Re Car Replacements Ltd ((in Liquidation))
| Jurisdiction | Ireland |
| Judge | O'Flaherty J. |
| Judgment Date | 01 January 1995 |
| Neutral Citation | 1994 WJSC-SC 2252 |
| Court | Supreme Court |
| Docket Number | [S.C. No. 209 of 1992],09/92 |
| Date | 01 January 1995 |
1994 WJSC-SC 2252A
THE SUPREME COURT
O'Flaherty J.
Egan J.
Denham J.
Citations:
RSC O.74 r107
PMPA GARAGE (LONGMILE) LTD, IN RE 1992 ILRM 337
PMPA GARAGE (LONGMILE) LTD (NO 2), IN RE 1992 ILRM 349
CIVIL PROCEDURE ACT 1833 (3 & 4 WILL 4 C42)
IRISH BANKRUPT & INSOLVENT ACT 1857 S260
THEO GARVIN LTD, IN RE (1967) 3 AER 497
MERCHANT SHIPPING COMPANY LTD V ARMITAGE & ORS 1873 LR 99
DUNCOMBE V THE BRIGHTON CLUB & NORFOLK HOTEL COMPANY 1875 LR 371
LONDON CHATHAM & DOVER RAILWAY CO V SOUTH EASTERN RAILWAY CO 1892 1 CH 120
LONDON CHATHAM & DOVER RAILWAY CO V SOUTH EASTERN RAILWAY CO 1893 AC 429
MAINE & NEW BRUNSWICK ELECTRICAL POWER COMPANY LTD V HART 1929 AC 631
Synopsis:
INTEREST
Creditor
Entitlement - Contract - Provision - Absence - Guarantee - Enforcement - Absence of contractual right to payment of interest on principal sum - Rules of court - (209/92 - Supreme Court - 19/5/94) - [1995] 3 I.R. 473
|In re Car Replacements Ltd.|
WINDING UP
Creditor
Debt - Proof - Interest - Entitlement - Guarantee - Enforcement - Absence of contractual right to payment of interest on principal sum - Rules of court - (209/92 - Supreme Court - 19/5/94)
|In re Car Replacements Ltd.|
WORDS AND PHRASES
Debt ... payable ... at a certain time~ Creditor - Debt - Proof - Interest - Entitlement - Guarantee - W:G7 Enforcement - Absence of contractual right to payment of interest on principal sum - Rules of court - (209/92 - Supreme Court - 19/5/94) - [1995] 3 I.R. 473
|In re Car Replacements Ltd.|
Judgment of O'Flaherty J. delivered on the19th day of May, 1994 [NEM DISS]
By notice of motion brought in the High Court Mr. William Horgan, liquidator to the Private Motorists' Provident Society Limited (in liquidation) - hereinafter called "PMPS" - applied pursuant to Order 74, r.107 of the Rules of the Superior Courts, 1986 for an order for the payment of interest on the sum of £1,861,464 from the 24th October, 1985 to the 15th May, 1991 (being the date upon which the petition for the winding up of Car Replacements Limited was presented). It should be noted that the principal sum has been repaid. The interest with which the case is concerned comes to about £600,000.
In the course of his grounding affidavit, Mr. Horgan recounted that by order of the High Court on the 19th December, 1983 he was appointed official liquidator of PMPS. He deposed that Car Replacements Limited with many other companies entered into a joint and several guarantee in favour of PMPS dated 31st December, 1982 1. He went on to depose that by letter of the 3rd
October, 1985, pursuant to the terms of the said guarantee, PMPS gave notice of the default of the debtor companies and by further letter dated 24th October 1985 PMPS demanded payment on foot of the guarantee from the company (as well as from the other guarantors)The relevant provisions of the guarantee were as follows:
To: Private Motorists' Provident Society Limited,
Wolfe Tone House,
Wolfe Tone Street,
Dublin 1.
In consideration of your having at our request agreed to advance and advancing to us sums of money not exceeding at any time in the aggregate the sum of £3 million pounds.
We jointly and severally guarantee to you the repayment of all such sums of money advanced by you to us as aforesaid subject as hereinafter mentioned that is to say:
1. Notice in writing of any default on the part of any of us is to be given by you to each of us and within ten days from its receipt payment will be made by us of all sums then due from us under this guarantee.
2. This guarantee is a continuing guarantee within the limits aforesaid as to time and demand and our liability under it is joint and several.
It appears that by letter of the 18th January, 1984 demand was made of each of the debtor companies but that no payment had been received up to the 3rd October, 1985.
On the 24th October, 1985 Mr. Horgan wrote the following letter to the receiver of Car Replacements Limited.
Dear Sir,
I refer to my letter of 3rd October, 1985 in which I gave you notice of default as required under the terms of the guarantees specified in that letter.
Under the terms of those guarantees, you agreed to discharge the amount due by the defaulting companies subject to the limit specified in each guarantee.
More than ten days have now elapsed since receipt of the notice of default by you.
I hereby demand from you payment of the sums due by each defaulting company, as set out in the schedule attached to my letter of 3rd October, 1985, which sums total IR£3,058,633
Before us counsel have agreed that this figure was incorrect but nothing turns on this.
Order 74, r. 107 of the Rules of the Superior Courts 1986 provides:
On any debt or sum certain, payable at a certain time or otherwise, whereon interest is not reserved or agreed for, and which is overdue at the date of the commencement of the winding up, the creditor may prove for interest at a rate not exceeding six per cent, per annum to that date from the time when the debt or sum was payable, if the debt or sum is payable by virtue of a written instrument at a certain time, and if payable otherwise, then from the time when a demand in writing has been made, giving notice that interest will be claimed from the date of the demand until the time of payment.
I have emphasised the critical words in the rule as far as this case is concerned.
In his judgment in the High Court of the 11th May, 1992, Murphy J. concluded that rule 107 provides that interest is payable in two circumstances
(a) when the sum certain is payable by virtue of a written instrument at a certain time or
(b) when the sum is not so payable but a written demand is made, including a demand for interest.
He went on to say:
Here the case is a hybrid. There is provision for a demand in the guarantee. The document provides for payment on a certain or specified date.
Under this guarantee there is a provision for a demand to be...
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