MTA Personal Injury Solicitors LLP (in administration) v Steven Wiseglass
[2024] EWHC 2208 (Ch)
Orthios Eco Parks (Anglesey) Limited, Re
28 November 2024
[2024] EWHC 3047 (Ch)
High Court
A company's administrator charged high fees agreed to by a secured creditor. Creditors tried to challenge these fees in court, but the judge said the right procedure wasn't followed. The court couldn't overturn the agreement, meaning the high fees stood.
Key Facts
- •Mr. Craig Ridgley was appointed administrator of Orthios Eco Parks (Anglesey) Limited and its subsidiary.
- •Applications were made to challenge Ridgley's remuneration and solicitor's fees, deemed excessive.
- •Fees were agreed upon with the security trustee, Mr. Colin, and paid from sale proceeds of land subject to a fixed charge.
- •Applicants included Mr. Laurence Pagden (successor security trustee) and administrators of an associated company.
- •The land was sold for £35 million, resulting in significant fees for Ridgley and his solicitors.
- •Applicants argued that the agreed expenses were excessive and not a product of genuine negotiation.
Legal Principles
Jurisdiction under rule 18.34 of the Insolvency Rules 2016 for challenging office-holder remuneration and expenses.
Insolvency Rules 2016, rule 18.34
Principles governing payment of expenses from company assets in insolvency proceedings, including assets subject to fixed and floating charges.
Insolvency Act 1986, Re Leyland DAF Ltd [2004] UKHL 9
The court's inherent jurisdiction to order payment of office-holder expenses from trust assets or property outside the insolvency.
Re Berkeley Applegate [1989] Ch 32, Re James Rose Projects Ltd (In Administration), Townsend v Biscoe [2010] WL 3166608
Rules governing the determination of an administrator's remuneration under Part 18 of the Insolvency Rules 2016.
Insolvency Rules 2016, Part 18
Estoppel by convention.
Chitty on Contracts, 35th Ed, 7-016 to 7-028; Tinkler v Revenue and Customs Commissioners [2021] UKSC 39
Court's power to address unfair harm and misfeasance by administrators under Schedule B1, paragraphs 74 and 75 of the Insolvency Act 1986.
Insolvency Act 1986, Schedule B1, paragraphs 74 and 75
Outcomes
Applications dismissed.
The court lacked jurisdiction under rule 18.34 to review the agreed fees, as they were not determined under Part 18 and were paid from assets subject to a fixed charge. Applicant Pagden was bound by the agreement made by his predecessor.
Applications were deemed to have been made within the time limit under rule 18.34(3).
The relevant report detailing the incurred remuneration was the Final Progress Report filed on 5 April 2023.
Estoppel by convention was not established.
The agreement was binding, and the applicants' argument regarding estoppel was unnecessary as the existence of the agreement wasn't disputed.
Second and Third Applicants lacked standing to challenge the agreement.
While OAT (the company they administered) was an unsecured creditor with potential interest, Miller and Katz themselves did not have standing; their interest was indirect and speculative.