Bayworld Invesments v McMahon
| Jurisdiction | Ireland |
| Judge | Mr Justice McCracken |
| Judgment Date | 13 July 2004 |
| Neutral Citation | [2004] IESC 39 |
| Court | Supreme Court |
| Docket Number | [2003 No. 91 SP and S.C. No. 260 of 2003] |
| Date | 13 July 2004 |
Between:
AND
[2004] IESC 39
Denham J
Murray J
McCracken J
THE SUPREME COURT
Synopsis:
- [2004] 2 IR 213
Facts: The defendant solicitors acted as solicitors in various transactions carried out by the plaintiff both as trustee and for other partnerships. The plaintiff purported to appoint Ivor Fitzpatrick & Co. to be its solicitors. The plaintiff initiated proceedings by way of special summons claiming an order that the defendant solicitors deliver up all documents pertaining to the plaintiff. Smyth J. made the order. The defendants appealed. By notice of motion to the Supreme Court the defendants also sought to adduce additional evidence relating to whether a partner in the defendant solicitors was a director of the plaintiff.
Held by the Supreme Court (Denham, Murray and McCracken JJ) in dismissing the appeal and refusing the motion to adduce additional evidence that the plaintiff was entitled to inspect the originals of all documents relating to transactions carried out on its behalf which were in the hands of the defendants and was entitled to copies of all such documents. A bare trustee was entitled to copies of all documents created by its own solicitor relating to transactions carried out in its name by that solicitor.
Reporter: R.W.
Citations:
RSC O.3 r19
RSC O.38 r3
RSC O.38 r9
COMPANIES ACT 1990 S150
COMPANIES ACT 1990 S160(2)
EX PARTE COBELDICK 1883 12 QB 149
Judgment of Mr Justice McCracken delivered the 13th day of July 2004
The plaintiff respondent (hereinafter called "Bayworld") was incorporated on 3 rd May 1996 as a limited liability company. The issued share capital was held in equal shares by Sean Cox. Kevin Fitzpatrick and Paul O'Brien, who were also appointed as directors. Paul O'Brien is and was at all material times a partner in the defendants appellants. Bayworld was originally incorporated for the purpose of holding land on trust for a partnership between Sean Cox. Kevin Fitzpatrick and Paul O'Brien, which became known as the "Cullenagh Partnership". McMahon O'Brien Downes (hereinafter called "the appellants") are a firm of solicitors practicing in Limerick. The legal status of the appellants in regard to their relationship with Bayworld is a matter at issue in these proceedings, but it is common case that the appellants at all times acted as solicitors in the various transactions carried out by Bayworld both as trustee for the Cullenagh Partnership and for other partnerships which subsequently came into being, and all of which would appear to have had Paul O'Brien as a partner. In most cases formal declarations of trust were executed by Bayworld in respect of lands which it held as trustee for the various partnerships.
In October 2000 Bayworld resolved that it be re-registered as an unlimited company and such registration duly took place. It is alleged by Bayworld that, prior to such re-registration, Paul O'Brien resigned as a director and shareholder of Bayworld, which is disputed by Paul O'Brien. The relevance of this dispute to this appeal will be dealt with later in the judgment.
One of the partnerships for which Bayworld subsequently acted for trustee was known as the "Cratloe Partnership". By a declaration of trust dated 1 st February 2000 and made between Bayworld of the one part and Sean Cox. Tomas Healy and Paul O'Brien of the other part, Bayworld acknowledged that it had entered into a contract to purchase certain lands on behalf of the Cratloe Partnership and would hold the legal estate to the said lands in trust for the members of the partnership as tenants in common in equal shares. By the same declaration of trust Bayworld was authorised to borrow up to £2 million to assist the finance of the purchase of such lands and to grant a mortgage to Ulster Bank Limited to secure such borrowing. Subsequently Sean Cox appears to have sold his interest in the Cratloe Partnership to the remaining partners, namely Paul O'Brien and Tomas Healy.
In December 2002 Bayworld purported to appoint Ivor Fitzpatrick & Co to be its solicitors. By letter dated 18 th December 2002 Ivor Fitzpatrick & Co wrote to the appellants in the following terms:-
"Re: Bayworld Investments (formerly Bayworld Investments Ltd)
Dear Sirs
We refer to the above company who has instructed this office to request you to immediately forward all of its files, title documents, the company seal and correspondence and any documents relating to its business to this office. In this regard, we enclose a copy letter of authority executed by directors of the company for your attention, the original of which is being hand delivered to your office.
The directors have also requested that you would please confirm in writing by return that your office and any partner, employee or agent thereof will not conduct any further business transactions on its behalf with immediate effect.
We will be obliged to receive this written confirmation by return and receipt of all files and documents within a period of two weeks.
We await hearing from you."
Enclosed with that letter was what was described as "letter of authority and instruction", authorising the appellants to forward all these documents and the company seal to Ivor Fitzpatrick & Co and directing the appellants not to carry out any transactions relating to Bayworld. This letter was signed by Sean Cox and Kevin Fitzpatrick as directors of Bayworld. It is alleged by Bayworld that at that time they were the only directors.
Correspondence then took place between Ivor Fitzpatrick & Co and O'Gradys Solicitors acting on behalf of the Cratloe Partnership, largely concerning the position of Paul O'Brien in relation to Bayworld, which it is not necessary to particularise in this judgment, except to say that, on a without prejudice basis, Paul O'Brien was invited to attend a meeting of the directors of Bayworld, but this invitation was declined. The appellants refused to accede to Bayworld's request for the documents and company seal and as a consequence these proceedings were issued on 20 th February 2003.
These proceedings were initiated were initiated by way of special summons claiming:-
2 "1 An order directing the defendants and each of them their servants and agents to release and deliver up to the plaintiff or such other person or persons as may be nominated by the plaintiff all files, title documents, books, records and correspondence pertaining to the plaintiff and its affairs, the corporate seal of the plaintiff and all other property of the plaintiff in the possession, custody or control of the defendants, their servants or agents.
2 In the alternative to the relief claimed at 1 above, an order directing the defendants and each of them their servants and agents to permit the plaintiff, its servants or agents to inspect and make copies of all files, title documents, books, records and correspondence pertaining to the plaintiff and its affairs in the possession, custody or control of the defendants, their servants or agents."
By order of Kelly J of 20 th February 2003, it was ordered that the summons should be returnable for 24 th February 2003 and directions as to service were given. A number of affidavits were then filed by both parties and by order of 9 th April 2003 of Kelly J the Court refused to join Tomas Healy as a defendant but ordered, in the absence of objection by the appellant, that Bayworld should be entitled to inspect and make copies of certain documents but not those relating to the Cratloe Partnership. By the same order the hearing of the special summons was fixed for 7 th May 2003.
Subsequently the appellants served notice to cross-examine Kevin Fitzpatick and Sean Cox, and Bayworld served notice to cross-examine Paul O'Brien. The matter ultimately came on for hearing before Smyth J, and the three deponents were cross-examined on their affidavits, and by order Smyth J dated 24 th June 2003 it was ordered:-
2 "1 That the defendants do deliver up to Messrs Ivor Fitzpatrick & Co Solicitors the corporate seal of the plaintiff and all other property of the plaintiff within their possession custody or control including all documents title documents books records and correspondence pertaining to the plaintiff and its affairs and prior to the handing over of such documents may make and retain copies thereof.
2 That the plaintiff shall not pledge or otherwise deal with any of the title documents referable to the...
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