Munster and Leinster Bank v Munster Motor Company

• Jurisdiction: Ireland
• Judgment Date: 01 February 1922
• Date: 01 February 1922
• Court: Chancery Division (Ireland)

Munster Bank v. Munster Motor Co.

MUNSTER AND LEINSTER BANK

Plaintiffs

and

MUNSTER MOTOR COMPANY, Limited, and Another, Defendants (1)

Practice - Sale by order of the Court - Private tender - Reopening sale after

acceptance of tender.

Where a private tender for the purchase of property sold by order of the Court has been accepted, the principles applicable to reopening biddings on a sale by auction by order of the Court will be followed.

Motion to vary order of the Court directing a sale.

The plaintiffs, the Munster and Leinster Bank, brought an action in the Chancery Division against the defendants, the Munster Motor Company, Limited, to have a debenture, issued to the bank by the company on the 2nd February, 1921, declared a charge on the undertaking and property of the company, for the usual accounts, and for the appointment of a receiver and sale. The Goodyear Tyre and Rubber company, Ltd., were joined as defendants as unsecured creditors. The action came on for hearing before Powell J. on the 28th July, 1921, when, there being no appearance for the defendants, judgment was given for the plaintiffs, with the provision that the parties were at liberty to apply to the Vacation Judge as there might be occasion.

On the 21st September, 1921, an application was made to Dodd J. sitting as Vacation Judge for the acceptance of an offer of £12,500 made for the purchase of the undertaking and property of the defendant company by a Miss Murphy, and guaranteed by a Mr. Woodhead, who claimed to hold a judgment mortgage on the leasehold property of the defendant company. The application was grounded upon the affidavit of Mr. Olden, the receiver, in which it was stated that the debts due by the company were £11,763 4s. 1d. due to plaintiffs, £5,000 due to Mr. Woodhead, and £2,788 14s. 2d. due to trade creditors. The valuation of the property and assets was calculated as £10,999 9s. Mr. Olden stated that although the offer would not clear off all the liabilities of the defendant company, it was not probable any larger sum would be obtained by any other means of realization, and that, owing to the dampness and situation of the company's factory, the stock was fast deteriorating. Dodd J. accepted the offer, but the order was never made up, and on the 10th October, 1921, Miss Murphy withdrew her offer and Mr. Woodhead his guarantee.

On the 7th December, 1921, Messrs. Byrne and O'Mahony made to the receiver an offer to purchase the property and undertaking of the defendant company for the sum of £11,500, and on the 12th December, 1921, counsel applied to Powell J. for leave to serve notice of motion for the 14th December for liberty to the receiver to accept this offer. The notice was served on the Goodyear Tyre and Rubber Co., Ltd., and Mr. Woodhead.

On the 14th December, 1921, the application was made to Powell J. for an order for sale and for acceptance of the proposal by Messrs.

Byrne and O'Mahony. The motion was grounded on the affidavit of Mr. Olden, who referred to his previous affidavit, and stated that since September the value of the stock had much deteriorated, and that the offer of £11,500 was, in his opinion, exceedingly good. Counsel, who moved, stated that since the motion was instituted an offer of £12,500 had been made to the receiver by Mr. Woodhead. A representative of Mr. Woodhead's solicitors informed the Court that Mr. Rearden had been instructed to appear for...