Listowel U.D.C., Nolan v Lynch v Ardmore Studios (Ir.) Ltd

• Jurisdiction: Ireland
• Judgment Date: 09 June 1966
• Date: 09 June 1966
• Docket Number: (1966. No. 138 P.)
• Court: High Court

(1966. No. 138 P.)

Lynch and Others v. Ardmore Studios (Ir.) Ltd.

GEORGE LYNCH, ANTHONY KELLY, DERMOT MOLONEY, LEO MURPHY and PETER KINGSLEY

Plaintiffs

and

ARDMORE STUDIOS (IRELAND) LIMITED and MICHAEL HAYES

Defendants.

Company - Action - Costs - Set-off - Injunction - Mortgage debenture - Receiver appointed - Costs awarded against company in action prior to appointment of receiver - Second action subsequent to appointment of receiver in which costs awarded to company - Assignment of costs by successful parties in first action to unsuccessful parties in second action - Crystallisation of debenture holder's charge - Absence of mutuality - No right to apply set-off - Rules of the Superior Courts (S.I., No. 72 of 1962), Or. 42, r. 28.

Notice of Motion.

The plaintiffs sought an injunction to restrain the defendants from issuing execution on foot of an order of the High Court, dated the 30th April, 1965, in an action (1) in which the plaintiffs herein were defendants and the first-named defendants were plaintiffs. The plaintiffs obtained an interim injunction on the 18th January, 1966, after the sheriff, the second-named defendant, had sent his bailiff to the dwelling-house of the first-named plaintiff for the purpose of levying execution. By consent, the hearing of the motion for an interlocutory injunction was treated as the trial of the action.

Prior to 1963, the first-named defendants (hereinafter referred to as "the Company") were engaged in the business of providing studio and other facilities for film-making. In 1963, members of the Electrical Trades Union (Ireland) picketed the Company's premises. The Company brought an action against certain members of the Union to restrain the picketing. This action (hereinafter called "the first action") was dismissed with costs on the 30th July, 1963 (2).

Prior to the first action, the Company had borrowed money from the Industrial Credit Company Ltd., the advances made being secured by a mortgage debenture dated the 31st October, 1963, and by supplemental deeds of charge. On the 31st October, 1963, the Industrial Credit company Ltd. appointed a receiver over the assets of the Company pursuant to the terms of the mortgage debenture. For six months after his appointment the receiver did not attempt to carry on the business of the Company, but tried to bring about a sale. He was not successful. In May, 1964, the receiver hired out the Company's studios for the making of a film. In June, 1964, the Company's premises were picketed by members of the Electrical Trades Union (Ireland) who alleged the existence of a trade dispute between the Union and the Company.

The receiver caused proceedings (hereinafter called "the second action") to be issued in the name of the Company seeking a declaration that no trade dispute existed which would make the picketing lawful and an injunction to restrain the defendants, members of the Union, from picketing the Company's premises. On the 5th October, 1964, McLoughlin J. gave judgment in the second action and granted the declaration and injunction sought (1). By order, dated the 30th April, 1965, the defendants in the second action (the plaintiffs herein) were ordered to pay the costs of the second action which were taxed to the sum of

£1,208 0s. 8d. on the 5th August, 1965. The defendants in the first action were not the same as the defendants in the second action, but by indenture of assignment, dated the 15th October, 1965, the defendants in the first action assigned the costs awarded to them therein to the defendants in the second action (the plaintiffs herein). Notice of the assignment was given to the solicitors for the Company in the second action by letter dated the 27th October, 1965, and at the same time the plaintiffs purported to set off the sum of £1,125 18s. 6d., the costs in the first action, against the sum of £1,208 0s. 8d., the costs in the second action. The difference, £82 2s. 2d., was tendered by cheque which was enclosed with the letter. The validity of the tender was not disputed, but the right of set-off was denied and the decree in the second action was sent to the sheriff, the second-named defendant. The second-named defendant agreed to abide the order of the Court.

