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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Frost & Anor v The Good Box Co Labs Ltd & Ors [2025] EWCA Civ 252 (12 March 2025) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2025/252.html Cite as: [2025] EWCA Civ 252

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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
THE BUSINESS AND PROPERTY COURTS IN LEEDS
HH Judge Klein, 5 March 2024
CR-2022-LDS-000414
IN THE MATTER OF THE GOOD BOX CO LABS LIMITED
AND IN THE MATTER OF THE INSOLVENCY ACT 1986

		Royal Courts of Justice Strand, London, WC2A 2LL
		12/03/2025

This judgment was handed down remotely at 10.30am on 12 March 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives (see eg https://www.bailii.org/ew/cases/EWCA/Civ/2022/1169.html). .............................

Lord Justice Zacaroli:

1. This is an appeal from the decision of HHJ Klein, sitting as a deputy judge of the High Court, dated 5 March 2024. By that decision he dismissed an application by the joint administrators (the "administrators") of The Good Box Co Labs Limited (the "Company") for an order increasing the amount of their remuneration as administrators.
2. The administrators were appointed on 28 June 2022. The administration ceased, and the administrators' appointment came to an end, on 26 January 2023 upon the occurrence of the effective date of a restructuring plan under Part 26A of the Companies Act 2006 in respect of the Company (the "Plan").
3. The administrators' attempts to have their fees approved have proved somewhat complicated.

The attempts by the administrators to have their remuneration approved

4. The administrators first sought to obtain a resolution in respect of their fees from the creditors, along with approval for their substantive proposals under paragraph 49 of Schedule B1 to the Insolvency Act 1986 (the "1986 Act") at a virtual meeting held on 5 September 2022. Prior to that meeting, they had provided a report to creditors, which contained a fees estimate in the sum of £225,817. At the meeting, the creditors approved the administrators' substantive proposals, but elected to appoint a creditors' committee to consider the administrators' proposals as regards their fees.
5. A creditors' committee meeting was held on 1 November 2022, at which the following resolution was sought:

"The Joint Administrators' fees be set on a fixed fee basis for the time properly spent by them and their staff in dealing with the matters relating to the Administration for the period 28 June 2022 – 15 November 2022. The fee approved for this period is £175,000 plus VAT".

6. The creditors' committee was, however, unable to reach a decision, apparently because of a lack of clarity as to what was being voted on.
7. The administrators therefore arranged a further decision procedure of the creditors, with a decision date of 30 December 2022, seeking approval in respect of their fees. Prior to that, they sent to creditors a "fee approval report" dated 13 December 2022. This set out the details of the work done, and to be done, by them, and contained an estimate of the fees that, on a time-cost basis, they would incur. This came to a total of £400,315.50 (of which £334,157.50 had already been incurred). The report explained that the increase in the estimate over that which had been given to creditors in August 2022 was predominantly due to the fact that the trading period of the administration had been much longer than anticipated.
8. Creditors were informed by the administrators in this report that:

"Since we cannot draw remuneration in excess of our fees estimate without first obtaining approval to do so, then where we consider it appropriate in the context of the case, we will seek a resolution to increase the fee estimate so that we will then be able to draw additional remuneration over and above this fees estimate."

9. Two paragraphs further on in the report, however, they said the following:

"You will note that, to date, Office Holders' fees of £175,000.00 plus VAT have been drawn on account. This amount has been paid by NGi as part of their funding package for the Administration. Upon approval of our fee basis, per the attached fees estimate, this amount will be refunded to NGi if realisations in the Administration permit. At this stage, we are seeking creditor approval of a fixed amount of £235,000.00 as you will see from the attached resolutions. This figure is derived from the £175,000.00 which has been billed on account, as well as a further £7,500 per week which has been pledged by NGi by way of further Administration funding, in their draft funding agreement. This includes a further 8 weeks of funding, starting from the date of cessation of the last funding agreement on 17 November 2022, through to 12 January 2022. Further requests for an increase in fees may be put to creditors in future should sufficient realisations be achieved.

Based on present information, we anticipate that it is unlikely that we will be able to draw our fees estimate in full, however it is not possible to anticipate the outcomes without confirmation of the exit strategy."

(emphasis added)

10. By the decision procedure, the creditors approved the following resolution:

"That the Joint Administrators' fees be charged by reference to the time properly spent by them and their staff in dealing with the matters relating to the Administration, such time to be charged at the hourly charge out rate of the grade of staff undertaking work at the time the work is undertaken. Fees on account of these costs to be approved at £235,000 plus VAT."

