Swift Structures Ltd & Euro Plant Hire Ltd v Companies Acts

JurisdictionIreland
JudgeMr Justice Haughton
Judgment Date31 July 2017
Neutral Citation[2017] IEHC 540
Docket NumberRecord no. 2011 COS 135 Record no. 2011 COS 136
Date2017
CourtHigh Court

[2017] IEHC 540

THE HIGH COURT

Haughton Robert J.

Record no. 2011 COS 135

Record no. 2011 COS 136

IN THE MATTER OF SWIFT STRUCTURES LIMITED (IN LIQUIDATION)

AND IN THE MATTER OF THE COMPANIES ACTS, 1963-2009

IN THE MATTER OF EURO-PLANT HIRE (IRELAND) LIMITED (IN LIQUIDATION)

AND IN THE MATTER OF THE COMPANIES ACTS, 1963-2009

Company – The Companies Act, 1963-2009 – O. 74, r. 46 of the Rules of the Superior Courts 1986 – Liquidation of non-asset companies – Payment to liquidator – Contract – Fixation of remuneration by the Court.

Facts: The official liquidator had filed the present application for asking the Court to fix his remuneration in relation to the liquidation work that he had completed for the two related companies. The Revenue Commissioners/notice party had opposed the present application on the ground that the dispute concerning payment was governed by a contract entered into between the parties. The Revenue Commissioners further submitted that since there were no assets in the companies under liquidation, the Court had no jurisdiction to direct payment.

Mr. Justice Haughton measured the costs incurred by the liquidator in carrying out the liquidation work in relation to both the companies. The Court took into account hours of work done, nature and complexity of work done and importance of that work while fixing the amount of the payment. The Court held that in addition to the aforesaid criteria, where the company under liquidation had no asset, the Court must have regard to the payments already made to the liquidator under any funding agreement entered into between the parties. The Court also measured the legal costs incurred by the liquidator. The Court however, refused to grant the costs of the present application to the liquidator on the ground that he had not accepted the offer of payment made by the Revenue Commissioner, which was reasonable. The Court also refused to award the costs of motion to the Revenue Commissioners as despite knowing that the companies had no asset, they presented a two fee note to the liquidators. The Court stated that since the present judgment would be favourable to the Revenue Commissioners, as it would help them in reaching agreement over liquidator's remuneration in other cases, it would not be appropriate to award the costs of the application to them. The Court pointed out that the funding agreement in the present case was restricted in its scope as there should have been provision pertaining to fixed rate agreement with anticipated variations. The Court suggested that the parties should have adopted alternative methods of dispute resolution.

Judgment of Mr Justice Haughton delivered the 31 day of July, 2017
1. Introduction
1.1

In this application Mr Neal Morrison the official liquidator ('the liquidator') of the above named companies ('Swift' and 'Europlant' respectively) asks the court to measure/fix his remuneration as liquidator including the legal costs of his solicitors McDowell Purcell. He was appointed liquidator of the two related companies by orders of the High Court dated 21 March, 2011, on foot of petitions presented by the Revenue Commissioners.

1.2

These liquidations are funded by the Revenue Commissioners in circumstances where it was anticipated, correctly, that there would otherwise not be sufficient realisations to fund the liquidations. The Revenue Commissioners are a notice party to and opposing the application.

2. The Notice of Motion
2.1

In the notice of motion the liquidator seeks the following reliefs: –

'Swift Structures Limited (in Liquidation)

1. An Order pursuant to Order 74, rule 46 of the Rules of the Superior Courts 1986 to 2014 fixing the remuneration of the Official liquidator of Swift Structures Limited (in liquidation) for the period from the commencement of this liquidation to date at €33,996.93 net of VAT as provided for in the table scheduled hereto.

2. An Order measuring the legal costs of the Official Liquidator of Swift Structures Limited (in liquidation) for the same period in the sum of €26,051.09 plus VAT thereon in the amount of €5991.74 together with counsel's costs in the amount of €1,250 plus VAT thereon in the amount of 172.50, together with outlay in the sum of €797.43, coming to a total of €34,262.76 inclusive of VAT.

3. An Order measuring the payment due to the Official Liquidator in respect of his outstanding remuneration and legal costs in the amount of €43,855.69 inclusive of VAT.

Euro-Plant Hire (Ireland) Limited (in Liquidation)

4. An Order pursuant to Order 74, rule 46 of the Rules of the Superior Courts 1986 to 2014 fixing the remuneration of the Official Liquidator of Euro-Plant Hire (Ireland) Limited (in Liquidation) for the period from the commencement of this liquidation to date at €28,380.82 net of VAT as provided for in the table scheduled hereto.

