Platt v Casey's Drogheda Brewery Company

• Jurisdiction: Ireland
• Judge: Barton, J.
• Judgment Date: 09 November 1911
• Court: Chancery Division (Ireland)
• Date: 09 November 1911

Platt

and

Casey's Drogheda Brewery Company.

Barton, J.

CASES

DETERMINITD BY

THE CHANCERY DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND.

AND BY

THE IRISH LAND COMMISSION,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL.

1912.

Payment out — Mistake — Recoupment — Order to bring back into Court moneys overpaid.

In a debenture-holder's action, brought by trustees for debenture-holders against an insolvent company, the realized assets were insufficient to pay debenture-holders in full. The allocation schedule was, by mistake, framed on the basis that certain banking companies, who held debentures as security for advances made by them to the company, should receive dividends on the amounts of the debts due to them, instead of on the face value of their debentures. As a result, the amount allocated to the banking companies was less than it should have been, and certain debenture-holders, directors of the company and parties to the action, were consequently overpaid. Upon motion by the plaintiff, who had carriage of the suit, the directors were ordered to bring back into Court the amounts by which they had been overpaid.

Motion on notice.

Casey's Drogheda Brewery Company was a company carrying on the business of brewers at Drogheda. The directors of the Company (in accordance with the articles of association) issued debentures for £25,000 divided into 250 debentures of £100 each. The debentures were secured by a trust deed dated 11th March, 1895, of which the plaintiffs were the trustees for the debenture-holders.

The Company had a current account with the Munster and Leinster Bank, Limited, and fifty-seven of the debentures were issued to the Munster and Leinster Bank, to be held as security for the repayment to the Bank of any money then due or thereafter to become due by the Company to the Bank. In like manner 125 debentures were issued to Lloyd's Bank (Limited), as security for advances, and the remaining debentures were issued to other persons for cash at the face value of each debenture.

As the Company was doing badly, an action was commenced in 1906 by the plaintiffs, as trustees for the debenture-holders, against the Company for the realization of the debentures.

On 1st December, 1906, an order was made directing the realization of the assets of the Company by the receiver, and declaring that plaintiffs as trustees for the debenture-holders were entitled to a first charge upon the property of the defendant Company mentioned in the order. The assets were realized; and by his certificate, dated 18th March, 1910, the chief clerk found that the debenture-holders were entitled to the amount due to each of them respectively, and by order of 13th May, 1910, made on further consideration, the certificate was confirmed; and on 20th December, 1910, an order was made allocating the funds in Court, and declaring a dividend on the amount found due to each debenture-holder. The allocation schedule was framed on the basis that the Banking Companies were to be paid a dividend upon the amount of the debts due to them respectively by the Company. Some little time after the allocation the solicitor for the Munster and Leinster Bank pointed out that the allocation schedule was framed on a wrong basis, and that they were entitled to be paid a dividend upon the face value of their debentures so long as they did not receive more than 20s. in the £. The allocation schedule proposed to pay to the Munster and Leinster Bank dividends on £2072 13s. 6d. (the amount of the debt actually due to them), instead of on £5700, the nominal value of their debentures. Four of the directors of the Company, who were debenture-holders, had taken up their dividend warrants, and had, as a result of the above mistake, been considerably overpaid, But the remainder of the drafts (except in the case of Lloyd's Bank) were still in the hands of the...