Liquidators’ Costs In A Preference Claim

Keywords: QQ Club, liquidator, costs, avoidance claim

In The Joint and Several Liquidators of QQ Club Limited (in liquidation) v. Golden Year Limited (HCCW 245/2011, 9 April 2013) (QQ Club), the Court of First Instance held that a liquidator's costs in pursuing an avoidance claim are "fees and expenses properly incurred in preserving, realizing or getting in the assets", and are payable out of the company's assets in priority to all other payments prescribed in rule 179 of the Companies (Winding-up) Rules. In reaching this conclusion, the court distinguished the English Court of Appeal's decision in Lewis v. Commissioner of Inland Revenue and others [2001] 3 All ER 499 (Lewis v. IRC), which has attracted a considerable amount of criticism in England.