Garden House Software v Marsh: High Court dismisses reverse summary judgement application as abuse of process

In Garden House Software Limited v Timothy Marsh & Ors [2026] EWHC 314 (Ch), His Honour Judge Cadwallader dismissed an application by four of the defendants for reverse summary judgement or strike-out, finding both that the application failed on its merits and that it constituted an abuse of process.

The claimant brought proceedings as assignee from the liquidator of Serisys Ltd ("SL"), a software development company that had assigned valuable intellectual property — a financial services software suite known as Adypt — to a related Hong Kong entity, Serisys Asset Holding Limited ("SAHL"), for nil consideration in August 2017. The claimant valued that intellectual property at approximately £3.2 million at the time of transfer and alleged SL was insolvent on both a cashflow and balance sheet basis when the assignment took place. The defendants denied both propositions.

The applying defendants ("THD") originally framed their summary judgement application around the contention that a charge purportedly created in 2016 over the intellectual property meant SL never held an unencumbered interest capable of being transferred at an undervalue. That argument was quietly abandoned at the hearing, having been met with the straightforward objections that the chargor — SGL, the Hong Kong parent — did not own the relevant assets and could not charge them, and that the charge had in any event never been registered, rendering it void against the liquidator under established principles.

THD pivoted instead to attacking the claimant's pleaded case on a separate charge executed in March 2019 — the same day a winding-up order was made against SL — but dated 1 March 2019. The claimant contended this charge, granted by SAHL in favour of the first defendant's wife over the same intellectual property, was itself a transaction defrauding creditors under section 423 of the Insolvency Act 1986, designed to obstruct enforcement of any order setting aside the original assignment.

THD advanced three objections. First, they argued that, following the Supreme Court's decision in El-Husseiny v Invest Bank PSC [2026] AC 1, section 423 could not be engaged because SAHL — not SL — entered into the 2019 charge, and SAHL was not a company owned by SL. The court rejected this at the summary stage, accepting that the claimant had at least arguably identified SL, its liquidator and creditors as victims of the charge, which had the aim and effect of obstructing the remedy in respect of the earlier assignment.

Secondly, THD relied on Re MC Bacon Ltd (No.1) [1999] BCC 78 for the proposition that the grant of security cannot constitute a transaction at an undervalue because it does not deplete assets. The court distinguished the position: MC Bacon addressed the scenario where consideration received was worth significantly less than consideration provided, whereas the claimant's case was that SAHL received no consideration at all for granting the 2019 charge — bringing the matter potentially within section 423(1)(a). Whether forbearance to call in the loan amounted to consideration was, the court held, a matter for trial.

Thirdly, THD contended the 2019 charge prevented the court from granting the remedy of setting aside the assignment. The court disposed of this briskly: an order under section 241 of the 1986 Act setting aside the 2019 charge would remove any such obstacle, and in any event alternative monetary remedies under section 241(1)(d) remained available.

The application was also dismissed as an abuse of process. An earlier strike-out application brought in 2023 had fallen away when THD accepted the claimant's proposed amendments to its particulars of claim — amendments that necessarily carried with them an implicit acknowledgement that the pleaded causes of action had a real prospect of success. THD could have raised the same points then but did not, and identified no significant change in circumstances or newly discovered facts to justify revisiting them. Applying the principles in Koza Ltd v Koza Altin Isletmeleri AS [2020] EWCA Civ 1018, the court found the application impermissibly serial and dismissed it on this basis independently of the merits.

Costs were ordered against THD on the standard basis, to be summarily assessed.

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