Sjk Wholesale Ltd (in_Liquidation) v Companies Act 2014

• Jurisdiction: Ireland
• Judge: Mr Justice David Keane
• Judgment Date: 28 April 2020
• Neutral Citation: [2020] IEHC 196
• Docket Number: [2019 No. 134 COS]
• Court: High Court
• Date: 28 April 2020

IN THE MATTER OF SJK WHOLESALE LIMITED (IN LIQUIDATION) AND IN THE MATTER OF THE COMPANIES ACT 2014

BETWEEN

MYLES KIRBY

APPLICANT

AND

GOOGLE IRELAND LIMITED

RESPONDENT

[2020] IEHC 196

David Keane J.

[2019 No. 134 COS]

THE HIGH COURT

Summary application – Liquidation – Companies Act 2014 – Applicant seeking an order compelling the respondent to provide him with access to an email account – Whether there is an implied power of the court that derives from ss. 596 and 627 of the Companies Act 2014 whereby the court must order the delivery up to a liquidator of any property to which a company is, or appears to be, entitled

Facts: The applicant, Mr Kirby, as liquidator of a company named SJK Wholesale Ltd (the company), moved for an order, pursuant to s. 596(1) and/or s. 596(2) and/or s. 627(9) of the Companies Act 2014, compelling the respondent, another company named Google Ireland Ltd (Google Ireland), which provided a free email service (Gmail) to persons in the European Economic Area (EEA) and Switzerland, to provide him with access to the email account associated with the email address ‘sjkwholesaleltd@gmail.com’ (the email address), and to provide him with all emails sent and received from that address, including any that had been deleted but remained accessible. Google Ireland opposed the application. In substance, Mr Kirby contended that the effect of ss. 596 and 627 of the 2014 Act, either separately or in combination, is to mandate the court, on the summary application of a company liquidator, to exercise an implied or inherent power to require any person in possession of any books or records of the company, or any other property to which the company is, or appears to be, entitled, to surrender that property to the liquidator.

Held by the High Court (Keane J) that: (a) there is no implied power of the court that derives from ss. 596 and 627 of the 2014 Act, interpreted separately or together, nor any inherent power of the court, whereby the court must order the delivery up to the liquidator of any property to which the company is, or appears to be, entitled; and (b) if such an implied or inherent power did exist, distinct from the more constrained express power conferred on the court by s. 673 of the 2014 Act, it could not be exercised in this case because the evidence was insufficient to establish that the contents of the Google account at issue comprised the books or records of the company, or that the company had, or appeared to have, a proprietary right, to access or use the account, or that the email content of the Google account was, or appeared to be, the property of the company.

Keane J held that the application would be refused.

Application refused.

JUDGMENT of Mr Justice David Keane delivered on the 29th April 2020

Introduction

1 As liquidator of a company named SJK Wholesale Limited (‘the company’), Myles Kirby moves for an order, pursuant to two identified sections of the Companies Act 2014 (‘the Act of 2014’), compelling another company named Google Ireland Limited (‘Google Ireland’), which provides a free email service called ‘Gmail’ to persons in the European Economic Area (‘EΕΑ’) and Switzerland, to provide him with access to the email account associated with the email address ‘sjkwholesaleltd@gmail.com’ (‘the email address’), and to provide him with all emails sent and received from that address, including any that have been deleted but remain accessible.

2 Google Ireland opposes the application.

Procedural history

3 An originating notice of motion issued on 16 April 2019, returnable for 13 May 2019. The motion is grounded on a short affidavit of Mr Kirby, sworn on 12 April 2019 (‘the first Kirby affidavit’). Ryan Meade, whose title within Google Ireland is Public Policy and Government Relations Manager, swore a lengthy replying affidavit on its behalf on 6 June 2019 (‘the Meade affidavit’). Mr Kirby swore a further short affidavit in response on 11 July 2019 (‘the second Kirby affidavit’).

4 The motion was argued on 11 March 2020. John Kennedy SC and Michael Donnelly BL appeared on behalf of Mr Kirby, instructed by AMOSS Solicitors. Kelley Smith BL appeared on behalf of Google Ireland, instructed by A & L Goodbody, Solicitors. I am grateful to counsel for their oral and written submissions.

The evidence

5 Although the evidence before me concerning the operation of the company and the progress of its liquidation is extremely limited, the following picture emerges.

