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Simion v Brown

[2007] EWHC 511 (Ch)

Neutral Citation Number: [2007] EWHC 511 (Ch)
Case No: CH/2006/APP/0327
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

ON APPEAL FROM THE MEDWAY COUNTY COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 14/03/2007

Before:

MR JUSTICE DAVID RICHARDS

Between:

Paul Simion

Appellant

- and -

Tim Brown

Respondent

- and –

Case No: 106 OF 2003

Between:

Tim Brown

Applicant

- and -

Paul Simion

Respondent

Catherine Mackenzie-Smith (instructed by CJ Jones) for the Appellant

Tina Kyriakides (instructed by Salans) for the Respondent

Hearing dates: 18 and 19 January 2007

Judgment

The Honourable Mr Justice David Richards:

1.

There are two matters before the court, an appeal and an application at first instance. Both concern the remuneration of the trustees in bankruptcy of Martin Bradley. Joint trustees were initially appointed. Tim Brown, a partner in Pure Recovery LLP, later became the sole trustee. For convenience I will refer to the trustee, although the application and appeal relate to the remuneration of both trustees.

2.

A bankruptcy order was made against Mr Bradley on 31 July 2003 on the petition of Paul Simion, who was then a creditor for £34,591. About half his debt has since been paid by Mr Bradley’s sister. Mr Bradley’s other liabilities were about £11,000 owed to Crown creditors, £6,906 to his bank, and household and other liabilities of £886.

3.

Mr Bradley’s only asset of any substantial value was a 54-foot Dutch barge in which he lived. It was moored in the dock at Port Weoburgh, Kent. There were some other assets, such as life policies and a car, but they have not proved to be of any value. The principal steps taken by the trustee, other than compliance with statutory reporting and other obligations, have been directed to realising the boat. For this purpose it was necessary to secure and insure it, obtain possession, commission a survey and repairs, and market it. Mr Bradley was not willing to give up possession voluntarily, to avoid being classified as intentionally homeless, and so required the trustee to bring possession proceedings. Mr Bradley did not contest those proceedings. A possession order was obtained and executed. For the purposes of the possession proceedings the trustee engaged the solicitors who had acted for the petitioning creditor and had introduced the trustee to the case. After possession was obtained, an agent was engaged to take the boat to dry dock, oversee the necessary repairs and market it. Although it was originally hoped that it would realise over £50,000, the best offer received by December 2004 was for £43,000 and the trustees decided to accept it. There is no criticism of that decision or the steps taken in relation to the boat or any other asset. The total costs and expenses in the bankruptcy, but excluding the trustee’s remuneration, amounted to £24,274. The principal items were the petitioning creditors costs (£2,500), fees payable to the secretary of state (£806), the agent’s fees and disbursements (£5,575), legal costs incurred under a conditional fee agreement involving a 50 per cent uplift (£6,685), mooring charges and other services (£3,438), survey fees (£800) and statutory insurance bonding for assets (£800). The remuneration claimed by the trustee, on a time basis, to 8 July 2005 is £21,265.50, exclusive of VAT. The combination of expenses and remuneration would exhaust the available assets, leaving nothing for distribution among creditors.

4.

The provisions governing the remuneration of trustees in bankruptcy are contained in rules 6.138–6.142 of the Insolvency Rules 1986 (as amended). Rule 6.138 provides as follows:

“(1) The trustee is entitled to receive remuneration for his services as such.

(2) The remuneration shall be fixed either—

(a) as a percentage of the value of the assets in the bankrupt's estate which are realised or distributed, or of the one value and the other in combination, or

(b) by reference to the time properly given by the insolvency practitioner (as trustee) and his staff in attending to matters arising in the bankruptcy.

(3) Where the trustee is other than the official receiver, it is for the creditors' committee (if there is one) to determine whether his remuneration is to be fixed under paragraph (2)(a) or (b) and, if under paragraph (2)(a), to determine any percentage to be applied as there mentioned.

