The Governor and Company of The Bank of Ireland v Eteams (International) Ltd (in Voluntary Liquidation)

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 04 July 2019
• Neutral Citation: [2019] IECA 186
• Date: 04 July 2019
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2019] IECA 186 Appeal No. 2017/368

[2019] IECA 186

THE COURT OF APPEAL

Baker J.

Whelan J.

Baker J.

Costello J.

Neutral Citation Number: [2019] IECA 186

Appeal No. 2017/368

IN THE MATTER OF THE COMPANIES ACT 1963-2009

AND IN THE MATTER OF ETEAMS (INTERNATIONAL) LIMITED (IN VOLUNTARY LIQUIDATION)

AND IN THE MATTER OF SECTION 280 OF THE COMPANIES ACT, 1963

BETWEEN

BY ORDER THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND

APPLICANT/RESPONDENT

-AND-

BY ORDER ETEAMS (INTERNATIONAL) LIMITED (IN VOLUNTARY LIQUIDATION)

RESPONDENT/APPELLANT

(NO. 2)

Costs – Debt sale agreement – Liquidator – Respondent seeking that the costs order be made against the liquidator – Whether the proceedings were correctly constituted

Facts: The Court of Appeal, on 14 May 2019, dismissed the appeal of the appellant, Eteams (International) Ltd (the Company). The appeal raised a question concerning the proper characterisation of a debt sale agreement made between the Company and the respondent, Bank of Ireland. The application commenced by originating motion brought by the Company of which Mr Fitzpatrick was appointed liquidator on 27 March 2013. The matter was determined following the delivery of a written judgment by Keane J on 15 June 2017. The appeal having been dismissed, no real opposition was made by counsel for the Company regarding the identification of the “event” for the purposes of O. 99 of the Rules of the Superior Courts (RSC), and to the application that the costs of the appeal be awarded to Bank of Ireland against the Company. However, Bank of Ireland sought that the costs order be made against the liquidator personally. The primary argument made by Bank of Ireland was that the proceedings were not correctly constituted as the application for directions under the then relevant s. 280 of the Companies Act 1963 ought properly to have named the liquidator, and not the Company, as applicant. Counsel for Bank of Ireland argued, in those circumstances, that the correct approach to the question of costs was that it was to be assumed that the proceedings had been commenced by the liquidator.

Held by the Court of Appeal (Baker J) that the question of the costs of the appeal was to be dealt with on the basis that, as the provisions of s. 280 of the 1963 Act, which establishes the jurisdictional basis on which the application for directions was brought, could have been properly commenced only by the liquidator in his personal capacity, the liquidator was in truth the correct party in the proceedings and to the appeal and ought to have been named as such, and was therefore as a matter of jurisdiction, the appellant who was unsuccessful in the appeal.

Baker J held that she would award the costs of the appeal against Mr Fitzpatrick personally on that basis.

Judgment on costs - costs to the respondent.

JUDGMENT of Ms. Justice Baker delivered on the 4th day of July 2019

1 This judgment is supplemental to a judgment delivered on 14 May 2019, The Governor and Company of The Bank of Ireland v. Eteams (International) Ltd. (In Voluntary Liquidation) [2019] IECA 145 which dismissed the appeal of the appellant, Eteams (International) Limited (hereinafter and in the principal judgment referred to as ‘the Company’). The appeal raised a question concerning the proper characterisation of a debt sale agreement made between the Company and the respondent in the appeal, Bank of Ireland. The application commenced by originating motion brought by the Company of which Anthony Fitzpatrick was appointed liquidator on 27 March 2013. The matter was determined following the delivery of a written judgment by Keane J. on 15 June 2017.

2 The appeal having been dismissed, no real opposition was made by counsel for the Company regarding the identification of the ‘event’ for the purposes of O. 99 of the Rules of the Superior Courts (‘RSC’), and to the application that the costs of the appeal be awarded to Bank of Ireland against the Company.

3 However, Bank of Ireland has sought that the costs order be made against the liquidator personally and it is in regard to that application that this ruling is directed.

4 The primary argument made by Bank of Ireland is that the proceedings were not correctly constituted as the application for directions under the then relevant s. 280 of the Companies Act 1963 (‘the 1963 Act’) ought properly to have named the liquidator, and not the Company, as applicant. Counsel for Bank of Ireland argues, in those circumstances, that the correct approach to the question of costs is that it is to be assumed that the proceedings had been commenced by the liquidator.

5 Section 280(1) of the 1963 Act identifies the nature of an application for directions:

‘The liquidator or any contributory or creditor may apply to the court to determine any question arising in the winding up of a company’.

6 That an application for directions is to be brought in the name of the liquidator was considered by the Court of Appeal recently in Tucon Process Installations Ltd. (in Voluntary Liquidation) v. The Governor and Company of The Bank of Ireland [2016] IECA 211, per Costello J., affirming the judgment of Hunt J., Tucon Process Installations Ltd. (in Voluntary Liquidation) v. The Governor and Company of The Bank of Ireland [2015] IEHC 312.

7 Both Costello J. and Hunt J. relied on the decision of the Supreme Court in Southern Mineral Oil Ltd. (in Liquidation) v. Cooney [1997] 3 IR 549 and the observation of Lynch J., at pp. 568 and 569:

‘None of these statutes provide that the application may be brought by the company in receivership or examinership or liquidation. They provide that the application shall be brought by the receiver or examiner or liquidator, as the case may be, and in all cases the application may also be brought by any creditor or contributory...