Deep Purple was, and still is, a rock music band. Its members included Mr Gillan, Mr Glover and Mr Paice. In 2005, band members entered into an agreement with HEC Enterprises Limited (HEC) and Deep Purple (Overseas) Limited (DPO). Under that agreement, the parties agreed to form a new company named Purpletuity, to which various copyrights and other assets were to be transferred. In 2015, Mr Gillan, Mr Glover and Mr Paice commenced proceedings against HEC and DPO to enforce that agreement.
In 2016, HEC and DPO went into administration. Mr Gillan, Mr Glover and Mr Paice subsequently applied to continue the proceedings against HEC and DPO. In Gillan v HEC Enterprises Ltd, the Court held that Mr Gillan, Mr Glover and Mr Paice could continue the proceedings. The Court also considered the application of the Berkeley Applegate principle. The Berkeley Applegate principle provides that administrators will be entitled to the expenses of investigating and taking appropriate advice in respect of trust claims. However, the court held that the administrators were not entitled to any indemnity from the companies' trust assets to cover their remuneration, costs and expenses in these circumstances.
The Court distinguished the case from Berkeley Applegate primarily because much of the work done by the administrators was for the benefit of unsecured creditors of the companies, rather than the trust beneficiaries. The Court also considered that the administrators had wasted considerable time and expense opposing the application to continue the proceedings and that those costs would be covered by litigation cost principles, rather than the Berkeley Applegate principle. As such, the Court saw no reason for the trust assets to be used to indemnify the administrators.
See Court decision here.