ACL Netherlands BV & Ors v Michael Richard Lynch & Anor

Where a deceased party’s executors have not renounced but are unwilling to take up their roles pending clarification of the estate’s solvency, the High Court may appoint an administrator under section 116 of the Senior Courts Act 1981 for the limited purpose of representing the estate in existing proceedings. The court may prescribe limited terms, provide for immediate action pending a formal grant, and substitute the administrator as a party. A mechanism, such as formal undertakings, must ensure that non-party executors are bound. The jurisdiction extends to reasonable costs of the limited administration, but not automatically to pre-death litigation costs unrelated to administration. A solicitor’s common law lien is not a secured lien. Where estate solvency is uncertain, payments authorised under the order may be validated under the Insolvency Act 1986.

The proceedings concerned claims by the successor entities of Autonomy Corporation and Hewlett-Packard against Michael Lynch and Sushovan Hussain. Dr Lynch died on 19 August 2024 while the proceedings remained unresolved and before judgment on quantum had been delivered.

His will appointed four executors. Two renounced, while the remaining two declined to take action unless and until the estate’s solvency could be assessed after the quantum judgment. The claimants applied under section 116 of the Senior Courts Act 1981 for the appointment of Jeremy Vaughan Sandelson as administrator solely to represent the estate in the proceedings and for his substitution as First Defendant.

The central issues were whether the court had jurisdiction to act in the existing proceedings, whether the proposed administrator and order were suitable, how the non-renouncing executors could be bound, and what costs and protective provisions could properly be authorised.

The application was granted on the papers. Mr Sandelson was appointed administrator of Dr Lynch’s estate for the limited purpose of representing it in the proceedings and was substituted as First Defendant.

1. Jurisdiction. Section 116 of the Senior Courts Act 1981 was not confined to the circumstances addressed by CPR 19.12. The existence of executors who had not renounced did not prevent an appointment where special circumstances made it necessary or expedient. A separate action joining those executors was unnecessary, provided an effective mechanism bound them to the order.
2. Binding the executors. The formal undertakings of the two non-renouncing executors, given after legal advice and authenticated in accordance with paragraph 14.70 of the Chancery Guide, were sufficient even though they had not been joined as parties.
3. Suitability and scope. The circumstances created a genuine circularity and delay. Mr Sandelson was willing, suitably experienced, and accepted by the interested persons. His relationship with Clifford Chance required careful attention to conflicts, but the estate’s interests remained paramount. The court could prescribe a limited appointment, reserve the executors’ future rights, authorise immediate action before a formal grant, and provide for substitution under CPR 19.2.
4. Costs and liens. The order could authorise reasonable remuneration and expenses of the administration, including costs incurred after Dr Lynch’s death in securing representation. It did not authorise payment of pre-death litigation costs unrelated to the administration. A common law solicitor’s lien was not a secured lien; any charge or payment under section 73 of the Solicitors Act 1974 required a separate application supported by evidence.
5. Insolvency protection. Given uncertainty about the estate’s solvency, a validation order under section 284 of the Insolvency Act 1986 was appropriate for the authorised payments. The agreed order was otherwise reasonable and expedient.