Stephen Louis Nardelli & Ors v Daniel Richardson & Anor
| Court | Chancery Division |
| Judge | Mr Hugh |
| Neutral Citation | [2024] EWHC 2740 (Ch) |
| Date | 04 November 2024 |
| Year | 2024 |
| Counsel | Gandy,Mr Joseph Curl Kc,Mr Jon Colclough,Mr Mark Watson-gandy |
Neutral Citation Number: [2024] EWHC 2740 (Ch)
Case Nos: CR-2022-000386, CR-2022-000540 and CR-2022-000541
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
IN THE MATTER OF:
CFJL PROPERTY PARTNERS LIMITED (in administration)
PORTFOLIO PROPERTY PARTNERS LIMITED (in administration)
P3ECO (BICESTER) HIMLEY LIMITED (in administration)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Date: 4 November 2024
Before:
MR HUGH SIMS KC (sitting as a Deputy Judge of the High Court)
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Between:
(1) MR STEPHEN LOUIS NARDELLI
(2) MR GRAHAM EDWARD JOHNSON
(3) BRIGADIER IAN PETER INSHAW DL
Applicants
- and –
(1) MR DANIEL RICHARDSON
(2) MR EDWARD AVERY-GEE
(in their capacity as joint administrators of
the above companies)
Respondents
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Mr Mark Watson-Gandy (instructed by public access) for the Third Applicant on 18 October
2024, and Third Applicant acting in person on 8-10 October 2024
Mr Joseph Curl KC and Mr Jon Colclough (instructed by Brecher LLP) for the
Respondents
Hearing dates: 8-10, and 18 October 2024
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APPROVED JUDGMENT
High Court Approved Judgment Inshaw v Richardson
MR HUGH SIMS KC:
Introduction
1. This case raises a question not frequently encountered by insolvency practitioners
(“IPs”) acting as administrators: how to exercise their powers, and discharge their
duties, where there is a likely surplus after payment of creditors and expenses, and
thus a likely return to members, or shareholders, of a company. More unusually, it
also involves a lender who was willing to forbear on defaulting loans, and advance
further funds in administration, in order to assist in the realisation of assets at a higher
price than might otherwise have been obtained on a forced sale scenario. The financial
support was not altruistic. The effect of the bargain made in administration increased
the share of returns to the lender at the expense of the shareholders. These commercial
tensions lie at the heart of the complaints made.
2. By application notices made under paragraphs 74, 88 and 95 of Schedule B1 to the
Insolvency Act 1986 (“IA 86”) dated 21 September 2023 (“the Removal
Application”) the Third Applicant challenges the conduct of the joint administrators
of CFJL Property Partners Limited (“CFJL”), Portfolio Property Partners Limited
(“PPP”) and P3ECO (Bicester) Himley Limited (“P3 Eco”) (together “the
Companies”) on the basis that their conduct was in breach of their duties and has
caused him unfair harm as member. The remedy he seeks is the removal of the joint
administrators and their replacement. This is my judgment following the trial of the
Removal Application.
3. The Removal Application was originally brought by all three Applicants, but on 13
September 2024 the First Applicant, Mr Nardelli, and the Second Applicant, Mr
Johnson, were adjudged bankrupt. This was on the petition of Desiman Limited
(“Desiman”), on the basis of a personal guarantee Messrs Nardelli and Johnson gave
to secure certain lending advanced by Desiman to the above-named companies, which
loans were defaulted on. This left the Third Applicant, Brigadier Inshaw, as the sole
applicant continuing with the Removal Application at trial. However, Mr Nardelli and
Mr Johnson continued to feature at trial. The day before trial a notice of change of
representation was lodged, and Brigadier Inshaw acted in person for the first 3 days of
trial. With my permission, Mr Nardelli and Mr Johnson provided him with assistance,
as McKenzie friends, in presenting the Removal Application. Brigadier Inshaw
subsequently obtained representation for closing submissions, when he was
represented by Mr Watson-Gandy. I should note here my thanks to Mr Watson-Gandy
for stepping back in to assist in the circumstances.
4. The Respondents, Mr Richardson and Mr Avery-Gee, both licensed IPs, of CG
Recovery Limited, were appointed as joint administrators (hereafter “the Joint
Administrators” or simply “the Administrators”) in February 2022. All of those
appointments were made by Desiman in its capacity as qualifying floating charge
(“QFC”) holder: it held floating charges falling within the definition under paragraph
14 of Schedule B1 giving it the power to appoint an administrator. Desiman also has a
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