Clandown Ltd v Davis

• Jurisdiction: Ireland
• Judge: Mr. Justice Morris
• Judgment Date: 09 June 1994
• Neutral Citation: 1994 WJSC-HC 2307
• Court: High Court
• Docket Number: Record No. 1487p/1994
• Date: 09 June 1994

1994 WJSC-HC 2307

THE HIGH COURT

Record No. 1487p/1994

CLANDOWN LTD v. DAVIS

BETWEEN

CLANDOWN LIMITED

PLAINTIFFS

AND

BRID DAVIS

DEFENDANT

Citations:

PAGEBOY COURIERS LTD, IN RE 1983 ILRM 510

STONEGATE SECURITIES LTD V GREGORY 1980 1 AER 241

MANN V GOLDSTEIN 1968 2 AER 769

A COMPANY, IN RE 1992 BCLC 633

CORNHILL INSURANCE PLC V IMPROVEMENT SERVICES LTD 1986 BCLC 26

Synopsis:

INJUNCTION

Interlocutory

Petition - Advertisement - Prohibition - Grounds - Debt - Existence - Dispute - Court not satisfied that petitioner was a creditor of plaintiff company - (1994/1487 P - Morris J. - 9/6/94) 1994 2 ILRM 536

|Clandown Ltd. v. Davis|

WINDING UP

Petition

Advertisement - Prohibition - Grounds - Debt - Existence - Dispute - Court not satisfied that petitioner was a creditor of the company - (1994/1487 P - Morris J. - 9/6/94) 1994 2 ILRM 536

|Clandown Ltd. v. Davis|

1 Judgment of Mr. Justice Morris delivered the9th day of June 1994.

2 This matter comes before the Court as an application by the Plaintiffs for an interlocutory injunction restraining the Defendant from advertising a winding-up Petition presented to the Central Office on the 3rd of March 1994 and for an interlocutory injunction restraining the Defendant from proceeding further with the said Petition. In addition to the relief claimed in the Notice of Motion, the Plaintiffs also seek an Order restraining the Defendant from publicising the existence of the Petition to third parties in circumstances which would be prejudicial to the Plaintiff company.

3 The circumstances in which this application arises can be summarised as follows. Up to the 3rd of February 1994 the Defendant was a shareholder, a Director and an employee of the Plaintiff company. On that date she was removed from her employment and removed as a Director at the annual general meeting on the 4th of March 1994. The Defendant claims that there is due to her by the company the sum of £56,889.69 and on the 3rd of March 1994 she presented a Petition in the Central Office seeking the winding-up of the company on the grounds of the company's insolvency, she having made demand for the payment of the said sum on the 10th of February 1994 and the said sum not having been paid. The Plaintiffs obtained from the Court an interim Order granting the relief which they now seek preventing the Defendant from publishing or proceeding further with the said Petition and the basis upon which the relief is sought can be summarised as follows:-

4 It is submitted on behalf of the Plaintiff company that the presentation of the Petition to the Court is an abuse of the process of the Court in as much as there are serious and genuine doubts as to the veracity of the Defendant's assertion that the Plaintiffs are indebted to the Defendant in the amount claimed or any amount and on the contrary it is alleged that in fact not only are the Defendant's figures inaccurate, but that the true figures disclose that the company is not indebted to the Defendant at all, but they say an examination of the accounts demonstrates clearly that, by way of counterclaim or set off, the Defendant is indebted to the company. In these circumstances it is submitted that there is at least a serious and bona fide dispute between the parties and that in these circumstances the Court should restrain the Defendant from proceeding further with her Petition as irreparable harm will result to the company if the Petition is advertised and that on the balance of hardship the Defendant should be restrained from publishing the Petition but should seek her relief through ordinary Court procedures.

5 I am satisfied that certain aspects of the law relevant to this application are well settled. In the Matter of Pageboy Courier's Limited and In the Matter of the Companies Acts 1963/ 1982 (1983) I.L.R.M. 510, O'Hanlon J. adopted the judgment of Buckley L.J. in Stonegate Securities Limited v. Gregory (1980) 1 A.E.R. 241, where he said

"If the company in good faith and on substantial grounds disputes any liability in respect of the alleged debt the Petition will be dismissed or if the matter is brought before the Court before the Petition is issued its presentation will in normal circumstances be restrained. That is because a winding-up Petition is not a legitimate means of seeking to enforce payment of a debt which is bona fide disputed. Ungood-Thomas J. put the matter thus in Mann v. Goldstein (1968) 2 A.E.R. 769"

"For my part I would prefer to rest the jurisdiction directly...