CR-2018-009110 - [2025] EWHC 2115 (Ch)

Finally, I should say something about the “reputation” ground. The Administrators in this case argue that their removal would cast a significant shadow over their commercial and professional reputations, and that this is a factor which the court should take into account in considering their removal. Hugh Sims KC considered this point in Nardelli v Richardson, and said

“…the court will not lightly remove its own officer and must pay due regard to the impact on any removal on professional standing and reputation: see Re Edennote Ltd [1996] 2 BCC 718 (CA) per Nourse LJ at 725H, referred to in Sisu Capital above at [86] and also referred to in Re VE Interactive Ltd (in Administration) [2019] BPIR 438 at [35]. I have my doubts as to whether “the impact on any removal on professional standing and reputation” is a factor to take into account, or should be given significant weight, and it does not seem to me to be part of the ratio of the decision of the Court of Appeal in Re Edennote (which was to focus on whether or not the office-holder was acting under advice; see at 726C-D). It did not feature in Re Keypak Homecare Ltd (1987) 3 BCC 558 where Millett J (as he then was) took the view the office holder had been guilty of complacency. Nor in any of the cases I have read does it appear to have been decisive. Instead, it seems to me that even if removal may resound to the discredit, to some extent, of an office-holder, the court should not shy away from making the order if satisfied there are good grounds for doing so; see Neuberger J in AMP Music Box Enterprises Ltd v Hoffman [2002] BCC 996 at 1001H. Office-holders have an important function which they should conduct with independence and professionalism.”

Mr Isaacs criticises this judgment, and describes it as Mr Sims “going out on a limb”. I do not agree. It is entirely correct that the dictum of Nourse LJ formed no part of the ratio in Edennote. Mr Sheehan KC submitted that there is no case in which the Court found that it would be appropriate to remove an Administrator, but then decided that because of the impact on reputation it was inappropriate. I think this is correct, if only because it seems to me that a court would be wrong to do any such thing.

The removal of an office-holder may well be damaging to the reputation and good standing of that office-holder. However, the fact that an office-holder may suffer such damage is not a reason not to remove him if good cause for that removal can be shown.