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

Having established that the Applicants constitute the overwhelming majority of the creditors, I should say something about the significance of this fact. A great deal of the discussion before me turned on the question of how much and to what extent the court should act in accordance with the wishes of the majority of creditors in a case of this kind.

In Pagden v Fry [2019] BPIR 972, Jeremy Cousins Q.C. pointed out that:

“On an application for removal, whether under s 108 or 171, the wishes of the majority are a factor to which the court will have regard, but those wishes are not determinative. A similar approach was adopted by Snowden J in bankruptcy proceedings in Maud [v Aabar Block Sarl & O’rs [2016] EWHC 2175 (Ch)] He said at para 97:

‘In that regard, it is significant that none of the authorities relied upon by Aabar and Edgeworth were cases where the petition was being opposed by other creditors. In such a case, for the reasons that I have already given, and as explained in cases such as the Crigglestone case [1906] 2 Ch 327, In re P & J Macrae [1961] 1 WLR 229 and In re Leigh Estates (UK) Ltd [1994] BCC 292, the collective nature of bankruptcy proceedings requires the court to evaluate the wishes of the creditors and to attribute weight to the views of individual creditors in deciding whether to grant the relief sought in the interests of the class. As Upjohn LJ made clear in In re P & J Macrae [1961] 1 WLR 229, this will require consideration of all the circumstances. Accordingly, in the same way as he pointed out that the court might have suspicions about the motives of creditors who oppose a winding up order (e.g. because of their connections to the company) and might require them to explain their reasons for doing so, in an appropriate case the court may also question the motives of the petitioners and supporting creditors and investigate whether they have any ulterior purpose(s) in seeking a winding up order or bankruptcy order. Or as Mr Richard Sykes QC put it in In re Leigh Estates (UK) Ltd [1994] BCC 292, 294 “it is for the court to decide as a matter of judicial discretion, what weight to attribute to the voices on each side of the contest ””.

I am tempted to say that this point is simply an irrelevance. If an applicant creditor can satisfy the court that an administrator is not performing his role to the required standard, or is in breach of his duties, the court should remove him, no matter what proportion of the creditor body that applicant may constitute. Even a large majority of creditors should not be able to keep a clearly defective administrator in post - this is simply the converse of the proposition that no majority of creditors, no matter how large, should be given the right to remove an administrator without showing good cause.

I also note that the majority of those authorities which have addressed the question of the degree of attention which the court should pay to the majority of creditors have dealt with the position where there is a split between the creditors, such that the majority think one thing and the minority another. I am not at all sure how these authorities can be said to apply to a position such as that before me, where a majority of creditors think one thing, and the remainder appear to have no view.

My conclusion on this point is that the court should have regard to, but is not bound by, the wishes of the majority of creditors in their capacity as creditors: Clydesdale Financial Services Ltd v Smailes [2010] BPIR 62 at [14], [30]; Cash Generator Ltd v Fortune [2018] 4 All ER 325 at [29](b).