About Kate Rigby Kate Rigby is a partner in Rosling King’s Dispute Resolution Group. Kate has wide-ranging experience in general commercial litigation, commercial fraud and asset tracing, professional indemnity cases and property litigation. About Rosling King LLP Rosling King LLP is a London-based law firm specialising in serving the needs of financial institutions, corporates and individuals. Contact Kate Rigby Partner, Rosling King LLP 55 Ludgate Hill, London, EC4M 7JW, UK Tel: +44 02072 468012 E: kate.rigby@rkllp.com www.rkllp.com “whether the liquidator’s conduct [amounted] to something so utterly unreasonable and absurd that no reasonable person would have done it”. He also noted the judgment of Sir John Vinelott in Edennote where he stated: “it is only in very exceptional circumstances that the court will interfere with the exercise by a liquidator of his discretion to sell the assets of an insolvent company”. Ultimately, it was held that the test had not been satisfied. The liquidator had approached another creditor and there was no evidence to prove that better terms may have been achieved with another party. Therefore, the assignment to Manolete could not be considered perverse. Mrs Lock went on to appeal both aspects of the judgment in the Court of Appeal. The Decision of the Court of Appeal The Court of Appeal upheld the decision of HHJ Halliwell and refused to set aside the assignment to Manolete. In doing so, they agreed with his reasoning that Mrs Lock did not have standing nor had the threshold for perversity been met. 42 LAWYERMONTHLYMARCH 2023 The Decision of the Supreme Court The Supreme Court dismissed the application, concluding that it did not raise an arguable point of law which could lead to a successful outcome for the appellant and that the appellant has no real prospect of success on the issue as to perversity. Commentary The decisions of both the Court of Appeal and the Supreme Court reflect the Courts’ longstanding reluctance to interfere with the commercial decisions made by office holders, including commercial decisions made by an insolvency practitioner such as a liquidator. Ultimately, the liquidator is appointed to act instead of the directors of a company and in doing so they will take commercial decisions for the benefit of the company/liquidation. Furthermore, it confirms that any party seeking to challenge an assignment made during insolvency proceedings must clear a very high threshold to satisfy the test of perversity – a fact which is likely to give confidence to both insolvency practitioners and litigation funders alike.
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