Ashmark Ltd v Allied Irish Banks Plc

• Jurisdiction: Ireland
• Judge: Mr. Justice Lardner
• Judgment Date: 01 January 1994
• Neutral Citation: 1993 WJSC-HC 2964
• Court: High Court
• Date: 01 January 1994
• Docket Number: [1988 No.,No. 6557p/1988

1993 WJSC-HC 2964

THE HIGH COURT

No. 6557p/1988

ASHMARK LTD v. AIB

IN THE MATTER OF ASHMARK LIMITED (IN LIQUIDATION AND

IN RECEIVERSHIP)

AND IN THE MATTER OF THE COMPANIES ACTS 1963 TO 1986

ON THE APPLICATION OF RAY JACKSON, OFFICIAL LIQUIDATOR, ASHMARK LIMITED

APPLICANT

AND

ALLIED IRISH BANKS PLC

RESPONDENT

Citations:

COMPANIES ACT 1963 S214(a)

COMPANIES ACT 1963 S210(2)

COMPANIES ACT 1963 S218

FOLEY V HILL 1848 2 HL CAS 28

HALESOWEN V WESTMINSTER BANK 1970 3 AER 487

PAGET ON BANKING 10ED 171

Synopsis:

BANKER

Customer

Relationship - Nature - Account - Adjustment - Winding up of customer company - Adjustment made by banker after commencement of winding up - Whether a void disposition of company's property - (1988/6557 P - Lardner J. - 29/7/93) - [1994] 3 IR 460 - [1994] 1 ILRM 223

|Ashmark Ltd. v. Allied Irish Banks|

WINDING UP

Property

Disposition - Validity - Banker - Customer - Relationship - Nature - Banker's adjustment of company's account - Adjustment made after commencement of winding up - Whether banker effected a disposition of property of company - Companies Act, 1963, s. 218 - (1988/6557 P - Lardner J. - 29/7/93)- [1994] 3 IR 460 - [1994] 1 ILRM 223

|Ashmark Ltd. v. Allied Irish Banks|

WORDS AND PHRASES

"Disposition of the property"

Property - Disposition - Validity - Banker - Customer - Relationship - Nature - Banker's adjustment of company's account - Adjustment made after commencement of winding up - Whether banker effected a disposition of property of company - (1988/6557 P - Lardner J. - 29/7/93) [1994] 3 IR 460 - [1994] 1 ILRM 223

|Ashmark Ltd. v. Allied Irish Banks|

1 Judgment of Mr. Justice Lardner delivered the 29th of July 1993

2 Ashmark Limited (which I shall call "Ashmark") is a company which carried on business as a wholesale supplier of refrigerators, freezers and electric appliances and was the main distributor in Ireland for Zanussi electrical appliances. For two months prior to July 1988 a dispute having arisen between Ashmark and Zanussi, the latter company terminated its distribution agreement with Ashmark and served notice under Section 214(a) of the Companies Act 1963demanding payment of a very large debt. Following upon this, in June 1988, Ashmark instituted proceedings to restrain Zanussi from prosecuting winding-up proceedings and obtained an interim injunction. Then these two parties made a compromise whereby it was provided that Ashmark would cease to trade from 4th July 1988; that Zanussi would be entitled to present a petition to wind up Ashmark but would not advertise it for three months. I have been told that the purpose of the last term was to enable Ashmark to collect debts before the petition was advertised.

3 Ashmark ceased trading on 4th July 1988 and this was advertised in trade magazines. On 8th July Zanussi presented its petition. This petition was not advertised until October. And on 27th October 1988 an Order was made by the High Court to wind up Zanussi and the Applicant, Mr. Ray Jackson was appointed Liquidator. Under Section 210 (2) of the Companies Act 1963the winding up was deemed to commence on 8th July 1988.

4 Ashmark had at all material times maintained a current account with Allied Irish Banks at their branch at 61 South Richmond Street, Dublin and had the bank's sanction for an overdraft facility for £25,000. It is not in dispute that it was an implied term of the contract between the bank and Ashmark that in relation to the account interest would accrue on any overdraft on a daily basis to be compounded at half yearly rests which had occurred in Ashmark's case by interest being calculated and debited to the account on the 16th March and 16th September in each year. It was also undisputed that it was an implied term of the banker/customer contract that Ashmark would be liable for the usual bank fees charged in accordance with the custom of bankers.

5 It...