Sligo Corporation v Cartron Bay Construction Ltd & Maguire
| Jurisdiction | Ireland |
| Judge | Mr Justice Aindrias Ó Caoimh |
| Judgment Date | 25 May 2001 |
| Neutral Citation | [2001] IEHC 94 |
| Court | High Court |
| Docket Number | 25 MCA/1988 |
| Date | 25 May 2001 |
[2001] IEHC 94
The High Court
and
Between
and
Citations:
RSC O.42 r32
COMPANIES ACT 1963 S149
COMPANIES ACT 1963 SCHEDULE 7
COMPANIES (AMDT) ACT 1983 S40
LEWIS V PONTYPRIDD, CAERPHILLY & NEWPORT RAILWAY COMPANY 11 TLR 203
RSC O.42 r31
GUILFORT BOROUGH COUNCIL V SMITH TLR 18.5.1993
POWER SUPERMARKETS LTD V CRUMLIN INVESTMENTS LTD UNREP COSTELLO 22.6.81 1981/11/2038
DUN LAOGHAIRE CORPORATION V PARK HILL DEVELOPMENTS 1989 IR 447
LOCAL GOVT (PLANNING & DEVELOPMENT) ACT 1976 S27(2)
COMPANIES ACT 1963 S131
COMPANIES ACT 1963 S148
DUBLIC CO COUNCIL V O'RIORDAN 1985 IR 159
LOCAL GOVT (PLANNING & DEVELOPMENT) ACT 1976 S27
DUBLIN CO COUNCIL V ELTON HOMES LTD 1984 ILRM 297
COMPANIES ACT 1963 S297
IRISH SHELL LTD V BALLYLYNCH MOTORS LTD & MORRIS OIL CO LTD UNREP KEANE 5.3.1997 1997/9/3083
ROSS CO LTD V SWAN 1981 ILRM 416
RSC O.42
STANCOMB V TROW BRIDGE URBAN DISTRICT COUNCIL (UDC) 1910 2 CH 190
FAIRCLOUGH V MANCHESTER SHIP CANAL CO 1897 WN 7
AG V TIMES NEWSPAPERS LTD 1992 1 AC 191
CON-MECH LTD V AMALGAMATED UNION OF ENGINEERING WORKERS 1973 ICR 620
MULTI-FORM DISPLAYS LTD V WHITMARLEY DISPLAYS LTD 1957 REP.PAT.DES.&TR.CAS. 137
PHONOGRAPHIC PERFORMANCE LTD V AMUSEMENT CATERERS LTD 1964 1 CH 195
WHITE BOOK O.42 r31
IBERIAN TRUST LTD V FOUNDERS TRUST & INVESTMENT CO LTD 1932 2 KB 87
FAIRCLOUGH V MANCHESTER SHIP CANAL CO (NO 2)
MILLER CONTEMPT OF COURT 2ED
LAW REFORM COMMISSION REPORT ON CONTEMPT OF COURT 35/1994 163
Synopsis
PRACTICE AND PROCEDURE
Contempt
Company law - Corporate liability - Construction - Whether failure to comply with terms of court order - Whether order of sequestration should be granted - Rules of the Superior Courts, 1986 Order 42, rule 32 - Local Government (Planning and Development) Act, 1976 section 27 (1988/25MCA - O Caoimh J - 25/5/01)
Sligo Corporation v Cartron Bay Construction Ltd
The applicant (“Sligo Corporation”) brought the present proceedings seeking an order of attachment and sequestration against the respondents. The applicant submitted that there had been a failure by the first named respondent (“Cartron Bay”) and the second and third named respondents (who were directors of Cartron Bay) to complete certain works on a housing estate as has been ordered by the High Court by Mr. Justice Barrington. The complaints related to works such as footpaths, sewers, roads and waterworks. The directors of Cartron Bay denied that they had disobeyed the court order and contended that Cartron Bay was insolvent and had ceased trading. Mr. Justice Ó Caoimh was satisfied that no clear distinction had been maintained between the directors and Cartron Bay. The company had been operated as a vehicle to avoid liability without the essential requirements of company law being observed by the two directors. There had been a failure to comply with the terms of the court order. In addition the directors had failed in their duties to maintain proper books of account. The court would made the required order of sequestration against the directors and the court would discharge same in the event of the directors paying £120,000 to the applicant.
Mr Justice Aindrias Ó Caoimh delivered 25th May 2001
This is an application by the Applicant (hereinafter referred to as Sligo Corporation) for an Order pursuant to Order 42 Rule 32 of the Rules of the Superior Courts for an Attachment and Sequestration directed against the second and third named Respondents who are the Directors of the Respondent company hereinafter referred to as Carton Bay.
