PIERRE WILSON v THE SPECTER PARTNERSHIP [2007] EWHC 133 (Ch)

Case No CH/2006/APP0529

[2007] EWHC 133 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

IN THE MATTER OF WILSON PROPERTIES LIMITED (in liquidation)

AND IN THE MATTER OF THE INSOLVENCY ACT 1986

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 1 st February 2007

Before

MR JUSTICE MANN

Between

PIERRE WILSONAppellant

(a shareholder in Wilson Properties UK Limited,Appellant

a company in liquidation)Appellant

(1) THE SPECTER PARTNERSHIPRespondents

(2) THE OFFICIAL RECEIVERRespondent

(3) THE JOINT LIQUIDATORS OF WILSON PROPERTIES UK LIMITEDRespondent

MR. M. HARTMAN for Appellant.

MR. B. MONNINGTON (instructed by The Specter Partnership) for First Respondent.

MR. J. COUSER (instructed by Messrs Blake Lapthorn Tarlo Lyons) for Third Respondents.

Hearing Hearing dates: 17 th and 18 th January 2007

Judgment Approved

Mr Justice Mann :

Introduction

[1]On 18th July 2005 Wilson Properties UK Ltd (“Wilson”) was wound up in the Liverpool District Registry on a petition of The Specter Partnership (“Specter”), a firm of solicitors. On about 23rd February 2006 an application was made to rescind the winding up order – that was apparently the date of service of an unstamped application notice, though there is a stamped one bearing a March date. In April it was amended to bring in the main ground which is now put forward as the reason for rescinding, namely that the petition debt arose on a contentious business agreement (“CBA”) within the meaning of section 59 of the Solicitors’ Act 1974 so that there could be no petition until a court had ruled on enforcement under section 61, District Judge Farquhar, apparently sitting in the Peterborough County Court, dismissed the application. I am not sure how the proceedings got to that court, but no point was taken on that. The first matter before me is an appeal from that order.

[2]The second matter is an application by Mr Pierre Wilson, a director and creditor of Wilson, for an order removing the liquidators or directing them to assign what is alleged to be a good cause of action that Wilson has against Specter. That application is made direct to me.

Background

[3]Wilson owned various properties. From time to time it required the assistance of solicitors in conveyancing and in litigation. In 2004 it was engaged in litigation with one of its former solicitors. It engaged Specter to act for it. On 24th September 2004 it signed a form entitled “Commercial Litigation” on one line and “Terms of Engagement” on the next. I shall come to its terms in due course. Specter acted for a few months and the matter came to an end. The judgment appealed from refers to a detailed bill of costs having been dated 15th March, which was apparently the subject of some discussion between the parties, followed by a threat to serve a formal bill. Such a bill was served under cover of a letter dated 6th April. The amount claimed was £51,115.73. On or about 19th April 2005 Specter served a statutory demand in the sum of £42,656.16, giving credit for sums paid by Wilson. That amount was not paid. On 25th May 2005 Specter presented a petition to wind up on the basis of that demand. At the end of June (probably about 22nd June) Wilson served a form of defence document in opposition to the petition taking a number of points in opposition to the petition, including the inflation of the bill, invoicing for non-existent work and breach of duty. Specter responded with a witness statement from one of its consultants, pointing out (among other things) that it was not the case that the whole of the debt was disputed. Wilson did not attend the hearing of the petition on 18th July 2005. Apparently the directors were on holiday at the time. I am told that there was some argument at the hearing (in the sense that the matter was not treated as automatic) and the winding up order was made.

[4]Mr Pierre Wilson said he did not have a copy of the relevant agreement between Specter and Wilson, and he claims to have asked for it a number of times both before and after the winding up order. He got it on 9th September 2005. He claims not to have had a copy in the period leading up to the petition. Having received it Mr Wilson complained that the costs of the solicitors were outside an estimate given in the terms. He did not take the CBA point now relied on. He wrote to the liquidators asking them to deal with the unfair winding up of the company. Eventually he made the application referred to above.

