Oyston & Anor v Rubin & Anor

A court-appointed receiver’s remuneration and expenses are recoverable from the assets subject to the receivership, including after discharge, unless the order clearly provides otherwise. A contractual cap on remuneration must be construed objectively and commercially, having regard to the order and incorporated contractual documents. Where the receivership has been properly conducted and the claims are supported by detailed evidence, a line-by-line assessment is not automatic and should be ordered only where proportionate. Contractual wording determines whether particular agents’ costs are recoverable as disbursements.

The claimants sought an account and surcharge of the fees and expenses incurred by the defendants, who had been appointed as receivers over assets in a judgment-debt enforcement receivership. The defendants sought declarations concerning the interpretation of the Receivership Order and the contractual terms governing their remuneration. The issues included VAT, disbursements invoiced to the receivers’ firm, the remuneration cap, unpaid costs incurred before discharge, agents’ fees, pre-appointment and post-discharge costs, and whether detailed assessment was required.

1. VAT. The hourly rates were inclusive of VAT. Although the November and December letters were silent on VAT and might, viewed alone, suggest VAT-exclusive rates, the earlier superseded letter expressly provided for VAT in addition. The deletion of those words in the replacement letter had an objective contractual purpose and converted the rates into VAT-inclusive rates.
2. Disbursements. The receivers were appointed personally, but the receivership services were supplied through their firm. Disbursements invoiced to the firm were therefore recoverable in principle, subject to their being proper disbursements.
3. Remuneration cap. The cap was 5% of the realisations necessary to discharge the judgment debt outstanding when the receivership began. It was not limited to money actually received, and the alternative construction based on work done towards unrealised assets was unnecessary.
4. Unpaid costs and lien. The receivers retained a lien over the receivership assets for remuneration and expenses. The lien survived discharge. The Receivership Order did not create the alleged priority rule requiring all later costs to have been retained before distributions to the judgment creditor. Unpaid fees and disbursements incurred during the receivership remained recoverable.
5. Agents’ fees. The contractual variation required residential property agents’ fees to be paid from realisations. Non-residential agents’ fees remained payable from the receivers’ fees and could not be recovered as disbursements. Hilco’s marketing costs were not non-residential agents’ fees.
6. Temporal limits. Pre-appointment legal costs were not recoverable because neither the order nor the engagement letters provided for them. Post-discharge fees and disbursements were recoverable independently of the order and letters, calculated by reference to the rates in those documents but without applying the cap.
7. Assessment. The receivers’ costs were properly documented and justified. No detailed, line-by-line assessment was proportionate or required. The parties were directed to prepare a draft order, with any remaining matters to be resolved at a further hearing.