Tackie & Anor v Morrison

An insolvency costs order may cover costs incurred by successive office-holders where the successor liquidators assume responsibility for the predecessor’s costs. A change in liquidator does not, of itself, defeat recovery or breach the indemnity principle. A later retainer may evidence the successors’ assumption of responsibility for earlier costs. No separate novation is required where the successors have assumed responsibility and the costs order is made in their favour.

The appellant challenged a detailed assessment of costs arising from insolvency proceedings. The respondents, the company’s replacement joint liquidators, sought to recover costs incurred both before and after their appointment. The appellant argued that the predecessor liquidator’s costs were personal to him, had not been assigned or novated, and could not be recovered by the respondents.

The appeal was against District Judge Moss’s assessment of the liquidators’ costs and the associated costs order. The central issue was whether the respondents could recover costs incurred by their predecessor under a costs order made after their substitution as claimants.

1. Appeal dismissed. The court also recorded that the appeal was totally without merit, but declined to make a limited civil restraint order.
2. The costs order made by District Judge Richmond was expressly in favour of the respondent joint liquidators. It contemplated indemnity costs from a date before their appointment and therefore covered costs incurred by the insolvency office-holders from time to time, including the predecessor liquidator’s costs.
3. The respondents had accepted Laytons’ retainer and conditional fee agreement, thereby assuming responsibility for costs previously incurred by their predecessor. Since those costs were liquidation expenses payable from the company’s assets, that assumption was a sensible and effective means of regulating responsibility for them.
4. The indemnity principle was not breached. The respondents had assumed responsibility for all liquidation costs, including costs incurred by the predecessor, and were entitled to recover them under the costs order.
5. A separate novation was unnecessary. The respondents’ assumption of responsibility, together with the terms of the costs order, entitled them to recover the assessed costs. District Judge Moss had therefore made no error in assessing costs incurred before and after the respondents’ appointment.
6. The court declined a limited civil restraint order. Although the appeal was recorded as totally without merit, there had been only one previous such application, more than three years earlier, and the appeal had been supported by experienced chancery counsel.

1. High Court (Chancery Division): appeal from District Judge Moss’s detailed assessment dismissed. The appeal was recorded as totally without merit.
2. Permission stage: Judge Pelling QC granted permission to appeal out of time and permission to appeal.
3. Detailed assessment: District Judge Moss assessed the respondents’ costs and ordered the appellant to pay the costs of the assessment.