Framus Ltd and Others v CRH Plc and Others

• Jurisdiction: Ireland
• Judge: Denham C.J.,Mr. Justice Clarke,Mr. Justice John MacMenamin
• Judgment Date: 14 May 2013
• Neutral Citation: [2013] IESC 23
• Court: Supreme Court
• Date: 14 May 2013

[2013] IESC 23

THE SUPREME COURT

Denham C.J.

Clarke J.

MacMenamin J.

Appeal No: 445/2012

Framus Ltd (In Liquidation) & Ors v CRH Plc & Ors

Between/

Framus Limited, Amantiss Enterprises Limited (In Liquidation) and Wilbury Limited (In Liquidation)

Plaintiffs/Appellants

and

CRH plc, Irish Cement Limited, Roadstone Provinces Limited, Roadstone Dublin Limited, Tradburn Limited, Readymix plc, Kilsaran Concrete Products Limited, and CPI Limited

Defendants/Respondents

RSC O.58 r8

FRAMUS LTD (IN LIQUIDATION) & ORS v CRH PLC & ORS UNREP COOKE 19.7.2012 2012 IEHC 316

AMANTISS ENTERPRISES LTD (IN VOLUNTARY LIQUIDATION) & WILBURY LTD (IN VOLUNTARY LIQUIDATION), IN RE UNREP LAFFOY 22.1.2013 2013 IEHC 2

PRACTICE AND PROCEDURE

Strike out

Motion to strike out appeal of second and third appellant as nullity - Appeal of order striking out proceedings for inordinate and inexcusable delay - Liquidator - Requirement of consent of liquidator for legal action of company in voluntary liquidation - Creditors' resolution in favour of continuation of appeal - Supervisory jurisdiction of High Court over companies under the Companies Acts - Whether liquidator had given consent for appeal - Whether appropriate to allow opportunity to invoke supervisory jurisdiction of High Court to allow appeals to proceed lawfully - Framus Limited and Others v CRH plc and Others [2012] IEHC 316, (Unrep, Cooke J, 19/7/2012) and Re Amantiss Enterprises Ltd [2013] IEHC 21, (Unrep, Laffoy J, 22/1/2013) considered - Rules of the Superior Courts 1986 (SI 15/1986), O 58, r 8 - Companies Act 1963 (No 33), s 309 - Appeals of second and third appellants struck out with stay of three months on order (445/2012 - SC - 14/5/2013) [2013] IESC 23

Framus Ltd v CRH Plc

Facts: The respondents brought motions seeking orders to strike out the appeals of the second and third appellants on the basis that they were brought without the consent or authority of the companies” liquidator, as well as an order for costs. The proceedings brought by the appellants had been dismissed before the High Court on the 19 ^th July 2012 on the ground of delay and the three appellants had served a notice of appeal on the 26th September 2012. The solicitors for the first to fifth respondent subsequently contacted the liquidator of the second and third appellants who confirmed on the 21 ^st November 2012 that he had not given consent for appeals to be launched. He did however state that he had offered to assign the cause of action to the shareholders of the companies but was awaiting a response at that time.

It was the respondents” position that the appeals of the second and third respondents should be struck out as an abuse of process due to the consent of the liquidator being absent for such a course of action and an assignment of the cause of action not having taken place. However, the appellants argued that such consent had been given. All three appellants shared the same director and it was averred that as the first appellant was not in liquidation, it had been agreed with the liquidator that consent would be given for proceedings to be issued on the basis that the first appellant would have carriage of proceedings along with full responsibility for costs. It was argued that this arrangement included any appeal. It was also pointed out that a creditors” meeting of the 22nd January 2013 showed the creditors were in favour of the appeals.

Held by Denham C.J. (with Clarke J. and MacMenamin J. concurring) that the most favourable course of action would be for the appeals of the second and third appellants to be struck out but with a stay of three months for each to allow the parties to seek relevant orders from the High Court and then to implement them. There would be an opportunity to seek an extension of the period of stay to allow any process to fully complete as long as the process was being completed in a timely fashion. Such a timeframe would thus give the appellants an opportunity to correct any difficulties that might exist in bringing the appeal in a lawful manner.

It was further ordered that if such measures were taken which put the second and third appellants in a position where they could lawfully continue their appeals, they would be at liberty to apply to the court for an appropriate order to allow them to do so. If no such order was granted within the period of stay or extension, the appeals of the second and third appellants would stand struck out.

1 Judgment delivered on the 14th day of May 2013 by Denham C.J.

2 Judgments delivered by Denham C.J., Clarke J, MacMenamin J.

3 1. Before the Court were motions brought, or supported, by the eight defendants/respondents, referred to as "the respondents", in this case.

