Start Mortgages dac v Kavanagh

JurisdictionIreland
CourtHigh Court
JudgeMr. Justice Garrett Simons
Judgment Date11 April 2019
Neutral Citation[2019] IEHC 216
Docket Number2013 No. 353 SP
Date11 April 2019
BETWEEN
START MORTGAGES DESIGNATED ACTIVITY COMPANY
PLAINTIFF
AND
SIMON KAVANAGH
DEIRDRE KAVANAGH
DEFENDANTS

[2019] IEHC 216

Simons J.

2013 No. 353 SP

THE HIGH COURT

Practice and procedure – Title of proceedings – Amendment – Defendant seeking to discharge the order amending the title of the proceedings – Whether the order amending the title of the proceedings was properly made

Facts: Pursuant to an ex parte application moved on behalf of the plaintiff, Start Mortgages, the title of the proceedings was amended pursuant to Order 17, rule 4 of the Rules of the Superior Courts to reflect the change in status of the plaintiff from a limited liability company to a designated activity company. The first defendant, Mr Kavanagh, applied to the High Court to discharge that order. The grounds relied upon included an argument that the plaintiff company ceased to exist and that the designated activity company was a new company, and an argument that the title of proceedings cannot be changed in circumstances where a final order, i.e. an order for possession, had already been made in the proceedings.

Held by Simons J that the objections made by Mr Kavanagh were untenable. He held that, on the facts of the case, the order amending the title of the proceedings was properly made. He held that the court has an inherent jurisdiction to amend the title of proceedings to reflect the fact that the status of a company has changed and that this amendment can be made at any time. He held that the making of such an amendment causes no prejudice to any of the other parties to the proceedings. He held that he would dismiss Mr Kavanagh’s application to discharge the order of 26 February 2018.

Simons J held that the only variation which he proposed to make to the order was to recite that the order was made pursuant to the inherent jurisdiction of the court, rather than pursuant to Order 17, rule 4.

Application dismissed.

JUDGMENT of Mr. Justice Garrett Simons delivered on 11 April 2019.
INTRODUCTION
1

This judgment addresses a net point of practice and procedure as follows. What procedural steps, if any, must a company, which has changed its status from a limited liability company to a designated activity company, take to reflect this change in status in legal proceedings. In particular, is it necessary for the company to make a formal application to court to amend the title of the proceedings.

2

On the facts of the present case, the title of the proceedings was amended pursuant to Order 17, rule 4 of the Rules of the Superior Courts to reflect the change in status of the plaintiff company. This order was made pursuant to an ex parte application moved on behalf of the plaintiff company. The first named defendant, Mr. Simon Kavanagh, has since applied to discharge this order. The grounds relied upon include (i) an argument that the plaintiff company ceased to exist and that the designated activity company is a new company, and (ii) an argument that the title of proceedings cannot be changed in circumstances where a final order, i.e. an order for possession, had already been made in the proceedings.

3

For the reasons set out hereinafter, I am satisfied that the objections made by Mr. Kavanagh are untenable. On the facts of the present case, the order amending the title of the proceedings was properly made. The court has an inherent jurisdiction to amend the title of proceedings to reflect the fact that the status of a company has changed. This amendment can be made at any time. The making of such an amendment causes no prejudice to any of the other parties to the proceedings. The only variation which I propose to make to the order is to recite that the order is made pursuant to the inherent jurisdiction of the court (rather than pursuant to Order 17, rule 4).

4

More generally, I am of the view that, strictly speaking, it is not necessary for a company to make a formal application to court to reflect its change of status from a limited liability company to a designated activity company. The legal entitlement to continue proceedings following the change in status of a company is expressly provided for under Section 63(12) of the Companies Act 2014, and this provision appears to be self executing. (See, by analogy, First Active plc v. Cunningham [2018] IESC 11). Of course, if a company does make a formal application to court—whether out of an abundance of caution or otherwise—then the court has an inherent jurisdiction to amend the title of proceedings.

PROCEDURAL HISTORY
5

The within proceedings were instituted by way of Special Summons in 2013. The proceedings ultimately came on for hearing before the High Court (Hedigan J.) on 18 July 2016. The High Court made the following order on that date.

‘IT IS ORDERED that the Defendants do forthwith upon service of this Order upon them deliver up to the Plaintiff or to some person duly authorised by it in writing in that behalf possession of ALL THAT and THOSE the plot of ground part of the lands of Enniscorthy situate in the Barony of Scarawalsh and County of Wexford now Known as Site no. 15 Parklands, Enniscorthy in the County of Wexford, more particularly the subject matter of Deed of Conveyance dated 1st September 1988 – between Lacey Brothers Limited to Simon Kavanagh and Deirdre Kavanagh.’

6

A nine-month stay on execution was placed on the order. The costs of the proceedings were awarded to the Plaintiff.

7

Start Mortgages Ltd. subsequently converted to a designated activity company on 21 October 2016. The Certificate of Incorporation on Conversion to a Designated Activity Company has been exhibited in the affidavit of Ms. Eva McCarthy sworn herein on 28 March 2018.