The restructuring plan

11. The Plan, having been approved by the classes of in-the-money creditors, was sanctioned by HHJ Davies-White KC on 16 January 2023.
12. Pursuant to clause 8.2 of the Plan, the administrators were required to hand over all matters, materials and correspondence of the Company to the "Plan Administrator".
13. By clause 8.3 of the Plan:

"Any unpaid fees or expenses of the Administrators approved by the Administration Creditors Committee as at the Restructuring Plan Effective Date will be paid by the Company within 14 days of the Restructuring Plan Effective Date. Any other fees or expenses claimed by the Administrators will be subject to the Adjudication Process and in the absence of agreement with the Plan Administrators the Administrators shall be at liberty to apply to Court for approval in accordance with the Rules."

14. The "Rules" referred to are the Insolvency Rules 2016 (the "2016 Rules").
15. Clause 8.3 does not take account of the history of the administrators' attempts to obtain approval of their fees, in particular the fact that no fees at all had been approved by the creditors' committee (as opposed to the creditors themselves). In the context of what actually happened, however, it must be read as referring to such fees or expenses as had by the effective date of the Plan been approved by creditors.
16. By clause 10.1 of the Plan, the Plan Administrators were to calculate the claims of creditors against the Company by "applying the Rules which would have applied in calculating the claims against the Company in a liquidation."
17. Clause 10.2 of the Plan contained a complex procedure for adjudicating on claims against the Company. In essence, it provided for claims to be notified to the Plan Administrators within 21 days of the effective date of the Plan, for the Plan Administrators to adjudicate on those claims and, in the case of disagreement, for the creditor to issue proceedings under Part 7 of the CPR for a determination of its claim.
18. There appeared to be an inconsistency between this and clause 8.3 but it was resolved by a recital to the order of HHJ Davis-White of 16 January 2023. This stated that the adjudication process in clause 10.2 was subject to the rights of the administrators set out in clause 8.3, and clause 10.2 was amended accordingly in the final version of the Plan.
19. The administrators submitted a claim in the Plan on 6 February 2023, for outstanding remuneration and expenses. The claim for expenses was accepted, but the claim for remuneration (approximately £230,000) was refused (on 3 July 2023), except for £21,667, which represented the undrawn balance of the payment on account approved by the decision procedure dated 30 December 2022.
20. In a letter dated 20 July 2023, the Plan Administrators informed the administrators that the procedure they should now follow, in order to increase their claim, "is set out under Insolvency Rule 18.24(b)". That prompted the administrators to apply to the Court. The application notice states that it is made pursuant to Rules 18.24 and 18.28. The respondents are the Company, the Plan Administrators, and NGI Systems & Solutions Limited, as representative of the former members of the former creditors' committee ("NGI"). The Company and NGI were represented on this appeal by Mr Tibor Barna, a director of NGI and an employee of the Company. The Plan Administrators have played no part in these proceedings.

The judge's decision

21. At the first hearing of the application, HHJ Saffman directed the determination of a preliminary issue, referred to as the "Standing Issue". This came about because of a concern that, since the application was made after the administrators had left office, they did not have standing to apply to the court. The preliminary issue came on for a substantive hearing before HHJ Klein on 20 February 2024. He recorded in his judgment that the Standing Issue required the resolution of a single question:

"whether the Applicants have standing to make an application under rules 18.24 and 18.28 of [the 2016 Rules] even though, at the time they made the application in August 2023 and since then, they were not, and have not been, office-holders in relation to the company."

22. At §10 of his judgment, however, the judge noted that a further dispute between the parties arose at the hearing "which they did not suggest does not fall within the preliminary issue", namely whether the administrators' application fell within the ambit of Rules 18.24 and 18.28 at all (the "Ambit Issue").
23. The judge recorded that, at an earlier hearing within the application in December 2023, the administrators and the first respondent (the Company) had agreed that the administrators' remuneration had been approved in the set amount of £235,000. His order contained a recital to that effect.
24. At the hearing before him in February, however, it was plain that the administrators contended that their remuneration had not been approved in a fixed amount, but that the basis of their remuneration had been approved on a time-cost basis. That was reiterated by Ms Temple KC, who appeared (before us and the judge) for the administrators.
25. The Company and NGI still contended, however, that the administrators' remuneration had been fixed in a set amount, up to the £235,000 referred to as a payment on account in the resolution approved by creditors in December 2022. Mr Barna in fact contended that the administrators' remuneration had been fixed in a slightly lower amount by the creditors committee. Nothing turns on that issue for present purposes, because the judge – having heard argument from both parties – concluded that the resolution approved at the decision procedure in December 2022 had fixed the administrators' remuneration on the time costs basis: see §26 of his judgment. He went on in the following paragraphs to refer to a number of matters referred to by Ms Temple which reinforced his conclusions. I set these out in full:

"28. She explained that, even if creditors put a limit on the amount which an administrator can draw on account of their remuneration when that remuneration has been fixed on the time-costs basis, the administrator's charge over assets provided for by paragraph 99 of Schedule B1 to the Insolvency Act 1986 ("Schedule B1") (which covers their remuneration) extends to the whole of the administrator's remuneration to which they are properly entitled on the time-costs basis and not just the authorised payment on account.

