D.O.M and Others v The Minister for Justice and Law Reform

• Jurisdiction: Ireland
• Judge: Ms. Justice Laffoy
• Judgment Date: 22 April 2013
• Neutral Citation: [2013] IEHC 193
• Date: 22 April 2013
• Court: High Court
• Docket Number: [No. 97 COS/2013]

[2013] IEHC 193

THE HIGH COURT

[No. 97 COS/2013]

Kirwan v Parker (Voluntary Liquidation)

IN THE MATTER OF THE COMPANIES ACTS 1963 - 2012

AND

SIMPLY READ LIMITED (IN MEMBERS' VOLUNTARY LIQUIDATION)

BETWEEN

YVONNE R. KIRWAN

APPLICANT

AND

RONAN PARKER (VOLUNTARY LIQUIDATOR)

RESPONDENT

COMPANIES ACT 1963 S256

COMPANIES ACT 1963 S280

COMPANIES ACT 1963 S277

COMPANIES ACT 1963 S213

RSC O.74

COMPANIES ACT 1963 S277(1)

COMPANIES ACT 1963 S277(2)

COURTNEY THE LAW OF COMPANIES 3ED 2012 PARA 23.113

COMPANIES ACT 1963 S256(5)

COMPANIES ACT 1963 S252(1)

COMPANIES ACT 1963 S261

COURTNEY THE LAW OF COMPANIES 3ED 2012 PARA 23.115

COURTNEY THE LAW OF COMPANIES 3ED 2012 PARA 23.116

COMPANIES ACT 1990 S129

Company law - Liquidation - Winding up - Appointment - Conversion - Bona fide s- Best interests - Compnaies Act 1963

Facts: The proceedings related to a company where the directors had initiated a voluntary winding up in 2010. The company then resolved that it would be wound up by a members voluntary winding up and the applicant made applications concerning the failure by the respondent too properly exercise his duties as liquidator. The Court considered whether the respondent had acted bona fides as a liquidator and in the best interests of the Company. The Court considered whether a Mr. Regan would be appointed as liquidator of the respondent and what action the liquidator should take to formally convert the liquidation into a creditors voluntary liquidation.

Held by Laffoy J. that the only order appropriate was to make an order appointing Mr. Regan as liquidator. Otherwise, the application had given rise for concern as to the manner in which the winding up of the company had been conducted.

Ms. Justice Laffoy

1 There are huge gaps in the affidavit evidence as to the factual background to this application and, in particular, the Court is hampered by the fact that neither a Companies Registration Office (CRO) search, nor crucial documents which were, or should have been, filed in the CRO, for example, the special resolution referred to later, have been exhibited by either party. However, I propose setting out such of the facts as may be extrapolated from the affidavit evidence which are relevant to the issues the Court has to determine.

2 Prior to its winding up, the applicant and her husband, Stephen Kirwan, were directors of, and each held fifty per cent of the shareholding in, Simply Read Limited (the Company). The Company traded as a newsagent, but ceased to trade on 6^th February, 2010. The directors then initiated a members' voluntary winding up in April 2010, obviously in the belief that the Company was solvent and that its assets, when realised, would discharge all its debts. They jointly swore a statutory declaration of solvency pursuant to s. 256 of the Companies Act 1963 (the Act of 1963) on 15^th April, 2010, which was filed in the CRO, and which stated that the Company was in a position to pay its debts within ten months, and identified a surplus of in excess of €30,000. The statutory declaration embodied a report of an independent person, in accordance with the provisions of s. 256, supporting their contention that the Company was solvent. That report of Brian Morgan & Co. was dated 16^th April, 2010.

3 Apparently, the Company resolved by special resolution that it be wound up by a members' voluntary winding up on 29^th April, 2010 and that the respondent, an accountant, be appointed liquidator for the purposes of the winding up. The respondent filed notice of his appointment as liquidator (Form E2) in the CRO on 5^th May, 2010. The applicant has made various allegations in the grounding affidavit on this application of failure by the respondent to properly exercise his duties as liquidator and to comply with his obligations under the Act of 1963, some of which have been acknowledged by the respondent in his replying affidavit, to which I will refer later. In any event, just short of three years after the commencement of the winding up the sums due to the creditors of the Company have not been discharged and it appears that the Company is probably not in a position to discharge them.

4 This application was initiated by an originating notice of motion issued on 1^st March, 2013 which was returnable on 8^th April, 2013. On the notice of motion the applicant sought the following reliefs:

5 (a) an order pursuant to s. 280 of the Act of 1963 determining three questions posed: whether the respondent is acting properly for the purpose of winding up the affairs, and in the best interests, of the Company; whether the respondent is actingbona fide as liquidator; and whether in failing to call a meeting of the Company's creditors where the Company has not met its debts within the time specified in the directors' declaration of solvency pursuant to s. 256 of the Act of 1963, the respondent ought to be removed as liquidator;

6 (b) an order pursuant to, inter alia, s. 277 of the Act of 1963 removing the respondent as voluntary liquidator of the Company;

7 (c) an order pursuant to s. 213 of the Act of 1963 converting the members' voluntary liquidation of the Company into "an Official Liquidation"; and

8 (d) an order appointing Timothy Regan (Mr. Regan) as official liquidator of the Company.

9 5. The application was grounded on the affidavit of the applicant which was sworn on 1^st March, 2013, which contains a considerable degree of detail in relation to what has occurred over approximately four years, both before and after the commencement of the winding up.

10 6. On 4^th April, 2013, an affidavit, which had been sworn on 23^rd March, 2013, was filed on behalf of the respondent. Although the name of the firm does not appear on the back sheet of the affidavit, it is stated after the jurat that the affidavit was filed for the respondent "by Kenny Boyd & Co. Solicitors".

11 7. On 5^th April, 2013 the respondent e-mailed the applicant's solicitor with confirmation that he...