Re Vantive Holdings and Others

• Jurisdiction: Ireland
• Judge: Murray C.J.,Denham J.
• Judgment Date: 14 October 2009
• Neutral Citation: [2009] IESC 69
• Court: Supreme Court
• Docket Number: [S.C. No. 378 of 2009]
• Date: 14 October 2009

Vantive Holdings & Ors, In Re

IN THE MATTER OF VANTIVE HOLDINGS

IN THE MATTER OF VILLEER DEVELOPMENTS

IN THE MATTER OF PEYTOR DEVELOPMENTS

IN THE MATTER OF CARRAGH ENTERPRISES LIMITED

IN THE MATTER OF PARLEZ INTERNATIONAL LIMITED

IN THE MATTER OF MORSTON INVESTMENTS LIMITED AND IN THE MATTER OF ROYCETON

AND IN THE MATTER OF THE COMPANIES ACTS 1963 TO 2009

[2009] IESC 69

Murray C.J.

Denham J.

Fennelly J.

378/2009

THE SUPREME COURT

COMPANY LAW

Examinership

Second petition - Whether any special circumstances or explanation - Duty on petitioner to present all relevant information to court - Hearing confidential or commercially sensitive information otherwise than in public - Second petition based on information available at time of first petition - Whether abuse of process - Whether protection of court artificially extended - Whether absence of exceptional reasons would undermine principle of finality - Inherent jurisdiction to protect integrity of courts - Obligations on examiner - Interests of those who may benefit from examinership not factor to be considered in deciding to withhold information from court - Henderson v Henderson (1843) 3 Hare 100 and Barrow v Bankside Ltd [1996] 1 WLR 257 considered; In re Greendale Developments Ltd (No 3) [2000] 2 IR 514 approved - Companies Act 1990 (No 27), ss 2, 4A and 31 - Petitioner's appeal refused (378/2009 - SC - 14/10/2009) [2009] IESC 69

Re Vantive Holdings

COMPANIES (AMDT) ACT 1990 S2

COMPANIES (AMDT) ACT 1990 S3(3B)

HENDERSON v HENDERSON 1843 3 HARE 100 67 ER 313 1843-60 AER 378

JOHNSON v GORE WOOD & CO (A FIRM) (NO 1) 2002 2 AC 1 2001 2 WLR 72 2001 1 AER 481

CARROLL v RYAN & ORS 2003 1 IR 309 2003 2 ILRM 1 2003/8/1753

A (A) v MEDICAL COUNCIL 2003 4 IR 302 2004 1 ILRM 372 2003/1/49

GREENDALE DEVELOPMENTS LTD, IN RE (NO 3) 2000 2 IR 514 2001 1 ILRM 161 2000/9/3223

COMPANIES (AMDT) ACT 1990 S31

COMPANIES (AMDT) ACT 1990 S4A

BARROW v BANKSIDE MEMBERS AGENCY LTD 1996 1 WLR 257 1996 1 AER 981

1 JUDGMENT of Murray C.J. delivered on the 14th day of October 2009

2 (Reasons for allowing the appeal of 6th October 2009)

3 Judgment delivered by Murray, C.J.

4 On the 14 ^th August 2009 Vantive Holdings and the above related companies presented, ex parte, a petition to the High Court seeking an order pursuant to s. 2 of the Companies (Amendment) Acts 1990 as amended, for the appointment of an examiner in respect of the petitioner, Vantive Holdings, and the related companies. At that stage de Valera J., adjourned the application, inter alia, because it was the second petition of that nature in relation to the petitioner and the related companies (with the exception of Royceton which was not included as one of the related companies in the first petition, but nothing turns on that). ACC Bank plc intervened in the proceedings and indicated its intention to oppose the second petition being heard, in substance on the ground that the presentation of the second petition and the application for the appointment of an examiner arising therefrom constituted an abuse of process of the Court.

5 The issue as to whether the petitioner should be permitted to proceed on foot of the second petition for the appointment of an examiner was heard and determined in the High Court by Cooke J. The learned trial judge gave his decision on 21 ^st August 2009 allowing the petition to proceed and rejecting the objections raised on behalf of ACC Bank plc. On the 24 ^th day of August 2009 he delivered his judgment setting out the reasons for his decision.

