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16 July 2018

High Court hears significant case on the status of a solicitors equitable lien in respect of fees owed by an company in liquidation

In Candey v Crumpler, the High Court has to decide whether an English firm of solicitors which acted for a BVI company which was then placed into liquidation in the BVI can have a charge over sums recovered by the liquidators under section 73 of the Solicitors Act 1974 which charge takes precedence over other expenses.

The liquidators argue that the solicitors: have waived any right to rely on the equitable lien by having taken an express charge over the company’s property prior to the liquidation; have waived their right to rely on the equitable line by filing a proof of debt in the liquidation which omitted to mention the equitable lien or section 73; sought not to be allowed to rely on the lien having litigated over the nature of the fixed charge for 2 years without mentioning the lien at all. There is also an issue as to whether the exemption which allowed recovery of success fees between 1st April 2013 and 6th April 2016 applied to proceedings brought in England by BVI liquidators.

The court heard argument over 4 days last week and has reserved judgment.

David Holland QC acts for the liquidators.

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