Re Mr Binman and Others
| Jurisdiction | Ireland |
| Judge | Ms. Justice Finlay Geoghegan |
| Judgment Date | 02 November 2011 |
| Neutral Citation | [2011] IEHC 401 |
| Judgment citation (vLex) | [2011] 11 JIC 0202 |
| Court | High Court |
| Date | 02 November 2011 |
[2011] IEHC 401
THE HIGH COURT
COMPANIES (AMDT) ACT 1990 S2(1)
COMPANIES (AMDT) ACT 1990 S4
GALLIUM LTD (T/A FIRST EQUITY GROUP), IN RE 2009 2 ILRM 11 2009/22/5449 2009 IESC 8
VANTIVE HOLDINGS & ORS, IN RE 2010 2 IR 118 2009/57/14518 2009 IESC 69
COMPANIES ACT 1963 S124
COMPANIES ACT 1963 S122
COMPANIES (AMDT) ACT 1990 S3
ASTON COLOUR PRINT LTD, IN RE 2005 3 IR 609 1997/7/2556
COMPANIES (AMDT) ACT 1990 S3(1)(A)
COMPANIES (AMDT) ACT 1990 S3(1)(B)
KERR & ORS v CONDUIT ENTERPRISES LTD UNREP FINLAY-GEOGHEGAN 22.7.2010 2010/25/6272 2010 IEHC 300
COMPANIES (AMDT) ACT 1990 S2(2)
PLANNING & DEVELOPMENT ACT 2000 S160
MISSFORD LIMITED (T/A RESIDENCE MEMBERS CLUB), IN RE UNREP KELLY 20.1.2010 2010/36/9069 2010 IEHC 11
COMPANY LAW
Examinership
Petition by company to appoint examiner - Petition opposed by bank - Whether presentation of petition validly authorised by company - Whether requirements of s 2(1) of Companies (Amendment) Act 1990 met - Whether reasonably prospect of survival of company as going concern - Re Vantive Holdings [2009] IESC 69, [2010] 2 IR 118 considered - Companies (Amendment) Act 1990 (No 27), s 2 - Petition refused (2011/592COS - Finlay Geoghegan J - 2/11/2011) [2011] IEHC 401
In re Mr Binman
Facts The petitioners (Mr. Binman) sought the appointment of an Examiner pursuant to section 2(1) of the Companies Amendment Act 1990 to Mr. Binman and related companies. The main Bank to the group of companies (which was owed approximately €53m) was opposed the petition. The Bank contended that the evidence did not establish a reasonable prospect of survival and that, even if it did, on a number of grounds, the court should exercise its discretion against appointment. Issue was taken by the Bank regarding the structure of shares held in the company and the extent of security over shares. In addition there were objections to the manner in which the company had proposed to seek Examinership and whether the necessary resolution had been correctly passed. It also transpired that there were concurrent legal proceedings between the petitioner under s. 160 of the Planning and Development Act 2000 brought by a third party against the petitioner regarding lands where the company operated a waste facility.
Held by Finlay Geoghegan J in refusing the petition. For the purposes of the application, it was not necessary to make any determination in relation to the continuing existence of security held by the Bank over shares in Mr. Binman. The subsequent ratification by the shareholders of the presentation done on the authority of the directors validated the presentation of the petition. The company had a bank debt at a level which it was unable to service from current revenue. The company was unable to access the necessary bank funding necessary for the annual capital expenditure programme which the business required and there was pressure on operational revenues due primarily to the general economic downturn and its impact on the waste disposal business. There was no evidence before the court of the availability of any alternative banking facilities. On the evidence and material placed before it, the court was not be satisfied that there was a reasonable prospect of the survival of Mr. Binman and the whole or any part of its undertaking as a going concern.
Reporter: R.F.
JUDGMENT of Ms. Justice Finlay Geoghegan delivered on the 2nd day of November, 2011
1. On 27 th October, 2011, I gave my decision on the petition of Mr. Binman for the appointment of Mr. William O'Riordan as Examiner of Mr. Binman pursuant to s. 2(1) of the Companies Amendment Act 1990, and of each of the four companies named in the title as related companies pursuant to s. 4 of the Act. In summary, my decision was:
(i) The presentation of the petition had been validly authorised by Mr. Binman; and
(ii) the requirements of s. 2(1) of the Companies Amendment Act 1990 ("the Act") were met; and
(iii) on the evidence and material placed before it, the Court could not be satisfied that there is a reasonable prospect of the survival of Mr. Binman and the whole or any part of its undertaking as a going concern.
