Bula Limited (In receivership) & ors -v- Crowley & ors, [2009] IESC 35 (2009)

Docket Number:262 & 314/05
Party Name:Bula Limited (In receivership) & ors, Crowley & ors
Judge:Denham J.
 
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THE SUPREME COURT

[Appeal No: 262 of 2005

and No: 314 of 2005]

Denham J.

Kearns J.

McGovern J.

Between/

Bula Limited (In receivership),

Bula Holdings,

Richard Wood and

Michael Wymes

Plaintiffs/Appellants

and

Laurence Crowley,

KPMG (A Firm)

Tara Mines Limited,

Outokumpu Oy,

Northern Bank Finance Corporation,

Ulster Investment Bank Limited,

Allied Irish Investment Bank Limited,

Navan Mining Public Limited Company

Defendants/Respondents

Judgment delivered the 3rd day of April, 2009 by Denham J.

1. This is an appeal by Bula Ltd. (in receivership), "Bula"; Bula Holdings, "Holdings"; Richard Wood, "Mr. Wood"; and Michael Wymes, "Mr. Wymes"; the plaintiffs/appellants, who are referred to collectively as "the appellants".

2. It is an appeal from the judgment of the High Court (Murphy J.) delivered on the 10th day of June, 2005.

3. The High Court had before it notices of motion: the notice of motion of the fifth, sixth and seventh named defendants, referred to as "the banks"; the notice of motion of Laurence Crowley

the first named defendant "the receiver"; the notice of motion of Tara Mines Limited, the third named defendant, and Outokumpu Oy, the fourth named defendant. The High Court noted the

attendance of the solicitor for the receiver of Navan Mining Public Company Limited (in receivership), who indicated to the Court that due to lack of funds in the receivership the receiver was

not taking any part in these proceedings save to indicate his support to the notices of motion.

4. The notice of motion, brought by the banks, sought:

(a) An order dismissing the proceedings as constituting an abuse of the process of the court.

(b) Further, or alternatively, an order pursuant to Order 19, rule 28 of the Rules of the Superior Courts dismissing the proceedings on the grounds that they are frivolous and vexatious and/or disclose no reasonable cause of action against the banks.

(c) An order restraining the appellants and each of them from instituting any further proceedings against the banks without the leave of the court.

5. The notice of motion brought by the receiver was in similar terms to that of the banks.

6. The notice of motion of the third and fourth named defendants sought an order dismissing the plaintiffs' action against the defendants pursuant to Order 27, rule 1 of the Rules of the Superior

Courts, further or in the alternative, an order pursuant to the inherent jurisdiction of the Court dismissing the appellants' action on the grounds:

(a) that the appellants' action constitutes a manifest abuse of the process of the Court,

(b) that the action discloses no reasonable cause of action against the second and third defendants or either of them,

(c) that the action is frivolous and vexatious, and that

(d) the appellants' claims against the defendant are res judicata.

7. Proceedings

These notices of motion were brought in response to proceedings instituted by the appellants, the plenary summons issued in August, 2003, referred to as "these proceedings". In these proceedings, in the general indorsement of claim on the plenary summons, the appellants claimed:

As against all the defendants:-

1. Damages for negligence

2. Damages for unlawful interference with the economic interests of the appellants and each of them.

As against the receiver:

3. Damages for breach of duty.

4. Damages for misrepresentation and/or negligent misstatements.

5. Damages for breach of contract.

6. A declaration that the receiver has purported to sell the property known as the Bula Mine at Nevinstown, Navan, County Meath in breach of duty.

7. A declaration that the receiver was and is prohibited from acting as receiver and manager.

8. An injunction restraining the receiver from dealing with the proceeds of the purported sale, pending the determination of these proceedings.

As against the second defendant:-

9. Damages for breach of contract.

10. Damages for misrepresentation and/or negligent misstatements.

As against the receiver and the third defendant:-

11. An Order setting aside the contract dated the 9th of May 2001 made between the receiver and Tara Mines Ltd.

12. An Order setting aside any conveyance between the receiver and Tara Mines Ltd pursuant to any purported completion of the contract dated 9th May 2001 between the receiver and Tara Mines Ltd.

13. An Order setting aside any conveyance to any purported completion of the contract.

As against Tara Mines Ltd:-

14. A declaration that Tara Mines Ltd has no good title to the property.

15. An injunction restraining Tara Mines Ltd. from exercising and/or asserting any rights as purchaser under the purported conveyance pending the determination of these proceedings.

