Gillan v HEC Enterprises Ltd & Ors

Gillan v HEC Enterprises Ltd & Ors

The administrators are not entitled to a general indemnity out of trust assets for all remuneration, costs and expenses. Only work that is necessary for the administration or management of the trust assets and which benefits the beneficiaries may be recoverable under the Berkeley Applegate principle. Work done for the benefit of unsecured creditors or in opposition to the beneficiaries' interests is not recoverable from trust assets. The claimants, having secured the substantive relief sought via the administrators' proposals, no longer required permission to continue proceedings. The administrators should have consented to continuation of proceedings at an early stage.

Parties
Claimant/applicant: Ian Gillan; Claimant/applicant: Roger Glover; Claimant/applicant: Ian Paice; Claimant/applicant: Victoria Lord and Keith Gordon (as executors of the estate of Jon Lord); Defendant/respondent: HEC Enterprises Limited (in administration); Defendant/respondent: Deep Purple (Overseas) Limited (in administration); Respondent: Mark Supperstone (Joint Administrator); Respondent: Simon Harris (Joint Administrator); Defendant: Dipak Shanker Rao, Manuela Edwards, John Andrew Craig & Nicholas Stanley John Kanaar (as executors/administrators of the estate of Maurice Anthony Edwards); Defendant: Dipak Shanker Rao (as executor/administrator of the estate of John Coletta); Interested Party: Mrs Abigail Flanagan (beneficiary, estate of Mr Edwards); Interested Party: Mrs Teresa Sadeghi (beneficiary, estate of Mr Coletta)
Jurisdiction
England and Wales
Judgment Date
09 December 2016
Procedural Posture
Civil/chancery/companies/administration / Judgment on Applications for Permission to Continue Proceedings and for Indemnity Out of Trust Assets
Outcome
Substantive issues resolved by agreement and court order; claimants' application for permission to continue proceedings dismissed as unnecessary; administrators' application for general indemnity out of trust assets refused in general terms; entitlement to indemnity limited to work benefitting trust assets, subject...
Legal Topics
Administration of Companies, Trust Assets in Insolvency, Berkeley Applegate Principle, Moratorium on Proceedings, Specific Performance, Costs and Remuneration of Administrators
Insolvency Trusts Company Law Contract Administration of Companies Trust Assets in Insolvency Berkeley Applegate Principle Moratorium on Proceedings +2 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 15 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Ian Gillan

Claimant/applicant

Roger Glover

Claimant/applicant

Ian Paice

Claimant/applicant

Victoria Lord and Keith Gordon (as executors of the estate of Jon Lord)

Claimant/applicant

HEC Enterprises Limited (in administration)

Defendant/respondent

Deep Purple (Overseas) Limited (in administration)

Defendant/respondent

Mark Supperstone (Joint Administrator)

Respondent

Simon Harris (Joint Administrator)

Respondent

Dipak Shanker Rao, Manuela Edwards, John Andrew Craig & Nicholas Stanley John Kanaar (as executors/administrators of the estate of Maurice Anthony Edwards)

Defendant

Dipak Shanker Rao (as executor/administrator of the estate of John Coletta)

Defendant

Mrs Abigail Flanagan (beneficiary, estate of Mr Edwards)

Interested Party

Mrs Teresa Sadeghi (beneficiary, estate of Mr Coletta)

Interested Party

Procedural Posture

Civil/chancery/companies/administration / Judgment on Applications for Permission to Continue Proceedings and for Indemnity Out of Trust Assets

Legal Issues

  1. 1 Whether claimants should be granted permission to continue proceedings against companies in administration under paragraph 43(6) of Schedule B1 to the Insolvency Act 1986
  2. 2 Whether administrators are entitled to indemnity out of trust assets for remuneration, costs and expenses under the Berkeley Applegate principle
  3. 3 Nature of the trusts over assets and shares in Purpletuity Ltd under the 2005 Settlement Agreement

Ratio Decidendi

The administrators are not entitled to a general indemnity out of trust assets for all remuneration, costs and expenses. Only work that is necessary for the administration or management of the trust assets and which benefits the beneficiaries may be recoverable under the Berkeley Applegate principle. Work done for the benefit of unsecured creditors or in opposition to the beneficiaries' interests is not recoverable from trust assets. The claimants, having secured the substantive relief sought via the administrators' proposals, no longer required permission to continue proceedings. The administrators should have consented to continuation of proceedings at an early stage.

Court Disposition

Substantive issues resolved by agreement and court order; claimants' application for permission to continue proceedings dismissed as unnecessary; administrators' application for general indemnity out of trust assets refused in general terms; entitlement to indemnity limited to work benefitting trust assets, subject...

Orders

  • Shares in Purpletuity Ltd to be transferred as to 64% to the claimants, 16% to Mr Blackmore, and 20% to the estates of the managers, with appropriate wording to preserve rights of Mr Coverdale and Mr Hughes.
  • Assets within clause 2 of the 2005 Settlement Agreement to be transferred to Purpletuity Ltd, with administrators to transfer such rights as they have, without prejudice to third party claims.