What is the scope of the Berkeley Applegate principle? (Gillan and others v HEC Enterprises Ltd and others)

What is the scope of the Berkeley Applegate principle? (Gillan and others v HEC Enterprises Ltd and others)

Katie Longstaff, barrister at St Philips Stone Chambers, discusses the recent case of Gillan and others v HEC Enterprises Ltd and others and warns that office-holders should think carefully before embarking on costly trust-related work.

Original news

Gillan and others v HEC Enterprises Ltd and others and other applications [2016] EWHC 3179 (Ch), [2016] All ER (D) 103 (Dec)

The Chancery Division considered an application by the administrators of two companies in administration which had provided services to the rock band Deep Purple for an order granting them a right of indemnity out of the trust assets of the two companies for the administrators’ remuneration, costs and expenses in relation to the administration and management of the assets. The court distinguished the case of Berkeley Applegate (Investment Consultants) Ltd; Re Harris v Conway [1989] Ch 32, [1988] 3 All ER 71 from the present case.

What was the case about?

In Re Berkeley Applegate (Investment Consultants) Ltd the court recognised its jurisdiction to order that an office-holder be remunerated out of trust assets, for work done in relation to those assets. In Gillan, Morgan J considered the scope of what has become to be known as the Berkeley Applegate principle.

What was the background to the case?

The claimants were members of the rock music band Deep Purple (the fourth claimant was the executor of a former band member) (the claimants). HEC Enterprises Ltd and Deep Purple (Overseas Ltd) (the companies) had contracted with the claimants to, among other things, account for Deep Purple’s music royalties. In 2015 the claimants brought proceedings against the companies for unpaid income deriving from various rights, and for the transfer of certain shares held on trust by the companies, to the claimants.

The companies went into administration on 19 January 2016 and the claimants sought permission to continue their proceedings notwithstanding the statutory moratorium. The administrators did not consent to the claimants’ applica

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