(4) In arriving at that determination, the committee shall have regard to the following matters—

(a) the complexity (or otherwise) of the case,

(b) any respects in which, in connection with the administration of the estate, there falls on the insolvency practitioner (as trustee) any responsibility of an exceptional kind or degree,

(c) the effectiveness with which the insolvency practitioner appears to be carrying out, or to have carried out, his duties as trustee, and

(d) the value and nature of the assets in the estate with which the trustee has to deal.

(5) If there is no creditors' committee, or the committee does not make the requisite determination, the trustee's remuneration may be fixed (in accordance with paragraph (2)) by a resolution of a meeting of creditors; and paragraph (4) applies to them as it does to the creditors' committee.

(6) Where the trustee is not the official receiver and his remuneration is not fixed as above, the trustee shall be entitled to remuneration calculated in accordance with Rule 6.138A.”

5.

There was no creditors’ committee. The trustee convened a final meeting of creditors and put before it a resolution to approve his remuneration on a time basis. Mr Simion, the petitioning creditor, objected to the size of the trustee’s remuneration and voted against the resolution which was therefore defeated. He was, I think, the only creditor to attend and vote at the meeting.

6.

Rule 6.138A therefore applies to the trustee’s remuneration. Rule 6.138A(1) and (2) provides:

“(1) This Rule applies where the trustee is not the official receiver and his remuneration is not fixed in accordance with Rule 6.138.

(2) Subject to paragraph (3), the trustee shall be entitled by way of remuneration for his services as such, to such sum as is arrived at by—

(a) first applying the realisation scale set out in Schedule 6 to the monies received by him from the realisation of the assets of the bankrupt (including any Value Added Tax thereon but after deducting any sums paid to secured creditors in respect of their securities and any sums spent out of money received in carrying on the business of the bankrupt); and

(b) then by adding to the sum arrived at under sub-paragraph (a) such sum as is arrived at by applying the distribution scale set out in Schedule 6 to the value of assets distributed to creditors of the bankrupt (including sums paid in respect of preferential debts).”

It is common ground that applying this rule, the trustee is entitled to remuneration of £5,050.

7.

The trustee has a right to apply to the court if he is dissatisfied with the remuneration otherwise payable to him. Rule 6.141(1) provides:

“(1) If the trustee considers that the remuneration fixed for him by the creditors' committee, or by resolution of the creditors, or as under Rule 6.138(6), is insufficient, he may apply to the court for an order increasing its amount or rate.”

Notice must be given to the creditors committee (rule 6.141(2)) or if there is no committee to such one or more of the creditors as the court may direct, who may nominate one or more of their number to appear or be represented (rule 6.141(3)).

8.

Creditors likewise are given a right to apply to the Court if they consider the remuneration payable to the trustee in accordance with the Rules is excessive. Rule 6.142(1) provides:

“(1) Any creditor of the bankrupt may, with the concurrence of at least 25 per cent in value of the creditors (including himself), apply to the court for an order that the trustee's remuneration be reduced, on the grounds that it is, in all the circumstances, excessive.”

Rule 6.142(4) provides:

“(4) If the court considers the application to be well-founded, it shall make an order fixing the remuneration at a reduced amount or rate.”

9.

On 10 November 2005, the trustee issued an application in the Medway County Court for an order to transfer the bankruptcy proceedings to the High Court in London and an order under Rule 6.141(1) allowing him to charge his remuneration on a time basis. This was supported by a witness statement of Mr Brown, made on 7 November 2005. On 21 December 2005 the trustee’s solicitors received notice that the application had been listed for hearing in the county court on 23 March 2006.

10.

