Summary

In deciding which replacement insolvency officeholders to appoint, the court presumed that the applicant professional body had had due regard to the public interest when it made its proposals for replacements and was as well placed as anyone, and better than most, to identify them. The onus was on anyone who disagreed with that body's choice to show positive reasons why someone else should be appointed, and it was not enough to identify others who were equally respected and suitable.

Facts

The applicant chartered accountants association (C) applied to replace an insolvency officeholder (M) with two other independent officeholders, and to appoint those two others to act with M in another capacity.

The insolvency appointments had been made under block transfer orders of 382 cases that replaced an earlier officeholder (P) with M, who had been his partner in an insolvency practice put into administration before the instant hearing. It was thought appropriate to investigate P, whose licence that had been granted by C had expired, and who had been adjudged bankrupt on his own petition, and it was expected that the new appointees would have the task of investigation. Previously, under a Tomlin order made by consent between P and one of the proposed officeholders, it was alleged that when P was an administrator he had been guilty of failures including appointing a director convicted of fraud and failing to monitor his activities, declaring profits when losses had been made, incurring further liabilities, misleading creditors, and resisting attempts to investigate the director's conduct. The Tomlin order also required P to pay a large sum to the liquidator. None of those failures had been disclosed to the court when the block transfers were made, and the impression given was that P was retiring principally for health reasons. P appeared to have held office in several hundred cases at once. The administrators for the insolvency practice of P and M suggested that alternative officeholders from a well-known and respected firm be appointed instead of those proposed by C on the basis that they had greater independence, as one of C's proposed appointees had a pre-disposition against P.

Held

No case of wrongdoing had been made out against M and the proceedings had been conducted on the basis that all those proposed, apart possibly from P, were highly competent and professional. The court had to consider whether or not to accede to a particular application. C was a responsible professional body seeking the appointment of individuals acknowledged to be reputable to be put in place instead of a current appointee. The presumption had to be that C had had due regard to the public interest and was as well placed as anyone and better than most to identify appropriate replacement appointees. The onus was on those disagreeing with C's choice of appointees to show positive reasons why someone else should be appointed. It was not enough, as had been done in the instant case, to identify other people who were equally respected and suitable. The decision was for the court, but in practice C's judgment had to carry significant weight, and in very many cases, decisive weight. Thus, the court acceded to C's proposed appointments, Institute of Chartered Accountants in England and Wales v Webb [2009] EWHC 3461 (Ch), [2010] Bus. L.R. D37 applied (see paras 5, 7, 8-11 of judgment).

Application granted