Costello Transport Ltd v Singh No.2

JurisdictionIreland
JudgeMs. Justice Baker
Judgment Date07 March 2019
Neutral Citation[2019] IEHC 143
Docket Number[2014 No. 28 COS]
CourtHigh Court
Date07 March 2019

[2019] IEHC 143

THE HIGH COURT

Baker J.

[2014 No. 28 COS]

IN THE MATTER OF KELLY TRUCKS LIMITED

(IN VOLUNTARY LIQUIDATION)

BETWEEN
COSTELLO TRANSPORT LTD
APPLICANT
AND
NEHAAL SINGH
RESPONDENT

No. 2

Jurisdiction – Amendment – O. 28, r. 11 of the Rules of the Superior Courts – Director of company seeking to challenge the jurisdiction of the High Court and the correctness of orders made – Whether the correct remedy was an appeal

Facts: Kelly Trucks Ltd (the Company) entered a creditors’ voluntary liquidation on 22 December 2013. The respondent, Mr Singh, was appointed liquidator at a creditors’ meeting of 3 January 2014 with the support of the Company’s directors, Mr and Mrs Kelly. At the time of Mr Singh’s appointment, the applicant, Costello Transport Ltd, was a creditor of the Company. It objected to the appointment of Mr Singh and brought an application by way of notice of motion dated 16 January 2014 for his removal and that he be replaced as liquidator by Mr Murphy. On 17 February 2014, Baker J made an order removing Mr Singh as liquidator of the Company and replacing him with Mr Murphy (the 2014 Order). On 2 March 2015, Mrs Kelly took issue with the validity of the 2014 Order, and issued a motion seeking declaratory orders. When that motion came on before Cregan J, and in the light of the submission made by Mr Murphy that the 2014 Order as perfected contained an error, he gave Mr Murphy liberty to issue a notice of motion to amend the 2014 Order under O. 28, r. 11 of the Rules of the Superior Courts (RSC), the so-called “Slip Rule”. Cregan J, on 9 March 2015, clarified that the application under the “Slip Rule” should be brought under the proceedings initiated by Costello Transport Ltd (No. 2014/28 COS). On 12 March 2015, Messrs. James Riordan & Partners Solicitors issued a motion on behalf of Costello Transport Ltd and Mr Murphy for an order pursuant to O. 28, r. 11 RSC, the “Slip Rule”, and/or the inherent jurisdiction of the Court amending the errors in the 2014 Order. On 13 April 2015, Baker J made an order pursuant to the “Slip Rule” and/or pursuant to the inherent jurisdiction of the High Court (the 2015 Order) by which she, inter alia, corrected the reference to s. 228 of the Companies Act 1963 in the 2014 Order, and by which she substituted s. 277 of the 1963 Act so as to ensure the correctness of the 2014 Order. The reasons for the making of the 2015 Order were set out in her ex tempore judgment of 13 April 2015 (the 2015 judgment). Mrs Kelly applied to the High Court by notice of motion entitled “Order 28 Rule 11, Correction of Errors” dated 22 February 2019, by which she sought various reliefs arising from the 2015 judgment. Mrs Kelly argued that by availing of the “Slip Rule” to make the amendments made by the 2015 Order, there was impermissibly added or substituted an order which was never part of the original judgment or order made in February 2014.

Held by Baker J that the reliefs sought by Mrs Kelly were not available and, of their very nature, challenged the jurisdiction of the Court and the correctness of orders made, and were matters in respect of which the correct remedy was an appeal.

Baker J held that the reliefs sought in the notice of motion would be refused.

Reliefs refused.

JUDGMENT of Ms. Justice Baker delivered on the 7th day of March, 2019
1

Kelly Trucks Ltd (‘the Company’) entered a creditors' voluntary liquidation on 22 December 2013, on the grounds of an inability to pay its debts as they fell due. Nehaal Singh was appointed liquidator at a creditors' meeting of 3 January 2014 with the support of the Company's directors, Mr James and Mrs Anne Kelly.

2

At the time of Mr Singh's appointment, Costello Transport Ltd was a creditor of the Company. It objected to the appointment of Mr Singh due to concerns as to his independence, competence and experience and brought an application for his removal and that he be replaced as liquidator by Gerard Murphy. The application was brought by way of notice of motion dated 16 January 2014 and was heard before me on 17 February 2014.

3

On that day, I made an order removing Mr Singh as liquidator of the Company and replacing him with Mr Murphy (‘the 2014 Order’).

4

Mr Murphy, as liquidator of the Company, thereafter brought applications for recovery of assets and disqualification of directors which are the subject matter of the judgment and orders of Murphy J. of 15 January 2019, In re Kelly Trucks Ltd (In Voluntary Liquidation) [2019] IEHC 6 by which she dealt with:

(i) proceedings bearing Record No. 2014/333 COS brought by Mr Murphy by originating notice of motion dated 2 July 2014, seeking, inter alia, orders pursuant to s. 297(a) of the Companies Acts 1963, as amended that Mr and Mrs Kelly be held personally responsible, without any limitation of liability, for the debts of the Company;

(ii) proceedings bearing Record No. 2014/484 COS brought by Mr Murphy by notice of motion dated 30 October 2014 seeking the disqualification of Mr and Mrs Kelly pursuant to s. 160 of the Companies Acts 1963 or, in the alternative, an order under s. 150 of the Companies Acts 1963 for their restriction.