29. She also explained that, had the administration in this case continued and not been brought to an end by the approval of the restructuring plan, the Applicants would have (prima facie at least) been entitled to all their fees referable to the time properly spent on the administration at the appropriate charge out rate. She explained that, if there had been a remuneration dispute, it would most likely not have been brought to court by the Applicants but, rather, by the dissatisfied creditors under rule 18.34 of IR2016.

30. I understood the underlying point in both scenarios to be that, in the cases being considered, remuneration has not been fixed in the amount of the sum approved as a payment on account.

31. Miss Temple did also say that, in this case, the Applicants would not have sought to draw any remuneration in excess of £235,000 without the further approval of the creditors as a matter of professional conduct. She also said that the rule in ex parte James may have precluded the Applicants from drawing remuneration in excess of £235,000 without further creditor approval. I do not need to decide that point and am prepared to accept that that may be so. However, that the Applicants may not have drawn remuneration in excess of £235,000 without further creditor approval or that, as officers of the court, the Applicants perhaps ought not to have done so, does not affect the determination about whether the Applicants are seeking an increase in the amount of their remuneration initially fixed by the approval of the resolution."

26. He accordingly concluded that the administrators were not seeking an increase in the rate or amount of their remuneration fixed by the approval of the resolution and, as they were not seeking a change in the basis of their remuneration, their application did not fall within the ambit of Rule 18.24 or 18.28. Those Rules, he held, only permitted an application to be made to increase the amount of remuneration where the remuneration had originally been fixed in a set amount.
27. As the judge had heard full argument on the Standing Issue, however, he went on to consider it, concluding that – had the application fallen within the ambit of Rules 18.24 and 18.28 – he would have held that the administrators had standing to make the application notwithstanding that they had left office before issuing the application.

Grounds of appeal

28. The administrators appeal, with the permission of Lewison LJ, against the judge's decision on the Ambit Issue.
29. The Company and NGI filed respondent's notices, seeking to appeal the judge's decision on the Standing Issue. In his order granting permission to the administrators, Lewison LJ noted that the respondents were entitled to contend that the judge was wrong on the Standing Issue as an additional reason for upholding his decision to dismiss the administrators' application.

The relevant parts of the 2016 Rules

30. The rules relating to the remuneration of insolvency office-holders are set out in Chapter 4 of Part 18 of the 2016 Rules. These apply variously to liquidators, trustees in bankruptcy or administrators, or all three, but in summarising their effect, I will refer only to administrators. I append to this judgment the text of the relevant rules.
31. The starting point is that by Rule 18.16(1) an administrator is entitled to receive remuneration for his services as office-holder. Rule 18.16 goes on to provide that the basis of remuneration must be fixed, on one of three bases (or a combination of them for different things done by them). The bases are: (1) as a percentage of the value of the assets with which the administrators deal or which they realise; (2) by reference to the time properly given by the office-holder and his staff; or (3) as a set amount.
32. The basis is to be fixed, in the first place, by the creditors' committee, but if there is no creditors' committee, or if it fails to do so, then it is for the creditors to fix the basis by a decision procedure: Rule 18.18. As noted above, that is what happened in this case.
33. If, having attempted, but failed, to have the basis of their remuneration fixed by the creditors' committee or the creditors, the administrators can apply to the Court to do so: Rule 18.23. Such an application must be made within 18 months of their appointment.
34. Rule 18.24 applies where the administrator considers the "rate" or "amount" of remuneration fixed to be insufficient, or "the basis fixed" to be inappropriate. The administrator may either (1) request the creditors to "increase the rate or amount" or "change the basis" in accordance with Rules 18.25 to 18.27, or (2) "apply to the court for an order increasing the rate or amount or changing the basis in accordance with rule 18.28".
35. The circumstances (as set out in Rule 18.28) in which the administrator can apply to the Court to increase the rate or amount or to change the basis, include where the basis of their remuneration was fixed by the creditors: Rule 18.28(2)(b). Notice of the application must be given to the creditors committee or, if there is no committee, to such one or more of the creditors that the Court directs.
36. If an administrator intends to take all or part of their remuneration on the time-cost basis, then they must, before the determination of which of the bases is to be fixed, deliver to creditors a fees estimate: Rule 18.16(4).
37. The fees estimate plays an important role: the administrator cannot draw remuneration in excess of the total amount set out in the fees estimate without approval: Rule 18.30(1). Rule 18.30(2) provides that such approval is to be requested from whichever of the creditors committee, the creditors (or a class of them) or the Court fixed the basis in the first place. It then states: "rules 18.16 to 18.23 apply as appropriate."
38. Where a secured creditor, or an unsecured creditor with the concurrence of at least 10% by value of the unsecured creditors, considers that the administrators' remuneration is in all the circumstances excessive, they may apply to court under Rule 18.34, for an order – among other things – reducing the amount of remuneration which the administrator is entitled to charge.
39. When an administrator leaves office, any outstanding remuneration (or expenses) of the administrator are charged on and payable out of the property of which he had custody or control immediately before he ceased to be administrator: paragraph 99 of Schedule B1 to the 1986 Act.

