United Power Ltd (In Liquidation) v Companies Act 2014 (Approved)

Factual and Procedural Background

This opinion concerns an application by Plaintiff for an order pursuant to section 645 of the Companies Act 2014 to fix his remuneration as provisional liquidator of Company A. The Plaintiff sought remuneration of €126,206.01 for work performed. The application was opposed by Defendant, the official liquidator of Company A, and The Revenue Commissioners (referred to as Revenue), a significant creditor of the company, on grounds that the remuneration claimed was excessive. The court fixed the remuneration at €48,804.12. Following the judgment, the parties filed written submissions regarding the costs of the application, which is the subject of this ruling.

Legal Issues Presented

1. Whether Plaintiff is entitled to recover his legal costs of the application as costs in the liquidation of Company A.
2. Whether Defendant and Revenue are entitled to recover their legal costs of opposing the application from Plaintiff personally or as costs in the liquidation.
3. Whether Plaintiff may have recourse to the assets of Company A to discharge his own costs or the costs of Defendant and Revenue.
4. Whether Revenue is entitled to set off its costs against the remuneration payable to Plaintiff as provisional liquidator.

Arguments of the Parties

Plaintiff's Arguments

• Seeks an order that his legal costs of the application be treated as costs in the liquidation, payable from the company’s assets.
• Contends that he “beat” Revenue’s offer on costs and remuneration and thus should recover his costs accordingly.
• Distinguishes prior case law concerning voluntary liquidations and the statutory basis for applications fixing remuneration.

Defendant's Arguments

• Seeks an order for his legal costs of the application against Plaintiff personally or, alternatively, as costs in the liquidation.

Revenue's Arguments

• Seeks an order for its costs of the application against Plaintiff personally.
• Seeks an order prohibiting Plaintiff from using company assets to discharge his own or other parties’ costs.
• Seeks set-off of its costs against the remuneration payable to Plaintiff under section 645 of the Companies Act 2014.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by confirming the general discretion to award costs under Order 99 of the Rules of the Superior Courts and the entitlement of a party entirely successful in proceedings to recover costs unless the court orders otherwise, considering factors such as conduct and reasonableness of issues pursued (Legal Services Regulation Act 2015, s.169(1)).

Revenue was entirely successful in opposing Plaintiff’s claim for excessive remuneration and costs. Plaintiff’s rejection of Revenue’s reasonable open offer was significant. The court rejected Plaintiff’s submissions that he “beat” the offer or that the offer was inclusive of VAT and outlays, noting the offer included separate sums for remuneration and legal costs.

The court found no reason to depart from the general rule that the successful party is entitled to costs against the unsuccessful party, given the nature, circumstances, and conduct of the parties.

The court considered the Ballyrider principles concerning costs liability of liquidators acting in representative versus personal capacities. Plaintiff’s application was brought personally, not on behalf of the company, so normal costs rules applied. Consequently, Plaintiff is personally liable for Defendant’s and Revenue’s costs and cannot have recourse to company assets to pay those costs.

Regarding Revenue’s request to set off its costs against Plaintiff’s remuneration, the court distinguished the present case from Re Star Elm Frames Limited, where costs were jointly payable by liquidator and company. Here, Plaintiff alone is liable for costs, and the company separately owes remuneration. Thus, no set-off arises; the request resembles a garnishee order, which the court declined to make without fuller argument.

Holding and Implications

The court’s final orders are as follows:

• Plaintiff’s remuneration as provisional liquidator of Company A is fixed at €48,804.12 pursuant to section 645 of the Companies Act 2014.
• Plaintiff is ordered to pay Defendant and Revenue their reasonable legal costs of the application, including reserved costs and costs of submissions, to be adjudicated if not agreed.
• Plaintiff is prohibited from having recourse to the assets of Company A to discharge his own costs or those of Defendant and Revenue for which he is liable.

The direct effect is that Plaintiff bears personal responsibility for the legal costs of opposing parties and cannot charge these costs to the company’s assets or creditors. No new precedent is established beyond the application of existing principles to the facts.