Insolvency—office-holder costs and adjudication challenges (Sanrose Investment Ltd v Foley and others)

Article summary

Restructuring & Insolvency analysis: In this judgment, the High Court considered together two related applications under the Insolvency (England and Wales) Rules 2016 (IR 2016), r 14.8 to reverse or vary decisions made by liquidators as to the admission and rejection (respectively) of two claims, and whether the liquidators should be held personally liable for the creditors' costs of those applications. Although the court ultimately reversed both of the liquidators’ decisions, it declined to order that the liquidators pay the applicants' costs. The liquidators' decision-making process was neither irrational nor unreasonable, they had acted fairly, in good faith, and without conscious bias, and they ‘did their best to give the correct answer’. Their conduct was, therefore, not ‘in substance so unreasonable or irrational, or so plainly contrary to the evidence as to attract an adverse costs consequence’. Thus, the 'starting point' under IR 2016, r 14.9(2) (that an office-holder is not personally liable for costs incurred by any...