Liquidators of a company pursued proceedings against the former administrators/liquidators of the company (Messrs White and Wood) alleging negligent and deliberate/dishonest overcharging of fees.
The judgment was handed down on the first day of the trial window. Mr White, his insurers having recently disclaimed liability, had agreed a consent order admitting misfeasance and breach of fiduciary duty, but without any specific finding of dishonesty, and agreeing to pay sums for loss and interest, as well as costs on an indemnity basis.
The Judge was told that Mr White did not have the means to pay any judgment award and it would result in his bankruptcy if any awards were enforced. Mr Wood’s position was slightly different in that he agreed to a judgment sum being awarded against him, with no finding of dishonesty and on the condition that the judgment was not enforced against his personal assets.
Notwithstanding those agreements in principle, the liquidators asked for the trial to proceed. Various reasons were raised in support of that position, but the Judge found that the main motivating factor was that there was a bond in place, against which the liquidators hoped to enforce and recover and findings of dishonesty by the court would assist this process. In light of the agreements reached, no evidence whether the bond issuer would dispute liability if no findings were made, the Judge concluded that, in the circumstances, he would not conduct a 15 day trial where the respondents were unrepresented and unprepared and encouraged the entering into the proposed consent orders.