4 2. Mr. Paul Sreenan S.C. moved the motion on behalf of the first five respondents. Mr. Brian Murray S.C. moved the motion on behalf of the sixth named defendant. Mr. C. McNamara B.L. moved the motion on behalf of the eighth respondent. The seventh respondent did not bring a separate motion; however, Ms. B. Quigley B.L. appearing on its behalf, informed the Court that the seventh named respondent supported the motions.

5 3. Essentially, counsel for the respondents all adopted each others submissions.

6 4. Mr. J. Hennessy S.C. appeared for Framus Limited, referred to as "the first appellant", and Mr. Seamus Maye, director and shareholder of the appellant companies. The Court was informed that Philip Lee, Solicitors, were on record as solicitors for Amantiss Enterprises Ltd (In Liquidation), referred to as "the second appellant", and Wilbury Limited (In Liquidation), referred to as "the third appellant", and that they were served with, and on notice of, the motions. Further, that the liquidator knew of the motions.

7 5. There was no representation by or on behalf of the liquidator.

Motions by first to fifth named respondents

8 6. The motions brought by the first to fifth named respondents sought:-

9 (i) An order pursuant to the inherent jurisdiction of the Court striking out the appeals of the second and third named appellants on the basis that the appeals were brought without the consent or authority of the liquidator of these appellants.

10 (ii) An order pursuant to Order 58, Rule 8 and/or the inherent jurisdiction of the Court against Seamus Maye in respect of the costs of this motion and the costs incurred by the first to fifth named respondents in connection with the appeal brought by the second and third named appellants.

11 (iii) If necessary, an order joining Seamus Maye as a party to these proceedings for the purposes of making an order for costs against him.

12 7. The motion was grounded on an affidavit of the 30 ^th November, 2012, of James Andrew Lenny, Arthur Cox Solicitors, solicitor for the first to fifth named respondents.

13 2 8.He deposed to background facts, including the following:-

14 (i) On the 19 ^th July, 2012, the High Court (Cooke J.) ordered that the proceedings stand dismissed for delay.

15 (ii) On the 26 ^th September, 2012, a Notice of Appeal to this Court, was served by the three appellants, referred to collectively as "the appellants", which was filed in the Supreme Court Office on the 2 ^nd October, 2012.

16 (iii) On the 4 ^th October, 2012, the solicitors for the first to fifth named respondents wrote to the liquidator seeking confirmation that he had authorised the appeal, and querying whether he continued to authorise the prosecution of the appeal.

17 (iv) It appears that it was only on the 4 ^th October, 2012, that a copy of the Notice of Appeal was sent by email to the liquidator by Mr Maye.

18 (v) By letter dated the 17 ^th October, 2012, the liquidator responded to Mr. Maye's email of the 4 ^th October, 2012, querying why the current appeal action had taken place without seeking his approval and consent, and stating that he was not in favour of the appeal proceeding.

19 (vi) Following a reply by Mr. Maye of the 18 ^th October, 2012, the liquidator by email on the 18 ^th October, 2012, stated that he had not given consent to the appeal being brought.

20 i (vii)The first to fifth named respondents were not informed of this situation. They understood that the appeal was proceeding.

21 (viii) The solicitors for the first to fifth named respondents issued a security for costs motion on the 26 ^th October, 2012, against the appellants.

22 (ix) On the 16 ^th November, 2012, the solicitor for the appellants wrote to the solicitors for the first to fifth named respondents confirming that they intended to issue a motion to adduce additional evidence.

23 (x) The appellants issued that motion on the 20 ^th November, 2012.

24 (xi) The first to fifth named respondents were unaware that the liquidator had not authorised the appeal until Adams Solicitors, acting for the liquidator, wrote to the respondents' solicitors on the 21 ^st November, 2012.

25 This letter stated clearly that the liquidator did not authorise the service of the Notice of Appeal or the prosecution of the appeal in the Supreme Court on behalf of the second and third named appellants.

26 It was stated in the said letter that the liquidator had taken a decision to offer to assign the cause of action to the shareholders of the companies and awaited a response to the offer.

27 (x) Mr. Maye has deposed an affidavit on behalf of the appellants.

28 (xi) The solicitors for the respondents sought an explanation from the solicitors of the appellants as to why they had not been informed earlier of the liquidator's view on the appeal.

29 9. From correspondence before the Court, from the solicitors for the liquidator to the solicitors for the first to fifth named respondents, which was exhibited in the affidavit of Mr. Lenny, it...