A SMALL group of clients of Dublin firm Custom House Capital have won a court victory against the company’s liquidator, stopping him from deducting thousands of euro in fees from their accounts.

Kieran Wallace, of accountancy firm KPMG, had sought to charge each client a fee of 0.5 per cent of the value of their equities and cash assets in the client accounts at the investment company for untangling the money trail to find out which equities and cash amounts belonged to each client.

Ms Justice Mary Finlay Geoghegan said in a judgment that this reconciliation process was “a reasonable and appropriate step” for Mr Wallace to have taken prior to transferring and distributing equities and segregated cash accounts but that his fees should be paid from the firm’s cash balances first. The judge said the company had cash of about €400,000 on its balance sheet.

The liquidator must prove that “the assets of CHC have been exhausted before the court has jurisdiction to make an order in his favour that he may have recourse to client funds”. “On the evidence before the court at present, it could not so hold,” said Ms Justice Finlay Geoghegan.

She refused the orders sought permitting the liquidator to deduct any sum from the funds of nine dissenting clients in respect of his remuneration and fees, costs and expenses for work carried out in segregating client assets.

Mr Wallace was appointed liquidator a year ago after two Central Bank inspectors found “systemic and deliberate misuse” of more than €56 million of clients’ funds in what was described last year by a High Court judge, Mr Justice Gerard Hogan, as “a sort of Irish Ponzi scheme”.

The money had been used by the firm, which was run by managing director Harry Cassidy, to cover losses and shortfalls on European property investments without the approval of clients.

The liquidator had carried out a reconciliation on the accounts of 678 clients who had investments in equities and separate cash accounts and had sought fees from 350. Mr Wallace had proposed charging €225,000. He received responses from 172 clients making payments of €185,176 to him.