Bank Notes

C - Costs and expenses

28/11/24

PAGDEN v RIDGLEY [2024] EWHC 3047 (Ch)

Rule 18.34 of the Insolvency (England and Wales) Rules 2016, which allows for applications to challenge the expenses or renumeration of office-holders in an administration, winding-up or bankruptcy, does not give the court power to review or determine the costs and remuneration of an administrator where they have been expressly agreed with the holder of fixed charge security in respect of realisation costs of that security, payable from the proceeds of its sale.

12/11/19

SHINNERS v LONDON TROCADERO (2015) LLP [2019] EWHC 2932 (Ch)

The court considered claims which are provable in insolvency (liabilities arising from obligations incurred before the commencement of liquidation/administration) [26], administration expenses (expenses incurred from obligations entered into by the office holder after the onset of the liquidation/administration) [33], the Lundy Granite principle (that claims arising from pre-liquidation/administration contracts may in certain circumstances be treated as an expense) [38], and the rule against double proof [68]. Lundy Granite can apply to non-provable claims but only applies where common sense and equity dictate that the particular liability should enjoy priority. A tenant’s obligation to top-up a rent deposit was a non-provable debt but was not within the Lundy Granite principle where the rent itself was an expense of the administration.

2/3/15

RANDHAWA v TURPIN (RE BW ESTATES LTD) [2015] EWHC 517 (Ch)

Administrators appointed by a director by the out of court procedure had not acted improperly in accepting the appointment and were not to be deprived of remuneration on that basis. Issues as to the level of their remuneration would be the subject of a further hearing at which the costs of the application would be determined.

13/6/14

HOSKING v SLAUGHTER & MAY (RE HELLAS TELECOMMUNICATIONS (LUXEMBOURG) II SCA) [2014] EWHC 1390 (Ch)

Costs which administrators had agreed during an administration could not be referred for detailed assessment by liquidators appointed at a later date. But costs purportedly agreed by the administrators after the date of the appointment of the liquidators could be referred for assessment as the administrators were not then the responsible insolvency practitioner and so could not agree the costs at that time.

Comment

24/7/13

IN THE MATTER OF THE NORTEL COMPANIES [2013] UKSC 52, [2014] AC 209

A contribution notice or financial support direction issued by the Pensions Regulator after a company went into administration ranked as a provable debt, not an administration expense. The applicable statute gave rise to a contingent obligation which was based on a state of affairs which existed before the insolvency event. Similarly a liability for costs arising from a judgment after commencement of insolvency in proceedings brought before the insolvency started, is provable as a contingent debt and cases to the contrary were wrongly decided.

24/7/13

NEUMANS LLP v ANDRONIKOU [2013] EWCA Civ 916

The judgment at first instance was “dead on” and affirmed. Where a company which had been in administration later went into liquidation, the company’s solicitor’s fees of resisting a winding up petition before the company had gone into administration were not expenses of the administration but expenses of the liquidation. The list of administration expenses in r 2.67 of the Insolvency Rules is a complete list and does not include such fees. The fees were not incurred in connection with the performance of the administrator’s functions. The court’s inherent jurisdiction could not be used to produce a result inconsistent with r 2.67, nor could the court do so under s 51 Senior Courts Act 1981 because unpaid fees are not costs within that provision.

2/11/12

NEUMANS LLP v ANDRONIKOU [2012] EWHC 3088 (Ch), [2013] Bus LR 374

Where a company which had been in administration later went into liquidation, the company’s solicitor’s fees of resisting a winding up petition before the company had gone into administration were not expenses of the administration but expenses of the liquidation.

19/7/12

RE WEDGWOOD MUSEUM TRUST LTD [2012] EWCH 1974 (Ch)

On an application for directions as to whether assets were available to meet creditor claims or held in a charitable trust, where a representative creditor and the Attorney-General (on behalf of the Charities Commission) were joined as parties to argue the competing cases and were represented by leading counsel, the administrator's instruction of leading counsel was disproportionate.

28/3/12

LEISURE (NORWICH) II LTD v LUMINAR LAVA IGNITE LTD [2012] EWHC 951 (Ch)

Rent payable in advance which fell due before commencement of liquidation or administration was payable as an unsecured debt, not an expense of liquidation or administration.

22/3/12

ROHL v BICKLAND LTD [2012] EWHC 706 (Ch), [2013] Bus LR 361

The applicant incurred costs preparing for a pre-pack administration which could not proceed when an out of court appointment was made by the holder of a qualifying floating charge. The court ordered that the applicant's costs should rank as an expense of the out of court administration.