Re H. Williams (Tallaght) Ltd

• Jurisdiction: Ireland
• Judge: Mr Justice Geoghegan
• Judgment Date: 07 October 1996
• Neutral Citation: [1996] IEHC 16
• Docket Number: [1991 No. 8563P],no. 8563P/1996
• Court: High Court
• Date: 07 October 1996

[1996] IEHC 16

THE HIGH COURT

no. 8563P/1996

H WILLIAMS (TALLAGHT) LTD v.

IN THE MATTER OF

H WILLIAMS (TALLAGHT) LIMITED (IN RECEIVERSHIP AND LIQUIDATION)

AND

IN THE MATTER OF THE COMPANIES ACTS 1963– 1990

Citations:

COMPANIES ACT 1963 S98(1)

COMPANIES ACT 1963 S285

COMPANIES ACT 1963 S98

COMPANIES ACT 1963 S285(2)

UNITED BARS LTD (IN RECEIVERSHIP) V REVENUE COMMISSIONERS 1991 1 IR 396

MERTHYR CONSOLIDATED COLLIERIES, IN RE 1929 CH 498

GL SAUNDERS LTD (IN LIQUIDATION), IN RE 1986 1 WLR 215

COMPANIES ACT 1963 S285(14)

OAKTHORPE HOLDINGS LTD, IN RE 1989 ILRM 62

COMPANIES ACT 1990 S134

Synopsis:

COMPANY LAW

Receivership - preferential claim advanced by Revenue Commissioners - subsequent liquidation - whether Revenue Commissioners entitled to separate preferential claim in re monies outstanding - ss.98(1), 285 Companies Act 1963 considered - whether second claim statute-barred - Held: Revenue Commissioners entitled to preferential treatment under both receivership and liquidation - ss.98 and 285 not mutually exclusive - but on the facts, claim was statute-barred - (High Court - Geoghegan J. - 07/10/1996)

|In the matter of H.Williams (Tallaght) Ltd. (in receivership and liquidation)|

1 Judgment of Mr Justice Geoghegan delivered the 7th day of October 1996.

2 H. Williams (Tallaght) Limited went into receivership on the 22nd September, 1987. The Receiver was appointed on behalf of the holders of a debenture secured by a floating charge. In accordance with the provisions of Section 98(1) of the Companies Act, 1963, the Receiver in respect of assets coming into his hands upon realisation of the property subject to the floating charge treated the Revenue Commissioners as preferential creditors in relation to certain debts of the company in respect of PAYE and PRSI. Having paid the preferential debts, the Receiver had sufficient assets in his hands to discharge the entire debt of the debenture holders and he had therefore no further function to perform. But on the 1st July, 1991 the company went into liquidation. The Revenue Commissioners are claiming to be a preferential creditor under Section 285 of the Companies Act, 1963in respect of a Corporation Tax liability of the company. The Liquidator argues that such a preferential claim cannot be permitted in that, as he submits, it was never intended that the same creditor could make a preferential claim in a receivership and claim preference again in a subsequent liquidation. He maintains that Section 98 of the 1963 Act when read in conjunction with Section 285 ought to be construed as precluding such a double preference as he might describe it. The Liquidator further submits that even if he is wrong in that view, the claim by the Revenue Commissioners is out of time and is statute barred.

3 These two issues now come to be determined by this Court on foot of an application for directions by the Liquidator and an order of Mr Justice Murphy that the matter be specially set down for hearing on foot of pleadings delivered by both sides. I now propose to deal with each of the two issues in turn.

4 The argument of the Official Liquidator is neatly summarised in paragraph 9 of the points of claim. That paragraph reads as follows:

"The Official Liquidator maintains that the Revenue's preferential claims against Tallaght were paid in full in the receivership of Tallaght and the Revenue cannot now make any preferential claim in the liquidation because, inter alia, Section 98 of the 1963 Act clearly contemplates that there would be only one set of preferential creditors if a receivership occurs. In such case, the preferential creditors are defined and paid by reference to the date of appointment of the Receiver only. The fact that Section 285(2) of the 1963 Act states that "in a winding up there shall be paid in priority to all other debts" the preferential debts does not mean that a new set of preferential creditors arises in a winding-up subsequent to the receivership."

5 No authority has been cited in support of the argument of the Official Liquidator and I can find no basis for his submission in the wording of Section 98. The relevant part of that section reads as follows:

"(1) Where ... a receiver is appointed on behalf of the holders of any debentures of a company secured by a floating charge ....... then, if the company is not at the time in the course of being wound up, the debts which in every winding-up are, under the provisions of Part VI relating to preferential payment to be paid...