The form of the signed agreement

[5]It will be convenient to set out the relevant parts of this document at this stage of the judgment. a) It is headed as described above, with Wilson’s name added in manuscript below, and is addressed a bit like a letter – “Dear Mr Wilson”, though it is not on the firm’s correspondence paper. b) It starts with these words:

“This firm’s policy, encouraged by the Law Society, is to explain from an early stage the terms upon which we act for you. These terms are intended to apply to all work undertaken by this firm for you (now and in the future) unless otherwise agreed.” c) In paragraphs numbered 1 and 2 the solicitors who will conduct the work are identified along with a liaison solicitor. d) Paragraph 3 is headed “Fees” and is important. “Our fees will be calculated according to the time involved, seniority of the executive concerned and nature and complexity of the case. All the time we spend is recorded according to the activity and collated on a running costs form contained on the file. Our current charging rates (in each case plus VAT) are: [and there then follows a table setting out the hourly rates of 3 levels of representative for 4 defined types of activity.] “In cases of unusual complexity or urgency we must reserve the right to charge an enhanced rate. Whilst it is difficult to give a precise figure as to the final total costs in your case for all steps leading up to but excluding trial should be in the region of £20,000-£25,000 plus VAT and disbursements. We will be keeping you updated as to this estimate…”

Our current charging rates (in each case plus VAT) are: e) Paragraph 4 refers to a complaints procedure, and the document ends with an invitation to direct inquiries or discussion as to the contents to the liaison partner. Mr Wilson has signed to acknowledge receipt and acceptance of those terms.

Our current charging rates (in each case plus VAT) are:

[6]I was also shown lengthier “Terms of Business” said to govern the terms of engagement of the firm in the case identified in the Schedule, and I was also addressed on them as if they applied to the relationship between Specter and Wilson. They are in the familiar style of standard terms and cover just over 4 pages of small print. However, there is no evidence as to how or whether they were introduced into the relationship, and they are not referred to in the document I have been describing, and I shall treat them as irrelevant.

The judgment of District Judge Farquhar

[7]The judgment of the District Judge can be summarised as follows: a) At paragraphs 1 to 7 he sets out the general factual background. b) Between paragraphs 8 and 11 he considers whether the document described above is indeed a CBA. He comes to the conclusion that it is not. At paragraph 9 he says:

“If one looks at section 59 of the Solicitors Act 1974 it sets out what is required of a Contentious Business Agreement stating that the solicitor ‘shall be remunerated by a gross sum (or by reference to an hourly rate) or by a salary, or otherwise, and whether at a higher or lower rate than that at which he would otherwise have been entitled to be remunerated’. There is nothing in the agreement that I have seen to indicate that the Petitioner could be remunerated at a greater rate than would normally be the case. Rather what is stated is the current charging rates for each level of solicitor or trainee solicitor. These range from £250 per hour to £150 per hour. There is then of course the estimate …” c) Having alluded to the impact of an agreement being a CBA (which he describes as the fact that leave to bring an action upon it is required by section 61), he then goes on (in paragraph 11) to point out that there is no reference to the agreement being a CBA in the document itself, in correspondence, or in the defence document put in by Wilson when the petition was served. He then observes that: “In these circumstances I am not of the view that the agreement between the Petitioner and the company was in fact a Contentious Business Agreement as I would have expected there to be some explicit reference that it was such an agreement within the document itself or certainly at some point thereafter. There is simply nothing in any of the correspondence to suggest that either of the parties were working on the basis that such an agreement existed.”

