The High Court reduced the remuneration claimed by the official liquidator of Custom House Capital by €200,000, measuring his fees and expenses for work up to 31 October 2013 at €1,110,809.11, plus €10,008.19 in outlays and VAT.
In a judgment delivered on 22 December 2014, Ms Justice Finlay Geoghegan also allowed legal costs claimed for the same period in full. She said the court had not been asked to order payment of the liquidator’s remuneration. She indicated it could be paid from available company funds, subject to the priority of legal costs and any other prior claim.
The judge said the legal costs could be paid from funds in the liquidation, or the unpaid balance could be paid. Before an order was drawn, however, the parties had to clarify whether €73,882.67 already paid to the solicitors was included in the measured amount and whether the amount included VAT. The court reserved the precise order and further directions until hearing counsel.
The application concerned only part of a 22-part motion by Kieran Wallace, the official liquidator, seeking directions and decisions on costs in the winding-up. This stage dealt with his fees, expenses and legal costs up to October 2013. Other issues in the motion remained for later consideration.
A committee representing clients argued that some reconciliation work should be treated as work Wallace performed as administrator under the Investor Compensation Act, rather than as liquidator. The judge concluded that, on the particular facts of the winding-up, reconciliation needed to identify which clients were entitled to assets still under the company’s control formed part of the liquidator’s work. She found no evidence that he was being separately paid as administrator for the detailed reconciliation work included in this claim. The judgment did not decide whether he was obliged, as administrator, to certify investors’ net losses.
The judge attributed the €200,000 reduction mainly to claimed costs for communicating with clients and the Central Bank, which she considered excessive in light of the value of that work. She also took account of delays in progress, including the time taken to develop a funding plan for the remaining work.
The winding-up followed findings by court-appointed inspectors that Custom House Capital had carried out unauthorised and, in many cases, improper transactions involving client assets. The judge noted that the company had about €1.1 billion in client assets under management, but those assets were not beneficially owned by the company and were not automatically available to meet winding-up costs. She said uncertainty over funding continued to hold up the liquidation.