Interesting and important decision on costs recovery in a Liquidation.
The Privy Council declined to approve the remuneration requested by the liquidators of an insolvent company incorporated in Trinidad and Tobago as a result of their failure to provide a full analysis of the tasks undertaken, and the levels of staff by whom they were undertaken.
The Board explained that, without the requisite level of detail, they were not in a position to be satisfied that the work was reasonably undertaken by the liquidators.
Drawing on extensive authorities from a number of common law jurisdictions, the Board distilled two general principles:
- There must be sufficient information to enable the court to have a clear view of what the officeholder has done; and
- The information should be proportionate to the size of the insolvency and to the cost of preparing the information.
The Board emphasised the importance of proportionality in the process and clarified that an exercise akin to a line by line analysis by the courts is not necessary.
Ultimately, despite disagreeing with significant parts of the Court of Appeal’s judgment, the Board affirmed the Court of Appeal’s order and dismissed the appeal, save for the issue of costs.
Read the full judgment here.