[8]Having thus concluded that the agreement was not a CBA, that was an end of the rescission application before him based on the assertion that it was. However, he went on to consider the position if he were wrong on that point, and to consider the effect of the delay taking the point. He understood that he had a discretion to extend the time limit of 7 days for providing for the rescission of a winding up petition (see Insolvency Rules rule 7.47(4), acknowledged that the jurisdiction had to be cautiously exercised and found that there was nothing in the facts of the case before him which justified the exercise of that jurisdiction. He then went on to consider an application to set aside the winding up order under what was described as the inherent jurisdiction. He records what was apparently a submission that he had jurisdiction under this head under section 375 of the Insolvency Act 1986, and on the footing that authority indicated that he could only exercise it in an exceptional case where there was reliance on factors which could not have been raised at the original hearing. He then referred to various irregularities, but in paragraph 25 seems to come to the conclusion that he did not have an inherent jurisdiction to set aside the order. The thrust of what he said about the irregularities was that there was nothing available to him that would not have been available at the original hearing of the petition, and implicitly ruled them out anyway.

The basis of this appeal

[9]Wilson appeals to this court on the footing that the District Judge was wrong. It was argued by Mr Michael Hartman for Wilson that the agreement was a CBA, that that meant that the petition should never have been brought, and that that in turn meant that the winding up order ought to be set aside. So far as he had to show something more, he said that the circumstances were such that the order ought to be rescinded on the basis of the evidence and that the District Judge erred in considering that the circumstances were such that he could not exercise his rule 7.47 jurisdiction, in finding that he had no inherent jurisdiction and in finding that he could only take into account post-order factors in exercising that jurisdiction.

Was the agreement a CBA?

[10]Obviously this is the first question. Part of the relevant provision of the Solicitors Act 1974 (section 59) is set out above in my description of the findings of the District Judge, but I will set out subsection (1) in full:

“59(1) Subject to subsection (2) a solicitor may make an agreement in writing with his client as to his remuneration in respect of any contentious business done, or to be done, by him (in this act referred to as a ‘contentious business agreement’) providing that he shall be remunerated by a gross sum (or by reference to an hourly rate) or by a salary, or otherwise, and whether at a higher or lower rate than that at which he would otherwise have been entitled to be remunerated.”

[11]The main significance of an agreement falling into this category for present purposes is twofold – first, section 60 deprives the client of a right to taxation which would otherwise exist, or of the restraints on the solicitor’s suing imposed by section 69 (save where payment at an hourly rate is provided for). Second, enforcement is governed by section 61:

“61(1) No action shall be brought on any contentious business agreement, but on the application of any person who – (a) is a party to the agreement … the court may enforce or set aside the agreement and determine every question as to its validity or effect.”

The section goes on to provide for various reconsiderations of the agreement and its effect even absent the right to a taxation. It includes a curious subsection (4B) which provides for a taxing master (costs judge) to consider the reasonableness of hours worked on a “taxation” even though there seems to be no scope for a taxation in respect of such an agreement, but I do not need to dwell on that.

[12]Wilson argues that the September 2004 document is a CBA, and since no “action” can be brought on it (section 61), and since the petition was an action for these purposes, it ought never to have been brought. Specter says that the District Judge was correct in his conclusion – the agreement was no more than a normal letter written pursuant to Rule 15 of the Solicitors’ Practice Rules, and in any event the possibility of varying the charging rate took it outside section 59. It was Wilson’s case that a petition to wind up was an action for the purposes of section 61, relying on remarks of Sir Donald Nicholls V-C in In re a Debtor (No 88 of 1991) in the context of a similar phrase in section 69 and a bankruptcy petition. He said:

“The phrase “no action shall be brought” is referring to a legal process and uses lawyers’ language. Traditionally an “action” is the name given to the legal process initiated by issue of a writ of summons. In the context of this section [ie section 69(1) of the 1974 Act], “action” is not to be construed so narrowly. It will include other forms of civil proceedings: for example an originating summons. In Re Laceward Ltd [1982] WLR 133 Slade J went further and held the expression “proceedings to recover costs” in the Solicitors’ Remuneration Order 1972 …includes a winding up petition even though such a petition does not lead to an order for payment of the sum in question. It may well be, and I incline to the view, that this conclusion would apply to a bankruptcy petition.”