In order to bring finality to the question of the trustee’s remuneration and in ignorance of the trustee’s own application, Mr Simion issued an application in the Medway County Court in January 2006, by which he sought an order that the trustee’s remuneration be fixed by the court in a sum not exceeding £8,323.50. This application was fixed for hearing on 9 March 2006 and served on the trustee. The trustee’s solicitor made a witness statement in response on 2 March 2006. She referred to the trustee’s own application and in paragraph 6 stated:

“While awaiting instructions in relation to this my client was served with this Application which is a mirror of my client's Application seeking an Order effectively in the reverse of Order that my client was originally seeking. However, Mr. Simion’s Application is listed for hearing on 9 March 2006 and on this basis, as it is listed for hearing over two weeks in advance of my client’s Application (which has not been served on Mr Simion), I have subsequently requested that my client’s Application be stayed and carriage of proceedings go forward under Mr Simion’s Application.”

11.

Mr Simion’s application was heard by District Judge Grand on 9 March 2005. Mr Simion appeared in person and the trustee was represented by his solicitor. The District Judge heard the application in a busy possession list. He gave a short judgment immediately in which he said in paragraphs 4 and 5:

“Mr. Simion is trying to tell me that recovery of the boat was straightforward but quite clearly a great deal of time and effort was expended in it, and there is nothing to suggest that that time and effort was not expended. With regard to his objection to the solicitors acting under a conditional fee agreement, there is an asset here which could easily be floated away or removed. I am satisfied that entering into a conditional fee agreement concerning its recovery was justified in those circumstances.

I have to say that I have not seen or heard anything to suggest to me that the Trustee has acted in any way improperly such that the time incurred by the Trustee should not be remunerated and his fee limited. It follows that I dismiss Mr. Simion's application in this respect. The application of the Trustee has been stayed so I have not been hearing that. So, the order I am making is that the application made by the petition creditor be dismissed.”

The District Judge accordingly dismissed Mr Simion’s application and ordered him to pay the trustee’s costs assessed at £2,832.50. This was recorded in the formal order sealed by the court, but on its receipt the trustee’s solicitor wrote to the Court on 22 March 2006 as follows:

“We have received a copy of the Order made by District Judge Grand dismissing the Application made by the Petitioning Creditor and ordering that the Petitioning Creditor pay the costs of our client in the amount of £2,832.50.

However, the Order does not reflect that at the hearing District Judge Grand also directed that our client was entitled to his remuneration on a time costs basis.

We would be obliged if you could pass this letter to the District Judge for his consideration/approval and if the Order of 9 March 2006 could be amended to reflect the above.”

12.

The Court replied, correctly, that the trustee’s application had been stayed at his request and that the District Judge had dealt only with Mr Simion’s application. The trustees’ solicitors replied on 5 April 2006 as follows:

“We did write to you on 2 March and ask that our Application be stayed, however at that point the application had not been served on the Respondent. We requested that the Application be stayed as the Respondent had issued an application at the hearing of which the remuneration of the Trustee was to be decided.

Our Ms Jordan was in attendance at the hearing of this application on 9 March 2006 and it is her record of the hearing that in addition to that application being dismissed and an order for costs being made against the Applicant, that the District Judge found the Trustee entitled to charge the full amount of his time costs and disbursements. Obviously, we are most keen to avoid the additional cost of the parties attending Court when the matter has already been considered by the Court.”

In reply the Court reiterated that the District Judge had dealt only with Mr Simion’s application, and there the matter lay. Mr Simion sought to appeal the District Judge’s order and instructed solicitors. An initial error was made by lodging the appeal in the County Court whereas, as an insolvency matter, an appeal lay to the High Court. He was given permission by the High Court to lodge his appeal out of time. Unsuccessful attempts were made to settle the matter which ended in July 2006.

13.

No attempt was made by the trustee to revive his application to fix his remuneration. Unless and until he proceeded with that application, his remuneration was fixed at £5,050 under the terms of rule 6.138A.

14.

