Re MJBCH Ltd ((in Liquidation))

• Jurisdiction: Ireland
• Judge: Ms. Justice Finlay Geoghegan
• Judgment Date: 15 April 2013
• Neutral Citation: [2013] IEHC 256
• Court: High Court
• Docket Number: [2012 No. 277 COS]
• Date: 15 April 2013

[2013] IEHC 256

THE HIGH COURT

[No. 277 COS/2012]

MJBCH Ltd (in liquidation), In re

IN THE MATTER OF MJBCH LIMITED (IN LIQUIDATION)

AND IN THE MATTER OF SECTION 222 OF THE COMPANIES ACT 1963

AND IN THE MATTER OF AN APPLICATION BY MARY MURPHY

APPLICANT

COMPANIES ACT 1963 S222

SAUNDERS (A BANKRUPT), IN RE 1997 CH 60

COLLIERS INTERNATIONAL UK PLC, IN RE 2012 AER (D) 255

CIVIL LIABILITY ACT 1961 S62

CIVIL LIABILITY ACT 1961 S35(1)(I)

INSOLVENCY ACT 1986 S130(2)

NATIONAL EMPLOYERS MUTUAL GENERAL INSURANCE ASSOCIATION LTD (IN LIQUIDATION), IN RE 1995 1 BCLC 232

CONSTITUTION ART 40.3

WILSON v BANNER SCAFFOLDING LTD THE TIMES 22.6.1982

COMPANIES ACT 1948 S231

INSOLVENCY ACT 1986 S285(3)

TAYLOR, IN RE 2007 CH 150

BOYD v LEE GUINNESS LTD 1963 NI 49

CONSTITUTION ART 34.3.1

MCCAULEY v MIN FOR POSTS & TELEGRAPHS 1966 IR 345

MURPHY v GREENE 1990 2 IR 566

CIVIL LIABILITY ACT 1961 S35(1)(I)

COMPANY LAW

Winding up

Practice and Procedure - Defendant company in liquidation - Leave to commence proceedings - Constitutional right of access to courts - Whether court has jurisdiction to retrospectively grant leave to commence proceedings against company in liquidation - Bank of Ireland v Colliers International UK plc [2012] EWHC 2942 (Ch), [2013] 2 WLR 895; Boyd v Lee Guinness [1963] NI 49; Canada (Wheat Board) v Krupski 26 CBR (3d) 293; Re H Kyosan Eng Co Ltd [1972] VR 403; In re Hutton (A Bankrupt) [1969] 2 Ch 201; Macauley v Minister for Posts and Telegraphs [1966] IR 345; Murphy v Greene [1990] 2 I.R. 566, [1991] ILRM 404; Re National Employers [1995] 1 BCLC 232; The Queen v Lord Mayor of London. Ex Parte Boaler [1893] 2 QB 146; Rendall v Blair 45 Ch 139; In re Saunders (A Bankrupt) [1997] Ch 60; In re Taylor [2006] EWHC 3029 (Ch), [2007] Ch 150; Re Testro Bros Consolidated Ltd [1965] VR 18; In re Wanzer, Limited [1891] 1 Ch 305; Wilson v Banner Scaffolding Ltd The Times, 22 June, 1982 - Companies Act 1963 (No 33), s 222 - Retrospective leave granted (2012/277COS - Finlay Geoghegan J - 15/4/2013) [2013] IEHC 256

Re MJBCH Ltd (in liquidation)

Facts: The applicant had an accident at a hotel complex which was the occupier of the premises owned by the respondent company and instituted proceedings for personal injuries, unaware that an order for winding up had been made in respect of the company. The Court considered whether it had jurisdiction to make an order granting leave for the commencement of proceedings with retrospective effect pursuant to s. 222 Companies Act 1963 or whether or not the Court could make an order the effect of which was to validate proceedings commenced after the making of a winding up order but without prior leave of Court.

Held by Finlay Geoghegan J. that s. 222 did not provide for the consequences of the commencement of an action without leave of the Court. A broader construction was in accordance with its statutory purpose. The Court did have jurisdiction to consider granting leave and the Court would exercise its discretion in favour of granting leave.

1 1. The applicant, Ms. Mary Murphy, suffered an accident on 20 ^th February, 2010, at the D4 Hotels Complex, Ballsbridge, Dublin 4. Arising out of investigations made on her behalf by her solicitors, they have been informed that MJBCH Ltd. ("the Company") was, at the material time, the occupier of the premises on which the accident occurred. They have further been informed that the Company had taken out a policy of insurance with a named insurance company.

