Re Walsh Maguire & O'Shea Ltd

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 05 December 2011
• Neutral Citation: [2011] IEHC 457
• Court: High Court
• Date: 05 December 2011

[2011] IEHC 457

THE HIGH COURT

[No. 330 COS/2011]

Walsh Maguire & O'Shea Ltd, In re

IN THE MATTER OF THE COMPANIES ACTS 1963 - 2009

AND

IN THE MATTER OF SECTION 310 OF THE COMPANIES ACT 1963

AND

IN THE MATTER OF WALSH MAGUIRE & O'SHEA LIMITED

COMPANIES ACT 1963 S310

COMPANIES ACT 1963 S310(1)

CROKE v WATERFORD CRYSTAL LTD 2005 2 IR 383

RSC O.28 r1

MIXHURST LTD, IN RE 1994 2 BCLC 19

MACCANN & COURTNEY COMPANIES ACTS 1963-2009 2010 ED P 581

DEAUVILLE COMMUNICATIONS WORLDWIDE LTD, IN RE 2002 2 IR 32

MORRIS v HARRIS 1927 AC 252

PHILIP POWIS LTD, IN RE 1998 1 BCLC 440

COMPANIES ACT 1963 S311(8)

COMPANIES (AMDT) ACT 1982 S12(B)

FRAMUS LTD & AMANTISS ENTERPRISES LTD & WILBURY LTD v CRH PLC & IRISH CEMENT LTD & ORS 2000 2 ILRM 177

COMPANIES (AMDT) ACT 1982 S12(6)

SMITH v WHITE KNIGHT LAUNDRY LTD 2001 2 BCLC 206

COMPANIES ACT 1948 S352(1)(UK)

COMPANIES ACT 1985 S651(1)(UK)

COMPANIES ACT 1985 S651(2)(UK)

COMPANIES (CONSOLIDATION) ACT 1908 S223

MORRIS v HARRIS 1927 AC 252

COMPANIES (CONSOLIDATION) ACT 1908 S223(1)

FOSTER YATES & THOM LTD v HW EDGEHILL EQUIPMENT LTD 1978 122 SJ 60

COMPANIES ACT 1985 S651(5)(UK)

COMPANIES ACT 1985 S651(6)(UK)

LIMITATION ACT 1980 S33(UK)

MCPHERSON LAW OF COMPANY LIQUIDATION 2001 P 895

COMPANIES ACT 1963 S311(8)

COMPANIES (AMDT) NO.2 ACT 1999

COMPANIES ACT 1963 S311(8)(A)

FINANCIAL SERVICES COMPENSATION SCHEME LTD v LARNELL (INSURANCES) LTD 2006 QB 808

NELSON CAR HIRE LTD, IN RE 1973 107 ILTR 97

Abstract:

Commercial law - Liquidation - Litigation - Practice and procedure - Dissolution of company - Outstanding claim - Amendment of pleadings - Locus Standi - Whether proceedings for damages statute-barred - Rules of the Superior Courts, 1986 - Companies Acts 1963 - 2009.

Facts The petitioner in this instance had issued proceedings seeking to have the dissolution of a company voided (S. 310 Companies Act) and the company in question (Walsh Maguire & Company Limited) restored to the register. The company had been voluntarily wound up and the assets distributed. The petitioner sought to have the company restored to the register in order to proceed with a claim against the company (relating to damages for alleged trespass and nuisance). On behalf of the company it was contended that even if the company was restored to the register new plenary proceedings would have to be instituted which would be statute-barred. It was also contended that the petitioner was attempting to sue the wrong defendant, the company had no liability to the petitioner before it was dissolved and the court should refuse the application on the grounds of delay.

Held by Laffoy J in granting the application. The petitioner had established that the claim against the company was neither frivolous nor vexatious and was being bona fide maintained. The petitioner must demonstrate that he had a legitimate purpose in seeking to have the dissolution declared to have been void. It would be not be equitable to refuse the petitioner's application under s. 310 on the ground that the petitioner delayed in prosecuting the proceedings, which, prima facie, was the case, when the company chose not to pursue any process available to it to have the proceedings disposed of. If the petitioner was unsuccessful in its claim against the company, the opposing party would be entitled to the costs of the application. Subject to this provision, the costs of the application would be reserved. It would be for the members of the company to determine who should be the liquidator for the purposes of concluding the winding up.

Reporter: R.F.

1. The application

2 2 1.1 On this application, which was initiated by a petition which was presented on the 8 ^th day of June, 2011, Brendan Loughnane (the petitioner) sought an order pursuant to s. 310 of the Companies Act 1963 (the Act of 1963) declaring the dissolution of Walsh Maguire & O'Shea Ltd. (the company) to be void.