2. I further indicated that I had considered all the evidence and submissions presented to the Court in accordance with the principles set out by the Supreme Court per Fennelly J., in Re Gallium Ltd. [2009] 2 ILRM 11, and per Murray C.J. in Vantive Holdings [2009] IESC 69.
3. I also indicated that it was commoncase that, unless Mr. Binman satisfied the Court that it and the whole or part of its undertaking had a reasonable prospect of survival as a going concern, the Court had no jurisdiction to appoint an Examiner and therefore could not enter into a consideration of discretionary matters, including the purpose and policy of the Act to protect employment.
4. I indicated I would give my full reasons for the above decision as soon as possible. This judgment contains those reasons.
5. The petitioner, Mr. Binman, is a trading company and is the holding company of the four other companies named in the title. Together, I will refer to these as the Binman Group. The Binman Group is primarily involved in waste collection and recycling throughout Munster and Galway. Its headquarters are at Grange, County Limerick. It is primarily run and owned by the Sheahan family. Mr Martin Sheahan Snr. and Mr Martin Sheahan Jnr. are directors of most of the companies. It currently employs approximately 331 full time employees and 10 independent contractor staff.
6. On 12 th October, 2011, Mr. Binman presented a petition seeking the appointment of Mr. William O'Riordan as Examiner of Mr. Binman pursuant to s. 2(1) of the Companies (Amendment) Act 1990, and of each of the other four companies named in the title, as related companies, pursuant to s. 4 of the Act. The petition was verified by affidavit of Mr Martin Sheahan Snr. ("Mr Sheahan"). It is not in dispute that the other four companies are related companies of Mr. Binman within the meaning of the Act.
7. On an ex parte application on 12 th October, 2011, I appointed Mr. O'Riordan as Interim Examiner of Mr. Binman and the four related companies and made the petition returnable for as soon as practicable which was Tuesday 18 th October, 2011. On 18 th October, 2011, by consent of the parties appearing, I adjourned the hearing of the petition to 20 th October, 2011, to enable exchange of affidavits and continued the appointment of Mr. O'Riordan. The petition was heard over two days with further affidavits filed in the course of the two days.
8. The petition of Mr. Binman was opposed by Bank of Scotland ("the Bank"). Bank of Scotland (Ireland) ("BOSI") had been for many years the principal banker and lender to the Binman Group and is now merged with the Bank. The Bank is owed approximately €53m by the Binman Group and hold extensive security over all the companies in the Group and from the Sheahan family. Mr. Graeme Keen, a banker of Edinburgh, swore two affidavits on behalf of the Bank. The Bank contended that the evidence before the Court did not establish a reasonable prospect of survival and that, even if it did, on a number of grounds, the Court should exercise its discretion against appointment. He also stated for reasons given that the relationship between the Bank and the Binman Group and Sheahan family had totally broken down. Mr Sheahan also makes much complaint of the behaviour of BOSI. The Court cannot resolve the cause of the breakdown in relations but must take it into account
9. The Revenue Commissioners appeared and took a position of "guarded neutrality". They filed two affidavits raising matters of great concern to them in relation to a withholding of approximately €1m in tax in 2010. They are currently owed €1.8 million. Limerick County Council also appeared. It is a creditor in the order of €2m, which debt is disputed by Mr. Binman. Limerick CC supported the petition and made it clear that it was doing so by reason of its concern for the preservation of jobs in the Limerick region. It is also the planning authority for the petitioner's principal site and operations and the deponent set out facts in relation to the planning and waste permit position in relation to same. Greenstar, a creditor for €2.2m, appeared at the first return date and indicated it was supporting the petition. Mr. Binman obtained letters of support from many unsecured creditors and BES investors.
10. Mr O'Riordan, the interim examiner, filed a short report on 18 th October which indicated the existence of potential investors with money with an interest in investing in the Group. He also stated that no matters had come to his intention which indicated that the conditions identified by the Independent Accountant as necessary for the survival of the companies as a going concern "are not capable of being satisfied". However he does not refer to knowledge of any of the matters referred to in this judgment as causing concern for the Court.
11. The Bank made two preliminary objections to what it referred to as the locus standi of Mr. Binman as petitioner. Nothing...
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