Truck and Machinery Sales Ltd v Marubeni Komatsu Ltd

• Jurisdiction: Ireland
• Judge: Keane J.
• Judgment Date: 23 February 1996
• Neutral Citation: [1996] IEHC 58
• Court: High Court
• Docket Number: [1995 No. 6928P],No. 6928p/1995
• Date: 23 February 1996

TRUCK & MACHINERY SALES LTD v. MARUBENI KOMATSU LTD

BETWEEN

TRUCK AND MACHINERY SALES LIMITED

PLAINTIFF

AND

MARUBENI KOMATSU LIMITED

DEFENDANT

[1996] IEHC 58

No. 6928p/1995

THE HIGH COURT

Synopsis:

CONSTITUTION

Personal rights

Recourse to courts - Creditor - Rights - Enforcement - Creditor threatened to present petition seeking order directing debtor company to be wound up - Debtor company brought motion seeking interlocutory injunction restraining creditor from presenting petition - Normal principles governing such motions inapplicable - (1995/6928 P - Keane J. - 23/2/96) - [1996] 1 I.R. 12

|Truck & Machinery Sales Ltd. v. Marubeni Komatsu Ltd.|

CONTRACT

Formation

Consideration - Absence - Company - Debtor - Whether rights of creditor waived - Promise by debtor company to pay part of debt to creditor - Right of creditor to payment of debt unaffected - (1995/6928 P - Keane J. - 23/2/96) - [1996] 1 I.R. 12

|Truck & Machinery Sales Ltd. v. Marubeni Komatsu Ltd.|

INJUNCTION

Interlocutory

Application - Determination - Principles - Exceptions - Creditor threatened to present petition seeking order directing debtor company to be wound up - Debtor company brought motion seeking interlocutory injunction restraining creditor from presenting petition - Normal principles governing such motions inapplicable - Right of creditor to have recourse to the Courts - (1995/6928 P - Keane J. - 23/2/96) - [1996] 1 I.R. 12

|Truck & Machinery Sales Ltd. v. Marubeni Komatsu Ltd.|

WINDING UP

Petition

Presentation - Restraint - Creditor - Rights - Enforcement -Interlocutory injunction sought by debtor company to restrain presentation by contingent creditor - Normal principles governing interlocutory injunctions inapplicable - Right of foreign creditor to have recourse to the Courts - Companies Act, 1963 (No.33), ss. 213–5 - Constitution of Ireland, 1937, Article 40 - (1995/6928 P - Keane J. - 23/2/96) - [1996] 1 I.R. 12

|Truck & Machinery Sales Ltd. v. Marubeni Komatsu Ltd.|

Citations:

COMPANIES (AMDT) ACT 1986 S18(3)

COMPANIES (AMDT) ACT 1983 S40(1)

PAGEBOY COURIERS LTD, IN RE 1983 ILRM 511

STONEGATE SECURITIES LTD V GREGORY 1980 1 AER 241

CAMPUS OIL LTD V MIN FOR INDUSTRY (NO 2) 1983 IR 88

BRYANSTON FINANCE LTD V DE VRIES (NO 2) 1976 1 CH 63

COULSON SANDERSON & WARD V WARD 1986 2 BCLC 99

TWEEDS GARAGE LTD, IN RE 1962 1 AER 121

TAYLORS INDUSTRIAL FLOORING LTD V M & H PLANT HIRE (MANCHESTER) LTD 1990 BCLC 216

HOLT SOUTHY LTD V CATNIC COMPONENTS LTD 1978 2 AER 276

KINSELA V RUSSELL KINSELA PROPERTY LTD 1986 4 NSWLR 722

FREDERICK INNS LTD, IN RE 1991 ILRM 582 1994 1 ILRM 387

FOAKES V BEER 1888 9 AC 605

COMPANIES ACT 1963 S213

COMPANIES ACT 1963 S214

COMPANIES ACT 1963 215

MANN V GOLDSTEIN 1968 2 AER 769

CLANDOWN V DAVIS 1994 2 ILRM 536

A COMPANY, IN RE 1983 BCLC 492

CHARLES FORTE INVESTMENTS LTD V AMANDA 1964 1 CH 240

SELECTMOVE LTD, IN RE 1995 2 AER 533

WILLIAMS V ROFFEY BROS & NICHOLLS (CONTRACTORS) LTD 1991 1 QB 1

STILK V MYRICK 1809 2 CAMP 317

PINNELS CASE 1602 5 CO REP 177a

HUGHES V METROPOLITAN RAILWAY CO 1877 2 AC 439

CENTRAL LONDON PROPERTY TRUST LTD V HIGH TREES HOUSE LTD 1947 KB 130

WEBB V IRELAND 1988 IR 353

AMERICAN CYNAMID CO V ETHICON LTD 1975 AC 396

1 JUDGMENT delivered the 23rd February, 1996 by Keane J.

2 The facts, insofar as they are not in dispute, in this case are as follows. The plaintiff company (hereafter "TMS") is an Irish company engaged in the business of buying and selling, inter alia, trucks and contractors" plant and machinery both in Ireland and abroad. Early in 1992, at a time when the European market for the equipment sold by TMS was poor, they identified a market for their goods in the United Arab Emirates (hereafter "the UAE"). The Defendants (hereafter "MKL") are an English subsidiary of a Japanese company which exports machinery of this nature manufactured by the Komatsu company in Japan. MKL entered into a written agreement on the 21st March, 1992 for the sale by MKL to TMS of a consignment of second hand machinery for a sum of approximately STG£2.9 million. The agreement was in form a Credit Sale Agreement under which the sums due under the contract were payable on or before the 31st October, 1992 and if included a reservation of title clause under which the property in the machinery remained vested in MKS until payment.

