Aston Colour Print Ltd and on the application of Declan Campion and Norman Blakely
Jurisdiction | Ireland |
Judgment Date | 21 February 1997 |
Date | 21 February 1997 |
Docket Number | [1997 No. 24 Cos] |
Court | High Court |
High Court
Company law - Directors - Board meeting - Informal meeting - Resolution - Examiner - Appointment - Petition for appointment of examiner - Whether board meeting had taken place - Whether resolution passed - Companies (Amendment) Act 1990 (No. 27), s. 3.
Under s. 3 of the Companies (Amendment) Act 1990 the right to present a petition for the appointment of an examiner is given to certain people including the directors. The company was in serious financial difficulties. A meeting had taken place which was attended by two of the directors of the company who were the petitioners. The other persons present were shareholders and the financial controller of the company. The evidence before the court was that meetings of this sort involving the attendance of the persons in question were a regular occurrence and were known as executive or management meetings. They were held on a weekly basis and discussed the day to day running of the company. No formal notices were issued convening such meetings. The options discussed to address the problems of the company included more investment, the appointment of a liquidator and the appointment of an examiner. The financial controller explained the differences in function between a liquidator and an examiner. There was a difference of opinion amongst those attending the meeting as to what was agreed. A petition was presented to the court seeking the appointment of an examiner to the company. One of the two petitioners indicated he was taking objection to the course which was being followed and filed an affidavit which controverted the averments that a board meeting had taken place and a resolution to seek the appointment of an examiner passed which had been placed before the court earlier.
Held by the High Court (Kelly J.), in striking out the petition and discharging the interim examiner, 1, that, pursuant to s. 3 of the Companies (Amendment) Act 1990, the right to present a petition to the court for the appointment of an examiner was given, amongst others, to the directors of the company.
2. That the meeting which purported to be a board meeting of the company could not be regarded as a board meeting in any real sense. While board meetings might be held on an informal basis, the directors must at least appreciate or have a basis for appreciating that they were attending such a meeting. The meeting in question did not describe itself as a board meeting, nor did it differ from other management or executive meetings, nor was it chaired by the chairman of the board.
3. That there was no formal resolution or vote taken at the meeting in question. The presentation of a petition to the court and the invocation of the jurisdiction of the courts under the Act of 1990 was a matter of some considerable solemnity and importance. A decision by the board of directors to take such a step must be made in a manner which makes the will of the board clear. The usual way to do that was by the proposal of a resolution and it being voted on.
There were no cases mentioned in this report.
Petition
The facts of the case have been summarised in the headnote and are more fully set out in the judgment of Kelly J., infra.
On the 5th February, 1997 the High Court (Shanley J.) made an order appointing an interim examiner. The petition was heard by the High Court (Kelly J.) on the 20th February 1997.
Cur. adv. vult.
Kelly J. | 21st February, 1997 |
On the 5th February, 1997, a petition was presented to this court in the names of Declan Campion, the first petitioner and Norman Blakely, the second petitioner seeking the appointment of an examiner to Aston Colour Print Limited (the company). On the same...
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