The appeal against the judge's decision on the Ambit Issue

40. Ms Temple KC submitted that the judge interpreted Rules 18.24 and 18.28 too narrowly. She submitted they are in "extremely broad terms", and that the reference in both Rules to increasing the "rate or amount" of remuneration was not intended to be limited to the matters referred to in 18.16. The judge should, she submitted, have concluded that the option of increasing "the amount" was intended to cover both the case where remuneration had been fixed as a set amount, and the case where it had been fixed on a time-cost basis. On that basis, she submitted that "the increase sought by the administrators was clearly an increase in the 'amount' of their remuneration, in that they sought an increase in the sums paid to them for work done."
41. I disagree. The phrases "the rate or amount of remuneration fixed" and the "the basis fixed", which appear in 18.24, clearly refer back to Rule 18.16. Three options are given: (1) increasing the "amount", which links directly to the remuneration having been fixed by reference to a set amount under Rule 18.16(c); (2) increasing the "rate", which links directly to the remuneration having been fixed by reference to a percentage of the assets under Rule 18.16(a); and (3) changing the basis, which applies to each of the three cases set out in Rule 18.16(a)-(c), including the remuneration having been fixed on the time-cost basis.
42. I consider, therefore, that the judge was clearly right, for the reasons he gave, to conclude that the administrators' application to increase the amount of remuneration to which they were entitled fell outside the ambit of Rules 18.24 and 18.28. The matter is put beyond doubt by the fact that the Rules make specific, and different, provision for the case where the remuneration was fixed on the time-cost basis. In those circumstances, as the Rules I have referred to above show, the administrators' right to draw remuneration is capped at the estimate which they provided to creditors before the basis of their remuneration was fixed.
43. Until the cap (in the amount of the fees estimate) is reached, the administrators can continue to draw remuneration from money within the administration estate without recourse to anyone. If, however, they have reached the cap, they cannot draw any further remuneration without seeking approval under Rule 18.30.
44. Much of Ms Temple's argument was based on the premise that interpreting Rule 18.24 in the way the judge did here would leave a gap. That is, however, proved wrong by the existence of Rule 18.30. There is simply a different process for enabling administrators to receive more remuneration than they originally considered would be necessary where it was fixed on the time-cost basis, than where it was fixed by reference to a set amount or a percentage of assets.
45. Ms Temple referred us to a decision of Snowden J in Re Nortel Networks International Finance & Holding BV [2018] EWHC 2266 (Ch), in which administrators sought orders from the Court under Rule 18.24 increasing their remuneration. The administrators' proposal, which had been approved by creditors, was that:

"the Administrators shall be paid their professional fees on account on a monthly basis of 80% of time charged as agreed by a creditors' committee (should one be formed) in accordance rule 2.106 of the Insolvency Rules 1986. The remaining 20% per month shall be agreed by subsequent resolution of the committee/creditors/court."

