Judge delivered “fatally flawed” decision in Art Loan fraud recovery, Court of Appeal told

A High Court judgment made in favour of defrauded members of the public who crowdfunded loans to a disgraced art dealer was “an impermissible extension of the Court’s jurisdiction” and should be quashed, three senior Judges have been told.

The background to this hearing can be read in “FundingSecure Art Loans saga to be heard at Court of Appeal“.

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Reporting by Daniel Cloake.

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Lord Justice Newey, Lord Justice Males and Lord Justice Arnold, sitting at the Royal Courts of Justice, heard submissions advanced on behalf of Matthew Green, 54, that 1,400 members of the public, defrauded as part of a £2.3m art-loan investment scam, should not be able to recover their money from his family pension scheme.

Deputy High Court Judge Andrew Hochhauser KC ruled at a hearing in March 2022 that they should, at the time telling the court “if someone acts fraudulently why on earth shouldn’t they be held to account“.

Top barrister Fenner Moeran KC, acting for the “convicted contemnor, fraudster, and fugitive” Mr Green, explained in written submissions that his client was appealing the “fatally flawed” judgment because “the Learned Judge was ignoring a relevant consideration“.

In oral submissions Mr Moeran told the court there was “a public policy for the provision of old age” and as such his pension entitlement should be protected. “What we’re asking for is not a fraudster’s charter” he added.

Mr Moeran also raised the issue of whether elements of Mr Green’s pension entitlement could accurately be described as ‘property’ saying in written submissions that whilst “The creditors have a right to payment… They do not have a right to make the debtor (i) incur greater liabilities and (ii) change their rights, so that the creditors can be paid“.

Point (i) was said to be a £1m tax charge, point (ii) was said to relate to Mr Green invoking so-called ‘Enhanced Protection’ on his pension entitlement.

In response, Mr Saaman Pourghadiri, the barrister representing the quartet of investors who purchased the rights to this litigation following the collapse of FundingSecure, disagreed with the submissions advanced on behalf of the borrower describing them as “unmeritorious“. “By this Appeal, Mr Green seeks to avoid the ordinary consequences of his fraud” began his written submissions to the court.

“We have a right to have our judgment debt satisfied” he told the court adding “it would be an outrageous affront to justice” if his pension scheme couldn’t be accessed. “There is a powerful public policy that judgment debts should be complied with“.

In support of his position Mr Pourghadiri read out a passage from the 2012 case of Blight v Brewster which said:
“The idea that the fraudster and forgerer can enjoy an enhanced standard of living at his retirement instead of paying the judgment debt would be a very unattractive conclusion.”

Even if the appeal was unsuccessful Mr Green would be left with a pension entitlement of over £1m, Mr Pourghadiri explained. It is understood that a worldwide freezing injunction currently in force would limit Mr Green to accessing £500/week for ordinary living expenses.

“All the factors point to us receiving the relief we seek” with Mr Pourghadiri’s written submissions concluding that “Mr Green is a fraudster who has evaded his debts for far too long… The Order [under appeal] was consistent with principle, policy, and justice. The Court is invited to dismiss the appeal“.

The Lord Justices indicated their Judgment would be handed down, in writing, at a later date.

Watch the Hearing

This Court of Appeal hearing was streamed on YouTube.
Watch 10.30 – 13.00 here
Watch 14.00 – 15.45 here

Hearing Details

IN THE COURT OF APPEAL
CIVIL DIVISION
Case Number: CA-2022-000591 (BL-2018-001572)

Court Room 71
Royal Courts of Justice
Strand, London, WC2A 2LL

29th September 2022 10.30am

Before:
Lord Justice Newey
Lord Justice Males
Lord Justice Arnold

Between:
Mr Matthew Green
Appellant

– And –

(1) David Bacci
(2) Michael Boyle
(3) Paul Mundy
(4) Marek Zwiefka-Sibley
(By way of an assignment dated 27 March 2020 by the Administrators of FundingSecure Ltd)
Respondents

Fenner Moeran KC (instructed by Mr Richard Quinn of Sehgal & Co) for the Appellant
Saaman Pourghadiri (instructed by CANDEY Limited) for the Respondents