P & B Security Services Ltd ((in Liquidation)) v Triglen Holdings Ltd t/a Russell Court Hotel
| Jurisdiction | Ireland |
| Judge | Mr. Justice Garrett Simons |
| Judgment Date | 12 March 2019 |
| Neutral Citation | [2019] IEHC 152 |
| Docket Number | 2018 No. 195 CA |
| Court | High Court |
| Date | 12 March 2019 |
[2019] IEHC 152
THE HIGH COURT
CIRCUIT APPEAL
Simons J.
2018 No. 195 CA
Debt collection – Right of set-off – Indemnity – Defendant seeking to set-off debt against monies which it held pursuant to an indemnity given by the plaintiff – Whether the defendant was entitled to claim a set-off
Facts: The defendant, Triglen Holdings Ltd, was a company which operated a hotel and night club in Dublin, and had availed of the security services of the plaintiff, P & B Security Services Ltd, prior to the latter company entering into liquidation. The defendant accepted, in principle, that it owed monies to the plaintiff. However, the defendant maintained that it was entitled to set-off that debt against monies which it held pursuant to an indemnity given by the plaintiff. The indemnity was in respect of personal injury claims brought against the defendant wherein it was claimed that the personal injuries arose from acts, negligence and/or failures on the part of the plaintiff arising from the provision of security services at the defendant’s hotel. The dispute between the parties centred on whether a right of set-off existed. The plaintiff contended that the requirement for “mutuality” was not satisfied on the facts. The matter came before the High Court by way of an appeal from the Circuit Court.
Held by Simons J that the defendant was entitled to claim a set-off, and that a “just estimate” of same exceeded the value of the Plaintiff’s claim (€51,435.78).
Simons J held that he would hear counsel as to the precise form of order, but his initial view was that the only order required was one dismissing the plaintiff’s application for liberty to enter final judgment, on the basis that the plaintiff’s claim was less than the amount which the defendant was entitled to set-off.
Judgment approved.
This matter comes before the High Court by way of an appeal from the Circuit Court. The proceedings are, in effect, debt collection proceedings. The Plaintiff is a company, now in liquidation, which previously provided security services to bars and night clubs. The Defendant is a company which operates a hotel and night club in Dublin, and had availed of the Plaintiff's security services prior to the latter company entering into liquidation.
The Defendant accepts, in principle, that it owes monies to the Plaintiff. However, the Defendant maintains that it is entitled to set-off this debt against monies which it holds pursuant to an indemnity given by the Plaintiff. The indemnity is in respect of personal injury claims brought against the Defendant wherein it is claimed that the personal injuries arise from acts, negligence and/or failures on the part of the Plaintiff arising from the provision of security services at the Defendant's hotel.
The dispute between the parties centres on whether a right of set-off exists. The Plaintiff contends that the requirement for ‘mutuality’ is not satisfied on the facts. If a right of set-off does not exist, then the Defendant must pay the debt to the Plaintiff in full. Insofar as the Defendant's right to an indemnity against the Plaintiff is concerned, the Defendant would simply rank as an unsecured creditor in the winding up.
For the reasons set out herein, I am satisfied that the Defendant is entitled to a right of set-off. In circumstances where the liability under the indemnity is contingent only, the Liquidator must make a ‘just estimate’ of what that liability will be. The uncontested evidence indicates that the liability will exceed the debt otherwise owing to the Plaintiff.
The Plaintiff is a limited liability company which had been in the business of providing security services to customers in the licensing trade, and, in particular, to the operators of public houses and nightclubs. The Plaintiff went into liquidation on 23 March 2015. Mr. Angus Donohoe has been appointed liquidator (‘ the Liquidator’).
The within proceedings were instituted before the Circuit Court in or about 14 October 2015, and seek to recover a sum of €51,435.78 which it is said the Defendant is indebted to the Plaintiff for in respect of the provision of security services. The Defendant operates a hotel and nightclub. The letter of demand seeking the payment of the €51,435.78 was sent on 1 September 2015.
Following the service of various motions, a Defence was ultimately delivered on 1 November 2017. The Defence consists, in effect, of a traverse of the Plaintiff's claim. However, the following pleas are made in the alternative, at paragraphs 6 to 8 (inclusive).
‘6. Without prejudice to the foregoing if the Defendant is indebted to the Plaintiff in the amount claimed or any amount, which is denied, then the Defendant will assert and claim that it is entitled to set off any amounts due and owing by it to the Plaintiff in respect of monies due by way of indemnity and/or agreement and/or representation by the Plaintiff, its servants and/or agents in respect of claims and/or legal proceedings instituted by third parties against the Plaintiff and/or Defendant in respect of which liability for same rests with the Plaintiff.
7. At all material times the Plaintiff, its servants and/or agents had furnished indemnity and/or agreed to indemnify the Defendant in respect of such claims but has failed and neglected to do so.
8. In the premises the Defendant denies that it is indebted to the Plaintiff in the amount claimed or any amount.’
The matter was heard before the Circuit Court, and an appeal brought to the High Court.
The appeal came on for hearing before me on 21 February 2019. Both counsel, very helpfully, agreed that the sole issue for determination was as to whether the Defendant was entitled to withhold money on the basis of the asserted indemnity.
In order to understand the arguments of the parties, it is necessary, first, to set out in full the terms of the indemnity asserted by the Defendant.
The indemnity is recorded in a letter dated 1 May 2010. This letter is signed by a director of the Plaintiff company, Mr. Victor Ellis. Mr. Ellis gave evidence before me, which I will summarise presently.
‘Re: Indemnity and Undertaking
We refer to the various claims against The Russell Court Hotel/Triglen Holdings Limited seeking damages for personal injuries sustained at the Russell Court Hotel, wherein it is claimed that the personal injuries arise from acts, negligence and/or failures on the part of the P & B Security Services Limited arising from the provision of security services at the Hotel, and we hereby indemnify the Russell Court Hotel/Triglen Holdings Limited in respect of those claims.
P & B Security Services Limited undertake that it will have in place a Policy of Insurance to cover Public Liability and Employee Liability and in the event that for some reason that the Insurers fail or refuse to indemnify the Russell Court Hotel/Triglen Holdings Limited in respect of any such claim, P & B Security Services Limited will make good the undertaking.
It is hereby accepted and agreed that by way of security for such indemnity and undertaking that the Russell Court Hotel/Triglen Holdings Limited can withhold payment due to P & B Security Services Limited in respect of the security services provided, and set off such monies...
To continue reading
Request your trial