46. Snowden J referred, at §21 to §22, to the fact that the administrators had regularly sought approval of their fees from the creditors committee, but that following full payment of the creditors' debts that could no longer be done, as the committee members had automatically ceased to be members.
47. I do not find that case to be of any assistance. The creditors' approval of the administrators' remuneration was expressly limited to that which was agreed by the creditors from time to time (with the administrators merely being entitled to take sums on account in the meantime). The resolution in this case is to the opposite effect: the basis of remuneration was fixed on a time-cost basis, with an ancillary permission to be paid a sum on account. The point raised in this appeal did not therefore arise in the Nortel case. There is unsurprisingly, therefore, no discussion of the point.
48. Similarly, I found no assistance in another authority Ms Temple referred us to, a decision of Registrar Jones (as he then was) in Re Brilliant Independent Media Specialists Ltd [2015] BCC 113. Whether or not the Registrar's decision to approve administrators' remuneration was consistent with the argument advanced by Ms Temple in this case (which is not clear from looking at the report alone), the point in issue on this appeal was not raised for debate and nothing was said about it in Registrar Jones' judgment.
49. Accordingly, the judge was correct to conclude that the administrators' application did not fall within the ambit of Rule 18.24 or Rule 18.28, and I would therefore dismiss this appeal.

The consequences which flow from dismissing the appeal

50. The week before the hearing of this appeal, we caused a note to be sent to the parties pointing out that if the administrators' case is that their remuneration had been fixed on the time-cost basis, following a fees estimate being sent to creditors in the sum of £400,315.50, then as a result of Rule 18.30 it appeared that they did not need any further approval to be entitled to claim remuneration up to that amount.
51. Mr Barna submitted that if (as we have done) we found that the judge's decision was correct, we should simply dismiss the appeal. He complained of the "shifting sands" of the case advanced by the administrators, and that it would be wrong for this Court to go any further and suggest ways in which the administrators might be able to resolve their fees.
52. Having regard to the overriding objective of dealing with cases justly and at proportionate cost, however, it would be wrong in my judgment to leave unresolved the consequences which flow from our decision to dismiss the appeal. Part of the reasoning for concluding that Rules 18.24 and 18.28 do not apply is that the circumstances of this case are governed by the different regime in Rules 18.16 and 18.30. It would not serve any of the parties to this application for us to refrain from pointing out where that leaves them.
53. The immediate consequence of dismissing the appeal is that the application itself stands dismissed. That follows from the fact that the application was only put on the basis of Rules 18.24 and 18.28.
54. A further consequence is that – subject to one point – because the creditors were provided with a fees estimate of £400,315.50 before their remuneration was fixed on a time-cost basis, they already have an entitlement to be paid remuneration up to that figure, without the need for further authorisation, whether from the creditors or the Court. They are entitled to that remuneration and to the benefit of a charge on the assets of the Company that were in their custody or control immediately before they left office as security for that amount.
55. The one potential caveat to this arises from the administrators' promise to return to creditors for approval before drawing any further amount beyond that authorised on account by the December decision procedure. To the extent that it might have been said that this meant that their remuneration had, in part at least, been fixed at a set amount, that point was answered by the judge in the negative – see §26 of his judgment – and there is no cross-appeal from that conclusion.
56. At §31 of his judgment, the judge left open the question whether, on some basis or other, the administrators were obliged to seek further approval from creditors before receiving remuneration above the amount approved on account. Ms Temple raised (before us, as before the judge) the possibility that the rule in Ex parte James might require them to do so.
57. That rule derives from the case of Ex parte James, In re Condon (1874) LR 9 Ch App 609, and is part of the Court's inherent jurisdiction to control the conduct of its officers, including administrators. It was recently re-affirmed by this Court in Lehman Bros Australia Ltd v MacNamara [2020] EWCA Civ 321; [2021] Ch 1, where it was applied to prevent administrators from relying on a contractual release provision which would have allowed them to refuse to correct an error in a deed determining a creditor's claim. David Richards LJ, with whom Newey and Patten LJJ agreed, summarised the rule as follows (at §68):

"The court will not permit its officers to act in a way that it would be clearly wrong for the court itself to act. That is to be judged by the standard of the right-thinking person, representing the current view of society. If one were to pose the question "would it be proper for the court to act unfairly?", only one answer is possible."

