CR-2024-MAN-000540 - [2025] EWHC 2159 (Ch)

Mr Flitcroft was clearly, and with some justification, extremely annoyed by the fact that Milltom had had to chase the Company through arbitration, and to judgment, in respect of monies that were properly due to Milltom, and frustrated by the fact that the attempts to enforce the judgment through the ICO and the FCO had been frustrated, seemingly deliberately, by Supahome appointing Mr Faik as administrator thereby subjecting the Order for Sale Proceedings to the moratorium under paragraph 43 of Schedule B1 IA 1986.

Mr Flitcroft was clearly distrustful of Mr Faik’s handling of the administration of the Company, considering that Mr Faik could not bring objectivity to it, primarily because he continued to instruct RHF, which had acted on behalf of the Company and its directors prior to it entering into administration in resisting Milltom’s attempts to recover the monies due to it. Further, from Mr Flitcroft’s perspective Mr Faik appeared to be siding with the directors of the Company and Supahome in the way that he had dealt with Milltom’s security in his Proposals and Progress Reports, showing the same as ranking after Supahome’s security and valued at only £1. I have no doubt that these concerns are genuinely held concerns, which is not to say that there is substance therein.

It is fair to say that Mr Flitcroft was not cross examined at any length with regard to the circumstances behind the sale of 6 Gezzerts Rise. As I have already mentioned, his evidence was that the idea of 6 Gezzerts Rise being transferred to Milltom in a reduction of the amount owed to it by the Company came from Mr Craig. I noted that Mr Flitcroft responded somewhat dismissively to what was put to him by Mr Couser in cross examination with regard to Mr Craig’s professional difficulties, including his suspension as an insolvency practitioner, and the findings of fraud made against him by the Pensions Ombudsman. Confirmation was not provided, in the light thereof, that Mr Craig would not be involved in the future sale of the Property, and the gist of Mr Flitcroft’s response was, as I have already said, that Mr Craig was not someone who had done him any harm.

I did not find convincing Mr Flitcroft’s evidence regarding the suggestion that he had sought to thwart the sale of the Property by putting pressure upon Entwistle Green, the estate agents instructed by Mr Faik in respect thereof. Mr Flitcroft suggested that any such approach would have made by somebody involved in Milltom’s letting department, rather than by himself. However, I regard this as an unrealistic suggestion absent some reason why somebody in the letting department would have sought to put pressure on Entwistle Green not to sell the Property.

So far as Mr Faik is concerned, he came across to me as a diligent insolvency practitioner with many years experience, and with the additional qualification of being a solicitor. He explained that the information contained in his Proposals and Progress Reports has been based on the statement of affairs to which Mr Middleton provided a statement of truth, and other information provided by the directors of the Company. However, he was at pains to make clear that when it came to a consideration of creditor claims, he would fully investigate the same and take into account all that he was told by Milltom. Mr Flitcroft made a fair point that Mr Faik had picked up upon the FCO, but not the ICO, which conferred priority on Milltom, and did not provide any real explanation for not doing so. However, I did not detect anything deliberate in this.

As Mr Couser pointed out, it is not unusual for an administrator to instruct the solicitors who previously acted for the relevant company pre-administration given that the latter may well have useful knowledge regarding the company’s affairs. Further, it is fair to say that where an administrator is appointed by the company or its board, or by a particular floating charge creditor, then often a relatively close relationship might develop between the administrator and the appointing party, and it is quite possible that this is the position in the present case, a point supported by Mr Faik’s engagement of RHF. However, Mr Faik came across to me as being sufficiently robust and independent not to be unduly influenced by any such relationship in relation to the key decisions that require to be made by him in the course of the administration of the Company.