Jackson & Ors v Suburban Property Company Ltd & Ors

In an unusually complex administration, the court may extend statutory deadlines where necessary to balance orderly administration, proportionality and the interests of justice. Administrators, receivers and agents with overlapping functions should establish a clear working arrangement allocating responsibility for rents, payments, property management, executive decisions and inspection of records. Where the recoverability of administrators’ costs is uncertain, the court may require forward estimates, preserve the parties’ right to seek cost limits, and leave remuneration subject to assessment. Interim funding applications should ordinarily first be addressed to the administrators and must identify the applicant’s need, available alternatives and any proposed repayment obligation.

The court considered a series of applications for directions in the administration of an offshore property company involved in extensive and contentious litigation. The proceedings concerned the ownership of the company, beneficial claims to substantially all its assets and income, a worldwide freezing order, a receiver appointed under section 37 of the Supreme Court Act, and a disputed administration appointment.

The applications addressed extensions of time for statutory administration steps, the interim relationship between the administrators and receiver, the administrators’ costs and expenses, and further funding sought by directors.

1. Statutory timetable. The court extended the time for the administrators’ statutory steps to allow the administration to proceed in an orderly and proportionate manner while the application challenging the appointment remained under consideration. The statement of affairs was to be provided four weeks after judgment was handed down, followed by the creditors’ meeting three weeks later.
2. Administration and receivership. The court directed that members of the Thakrar family and other litigants should have no involvement in the company’s day-to-day affairs. The administrators and receiver were expected to establish a memorandum of understanding or working code allocating responsibility for receiving rents, making payments, managing the property portfolio, executive decisions and inspection of books and records.
3. Costs and expenses. Given the uncertainty concerning the administrators’ continuation in office and the recoverability of their expenditure, they were required to provide estimates of future costs, expenses, disbursements and work in progress. Any party could apply for a cap or other limitation if the estimate appeared unreasonable. The administrators’ reasonable remuneration remained subject to assessment by the registrar.
4. Funding. No immediate order was made on the directors’ application for further funding. They were required first to approach the administrators and, if renewing the application, to explain their funding difficulties, the availability of the company’s indemnity and the extent of any proposed repayment obligation.
5. The applications were therefore dealt with by directions and interim orders, with certain matters stood over for further order.