Anthony James Broom v Maria Del Pilar Molina Aguilar (Costs)
[2024] EWHC 1961 (Ch)
Brian Burke & Ors v Peabody Construction Limited
23 February 2024
[2024] EWHC 392 (Ch)
High Court
Three supervisors of a failing company were ordered to pay legal costs. They appealed, arguing they acted fairly. The judge agreed, saying there wasn't enough evidence to show they had done anything wrong. The initial cost order was cancelled.
Key Facts
- •Appeal against a costs order made against joint supervisors of a CVA.
- •The CVA was challenged by creditors, Peabody Construction Limited and Newlon Housing Trust.
- •ICC Judge Prentis awarded costs against the company and the joint supervisors.
- •The joint supervisors appealed, arguing they acted neutrally and that no personal misconduct was found.
- •The company entered administration before the consequential costs hearing.
Legal Principles
Costs orders against nominees (like CVA supervisors) require evidence of personal misconduct.
Re Naeem (A Bankrupt) (No. 18 off 1988) [1990] 1 WLR 48, Re a Debtor (No. 222 of 1990) ex parte Bank of Ireland (No. 2) [1993] 1 BCLC 233, Carraway Guildford (Nominee A Limited) & Ors v. Regis UK Limited & Ors [2021] EWHC 2064 (Ch)
CPR 44.2(2)(a): Costs generally awarded against the unsuccessful party.
CPR 44.2(2)(a)
Outcomes
Appeal allowed; costs order against joint supervisors set aside.
The judge erred in concluding the supervisors' actions constituted misconduct. Their representation by the same counsel as the company, and the wording in their skeleton argument, were not sufficient evidence of moving from neutrality to hostility. The judge misdirected himself by focusing on these aspects without considering other evidence of neutrality and the lack of opportunity for the supervisors to respond.