3 3 1.2 Section 310(1) provides as follows:

"Where a company has been dissolved, the court may at any time within 2 years of the date of the dissolution, on an application being made for the purpose by the liquidator of the company or by any other person who appears to the court to be interested, make an order, upon such terms as the court thinks fit, declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved."

2. Dissolution of company

2 2 2.1 By resolution passed at an extraordinary general meeting of the company on 1 ^st February, 2007 it was resolved that the company be wound up voluntarily and that Charles Carri, Chartered Accountant, be appointed the liquidator for the purposes of such winding up and that any part of the assets of the company might be divided by the liquidator among the members of the company in specie. On 8 ^th March, 2010 the liquidator filed in the Companies Registration Office (CRO) the various documents demonstrating compliance with the statutory provisions and the taking of the steps required to finalise the members' voluntary winding up. The documents filed disclosed that the liquidator had distributed a substantial sum of money, in excess of €1m, to the members. Subsequently, the company was dissolved, the effective date of the dissolution being 8 ^th June, 2010.

3 3 2.2 At the date of the winding up the directors of the company were Vincent Maguire (Mr. Maguire) and Crohan John O'Shea (Mr. O'Shea).

3. Petitioner's factual basis for seeking to void dissolution

2 2 3.1 In his petition as presented, the petitioner contends that he is a person who is interested in having the dissolution of the company declared void because he is a contingent creditor of the company (although the petition erroneously states that the company is a contingent creditor of the petitioner) and that he is the plaintiff in plenary proceedings (Record No. 2004 No. 18973P), which were pending in this Court when the members' voluntary winding up commenced. It is necessary to consider the steps which were taken in the plenary proceedings in some detail.

3 3 3.2 The title of the proceedings, as shown on the plenary summons, is "Brendan Loughnane v. Walsh Maguire O'Shea Ltd.". For present purposes I am not attaching any significance to the fact that the ampersand, which appeared in the name of the company as registered, does not appear in the name of the defendant in the title to the plenary proceedings, which were initiated by plenary summons which issued on 8 ^th October, 2004. As I understand the position, a statement of claim was not delivered, although a draft of a proposed statement of claim has been exhibited for the purposes of this application. In it, the plaintiff claimed injunctive relief in relation to alleged trespass by the defendant on the plaintiff's property at 46, Bolton Street in the City of Dublin, arising from construction works on the adjoining property, 45, Bolton Street, and damages under various headings - trespass, negligence and nuisance. The plenary summons was addressed to the defendant at the registered office of the defendant. It is his claim for damages against the defendant that the petitioner wishes to pursue at this juncture.

4 4 3.3 An application for an interlocutory injunction returnable for 12 ^th October, 2005 was brought by the petitioner in the plenary proceedings. However, at that stage, the issues raised by the petitioner appear to have been addressed by interaction between the petitioner's then solicitors and the solicitors who subsequently came on record for the defendant in the plenary proceedings. The motion was adjourned generally with liberty to re-enter.

5 5 3.4 On 5 ^th July, 2005 the petitioner issued a motion, returnable for 11 ^th July, 2005, seeking liberty to re-enter the earlier motion. On 6 ^th July, 2005 O'Donnell Sweeney, Solicitors, entered an appearance on behalf of the defendant. On 11 ^th July, 2005, as reflected in the perfected order of the Court, counsel for the defendant gave an undertaking to the Court in relation to entry on 46, Bolton Street. The costs of the motion were reserved. An affidavit sworn by Michael Gillen (Mr. Gillen) had been filed on behalf of the defendant on 11 ^th July, 2005. In that affidavit Mr. Gillen, whose address was given as the registered office of the company, averred that he was the "Construction Director of the Defendant company in the above entitled action".

6 6 3.5 A further motion was issued by the petitioner's then solicitors on 12 ^th July, 2005, which was returnable for 13 ^th July, 2005, in which the petitioner sought an order for the sequestration of the defendant's property by reason of the failure of the defendant to comply with the undertaking given to the Court on 11 ^th July, 2005. On 15 ^th July, 2005 Mr. Gillen swore an affidavit in response to that application, in which he admitted that certain minor activity had been conducted in breach of the undertaking, for which he apologised on behalf of the defendant. On this application the petitioner has averred that a further consent order and undertaking was given to the Court and the injunction was disposed of in that manner. The motion appears to have been adjourned generally with liberty to re-enter by consent of the parties.

7 7 3.6 The only further action taken by the petitioner in the plenary proceedings was as follows:

(a) on 7 ^th December, 2007, that is to say, after the members' voluntary winding up of the company had commenced, notice of intention to proceed was served on the solicitors on record for the defendant;

(b) on 10 ^th August, 2010, that is to say, after the dissolution of the company, a further notice of intention to proceed was purportedly served on the solicitors on record for the defendant; and

(c) on 14 ^th April, 2011 notice...