Failed Removal Of Liquidator Application – £19,800 Bill But No Indemnity Costs

The failed removal of liquidator application in the matter of Akwagbe v Ulrick (Re BL 634 Ltd) [2025] EWHC 2371 (Ch) highlighted the risks creditors face when attempting an application to remove a liquidator.

On 14 May 2025, Mr Akwagbe, acting in person, applied to remove the First Respondent as liquidator of BL 634 Limited. The court dismissed his application. Although costs normally follow the event, a question left over was whether Mr Akwagbe should face indemnity costs given the First Respondent’s stance that his application was baseless and vexatious.

The Court’s Approach

The judge acknowledged several factors:

• Mr Akwagbe had played a pivotal role in placing the company into compulsory liquidation and felt a strong (if misplaced) sense of proprietorship.
• He suffered lasting effects from a serious head injury, affecting executive functioning and contributing to his frustrations with the process.
• The First Respondent, while ultimately not guilty of bias, had at times been brusque and uncommunicative in its dealings with him.

The Court said:

… Mr Akwagbe, clearly a highly intelligent and organised man, had suffered a serious head injury some years ago that has affected his executive functioning to the extent that he was unable to continue in his previous high-flying career. Whilst the First Respondent was unaware of this, there was a level of failure of communication and of impatience which was bordering on inappropriate even without that knowledge. Mr Akwagbe may have been something of a horsefly to the administration, but he is a creditor, and it was his efforts which resulted in the Company being placed into liquidation in the first place. It has given him something of a sense of proprietorship over the liquidation, which, in a non-legal sense, is understandable. Regrettably, however, that has translated over into Mr Akwagbe seeking an inappropriate level of control over the Liquidation Committee and the administration of the liquidation.

The court held that while the application was weak, it was not so hopeless as to be abusive. Poor claims and losing cases are not, in themselves, “out of the norm.” Indemnity costs therefore were not justified.

Costs Awarded

Instead, the court ordered costs on the standard basis. After assessing competing costs schedules, the judge reduced the claim to reflect unnecessary duplication and errors.

• Main application: £18,000 (inclusive of VAT)
• Separate application re Sadler witness statement: £1,800 (inclusive of VAT)
• Total payable: £19,800 by 9 September 2025 (or 28 days from service of the order).

The judge further allowed that any shortfall may be recovered as an expense of the liquidation.

Note For Creditors

For creditors, this judgment is a cautionary tale: even well-intentioned challenges to office-holders and their removal can backfire financially, leaving them with a sizeable bill.