58. In my judgment, that rule would indeed have prevented the administrators from taking further remuneration out of the assets of the Company (assuming there were assets from which they could do so) without further approval. It would be unfair to do so when, at the time the basis of their remuneration was fixed, creditors were told in clear terms that the administrators would seek further approval before taking remuneration above the amount of the sum approved as a payment on account. In fact, Ms Temple made it clear that it was never the administrators' intention to do so: they wish to have the amount of their fees reviewed, if necessary by a court, so that they can be paid what is due. Their problem has been finding the right procedural route to allow this to happen.
59. The cessation of the administration upon the approval of the Plan changed the landscape. This is a relatively uncommon case where administration has achieved, in conjunction with the Plan, the objective of the survival of the Company as a going concern. The entity now directly interested in ensuring that the administrators are paid no more than can be justified is the Company. Adjudication of all claims against the Company existing as at the date of the Plan is under the control of the Plan Administrators. Accordingly, I consider that any obligation on the administrators as a result of the application of the rule in Ex parte James arising from their promise to creditors would be satisfied by seeking approval from the Plan Administrators (or, if the Plan Administrators delegate this function to it, the Company itself).
60. That, in my view, is what clause 8.3 of the Plan was intended to achieve. The first sentence of clause 8.3 appears to cover any unpaid part of the fees that were approved on account – although it wrongly refers to fees approved by the creditors' committee and not the creditors. The Plan Administrators clearly took that view, as they approved payment to the administrators of such amount.
61. Any other unpaid remuneration is governed by the second sentence, and is therefore covered by the Adjudication Process. The current procedural muddle in which the administrators find themselves stems in large part, in my view, from the drafting of that sentence, specifically, the reference to the administrators being at liberty to apply to the Court "in accordance with the Rules", in the event that the Plan Administrators do not accept the administrators' claim to remuneration up to the amount of the fees estimate.
62. The problem is that the Rules do not make provision for the Court approving an increase in remuneration (above an earlier payment on account, and to no more than the amount of the fees estimate), where it was fixed on the time-cost basis. The Plan Administrators' response to the administrators' claim (in correspondence dated 20 July 2023 to which Ms Temple referred in her skeleton argument) was that they refused to adjudicate on the claim, and said that the process the administrators should follow was an application under Rule 18.24. For the reasons set out above, that was the wrong process. That cannot mean, however, that if the Plan Administrators do not agree to the claim lodged by the administrators within the Plan adjudication process, there is no recourse to the Court: the liberty to apply to the Court under the adjudication process (set out both in clause 8.3 and clause 10.3 of the Plan) is not removed merely because the phrase "in accordance with the Rules" is inapposite.
63. To summarise, therefore, the consequence of our dismissal of this appeal is that:

(1) So far as the Rules are concerned, the administrators are entitled to further remuneration (charged on the assets in their possession or control immediately before they ceased office) up to the amount of the fees estimate (£400,315.50) without the need for further approval;

(2) As a result of their promise, made in the fees report of December 2022, not to take remuneration beyond the amount approved as a payment on account in the decision procedure of 30 December 2022, however, they cannot take such further remuneration without having sought further approval;

(3) The consequence of the Plan is that the appropriate persons from whom approval should be sought is the Plan Administrators, pursuant to the Adjudication procedure in the Plan;

(4) The approval to be sought from the Plan Administrators is not, however, to the further remuneration as a matter of principle, it is only to the quantum of the remuneration (e.g. on the basis that it is properly incurred in connection with their responsibilities as administrators);

(5) In the event that the amount of further remuneration cannot be resolved, then the dispute would need to be resolved in a Part 7 claim before the Court (not, for reasons given above, by an application under the Rules).

The Standing Issue

64. My conclusion on the Ambit Issue makes it unnecessary to consider the Standing Issue, since for the reasons set out above the administrators do not need to, and are not now seeking to, make any application under the Rules to increase the amount of their Remuneration. There can be no dispute that the administrators have standing to lodge a claim under the Plan, since the Plan was drafted and sanctioned on the express basis that the administrators would cease to be in office from its effective date. The references to the administrators in the Plan cannot, therefore, be limited to the administrators only so long as they remained in office.
65. The Company contended in its respondent's notice that the judge's decision should be upheld on the alternative basis that the administrators had no standing, as former administrators, under Rule 18.24 or Rule 18.28. It is also unnecessary to address that issue, given my conclusion on the Ambit Issue.

