MK Airlines Ltd v Katz & Anor (Acting As Joint Liquidator of MK Airlines)

MK Airlines Ltd v Katz & Anor (Acting As Joint Liquidator of MK Airlines)

The Deed of Indemnity provided funds for administrator remuneration as a subordinated loan for specific purposes, not as company assets; payment of remuneration from mixed accounts did not constitute misfeasance under statutory priority rules; the Registrar was wrong in law on construction of the Deed and application of priority rules; the Appellant is not liable for repayment of remuneration sums but remains liable for pre-administration expenses paid to Salans.

Parties
Appellant: Michael Johnathan Christopher Oldham; Respondent: Stephen Katz; Respondent: Carl Bowles
Jurisdiction
England and Wales
Judgment Date
16 March 2018
Procedural Posture
Appeal / Judgment
Outcome
Appeal allowed in part
Legal Topics
Misfeasance, Administrator Liability, Priority of Payments, Quistclose Trusts, Remuneration of Administrators, Pre Administration Expenses
Insolvency Company Law Misfeasance Administrator Liability Priority of Payments Quistclose Trusts Remuneration of Administrators Pre Administration Expenses

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Parties

Michael Johnathan Christopher Oldham

Appellant

Stephen Katz

Respondent

Carl Bowles

Respondent

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Whether funds paid under the Deed of Indemnity were company assets or administrator assets
  2. 2 Whether payment of remuneration breached statutory priority rules
  3. 3 Whether the Appellant was individually liable for misfeasance

Ratio Decidendi

The Deed of Indemnity provided funds for administrator remuneration as a subordinated loan for specific purposes, not as company assets; payment of remuneration from mixed accounts did not constitute misfeasance under statutory priority rules; the Registrar was wrong in law on construction of the Deed and application of priority rules; the Appellant is not liable for repayment of remuneration sums but remains liable for pre-administration expenses paid to Salans.

Court Disposition

Appeal allowed in part

Orders

  • Derrett Order set aside as regards remuneration sums
  • Derrett Order upheld as regards Salans pre-administration expenses