6 Mr Kirby was appointed liquidator of the company at a creditors’ meeting on 15 February 2019 with the support of the Revenue Commissioners, a significant creditor. He has exhibited the notice of that appointment, filed in the Companies Registration Office (‘CRO’) on 28 February 2019. None of the other documents or particulars concerning the company that, under s. 33 of the Act of 2014, must be delivered to, or issued by, the Registrar of Companies – such as the certificate of incorporation, the constitution of the company, returns relating to its register of directors, annual returns or financial statements – has been exhibited, nor have their contents been disclosed.

7 In the first Kirby affidavit, it is averred that a person named Jawad Khan, described as a director of the company, has confirmed to Mr Kirby that the email address was operated by the company; that ‘all financial information was sent from that address’; and that ‘all company business was transacted through [the email address], including correspondence with Revenue, suppliers and accountants’. Mr Kirby obtained the ‘log-in’ details for the Google account associated with the email address from Mr Khan but, when he attempted to access the account using those details, he could not do so. It is unclear what steps, if any, Mr Kirby took to resolve that problem with Mr Khan or any other officer of the company.

8 Mr Kirby avers that, at some undisclosed time, the United Kingdom National Health Service Counter Fraud Authority (‘the NHSCFA’) informed him that it is conducting a ‘fraud/money laundering investigation concerning the use of criminal property to fund the purchase of vehicles on behalf of the company’, and he is now investigating that claim. Beyond Mr Kirby’s averment to that effect, he has provided no other details of the underlying allegations or of the nature or scope of the investigations that are being conducted by him or the NHSCFA.

9 Mr Kirby has exhibited a written statement that he avers was circulated at the creditors’ meeting by Mr Khan, as both a director of the company and chairperson of that meeting. A directors’ estimated statement of the company’s affairs as they stood on 7 February 2019 is appended to that document.

10 The written statement names four persons, including Mr Khan, as directors of the company at various times during the previous three years and two other persons as company secretary at different times during that period. It asserts that Mr Khan holds all of the shares in the company. It explains that the company had commenced trading on 7 September 2015 as an importer and seller of vehicles, and had done so successfully until an audit by the Revenue Commissioners revealed several errors in the company’s accounting treatment and handling of value added tax (‘VAT’), following which a sheriff seized all of its stock, forcing it to cease trading, which led the directors to resolve, on 30 January 2019, to wind the company up. The accompanying statement of affairs discloses a financial deficiency of €630,500.

11 On 15 February 2019, through his solicitors, Mr Kirby wrote to Google Ireland. In that letter, he informed Google Ireland of his belief that the company had been engaged in fraudulent activity and that those responsible might attempt to hide evidence, before requiring Google Ireland to deactivate and preserve the account associated with the email address and to provide him with full access to it.

12 Google Ireland responded by email on 6 March, stating that it only takes steps to preserve data upon being properly served with a valid legal process and acknowledging that it was open to Mr Kirby to take that course.

13 Mr Kirby wrote again on 27 March, requiring Google Ireland to provide him with full access to the email address to include all sent, received and deleted emails, and to do so by providing him with full log in details by close of business on 29 March. Google Ireland replied on 10 April, reiterating the position set out in its email of 6 March.

14 After the present motion issued on 16 April, Google Ireland wrote to Mr Kirby on 8 May. In that letter, it pointed to the requirement to respect the privacy rights of its users, which – it asserted – necessitates the utmost care when faced with a demand to produce communications. Google Ireland expressed the view that Mr Kirby had failed to provide sufficient evidence in support of his belief that the contents of the email account comprise the books, records or property of the company and suggested that, instead, he should take further action directed toward the relevant officer(s) or employee(s) of the company to obtain the information necessary to access that account, if indeed it had been operated by, or on behalf of, the company.

15 Mr Kirby replied on 9 May, maintaining that Google Ireland was ignoring the significance of the use of the company’s name in the email address, before responding to the suggestion that he should consider taking action against the persons involved in the operation of the company, rather than against Google Ireland, by stating that the company’s sole director was outside the jurisdiction and not cooperating with him and, later in his reply, that the company’s officers were not cooperating with him. Mr Kirby’s stated position was, and remains, that his rights and entitlements against the officers of the company as liquidator are irrelevant to the exercise of...