Re McCairns (P.M.P.A.) Plc

• Jurisdiction: Ireland
• Judge: McCarthy J.
• Judgment Date: 01 January 1992
• Neutral Citation: 1991 WJSC-SC 2104
• Court: Supreme Court
• Docket Number: [S.C No. 126 of 1989]
• Date: 01 January 1992

1991 WJSC-SC 2104

THE SUPREME COURT

Finlay C.J.

Hederman J.

McCarthy J.

O'Flaherty J.

Egan J.

(126/89)

MCCAIRNS (PMPA) PLC

IN THE MATTER OF THE COMPANIES ACTS, 1963 TO 1986 AND McCAIRNS (P.M.P.A.) PLC (IN LIQUIDATION)

HILL SAMUEL AND COMPANY (IRELAND) LIMITED

APPELLANT

Citations:

MCCAIRNS (PMPA) PLC, IN RE UNREP HIGH 17.2.89

SUPREME COURT & HIGH COURT (FEES) ORDER 1986 SI 375/1986

MICHAEL ORR (KILTERNAN) LTD, IN RE 1986 IR 273

THORNBERRY CONSTRUCTION (IRL) LTD,IN RE 1986 IR 273

COMPANIES ACT 1963 S284

IRISH BANKRUPT & INSOLVENT ACT 1857 S331

COMPANIES (CONSOLIDATION) ACT 1908 S207

JUDICATURE (IRL) ACT 1877 S28

COMPANIES ACT 1963 S98

COMPANIES ACT 1963 S218

COMPANIES ACT 1963 S219

COMPANIES ACT 1963 S285

COMPANIES ACT 1963 S288

COMPANIES ACT 1963 S291

REGISTRATION OF TITLE ACT 1964 S62(6)

EGAN ELECTRIC LTD, IN RE 1987 IR 398

BANKRUPTCY LAW COMMITTEE REPORT PRL 2714

HUMBER IRONWORKS & SHIPBUILDING CO, IN RE 4 CH APP 643

COMPANIES ACT 1862

Synopsis:

WINDING UP

Creditors

Secured creditor - Claim - Enforcement - Interest - Terminal date for assessment - Whether bankruptcy rules applicable - Contract - Unilateral mistake - Consent of secured creditor to sale of land by official liquidator - Proceeds of sale - Court fees - Liquidator's undertaking to pay creditor's claim without deduction - Estoppel - High Court (Fees) Order, 1986, schedule No. 33 - Companies Act, 1963, s. 284 - Registration of Title Act, 1964, s. 62 - (126/89 - Supreme Court - 18/7/91) - [1991] 2 I.R. 465

|In re McCairns (P.M.P.A.) Plc.|

EVIDENCE

Estoppel

Representation - Reliance - Company - Liquidator - Sale of land - Proceeds of sale - Claims of secured creditor - Court fees pay able by liquidator - Liquidator's undertaking to pay creditor's claim without deduction - (126/89 - Supreme Court - 18/7/91)

|In re McCairns (P.M.P.A) Plc.|

INTEREST

Assessment

Creditor - Security - Enforcement - Company - Insolvent debtor - Sale of land by liquidator - Acquiescence of secured creditor - Creditor entitled to interest at contract rate until redemption - (126/89 - Supreme Court - 18/7/91) [1991] 2 I.R. 465 [1992] ILRM 19

|In re McCairns (P.M.P.A.) Plc.|

MISTAKE

Contract

Formation - Creditor - Security - Enforcement - Sale of company's land - Sale by liquidator - Liquidator's promise to pay secured creditor from proceeds of sale without deduction - Unilateral mistake of liquidator - Sale facilitated by creditor - Court fees payable by liquidator - Creditor entitled to payment without deduction for court fees - (126/89 - Supreme Court - 18/7/91)

|In re McCairns (P.M.P.A.) Plc.|

PRACTICE

Court fees

Company - Winding up - Liquidator - Lands - Sale - Secured creditor - Acquiscence in sale - Agreement of liquidator to discharge creditor's claim from proceeds of sale without deduction - Court fees payable by liquidator in respect of proceeds - Whether fees to be deducted from sum otherwise payable to creditor - (126/89 - Supreme Court - 18/7/91) - [1991] 2 I.R. 465 - [1992] ILRM 19

