Samson Akwagbe v Frazer Ulrick (as liquidator of BL 634 Limited) & Anor

1. On 14.5.2025 I heard the application of Mr Akwagbe in person for the removal of the First Respondent as liquidator of BL 634 Limited (“the Company”). Other issues regarding the Second Respondent were not fully dealt with, and did not need to be. The Second Respondent did not attend and was not represented. 2. I declined to remove the First Respondent. The hearing had over-run and it was late in the day. Although I had dismissed the application, and the presumption is that costs follow the event, there were features to this application and the issue of costs which gave me pause. I ordered that each side should make written submissions and extended time for any appeal against my judgment on the main issues to twenty-one days after I handed down this judgment. 3. The First Respondent takes the view that Mr Akwagbe’s application was baseless and vexatious and that he should pay the First Respondent’s costs on the indemnity basis, with any unrecoverable costs being an expense of the liquidation. The law was set out in a careful and helpful submission by Mr Fletcher-Wright as Counsel for the First Respondent. 4. In response, Mr Akwagbe relies on the discretion of the court and the conduct of the First Respondent. I add here that his submissions were also helpful, set out clearly and in proper form. He points to what he says was a failure by the First Respondent to communicate properly or at all, and that the First Respondent had also not conducted itself appropriately during the progress of the application, in particular in respect of Mr Sadler’s witness evidence. 5. One other relevant factor became clear during the hearing. 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. 6. It is against this background that I consider the costs issues. 7. It is my primary view that Mr Akwagbe cannot escape the consequences of his failed application. Although, as he rightly points out, the court has a discretion under CPR 44(2)(2)(b), the court can make a different order, the starting point is that costs follow the event. There must be sound reasons for depriving a successful party of its costs. 8. I now turn to the First Applicant’s submission that costs should be awarded on the indemnity basis. Reliance is placed on Beattie v Smailes [2011] EWHC 1563, [2012] BCC 205, which it is said strongly resembles Mr Akwagbe’s application. Particular reliance is placed on the following passages: “2. I will order (and there had been no real opposition to this) that Mr Beattie shall pay the costs of the joint liquidators of and occasioned by his (unsuccessful) application for their removal. I will order that those costs shall, in default of agreement, be the subject of assessment and on the indemnity basis. I take the view that this case is out of the ordinary, a departure from the norm. 3. First, even allowing for the inclusion in the claim of both the calculation of interest and his claim to reimbursement of expenses, Mr Beattie’s claim in the liquidation, when compared to that of the other creditors, is very small. 4. Secondly, the basis of his argument for the removal of the joint liquidators was that there were hypothetical conflicts of interest: conflicts of interest which in some cases (in particular relating to the proprietary claim) he had difficulty in identifying; conflicts of interest where it is plain that the court has said there is readily available machinery for resolution without removal of the present office-holders. 5. Thirdly, this was, in my judgment, an extravagant claim. It was one that ought not to have been brought; and, even now, I find difficulty in seeing what real and substantial advantage it could ever have conferred on Mr Beattie, even if wholly successful”. 9. The First Respondent also relies on the need for the other creditors to underwrite Mr Akwagbe’s failed application. 10. The background facts in Beattie are very different to the current position. Mr Akwagbe’s role in the original liquidation, whilst not giving him pre-eminence, unquestionably resulted in there being a more emotional attachment to the liquidation, which is exacerbated by his difficulties with executive functioning (which he freely admits). It is also the case that Mr Akwagbe personally lost the compensation for his accident through the failed investment through the Company. His anxiety about the conduct of the liquidation and recovery of his money must been seen through that prism. This is a man who has lost a great deal in the past few years. 11. The interactions between Mr Akwagbe and the First Respondent are set out in Mr Akwagbe’s statement in support. The Company was placed in liquidation on 29.3.2023 when he persuaded a number of creditors to join forces and was instrumental in preparing and presenting the relevant documents. He told me at the hearing that he had informed the other creditors that this would be the swiftest way to get their money back. This has not proved to be the case and Mr Akwagbe’s frustration is manifest. He also takes the view that he has a unique role in the liquidation by reason of his efforts. 12. It is my view that Mr Akwagbe genuinely felt that he was being treated with a lack of respect, given his obvious efforts in the liquidation and that the apparently dismissive attitude of the First Respondent was the main trigger for this application. He read this as being a bias against him and that, given the lack of progress, the First Respondent had been acting in bad faith. 13. It was my finding that this was not the case, although I did comment on the delays in dealing with the single asset available and the, at the least, borderline dismissiveness by the First Respondent of Mr Akwagbe’s concerns. Had the First Respondent been fully aware both of Mr Akwagbe’s involvement and of the difficulties he faced following his accident, it seems to me that the First Respondent might well have been more communicative and forthcoming and I would expect this from the First Respondent as the liquidation progresses. 