Re MG Engineering & Consultancy Limited
21 Apr 2016
The appeal was against an order of Jack J in the Supreme Court of Gibraltar allowing the remuneration of joint liquidators on the basis claimed, but only from the date of the order rather than the date of their appointment. The forward-looking effect of the order deprived the liquidators of over £270,000 in remuneration for past work, despite Jack J's finding that the remuneration was justified given that the liquidators had recovered over £900,000 for the insolvent estate and were still engaged in recovering more.
The Court of Appeal of Gibraltar held-
1. The order of Dudley CJ appointing the joint liquidators in place of the Official Receiver, which specified inter alia that that Liquidators' Scheme would apply, was not an exercise of the Court's jurisdiction to make an order fixing the liquidators' remuneration under section 238(2) of the Companies Act 1930.
2. The court could (as Jack J had done) make a forward-looking order specifying the basis on which the joint liquidators would be remunerated from the date of that order onwards, which order could stipulate that their remuneration would be on a basis different to that provided for under the Scheme.
3. The court (reversing Jack J) also held that it had the power under section 238(2) to make an order specifying the basis on which the joint liquidators were to be remunerated for work done from the date of their appointment, and to remit the remuneration claim to the Registrar for assessment.
4. The court (reversing Jack J) also held that the Liquidators' Scheme does not apply to liquidations in which the company in liquidation has assets in excess of £1,000. If, after appointment, it emerges that the company's assets are in excess of that amount, the Scheme ceases to apply and remuneration of the liquidators is to be the subject of a section 238(2) application which will encompass remuneration from the date of their appointment.
Although the court's judgment related to insolvency proceedings under Gibraltarian legislation which was replaced on 1 November 2014, it provides useful clarification of how the Liquidators' Scheme should operate under the new law and of the courts' powers to make remuneration orders relating to work done prior to the order.
Instructing Solicitors: Gateleys Plc (UK), Triay Stagnetto Neish (Gibraltar)
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