Van Hool McArdle v Rohan Industrial Estates

• Jurisdiction: Ireland
• Judge: O'HIGGINS C.J.,KENNYJ.:
• Judgment Date: 01 January 1980
• Court: Supreme Court
• Docket Number: (173-1979),[S.C. No. 173 of 1979]
• Date: 01 January 1980

1978 WJSC-SC 3915

THE SUPREME COURT

O'Higgins C.J.

Kenny J.

Parke J.

(173-1979)

VAN HOOL McARDLE LTD, IN RE

IN THE MATTER OF VAN HOOL McARDLE LIMITED (INLIQUIDATION)

AND

IN THE MATTER OF THE COMPANIES ACT 1963

1 JUDGMENT delivered the 26th day of October1979by O'HIGGINS C.J.

2 This appeal comes before this Court under the following circumstances. On the 10th April 1978 Van Hool McArdle Limited was ordered to be wound up by the High Court pursuant to the provisions of the Companies Act 1963. Mr. John Donnelly was appointed Official Liquidator. One of the principal assets of the Company consists of 20 acres of land at Palmerston, Co. Dublin, which has the benefit of full planning permission in respect of factory development. The Liquidator engaged the services of two firms of estate agents for the purpose of advising him in relation to the value of this property and the best manner of selling it. In accordance with the advice he received from these two firms he decided to offer the property for sale by Tender. He was also advised that the value of the property was ofthe order of £600,000 but that £650,000 might be obtained. Tenders for the property were duly received but all of these fell far short of the figure of £600,000. The matter was then reconsidered and it was decided to reject these offers and to seek fresh Tenders. On the 4th September 1979 an offer of £750,000 was received from Mr. Jeff Schools on behalf of the Van Hool group of companies in Belgium. which included the Appellants in this matter. This offer was conditional upon exchange control consent being obtained. On the 6th September 1979 an offer of £730,000 was received from Rohan Industries Estates Limited. This offer was open for acceptance only for that day. The Liquidator sought the advice of the two firms of estate agents, and came to the conclusion that as the Rohan offer, although smaller, was not subject to any condition as to exchange control consent, it ought to be accepted. Naturally the Liquidator was apprehensive lest any delay might result in this offer being withdrawn. Accordingly, on the 7th September 1979, a contract for the sale of the propertyat the price of £730,000 was entered into between the Liquidator and Rohan Industries Limited. This Contract was made subject inter alia to the following condition:

"The sale to the purchaser shall be subject to and conditional upon the consent of the High Court there to being obtained and if such a consent shall not have been obtained on or before the 31st day of October 1979 either party hereto may be notice in writing to the other determine this Contract and thereupon the purchaser shall be entitled to the return of its deposit but without interest, compensation, or otherwise. The Liquidator shall use his best endeavours to obtain the consent of the Court to the sale."

3 On the 10th September 1979 the Liquidator received from Mr. Schools on behalf of the Appellants another offer of £850,000 subject again to exchange control consent. The matter was then brought before the High Court on the motion of the Liquidator who sought an Order approving the proposed sale in accordance with the Contract of September 7th. In his affidavit the Liquidator disclosed the subsequent offer from theAppellants.

4 The matter was dealt with by Mr. Justice McWilliamon the 12th September and adjourned by him for further consideration to the 28th September. In so adjourning the matter the learned Judge was concerned with the reality of the Appellants" offer having regard to the exchange control consent subject to which it was conditioned. However, on September 28th, although the necessary consent was then forthcoming Mr. Justice McWilliam felt that he was bound to uphold the Contract made by the Liquidator even though the price or consideration was subsequentially smaller than the offer then before the Court. In so deciding, the learned Judge was affected by the fact that the Contract had been properly entered into, on proper advice and that the Liquidator's action and conduct had at all times been prudent and bona fide. In such circumstances he felt that he could not have regard to any subsequent or higher offer and was bound to approve of the Contract made by the Liquidator as an officer of the Court. Against his decision in this respect this appeal has been brought.

5 In the first place it should be said that no criticism was or could be directed against the Liquidator as to the manner in which he acted. All parties accept that he acted with great care and prudence and that his concern at all times was to secure the best possible price for the property. The Contract into which he entered was, therefore, properly concluded by him and was, in all respects a bona fide and due discharge of his duties as Liquidator. The question for decision on this appeal is whether this being so the Court has any function or discretion in the matter. Mr. Justice McWilliam took the view that it had not and that once the Contract was concluded in such circumstances the Court was bound to approve it. In my view, this was to approach a rather difficult question in too doctrinaire a manner.

6 It seems to me that regard must be had to the actual Contract concluded by the Liquidator. Under the provisions of Section 231 (2) of the Companies Act 1963, the Liquidator in a winding up by the Court, as this was,was empowered to sell this property by public auction or private treaty...