14. Mr Akwagbe also alleged that there had been a lack of efficiency and vigour by the First Respondent. I have alluded to delay, but did not take the view that it came anywhere near the level of delay and inefficiency that would justify removal. 15. In addition, although I have criticised the First Respondent for being somewhat brusque and uncommunicative with Mr Akwagbe, this again did not reach the level of a bias which should result in the removal of the First Respondent. 16. Indemnity costs are out of the ordinary. They should relate to something “out of the norm”. A poor claim and/or losing a case with limited prospects of success is not out of the norm. No matter how resounding a victory, it does not lead to indemnity costs. There must be some form of conduct which takes this application out of the norm. Whilst Mr Akwagbe has been annoying and difficult, that is insufficient in itself. I therefore turn to consider his conduct during the litigation. This does not appear to have been out of the ordinary. I am told he has not paid a previous costs order but that does not take his conduct out of the ordinary and does not affect the issue of indemnity costs in this separate consideration. 17. Mr Akwagbe’s claim arises from his anxiety that the liquidation is not making progress or providing the returns to the creditors which he had anticipated. He has been very vocal in his criticisms, but has not made personal threats or conducted the litigation in a way which amounts to abuse of the process. His application had little chance of success, but I do not take the view that it was so hopeless as to be of no merit at all. Whilst I am sympathetic to the First Respondent’s submission that any shortfall will fall upon the other creditors, that is also insufficient reason for Mr Akwagbe to be found to have conducted himself out of the norm. That the First Respondent was forced to defend itself is not unusual. 18. Mr Akwagbe, subject to my comments below, will pay the First Respondent’s costs on the standard basis. I remind myself that the costs must therefore be both reasonable and proportionate. Although I do not have the parties before me, I have careful costs submissions for both and I propose to undertake a summary assessment of the costs on that basis as sought by the First Respondent. 19. The costs of the application by the First Respondent seeking to rely on the witness evidence of Mr Sadler, granted on 24.4.2025, are costs in the main application but are subject to a separate costs schedule in the sum of £4,518.20. The balance of the costs are £20,065.80. The total balance is therefore £24,584.00 inclusive of VAT [£20,419.50 without VAT]. 20. In respect of the costs of the application to adduce the witness statement of Mr Sadler, it seems to me that this was an error by the First Respondent. Mr Akwagbe sets out the chronology of the production of that statement and it is clear that he alerted the First Respondent early that there was no permission for this statement to be adduced. In the event, it repeated some of the evidence in Mr Ulrick’s statement and it was Mr Sadler who gave evidence, not Mr Ulrick. This application was occasioned by the First Respondent needing permission to rely on the statement. The N260 for that application quite properly does not seek the costs of the statement but I take the view that the application ought not to have been necessary, and this will be reflected in the sums allowed. 21. The total sought by the First Respondent is £24,489.00. The work has been done by a Grade A solicitor charging £255 per hour. This is low charging rate for a Grade A which, as at 1.1.2025 ranged between £566 and £282. The rate of £255 claimed is at the lower guideline for a Grade B solicitor, and well below the guidelines for a Grade C in London 1. Although I would not have expected a Grade A solicitor do so some of the work, it is my view that this is offset by the modesty of the hourly fee. Counsel’s fees are perhaps a little on the high side for the December 2024 hearing but otherwise are not out of line with what would be expected. 22. I also bear in mind that there was dispute about the bundle, with Mr Akwagbe’s documents being excluded and that he did not receive a hard copy of the bundle. 23. Looking at the N260 for the application, it is my view that the application would have to have been made and was not as a consequence of Mr Akwagbe’s conduct. It does not seem that he conceded that application and that attendance would have been necessary to obtain permission. In the circumstances, I will allow £1,500 plus VAT [£1,800] for that application. 24. In respect of the main schedule, there is little to criticise in terms of hourly rates or much of the work done. Some of the work relates to the issue of the liquidation committee, which was not dealt with at the hearing, and some seems to be related to the issue of the Sadler witness statement. The schedule is proportionate to the issues canvassed at the hearing. 25. Taking into account all those issues on a summary assessment basis, Mr Akwagbe shall pay the sum £18,000 inclusive of VAT, plus the sum of £1800 on the application to adduce the evidence of Mr Sadler. The total payable is therefore £19,800 and I will provide that this is payable by 9.9.2025 or 28 days after service of the order, whichever is the later date. 26. I also order that any shortfall may be recovered as an expense of the liquidation. 27. This judgment is handed down in the absence of the parties. The time for appealing this order or the order in the main claim expires 21 days after this judgment is handed down. The route of appeal is to the High Court Judge and for the purpose of clarity, this information does not amount to a permission any part to appeal. Permission must be sought from the High Court Judge. DATED: 18 September 2025