8

On 26 February 2018, an ex parte application was made on behalf of the plaintiff company seeking, in effect, to amend the title of the proceedings. The application was put forward on alternative bases, namely (i) Order 17, rule 4; (ii) the court's inherent jurisdiction, or (iii) pursuant to Section 63 of the Companies Act 2014.

9

It should be noted that this application took the form of an ‘omnibus’ application, whereby the plaintiff company relied on an affidavit and ex parte docket filed in one set of proceedings (Start Mortgages Ltd. v. Ryan Record Number 2008 No. 26 SP) to ground an application to amend a total of twelve sets of High Court proceedings. These proceedings were identified in an exhibit to the grounding affidavit of Gill Cotter sworn on 13 February 2018 filed in the Ryan proceedings. As discussed presently, the fact that the application was an ‘omnibus’ application meant that there was no grounding affidavit filed on the court file in the within proceedings.

10

The ex parte application was moved before the High Court (Meenan J.) on 26 February 2018. The following order was made.

‘IT IS ORDERED pursuant to Order 17 Rule 4 of the Rules of the Superior Courts that the within proceedings herein be amended so as to disclose the correct title of the Plaintiff to read “Start Mortgages Designated Activity Company” a change and/or transmission of interest having taken place after the commencement of the said proceedings

And IT IS ORDERED that the within proceedings shall be carried on between the continuing party and the said Start Mortgages Designated Activity Company

The title hereof to be duly entered in the Central Office of the High Court with the proper officer.’

11

The order was perfected on 31 March 2018. There was a clerical error in the original version of the order in that it mistakenly described the second named defendant as Deirdre Murphy rather than Deirdre Kavanagh. This clerical error was subsequently corrected on 9 April 2018, and this is recorded on the amended order as follows.

‘Amended pursuant to O. 28 R 11 RSC as amended by S I 271 of 2009

9th April 2018.’

12

Subsequently an order for substituted service was made ex parte on 8 October 2018.

13

The first named defendant, Mr. Simon Kavanagh, issued a Notice of Motion dated 13 November 2018, seeking the following principal relief.

‘An Order pursuant to Order 17 Rule 6 discharging or varying the Order of the 26th day of February 2018 perfected 23rd March 2018 and served by covering letter dated the 30th October 2018 and received on the 2nd November 2018.’

14

This application was grounded upon an affidavit of Mr. Kavanagh dated 13 November 2018. Thereafter, there was an exchange of affidavits between the parties. The matter came on for hearing before me on Monday, 25 February 2019. The plaintiff company was represented by Mr. Rudi Neuman, B.L., and Mr. Kavanagh appeared as a litigant in person.

SECTION 63, COMPANIES ACT 2014
15

The procedure for the re-registration by an existing private company as a designated activity company is prescribed under Section 63 of the Companies Act 2014. Relevantly, subsection 63(12) expressly addresses the legal effect of a change in status on legal proceedings, as follows.

‘(12) The re-registration of an existing private company as a designated activity company pursuant to this Chapter shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings which might have been continued or commenced against it in its former status may be continued or commenced against it in its new status.’

16

The provisions of Section 63(12) were relied upon by the High Court (Eagar J.) in Launceston Property Finance Ltd. v. Burke [2018] IEHC 552 to justify the court in making an order amending the title of proceedings to reflect the change in status of the plaintiff company in that case.

17

The statutory language under subsection 63(12) indicates that the change in status does not render ‘defective’ any legal proceedings by or against the company. The use of the term ‘defective’ is significant in that the relevant Rules of the Superior Courts which allow for...

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5 cases
  • Start Mortgages DAC v McNair
    • Ireland
    • High Court
    • 23 March 2020
    ...a designated activity company under the Companies Act 2014. 99 For the reasons set out in my judgment in Start Mortgages DAC v. Kavanagh [2019] IEHC 216, no formal application is required as the change takes effect by operation of law by virtue of section 63(12) of the Companies Act 2014. “......
  • Start Mortgages Designated Activity Company v Thomas Ryan and Eileen Ryan
    • Ireland
    • High Court
    • 18 November 2021
    ...by the company. Counsel also referred me to the decision of the High Court in Start Mortgages Designated Activity Company v. Kavanagh [2019] IEHC 216. In that case, Simons J. was of the view that, strictly speaking, it is not necessary for a company to make a formal application to Court to ......
  • Start Mortgages DAC v Kavanagh
    • Ireland
    • High Court
    • 30 January 2023
    ...2019. I delivered a reserved judgment on the matter on 11 April 2019 refusing the relief sought: Start Mortgages DAC v. Kavanagh [2019] IEHC 216. 17 The first named defendant, as was his right, lodged an appeal against my judgment and order. This appeal was ultimately dismissed by the Court......
  • ACC Bank Plc v Sweeney
    • Ireland
    • High Court
    • 3 July 2023
    ...ability of the company to seek to enforce judgments which it had previously obtained. See, generally, Start Mortgages DAC v. Kavanagh [2019] IEHC 216 (at paragraphs 15 to 17 Insofar as the delay subsequent to the initial six year period is concerned, there is very little offered by way of e......
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