Settle v Sandstone Legal Ltd & Anor (Costs) [2025] EWHC 2771 (Ch) (30 October 2025)

Settle v Sandstone Legal Ltd & Anor (Costs) [2025] EWHC 2771 (Ch) (30 October 2025)

The court has discretion to limit or disallow an applicant's costs as an expense of the administration under rule 3.12(2) IR 2016, especially where the applicant has engaged in dishonest conduct. Mr Settle's knowingly false evidence and self-serving conduct justified capping his recoverable costs at the issue fee only and ordering him to pay Seven Stars' costs personally up to 7 February 2025. The Petitioner's and Administrators' costs were properly payable as expenses of the administration.

Citation
[2025] EWHC 2771 (Ch)
Parties
Applicant: Mr Andrew Settle; First Respondent: Sandstone Legal Limited (in administration); Second Respondent: Seven Stars Legal Limited; Petitioning Creditor: Medical-Legal Appointments Limited; Administrators: Ms Philippa Smith and Ms Jessica Thomas (Administrators)
Jurisdiction
England and Wales
Judgment Date
30 October 2025
Procedural Posture
Administration Application and Winding Up Petition / Costs Judgment Following Administration Order
Outcome
Costs orders made as set out: Petitioner's and Administrators' costs payable as expenses of the administration; Mr Settle's costs capped at issue fee; Mr Settle personally liable for Seven Stars' costs up to 7 February 2025; Seven Stars' further costs as administration expense.
Legal Topics
Administration Order, Costs Orders, Personal Costs Liability, Pre Administration Expenses, Priority of Expenses, Misleading Evidence, Director Conduct
Insolvency Company Law Civil Procedure Administration Order Costs Orders Personal Costs Liability Pre Administration Expenses Priority of Expenses +2 more

Case Brief

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Parties

Mr Andrew Settle

Applicant

Sandstone Legal Limited (in administration)

First Respondent

Seven Stars Legal Limited

Second Respondent

Medical-Legal Appointments Limited

Petitioning Creditor

Ms Philippa Smith and Ms Jessica Thomas (Administrators)

Administrators

Procedural Posture

Administration Application and Winding Up Petition / Costs Judgment Following Administration Order

Legal Issues

  1. 1 Whether the applicant (Mr Settle) is entitled to his costs as an expense of the administration
  2. 2 Whether Seven Stars is entitled to a personal costs order against Mr Settle
  3. 3 Whether the Petitioner's (Medical-Legal Appointments Limited) costs should be paid as an expense of the administration

Ratio Decidendi

The court has discretion to limit or disallow an applicant's costs as an expense of the administration under rule 3.12(2) IR 2016, especially where the applicant has engaged in dishonest conduct. Mr Settle's knowingly false evidence and self-serving conduct justified capping his recoverable costs at the issue fee only and ordering him to pay Seven Stars' costs personally up to 7 February 2025. The Petitioner's and Administrators' costs were properly payable as expenses of the administration.

Court Disposition

Costs orders made as set out: Petitioner's and Administrators' costs payable as expenses of the administration; Mr Settle's costs capped at issue fee; Mr Settle personally liable for Seven Stars' costs up to 7 February 2025; Seven Stars' further costs as administration expense.

Orders

  • Administrators' costs (including interim manager costs) to be paid as an expense of the administration.
  • Administrators may apply to reorder priority of expenses under Rule 3.51(3) IR 2016.