I respectfully agree and share the same view. That being the case, the same would apply to a winding up petition, and since the same word (“action”) is used in section 61 it ought to have the same meaning. Policy dictates that that be so. The purpose of section 61 is to give the client an opportunity to raise a challenge to a bill, albeit of a different nature to a taxation. I do not see why that should be circumvented by the presentation of a winding up petition instead of a claim form.

[13]Mr Monnington, for Specter, drew my attention to a passage in Cook on Costs at paragraph 6.9 in which the author suggests that an action could be commenced without what he calls the “permission” of the court to enforce the agreement, and that the statutory bar would only be called into play if the point was taken. He says “… it is only if the solicitor wishes to rely on the contentious business agreement that he needs permission to proceed”. If the point were not taken then the solicitor would be able to benefit from a default or summary judgment (assuming, of course, that the conditions necessary for those forms of judgment existed). Mr Monnington relied on this passage as justifying the commencement of proceedings by petition; the point would only become relevant if it were taken. I confess I have difficulty understanding the passage in Cook. If there is a CBA, and the solicitor sues for fees due under it, it seems to me that he would be enforcing the CBA. I do not understand how he can claim the fees due under it without enforcing it. Accordingly, I do not consider that this is an answer to the section 61 point.

[14]I turn therefore to the question of the District Judge’s decision as to whether the relevant agreement was indeed a CBA. The judge’s reasoning is set out above. I confess to having some difficulty with it. His main reason is that it was not referred to anywhere as being a CBA. With respect, I do not think that that is necessarily relevant, and it is certainly not determinative. What matters is substance, not form. If the agreement fulfilled the criteria for a CBA then it would be one whether or not the parties labelled it as such. So far as it is part of his reasoning that the agreement does not indicate that Specter could be remunerated at a greater rate than normal, then that is both wrong and irrelevant. The agreement does provide for remuneration at a greater rate than normal in a difficult or complex case, and in any event it is a misreading of the section to suggest that such a departure from the norm is of the essence of a CBA. In referring to the possibility of a higher or lower charging rate than normal, what the section is doing is extending its ambit to include those cases, not confining its ambit to those cases.

[15]I therefore do not find the reasoning the District Judge satisfactory. However, I do agree with his result. The essence of a CBA is certainty. The parties to the CBA define how the client will be charged. The benefit to both parties is certainty. The disadvantage for the client (or one of them) is that he no longer has a right to taxation, though he has protections under section 61. One disadvantage for the solicitor is the limits on enforcement under section 61. But both have the benefits of certainty. Since the client is disadvantaged, the agreement has to be in writing, and it has to be sufficiently certain: “It seems to me that an agreement in writing can be contained in letters. But the letters ought at least to be signed by the client if he is to be deprived by the agreement of his right to tax. Further the agreement must be sufficiently specific, so as to tell the client what he is letting himself in for by way of costs. It seems to me that the letters in this case do not give the client the least idea of what he is letting himself in for. As counsel for Mr Chamberlain said to us, there is broad band of uncertainties. Take, for instance, the rate. It certainly seems high enough to me. It is £60 to £80 an hour. What rate is to be charged? And for what partner? Of what standard? Then £30 to £45 an hour for associates who may be involved. Which legal executives? Of what standard? Which associates? Does it include the typists? That is one of the broad bands which is left completely uncertain by this agreement …” (per Lord Denning MR in Chamberlain v Boodle & King

[1982] 3 All ER 188

at 191c-e) That demonstrates the degree of certainty as to the charging that must appear in a CBA.

