Re Greendale Developments Ltd ((in Liquidation)) (No. 1)

JurisdictionIreland
CourtHigh Court
JudgeMiss Justice Laffoy
Judgment Date28 July 1997
Neutral Citation1998 WJSC-HC 7600
Date28 July 1997
Docket Number[1995 No. 133 C.O.S.]

1998 WJSC-HC 7600

THE HIGH COURT

133 COS/1995
IN RE GREENDALE DEVELOPMENTS LTD.
IN THE MATTER OF GREENDALE DEVELOPMENTS LIMITED (IN LIQUIDATION)

AND

IN THE MATTER OF THE COMPANIES ACTS 1963– 1990

Citations:

COMPANIES ACT 1963 S231

COUNTYGLEN PLC, IN RE 1995 1 IR 220

COMPANIES ACT 1963 S231(1)

COMPANIES ACT 1963 S231(3)

CONSTITUTION ART 34.1

R, IN RE 1989 IR 126

IRISH PRESS PLC V INGERSOLL 1993 ILRM 747

MCDONALD V BORD NA GCON 1965 IR 217

KEADY V COMMISSIONER OF AN GARDA SIOCHANA 1992 2 IR 197

COMPANIES ACT 1990 S7(4)

COMPANIES ACT 1963 S205(7)

Synopsis:

Company

Compulsory winding up; in camera hearing; administration of justice; application for directions by liquidator; leave sought to continue legal proceedings; s.231 Companies Act, 1963; whether application for directions can be heard in camera; whether giving of directions by Court constitute administration of justice; whether directions an administrative function; characteristics of administration of justice; justice to be administered in public; test of administration of justice applied Held: Application to be heard in public High Court: Laffoy J. 28/07/1997

Greendale Developments Ltd., In re - [1997] 3 IR 540

1

Judgment of Miss Justice Laffoy delivered on the 28th day of July 1997

2

The Ap??? ("the Liquidator"), the Official Ligidator of ??? pany"), which is being wound up by the Court ???pany"), which is being wound up by the Court ???n which is pending before the Court heard in ear???dator seeks directions in connection with the lic???n Order pursuant to Section 231 of the Cor???tinue two plenary actions which were commence???ler was made, one being an action against a bani???her being an action against a firm of solicitors. The Act of 1963 does not confer any power on the Court to hear an application under Section 231 otherwise than in public. Not being satisfied that authority exists which permits the hearing of the substantive application in camera, I adapted the approach adopted by Murphy J. in In Re: Countyglen Plc [1995] 1 I.R. 220 and I directed that the Attorney General should come into the proceedings as legitimus contradictor to argue that the substantive application must be heard in public.

3

Subsection (1) of Section 231 empowers the liquidator in a winding up by the Court to do various acts with the sanction of the Court or of the committee of inspection, including the bringing or defending of any action or other legal proceedings in the name and on behalf of the company. Subsection (3) of Section 231 provides as follows:-

"The exercise by the liquidator in a winding up by the court of the powers conferred by this section shall be subject to the control of the court, and any creditor or contributory may apply to the Court in relation to any exercise or proposed exercise of any of those powers."

4

Counsel for the Liquidator has intimated that one creditor which is on notice of the substantive application does not object to leave to continue the proceedings being granted. Another creditor of the Company has filed an Affidavit in the substantive application strenuously objecting to the proceedings being continued. It is against this background that the preliminary issue as to whether the Liquidator's application to have the substantive application heard in camera must be considered.

5

Article 34.1 of the Constitution provides that justice shall be administered in court established by law by Judges appointed in the manner provided by the Constitution, and, save in such special and limited cases as may be prescribed by law, shall be administered in public. It is well settled that the effect of Article 34.1 of the Constitution is that justice must be administered in public in the absence of a statutory provision enacted or re-enacted or applied by a law enacted by the Oireachtas subsequent to the coming into force of the Constitution ( In Re: R. [1989] I.R. 126; Irish Press Plc -v- Ingersoll [1993] I.L.R.M. 747). The essential question which falls for consideration on this application is whether the making of a decision to grant or refuse leave to continue proceedings in the circumstances of the substantive application is an administration of justice.