16. An injunction directing that Tara Mines Ltd. refrain from entering onto, into or under, or extracting minerals from the property.

As against the fourth, fifth and sixth defendants:-

17. Damages for breach of duty and negligence.

As against the first, second, third, fourth, fifth, sixth, seventh and eighth defendants:-

18. Damages against the first, second, third, fourth, fifth, sixth, seventh and eighth defendants for unlawful interference with and obstruction of the course of justice.

As against the eighth defendant:-

19. A declaration that the eighth defendant had an interest in the security, pursuant to which the receiver purported to sell the property to the Tara Mines Ltd.

20. A declaration that the eighth defendant was an intended beneficiary pursuant to the contract between the receiver and Tara Mines Ltd. dated 9th May 2001.

21. An order directing that all necessary accounts and enquiries be taken.

22. Such further or other relief as to this Honourable Court shall seem fit.

23. Costs.

7. High Court Order

The High Court ordered that the proceedings be dismissed as constituting an abuse of the process of the Court. This order was made pursuant to the inherent jurisdiction of the Court. Also, it was ordered that the appellants and each of them be restrained from instituting any further proceedings against the receiver, Tara Mines Ltd., Outokumpu Oy, and the banks, without the prior leave of the High Court.

8. Appeal

The appellants have appealed against the order and judgment of the High Court, filing seventy grounds of appeal.

9. Submissions on behalf of the appellants

On the case opening in this Court, counsel for the appellants, Mr. Frank Callahan, S.C., limited the grounds of appeal. He submitted that he did not advance arguments to set aside the sale of the lands, or to set aside the judgment of this Court on the s.316 application. Counsel submitted that the essence of the appellants' case was that there was in the judgment of this Court in the s.316 application no determination on the merits of any of the matters that are the gravamen of these proceedings. Further, that the merits could not have been determined under the s.316 application. He submitted that the only proceedings which could ground a finding that the case was an abuse of process was the s.316 application and judgment of this Court. Therefore, he submitted that, the primary legal issue on the appeal was whether the judgment on the s.316 application is capable of giving rise to a res judicata in these proceedings given the issues in that case and the nature of a s.316 hearing. Counsel referred to the events leading up to the s.316 order. He referred to relevant dates in January 2001, to the receiver receiving an offer from Tara Mines Ltd., to the receiver's application to court under s.316, the receiver instituting the proceedings by Motion on the 20th March, 2002, the affidavit of Mr. Wymes of the 17th April, 2002, the Court hearing on the 27th April, 2002, the Court approval on the 20th June, 2002, the refusal of the stay on the 12th July, 2002, by the High Court, and the subsequent completion of the sale by the receiver. On the 11th April, 2003, the Supreme Court affirmed the order of the High Court: Bula Ltd. v. Crowley (No.4) [2003] 2 I.R. 430. Counsel submitted that the s.316 application, from the date of the application to the date of the judgment in the High Court, occurred in a telescoped period of time, and he submitted that this is a relevant factor in considering the difference between that application regarding the sale and these proceedings. Counsel opened Bula Ltd. v. Crowley (No.4). He stated that the appellants relied on In re Edenfell Holdings Ltd [1999] 1 I.R. 443. Counsel submitted that when the applicants disputed the contract price under the s.316 application they were told that "it was a very narrow goal mouth", that what was relevant was the process. Now on this application the receiver and other defendants assert that the goal posts on the s.316 application were broad and that the rule in Henderson v. Henderson [1843] 3 Hare 100 applies. He made submissions as to the narrow nature of the s.316 application, and stressed that it was a summary procedure, grounded on affidavit, with the receiver as applicant and as dominus litus. He submitted that an application under s.316 has a narrow purpose and a narrow effect, and that s.316 is limited in its ambit. He submitted that it would be extraordinary if, because the receiver brings an application under s.316, that, if a full scale challenge to the conduct of a receiver alleging wrong doing of a receiver, is not mounted in the s.316 application, persons like the appellants are precluded from doing so. He submitted that that could not be right. Counsel referred to the alleged wrong doing of the receiver. He submitted that the sale was at a gross undervaluation. He submitted that if in these proceedings he could show wrongful conduct of the receiver, then the order of this Court approving the sale is not determinative of the value. He emphasised that he was not trying to intervene in the sale. Counsel submitted that the s.316 application had been a narrow determination, that he had been precluded form canvassing other issues. He submitted that it was a classic s.316 application...

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