|In re McCairns (P.M.P.A.) Plc.|

REAL PROPERTY

Incumbrance

Mortgage - Security - Enforcement - Mortgagor - Insolvent company - Winding up - Liquidator - Sale of Company's lands - Acquiescence of secured creditor - Creditor claimed payment of interest until date of redemption - Liquidator promised to pay creditor from proceeds of sale without deduction - Court fees payable by liquidator in respect of proceeds - Whether fees to be deducted from sum otherwise payable to creditor - (126/89 - Supreme Court - 18/7/91) - [1991] 2 I.R. 465 - [1992] ILRM 19

|In re McCairns (P.M.P.A.) Plc.|

1 McCarthy J. delivered the 18th day of July, 1991. [Nem Diss]

2 The bank appeals in respect of three issues arising from the judgment of the High Court (Costello J.) determining certain questions submitted by the Official Liquidator of the company.

3 (a) Whether the proceeds of sale to which the bank is entitled are to bear a portion of the Court fees - Answer - Yes.

4 (b) The basis on which the bank is entitled to claim interest after the date of the commencement of the winding up - Answer - not in the liquidation, and

5 (c) the order that the Official Liquidator do recover against the bank his costs of and incidental to the proceedings in the High Court.

6 This latter issue was, by agreement, postponed for argument after judgment on the main issues. The facts are set out in detail in the judgment in the High Court; it is sufficient to say that the bank, by virtue of registered charges over the relevant property, is a secured creditor for the payment of the principal and interest due to it. The company was ordered to be wound up on the 13th July 1987 pursuant to a petition presented on the 29th June 1987, which is the relevant date for the purposes of the Companies Act 1963. By agreement between the bank and the liquidator, the property was sold for a sum of £1.525m; the sale was closed on the 25th January 1988 and the net proceeds placed on interest-bearing deposit in the joint names of the Official Liquidator and the Examiner "pending adjudication on the secured claims of the Governor and Company of the Bank of Ireland and of Hill Samuel and Company (Ireland) Limited" (Order of Murphy J.)

(1) Court Fees.

7 Pursuant to the Supreme Court and High Court (Fees) Order, 1986 (S.I. No. 375 of 1986) the fees payable in the Examiner's office include a fee of £2.50

"33. On taking account of moneys received by a person liable to account for same - for every £100 of the amount received or in the case of a Company being wound up by the Court for every £100 of the moneys received by the Liquidator in realisation of the assets of the Company."

8 Because of the Order approving the sale, an account must be taken in respect of it; this attracts a Court fee of £2.50 per £100, approximately £7,000 in respect of the bank's charge. The Liquidator seeks to deduct this sum from the net amount payable to the bank: the bank says it must be paid in full, this for two reasons:-

9 (a) There was an express agreement to that effect.

10 (b) The liability of the Liquidator is for Court fees on the value of the equity of redemption only.

A. Agreement.

11 On accountable receipt from the Liquidator's solicitors, the bank's solicitors handed over, amongst other documents, the original land certificate in respect of the relevant Folio 4952 County Dublin. In correspondence (4th November 1987) the Liquidator's solicitor confirmed "that your client will be paid in full as a result of the sale of the Santry premises to Sheelin Homes Limited. I would be obliged to receive a formal letter from the bank consenting to the said sale as a matter of urgency as the said letter will need to be exhibited to the affidavit of the Official Liquidator grounding our motion for Court approval." The bank responded (6th November), stating it had no objection to the proposed sale and adding:-

"It must however be understood that our approval of this transaction is on the strict understanding that:"

(a) The company's indebtedness to this bank (Ir£263,893.49 as of today's date) together with interest thereon accruing to date of repayment is as indicated in your letter discharged in full without deduction.

(b) Releases of this bank's security will only be furnished in return for payment of the indebtedness as set out above. and

(c) our legal costs are discharged on delivery of such releases."

12 The relevant documents were sent for sealing by the bank (15th December) and the Liquidator's solicitor "confirm (ed.) that, following completion of the sale of the property comprised in Folio 4952 County Dublin, we will discharge all sums due by McCairns (P.M.P.A.) plc to the bank out of the proceeds of sale." Later the Liquidator's solicitor (20th January 1988) sent to the bank's solicitors a written undertaking "following admission of your clients' security by the Examiner, and adjudication of the amounts payable thereunder, to discharge out of the proceeds of sale all sums so admitted and adjudicated." The bank has argued that the Liquidator must abide by the agreement alleged to be found in the correspondence. The learned trial Judge has found a lack of mutuality. He said "I...