question for the court in this Petition, or on this Application.

This argument, however, does not provide a complete answer to the basis on which Koza Ltd is pleading the relevance of the EPA, and in particular to the main point (made at [16] of the Points of Defence) to allege that Koza Altin is pursuing a strategy for a “collateral, improper and unlawful purpose” to “deprive [Koza Ltd] of its assets and to act otherwise than in accordance with [Koza Ltd’s] best interests”.

Koza Altin does address this specific point in arguing that the “collateral purpose” issue fails for the same reasons as the similar “collateral purpose” argument made by Mr Ipek in his Points of Defence fails.

Whilst the “collateral purpose” that Koza Ltd is alleging is somewhat different from that which Mr Ipek is alleging (Koza Ltd is alleging a strategy to deprive the Company of its assets, whereas Mr Ipek was alleging an expropriation of his assets), I agree that the same argument applies. It cannot be said that Koza Altin is seeking through the Petition to achieve anything other than the natural result of a winding-up. Of course, a winding-up always results in the distribution of a company’s assets to its creditors and shareholders, but it is misuse of language to call this an “expropriation” with the pejorative connotations of that word.

Accordingly, I agree with Koza Altin that the collateral purpose argument deployed by Koza Ltd in its Points of Defence discloses no reasonable basis for resisting the Petition.

Koza Ltd also asserts a belief that Koza Altin is not coming to the court with clean hands (or at least asserts that it does not believe that it is coming to the court with clean hands which is not quite the same thing). The basis of this belief (or lack of belief) is not properly explained but in context it must be presumed to be the Company’s concerns about the EPA, as this is the only complaint that has been made about the conduct of Koza Altin within Koza Ltd’s Points of Defence.

I have already discussed the circumstances of the EPA, and have recognised that there are concerns about the terms of the EPA in that it appears to divert all or part of the consideration for the sale of the Company’s principal asset from the Company towards Koza Altin.

The “clean hands” argument made by Koza Ltd is slightly different narrower than that made by Mr Ipek, but both arguments have sought to rely on the circumstances around the EPA as supporting the argument. For the reasons I have given at [‎212] to [215] in the context of this “just and equitable” winding-up petition, these facts will not support the application the doctrine of unclean hands.

I must conclude, therefore, that the “clean hands” argument in Koza Ltd’s Points of Defence also does not disclose any reasonable grounds for defending the Petition.

The improper purpose argument and the “clean hands” argument are essentially the only arguments put forward in Koza Ltd’s Points of Defence that might have any bearing on the Petition. As I have found that neither of these arguments disclose any reasonable grounds for defending the Petition, I must conclude that the circumstances described in CPR r.3.4(2)(a) do apply so that it is open to the court to strike out the entirety of Koza Ltd’s Points of Defence.

That is not quite the end of the matter, in that the word “may” within CPR r. 3.4(2) indicates that the court has a discretion when the circumstances described in that role apply whether or not to strike out a statement of case.

There are some circumstances that the court should consider in this case that could be argued to be relevant to this exercise of discretion – in particular that Koza Ltd was not represented at the hearing. However, given the point that Koza Ltd is not regarded as having a stake in relation to the matter of its own winding-up, as I have discussed above, and having regard to the overriding objective (which would be better served by taking these irrelevant pleadings out of the future consideration of this matter), I consider that justice is best served by my ordering the striking out of these Points of Defence in their entirety.

Conversely, whilst would be open to me on the basis of the logic above to strike out some elements of Mr Ipek’s Points of Defence which I have found to have no merit, in this case I think it would be too difficult in terms of drafting to carve out the elements of his Points of Defence that I have found to have no merit from those which I have found might possibly still succeed. In this case I consider that the overriding objective is best served by not striking at any of Mr Ipek’s Points of Defence and leaving it to the good sense of whichever judge may hear the Petition (if indeed the Petition is ever heard) to deal with the points appropriately.