Jeremy Charles Frost & Anor v The Good Box Co Labs Limited & Ors

Rules 18.24 and 18.28 of the Insolvency (England and Wales) Rules 2016 provide a mechanism to increase an initially fixed rate or amount of remuneration, or to change its basis. They do not permit an office-holder to use the procedure merely to establish the final sum payable under a time-cost remuneration arrangement where the rate and basis remain unchanged. An authorised payment on account is not itself the amount of remuneration fixed. A former administrator may nevertheless have standing to make a rule 18.28 application, because the rules must be read purposively and the former office-holder may have a direct interest in the outcome.

The former administrators of The Good Box Co Labs Ltd applied under rules 18.24 and 18.28 of the Insolvency (England and Wales) Rules 2016 for an increase in remuneration. Their appointments ended when a restructuring plan was sanctioned under section 901F(1) of the Companies Act 2006. The plan included an adjudication process and permitted an application to court in accordance with the Rules.

The preliminary issue was whether the applicants had standing to apply despite no longer being office-holders. A further issue was whether, on their case that remuneration had been fixed on a time-cost basis, they were seeking an increase within rule 18.28.

1. Nature of the application. The application did not seek an increased rate, a changed basis, or an increase in a set amount of remuneration. The applicants maintained that remuneration was fixed on a time-cost basis and sought payment for additional work at the agreed rates.
2. Scope of rules 18.24 and 18.28. Read in the context of Chapter 4 of the Insolvency (England and Wales) Rules 2016, the rules provide a mechanism to increase a percentage or set amount initially fixed, to change the basis of remuneration, and potentially to increase charge-out rates under a time-cost basis. They do not provide a mechanism to determine the final amount payable where the fixed rate and basis remain unchanged.
3. Payment on account. The approval of £235,000 plus VAT authorised withdrawal of that sum on account. It did not fix the applicants’ total remuneration at that amount.
4. Former office-holders. Although the ordinary meaning of “office-holder” suggests a person currently in office, rules 18.24 and 18.28 had to be read contextually. Other provisions of Chapter 4 contemplate applications affecting former office-holders. A purposive approach, supported by Brake v The Chedington Court Estate Ltd [2023] 1 WLR 3035, permits a former administrator with a direct interest in remuneration to make a rule 18.28 application.
5. Disposition. The applicants therefore had standing in principle, but their claim did not fall within rule 18.28. The Standing Issue Question and the preliminary issue were answered in the negative, and the application was dismissed. The judge noted that an alternative insolvency application or civil claim might be available.