Clark & Anor v Finnerty & Anor

Clark & Anor v Finnerty & Anor

The existence of a triable issue or the prospect of rescuing the company as a going concern is not, by itself, sufficient cause for removal of administrators under paragraph 88 Schedule B1. Removal should only be ordered for good or sufficient reason, determined by reference to the purposes of the office and the facts of the case. The Registrar's order was unjustified as the administrators were unbiased and entitled to their decision, and the removal would not necessarily advance the statutory objectives of administration.

Parties
Appellants: Clark & Anr; Respondents: Finnerty & Anr
Jurisdiction
England and Wales
Judgment Date
14 October 2010
Procedural Posture
Civil Appeal / Judgment on Appeal
Outcome
appeal allowed
Legal Topics
Removal of Administrators, Extortionate Credit Transactions, Penalty Clauses, Administration Objectives
Insolvency Company Law Removal of Administrators Extortionate Credit Transactions Penalty Clauses Administration Objectives

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Parties

Clark & Anr

Appellants

Finnerty & Anr

Respondents

Procedural Posture

Civil Appeal / Judgment on Appeal

Legal Issues

  1. 1 Whether sufficient cause existed to remove the administrators under paragraph 88 Schedule B1 Insolvency Act 1986
  2. 2 Whether refusal to commence proceedings under s.244 Insolvency Act 1986 or for relief from a penalty constitutes sufficient cause for removal
  3. 3 Whether the Registrar erred in law or fact in ordering removal

Ratio Decidendi

The existence of a triable issue or the prospect of rescuing the company as a going concern is not, by itself, sufficient cause for removal of administrators under paragraph 88 Schedule B1. Removal should only be ordered for good or sufficient reason, determined by reference to the purposes of the office and the facts of the case. The Registrar's order was unjustified as the administrators were unbiased and entitled to their decision, and the removal would not necessarily advance the statutory objectives of administration.

Court Disposition

appeal allowed

Orders

  • Order of Registrar set aside
  • Originating application for removal of administrators dismissed