The Court of Appeal has set aside a High Court order refusing to approve any of the remuneration, costs and expenses claimed by the former examiner of Tower Trade Finance (Ireland) Ltd and Deal Partner Logistics Ltd. It directed that the order sought in his application be made, allowing payment from the companies’ assets in the proportions indicated in the notice of motion.
The companies entered examinership in February 2023, but creditors did not approve proposed schemes and the companies went into liquidation. Declan McDonald, who had served as examiner and was later appointed liquidator, sought court approval for about €171,000 in examinership remuneration, costs and expenses. The High Court accepted that the sums were reasonable and properly incurred but refused the application in full.
The dispute concerned what the companies’ directors had said they would contribute. At the February 2023 petition hearing, counsel for the petitioner told the court that the directors would invest €150,000, and that the money could help meet examinership fees if the process failed. The petition and independent expert’s report, however, described the funding as supporting working capital and cashflow. The directors ultimately provided €35,000 for working capital.
When the examiner later applied for his fees, a committee member recalled the €150,000 as specifically intended to offset examinership costs. The examiner’s solicitor, relying on his recollection and documents, initially described it as working capital. After the hearing transcript was obtained, the solicitor acknowledged that his account was inaccurate. The High Court considered that the examiner and solicitor had failed to correct the record adequately and that approving the fees would burden creditors.
The Court of Appeal said an examiner must keep the court fully informed and correct inaccurate or incomplete information promptly. It found that the examiner should have followed up on the discrepancy between counsel’s oral submission and the written documents, but concluded the failure was not deliberate or grave enough to justify denying all costs. It also accepted that the solicitor’s mistaken account reflected an understandable failure of recollection, and found that the lack of a corrective affidavit did not amount to misconduct in the circumstances.
The appeal court further held that the High Court should have raised its concerns and allowed the examiner and solicitor to address them before relying on those concerns. It said there was no legal basis for the examiner to pursue the directors personally for the fees, and that the statutory priority given to examinership costs can reduce what remains for creditors when an examinership fails. The High Court had not ordered that the examiner’s recovery be capped at the directors’ promised contribution. The appeal was allowed and the High Court order was set aside.