Orthios Eco Parks (Anglesey) Limited, Re
[2024] EWHC 3047 (Ch)
Jeremy Charles Frost & Anor v The Good Box Co Labs Limited & Ors
5 March 2024
[2024] EWHC 422 (Ch)
High Court
Former company administrators tried to get more money for their work. The court said they could generally ask for more money even after they stopped being administrators, but in this case, their request wasn't properly made under the right rules, so they lost. The court focused on what their application actually asked for, rather than just on their right to apply after leaving the job.
Key Facts
- •The Good Box Co Labs Ltd was placed in administration on 28 June 2022.
- •Jeremy Frost and Stephen Wadsted were appointed joint administrators.
- •A restructuring plan was sanctioned on 16 January 2023, ending the administrators' appointment on 26 January 2023.
- •Creditors seemingly fixed the administrators' remuneration at £235,000 plus VAT on 30 December 2022.
- •The administrators claimed additional fees of approximately £209,000.
- •The administrators applied for an increase in remuneration under Insolvency Rules 2016 (IR2016) rules 18.24 & 18.28.
- •A preliminary issue arose concerning the administrators' standing to make the application after ceasing to be office-holders.
Legal Principles
Rules 18.24 and 18.28 of IR2016 provide mechanisms for office-holders to increase remuneration or change its basis.
IR2016, Part 18, Chapter 4
The court adopts a purposive interpretation of insolvency legislation regarding standing.
Brake v. The Chedington Court Estate Ltd [2023] 1 WLR 3035
Applicants must have a sufficient interest in the matter in issue to have standing.
Re Lehman Brothers Europe Ltd (in administration) (No. 2) [2021] 2 All ER (Comm) 559
Office-holder remuneration rules should be interpreted in context within Chapter 4 of IR2016.
IR2016, Part 18, Chapter 4
Outcomes
The application was dismissed.
The administrators were not seeking an increase in the rate or amount of remuneration, nor a change in its basis, as required by rules 18.24 and 18.28 of IR2016. Their claim for additional fees was not considered an application for an increase in the amount initially fixed.
Former administrators can make a rule 18.28 application.
A purposive interpretation of IR2016 rules 18.24 and 18.28, considering the overall aim of Chapter 4 and related rules, supports the conclusion that former administrators retain standing to pursue such applications if their interests are directly affected.
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