In September 2006, Mr Simion’s appeal was fixed for hearing in January 2007. On 12 January 2007, the trustee issued an application for leave to serve out of time a respondent’s notice. This would revive a point previously taken in correspondence on behalf of the trustee that Mr Simion should seek a review of the order rather than appeal it. More importantly, it raised for the first time a submission that Mr Simion’s application was misconceived, on the ground that a creditor’s right to challenge remuneration arose under the Insolvency Rules only if he sought to reduce the trustee’s remuneration. The trustee’s remuneration was then fixed at £5,050 and Mr Simion was not seeking to reduce that figure.

15.

For reasons which will appear I have not heard argument on that point. Given the trustee’s approach to the hearing on 9 March 2006, as I have recorded, it was a surprising change of tack. Given in part that Mr Simion was acting in person, it was a point which should have been brought to the District Judge’s attention on 9 March. If well founded, and on the face of it appears to be a substantial point, it meant that the appeal would be dealt with without any further progress on the trustee’s remuneration. This might well also be true even if the point was not good; the only order under appeal was the dismissal of Mr Simion’s application to fix the trustee’s remuneration at £8,323.50 and, if the appeal failed, the trustee’s remuneration would still have to be fixed.

16.

In my judgment, the trustee had taken the wrong course in obtaining a stay of his application to fix his remuneration. The right course would have been for both applications to be listed and heard together, which would have resulted in finality on his remuneration, subject only to any appeal.

17.

There was a further difficulty. Even though the trustee had in March 2006 treated the hearing before the District Judge as one to fix his remuneration, the District Judge had not been referred to the Practice Statement which governs such applications, The Fixing and Approval of the Remuneration of Appointees (15 July 2004), to which clearly he should have been referred.

18.

In the case of this estate, involving modest amounts, it seemed to me wholly disproportionate just to deal with Mr Simion’s appeal and then, if the appeal failed, leave the trustee to incur yet further costs and take up yet more court time in reviving his application to fix his remuneration.

19.

Accordingly, with the consent of the parties, I ordered the transfer of the bankruptcy to the High Court for the purpose of dealing with the trustee’s remuneration, lifted the stay on the trustee’s application, and directed that it be heard immediately. I heard submissions from counsel for the parties both on the principle as to whether his remuneration should be fixed with any reference to the time spent by him and as to the quantum of the remuneration which he seeks.

20.

The Insolvency Rules do not in terms specify criteria to which the court should have regard when considering applications under Rule 6.141 or 6.142 but, like Ferris J in Mirror Group Newspapers Ltd v Maxwell [1998] BCC 324 at 335-336, I think it inevitable that the court should have regard to the factors listed in Rule 6.138(4).

21.

Further guidance to the court is provided by the Practice Statement. As stated in paragraph 3.2, it has as its objective:

“to ensure that the remuneration of an appointee which is fixed and approved by the court is fair, reasonable and commensurate with the nature and extent of the work properly undertaken by the appointee in any given case and is fixed and approved by reference to a process which is consistent and predictable.”

Paragraph 3.3 states:

“Set out below are the guiding principles by reference to which applications for the fixing and approval of the remuneration of appointees are to be considered both by applicants, in the preparation and presentation of their application, and by the court which is required to determine such applications.”

Paragraph 3.4 sets out guiding principles to which I will refer.

22.

Applications to fix remuneration will usually be heard by a registrar or district judge (para 4.1) but, in view of the circumstances of this case to which I have referred, I thought it right to hear the trustee’s application myself. Paragraph 4.2 enables the Court to direct a report to the court by an assessor or costs judge and Mrs McKenzie-Smith for Mr Simion suggested that this would be an appropriate course. However, paragraphs 4.3 and 4.4 make clear that in the usual course these applications should not require such a report and it was not in my view a necessary or appropriate direction in this case.

23.

