Countyglen Plc v Carway

• Jurisdiction: Ireland
• Judge: Ms. Justice Laffoy
• Judgment Date: 01 January 1998
• Neutral Citation: 1996 WJSC-HC 508
• Court: High Court
• Docket Number: [1994 No. 339 COS],No. 339 COS/1994
• Date: 01 January 1998

1996 WJSC-HC 508

THE HIGH COURT

No. 339 COS/1994

No. 7883P/1994

No. 7884P/1994

COUNTYGLEN PLC v. CARWAY

IN THE MATTER OF THE COMPANIES ACTS 1963– 1990

AND IN THE MATTER OF SECTION 12 OF THE COMPANIES ACT 1990

AND IN THE MATTER OF COUNTYGLEN PLC

BETWEEN

COUNTYGLEN PLC

PLAINTIFF

AND

JOHN CARWAY, MALCOLM STOCKDALE, SARAH SHARPE, RICHARD KING, HANK VANDERKAM, JANE CARWAY, STEPHEN CARWAY AND WARREN CARWAY

DEFENDANTS

BETWEEN

COUNTYGLEN PLC

PLAINTIFF

AND

ANGLO IRISH BANK CORPORATION PLC

DEFENDANT

BETWEEN

COUNTYGLEN PLC

PLAINTIFF

AND

DERMOD MORRISSY MURPHY, NIALL SHEEHY, PATRICK J GERAGHTY, JOSEPH MURPHY AND MARK BENNETT, PRACTISING AS CONNOLLY SELLORS GERAGHTY FITT, SOLICITORS

DEFENDANTS

Citations:

COMPANIES ACT 1963 S60

COMPANIES ACT 1990 S8

COMPANIES ACT 1990 S11(1)

COMPANIES ACT 1990 S22

RSC O.25

RSC O.31 r29

COMPANIES ACT 1963 S172

COMPANIES ACT 1985 S441 (UK)

COMPANY DIRECTORS DISQUALIFICATION ACT 1986 S8

CONSTITUTION ART 34.1

HOWARD V COMMISSIONER FOR PUBLIC WORKS 1993 ILRM 665

EAST DONEGAL CO-OP V AG 1970 IR 317

MCDONALD V BORD NA GCON 1965 IR 217

LOFTUS V AG 1979 IR 211

HEANEY V IRELAND 1994 2 ILRM 420

C (V) V M (J) & M (G) 1987 IR 510

COMPANIES ACT 1990 S7

COMPANIES ACT 1990 S8

HEGARTY V O'LOUGHRAN 1990 1 IR 148

Synopsis:

COMPANY

Affairs

Investigation - Inspector - Report - Contents - Use - Admissibility in evidence - Enactment provided that report shall be admissible in civil proceedings as evidence of facts set out in report - Nature of facts which are so evidenced - Interpretation to G7nG7 accord with provisions of Constitution - (1994/339 Cos - Laffoy J. - 20/2/96) [1998] 2 IR 540

|Countyglen Plc. v. Carway|

EVIDENCE

Admissibility

Facts - Proof - Statute - Provision - Company - Inspector - Report - Contents - Use - Admissibility in evidence - Enactment provided that report shall be admissible in civil proceedings as evidence of facts set out in report - Nature of facts which are so evidenced - Interpretation to accord with provisions of Constitution - (1994/339 Cos - Laffoy J. - 20/2/96) [1998] 2 IR 540

|Countyglen Plc. v. Carway|

STATUTORY INTERPRETATION

Company

Inspector - Report - Contents - Use - Admissibility in evidence - Enactment provided that report shall be admissible in civil proceedings as evidence of facts set out in report - Nature of facts which are so evidenced - Interpretation to accord with provisions of Constitution - Companies Act, 1990 (No. 33), ss. 8, 11, 22 - (1994/339 Cos - Laffoy J. - 20/2/96) [1998] 2 IR 540

|Countyglen Plc. v. Carway|

1 Judgment of Ms. Justice Laffoy delivered on the 20th day of February, 1996

2 In the first of the above named actions (the Main Action) the Plaintiff alleges that the Defendants were guilty of deceit and/or fraud and/or conspiracy to defraud and/or in breach of Section 60 of the Companies Act, 1963 in connection with the following transactions:

3 (a) The purchase of a minority shareholding by the Plaintiff in Lawrence Trading Limited, a company registered in the British Virgin Islands, and the purchase by Wyndham Trading Limited, another company registered in the British Virgin Islands, of a 16.2% interest in the Plaintiff, which transactions have come to be collectively known as the Lawrence/Wyndhan transactions in the proceedings in this Court in relation to the Plaintiff; and

4 (b) The purchase by the Plaintiff of a minority shareholding in Orbitron Capital Corporation, a company registered in the United States of America, which transaction has come to be known as the Orbitron transaction in the proceedings in relation to the Plaintiff in this Court.

