Liquidator's costs again

United Kingdom
27/03/2001
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Another case concerning Liquidator's costs has been reported (re Romar Engineering Ltd, NLD 9 March 2001). Law Now has previously reported on the more complex cases of Re Floor Fourteen Limited: Lewis v Commissioner of Inland Revenue & ors, which is under appeal to the House of Lords and re Leyland Daf . This time the issue was not whether the Liquidator could take priority in respect of his costs, but whether he could recover them at all.

In Romar, the Liquidator applied to the court for an order for reimbursement of his costs to date (GBP 5,000) from the assets of the Company in ongoing litigation. This was after a preferential creditor emerged who had not previously been accounted for.

The Order was refused on the grounds that it was not possible to decide whether the Liquidator had acted properly in commencing the Litigation; there was insufficient evidence of Counsel's opinion and not all creditors had been involved in the decision to commence. It was possible that others might still object. The court said that the Liquidator did not need to know now if he was protected by the indemnity and that he had reached the present stage in the litigation without an order from the court. It was only because of the emergence of a preferential creditor that the application had been made at all. The application was therefore adjourned until such a time as appropriate evidence to found an order could be put before the court.

For further information, please contact Ruth Pedley by e-mail at [email protected] or by telephone on +44 (0)20 7367 2098.

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