Prior to 1963, the first-named defendants, a company, carried on the business of providing various facilities for film-making. In 1963, the company became involved in a trade dispute with a trade union. By an action in the High Court the company sought to restrain certain members of the union from picketing its premises. On the 30th July, 1963, the action was dismissed with costs. On the 31st October, 1963, the Industrial Credit Company Ltd. appointed a receiver over the assets of the company pursuant to a mortgage debenture of the 31st October, 1958. In June, 1964, when the company's studios had been hired by the receiver to a film-making concern, the company's premises were again picketed by members of the union. The receiver, in the name of the company, brought proceedings against the union members seeking to restrain the picketing and seeking a declaration that no lawful trade dispute existed. The company was successful in the second action and on 5th October, 1964, the relief sought was granted and the defendants in the second action (the plaintiffs herein) were ordered to pay the costs. Costs were taxed on the 5th August, 1965. The defendants in the first action were not the same as the defendants in the second action, but on 15th October, 1965, the defendants in the first action assigned the costs of that action, with all the benefit of the judgment therein, to the defendants in the second action (the plaintiffs herein). Notice of the assignment was given to the company by letter, dated the 27th October, 1965, and at the same time the plaintiffs purported to set off the two sets of costs and they tendered the difference, viz., £82 2s. 2d. The right to set off was denied and the decree obtained in the second action was lodged with the sheriff, the second-named defendant herein, who sent his bailiff to the dwelling-house of the first-named plaintiff. On an application by the plaintiffs to restrain the defendants by injunction from issuing execution on foot of the said decree, it was

Held by Budd J. that there was no valid right of set-off. The costs awarded in the second action "was a judgment debt owing to the Company. The charge created by the debenture crystallised on that asset of the Company when it came into existence and it became assigned in equity to the debenture holder at the latest upon the taxation of the costs on the 5th August, 1965,"(date of certification of costs). ". . . at the time of the assertion of the set-off, on the 27th October, 1965, there was no mutuality, because the claim founded upon the judgment in the first action involved the company alone and did not involve the debenture holder."

The relief sought was, accordingly, refused.

Observations of Evershed M.R., Jenkins and Parker L.JJ. in In Re B. Johnson & Co. (Builders) Ltd.[1955] 1 Ch. 634 adopted; N. W. Robbie & Co. Ltd. v. Witney Warehouse Co. Ltd.[1963] 1 W. L. R. 1324 followed; conclusions of McLoughlin J. in Ardmore Studios (Ir.) Ltd v. Lynch and Others[1965] I. R. 1 followed; Gosling v. Gaskell[1897] A. C. 575 distinguished.

Cur. adv. vult.

Budd J.:—

In these proceedings the plaintiffs seek an injunction to restrain the defendants and each of them from issuing execution or causing or procuring execution to be issued on foot of the order of the High Court dated the 30th April, 1965, in an action entitled:—"1964. No. 1193 P. The High Court. Between Ardmore Studios (Ireland) Limited, Plaintiffs, and George Lynch, Anthony Kelly, Dermot Moloney, Leo Murphy and Peter Kingsley, Defendants."

The present application is by way of motion for an interlocutory injunction to much the same effect, but in somewhat wider terms. It has been agreed to treat the hearing of the motion as the trial of the action.

The background of the case is as follows: Ardmore Studios (Ireland) Ltd., the first-named defendants (generally herein referred to as "the Company"), carried on business, prior to certain events to which I am about to refer, at Ardmore Studios, Bray, Co. Wicklow. The Company was engaged in the business of letting its studios and premises and providing facilities for film making. In 1963 it became involved in a trade dispute resulting in the picketing of the Company's premises by members of the Electrical Trades Union (Ireland). An action (Ardmore Studios (Ireland) Ltd.v. Lynch and Others: see [1965] I. R., at p. 6) was brought

to restrain the picketing. This action was dismissed with costs on the 30th July, 1963. A certificate of taxation of the costs was issued on the 23rd June, 1965, the amount certified for being £1,125 18s. 6d. These proceedings are referred to herein as "the first action."

The Company had, prior to the first action, borrowed money from the Industrial Credit Company Ltd. The advances made were secured by an indenture of mortgage debenture, dated the 31st October, 1958, executed by the Company in favour of the Industrial Credit Company Ltd. and by sundry supplemental deeds of charge.

After the termination of the first action, and largely by reason thereof, the Industrial Credit Company Ltd. appointed Mr. William Sandys receiver over the assets of the Company pursuant to the powers enabling them to do so under the terms of the indenture of mortgage debenture. The appointment was made by an indenture of agreement, dated the 31st October, 1963, made between the Industrial Credit Company Ltd. and Mr. Sandys.

For six months after his appointment the receiver did not attempt to carry on the business of the Company as a going concern, but tried to bring about a sale. He failed to find a purchaser.

In or about May, 1964, there were negotiations with a film production company for the sale of the Company's business, but...