Allied Irish Coal Supplies Ltd v Powell Duffryn Intl. Fuels Ltd

• Jurisdiction: Ireland
• Court: High Court
• Judge: Miss Justice Laffoy
• Judgment Date: 01 January 1997
• Neutral Citation: 1996 WJSC-HC 2670
• Docket Number: No. 5692P/1984
• Date: 01 January 1997

1996 WJSC-HC 2670

THE HIGH COURT

No. 5692P/1984

ALLIED IRISH COAL SUPPLIES LTD v. POWELL DUFFRYN INTERNATIONAL FUELS

BETWEEN

ALLIED IRISH COAL SUPPLIES LIMITED

PLAINTIFF

AND

POWELL DUFFRYN INTERNATIONAL FUELS LIMITED

DEFENDANT

Citations:

RSC O.15 r13

RSC O.15 r14

COURTNEY LAW OF PRIVATE COMPANIES (1994) PARA 4.041 – 4.046

POWER SUPERMARKETS LTD V CRUMLIN INVESTMENTS LTD UNREP COSTELLO 22.6.81 1981/11/2038

LIFF V PEASLEY 1980 1 AER 623

KETTEMAN V HANSEL PROPERTIES LTD 1987 AC 189

ADAMS V CAPE INDUSTRIES PLC 1992 2 WLR 657

REX PET FOODS LTD (IN RECEIVERSHIP) V LAMB BROS (IRL) LTD UNREP COSTELLO 5.12.85 1986/4/1391

WOOLFSON V STRATHCLYDE REGIONAL COUNCIL 1978 SC 90

SMITH STONE & KNIGHT LTD V BIRMINGHAM CORPORATION 1939 4 AER 116

DHN LTD V TOWER HAMLETS LONDON BOROUGH COUNCIL 1976 1 WLR 852

HAROLD HOLDSWORTH & CO LTD V CADDIES 1955 1 WLR 352

SCOTTISH CO-OPERATIVE WHOLESALE SOCIETY LTD V MEYER 1959 AC 324

SALOMON V SALOMON & CO LTD 1897 AC 22

STATUTE OF LIMITATIONS 1957

Synopsis:

PRACTICE

Parties

Addition - Necessity - Absence - Defendant - Company - Wholly-owned subsidiary of parent company - Plenary summons in 1984 claimed damages for breach of contract or warranty - Statement of claim delivered in 1990 - Motion in 1996 to add parent company as defendant - Allegation that defendant controlled entirely by parent - Claim that both companies were a single economic unit - No cause of action against parent revealed - Motion dismissed - Rules of the Superior Courts, 1986 (S.I. No. 15), order 15, r. 13 - (1984/5692 P - Laffoy J. - 19/7/96) [1998] 2 IR 519 - [1997] 1 ILRM 306

|Allied Irish Coal Supplies Ltd. v. Powell Duffryn International

Fuels Ltd.|

1 Miss Justice Laffoy delivered on the 19th day of July, 1996.

2 This is the Plaintiff's application for an Order joining Powell Duffryn Public Limited Company, which for the sake of brevity I will call "the PLC", as a Defendant in these proceedings.

3 The factual background to the application is as follows:

4 (a) These proceedings were instituted by Plenary Summons issued by the Plaintiff on 20th July, 1984 in which the Plaintiff claimed damages against the Defendant for breach of contract and/or breach of warranty.

5 (b) A Statement of Claim was not delivered in the proceedings until 2nd January, 1990. In the Statement of Claim the Plaintiff alleged that the Defendant was in breach of a commercial contract to supply industrial coal of agreed specification to the Plaintiff and claimed damages, including exemplary damages, for breach of contract and for fraudulent or, alternatively, negligent misrepresentation.

6 (c) This application is brought by motion on notice to the Defendant on foot of a Notice of Motion dated 12th January, 1996.

7 (d) The application is grounded on an Affidavit sworn by Edward Braham Henry Sutton sworn on 17th January, 1996 in which Mr. Sutton averred that the Defendant is a wholly owned subsidiary of the PLC. Mr. Sutton referred to an Affidavit sworn by David Wesley-Rogers in a related Discovery Motion brought by the Plaintiff, in which Mr. Wesley-Rogers averred that the Defendant was not financially or otherwise independent of the PLC, but operated essentially as a department of the PLC and not as any separate entity either as regards control, finance or operations, that the Defendant operated from various premises in other parts of the world using both the staff and premises of the PLC, that the Defendant was run merely as a department of the PLC and not as an independent or stand-alone entity in any respect, and that everything of any significance which the Defendant did had to have the prior authorisation of the PLC including, in particular, such matters as the proposed and actual dealing with the Plaintiff. Mr. Sutton further deposed that Mr. Wesley-Rogers" averments confirmed representations concerning the Defendant and its substance by reason of its relationship with the PLC, which had been made to Mr. Sutton and to prospective customers of the Plaintiff by Thomas Brassey, a Director of the Defendant, before these proceedings were commenced. Mr. Sutton then stated his belief that the business of the Defendant is the business of the PLC and that the Defendant is financially dependent on the PLC and that it does not have substantial financial resources of its own. Finally, Mr. Sutton referred to the matter which precipitated this application: he became aware in late 1995 that the PLC was in the process of selling off the Defendant and he was deeply apprehensive that moves were afoot to distance the Defendant from the PLC.

8 (e) In a replying Affidavit sworn on 22nd February, 1996, Simon Varley, a Director of the Defendant, averred that the PLC now has in excess of 25 subsidiary companies and a number of associated companies which together form the Powell Duffryn Group, which is an industrial group with interests in distribution and specialist engineering serving primarily the transport and energy markets. It is directed from a small headquarters in Berkshire and its business is managed by the subsidiary and associated companies, which operate with decentralised responsibility. The Defendant is one of the subsidiary companies of the PLC, which is involved in the international coal trade and is part of the distribution division. The Defendant operates from Hertfordshire and is an independent legal entity, which reports only to the parent on a financial basis, and it functions as a separate legal and corporate entity with its own board, preparing its own annual accounts in the usual way. Mr. Varley further averred that he had been informed by the Chief Executive of the PLC that it was not at the time selling nor did it have any present plan to sell off its shares in the Defendant, although negotiations had been ongoing since June 1995 for the sale of some of the assets of the Defendant.

9 (f) A further Affidavit was sworn by Mr. Sutton on 24th April, 1996 in which he exhibited the following documents:

10 (i) A press release from Celtic Energy in which it was stated that Celtic Energy had entered into an agreement with the PLC to assume the operations of its trading subsidiary, the Defendant.

11 (ii) Companies Office copies of the directors" report and accounts of the Defendant for the years ended 31st March, 1994 and 31st March, 1995.

12 (iii) Companies Office copies of the annual report and accounts of the PLC for the same years.

13 (iv) Certain documents discovered by the Defendant in these proceedings.

14 (g) The Defendant and the PLC are each incorporated in accordance with the laws of England and Wales.

15 This Court's jurisdiction...