The guiding principles in paragraph 3.4 of the Practice Statement relevant to this application are as follows:

“(1) “Justification”: It is for the appointee who seeks to be remunerated at a particular level and/or in a particular manner to justify his claim and in order to do so the appointee should be prepared to provide full particulars of the basis for and the nature of his claim for remuneration.

(2) “The benefit of the doubt”: The corollary of guiding principle (1) is that on any application for the fixing and approval of the remuneration of an appointee, if after considering the evidence before it and after having regard to the guiding principles (in particular guiding principle (3)), the matters contained in paragraph 5.2 (in particular paragraph 5.2(10)) and the matters referred to in paragraph 5.3 (as appropriate) there remains any element of doubt as to the appropriateness, fairness or reasonableness of the amount sought to be fixed and approved (whether arising from a lack of particularity as to the basis for and the nature of the appointee’s claim to remuneration or otherwise) such element of doubt should be resolved by the court against the appointee.

(3) “Professional integrity”: The court should give weight to the fact that the appointee is a member of a regulated profession (where such is the case) and as such is subject to rules and guidance as to professional conduct and (where such is the case) the fact that the appointee is an officer of the court.

(4) “The value of the service rendered”: the remuneration of an appointee should reflect and should be fixed and approved so as to reward the value of the service rendered by the appointee, not simply to reimburse the appointee in respect of time expended and cost incurred.

(5) “Fair and reasonable”: the amount of the remuneration to be fixed and approved by the court should be fair and reasonable and represent fair and reasonable remuneration for the work properly undertaken or to be undertaken.

(6) “Proportionality”:

(i) “proportionality of information”…

(ii) “proportionality of remuneration”: the amount of remuneration to be fixed and approved by the court should be proportional to the nature, complexity and extent of the work to be completed (where the application relates to future remuneration) or that has been completed by the appointee and the value and nature of the assets and/or potential assets and the liabilities and/or potential liabilities with which the appointee will have to deal or has had to deal, the nature and degree of the responsibility to which the appointee has been subject in any given case, the nature and extent of the risk (if any) assumed by the appointee and the efficiency (in respect of both time and cost) with which the appointee has completed the work undertaken;”

24.

In support of her submission that time costs should play little or no part in fixing the trustee’s remuneration in this case, Counsel for Mr Simion referred in particular to the guiding principles in paragraphs 3.4(4) and 3.4(6)(ii), but they must be read with the other guiding principles, in particular paragraphs 3.4(3) and (5).

25.

In approaching the quantum of the trustee’s costs, one can readily sympathise with Mr Simion’s concern that the total realisation proceeds of £43,000, arising from the sale of a single asset, are consumed in costs and remuneration. However, it must be remembered that the trustee is under statutory duties, both as regards standard acts such as communicating with creditors, convening meetings, preparing accounts and so on and as regards the substantial acts of investigating the bankrupt’s assets, taking control of the assets and taking all steps necessary for their realisation. The trustee has no choice as to whether to perform these duties. It is likely that the smaller the estate, the larger will be the proportion expended in disbursements and remuneration.

26.

Although the present case involved only a few creditors and only one asset of any value, it would not in my view be right to describe it as entirely straightforward. The nature of the asset, a boat, raised problems of securing and insuring the asset, and repairing and marketing it, which were not run of the mill. The fact that Mr Bradley insisted on possession proceedings being taken against him, and the fact that Mr Simion had warned the trustee that Mr Bradley was untrustworthy, added to the tasks and responsibilities of the trustee. The complexities must not however be overstated. Mr Bradley did not resist the possession proceedings and the trustee’s activities were primarily directed to dealing with the one valuable asset. Looking overall at the responsibility of the trustee in this case, it would not in my judgment be right to confine him to the sum of £5,050, calculated by applying the scale fees to the proceeds of sale of the boat. Nor has Mr Simion sought to do so. His application was to seek to limit the trustee’s remuneration to £8,323.50 for the reasons given in his witness statement of 19 January 2006.

27.

