FundingSecure Art Loans saga to be heard at Court of Appeal

A High Court judgment made in favour of 1,400 defrauded members of the public who crowdfunded loans to disgraced art dealer Matthew Green, 54, is set to be appealed, the mouseinthecourt can reveal.

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The background to the loans can be read in my long-read blog post “The Great Green Art Fraud – How FundingSecure lenders were scammed“.

In short – some 1,400 investors, “many of whom were ordinary consumers investing their personal savings”, collectively funded a series of loans totalling £2.3m supposedly secured against valuable works of art. 

In what is a truly remarkable story the art works promptly disappeared and the art dealer who had received the loans splurged the money, fled to Spain and was declared bankrupt. The investing public have yet to receive any money back.

In March 2022 a quartet of investors, who had acquired the rights to the litigation following FundingSecure’s collapse into administration, finally had their day in court.

In his Judgment Deputy High Court Judge Andrew Hochhauser QC found that the investors could enforce the judgment debt against Mr Green’s interest in his family’s pension scheme.

Lawyers for the investors had placed reliance on the decision in the case of Blight v Brewster in making their application.

The Appeal

In an order dated 13th July 2022, the Court of Appeal Judge Lord Justice Nugee recorded his reasons for allowing the application for permission to appeal. The application had been made by lawyers acting for Mr Green.

The Judge wrote that whilst the order made at the lower court was “within the principle of Blight v Brewster” it was a “novel order with potentially far-reaching consequences“. As a result Nugee LJ considered “that the proposed appeal has a sufficient prospect of success (on all 3 grounds) to justify it being considered by the Court of Appeal“.

A temporary pause (aka a stay) was granted over the order made by the lower court. At the very least this means a delay over the investors ability to access funds inside the families pension scheme.

Curve Ball

The application for permission to appeal was made 3-days-late. It is said that Mr Green’s solicitor had Covid which had prevented him from conducting the matter.

In consideration of whether this 3-day-delay would prove fatal to the application Nugee LJ said the application “is finely balanced“.

“On the one hand the Appellant’s notice was only 3 days late, and the Respondent was
notified of the proposed appeal before time expired. On the other hand the explanation given (that [the solicitor] had covid) is difficult to understand as the Appellant’s notice was signed on 24 March 2022 and the e-mails provided by the Respondents show that he was perfectly capable of attending to the appeal on 28 March 2022“

Concluding that “If no adequate explanation – or, worse still, a false explanation – is given, that can be very relevant to the grant or refusal of the application” the Judge said he would “therefore adjourn the application for an extension [of time] to the hearing of the
appeal“.

So what next?

Lord Justice Nugee directed that the appeal, with a time estimate of 1-day “be heard if possible by Friday 14 October 2022.“

Court of Appeal hearings are often live streamed, and available to watch after the event on YouTube.

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