5 The Plaintiff in the Main Action seeks to recover the sum of £1,144,948 alleged to have been unlawfully and wrongfully removed from the Plaintiff in the course of the Lawrence/Wyndham transactions and the Orbitron transaction and claims other reliefs including damages. By Order of this Court made on 18th December, 1995, the Plaintiff obtained judgment against the second, third, fourth and fifth Defendants in the Main Action for such amount as the Court might assess in respect of the Plaintiff's claim in the Main Action for damages and costs. The Main Action continues against the first Defendant, the sixth Defendant, the seventh Defendant and the eighth Defendant whom, for the sake of brevity, I refer to hereafter as "the Carway Defendants".

6 In the second of the above named actions (the Bank Action), the Plaintiff alleges that the Defendant therein (the Bank) acted as banker or intended banker to the Plaintiff at or around the time of the Lawrence/Wyndham transactions and was negligent and in breach of duty to the Plaintiff in connection therewith and claims damages to compensate it for the losses alleged to have been incurred by the Plaintiff in connection with the Lawrence/Wyndham transactions and the Orbitron transaction and certain other losses and outlays.

7 In the third of the above named actions (the Solicitors Action), the Plaintiff alleges that all material times the Defendants in the Solicitors Action (the Solicitors) were the solicitors to the Plaintiff and that they acted in breach of duty and negligently in connection with the Lawrence/Wyndham transactions and the Plaintiff claims damages to compensate it for losses alleged to have been incurred by the Plaintiff in connection with, inter alia, the Lawrence/Wyndham transactions and the Orbitron transaction.

8 This Court has ordered that the Main Action be heard before the Bank Action and the Solicitors Action and that the Bank Action and the Solicitors Action be heard concurrently.

9 By Order of this Court made on 19th January, 1994 in a matter entitled "The High Court In the matter of the Companies Act, 1990and in the matter of the appointment of an inspector pursuant to Section 8 of the aforesaid Act and in the matter of Countyglen Plc (under investigation) Between The Minister for Enterprise and Employment, Applicant and Countyglen Plc, Respondent" (Record No 1993 No 8638P) (the Companies Act Proceedings), Frank Clarke S.C. (the Inspector) was appointed pursuant to Section 8 of the Companies Act, 1990 (the Act of 1990) to investigate the affairs of the Plaintiff with particular reference to certain matters set out in the Order, including the Lawrence/Wyndham transactions and the Orbitron transaction. By further Order of this Court made on 15th July, 1994 in the Companies Act Proceedings, the Court granted the Inspector leave to deliver an interim report (the Interim Report) to the Court under Section 11(1) of the Act of 1990. By further Order of this Court made on 17th October, 1994 in the Companies Act Proceedings, it was ordered that the final report (the Final Report) of the Inspector be received by the Court and that copies thereof be forwarded by the Inspector on behalf of the Court to certain persons, including the Minister for Enterprise and Employment, and that the report be printed and published generally and circulated to the widest extent practicable. By that Order, the Court directed that Appendix 23 be omitted from each copy of the report, save the copy forwarded to the Minister for Enterprise and Employment, and that the report as printed and published should omit Appendix 23.

10 Section 22 of the Act of 1990 provides as follows:

"A document purporting to be a copy of a report of an inspector appointed under the provisions of this Part shall be admissible in any civil proceedings as evidence -"

(a) of the facts set out therein without further proof unless the contrary is shown, and

(b) of the opinion of the inspector in relation to any matter contained in the report."

11 In its Statement of Claim delivered in the Main Action on 18th August, 1995 the company pleaded that it would seek to rely on the factual and opinionative contents of the Interim Report and the Final Report of the Inspector in accordance with Section 22 of the Act of 1990. At the hearing of a motion brought by the Carway Defendants seeking to have the manner in which the Plaintiff is entitled to use the Interim Report and the Final Report in the Main Action determined as a preliminary point of law under Order 25 of the Rules of the Superior Courts, 1986, Counsel for the Plaintiff apprised the Court that the Plaintiff intended to rely on the facts set out in the Interim Report and the Final Report to prove the allegations made against the Carway Defendants in the Main Action and to prove the allegations made against the Bank in the Bank Action and against the Solicitors in the Solicitors Action and did not propose to adduce any further evidence of matters of fact dealt with in the reports. On the applications of the Carway Defendants, the Bank and the Solicitors, the Court ordered that a preliminary issue be tried in each action as to the proper construction of Section 22 of the Act of 1990 and, in particular, to what extent, having regard to the provisions of Section 22, the contents of the Interim Report and the Final Report are admissible in the Main Action, the Bank Action and the Solicitors Action, for the purpose of proving the facts alleged in the said actions without further proof of the said facts. It was further ordered that the preliminary issues in each of the three actions should be heard concurrently.

12 No issue has been raised in either the Main Action, the Bank Action or the Solicitors Action that Section 22 is invalid having regard to the provisions of the Constitution.

13 At the hearing of the preliminary issues, the Interim Report and the Final Report of the Inspector in their full form (including, in the case of the Final Report, Appendix 23) as received by this Court in the Companies Act Proceedings were proved by the Chief Registrar of the High Court.

14 On an application by the Carway Defendants under Order 31, Rule 29 of the Rules of the Superior Courts, 1986 against the Inspector seeking...