[16]In my view the agreement said in this case to be a CBA lacks that certainty. This arises from the following factors: a) There is no signed agreement relating to the specific piece of litigation which gave rise to the bill. Save for one aspect, these are general terms said to be applicable to all future work. While the terms are capable of being incorporated into any specific future retainer, it seems to me that it is the subsequent retainer which would, if appropriately agreed, become the CBA. There was no written agreement as to the application of these terms into the retainer in the matter in question (or at least no evidence of one was placed before me). I say that despite the fact that one provision of the document apparently relates to that specific matter, namely the estimate of fees, and despite the fact that the bill seems to charge at the rates referred to in this document. I do not have clear evidence of how precisely the retainer came about, and it may well be that it was implicitly on the terms in this letter. However even if that is the case, there was no agreement in writing as required by the section. b) The terms as to charging are not sufficiently fixed. The purpose of a CBA is to fix the fees, or provide a fixing mechanism, so that the parties (and in particular the client) knows where they stand. Under the terms of this document there is still an element of uncertainty. While it is more certain in its charging consequences than the agreement in Chamberlain, it still leaves open the possibility of charging at a higher rate than the specified rates. The agreement specifies fixed hourly charging rates, but at two points refers to the possibility of increase. First, there is a reference to the fees being calculated “according to the … nature and complexity of the case.” Second, there is the reference to “cases of unusual complexity or urgency”. That means that, absent some written agreement disapplying those provisions, they apply to future retainers. Although the point was not argued before me on either side, it seems to me that the urgency provision (entitling a higher rate) would be capable of applying to areas of costs within a given retainer as well as to an overall retainer. That being the case, the agreement is not one which fixes the costs by reference to a fixed hourly rate, and since it is not one for an overall sum then it falls outside section 59. It was not proved before me that there was any express agreement that only the specified rates applied to the retainer in question.

[17]I should record that I reject the argument of Mr Monnington to the effect that this was a Rule 15 document (see above) and therefore cannot be a CBA. This is not quite the right way of putting it. This agreement is not a CBA because it does not fulfil the requirements of one, irrespective of whether it is a rule 15 document. It may be a rule 15 document, but that is incidental.

[18]For those reasons, therefore, I do not consider that the signed terms clearly constituted a CBA for the purposes of the Act. That means that the central argument relied on by Wilson fails.

Other attacks on the petition

[19]As I have pointed out, when the initial application to rescind was launched it was not based on the CBA point. It was based on other attacks on the petition. However, the main point urged on me was the CBA point. The other points were points which might have been used to demonstrate that the debt was disputed. They included the following: a) As District Judge Farquhar observed, with an air of criticism, the bill was for a sum very significantly in excess of the estimate. b) On 16th April 2005, having received the bill, a director of Wilson wrote to Specter and said that they would be requesting that the costs be “taxed by the Law Society”. He expressed his understanding that he had to pay 50% of the bill before commencing the taxation. Specter responded on 19th April by saying that a remuneration certificate (which they presumably thought was being referred to) could not be obtained in contentious matters or in matters exceeding £50,000. They threatened a statutory demand. This has given rise to a complaint that Specter failed to point out at the time (or indeed subsequently) what the taxation rights were; and that the winding up tribunal was unaware of what is described (wrongly) as a promise to tender sums in excess of sums due under the contract (there was no promise of tender, and no tender). c) The defence document revealed matters showing the debt was disputed. d) That the court was wrongfully and misleadingly informed by Specter on the hearing of the petition that the company had failed to make any offer in respect of the bill. The “offer” which is relied on is the acknowledgment that 50% of the bill would have to be paid in order to get a taxation. That is no offer. e) There was work carried out prior to the date of the letter. This seems to be true. Its relevance was never made clear to me.

[20]It is not necessary for me to consider all these matters in detail. Some of them are misplaced. Others are, at most, matters which might have been deployed to demonstrate that the petition debt was said to have been disputed. For the reasons appearing below, it is now too late to take those points so far as there is anything in them.

Delay

[21]My decision in relation to the CBA makes it unnecessary to consider the question of delay in applying to rescind on that basis. However, in case I am wrong on that, and in any event to deal with other possible attacks on the petition debt, I express a view on delay.