3 The machinery was in due course shipped from England to Dubai, where TMS had leased premises from the government in what was called the Jebel Ali Free Zone. However, the company in the UAE which distributed Komatsu equipment, Galadari Trucks and Heavy Equipment (PVT) Limited (hereafter "Galadari") objected to the sale of the equipment on the ground that they were the sole distributors of Komatsu equipment in the UAE. Although the attitude of the Komatsu company in Japan was that Galadari's exclusive distributorship arrangement did not extend to second hand machinery, such as that proposed to be sold by TMS, the objections of Galadari prevailed with the local administration and, as a result, TMS were unable to move the equipment from the Jebel Ali Free Zone.

4 Despite efforts by all the other parties concerned to resolve the situation, both Galadari and the local administration maintained their objection to the removal of the machinery. Since then, there have been extensive correspondence, discussion and negotiations (some of them on a "without prejudice" basis) concerning the outstanding indebtedness of TMS to MKL under the Credit Sale Agreement and the re-sale of the machinery. As a result, some of the machinery was shipped back from the UAE and sold at auction in Rotterdam. TMS also indicated to MKL their intention of instituting legal proceedings in the UAE against Galadari and the local administration. Sums amounting to STG£734,837.26 have been paid by TMS to MKL in reduction of their indebtedness under the Credit Sale Agreement and, in addition, certain trucks (not part of the consignment sold pursuant to the Credit Sale Agreement) were returned by TMS to MKL in respect of which MKL gave credit to TMS in the sum of STG£275,000.

5 On the 26th July, 1995, the Irish solicitors acting for MKL wrote to TMS as follows:-

"As you are aware, we are instructed by Marubeni Komatsu Limited in relation to the debt due to them by you on foot of the Credit Sale Agreement dated 31st March, 1992. We are instructed by our clients that despite numerous attempts by them to enter into an arrangement with you regarding the repayment of this debt, no satisfactory proposals regarding repayment have been forthcoming from you."

"As Solicitors for Marubeni Komatsu Limited and on their behalf, we accordingly make formal demand pursuant to the provisions of Sections 213 and 214 of the Companies Act, 1963as amended that you pay to them the sum of STG£2,357,856.39 (being the sum outstanding on foot of the Credit Sale Agreement as of 30th June, 1995) within a period of 21 days from the date of this letter."

"In the event that the said sum is not paid within this 21 day period, Truck and Machinery Sales Limited shall be deemed unable to pay its debts and our clients will petition to the High Court for an Order winding-up Truck and Machinery Sales Limited pursuant to the aforesaid provisions of the Companies Act, 1963as amended."

6 These proceedings were then instituted in which TMS claim:-

7 (1) a declaration that MKL is estopped by its conduct and representations from proceeding by way of legal action against TMS whether by petition for winding-up of TMS or otherwise to enforce the payment by TMS to MKL of the sums in question;

8 (2) specific performance of an agreement allegedly entered into between TMS and MKL on 23rd December, 1993 under which MKL agreed that it would not proceed further with legal action against TMS for the recovery of the sums in question;

9 (3) an injunction restraining MKL from advertising a petition to wind-up TMS; and

10 (4) damages for fraudulent and/or negligent misrepresentation and for breach of fiduciary duty.

11 A notice of motion was then served on behalf of TMS claiming an injunction restraining MKL from presenting a petition and/or an injunction restraining its advertisement. That motion was grounded on an affidavit of Mr. James Mansfield, the Managing Director of TMS, which was responded to by an affidavit by Mr. Mark Carrington, the Sales Director of MKL. Two further affidavits having been sworn by Mr. Mansfield, the motion came on for hearing before me on January 26th last.

12 The affidavits sworn by Mr. Mansfield and Mr. Carrington were lengthy and in addition there were exhibited with them voluminous correspondence, faxes and other material. For the purposes of the present application, I need do no more than refer to certain features of the course of conduct between TMS and MKL on which counsel placed particular emphasis in the course of their submissions.

13 On the 22nd December, 1993, Mr. Carrington sent the following fax to a Mr. Tony Campbell, of Anglo-Irish Bank Corporation, with whom TMS were having discussions as to the financial difficulties they were experiencing because of the abortive UAE transaction:-

"Following our telephone conversation yesterday, we confirm that we have reached agreement with (TMS) regarding the disposal of the remaining used machines in Dubai and it is not our intention to proceed further with legal action."

"We have told (TMS) that provided a part payment of approximately 0.75 to 1.0 million pounds is paid to us promptly, we would wait for the balance until such time as the remaining equipment is sold through alternative channels or in the event that the proceeds do not clear the outstanding debt, we will await the outcome of legal proceedings currently in progress in Dubai".

14 TMS claimed that the presentation of a winding-up petition by MKL would be a breach of the...