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Jane Moir

PricewaterhouseCoopers has suffered another blow in its bid to recoup fees for the Peregrine Investments Holdings' liquidation.

 The Court of Appeal declined to interfere with Mrs Justice Doreen Le Pichon's refusal to pay more than about 33 per cent of the initial $76 million charged by the provisional liquidators.

 PricewaterhouseCoopers must now return to the judge to seek further payments for work done almost 18 months ago after Peregrine crashed and went into liquidation.

 It must also pay for the failed appeal after the court refused to grant costs.

 The appeal judges also ruled that Mrs Justice Le Pichon's order to appoint an independent expert to examine the fees was within her jurisdiction.

 However, it now seems unlikely a law-costs draftsman will be called in as requested by the judge amid concerns over relevant skills and expertise.

 Appeal judge Mr Justice Barry Mortimer dismissed PricewaterhouseCoopers' challenge 'without hesitation'.

 'Throughout, the judge has demonstrated a formidable grasp of the case and the principles which ought to be applied,' he added.

 PricewaterhouseCoopers had claimed in principle it should be paid at least 90 per cent of the $76 million charged between the date of appointment and the winding-up order.

 It was initially granted only 25 per cent, later increased to 33 per cent.

 The liquidator has received $69 million in fees. A payment of $57 million was made after the winding-up order.

 However, in May, Mrs Justice Le Pichon ordered that any overpayment would have to be rectified.

 PricewaterhouseCoopers partner David Hague defended the fees charged so far, saying: 'Let's not underestimate the scale of the whole thing. It has involved bringing people in on short notice, putting people in office not only in Hong Kong but various offices around the world.'  Scepticism had been voiced by Mrs Justice Le Pichon over the way fees were calculated.

 In particular, she referred to the possibility of overmanning and high billing hours.

 Mr Hague said: 'I don't think the number of people was excessive - there was a concern early on we didn't have enough people in place.

 'Clearly nobody has yet sat down with us and said 'what did you do, why did you do that, why did you have this number of people' . . . nobody has actually established what the manning problems were.'  Any expert appointed to scrutinise the fees would need relevant experience, the appeal court said.

 Mr Justice Simon Mayo said: 'In my view only an experienced professional in the field of insolvency practices would be able to make this assessment and give appropriate advice on them.'  Clifford Chance partner Mark Hyde concurred, saying the appointment of a law-costs draftsman was 'wholly novel'.

 'It was one of the reasons we felt quite justified in bringing the appeal.' 



PricewaterhouseCoopers suffers blow in Peregrine pay-out bid