United Bars Ltd ((in Receivership)) v Revenue Commissioners

• Jurisdiction: Ireland
• Judge: JUSTICE MURPHY
• Judgment Date: 01 January 1991
• Neutral Citation: [1988] IEHC 8
• Date: 01 January 1991
• Docket Number: [1988 No. 153 Sp]
• Court: High Court

[1988] IEHC 8

THE HIGH COURT

153SP CT5/1988

In re UNITED BANK LTD

UNITED BARS LIMITED ( In Receivership ) WALKINSTOWN INN LIMITED ( In Receivership ) RAYMOND JACKSON

Plaintiffs

THE REVENUE COMMISSIONERS

Defendants

Citations:

COMPANIES ACT 1963 S98(1)

SAUNDERS LTD, IN RE 1986 BCLC 40

COMPANIES ACT 1948 S94 (UK)

COMPANIES ACT 1963 S98

LEWIS MARLTY CONSOLIDATED COLLIERIES, In re 1939 1 CH 498

COMPANIES (CONSOLIDATION) ACT 1908 S107

Synopsis:

COMPANY

Receiver

Appointment - Assets - Sale - Application of proceeds - Company not in liquidation - Sale pursuant to power conferred in mortgage debenture whereby floating and fixed charges created over company's assets - Whether receiver obliged to satisfy the claims of persons who, if the company were in liquidation, would be entitled to preferential payments - Statute - Interpretation - Section 98 of the Act of 1963 states:- "Where ... a receiver is appointed on behalf of the holders of any debentures of a company secured by a floating charge ... then, if the company is not at the time in course of being wound up, the debts which in every winding up are, under the provisions of Part VI relating to preferential payments, to be paid in priority to all other debts shall be paid out of any assets coming to the hands of the receiver in priority to any claim for principal or interest in respect of the debentures" - On 6/10/81 the plaintiff company executed a mortgage debenture whereby the said company (a) created in favour of its bank a floating charge on the company's assets to secure the repayment to the bank of the moneys advanced by the bank to the plaintiff company and (b) charged the company's lands in favour of the bank as further security for the repayment of the said moneys - The plaintiff company failed to repay the bank in accordance with the terms of the said deed and on 3/12/86 the bank appointed a receiver over the assets of the company pursuant to a power in that behalf therein contained - The receiver sold the assets of the company for a sum which yielded a surplus of #85,417 over the sum payable to the company's bank on foot of the said fixed charge - The receiver applied to the High Court pursuant to s. 316 of the Act of 1963 for directions on the issue whether he was bound to apply any part of the said surplus in satisfying the claims of persons who, if the company were in liquidation, would be entitled to preferential payments pursuant to the provisions of Part VI of the Act - Held that the receiver was not bound to apply any part of the said surplus proceeds of sale in that manner - Extempore judgment - Companies Act, 1963, s. 98 - (1988/153 Sp - Murphy J. - 3/6/88) - [1991] 1 I.R. 396

|United Bars Ltd. v. Revenue Commissioners|

1 JUSTICE MURPHY ON JUNE 3, 1988.

2 I hereby certify the following to be a true and accurate transcript of my shorthand of the Judgement delivered in the above Action.

3 Doyle Court Reporters,

4 Arran Chambers,

5 6 Arran Quay,

6 Dublin 7.

7 Tel. 722833/862097

APPEARANCES

For Plaintiffs:

MR. O'KEEFFE, S.C.

MR. PAUL GALLAGHER

Instructed by:

ARTHUR COX & COMPANY

Solicitors

For Defendants:

MR. EOIN FITZSIMONS, S.C.

MR. ASTON

Instructed by:

PATRICK J. MAHER

REVENUE SOLICITOR

8 DOC MC 3172S

MR. JUSTICE MURPHY DELIVERED JUDGEMENT AS FOLLOWS:

9 Although the facts of this case have been fully set out in the affidavit sworn by Mr. Raymond Jackson herein on the 20th of January of 1988 and furthermore those facts have been fully explored and analysed in the arguments addressed to me by Counsel earlier today, it may be helpful if I summarise the material facts as follows: United Bars Limited and Walkins-town Inns Limited are two companies within what is known as the Belton Group. That group of companies were apparently engaged in the licensed trade. On the 6th of October 1981 three documents were executed. The first was a mortgage deben-ture given by the United Bars Limited in favour of Irish Inter-national Bank Limited to whom I shall refer as the bank, whereby United Bars charged by way of a floating security all its undertaking and assets with the payment of certain monies to the bank. It further charged and mortgaged to the bank certain lads and hereditaments consisting of licensed premises by way of further security and its indebtedness to the bank. The second of the documents executed in October 1981 was a guarantee for the payment of United Bars indebtedness to the bank by other members of the Belton Group, including, in part-icular, Walkinstown Inns Limited. The third material docu-ment was then a mortgage debenture given by Walkinstown Inns in support of the guarantee already referred to. That mortgage debenture, like the one given by United Bars Limited, comprised both a floating security and a fixed charge. A subsequent document was executed on the 17th of October 1983 but its provisions don't affect any matter of principle involved in these proceedings. Subsequently United Bars defaulted in the payment of monies due and owing by it to the bank. As a consequence the bank, on the 3rd of December 1986, appointed Mr. Jackson as Receiver and Manager of the properties of United Bars comprised in the debenture already referred to, and a similar appointment was made on the same day of Mr. Jackson in respect of the properties of Walkinstown Inns comprised in the debenture granted by that company. After his appoint-ment Mr. Jackson proceeded to realise the property over which he had been appointed and happily from the bank's point of view at any rate, the realisation appears to have been very successful. The total amount received as a result of the sale of the premises, the first premises charged by United Bars, amounted to £991,125. The amount realised by the sale of the licensed premises charged by Walkinstown Inn in favour of the bank amounted to £127,876. Thus, the total amount received by Mr. Jackson by the realisation of the licensed premises which were subject to a fixed charge amounted to £1,119,000. As the total due to the bank was £1,033,584 this left Mr. Jackson with a surplus of...