Submissions from Mr Barna after the hearing

66. Mr Barna reiterated his concerns about the fairness of this case, in a letter to the Court after the hearing, raising two points that he felt he was denied the opportunity to make at the hearing. The first point is that he contends that HHJ Klein made no determination as to the meaning of the resolution approved by the decision procedure in December 2022. As I have noted above, however, the judge did conclude that it did not have the effect of fixing the remuneration in a set amount, the necessary implication being that it fixed the remuneration on the time-cost basis, in agreement with the approach adopted before him by the administrators.
67. In any event, the necessary consequence of the Company's position before the judge – that the remuneration had been fixed in a set amount – was that, subject only to the Standing Issue, the administrators were entitled to apply to the Court for an increase in the amount. It is in the interests of all parties that the substantive issue, which the administrators have acknowledged throughout needs to be addressed, is resolved as speedily as possible; namely whether their remuneration beyond that paid on account and up to the amount of the fees estimate is justified as having been properly incurred in the exercise of their functions as administrators.
68. I emphasise that the consequences I have set out above of the dismissal of the appeal do not prevent the Company raising objections to the amount of remuneration sought. Nor do they prevent the Company taking such objection based on delay as may be open to it, based on the terms of the Plan. Mr Barna submitted that the administrators are too late to pursue a claim under the terms of the Plan. That will be a matter primarily for the Plan Administrators to consider. Since this was not a point covered by the scope of the appeal, I say nothing about the merits of it either way.
69. The second point related to the cross-appeal in relation to costs. Lewison LJ, however, refused permission for an appeal against the judge's costs order. There is no jurisdiction to re-open that decision at the hearing of the appeal.
70. After circulating the judgment in draft, Mr Barna requested amendments to be made to it so as to indicate that there remained an open issue as to the validity of the resolution approved via the December 2022 decision. The judge, however, clearly proceeded on the basis that there had been an effective resolution, the only question being as to its terms and effect. Any point that there had been no effective resolution ought to have been taken before the judge. The Plan Administrators, despite being parties to this application, have not sought to raise the issue. Nor was it raised for determination on the hearing of the appeal. In those circumstances, I have not made the requested changes to the judgment, as I consider the point is not open to the Company.

Lady Justice Falk

71. I agree.

Lord Justice Males

72. I also agree.
Appendix

Rule 18.16. Remuneration: principles

(1) An administrator, liquidator or trustee in bankruptcy is entitled to receive remuneration for services as office-holder.

(2) The basis of remuneration must be fixed:

(a) as a percentage of the value of:

(i) the property with which the administrator has to deal, or

(ii) the assets which are realised, distributed or both realised and distributed by the liquidator or trustee;

(b) by reference to the time properly given by the office-holder and the office-holder's staff in attending to matters arising in the administration, winding up or bankruptcy; or

(c) as a set amount.

(3) The basis of remuneration may be one or a combination of the bases set out in paragraph (2) and different bases or percentages may be fixed in respect of different things done by the officeholder.

(4) Where an office-holder, other than in a members' voluntary winding up, proposes to take all or any part of the remuneration on the basis set out in paragraph (2)(b), the office-holder must, prior to the determination of which of the bases set out in paragraph (2) are to be fixed, deliver to the creditors:

(a) a fees estimate; and

(b) details of the expenses the office-holder considers will be, or are likely to be, incurred

(5) The fees estimate and details of expenses given under paragraph (4) may include remuneration expected to be charged and expenses expected to be incurred if the administrator becomes the liquidator where the administration moves into winding up.

(6) An office-holder, other than in a members' voluntary winding up, must deliver to the creditors the information required under paragraph (7) before the determination of which of the bases set out in paragraph (2) is or are to be fixed, unless the information has already been delivered under paragraph (4).

(7) The information the office-holder is required to give under this paragraph is:

(a) the work the office-holder proposes to undertake; and

(b) details of the expenses the office-holder considers will be, or are likely to be, incurred.

(8) The matters to be determined in fixing the basis of remuneration are:

(a) which of the bases set out in paragraph (2) is or are to be fixed and (where appropriate) in what combination;

(b) the percentage or percentages (if any) to be fixed under paragraphs (2)(a) and (3);

(c) the amount (if any) to be set under paragraph (2)(c).

(9) In arriving at that determination, regard must be had to the following:

(a) the complexity (or otherwise) of the case;

(b) any respects in which, in connection with the company's or bankrupt's affairs, there falls on the office-holder, any responsibility of an exceptional kind or degree;

(c) the effectiveness with which the office-holder appears to be carrying out, or to have carried out, the office-holder's duties; and

(d) the value and nature of the property with which the office-holder has to deal.

(10) … [deals only with liquidators]

18.18: Remuneration: procedure for initial determination in an administration

(1) This rule applies to the determination of the officer-holder's remuneration in an administration.

(2) It is for the committee to determine the basis of remuneration.

(3) If the committee fails to determine the basis of the remuneration or there is no committee then the basis of remuneration must be fixed by a decision of the creditors by a decision procedure [except in a case under paragraph (4)].

(4) Where the administrator has made a statement under paragraph 52(1)(b) of Schedule B1 that there are insufficient funds for distribution to unsecured creditors other than out of the prescribed part and either there is no committee, or the committee fails to determine the basis of remuneration, the basis of the administrator's remuneration may be fixed by:

(a) the consent of each of the secured creditors; or

(b) if the administrator has made or intends to make a distribution to preferential creditors:

(i) the consent of each of the secured creditors, and

(ii) a decision of the preferential creditors in a decision procedure.