[22]The provisions of Insolvency Rules rule 7.47(4) have the effect that an application to rescind a winding up order must be made within 7 days, but the District Judge rightly held that there was a discretion to extend that time in an appropriate case. Mr Hartman submitted that this was an appropriate case and that the District Judge was wrong to hold that it was not. He also submitted that the District Judge misdirected himself by holding that he could not take account of any matters which the company could have brought to the attention of the court at the date of the petition and that he was confined to considering new matters which had come to light since the date of the winding up order.

[23]The first point to observe is that the District Judge acknowledged, correctly, that the jurisdiction to set aside had to be cautiously exercised, and particularly in the case of a winding up order. The second is that the error that is said to have been made by him is not apparent in the section of his judgment dealing with this point. While he does refer to the need only to take post-judgment matters into account in the following section, dealing with the alleged inherent jurisdiction, he does not do so in connection with rule 7.47. He notes that the directors said that they could not do anything to challenge the order until they had a copy of the letter in question, and did not believe they could displace the order because of a lack of evidence of the arrangement. He went on to observe that he could see nothing in the correspondence which would take this case out of the ordinary and justify a delay of 7 months in making the application to rescind. I can see nothing wrong in the reasoning thus expressed. He obviously did not accept that the directors could not have applied earlier, and there is plenty of material for saying that. If their points of attack on the petition debt irrespective of the CBA point were good, they could have taken them immediately on the making of the order. Indeed there is an e-mail of the very next day avowing an intention to appeal, and various other threats followed. On 9th August 2005 Mr Specter of Specter wrote to a director of Wilson referring to an offer to settle for £10,000, and indicating a willingness to co-operate in setting aside the winding up order. It ended by telling him that he needed to act quickly. Wilson did not do so. Nor did the directors act when they obtained a copy of the letter of September 2004 on 9th September 2005. Mr Hartman says that the period between then and when the application was launched was explained, at least in part, by the directors indulging in an effort to get more evidence, though he did accept that that effort might well have been misplaced. In my view it was. If the directors had wished to say that the winding up order ought not to have been made then there was no reason why they should not have applied promptly. Even if one assumes that the CBA point was a good one, and that they cannot have known about it until they got a copy of the agreement in September 2005, there was still a very large delay between then and when the point was finally taken. There is no good explanation for the delay. In my view, it is not only the case that the District Judge below was entitled to reach the decision that he did on the evidence, it is a decision that was entirely correct and I would have reached (and do reach) the same decision.

[24]Mr Hartman urged on me that if the fees were due under a CBA then the petition and winding up order were a nullity and could not be allowed to stand no matter what the delay was. In this respect he relied heavily on Mann v Goldstein

[1968] 1 WLR 1091

and Re Calmex Ltd

[1989] 1 All ER 485

. I do not consider that he is right about this. It may be that it could have originally been argued that the debt was disputed, but that does not make the proceedings and order a nullity. It means that there was a point that could have been taken. The order having been made, it cannot now be taken. Even if the CBA point were good it does not make the proceedings a nullity, and does not make the order a nullity either. An order is an order until it is rescinded or otherwise set aside. A winding up order is in the same position. The court in question had jurisdiction to make it. There is jurisdiction to set it aside, but there are time limits. The company failed to observe those time limits so the order stands. This point therefore fails too.

The inherent jurisdiction

[25]This was advanced as a separate basis for setting aside the order. The District Judge considered it, and while doubting that the jurisdiction existed he dealt with it on the facts. It was in this context that he suggested that he could only take post-winding up events in to account, relying on Papanicola v Humphreys

[2005] EWHC 335

(Laddie J) as authority for that. I agree that at paragraph 25 of his judgment in that case Laddie J accepted that an application to rescind could be made on the basis of facts existing at the time of the first order but which were not known to the court, and that to that extent the District Judge erred. However, that error is immaterial. In my view there are two short answers to this point. First, there is no inherent jurisdiction to do what Wilson are asking should be done. Once an order has been drawn up the jurisdiction to set it aside is limited. It can be set aside, for example, on the footing that it was obtained by fraud, but that sort of point does not arise here. It can be set aside pursuant to statute or statutory instrument – rule 4.74 is the relevant jurisdiction here. There are other bases. But there is no general jurisdiction to set aside of the kind invoked by Wilson. The second answer is that even if there were, the unjustifiable delay in applying would be as fatal to the exercise of this jurisdiction as it is in relation to the jurisdiction under rule 7.47.

