Remuneration, Re Berkley Applegate and the statutory charge

The previous office holders obtained orders that "the company" had a beneficial entitlement to some proceeds of two overseas development sites it held on trust for itself and investors. By the time of the winding up order, creditors had already approved the former administrators’ fees on a time cost basis and the office holders had secured an order entitling them to payment from some of the trust assets pursuant to Re Berkley Applegate. Most of that remuneration remained unpaid so stood charged on the assets under Paragraph 99(3).

The new liquidators later realised the sites, obtaining three orders of their own that they be paid out of those realisations before distributing which they then did. It later transpired the court had not been aware of the administrators’ entitlements under the statutory charge before those later orders were made. When the matter came before the court again, it concluded that the liquidators should have drawn that to the attention of the court when they applied for permission to draw remuneration. The failure to do so was a breach of duty - the liquidators ought to have known about the existence of the charge and it was a material factor to be considered. 

The rule Ex Parte James precluded the liquidators from relying on the orders, which were then varied so as not to prejudice the statutory charge and the liquidators were required to return funds drawn to the estate so they could be properly applied towards discharging the remuneration entitlements of the prior office holders.

Rosler v Shah [2022] 10 WLUK 428