18.23. Remuneration: application to the court to fix the basis

(1) If the basis of the administrator's remuneration or the liquidator's remuneration in a voluntary winding up is not fixed under rules 18.18 to 18.20 (as applicable) then the administrator or liquidator must apply to the court for it to be fixed.

(2) Before making such an application the liquidator or administrator must attempt to fix the basis in accordance with rules 18.18 to 18.20.

(3) An application under this rule may not be made more than 18 months after the date of the administrator's or liquidator's appointment.

(4) … [deals only with members' winding up]

18.24. Remuneration: administrator, liquidator or trustee seeking increase etc.

An office-holder who considers the rate or amount of remuneration fixed to be insufficient or the basis fixed to be inappropriate may:

(a) request the creditors to increase the rate or amount or change the basis in accordance with rules 18.25 to 18.27;

(b) apply to the court for an order increasing the rate or amount or changing the basis in accordance with rule 18.28.

18.28.— Remuneration: recourse by administrator, liquidator or trustee to the court

(1) This rule applies to an application by an office-holder to the court in accordance with rule 18.24 for an increase in the rate or amount of remuneration or change in the basis.

(2) An administrator may make such an application where the basis of the administrator's remuneration has been fixed:

(a) by the committee and the administrator has requested that the rate or amount be increased or the basis changed by decision of the creditors (by a decision procedure), but the creditors have not changed it;

(b) by decision of the creditors (by decision procedure); or

(c) by the approval of either the secured creditors or the preferential creditors or both in a case where the administrator has made a statement under paragraph 52(1)(b) of Schedule B1.

(3) … [deals only with liquidators]

(4) … [deals only with trustees in bankruptcy]

(5) Where an application is made under paragraph (2)(c), the administrator must deliver notice to each of the creditors whose approval was sought under rule 18.18(4).

(6) The office-holder must deliver a notice of the application at least 14 days before the hearing as follows:

(a) in an administration, a creditors' voluntary winding up, a winding up by the court or a bankruptcy:

(i) to the members of the committee, or

(ii) if there is no committee to such one or more of the creditors as the court may direct;

(b) in a members' voluntary winding up, to the company's contributories, or such one or more of them as the court may direct.

(7) The committee, the creditors or the contributories (as the case may be) may nominate one or more of their number to appear or be represented and to be heard on the application.

(8) The court may, if it appears to be a proper case (including in a members' voluntary winding up), order the costs of the office-holder's application, including the costs of any member of the committee appearing or being represented on it, or of any creditor or contributory so appearing or being represented on it, to be paid as an expense of the estate.

18.30: Remuneration: exceeding the fee estimate

(1) The office-holder must not draw remuneration in excess of the total amount set out in the fees estimate without approval.

(2) The request for approval must be made:

(a) where the committee fixed the basis, to that committee;

(b) where the creditors or a class of creditors fixed the basis, to the creditors or that class of creditors;

(c) where the court fixed the basis, to the court; and rules 18.16 to 18.23 apply as appropriate.

(3) The request for approval must specify:

(a) the reasons why the office-holder has exceeded, or is likely to exceed, the fees estimate;

(b) the additional work the office-holder has undertaken or proposes to undertake;

(c) the hourly rate or rates the office-holder proposes to charge for each part of that additional work;

(d) the time that additional work has taken or the office-holder expects that work will take;

(e) whether the office-holder anticipates that it will be necessary to seek further approval; and

(f) the reasons it will be necessary to seek further approval.

18.34: Remuneration and expenses: application to court by a creditor or member on grounds that remuneration or expenses are excessive

(1) This rule applies to an application in an administration, a winding-up or a bankruptcy made by a person mentioned in paragraph (2) on the grounds that:

(a) the remuneration charged by the office-holder is in all the circumstances excessive;

(b) the basis fixed for the office-holder's remuneration under rules 18.16, 18.18, 18.19, 18.20 and 18.21 (as applicable) is inappropriate; or

(c) the expenses incurred by the office-holder are in all the circumstances excessive.

(2) The following may make such an application for one or more of the orders set out in rule 18.36 or 18.37 as applicable:

(a) a secured creditor,

(b) an unsecured creditor with either:

(i) the concurrence of at least 10% in value of the unsecured creditors (including that creditor), or

(ii) the permission of the court, or

(c) … [deals only with members' winding up]

(3) The application by a creditor or member must be made no later than eight weeks after receipt by the applicant of the progress report under rule 18.3, or final report or account under rule 18.14 which first reports the charging of the remuneration or the incurring of the expenses in question ("the relevant report").