5. An Order measuring the legal costs of the Official Liquidator of Euro-Plant Hire (Ireland) Limited (in Liquidation) for the same period in the sum of €18,283.13 plus VAT thereon in the amount of €4,205.12, together with counsel's costs in the amount of €1,250 plus VAT thereon in the amount of €172.50, together with outlay in the sum of €1,023.15, coming to a total of €24,933.90 inclusive of VAT.

6. An Order measuring the payment due to the Official Liquidator in respect of his outstanding remuneration and legal costs in the amount of €28,077.77 inclusive of VAT.

7. Such further or other direction as to this Court shall seem appropriate.

8. Such further or other order as to this Court shall seem appropriate.

9. An Order providing for the costs of this application.'

2.2

The reference to the 'same period' in paragraphs 2 and 5 are references to work done by the liquidator and his solicitors post March 2012. This is because in April 2012 the Revenue Commissioners discharged remuneration and legal costs up to that time in respect of both liquidations. The payments then made for combined professional fees amounted to €51,695 plus VAT and outlay, giving a total of €63,987.88.

2.3

It is common case that the liquidations were substantially completed in October 2015 when the High Court made restriction orders in respect of the companies' directors. It is apparent from the narrative in the 'Billing Guide Data' from McInerney Saunders, the liquidator's firm of accountants, and 'Time And Charges Ledger By Matter' prepared by his solicitors in respect of their work, which are exhibited by the liquidator, that the sums sought in the Notice of Motion include many items arising since that time, and more particularly since January 2016, referable to the present dispute in relation to the liquidator's remuneration and legal costs, and in relation to the preparation and bringing of the present application. The amounts featuring in the notice of motion include claims in respect of these items arising post October 2015 – they are rolled up in what the liquidator asserts are remuneration and legal costs properly arising in the liquidations and which the court is asked to measure. One of the Revenue Commissioners arguments is that insofar as these can be allowed at all they are items of costs related to this application, and that as the application was not necessary or appropriate they should not be allowed.

3. The legal costs accountant
3.1

While this application was pending, and with some encouragement from the court, the parties agreed to refer McDowell Purcell's legal fees for reports from Behan associates, legal costs accountants, and to share the costs of that exercise. Three reports from Mr Noel Guiden all dated 11 July, 2017, have been produced. He expresses his views 'as an experienced Legal Costs Accountant of the fees that would be taxed and determined by a Taxing Master'. In respect of legal fees incurred for the period 2 April, 2012, to 31 January, 2016, his view is that the solicitor's instructions fee in Swift would tax at about €13,000, and that counsel's brief fee of €750 is reasonable, and in respect of Europlant his figures are an instructions fee of €8,500 and a brief fee of €750.

3.2

In opening the application counsel for the liquidator adopted these new figures and sought to modify the sums sought to be measured in the Notice of Motion at paragraphs 2 and 5, with consequential reductions in the measurement sought in paragraphs 3 and 6 respectively. Thus in paragraph 2 instead of a total of €34,262.76 inclusive of VAT and outlay, measurement was sought at a total of €18,104 and in paragraph 5 instead of a total of €24,933.90, measurement was sought at a total of €12,832.65, in respect of the legal costs in Swift and Euro plant respectively post March 2012. Counsel for the Revenue Commissioners opposed any amendment of the Notice of Motion.

3.3

In addition to seeking payment of the sums as modified the liquidator relied on Mr Guiden's third report in which he expresses the view that the solicitors appropriate professional fee in respect of this motion for directions would be about €35,000 with an appropriate brief fee for Senior Counsel at €3000 plus an appropriate fee for Junior Counsel.

3.4

It appears that Mr Guiden's estimations are largely based on time worked – although he opines that it would not all necessarily be allowed in full – and hourly rates that he regards as reasonable. In his first report on Swift he adds that –

'Time of course is only one of the factors to be taken into consideration and the other factors are set out in detail in Order 99 rule 37(22)(ii)'.

3.5

Some of the items of legal work itemised in Mr Guiden's reports on Swift and Europlant relate to preparation and prosecution of the section 150 restriction proceedings. The Revenue Commissioners assert that this work was separately invoiced by McDowell Purcell on 30 October, 2015, in the sum of €2,583 in each liquidation, making a total of €5,166 inclusive...

To continue reading

Request your trial
1 cases
  • James Adams Vintners Ltd ((in Liquidation)) v Companies Acts
    • Ireland
    • High Court
    • 21 Julio 2020
    ...scrutiny when an application for costs falls to be considered pursuant to section 228.” 24 In The Matter of Swift Structures Limite [2017] IEHC 540, Haughton J. considered s. 228 of the 1963 Act and RSC Order 74 rr. 46 & 47 dealing with similar issues regarding the entitlement of the court ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT