The High Court has given an examiner a further opportunity to support claims for fees and legal costs arising from the examinership of three Sammon companies, after finding that the evidence so far did not justify the claims in full.
In a judgment delivered on 30 March 2020, Mr Justice Allen addressed an application under section 554 of the Companies Act 2014 by examiner Michael McAteer. He sought approval of remuneration and outlays of €153,750 for Sammon Contracting Ireland Limited (SCIL) and €36,900 for Micheál Sammon Woodcraft Limited (MSWL), as well as legal costs of €91,922.97 for SCIL and €12,300 for MSWL.
Randelswood Holdings Limited, which had provided certified funding to the companies, opposed the application. The court ruled that examiner remuneration and costs sanctioned under section 554 rank ahead of liabilities certified under section 529. It rejected Randelswood’s arguments that the examinerships were prolonged unnecessarily and that part of the claim should be apportioned to the parent company, Sammon Contracting Group Limited (SCGL).
The companies entered examinership in April 2018 after Carillion plc’s liquidation left them owed €8 million. SCIL and SCGL were ordered wound up on 5 June 2018; MSWL remained under protection until 27 June, when it too was ordered wound up. Randelswood had initially certified loans of €525,000 to SCIL and €105,000 to MSWL. The judgment said there appeared to be insufficient realisations to meet all claims.
Justice Allen found that the examiner’s summaries generally described the work but did not show the necessity or value of much of it, or establish that it related to the examinership. In particular, the evidence did not explain much of the time claimed for dealing with creditors, stakeholder communications and general administration. The court also found the supporting information for some legal fees inadequate, including work on terminated contracts and the SCIL winding-up application.
The judge said the examiner, as a fiduciary, bore the burden of justifying his claim with a sufficiently detailed account. The court was not satisfied the claims were supported in full, but allowed the applicant an opportunity to submit further evidence. The judgment did not determine the final amount payable. The applicant’s solicitors were directed to tell the registrar and Randelswood’s solicitors within two weeks whether they intended to file further evidence and, if so, when.