Re Lycatel (Ireland) Ltd

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 13 May 2009
• Neutral Citation: [2009] IEHC 264
• Docket Number: [2009 No. 169COS]
• Court: High Court
• Date: 13 May 2009

[2009] IEHC 264

THE HIGH COURT

[No. 169 COS/2009]

Lycatel (Ireland) Ltd, In Re

IN THE MATTER OF LYCATEL (IRELAND) LIMITED

AND

IN THE MATTER OF THE COMPANIES ACTS 1963 -2006

COMPANIES ACT 1963 S214(A)

RSC O.74 r18

COMPANIES ACT 1963 S212

COMPANIES ACT 1963 S213

COMPANIES ACT 1963 S213(E)

COMPANIES ACT 1963 S215

COMPANIES ACT 1963 S214

COMPANIES ACT 1963 S216

COMPANIES ACT 1963 S220

COMPANIES ACT 1963 S218

COMPANIES ACT 1963 S220(2)

RSC O.74 r7

RSC O.74 r8

RSC O.74 r9

RSC O.74 r10

RSC O.74 r15

UNITED STOCK EXCHANGE LTD, EX PARTE PHILIP & KIDD IN RE 1884 28 CH D 183

CREATIVE HANDBOOK LTD, IN RE 1985 BCLC 1

FRENCH APPLICATIONS TO WIND UP COMPANIES 2ED 2008 245

COMPANY LAW

Winding up

Petition - Substitution of petitioner - Whether locus standi for substitution without advertisement - Companies Act 1963 (No 33), ss 214, 215, 216, 218 and 220 - Rules of the Superior Courts 1986 (SI 15/1986), O 74, r 18 - Petitioner substituted (2009/169Cos - Laffoy j - 13/5/2009) [2009] IEHC 264

In re Lycatel (Ireland) Limited

Facts: Wavecrest (UK) Limited presented a petition to the Court to wind up Lycatel (Ireland) Limited on the basis that the company was insolvent and unable to pay its debts. The petition was not advertised and Wavecrest wished to withdraw its petition. An application was made to court to substitute Cronosell as petitioner. The issue arose as to whether Cronosell had locus standi to apply to be substituted. Order 74 of the Rules of the Superior Courts governed the application for the compulsory winding up of a company.

Held by Laffoy J. That an order would be made substituting Cronosell as petition*** set out in terms directed by the Court, as to the following: its identity, the grounds for the petition, the jurisdiction as to centre of main interests, that the amended petition was verified, that the amended petition was served on the company and that the amended petition would be advertised in accordance with Order 74, rule 10, Rules of the Superior Courts.

Reporter: E.F.

1 Judgment of Miss Justice Laffoy delivered on the 13th day of May, 2009.

Background

2 On 6 ^th April, 2009 Wavecrest (U.K.) Limited (Wavecrest) presented a petition in this Court to wind up Lycatel (Ireland) Limited (the Company). The basis on which the winding up order was sought was that the company was insolvent and unable to pay its debts, Wavecrest having served a statutory notice under s. 214(a) of the Companies Act 1963 (the Act of 1963) on 11 ^th March, 2009 demanding payment of Stg£255,238.30, which was not complied with. The return date of the petition was 27 ^th April, 2009.

3 The petition was listed for hearing on 27 ^th April, 2009. On that occasion, counsel for Wavecrest told the Court that the petition had not been advertised and that Wavecrest wished to withdraw the petition. When that application was made, a solicitor representing Cronosell Telecom Limited (Cronosell) applied to the Court to substitute Cronosell as petitioner on the basis that Cronosell would have a right to present a petition and desired to prosecute this petition. On that occasion, I adjourned the matter until the next motion day, 11 ^th May, 2009, to enable Cronosell to put evidence before the Court that it was a person who would have a right to present a petition.

4 On 11 ^th May, 2009, counsel for Cronosell submitted an affidavit which had been sworn and notarised in the Ukraine on 9 ^th May, 2009 by Ihor V. Bodyak, in which the deponent averred that the Company is indebted to Cronosell in the sum of US$94,161.64 in respect of the provision of telecommunication services from 1 ^st January, 2008 to 28 ^th February, 2009. The deponent further averred that Cronosell's Irish solicitors had, on 3 ^rd April, 2009, served a statutory notice under s. 214(a) of the Act of 1963 on the Company demanding payment of that sum, which notice had not been complied with. Cronosell sought to be substituted as petitioner pursuant to Order 74, rule 18 of the Rules of the Superior Courts 1986 (the Rules).

5 Opposition to Cronosell's application to be substituted came from counsel for Wavecrest. The Court was informed by counsel for Cronosell that the company was not objecting.

The issues

6 The primary issue for the Court, in my view, is whether Cronosell has locus standi to apply to be substituted. If it has, an ancillary issue is whether Wavecrest had locus standi to oppose the application to be substituted.

The legislation and the Rules

7 The jurisdiction of this Court to wind up a company is derived from s. 212 of the Act of 1963. The succeeding sections govern the procedure to be followed and the powers of the Court. Section 213 sets out the cases in which a company may be wound up. Paragraph (e) thereof is the provision which was originally invoked by Wavecrest and is now being invoked by Cronosell. It stipulates that the company is unable to pay its debts. Section 215 sets out the parties who may petition to wind up, who include creditors. On the basis of the evidence put by Cronosell before the Court, I am satisfied that Cronosell is a creditor who would have a right to present a petition and that it would be able to rely on the deemed insolvency provision contained in s. 214. Section 216 deals with the powers of the Court on the hearing of a petition to wind up and provides as follows:

"On hearing a winding-up petition, the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make any interim order, or any other order that it thinks fit, but the court shall not refuse to make a winding-up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets."

8 I infer that the reason for Wavecrest's opposition to the application of Cronosell is the potential combined effect of s. 220 and s. 218 in the event of the application succeeding. By virtue of s. 220(2), the winding up of a company by the Court is deemed to commence at the time of the presentation of the petition for the winding up. Accordingly, if the Court has jurisdiction and if it were to accede to the application of Cronosell, the winding up would be deemed to commence on 6 ^th April, 2009, if a winding up order were subsequently made. Section 218 provides that in a winding up by the court, any disposition of the property of the Company made after the commencement of the winding up, shall, unless the court otherwise orders, be void. Although the Court was not apprised of this fact formally, the Court was left with the understanding that the claim of Wavecrest against the Company had been compromised after the presentation of the petition.

9 Turning to the relevant rules, Order 74 of the Rules governs the practice and procedure on an application for a compulsory winding up order. Rules 7, 8 and 9 deal with the form of the petition and what happens in the Central Office when the petition is presented. Rule 10 deals with advertisement of the petition and provides that every petition shall be advertised seven clear days before the hearing, once in Iris O'figiúil and once at least in two Dublin daily morning newspapers. It stipulates the form of the advertisement and the requirement that it shall contain a note at the foot thereof stating that any person who intends to appear at the hearing of the petition, either to oppose or support, shall send notice of his intention to the petitioner within the time and in the manner prescribed by rule 15. Rule 15 deals with the hearing of the petition and the appearances thereon. It requires that a person intending to appear on the hearing of the petition shall serve notice in the prescribed form on the petitioner's solicitor by 5pm on the day prior to the day appointed for the hearing of the petition. The rule further stipulates that a person who fails to comply with it shall not, without special leave of the Court, be allowed to appear on the hearing of the petition.

10 Rule 18, which is the...