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Wood v Gorbunova & Ors [2013] EWHC 1935 (Ch) - 05/07/13


Judgment determining costs of an application for directions and powers of a receiver appointed by the court.

Held: Where a court appointed receiver initiates proceedings against a third party the general rule that costs follow the event applies. Such a receiver is indemnified out of the assets of the estate where costs and expenses are reasonable and properly incurred. If a receiver litigates and is not successful it does not necessarily mean that the costs of the litigation were not reasonable sums properly incurred.
In the present case, some of the decisions made by the receivers were sufficiently unwise to justify the right of indemnity to be partially withheld. The receivers were to pay the third parties' costs of the application on the standard basis, fully indemnified in relation to one and indemnified to the extent of 2/3 in relation to the other. Although the receivers' own costs were increased above a reasonable and proper amount, they were allowed to recover 85 per cent.