Murphy v Murphy

• Jurisdiction: Ireland
• Judge: Ms. Justice Finlay Geoghegan
• Judgment Date: 11 December 2003
• Neutral Citation: [2003] IEHC 91
• Docket Number: [2003 No. 306 Cos]
• Court: High Court
• Date: 11 December 2003

[2003] IEHC 91

THE HIGH COURT

306 COS/2003

MURPHY v. MURPHY & ORS

IN THE MATTER OF VISUAL IMPACT AND DISPLAYS LIMITED (IN VOLUNTARY LIQUIDATION)

AND IN THE MATTER OF SECTION 150 OF THE COMPANIES ACT, 1990

AND SECTION 56 OF THE COMPANY LAW ENFORCEMENT ACT, 2001

BETWEEN

STEPHEN MURPHY

APPLICANT

AND

TOM MURPHY, BRIAN McGARVEY, SEAN FARRELL AND BERNARD HACKETT

RESPONDENTS

1 JUDGMENT of Ms. Justice Finlay Geoghegan given on the 11th day of December 2003.

2 The applicant is the liquidator of Visual Impact and Displays Limited ("the Company") having been so appointed by a resolution of the members of the Company passed on the 26 ^th March, 2002.

3 By notice of motion dated the 30 ^th May, 2003 the applicant brought an application pursuant to s. 150 of the Companies Act, 1990, seeking a declaration of restriction in respect of each of the respondents.

4 On the 22 ^nd October, 2003, I heard the application in respect of the fourth named respondent Mr. Bernard Hackett. Following that hearing I concluded that the fourth named respondent was not a director of the company within twelve months of the date of commencement of winding up and accordingly having regard to the provisions of s. 149 of the Act of 1990, the provisions of s. 150 did not apply to the fourth named respondent. I dismissed the application in respect of the fourth named respondent.

5 Following my conclusion, an application was made on behalf of the fourth named respondent for costs against the applicant. I adjourned that application to permit the parties consider the question as to whether I had a discretion to award costs in favour of the fourth named respondent having regard to the provisions of s. 150 (4B) of the Act of 1990. Having heard the costs application I reserved my judgment until today.

The law in relation to costs

6 The general jurisdiction of the High Court in relation to costs is currently contained in Order 99 Rule 1 of the Superior Court Rules. This, insofar as relevant, provides:

"Rule 1: Subject to the provisions of the Acts and any other statutes relating to costs and except as otherwise provided by these Rules:"

(1) The costs of and incidental to every proceeding in the Superior Courts shall be in the discretion of those Courts respectively.

(2) No party shall be entitled to recover any costs of or incidental to any proceeding from any other party to such proceeding except under an order or as provided by these Rules.

2 (3)...

(4) The costs of every issue of fact or law raised upon a claim or counterclaim shall, unless otherwise ordered, follow the event."

7 ...

8 The specific provision in relation to costs of an application under s. 150 of the Act of 1990 is contained in s. 150 (4B) which was inserted by s. 41 of the Act of 2001 and provides

"The Court, in hearing an application for a declaration under subsection (1) from the Director, a liquidator or a receiver, may order that the directors against whom the declaration is made shall bear the costs of the application and any costs incurred by the applicant in investigating the matter."

9 The first issue which I have to consider is whether or not s. 150 (4B) has restricted or excluded the discretion of the Court under Order 99 Rule 1 to make an order for costs in favour of a respondent in respect of whom an unsuccessful application for a declaration of restriction under s. 150 has been brought.

10 I have previously concluded that s. 150 (4B) of the Act of 1990 should be construed as limiting the discretion which the Court may otherwise have under Order 99 Rule 1 in relation to the orders it might make in respect of the applicant's costs when hearing an application under s. 150 (1). GMT Engineering Services Limited (in voluntary liquidation) Luby v. McMahon and Anor (30 ^th July, 2003).

11 The submission that this Court's jurisdiction and discretion to deal with the costs of a successful respondent in a s. 150 application under Order 99, Rule 1, is not interfered with by s. 150 (4B) is primarily based upon the principle in the following passage from Maxwell on Interpretation of Statute (11 ^th ed. at People. 78) cited with approval by Henchy J. in the High Court in Minister for Industry and Commerce -v- Hailes [1967] I.R.

"Presumption against Implicit Alteration of Law. One of these presumptions is that the legislature does not intend to make any substantial alteration in the law beyond what it explicitly declares, either in express terms or by clear implication, or, in other words, beyond the immediate scope and object of the statute. In all general matters outside those limits the law remains undisturbed..."

12 Section 150 (4B) was inserted by s. 41 of the Company Law Enforcement Act, 2001. At the date of the passing of that Act the costs of a s. 150 application were dealt with by the Court under Order 99. Section 150 (4B) makes no express reference to the costs of a respondent, whether successful or unsuccessful. There is nothing in the wording of the subsection which could be considered to include a clear implication that the Oireachtas intended that the Court's jurisdiction and discretion in relation to the costs of a respondent be restricted or interfered with.

13 The impact of s. 150 (4B) upon the Court's jurisdiction to deal with the costs of a respondent must be distinguished from its impact upon the Court's jurisdiction to deal with the costs of an applicant as concluded in the case of GMT Engineering Services Limited (in voluntary liquidation) referred to above. As appears from my judgment in that case the subsection expressly refers to the costs of an applicant and provides that the Court "may order that the directors against whom the declaration is made shall bear the costs of the application". That was an order which the Court already had jurisdiction and discretion to make under Order 99, Rule 1, prior to the passing of s. 150 (4B). Accordingly to give those words any meaning and effect I concluded they must be construed as limiting the discretion conferred on the Court under Order 99, Rule 1, so as to exclude the Court from having a discretion to make any order for the applicant's costs other than against the persons expressly referred to therein.

14 I have concluded on this application that the Court does retain jurisdiction and a discretion to deal with the costs of the respondents under Order 99, Rule 1.

Exercise of discretion under Order 99

15 The fourth named respondent was successful on the application made against him under s. 150...