Ashcoin Ltd (in creditors voluntary liquidation) v Moriarty Holdings Ltd (No 2)

• Jurisdiction: Ireland
• Judge: Mr. Justice Hogan
• Judgment Date: 16 January 2013
• Neutral Citation: [2013] IEHC 8
• Court: High Court
• Docket Number: [2008 No. 2471 S]
• Date: 16 January 2013

[2013] IEHC 8

THE HIGH COURT

[No. 2471S/2008]

Ashcoin Ltd (in creditors voluntary liquidation) v Moriarty Holdings Ltd (No 2)

BETWEEN/

ASHCOIN LTD (IN CREDITORS' VOLUNTARY LIQUIDATION)

PLAINTIFF

AND

MORIARTY HOLDINGS LTD (No.2)

DEFENDANT

HENDERSON v HENDERSON 1843 3 HARE 100 67 ER 313 1843-60 AER 378

ASHCOIN LTD v MORIARTY HOLDINGS LTD UNREP HOGAN 31.7.2012 2012 IEHC 365

VANTIVE HOLDINGS & ORS, IN RE 2010 2 IR 118 2009 IESC 69

A (A) v MEDICAL COUNCIL 2003 4 IR 302 2004 1 ILRM 372 2003/1/49 2003 IESC 70

MCFARLANE v DPP 2008 4 IR 117 2008 IESC 7

JOHNSON v GORE WOOD & CO 2002 2 AC 1 2001 2 WLR 72 2001 1 AER 481

M (S) v IRELAND (NO 1) 2007 3 IR 283 2007 IESC 11

PRACTICE AND PROCEDURE

Abuse of process

Reconstitution of proceedings - Proceedings seeking recovery of share of proceeds of grant - Prior application pursuant to debenture - Reconstituted proceedings pursuant to invoice discounting agreement - Objection to reconstitution of proceedings - Alleged abuse of process - Application of rule in Henderson v Henderson - Objects of rule - Absence of adjudication of underlying merits of claim - Motives of plaintiff - Henderson v Henderson (1843) 3 Hare 100; Ashcoin Ltd v Moriarty Holdings Ltd [2012] IEHC 365, (Unrep, Hogan J, 31/7/2012); Re Vantive Holdings [2009] IESC 69, [2012] 2 IR 118; AA v Medical Council [2003] IESC 70, [2003] 4 IR 302; McFarlane v Director of Public Prosecutions [2008] IESC 7, [2008] 4 IR 117; Johnson v Gore Wood & Co [2002] 2 AC 1 and SM v Ireland (No 1) [2007] IESC 11, [2007] 3 IR 283 considered - Finding that reconstitution of proceedings not barred (2008/2471S - Hogan J - 16/1/2013) [2013] IEHC 8

Ashcoin Ltd v Moriarty Holdings Ltd

Facts: The receiver of the plaintiff sought to recover proceeds relating to a shared grant in respect of housing development in County Dublin. In an earlier hearing (see [2012] IEHC 365), the Court had held that the sums claimed were a book debt and therefore not recoverable on the standing of the debenture under which the receiver was appointed. The receiver"s application to reconstitute the proceedings was challenged by the defendant on the basis they were an abuse of process and contrary to the rule in Henderson v Henderson (1843) 3 Hare 100.

Held by Hogan J, that the rule in Henderson v Henderson was capable of applying to the present proceedings. However, a number of factors suggested that the rule should not apply. Firstly, to blindly apply the rule might lead to preventing logical and reasonable amendments to pleadings. Secondly, the application to reconstitute proceedings was a procedural matter and did not concern substantive matters. Finally, the plaintiff"s motives in the case could not be said to be unreasonable, and they had already been punished by the award of costs against them in the first hearing. The application to reconstitute would therefore be granted. Henderson v Henderson (1843) 3 Hare 100 considered.

1 1. Does the special feature of the general abuse of process jurisdiction known as the rule in Henderson v. Henderson (1843) 3 Hare 100 apply where it has proved necessary to reconstitute proceedings? That, in essence, is the issue which now arises for consideration, given that the receiver of the plaintiff company ("Ashcoin") now accepts that the debenture instrument on which he originally moved the court was insufficient for this purpose. The issue arises in the following way.

2 2. In these proceedings the receiver of Ashcoin seeks to recover on its behalf what it contends is its share of the proceeds of a grant which Sustainable Energy Ireland agreed to make in April 2007 to the defendant ("Moriarty Holdings") in respect of a housing development at Spicers Mill, Balbriggan, Co. Dublin. As Ashcoin had provided engineering solutions for these heat efficient dwellings, it is contended that Moriarty Holdings agreed in June, 2007 to share the proceeds of that grant with it on an equal basis. A grant of some €328,500 was paid by Sustainable Energy Ireland in June 2008, but the relevant moiety allegedly payable to Ashcoin remains in dispute and has not been paid.

3 3. When the matter originally came before me (Ashcoin Ltd. v. Moriarty Holdings Ltd. [2012] IEHC 365), the receiver sued pursuant to a debenture which had charged all debts of Ashcoin (other than book debts) in favour of Ulster Bank Commercial Services Ltd. as well as creating a first floating charge over the property and assets of the company. On 20 ^th June, 2008, the debenture holder had appointed Mr. Kieran Wallace as receiver over the assets of the company.

4 4. In Ashcoin (No. 1) Mr. Wallace now maintained these proceedings against Moriarty Holdings in that capacity as receiver. Moriarty Holdings disputed his entitlement to do so on the grounds that if any monies are in fact due to Ashcoin, they would constitute a book debt within the meaning of the December, 2007 debenture and that Mr. Wallace accordingly had no standing to maintain these proceedings, since book debts were expressly excluded from the scope of the debenture from which Mr. Wallace derived his authority. In my judgment in Ashcoin (No.l) I agreed that any such proceeds would so constitute a book debt, so that the action was not maintainable in its present form.

5 5. In arriving at that conclusion, I deliberately refrained from expressing any view in relation to any issues which might arise were the proceedings to be reconstituted. Whereas Mr. Wallace's standing to act had...