This matter comes before the Court pursuant to Notice of Motion dated the 18th day of May 1989 in which Sligo Corporation seeks an Order pursuant to Order 42 Rule 32 for leave to enforce an Order of the High Court made on the 16th of May 1988 directing the Respondent company Carton Bay to complete on or before the 15th day of September 1988 certain works set out in the schedule to the Order made by Mr Justice Barrington at the Cartron Bay residential estate in Sligo in accordance with planning permission granted to Carton Bay in the years 1974 and 1976. That order set out a lengthy schedule of works which were required to be completed and particularly related to the roads, footpaths, sewers and various manholes both in respect of foul sewers and surface water sewers and water supply at the housing estate in question on or before the 15th September 1988.
While the estate in question consists of 94 houses, Sligo Corporation contended that in respect of six of these they were being rented by Cartron Bay at a time when it was alleged that this company was not trading. It is alleged that the Respondent directors were using these houses to syphon off funds from the company through renting them out on a weekly basis.
Since the issue of the Notice of Motion in these proceedings a considerable degree of dispute existed between Sligo Corporation on the one hand and the Respondents on the other hand to the existence of defective workmanship on the estate or otherwise. This lead ultimately to a situation were in early 1996 a camera survey was completed in relation to the underground pipes in the estate. This survey revealed a host of deficiencies in regard to sewage pipes. The survey revealed defective manholes and connections and wrong bore of pipes relative to the planning permission obtained.
The defects in question in the estate have resulted in very defective footpaths, roads with potholes and severe flooding being experienced on the estate in question. It is clear that the defects in the estate have resulted in great difficulty for the residents of the estate. The residents have sought to turn to Sligo Corporation to address their difficulties and at the same time Sligo Corporation has sought through these proceedings to obtain some redress in relation to the state of the estate as against the second and third Respondents Thomas Maguire and Pauline Maguire in person.
The application is grounded upon the affidavits of John McNabola dated the 18th of May 1989. In his affidavit Mr McNabola states that the Respondent has failed to comply with the terms of the Order of this Court made the 16th of May 1988. He states his belief that the company and its directors the second and third named Respondents intend to continue in wilful disobedience of the said Order and that the same is being disobeyed not by reason of any negligence or mismanagement but by premeditated wilfulness and an anxiety to frustrate the rights of the Applicant authority, the rights of the citizens inhabiting the Cartron Bay Estate and the Order of the Court. Mr McNabola deposes his belief that the second and third Respondents being the principles of Cartron Bay have an intimate knowledge of the affairs of the company and are solely responsible for deciding the recalcitrant policy of wilful disobedience of the Respondent company. He further states his belief that the Respondent company and its directors are in contempt of court and seeks leave to apply to have attachment to issue against the second and third Respondents.
Mr Thomas Maguire swore an affidavit on the 30th June 1989 in reply to that of Mr McNabola. He swore this affidavit on his own behalf and on behalf of the third Respondent Pauline Maguire. In his affidavit Mr Maguire says that Cartron Bay did not wilfully refuse to make any efforts to rectify the defects in the Cartron housing estate. He says that it is not his intention or the intention of the third Respondent in their capacities as directors of the Cartron Bay to continue in wilful disobedience of the Order of the High Court and he denies the averments to this effect in the affidavit of Mr McNabola. He denies that he or the third named Respondent are personally responsible for the affairs of Cartron Bay and he denies that they are responsible for or have decided on a policy of wilful disobedience as alleged. He states that Cartron Bay is insolvent and has ceased trading. He states that it has no longer any assets. Mr Maguire says that in or about the month of January 1988 the company sold six of the houses on the Cartron Bay housing estate to him and the third named. Respondent for the sum of £124,000 which he states represents the full market value of the houses. He sates that the sum realised by the sale was used to reduce the Company's liability to Allied Irish Banks plc. He states that the company's liabilities are in the region of £50,000 approximately and that there are no assets to discharge of the same. He says that as a consequence there are no funds available to the company out of which to complete the work required. Mr Maguire claims that at all times he and the third named Respondent acted in a proper manner in the conduct of the affairs of the company and that there had been no impropriety on their behalf. He claims that they are not personally liable for any default on the part of the company.
John O'Dwyer, then acting Town Clerk, swore an affidavit dated the 19th of July 1989 in response to that of Mr Maguire. He states that from the month of January 1988 when the company sold six of the houses on the Cartron housing estate that it continued to hold out to Sligo Corporation, including its engineers and solicitors, that the company was not in any way insolvent and was in a financial and logistic position to complete the works which were required to satisfy the Applicant's planning requirements in accordance with the Order of this honourable Court...
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