6

On behalf of the Liquidator, Mr. Trainor submitted that such a decision is not an administration of Justice, rather it is an administrative function which the Court performs in a compulsory winding up which is analogous to administrative functions which the Court performs in the administration of the estates of deceased persons and the exercise of jurisdiction over minors and wards of court. Moreover, it was submitted on behalf of the Liquidator that such a decision does not manifest any of the five features which were identified in McDonald -v- Bord na gCon [1965] I.R. 217 as being characteristic of the administration of justice. On the other hand, Mr. Clarke submitted on behalf of the Attorney General that all of the five characteristic features identified in McDonald -v- Bord na gCon are present in an adjudication under Section 231 in the circumstances which arise on the substantive application and that in dealing with the substantive application this Court will be administering justice.

7

I propose considering the arguments advanced in relation to each of the five features individually. These features are:-

(1) A dispute or controversy as to the existence of legal rights or a violation of the law.
8

In determining an application under Section 231, such as the application in the substantive application, it was submitted on behalf of the Liquidator, the Court arrives at an assessment of the appropriate course of action for the Liquidator to adopt having regard to certain variables, for example, the strength of the action which the Liquidator wishes to bring or continue as against the likely expense of the case and the level of costs to which the Company would be exposed if it were to lose the action. Such an assessment is not a disputed or controversy as to legal rights in the sense which that term is normally understood. The decision which the Court makes is not different in quality than that which the Board of Directors of a solvent company would make when determining whether to proceed with, or desist from, litigation.

9

Mr. Clarke argued that Section 231 itself recognises that the manner in which his powers may be exercised by a liquidator can have a serious effect on the rights of creditors and contributories. If the Court accedes to an application to continue proceedings and the liquidator loses the action and costs are awarded against him, the...

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9 cases
  • Irish Bank Resolution Corporation Ltd v Morrissey
    • Ireland
    • High Court
    • 10 November 2014
    ...liquidator to continue existing proceedings in the name of the company: (see Re Greendale Developments Limited (In Liquidation) [1997] 3 I.R. 540). Section 231(1)(a) relates to those type of proceedings where the cause of action is the cause of action of the company and is applicable to suc......
  • Re Lance Homes Ltd & The Companies Act; Lee Towers Management Company Ltd v Lance Investments Ltd ((in Liquidation))
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    ...winding up of it.' The principle is well established. Laffoy J., in In re Greendale Developments Ltd. (In Liquidation) (No. 1) [1997] 3 IR 540, expressed the effect as follows: 'Once a winding up order is made, the company is doomed to extinction. The winding up process is the process of t......
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    • 6 April 2021
    ...Health Board v. M.K and M.K. v. K. [1999] 2 I.R. 99, Barrington J. at 116: In Re Greendale Developments Limited (in liquidation) (No.1) [1997] 3 I.R. 540 at 547 and In the matter of JJ [2021] IESC 1, McKechnie J.). Aside from this caveat however, such limitations are self-created and self-i......
  • RE CUSTOM HOUSE CAPITAL Ltd ((in Liquidation))
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    ...FINANCIAL INSTRUMENTS) REGS 2007 SI 60/2007 REG 172 TAXES CONSOLIDATION ACT 1997 S784 GREENDALE DEVELOPMENTS LTD (IN LIQUIDATION), IN RE 1997 3 IR 540 1998/20/7600 COMPANIES ACT 1963 S249 COMPANIES ACT 1963 S228(D) COMPANIES ACT 1963 S244 KEAY & MCPHERSON MCPHERSONS LAW OF COMPANY LIQUIDAT......
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1 books & journal articles
  • Preferential Creditor Status in Irish Corporate Insolvency Law: A Need for more Priorities?
    • Ireland
    • Irish Judicial Studies Journal Nbr. 1-20, January 2020
    • 1 January 2020
    ...basis for the statutory priority of claims in distribution in liquidation was summarised by Laffoy J in Re Greendale Developments Ltd. [1997] 3 IR 540, 547: ‘The winding-up process is the process of the administration of the assets of the company, their collection, realisation and distribut......

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