[26]This ground of appeal therefore fails too. The applications to remove the liquidators and order an assignment of the chose in action against Specter

[27]On 15th January 2007 Mr Wilson issued an application for the removal of the liquidators from office and/or for an order that they assign to Mr Wilson what is said to be a cause of action against Specter.

[28]The application was supported by a witness statement from Mr Wilson in which he stated that the claim had a “very high likelihood of success”. Reliance is placed on certain observations by District Judge Farquhar in his judgment about shortcomings in what the solicitors said and did. It is alleged that they altered a bill of costs. The claim is asserted by Mr Hartmann on behalf of Mr Wilson to be worth £600,000, which is apparently related to the value of certain properties owned by Wilson. Mr Hartmann said that it would not be to the detriment of the company and its creditors that there should be an assignment because the liquidators were not pursuing it and terms were proposed for sharing the benefit of any fruits of the cause of action.

[29]The liquidators are also accused by Mr Wilson of being complicit with Specter and of having a conflict of interest. Complaint is made that they were in regular contact with Specter, and it is asserted that they were appointed by Specter. This last point is wrong – they were a Secretary of State appointment. The conflict of interest is said to be demonstrated by a statement by one of the liquidators (made in the course of a freezing order application) that Specter had told him that another director of Wilson had a house in Spain, which was said to be the disclosing of confidential information. They are also accused of “collusion” – no real particulars are given of that.

[30]The application to remove the liquidators is hopeless. The allegations on which it has been made are not particularised, and appear to me to be baseless. It is a strong step to remove liquidators, and the material to justify it in this case does not exist. I think that Mr Wilson’s real complaint is that the liquidators have not pursued a cause of action which he feels strongly about. That is no basis for their removal. I reject that application.

[31]The application for an order that they assign to him the cause of action fares no better. In August 2006 the liquidators’ solicitors invited Mr Wilson to identify the cause of action, identify the evidence relied on, to provide any counsel’s opinion on the merits that he might have, to identify the lump sum payment that was apparently proposed as part of the consideration (together with the means of payment) and the percentage recovery amount which it was proposed that the liquidators should receive. It is apparent from correspondence that those matters were never dealt with or provided by Mr Wilson. A letter from the liquidators’ solicitors dated 27th November recorded that Mr Wilson had declined to provide information as to the claim, which he described as a claim “against their own instructing petitioner”. It has still not been provided. During the course of submissions Mr Hartman informed me of the percentages of any recovery which Mr Wilson proposed the liquidators should receive. Mr Couser for the liquidators said he was unaware that any offer to that effect had been received.

[32]The liquidators have so far declined to assign the chose in action (if any) because they do not know enough about it to form any view as to its assignability, merits or value, or indeed whether it even exists. Their insistence that they should receive information from Mr Wilson on these matters is entirely reasonable. They can in no way be blamed for refusing to assign until they have had a proper opportunity to consider those matters. They have not had that opportunity. It was implicit in Mr Hartman’s submissions that Mr Wilson should receive an assignment because he has proposed terms and because the liquidators are not pursuing the claim – it can only work for the benefit of the creditors that the assignment take place. The thrust of his submissions is that his offer to take an assignment should be accepted because any offer is better than no offer. That is not a sound basis for demanding an assignment from the court. This application fails.

Conclusion

[33]It follows, therefore, that I make the following orders: a) I dismiss the appeal from District Judge Farquhar b) I dismiss the application to remove the liquidators c) I dismiss the application that the liquidators be required to assign the alleged cause of action against Specter.