Dolfin Asset Services Limited v Adam Stephens (in his capacity as joint special administrator of Dolfin Financial (UK) Ltd) & Anor.

Rule 201 of the Investment Bank Special Administration (England and Wales) Rules 2011 does not create a free-standing obligation to provide remuneration information. A request for further information relates to a remuneration statement required by rule 122(1)(f), which arises only after the basis of remuneration has been fixed.

The right to further information is also qualified. An administrator may refuse a request where the administrator considers that preparation would involve excessive time or cost, subject to the requirement to give reasons. The court should give reasonable weight to the administrator’s decision and intervene only where it was made in bad faith or was irrational. A detailed line-by-line breakdown may be disproportionate where the basis of remuneration remains unfixed and SIP 9 information has been supplied.

Dolfin Financial (UK) Ltd was placed into special administration, and Adam Stephens and Kevin Ley were appointed joint special administrators. Dolfin Asset Services Ltd, a client and member of the client and creditor committee, sought detailed information about the administrators’ post-appointment remuneration, including a line-by-line breakdown of time entries.

The administrators declined to provide the requested information, relying on rule 201(2) of the Investment Bank Special Administration (England and Wales) Rules 2011, including excessive time and cost, prejudice to the administration and confidentiality. Dolfin applied under rule 201 for an order compelling disclosure and sought extensions of time under rules 201 and 202.

The central issues were whether the court had jurisdiction to order further remuneration information before the basis of remuneration had been fixed, and whether the administrators’ refusal was lawful.

1. The applications were dismissed. The court invited the parties to agree an order.
2. Rule 201 must be read with rule 122. Although rule 201 refers to further information about remuneration or expenses in a statement required by rule 122(1)(g) or (h), the reference to remuneration is to a remuneration statement required by rule 122(1)(f). Rule 122(1)(f) requires such a statement only where the basis of remuneration has been fixed. The Rules do not impose a free-standing obligation to provide a remuneration statement before that event.
3. The statutory scheme confirms that remuneration is fixed under rule 196. Challenges under rule 202 arise after the relevant event, including where remuneration has been charged and fixed, where the basis is inappropriate, or where expenses are excessive. A challenge before the basis has been fixed would be premature and effectively empty.
4. Rule 201(2) gives administrators a qualified choice: they may provide the requested information or give reasons for refusing it on one of the prescribed grounds. The administrator need only consider that a ground applies. Following Davey v Money [2018] Bus LR 1903, the court should give reasonable weight to such a decision and interfere only where it was made in bad faith or was irrational.
5. The administrators’ refusal was not irrational. The basis of remuneration had not been fixed, SIP 9-compliant information had been provided, and a line-by-line breakdown would require substantial review and allocation of overlapping work between the special administration objectives. It could divert resources from the administration and prove unnecessary if remuneration were fixed on another basis. Confidential information could also properly be withheld.
6. The court noted that, once the basis was fixed, the appropriate remuneration statement would be provided in a later progress report. The court retained a discretion to extend the relevant periods under rules 201(4) and 202(4).