Ashcoin Ltd v Moriarty Holdings Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Hogan
• Judgment Date: 31 July 2012
• Neutral Citation: [2012] IEHC 365
• Court: High Court
• Date: 31 July 2012

[2012] IEHC 365

THE HIGH COURT

[No. 2471 S/2008]

Ashcoin Ltd (in creditors voluntary liquidation) v Moriarty Holdings Ltd

BETWEEN/

ASHCOIN LTD. (IN CREDITORS VOLUNTARY LIQUIDATION)

PLAINTIFF

AND

MORIARTY HOLDINGS LTD.

DEFENDANT

RSC O.25 r1

RESPONSE ENGINEERING LTD v CAHERCONLISH TREATMENT PLANT LTD 2011 IEHC 345 2012 2 ILRM 67

INDEPENDENT AUTOMATIC SALES LTD v KNOWLES & FOSTER 1962 3 AER 27

COMPANY LAW

Receivership

Preliminary issue of law - Grant payment in respect of housing development - Debt - Debenture - Agreed moiety payable for provision of engineering solutions for heat efficient dwellings - Receiver maintained proceedings - Application brought by receiver - Standing - Definition of âÇÿbook debts' - Book debts fell outside scope of debenture pursuant to which receiver appointed - Whether proceedings properly constituted - Whether proceeds of grant from statutory agency capable of amounting to book debt within meaning of particular debenture - Whether monies claimed related to trading activities - Response Engineering Ltd v Caherconlish Treatment Plant Ltd [2011] IEHC 345, [2012] 2 ILRM 67 and Independent Automatic Sales Ltd v Knowles & Foster [1962] 3 All ER 27 considered - Rules of the Superior Courts 1986 (SI 15/1986), O 25, r 1 - Proceedings dismissed (2008/2471S - Hogan J - 31/7/2012) [2012] IEHC 365

Ashcoin Limited v Moriarty Holdings Limited

Facts: The defendant had received a grant from Sustainable Energy Ireland in relation to a housing development in Dublin. The plaintiff contended it was entitled to a share in the proceeds of that grant, which led to a dispute between the parties.

A receiver was appointed to manage the assets of the plaintiff pursuant to a debenture agreed with Ulster Bank. Amongst the terms of that denture, a clause was agreed charging all debts of the plaintiff other than book debts to Ulster Bank. The defendant now claimed the sums claimed by the plaintiff in respect of the grant constituted a book debt, and accordingly the receiver had no standing to pursue the matter.

Held by Hogan J, that the preliminary issue in the matter was whether the sums claimed constituted a book debt for the purposes of the Ulster Bank debenture. Assuming the plaintiff could demonstrate it had a good claim to the sums, the Court considered the meaning of the term "book debts". Given the nature of the sums owed, they clearly fell under the definition of a book debt and as such the proceedings as currently formulated could not be continued. Response Engineering Ltd v Caherconlish Treatment Plant Ltd [2012] 2 ILRM 67 referred to.

1 1. Are the proceeds of a grant from a statutory agency capable of amounting to a book debt within the meaning of a particular debenture? This, essentially is the issue which the parties have agreed should be determined as a preliminary issue of law pursuant to O. 25, r. 1 RSC. The issue arises in this way.

2 2. In April 2007, Sustainable Energy Ireland agreed to make a grant payment to the defendant ("Moriarty Holdings") in respect of a housing development at Spicers Mill, Balbriggan, Co. Dublin. As the plaintiff company ("Ashcoin") had provided engineering solutions for 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 to Moriarty Holdings by Sustainable Energy Ireland in June 2008, but the relevant moiety allegedly payable to Ashcoin...