June 5, 2025
The High Court has handed down judgment in an important decision about the remuneration of insolvency office-holders, and specifically about applications made under rules 18.24 and 18.28 of the Insolvency Rules 2016 to seek increases in the rate or amount of remuneration or a change in its basis.
The Court had two applications before it, made by the joint liquidators of two related companies: Henry Walters Limited (HWL) and Old Manor Homes Limited (OMHL). The companies had entered liquidation following a breakdown in relations between their sole equal shareholders and directors.
The office-holders’ remuneration had been fixed at a rate of 5% on realisations. By their applications, they sought an increase in their remuneration in respect of HWL to a rate of 9% of realisations, and an increase in their remuneration in respect of OMHL to a rate of 6.3% of realisations.
The applications were made on the basis that the overall workload required in both the HWL and OMHL liquidations exceeded that which had been anticipated and allowed for when fixing the original basis of remuneration.
ICC Judge Greenwood dismissed both applications, finding that in substance, they were both applications for a change in the basis of remuneration rather than for an increase in its rate, and that they had both been made only after the work in question had been done, such that the Court and the Respondents were presented with a fait accompli. The Court also held that the existing bases of remuneration were the product of a commercial, freely negotiated agreement, made in circumstances where the work said to have been unanticipated was foreseeable from the outset. Finally, it found the evidence adduced as to the amount and value of the work done by the office-holders was not adequate to support the claims made.
Tom Gentleman and Zara McGlone acted for the successful First Respondent, and were instructed by Ashkhan Candey and Matthew Rogers of CANDEY Limited.
Read the judgment.
