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

Where an administrator’s remuneration is fixed by reference to time properly spent, an application under rules 18.24 and 18.28 to increase the amount is unavailable. Those rules address an increase in a set amount, an increase in a percentage-based rate, or a change of basis. The separate regime in rule 18.30 governs remuneration exceeding the fees estimate. Remuneration may be drawn up to the estimate without further approval, but approval is required above it. A promise to obtain further approval may still bind administrators under the court’s inherent jurisdiction over its officers. After a restructuring plan ends the administration, unresolved quantum may be pursued through the plan’s adjudication process and, if necessary, a Part 7 claim.

The former administrators of The Good Box Co Labs Ltd sought approval for further remuneration after the administration ended on the effective date of a restructuring plan. Creditors had approved remuneration by reference to time properly spent, subject to a payment on account and a fees estimate.

The High Court, on an application under rules 18.24 and 18.28 of the Insolvency Rules 2016, held that the application fell outside those rules and dismissed it. The judge also held, alternatively, that the former administrators would have had standing. The appeal concerned the proper scope of rules 18.24 and 18.28 and, by respondent’s notice, the standing issue.

Zacaroli LJ gave the leading judgment, with Falk and Males LJJ agreeing. The appeal was dismissed, and the application itself remained dismissed because it had been brought only under rules 18.24 and 18.28.

1. Construction of the remuneration rules. Rule 18.16 identifies three bases for remuneration: a percentage of assets, time properly spent, and a set amount. In rules 18.24 and 18.28, an increase in the amount refers to remuneration fixed as a set amount, an increase in the rate refers to percentage remuneration, and a change of basis can apply to any of the three bases. Since the administrators’ remuneration had been fixed on a time-cost basis, their application for further remuneration fell outside rules 18.24 and 18.28. Re Nortel Networks International Finance & Holding BV [2018] EWHC 2266 (Ch) was materially different, and Re Brilliant Independent Media Specialists Ltd [2015] BCC 113 did not address the issue.
2. Fees estimate. Rule 18.30 provided the applicable route. The administrators could draw remuneration up to the £400,315.50 fees estimate without further approval. They required approval to draw more, from the body which had fixed the remuneration basis, applying rules 18.16 to 18.23 as appropriate.
3. Promise and restructuring plan. The administrators’ promise to seek further approval before drawing more than the amount approved on account engaged the rule in Ex parte James, In re Condon (1874) LR 9 Ch App 609. That rule, recently reaffirmed in Lehman Bros Australia Ltd v MacNamara [2020] EWCA Civ 321; [2021] Ch 1, prevented them from taking further remuneration without approval. The appropriate approval was from the Plan Administrators under the plan’s adjudication process, or the Company if that function was delegated. Approval concerned quantum, not entitlement in principle. If quantum remained disputed, the matter could proceed by a Part 7 claim, rather than an application under the Rules.
4. Standing. It was unnecessary to decide standing under rules 18.24 and 18.28. The administrators had standing to lodge a claim under the plan, which contemplated that they would cease to hold office. The Company remained entitled to raise objections, including any available objection based on delay.

• Court of Appeal (Civil Division) — In [2025] EWCA Civ 252, the appeal was dismissed. The Court held that the application fell outside rules 18.24 and 18.28 and explained the alternative remuneration and plan-adjudication routes.
• High Court of Justice, Business and Property Courts in Leeds — HHJ Klein, 5 March 2024, dismissed the administrators’ application under rules 18.24 and 18.28 on the Ambit Issue. He also held, alternatively, that they would have had standing if those rules applied.