Orthios Eco Parks (Anglesey) Limited, Re
[2024] EWHC 3047 (Ch)
David Egerton Wedgwood v Reeta Hosein & Anor
24 July 2024
[2024] EWHC 1836 (Ch)
High Court
A man's estate might be broke. His former employer sued the estate for a lot of money. The estate's manager asked a judge for permission to fight back and pay legal fees. The judge said yes, but only to certain things and only after considering everyone involved – both those owed money and those who would inherit.
Key Facts
- •Aleem Hosein died on 30 January 2021 leaving a will with his wife, Reeta Hosein, as the sole residuary beneficiary.
- •David Egerton Wedgwood is the administrator of Mr. Hosein's potentially insolvent estate.
- •FFS (2023) Limited (EBP), Mr. Hosein's former employer, brought a claim against the estate for approximately £2.5 million.
- •The administrator sought Beddoe relief and approval under section 284 of the Insolvency Act 1986 to manage the estate and defend the EBP claim.
- •Two other claims (Rosenkrantz and Priti Patel) were also intimated against the estate.
Legal Principles
Beddoe relief allows the court to approve actions by an executor or administrator that are not expressly authorized by the will or the law, but are considered to be in the best interests of the beneficiaries.
Beddoe jurisdiction
Section 284 of the Insolvency Act 1986 deals with the validity of transactions made by the estate when there is a risk of insolvency. The court must consider the interests of both creditors and beneficiaries.
Insolvency Act 1986, section 284
In cases involving potential insolvency and Beddoe relief, the court must balance the interests of creditors and beneficiaries. The administrator has a duty to act fairly towards both.
National Westminster Bank plc v Lucas and others (re the Estate of Jimmy Savile) [2014] BPIR 551; Re Savile [2015] BPIR 450
The court may grant approval to conduct litigation on an iterative basis.
Practice Direction 64B, paragraph 7.8
Outcomes
Beddoe relief granted to allow the administrator to continue defending the EBP claim, but not to participate in the CCMC without further order.
The court considered the balance of interests between creditors and beneficiaries, the potential value of the MetLife payment, and the need to allow the administrator to defend the estate's interests. The court adopted a pragmatic and cautious approach.
Section 284 approval granted for costs incurred in defending the EBP claim and administering the estate, but limited in scope. The court rejected the argument that the test in paragraph 12.8.8 of the Insolvency Practice Direction should apply.
The court found that the interests of both creditors and beneficiaries must be considered, following the precedent in Re Savile. The limited approval granted struck a balance between these interests.
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