5

By notice of motion issued on 20 January 2015, Mr Murphy sought to amend his originating notice of motion and that application was adjourned to 2 March 2015 to give Mrs Kelly an opportunity to deliver a reply to the grounding affidavit. On that day, Mrs Kelly for the first time took issue with the validity of the 2014 Order, and issued a motion seeking declaratory orders. When that motion came on before Cregan J., and in the light of the submission made by Mr Murphy that the 2014 Order as perfected contained an error, he gave Mr Murphy liberty to issue a notice of motion to amend the 2014 Order under O. 28, r. 11 of the Rules of the Superior Courts (‘RSC’), the so-called ‘Slip Rule’. Cregan J., on 9 March 2015, Mrs Kelly being present in court, clarified that the application under the ‘Slip Rule’ should be brought under the proceedings initiated by Costello Transport Ltd No. 2014/28 COS, the present proceedings.

6

On 12 March 2015, Messrs. James Riordan & Partners Solicitors issued a motion on behalf of Costello Transport Ltd and Mr Murphy for an order pursuant to O. 28, r. 11 RSC, the ‘Slip Rule’, and/or the inherent jurisdiction of the Court amending the errors in the 2014 Order.

7

On 13 April 2015, I made an order pursuant to the ‘Slip Rule’ and/or pursuant to the inherent jurisdiction of the High Court (‘the 2015 Order’) by which I, inter alia, corrected the reference to s. 228 of the Companies Act 1963 in the 2014 Order, and by which I substituted s. 277 of the Companies Act 1963 so as to ensure the correctness of the 2014 Order. The reasons for the making of the 2015 Order were set out in my ex tempore judgment of 13 April 2015 (‘the 2015 judgment’) of which a full written transcript is available as the judgment was dictated in the course of its delivery and it was also quoted in full by Murphy J. in her judgment in In re Kelly Trucks Ltd (In Voluntary Liquidation).

8

Murphy J. delivered judgment In re Kelly Trucks Ltd (In Voluntary Liquidation) on 15 January 2019, approximately one week before Mrs Kelly issued her motion the subject matter of the present judgment. Murphy J. acceded to Mr Murphy's applications and made inter alia, orders against Mr and Mrs Kelly.

The present motion
9

The present judgment is given in regard to an application brought by Mrs Kelly by notice of motion entitled ‘Order 28 Rule 11, Correction of Errors’ dated 22 February 2019, by which she seeks various reliefs arising from the 2015 judgment.

10

The motion was returnable on 1 March 2019 on notice to Messrs. James Riordan & Partners Solicitors. The motion is grounded on the affidavit of Mrs Kelly and while counsel appeared for the respondent, no replying affidavit was served.

11

Mrs Kelly argues that by availing of the ‘Slip Rule’ to make the amendments made by the 2015 Order, there was impermissibly added or substituted an order which was never part of the original judgement or order made in February 2014.

12

The notice of motion seeks unusual relief and I propose setting out in general terms the jurisdiction purported to be relied upon by Mrs Kelly before dealing with the specific reliefs sought.

The general jurisdiction to amend or correct
13

Order 28, r. 11 RSC, commonly referred to as the as the ‘Slip Rule’, provides for the correction of ‘clerical mistakes in judgements or orders’ where the error arises from an ‘accidental slip or omission’. The Order provides for corrections which may be made ‘without an appeal’, and, in its terms, envisages that there may be occasions when the use of the ‘Slip Rule’ is not appropriate and an appeal is the only remedy available to a disaffected litigant.

14

Hilary Biehler, Declan McGrath, and Emily Egan McGrath in their authoritative text Delany and McGrath on Civil Procedure (4th ed., Round Hall, 2018), at para. 25.80, describe the jurisdiction as ‘limited in nature’, and one that may not be invoked to ‘alter the effect of a judgement with the benefit of hindsight.’ By this, they make the distinction between matters which more properly are to be canvassed by way of appeal and those amenable to an application under the ‘Slip Rule’.

Inherent jurisdiction
15

In addition to the jurisdiction conferred by O. 28, r. 11 RSC, there exists a wider and inherent jurisdiction to amend an order. As will be noted, the 2015 Order was also made in the exercise of that inherent jurisdiction. This is apparent from para. 14 of the 2015 judgment and indeed from the nature of the motion on foot of which the order was made. At para. 14 of the 2015 judgment I said as follows:

‘Accordingly, I make an order in terms of the notice of motion relying also on the old judgment of McCaughey v. Stringer [1914] 1 I.R. 73, where exactly the same set of circumstances arose,...

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    ...it is sufficient to refer to the recent decision of Baker J. in the High Court in the case of Costello Transport Limited v. Singh No.2 [2019] IEHC 143 in which she stated at para. 13: “Order 28, r. 11 RSC, commonly referred to as the as the ‘Slip Rule’, provides for the correction of ‘cleri......

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