Goode Concrete (In Recievership) -v- Companies Acts,  IEHC 439 (2012)
|Docket Number:||2012 492 COS|
|Party Name:||Goode Concrete (In Recievership), Companies Acts|
THE HIGH COURT[2012 No. 492 COS]
IN THE MATTER OF GOODE CONCRETE (IN RECEIVERSHIP)
IN THE MATTER OF THE COMPANIES ACTS 1963 – 2012
Judgment of Ms. Justice Laffoy delivered on 2nd day of November, 2012.
On 3rd September, 2012 Kilsaran Concrete (the Petitioner) presented a petition that Goode Concrete (the Company) be wound up by the Court under the Companies Act 1963 (the Act of 1963). The making of a winding up order was resisted by the Company on a number of grounds which will be outlined later. At the hearing of the petition two creditors, CRH Plc and Roadstone Wood Ltd. (the Co-defendants) were represented by counsel and they supported the petition for the winding up of the Company. Another creditor, Allied Irish Bank Plc (AIB), which is a secured creditor and the Company’s largest creditor, which was also represented by counsel, did not support the petition. The stance of other creditors in relation to the petition had obviously been canvassed by Mr. Peter Goode (Mr. Goode), the Managing Director of the Company, and letters from those creditors were exhibited in affidavits filed on behalf of the Company, the contents of which will be outlined later.
The debt which the Petitioner claims is due to it and which forms the basis of the petition arises out of one aspect of proceedings which are pending in the Competition List in the High Court between the Company, as plaintiff, and the Co-defendants and the Petitioner, as defendants (Record No. 2010/10685P) (the Competition Proceedings). It is convenient to consider the course of the Competition Proceedings, insofar as they are relevant, at the outset.
The Competition Proceedings
In the Competition Proceedings, which were initiated in November 2010, the Company alleges various breaches of domestic competition law (ss. 4 and 5 of the Competition Act 2002) and of European Competition Law (Articles 101 and 102 of the Treaty on the Functioning of the European Union) on the part of the Petitioner and the Co-defendants, including that they engaged in predatory pricing with the aim of eliminating the Company from the ready-mix concrete market and that they engaged in collusive tendering in respect of bids for the supply of ready-mix concrete. In November 2011 the Company sought interlocutory relief against the Petitioner and the Co-defendants in the Competition Proceedings to restrain the Company and the Co-defendants from continuing the alleged anti-competitive practices. By order of the Court made on 20th January, 2011 the Company’s application for interlocutory relief was refused and costs of the application were awarded to the Petitioner and the Co-defendants against the plaintiff, the said costs to be taxed in default of agreement.
The Competition Proceedings have continued to be prosecuted by the Company and the following steps in the process have been brought to the attention of this Court:
(a) On 5th April, 2011 the Company delivered a statement of claim in which it sought declaratory relief and damages under various headings, including exemplary damages and aggravated damages.
(b) The Petitioner and the Co-defendants applied to Court for an order for security for costs. The Court delivered judgment on 21st March, 2012 ( IEHC 116), wherein it was stated that the Court proposed to make an order requiring security to be given to both sets of defendants (that is to say the Petitioner and the Co-defendants) by the Company but on a phased basis, the first phase being limited to a sum appropriate to the completion of the exchange of pleadings and the making of discovery on either side. By order of 15th May, 2012, the Court ordered that the security in respect of the first phase be fixed in the amount of €110,000 in respect of the Co-defendants and €85,000 in respect of the Petitioner. The Company has complied with that order, in that the security ordered by the Court in relation to the first phase has been paid into Court within the timeframe set by the Court. In his response to the petition, Mr. Goode has averred that the security was provided by way of a loan from the Goode family to Mr. Tom Goode, the Chairman of the Company.
(c) The Competition Proceedings are next listed for case management before the Court on 13th November, 2012. While a defence has not yet been delivered by either the Petitioner or the Co-defendants, it was averred by Mr. Goode on behalf of the Company that it is envisaged that the Competition Proceedings will reach the stage of discovery in early 2013.
The current financial state of the Company
The Company ceased trading on 16th February, 2011 because, as averred to by Mr. Goode, the position of the Company was extremely precarious, given that it was unable to obtain new concrete tenders and had no prospect of obtaining contracts in the near future, which state of affairs the Company attributes to the actions of the Petitioner and the Co-defendants which are the subject of the Competition Proceedings.
On 24th June, 2011, AIB appointed David Carson (the Receiver) to be Receiver and Manager of the Company. While the relevant documentation has not been put before the Court, the Court has been informed that the security of AIB on foot of which the Receiver was appointed contains fixed and floating charges on all of the assets of the Company. Mr. Goode has averred that the Company’s indebtedness to AIB is in the region of €26m. However, at the hearing of the petition, counsel for AIB clarified the position by informing the Court that the Company’s indebtedness to AIB is in the region of €21m, and the Company also owes in the region of €5m to AIB Finance and Leasing Limited. From information obtained by Mr. Goode from the Receiver’s firm, Deloitte, he has estimated the value of the assets of the Company as being in the region of €1.4m to €1.55m, the estimated value of land and quarries held by the Company being in the region of €1.2m to €1.35m, the estimated value of other assets (plant, equipment, vehicles and debts due to the Company) being €200,000. It is undoubtedly the case that, as things stand, the Company is hopelessly insolvent.
The Petitioner’s debt and its standing to seek a winding up order
The order of the Court in the Competition Proceedings awarding costs to the Petitioner and the Co-defendants against the Company was not appealed. The costs of the Petitioner were taxed and a certificate of taxation in the sum of €56,763.33 was issued and taken up by the Petitioner on 19th July, 2012. On the same day, 19th July, 2012, solicitors for the Petitioner served notice on the Company demanding payment of the said sum of €56,763.33, stipulating that if the said sum was not paid within twenty one days of the service of the notice, application would be made to the Court to have the Company wound up pursuant to the provisions of s. 213(e) and s. 214 of the Act of 1963. The debt was not discharged within the period stipulated or at all. Accordingly, by virtue of s. 214 of the Act of 1963 the Company is deemed to be unable to pay its debts and by virtue of s. 213(e) of that Act the Company may be wound up by the Court on the petition of the Petitioner as a creditor of the Company.
I am satisfied that the Petitioner has complied with all of the requirements of the Act of 1963 and the Rules of the Superior Courts in relation to the petition and that all the formal proofs are in order. Therefore, but for the resistance of the Company to the making of a winding up order and the position adopted by some of the creditors of the Company, there would be no obstacle to the making of a winding up order.
Position adopted by the creditors
The only creditors who have come forward in support of the petition are the Co-defendants. The Court was informed that the Co-defendants have taxed the costs awarded to them against the Company in the order of 20th January, 2011 in the sum of €101,377.25 and have taken up a certificate of taxation dated 6th July, 2011 in that amount. As such, the Co-defendants claim that jointly they are a significant unsecured creditor of the Company and they support the winding up of the Company.
The Revenue Commissioners, to whom the Company owes in the region of €100,000, have advised the Company by e-mail dated 4th October, 2012 to the Company that it is adopting “a neutral position” in respect of the petition.
As I have indicated, AIB, which is owed in the region of €21m, is not supporting the petition on the ground, as articulated by its counsel...
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