The task for the court is to arrive at a level or remuneration which balances the various criteria of the value of the service rendered, the proportionality of remuneration and a fair and reasonable remuneration for the work properly undertaken, as these criteria are explained in the Practice Statement. The result must resolve the conflict which may in a particular case exist between these criteria. The conflict is likely to be the more acute in cases such as the present where substantial costs have been incurred in relation to a relatively small estate.

28.

It is necessary to turn to the details of the remuneration sought by the trustee. These have been set out in two principal schedules, a time and cost summary, broken down by reference to different main and subordinate categories, and a narrative ledger. There are inconsistencies between them, with some items wrongly categorised in the time and cost summary. There are some items in the summary which are simply wrong. For example, sums are included for dealing with floating charge assets and with a liquidation committee, when in fact there were no secured assets and no committee. I have found it more helpful to focus on the narrative ledger.

29.

The trustee’s evidence shows that as well as the trustee himself, four members of staff were involved in this bankruptcy. They were principally Andrew Dix, a manager and qualified insolvency practitioner, who worked on the case until 2004 when his role was taken over by Henry Nixon, an unqualified manager. The great bulk of the work was done by Mr Nixon, with some work undertaken by Mr Brown and administrative work undertaken by an administrator and an assistant administrator. The hourly charge-out rates were: Mr Brown £250, Mr Dix £180, Mr Nixon £130, the administrator £90 and the assistant administrator £75. There was expressly no challenge on behalf of Mr Simion to these rates. The subjects of challenge related to some of the items of work, the time taken and the grade of person undertaking the work.

30.

Counsel for Mr Simion made her submissions by reference to certain categories of work and also by reference to many of the individual items of work, suggesting they were unnecessary, had taken too long or were undertaken at too senior a level.

31.

First, as a general point, it was pointed out that the bulk of the necessary work in securing and obtaining possession of the boat, and then repairing and marketing it, was undertaken by solicitors and agents instructed by the trustee. It was submitted that only a small amount should be allowed to the trustee to monitor their work. Plainly duplication had to be avoided but equally, in my view, the trustee needed to know what the solicitors and agents were doing and he was, no doubt, required to give instructions from time to time. I have reviewed the items included for liaising with the solicitor instructed in the possession proceedings (£630) and with the boat agents (£1,385) and I am satisfied that they are justified.

32.

Secondly, arranging insurance of the boat results in a charge for remuneration of approximately £2,740 based on 15.5 hours work by Mr Dix. Clearly arranging insurance for the boat, involving completion, as I was told, of a lengthy proposal form and an assessment of its state of repair, is not as straightforward as arranging ordinary car or house insurance. This is nonetheless a large item for a policy issued at a premium of £800. I do not feel satisfied, having regard to the guiding principles of “justification” and “the value of the service rendered” in paragraph 3.4(1) and (4) of the Practice Statement, that anything like the entirety of this figure can stand. I would allow a sum of £1,200 for this.

33.

Thirdly, there are a number of items from 11 March 2004 which involved telephone calls or other communication with Mr Anthony Bloom, who acted for Mr Simion on the bankruptcy petition and for the trustees in the possession proceedings against Mr Bradley. Uncertainty as to Mr Bloom’s status after 4 March 2004 was largely cleared up by a letter from him obtained during the hearing. He stated that he acted for the trustees solely in relation to obtaining and executing the possession order and that:

“After the boat was taken into possession and being marketed I did raise an occasional enquiry with Mr. Brown as to progress regarding the sale of the vessel. These would have amounted to probably about five or six communications in which I asked for an update in relation to the distribution of the estate and the likely dividend so that the information could be passed on to Mr. Simion.”

34.

