A shareholder applied under section 4 of the 1986 Act for disqualification orders against the liquidators of a hopelessly insolvent company.
Held: The application was refused on two grounds: first, that the applicant had no standing to bring the application and, secondly, that the application anyway had no merit.
As regards the applicant’s standing, Jacob J said: ‘The company is hopelessly insolvent. It follows that the two individuals concerned, the liquidators, are principally concerned with apportioning the company’s assets amongst the creditors. [The applicant] is not a creditor, and so to the extent that the liquidators make an error in admitting to proof, or not admitting to proof, debts, he is wholly unaffected. He cannot be a victim of any maladministration by the liquidators of their duties. In those circumstances, it is submitted that [the applicant] has no standing to make this application. I think that submission is right. It cannot be right that [the applicant] sets himself up as some kind of public prosecutor for the general interests of the public to complain about what has been done or done wrongly by these liquidators. The fact that he was a director once makes no difference. Of course, the Secretary of State, if he comes to the conclusion that there has been some sort of maladministration warranting disqualification can apply under s.4. I was told that [the applicant] has made no complaint to the Secretary of State. It was suggested that if I thought that there was sufficient to look into that I ought to adjourn the matter for the Secretary of State to make representations. Quite apart from the fact that I do not so think, such a course would be wholly unjust and wrong. If a disinterested person thinks that a liquidator’s conduct warrants disqualification, then the proper person to report it to is the Secretary of State, not to bring proceedings before the court and then ask the court to refer it to the Secretary of State.’
Judges:
Jacob J
Citations:
[2003] BCC 696
Jurisdiction:
England and Wales
Cited by:
Cited – Wood and Another v Mistry ChD 10-Jul-2012
A director’s disqualification order was sought. The order was sought on the basis of allegations of conduct as liquidator of several companies. . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 20 April 2022; Ref: scu.462498
