The High Court ruled that 13 companies in examinership could not be made jointly and severally liable for the examiner’s combined fees and expenses. It sanctioned reduced aggregate amounts and directed that they be apportioned between the companies, with the final figures to return to court for approval.
In a judgment delivered on 30 July 2009, Ms Justice Finlay Geoghegan said section 29 of the Companies (Amendment) Act 1990 did not give the court jurisdiction to make the joint liability order sought by examiner Kieran McCarthy. The court held that, ordinarily, each company was responsible for the examiner’s remuneration, costs and expenses attributable to his work for that company.
McCarthy had initially been appointed to Sharmane Limited and 12 related companies. Four companies—Eatoncroft Limited, Jestdale Limited, Kadaran Limited and Topart Limited—had been ordered wound up on 23 February 2009, and an official liquidator was appointed. The court said the examiner’s function in relation to those four companies had ended. Later, the protection period ended for the other nine companies after difficulties arose with an investor whose funding was essential to proposed schemes of arrangement. Receivers were appointed, and no winding-up orders were made for those nine.
The examiner asked the court to determine his remuneration and expenses, and sought joint and several liability across the companies. ACC Bank and Ulster Bank opposed that request, arguing the court lacked jurisdiction and challenging the amounts claimed. The judge rejected the joint-liability request, finding that the statutory priority given to examiner fees over other claims required a strict interpretation of which company’s assets could be charged.
The examiner had sought €456,057.50 in remuneration, plus €3,408 in printing and postage outlays, and €518,016.76 in legal costs. The judge used as her starting point an agreement from February 2009 under which the examiner had indicated he would accept €300,000 for remuneration and €280,000 for legal fees. She allowed a 25% increase for discounted fees tied to prompt payment and some additional work, sanctioning aggregate remuneration of €375,000 plus VAT and legal professional fees of €350,000 plus VAT. She also allowed the claimed €3,408 outlays and €912.76 in solicitors’ incidental outlays.
For the costs of the application, the judge allowed the examiner 60% of the professional fees claimed, amounting to €13,500 plus VAT. She made no costs order in Ulster Bank’s favour against the examiner.
The judgment did not set final amounts for each company. It directed the examiner and his solicitors to apportion the sanctioned aggregate amounts in the same relative proportions as the fees claimed, taking account of the four companies placed in liquidation, and submit the figures for court approval.