2 2. The applicant applied to the Personal Injuries Assessment Board and by an authorisation dated 3 ^rd June, 2011, was granted authorisation to commence proceedings against the Company. On 10 ^th August, 2012, plenary proceedings were instituted under High Court Record Number 2012 No. 7988 P between Mary Murphy, plaintiff and JDPHC, MJBCH Ltd., Mountbrook Developments Ltd. and BCPHC, defendants. At the time of institution of the plenary proceedings, the applicant and her solicitors were unaware that on 25 ^th June, 2012, an order had been made by the High Court for the winding up of the Company by the Court and Mr. Declan Taite appointed Official Liquidator thereof.

3 3. The plenary proceedings were served on the Company in January, 2013. In response, the applicant's solicitor received a letter from the Official Liquidator advising that the Company had been wound up and that the Official Liquidator did not intend to defend the proceedings. Thereafter, the solicitor for the applicant wrote to the Official Liquidator of an intention to make an application pursuant to s. 222 of the Companies Act 1963, seeking retrospective leave of the Court to the commencement of the proceedings. In that letter, the solicitors refer to the English decisions of In Re Saunders (A Bankrupt) [1997] Ch. 60, and Re Colliers International UK plc. [2012] EWHC 2942 (Ch) as authority for the proposition that this Court could retrospectively make an order pursuant to s. 222 granting leave to commence proceedings. The solicitors also made clear that the applicant was anxious to proceed against the Company in the plenary proceedings in order to protect her position in respect of s. 62 of the Civil Liability Act 1961, having regard to the position taken by other parties in the proceedings to s. 35(1)(i) of the Act of 1961.

4 4. The present application was served on the Official Liquidator. The Court was informed that in advance of the application, through his solicitors, the Official Liquidator had informed the solicitors for the applicant that he was taking a neutral stance on the application and did not propose incurring the expense of appearing on this application.

5 5. The primary issue on this application is whether or not the Court has jurisdiction pursuant to s. 222 to make an order granting leave for the commencement of proceedings which has retrospective effect. Put another way, the question is whether or not the Court has jurisdiction to make an order, the effect of which is to validate proceedings commenced after the making of a winding up order but withoutthe prior leave of the Court. If the Court does have jurisdiction, there is the further issue as to whether it should grant the order sought.

The Law

6 6. Section 222 of the Companies Act 1963 provides:

"When a winding-up order had been made or a provisional liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose."

7 7. Applications pursuant to s. 222 are brought as a matter of course in the Examiner's Court motion list. In recent years, it has been the practice to reject applications made in respect of proceedings commenced after the making of a winding up order and prior to an application under section 222. This was done following the approach of Rattee J. in the English High Court to s. 130(2) of the Insolvency Act 1986, which is expressed in identical terms to s. 222, in Re National Employers Mutual General Insurance Association Ltd. (In Liquidation) [1995] 1 B.C.L.C. 232. Until the present application, no counsel or solicitor has sought to challenge the correctness of this approach as the proper construction of s. 222 of the Act of 1963.

8 8. Counsel for the applicant does so in this application relying, in particular, on the reasoning of and authorities referred to in two decisions also of the English High Court: Re Saunders (A Bankrupt) [1997] Ch. 60, and Re Colliers International UK plc. (In Administration) & Ors. [2012] EWHC 2942 (Ch), decided subsequent to Re National Employers Mutual General Insurance Association Ltd. Counsel, in making the application, informed the Court that he was not aware of any contrary authoritiesin England and Wales (other than those referred to in these two judgments) and had been unable to find any written Irish judgment on s. 222 of the Act of 1963. The carefully reasoned judgments given by Lindsay J. in Re Saunders and David Richards J. in Re Colliers International UK plc. appear to me persuasive and necessitate a reconsideration of the former practice of following the approach of Rattee J. in Re National Employers Mutual General Insurance Association Ltd. Furthermore, on a full consideration of the issues, there is the additional requirement in Ireland that s. 222 of the Act of 1963 be given a construction consistent with the Constitution, and in particular, the right of access to the courts guaranteed by Article 40.3.

9 9. The issue is whether, on a proper construction of s. 222, a proceeding commenced against a company which has already been the subject of a winding...