Christopher James Scanlon v Dane O’Hara & Ors

Amendment of an application challenging an insolvency office-holder’s remuneration is a discretionary case-management exercise under CPR 3.1(2)(p), applied by the Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021. The proposed amendment must have a real prospect of success and a proper evidential basis. In an electronic-money special administration, the distinction between customers and creditors remains important but does not automatically bar a dual-capacity applicant from challenging remuneration. Permission to proceed without the prescribed customer concurrence may be granted where the application appears bona fide, the applicant has a real interest, obtaining support is impractical, and court scrutiny would otherwise be unlikely. The ruling was fact-specific and did not determine the merits of the remuneration challenges.

Nvayo Limited was an electronic money institution in special administration under the Payment and Electronic Money Institution Insolvency Regulations 2021. Christopher James Scanlon, its CEO, ultimate beneficial owner, unsecured creditor and customer, had challenged the special administrators’ remuneration under rule 167 of the Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021.

He sought to amend his first application to challenge remuneration relating to all three statutory objectives, to obtain permission as a customer without 10 per cent concurrence, and to rely on paragraph 74 of Schedule B1 to the Insolvency Act 1986 and the court’s inherent jurisdiction. The administrators opposed the amendments, relying on the customer-creditor distinction, alleged conflicts and collateral purpose, threshold requirements and prejudice. The court decided the amendment and permission applications only. The central issues were whether the proposed cases had a real prospect of success and whether permission should be granted.

1. Amendment jurisdiction. The two amendment applications were allowed. Rule 187 of the Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021 applies CPR 3.1(2)(p). The power is discretionary and directed to the overriding objective. A proposed amendment must have a real prospect of success and a proper evidential basis. The court applied that approach, relying on Kawasaki Kisen Kaisha Ltd v James Kemball Ltd [2021] 1 CLC 274, Elite Property Holdings Ltd v Barclays Bank plc [2019] EWCA Civ 204 and Zu Sayn-Wittgenstein v Borbón y Borbón [2023] 1 WLR 1162, and held that the threshold was met.
2. Remuneration and fiduciary accountability. Administrators are fiduciaries. Remuneration is an exception to the rule against fiduciary profit and must be justified. A resolution based on time properly given involves both recording time and considering whether it was properly spent. Duplication, inefficiency and the proper allocation of time may therefore be scrutinised. The court drew this principle from Mirror Group Newspapers plc v Maxwell (No 2) [1998] 1 BCLC 638.
3. Customer and creditor capacities. The statutory scheme distinguishes safeguarded funds claimed by customers from the special-administration estate available to creditors, but the distinction is not absolute. The two pools and interests interact. A person who is both customer and creditor is not automatically barred from challenging remuneration merely because the capacities may produce conflicting interests. Such conflicts can be managed by the judge hearing the substantive application.
4. Scope of scrutiny. A hearing confined to remuneration for objectives 2 and 3 would make little sense. Remuneration should be assessed in the round because overlaps and grey areas arise between the categories.
5. Permission. Permission under rule 167(1)(c) and (2) was granted despite the absence of the prescribed customer concurrence. Numerical thresholds alone were not decisive. The application appeared bona fide, Mr Scanlon had a real interest, obtaining the required support appeared impractical, and meaningful scrutiny would otherwise have been unlikely. The court relied in part on the dicta discussed in Re Singh (a bankrupt) [2019] Bus LR 575. The decision was expressly fact-specific and did not purport to fill the wider gap in authority.
6. Collateral purpose and gateways. Concerns about collateral motives were serious, but a collateral purpose need not defeat a proper application where a proper purpose also exists. The issue could be assessed at the substantive hearing on the fuller evidence, following the approach taken from Aabar Block SARL v Maud [2016] Bus LR 1243. Amendments invoking paragraph 74 of Schedule B1 to the Insolvency Act 1986 and the inherent jurisdiction were also allowed. Their ultimate merits and scope remained for the final hearing.

High Court (Insolvency and Companies List): First-instance interlocutory decision. The first remuneration application was made on 31 October 2025 and a second on 30 April 2026; this judgment determined two applications to amend the first application. No appeal or lower-court decision is stated.