Re Mercer Agencies Ltd [(in Administration)] and an Application for Recognition and Orders in Aid of Foreign Insolvency Proceedings

• Jurisdiction: Ireland
• Judge: Mr. Justice Michael Quinn
• Judgment Date: 07 May 2025
• Neutral Citation: [2025] IEHC 261
• Court: High Court
• Year: 2025
• Docket Number: Record No. 2025/138 MCA

Mercer Agencies Limited (In Administration)

and

In the Matter of an Application by Mercer Agencies Limited for Recognition and Orders in Aid of Foreign Insolvency Proceedings

Respondent

[2025] IEHC 261

Record No. 2025/138 MCA

THE HIGH COURT

Insolvency – Equivalence of jurisdiction – Legitimate purpose – Applicant seeking an order recognising the entry of the applicant into a process of administration pursuant to the Insolvency (Northern Ireland) Order 1989 – Whether recognition was being sought for a legitimate purpose

Facts: The applicant, Mercer Agencies Ltd (the Company), applied to the High Court for an order recognising: (a) the entry of the Company into a process of administration pursuant to the Insolvency (Northern Ireland) Order 1989; (b) the appointment of Mr Murray and Mr Davison of Keenan Corporate Finance Ltd, Belfast as joint administrators (the Joint Administrators); (c) the powers of the Joint Administrators to bring or defend any action or legal proceedings in the name of and on behalf of the Company pursuant to s. 627, Table 1, Paragraphs (a) and (b) of the Companies Act 2014, in a manner analogous to Article 6 of Schedule 1 of the 1989 Order; and (d) the power of the Joint Administrators to collect and gather in the property of the Company and for that purpose to maintain such proceedings as may seem to them expedient in accordance with s. 624(2) of the 2014 Act, which power corresponds to the power contained in Article 1 of Schedule 1 of the 1989 Order. The Company also applied for an order that the court and its officers act in aid of and be auxiliary to the High Court of Justice of Northern Ireland, Chancery Division, in respect of the administration proceedings. On 25 March 2025, Quinn J made the orders applied for and stated that he would give his reasons later.

Held by Quinn J that, although administration under the 1989 Order is not the same as liquidation or examinership because it can be utilised for a number of different purposes, including the alternate purposes of a rescue or asset realisation for the benefit of the creditors, each of those objectives and the attendant powers had an equivalent within different parts of the 2014 Act, namely Parts 10 (examinership) and 11 (winding up). Most importantly for the purpose of the application, Quinn J held that the asset realisation function of the Joint Administrators, coupled with the power to bring or defend legal proceedings in the name of the Company, directly corresponded with provisions of Part 11 of the 2014 Act. It seemed to Quinn J that in those circumstances there was sufficient evidence of equivalence between the two insolvency regimes to warrant the making of the orders of recognition sought on the application. Quinn J held that the purpose of the application was to ensure that insofar as it may be necessary for the Joint Administrators, in the performance of their statutory duties of realising assets for the benefit of creditors, to take any action, whether by way of legal proceedings or otherwise, in the State they may do so without encountering delay associated with establishing their standing to do so on behalf of and in the name of the Company in administration. Quinn J held that this was clearly a legitimate purpose, having direct equivalence with the functions of a liquidator appointed under Part 11 of the 2014 Act.

Quinn J held that, for those reasons, it was appropriate to make the orders sought.

Application granted.

JUDGMENT of Mr. Justice Michael Quinn delivered on the 7 ^th day of May 2025

1 . This judgment relates to an application by Mercer Agencies Limited (“the Company” or “the Applicant”), acting by joint administrators appointed to it pursuant to the Insolvency (Northern Ireland) Order 1989 (“the 1989 Order”), for an order recognising:

(a) the entry of the Company into a process of administration pursuant to the 1989 Order,

(b) the appointment of joint administrators Scott P. Murray and Ian Davison, of Keenan Corporate Finance Limited, Belfast as joint administrators (“the Joint Administrators”),

(c) the powers of the Joint Administrators to bring or defend any action or legal proceedings in the name of and on behalf of the Company pursuant to s. 627, Table 1, Paragraphs (a) and (b) of the Companies Act 2014, in a manner analogous to Article 6 of Schedule 1 of the 1989 Order,

(d) the power of the Joint Administrators to collect and gather in the property of the Company and for that purpose to maintain such proceedings as may seem to them expedient in accordance with s. 624(2) of the Companies Act 2014, which power corresponds to the power contained in Article 1 of Schedule 1 of the 1989 Order.

