Cawson: Evidence raises concerns
A judge has set aside his order for payment of a law firm’s administrator after new evidence raised “a sense of real unease and concern” about the decision.
While not prepared to make a definitive ruling on the conduct of Steven Wiseglass, His Honour Judge Cawson found “credible evidence” to support the suggestion that he acted “unfavourably leniently” towards the law firm’s owner “in a manner and to an extent that was not justified in the circumstances”.
Mr Wiseglass, director of Manchester-based Inquesta Ltd, was appointed administrator of MTA Personal Injury Solicitors in November 2021 but the creditors replaced him with Sean Bucknell and Andrew Hosking of Quantuma in January 2023.
MTA had closed after failing to find a buyer, with its files being distributed to five different firms by Recovery First. Mr Wiseglass had previously been the liquidator of four other companies owned by MTA founder Michael Taylor.
Mr Wiseglass had already made a remuneration application to the court, as the creditors had not agreed it. He sought a fixed fee of £40,000 in pre-administration costs and nearly £120,000 in fees as administrator (a £50,000 fixed fee plus £69,000, representing 35% of realisations to date).
In April 2023, HHJ Cawson reduced the claim to £30,000 and £60,000 respectively, after neither party was keen on his referring the matter to detailed assessment.
This was despite Mr Wiseglass not providing a proper breakdown sufficient to justify the fees claimed, in breach of paragraph 21.4.4 of the Insolvency Practice Direction.
Quantuma then applied to set aside the order in favour of an assessment after making new allegation that Mr Wiseglass had been too close to Mr Taylor, “either as a matter of fact or as a matter of reasonable perception, such that they considered that he should not have taken the appointment”.
HHJ Cawson found no reason to set aside the pre-appointment costs he had ordered. Even if Mr Wiseglass ought not to have taken the appointment – a point he was not prepared to decide, in part because it was only raised by Quantuma late in the day – “I do not consider that the familiarity threat issues raised have been shown to have been at risk of affecting the tasks performed by Mr Wiseglass pre-appointment”.
But he went on to express “very real concerns with regard to the evidence now before the court concerning what may or may not have been done by Mr Wiseglass, as administrator, in respect of investigating the affairs of LLP, and in particular investigating the extent to which Mr Taylor might have been indebted to LLP”.
He continued: “On this basis I feel bound to conclude that matters may not have been fairly and frankly disclosed to the court when I considered the position on 5 April 2023, and that the remuneration that I then found that Mr Wiseglass was entitled to cannot be properly justified, at least on the evidence presently before the court.”
The judge noted too “the somewhat deafening silence from Mr Wiseglass as to what, exactly, was done”.
He set aside that part of his order and directed that, if Mr Wiseglass wanted to pursue his claim, it should be subjected to a detailed assessment, and he should return the money to the administrators.
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