Possession of the boat was obtained on 4 March 2004. There are 11 items involving communication with Mr Bloom between 11 March 2004 and 6 January 2005, ten of which involved Mr Dix or Mr Nixon and the remaining one involved Mr Brown. The total time taken is recorded at 9.25 hours with a total cost of about £1,600. Looking at the dates recorded in the trustee’s narrative ledger, there is a pattern of communications at the rate of approximately one per month (not, as the trustee stated in his comments on his time and cost summary, on a weekly basis). Since Mr Bloom would be paid his own fees under the conditional fee agreement only once the boat was sold, he had his own interest in being kept up to date with progress, in addition to reporting to Mr Simion. Mr Simion’s own evidence through his solicitor is that he may have contacted Mr Bloom once or twice to ask when he was likely to receive a distribution. The trustee is entitled to charge for answering Mr Bloom’s requests, whether made for himself or for Mr Simion, but I am certainly not satisfied that this required 9.25 hours’ chargeable time at a total cost of just over £1,600. It is hard to see that more than 15-20 minutes per call could be required or justified. Mr Dix or Mr Nixon were quite capable of giving the information. I consider that a total of £545 should be allowed for 11 calls of 20 minutes each, comprising 4 by Mr Dix and 7 by Mr Nixon at their respective charge-out rates.

35.

Fourthly, a sum of £1,710 was charged for 9.5 hours of Mr Dix’s time in attending at the execution of the possession order on 4 March 2004. It is very difficult to see why he should have attended. I was told on instructions that he understood that he was required by the court order to be present. I have not seen the order but this seems highly unlikely. Once there, he remained at Mr Bloom’s request because of concern that Mr Bradley might try to regain possession. In my view, there is a lack of effective planning. It was unnecessary for Mr Dix to attend and if there were concerns about Mr Bradley’s possible actions some security could have been arranged at far less cost. Making some allowance for this, I will reduce this item by £1,450 to £260.

36.

Fifthly, there are a number of items in 2005 relating to the trustee’s costs and remuneration. Mr Nixon spent 7.75 hours at a total cost of £1,007 on the calculation of the time costs. Mr Brown spent 2.25 hours at a cost of £562.50 in February 2005 on his final report and time costs and a total of 10 hours at a cost of £2,500 on reviewing timesheets and costs in May and July 2005. In addition, Mr Brown spent 4.75 hours at a cost of £1,187.50 dealing with a one-page letter from Mr Simion concerning his remuneration. I find it very difficult to accept that with an efficient time recording system, it was necessary for as much time to have been spent in total on these tasks. A total of £5,257, about a quarter of the total remuneration claimed, was therefore incurred in preparing and reviewing time costs and dealing with Mr Simion’s letter. Expenditure on this scale was, in my judgment, grossly disproportionate. I would reduce the total of these items from £5,257 to £1,650, even then a high figure, comprising five hours of Mr Nixon’s time and four hours of Mr Brown’s time.

37.

Sixthly, there are a number of administrative tasks charged at a total cost of about £550 which are said by Mr Simion to be overheads and therefore not recoverable as separate items. Paragraph 5.2(7)(ii) of the Practice Statement requires more general explanation than has been provided by the trustee, but I am prepared to accept that these items have not been indirectly charged for as part of the rates for other work.

38.

Many other individual items in the trustee’s narrative schedule have been the subject of objection, either as regards the item at all or more frequently as to the time taken or the seniority of the individual engaged. I have looked at each of these items. Some of them appear to be justifiable on their face. Others appear to be on the high side but taking account of the guiding principle of professional integrity, I am satisfied that none of them should be rejected or reduced as unnecessary or unreasonable.

39.

Accordingly, taking account of all the matters discussed above, I fix the trustee’s remuneration at £13,613.50. I dismiss Mr Simion’s appeal, save as to the order for costs, although this is somewhat technical because, as I explained earlier, the real issue which the trustee should have ensured was before the court was his application to fix his remuneration. I will hear submissions from counsel as regards the costs of Mr Simion’s application before the District Judge, as well as the costs of the present hearing.

Simion v Brown

[2007] EWHC 511 (Ch)

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