2 . The Company applies also for an order that this court and its officers act in aid of and be auxiliary to the High Court of Justice of Northern Ireland, Chancery Division, in respect of the administration proceedings.

3 . The application was made ex parte and was stated to have been made pursuant to the powers of this court at common law or alternatively pursuant to the inherent jurisdiction of this court.

4 . No direct precedent was cited for this court making an order for recognition of administrators appointed under the 1989 Order.

5 . Although the application was made ex parte, the ex parte docket and grounding affidavits were provided to the court in advance. Having considered these documents and the submissions of counsel on this application I concluded that, having regard to the legislation and to cases cited as to the common law and inherent jurisdiction of this court to recognise and provide assistance to foreign courts in relation to insolvency proceedings, this court has jurisdiction to make the order sought. I decided also that, on the evidence, this was an appropriate case in which to make such orders. On 25 March 2025 I made the orders applied for and stated that I would give my reasons later, which I now do by this judgment.

The Company and appointment of joint administrators

6 . The Company was incorporated under the laws of the United Kingdom and had its registered office at Moira Industrial Estate, Old Kilmore Road, Moira, County Down, Northern Ireland. Its principal place of business was in Northern Ireland. It operated from warehouses and trade showrooms near Lisburn, Co. Down and in Coventry, England. Its principal business was the wholesale supply of Christmas decorations, garden furniture and garden trellises. It had become one of the leading suppliers of such products within the Irish market, both Northern Ireland and in the State, and had a strong presence also in the United Kingdom.

7 . The Company had at least 35 live customers in the State, one of whom was said on this application to owe the Company, at the time of the making of this application USD$1,499,339.17.

8 . The court was informed that the Company had no creditors in the State.

9 . Arising from a deterioration of trade and ensuing financial difficulties the Company entered administration on 28 November 2024.

10 . One of the procedures by which a company can be placed in administration under the 1989 Order is that the directors resolve to place the Company in administration and to appoint administrators. Notice of the appointment is then filed with the High Court of Justice, Northern Ireland Chancery Division. The administration and appointment of joint administrators takes effect on the filing of such a notice. This was the procedure availed of in this case.

11 . In a case where the Company has granted floating charges, the procedure described above can only be availed of where the holders of those floating charges have consented, as they did in this case, namely the Governor and Company of the Bank of Ireland (U.K.) Plc and N.I. Growth Loan Fund II General Partner Limited, both of which had their registered offices in Belfast. Each of these floating charge holders consented to the appointment of administrators and the appointment therefore took effect on 29 November 2024.

Conduct of the administration

12 . The application was grounded on an affidavit sworn on 12 March 2025 by one of the Joint Administrators Mr. Scott P. Murray.

13 . A supporting affidavit was sworn by the solicitor acting for the Joint Administrators Ms. Ellen Forester. Ms. Forester is a solicitor qualified and holding a practising certificate with the Law Society in Northern Ireland and with the Law Society of Ireland.

14 . Mr. Murray described the statutory purpose of the administration and his powers under the 1989 Order, to which I shall return later. He outlined the steps taken by him to achieve a better result for the creditors of the Company as a whole than would be achieved if the Company were wound up without first being placed in administration. This is one of the permitted objectives under the 1989 Order and was the objective being pursued by the administrators in this case. Further to that objective the Joint Administrators have since their appointment pursued the collection of debts due to the Company.

15 . The largest single debt due to the Company was owed by Rath-Wood Home and Garden World Limited, which had its registered office at Rath, Tullow, County Carlow (“Rath-Wood”). It is said by Mr. Murray that the debt due by Rath-Wood to the Company as of the date of swearing his affidavit was USD$1,499,339.17.

16 . In describing Rath-Wood and the debt claimed by the Company and the engagement between the Company and Rath-Wood, I am relying on Mr. Murray's affidavit. In doing so I caution that since this application was made ex parte and Rath-Wood did not participate or have any opportunity to respond, nothing I say in the description of the engagement between the Company and Rath-Wood may be treated as determinative of any issue, should one arise, as between the Company and Rath-Wood. The adjudication of any such issue would be a matter for another day...