Gillan & Ors v HEC Enterprises Ltd & Ors

The Berkeley Applegate jurisdiction cannot be applied in general terms or in the abstract. Any entitlement to remuneration or disbursements must be assessed by reference to particular circumstances and particular claims. Where administrators pursue an excessive claim, fail to advance the administration, or improperly prioritise their remuneration, the court may restrict the recoverable costs and make an adverse costs order. Costs may also be apportioned where later procedural directions bring the substantive dispute before the court and reduce the work properly attributable to the relevant application.

The administrators of HEC Enterprises Limited and Deep Purple (Overseas) Limited sought directions concerning remuneration and disbursements under the Berkeley Applegate jurisdiction. The claimants had separately sought permission to continue earlier proceedings concerning trust assets. The court had previously given judgment on the substantive issues and now determined the appropriate directions and costs consequences.

The central questions were whether a declaration should be made concerning the administrators’ entitlement, how any further inquiry should proceed, and how the costs of the applications should be allocated.

1. Berkeley Applegate application. No declaration was made concerning the administrators’ entitlement to remuneration or disbursements. The administrators were permitted to serve an itemised account on the beneficiaries. If agreement was not reached, they could apply to the registrar for an inquiry into entitlement and quantification. Points of claim, defence and reply were then to be served in accordance with the directions given.
2. The Berkeley Applegate principle was accepted as the applicable legal principle, but it could not be applied generally or abstractly. Entitlement had to be determined by reference to particular circumstances and particular claims. Substantial parts of the administrators’ claim had already been disallowed, and the remaining issues required a quantification exercise.
3. The administrators’ conduct was relevant to costs. They had maintained a claim materially in excess of any entitlement, had treated it as a priority, and had made no real progress despite substantial expenditure. The claimants had achieved an important reduction in the claim. The administrators were therefore ordered to pay the claimants’ costs of the Berkeley Applegate application on the standard basis.
4. As to the application for permission to continue the earlier proceedings, the administrators were ordered to pay the claimants’ costs up to 12 August 2016 on the standard basis and 50 per cent thereafter. The reduction reflected the fact that procedural directions had brought the ultimate substantive issue before the court, reducing the work properly attributable to the permission application. The administrators could recover from the trust assets only the costs of strictly complying with the registrar’s directions.
5. Mr Blackmore, Mrs Edwards and Mr Coverdale were entitled to such recoverable costs as they had incurred, assessed on the standard basis if not agreed. No indemnity basis was ordered for Mr Blackmore.