The High Court has ordered Roger Day to pay 30% of the costs incurred by Kieran Wallace, the official liquidator of Custom House Capital, in defending Day’s unsuccessful motion to be appointed as a representative of uncompensated investors.
Mr Justice Brian O’Moore made the costs order in a judgment delivered on 1 November 2024. The amount is to be adjudicated if the parties cannot agree.
The motion had sought Day’s appointment as a “Legitimus Contradictor” representing uncompensated investors, or alternatively as a notice party representing their interests. In a decision on 19 December 2023, the court refused both forms of relief. The costs judgment addressed the costs of that motion; it did not reconsider the appointment application.
Day submitted that he should not have to pay another party’s costs. He relied on his earlier work in investor-related roles, his concern for affected investors and the stress and time involved. The judge accepted that Day had acted without hope of personal benefit, that the role had been distressing and time-consuming, and that he had brought the motion genuinely in investors’ interests, although mistakenly.
Wallace had succeeded completely in resisting the motion and was, on its face, entitled to his costs. The judge also considered that Wallace’s solicitors had set out before the motion was brought why it would not succeed, following the court’s direction that the parties exchange correspondence. The judge said this was intended to prevent an unnecessary application.
The court made no costs order concerning the Investor Compensation Company DAC (ICCL). It had taken no part in the motion and was not seeking its own costs. The judge found no reason for it to pay another party’s costs.
In deciding how much of Wallace’s costs Day should bear, the judge weighed Day’s history in the role and the risk that a full costs order could discourage others from acting as Legitimi Contradictores. He also considered the company’s poor financial position and the possibility that liquidation costs could ultimately fall on investors, while noting that the cost of this motion would likely be marginal in the wider administration and liquidation.
The judge said he would have seriously considered making no costs order but for the pre-motion correspondence. He ordered Day to pay 30% of Wallace’s costs of defending the motion, discounted in light of the considerations set out in the judgment. Those costs are to be adjudicated in default of agreement.