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Neumans LLP (A Firm) v Andrew Andronikou & Ors [2013] EWCA Civ 916 - 24/07/13


Appeal against a finding that, in the absence of an express provision in the Insolvency Rules 1986, the court had no jurisdiction to order payment of solicitors' fees for work done in an unsuccessful opposition to a winding up petition as an expense in a company's subsequent out of court administration.

Appeal dismissed. Held: There is no jurisdiction, either generally, inherently or under the 1986 Rules, to direct administrators to treat fees not incurred in connection with the performance of their functions as an expense. Such fees are not 'costs' within the meaning of s. 51, Senior Courts Act 1981 but claimed by the firm against the company, which places solicitors on the same footing as unsecured creditors. If there is in fact a lacuna or an anomaly in the 1986 Rules, then the point should be addressed by express amendment.

In the present case, the judgment under appeal (at [2012] EWHC 3088 (Ch)) was impeccable: the judge was right in law to rule that the fees in relation to the company's defence of a winding up petition were payable as an expense of the liquidation and not payable as an expense in the out of court administration.