Summary

Receivers appointed under the Criminal Justice Act 1988 were officers of the court and remained so after discharge of the receivership order. Post-discharge functions could be time-consuming and costly; discharge did not extinguish their common law entitlement to be indemnified for both pre- and post-discharge remuneration, disbursements and fees out of the receivership assets.

Facts

The second and third appellants (X), being individuals or trusts connected with the first appellant solicitor (G), appealed against decisions [2010] EWHC 3619 (Admin) and ([2012] EWHC 2015 (Admin)) that the respondent receiver (R) was entitled to recover remuneration, disbursements and expenses from G for work done after the discharge of a receivership order relating to G.

The court had appointed R under the Criminal Justice Act 1988 to act as receiver and manager of G's assets. The order provided that the costs of the receivership would be paid out of the receivership assets. The receivership was complex and acrimonious. G's appeal against conviction was dismissed and his application to discharge R refused. However, in March 2006, a confiscation order imposed against him was set aside, which prompted a successful without-notice application to discharge the receivership order. Despite discharge, the disputes between R, G and X continued. In September 2007, G applied for the detailed assessment of R's costs. By then, R had secured a lien for his charges over the receivership assets. It was decided, as confirmed in Sinclair v Glatt [2009] EWCA Civ 176, [2009] 1 W.L.R. 1845, that the lien extended to assets legally vested in G but beneficially owned by X. R applied for permission to realise assets to meet his remuneration, costs and interest for the period up to November 2010. In December 2010, it was held that R was entitled to be paid a substantial sum and a detailed assessment was ordered. In June 2012, the judge clarified that his December 2010 order extended to R's post-discharge remuneration and fees. The issues on the instant appeal were (i) whether the December 2010 order, as affirmed by the June 2012 order, permitted R to recover post-discharge costs; (ii) if so, whether it was too late for X to argue that the court had had no power to make such an order; (iii) whether the court had had power to make the December 2010 order.

Held

(1) The orders made in December 2010 and June 2012 were clear that R could claim costs "up to and including 19 November 2010". That necessarily included post-discharge remuneration (see paras 19-22 of judgment). (2) It would be unjust to permit X to argue that the court had had no jurisdiction to make the December 2010 and June 2012 orders. R had undertaken work and acted on the footing of those orders, and would suffer significant detriment if the point were to be argued and established. Furthermore, X had been live to the issue in November 2010 but had not pursued it (paras 26-32). (3) The court had had jurisdiction to make the December 2010 order. The starting point was that the receivership order, although silent specifically as to post-discharge costs, sanctioned the payment of costs to R. Receivers appointed under the 1988 Act were officers of the court and subject to its supervision and to common law generally. It was an established common law principle that they were ordinarily entitled to be indemnified from the assets of the receivership estate. Importantly, the right to an indemnity was not extinguished by discharge of the receivership order; the lien could continue to exist for that purpose after discharge, Mellor v Mellor [1992] 1 W.L.R. 517 applied and Crown Prosecution Service v Eastenders Group [2012] EWCA Crim 2436 considered. In Glatt v Sinclair [2010] EWHC 3082 (Admin), [2011] Lloyd's Rep. F.C. 140, Parker J had taken the correct approach, in principle, when he indicated that the receiver, post-discharge, continued to be a court officer, Glatt approved. After discharge, the receiver still had functions to perform in order to conclude the administration of the receivership, as was confirmed by CPR r.69.11, which was not to be construed as exhaustive. Such matters could be time-consuming and/or expensive. There was no principled basis for denying a receiver a right to claim remuneration in respect of them, and neither common law nor CPR Pt 69 called for that. The fact that r.69.7 made a receiver's remuneration subject to court approval provided protection to the person whose assets had been subject to receivership, but also indicated that the court retained a supervisory jurisdiction over a receiver, after discharge, in matters relating to the conclusion of the receivership, the transfer of assets and any enforcement of the lien, Boehm v Goodall [1911] 1 Ch. 155 applied (paras 32-50).

Appeal dismissed