6 This is an appeal by ACC Bank plc against the decision and order of Cooke J., on that question. One of the issues decided by Cooke J., was that the Act of 1990 did not, as such, prohibit the Court from entertaining and hearing a second petition by the same petitioner. While the appellants appealed against the decision on that issue it was not pursued at the hearing of the appeal, and in my view, correctly so. In my view the learned trial judge was correct in concluding "...that the Act of 1990 does not preclude the presentation of a second petition by the company although ... it would clearly require the intervention of some special circumstance or explanation". I do not think the learned trial judge was referring to any mere explanation but an explanation which established some special or exceptional circumstances, which, having regard to all the facts of the case and the interests involved justified the presentation of a second petition by the same petitioner notwithstanding that an earlier petition had been unsuccessful. One cannot define what those special or exceptional circumstances might be, though the learned trial judge gave one possible example, since a decision on the justification for such second application will, as indicated, fall to be considered in the particular circumstances of the case.

Background Facts

7 The genesis of these proceedings and the earlier related proceedings is the fact that the petitioner company and the related companies are insolvent. This is essentially due to the collapse of the property market in Ireland, particularly in Dublin, in the context of an economic recession in this country, accentuated by a banking crisis and also a virtually worldwide recession.

8 The first petition of the petitioner for the appointment of an examiner pursuant to s. 2 of the Act of 1990 was presented to the High Court on 17 ^th July 2009. Its timing was prompted by certain legal steps which the appellants, ACC Bank plc, had indicated it was proposing to take arising from the indebtedness of the group of companies to it. The facts and circumstances concerning the insolvency of the Zoe Group, as the petitioner and related companies have been referred to, are set out in the judgment of this Court, which I delivered on the 11 ^th August 2009, which dismissed the appeal of the petitioner against the refusal of its first application for the appointment of an examiner, and in the judgment of Cooke J., delivered in this particular matter. Those judgments as well as that of Kelly J., giving his decision to refuse the first application made to the High Court, also set out the inter-relationships which exist between the related companies themselves and their relationship with the petitioning companies. I do not think it is necessary to set out again all those matters for the purposes of the present appeal.

9 Following upon the dismissal by this Court on 11 ^th August 2009 of the petitioner's appeal against the refusal of the High Court to appoint an examiner on foot of its first petition the same petitioner presented a second petition for the same purpose pursuant to s. 2 of the Act of 1990 to the High Court on 14 ^th August 2009.

10 The second petition is not founded simply on new circumstances, new material or evidence which has arisen or become available subsequent to the decision of this Court or indeed that of the High Court dismissing the first petition.

11 Rather it is based substantially on factual material, expert opinion and evidence which was either available to the petitioner or obtainable by it at the time of the High Court hearing on the merits of the petition.

12 Among the matters fundamental to the petitioner's application on foot of the first petition was a three year business plan drawn up in December 2008 by the petitioner and related companies. On foot of this business plan it was claimed the group could trade out of its current difficulties and continue as a going concern.

13 This business plan was not placed before the High Court or the Supreme Court in the first petition but was produced for the second petition .

14 A Statement of Affairs was presented to the Court in the first petition and this Court, in its judgment noted "Firstly, and most crucially, no valuations had been exhibited" even though certain valuations did exist and were directly related to that Statement. The Court also noted that there was a failure, for the purposes of that first application, to evaluate or address in any reasoned or analytical manner future developments of the property market in Dublin although this was done for the purposes of the second petition.

15 Moreover, this Court in its judgment in relation to the first petition pointed to manifest deficiencies in the report of the independent accountant which the petitioner was required to present by statute.

16 In that regard the judgment of the Court noted that the independent accountant stated that he based his opinion that the companies had a reasonable prospect of survival on "the companies' trading projections" contained in Appendix 5 to his report. The Court went on to state "It is to be noted that the accountant expresses no view about the reasonableness of the projections in Appendix 5 or about the assumptions upon which they are based. He restricts himself to saying that he has discussed these matters with the management of the companies. Consequently, the Court does not have the benefit of any opinion from the accountant bearing on the viability of the projections."

17 For the purposes of the second petition the petitioner has sought to address those deficiencies in the report of the independent accountant in the first petition by relying on a new report of a new independent accountant. I see no reason why this could not have been done for the purposes of the first petition had the petitioner chosen to do so.

18 Evidence crucial to the first petition, and so described by the Court, namely the business plan and the property valuations were then actually in the possession of the petitioner but not presented to the Court.

19 At paragraph 81 of the Affidavit of Mr. John Pope grounding the second petition it was stated "In the light of the terms of the judgment of...