Attorney General of Trinidad and Tobago v CL Financial Ltd (in Liquidation)

In a time-based liquidation remuneration regime, officeholders must establish that claimed time was reasonably incurred. They must provide information proportionate to the size and complexity of the insolvency, sufficient to show the tasks undertaken, why they were reasonable, the time spent by task or category, staff grades and any duplication. Individual names, daily hours and every underlying time record are not usually required initially. The court must exercise independent judgment, but should make a broad assessment rather than a line-by-line taxation. Where evidence is insufficient, further particulars may be ordered and remuneration should not be approved until the court can assess it. Statutory duties, reasonable asset-protection work and unsuccessful claims may justify remuneration. A Government creditor has no special status.

CL Financial Ltd (in Liquidation), a holding company in compulsory liquidation, applied for approval of its liquidators’ remuneration and related charges for 2019. The Government, the company’s largest creditor, opposed the application, principally arguing that the supporting information was inadequate and that the remuneration required detailed, line-by-line examination.

The High Court approved the claims. The Court of Appeal set that order aside and remitted the application, principally because it considered that the High Court had failed to give proper reasons and that a more detailed analysis was required. The Court of Appeal had overlooked the High Court’s written judgment. The central issues before the Board were the information required for time-based remuneration, the proper method of assessment, subsidiary corporate directors, expenses and costs.

The appeal was dismissed in substance. The Court of Appeal’s order was affirmed, save that its costs order was varied.

1. Governing principles. An officeholder has no right to remuneration merely by holding office. Entitlement derives from statute, a court order or both. The officeholder bears the burden of justification, and residual doubt is resolved against the officeholder. Remuneration must be fair and reasonable. Under section 373(2) of the Companies Act 1995, the court has power to direct the remuneration of a liquidator.
2. Time-based remuneration and evidence. The April 2018 Order required payment for reasonable time expended. The liquidators therefore had to show that work was reasonably undertaken, was performed by staff of appropriate seniority and was not duplicated. Supporting information had to be proportionate but sufficient to identify the tasks, the reasons for undertaking them, the time and charges attributable to each task or category, and the grades of staff involved. The court should not usually require individual names, dates of every task or all contemporaneous time records at the outset. Proper records should nevertheless be maintained and produced where particular charges require closer justification. The approach reflected in Mirror Group Newspapers plc v Maxwell (No 2) [1998] 1 BCLC 638 and the Practice Direction was influential, but a solicitor’s detailed bill of costs was not the standard.
3. Assessment. The court must exercise its own judgment and must not act as a rubber stamp. It should not conduct a line-by-line analysis. A broader assessment, including appropriate discounts where justified, is permissible and generally proportionate. In this case the remuneration report and affidavits were far too general. They did not permit assessment of the tasks undertaken, the time spent on particular tasks or the grades of staff involved. The High Court therefore could not approve the remuneration. The application was remitted for fuller evidence and reconsideration.
4. Subsidiaries and administrative staff. Appointing directors to significant subsidiaries was reasonable because they were the company’s only assets and the liquidators otherwise lacked participation in day-to-day management. Corporate directors were permissible because their representatives owed fiduciary duties. Separate charges could be made, subject to justification. Administrative work ordinarily formed part of overheads; a separate charge required explanation.
5. Expenses and costs. The Board left open whether third-party expenses required taxation under the April 2018 Order. Costs incurred in preparing reasonable evidence were liquidation expenses. Given the mixed merits of the parties’ positions, half of the liquidators’ costs at first instance and in the Court of Appeal was ordered to be paid from the liquidation estate.

• Privy Council. In [2025] UKPC 41, the Board dismissed the appeal, affirmed the remittal of the remuneration application and substituted a different costs order.
• Court of Appeal of the Republic of Trinidad and Tobago. On 1 December 2022, the Court set aside the High Court order and remitted the application, principally because it considered that the High Court had not given a proper judgment or sufficiently analysed the evidence. The Court overlooked the High Court’s written judgment.
• High Court. The High Court approved the remuneration and related charges by order dated 6 July 2021, later giving written reasons on 15 November 2021.