The High Court has ordered the liquidator of Brandon Plant Hire Limited to obtain court approval before making payments to himself or his lawyers during the liquidation, and to comply with the statutory order of payment priorities.
Mr Justice Brian O’Moore made the order on 6 July 2021 in a motion brought by Cairn Homes Construction Limited. The company, Brandon, had worked as Cairn’s subcontractor on building and development projects. In March 2020, before the liquidator’s appointment, the companies agreed a reduced payment to Brandon. The liquidator, Mr Fitzpatrick, is challenging that settlement in separate proceedings, alleging it was a fraudulent disposition of €6,002,832.27. Brandon also seeks to rescind the agreement for duress and other reasons.
Cairn sought orders to protect Brandon’s assets and restrict payments from the liquidation. It said its costs in the two sets of proceedings were expected to be about €1.01 million, excluding VAT, with €150,000 already incurred. It also cited concerns about Mr Fitzpatrick’s handling of fees in other liquidations and questioned whether he had made payments to himself or his solicitor in this liquidation. Mr Fitzpatrick had not answered that question directly.
At the hearing, Mr Fitzpatrick’s counsel accepted that Cairn’s existing costs orders, and any further costs order in its favour, ranked ahead of the liquidator’s remuneration and his solicitor’s fees. The judge said the statutory priority was clear, but found that Mr Fitzpatrick had been slow to acknowledge it and had not answered Cairn’s questions about possible payments. The judge also referred to earlier Court of Appeal judgments concerning Mr Fitzpatrick’s conduct in other liquidations.
The resulting order combines elements of Cairn’s requests: Mr Fitzpatrick may make no payment to himself or his lawyers during the liquidation except in accordance with the priorities in section 617 of the Companies Act 2014 and with prior court approval. The judge said the order would allow the court to assess whether interim payments were necessary and, if approved, on what terms.
The court declined to make the separate “mareva type” order sought to preserve Brandon’s assets. It said the payment restriction and approval requirement addressed the only potential dissipation identified: payments of legal fees and liquidator’s remuneration. The judge also left undecided whether a mareva order could be made under section 631 of the 2014 Act.
The order’s precise form and the costs of the motion were left for a further hearing at 10am on 20 July 2021. The judgment did not determine the challenges to the March 2020 settlement.