The Court of Appeal has confirmed that liquidator Anthony J. Fitzpatrick must pay the costs of his appeal personally, after rejecting his request for an indemnity from Cherryfox Limited’s liquidation assets.
The ruling, delivered electronically on 30 April 2020 by Mr Justice Robert Haughton, addressed only the appeal costs. The court had already dismissed Mr Fitzpatrick’s appeal against a High Court decision fixing his fees and remuneration as liquidator. It also left unchanged the High Court’s costs order, which had made no order as to costs.
The Revenue Commissioners, a preferential creditor, had challenged €65,981.55 in fees and remuneration, including VAT. The High Court set the amount at €37,500 plus VAT, and allowed €10,157.69 in outlay. It directed that €42,161.31 remaining from the liquidation funds be paid to Revenue as sole preferential creditor.
After the appeal was dismissed, the Court of Appeal ordered Mr Fitzpatrick to pay its costs personally. It allowed further written submissions before finalising that order. Mr Fitzpatrick relied on a Supreme Court decision concerning liquidators’ costs and argued that the costs of the fee application were properly incurred in the winding up, so should be payable from company assets under section 281 of the Companies Act 1963.
The court said the earlier Supreme Court case involved materially different circumstances. In this case, Mr Fitzpatrick had opposed the fee application and pursued the appeal in his own interest, rather than in a representative capacity for the company. The court said his refusal to agree to the level of fees proposed by Revenue had prompted the application, and that his claims had been found unreasonable.
The ruling also addressed the liquidation account. The High Court had refused a stay of its order to pay Revenue €42,161.31. The Court of Appeal said there was evidence that the order had not been complied with and that the account had fallen to about €22,000, without a proper explanation. It said the timing, recipients and purposes of payments from the account had not been disclosed. Depending on when the payments were made, the court said they raised concerns about failure to inform the courts or payments made despite the High Court direction.
The court concluded that the evidence pointed to bad faith or misconduct and that this was not a borderline case. It was therefore unnecessary to determine whether the appeal costs were “properly incurred” under section 281. The court confirmed the appeal-costs award against Mr Fitzpatrick personally.