Walsh v an Post National Lottery Company
| Jurisdiction | Ireland |
| Judge | Ms. Justice Pilkington |
| Judgment Date | 19 October 2020 |
| Neutral Citation | [2020] IEHC 605 |
| Date | 19 October 2020 |
| Court | High Court |
| Docket Number | [Record No. 2019/424 COS] |
IN THE MATTER OF AN POST NATIONAL LOTTERY COMPANY
AND
IN THE MATTER OF SECTION 678 OF THE COMPANIES ACT, 2014
AND
[2020] IEHC 605
Pilkington
[Record No. 2019/424 COS]
[Record No. 2016/11459P]
THE HIGH COURT
By way of originating notice of motion (issued in these proceedings but, for the reasons set out below, relied upon in respect of proceedings 2016/ 11459P) dated the 13th of November 2019, the applicant seeks the following reliefs: -
(1) An order pursuant to RSC O. 74, r. 83 and further pursuant to s. 678 of the Companies Act, 2014 for such order, allowing for the taking and continuation of proceedings and the service of a statement of claim on the respondent company, which is in voluntary liquidation.
(2) An order pursuant to RSC O.28, r. 7 amending the title of the existing proceedings bearing record number 2016/ 11459 P to include the words “in voluntary liquidation” in respect of the second named defendant, the respondent herein.
(3) An order pursuant to RSC O. 9, r. 15 declaring the service of the plenary summons as already effected on the second named defendant, the respondent herein as sufficient.
(4) Further or other order and an application for costs.
The background facts and circumstances of this case are certainly unusual.
By way of a brief summary: -
(a) The applicant, Ms. Walsh, was the winner of a lottery ticket drawn on the 22nd day of January, 2011. She won some €3.389 million. Thereafter, matters took a turn for the worse.
(b) Ms. Walsh contends that she was advised by the National Lottery (specifically by a Mr. Hughes) that if she wished to make gift to any members of her family, without them being liable to tax, then she should print the names of the intended recipients on the back of the ticket. She did so prior to its presentation. The plaintiff at all times denied that a syndicate was thereby formed. She contended that she intended to give gifts to certain family members but not to form a syndicate, comprising of herself and five other people, which would thereby entitle each to a one-sixth share.
(c) Following the death of Ms. Walsh's husband, his son (and lately I understand his nephew) have issued High Court proceedings seeking their share of the applicant's lotto winnings.
(d) The first set of proceedings seeking such a share were issued by David Walsh (a step son of Ms. Walsh), on the 20th day of November, 2013 bearing record number 2013/ 13066 P (‘the 2013 proceedings’). Humphreys J. delivered his ex tempore decision on the 2nd day of February, 2017 - Walsh v. Walsh [2017] IEHC 181. Mr. Walsh succeeded in the 2013 proceedings.
(e) The matter was then appealed to the Court of Appeal and, on consent of both parties, on the 31st day of July, 2018 Irvine J. (as she then was) made an order in the following terms:
“That the appeal be allowed and that all prior orders made in this Court and all orders made in the High Court be vacated save for the counterclaim of the defendant do stand dismissed”
The appellant's claim (this applicant) was then struck out with no order as to costs.
In the interim, on the 22nd of December, 2016 this applicant issued proceedings bearing record number 2016/ 11459 P, instructing Beauchamps Solicitors, against three named defendants, An Post, An Post National Lottery Company and Premier Lotteries Ireland Designated Activity Company. These proceedings essentially constitute negligence proceedings in respect of the advices allegedly furnished to her by Mr. Hughes. This was prior to the judgment in the 2013 proceedings on the 2nd day of February, 2017 and the subsequent appeal. I also understand that certain reliefs, arising from an application for a Mareva injunction, attached to the monies thereafter (but I am uncertain as to any terms of such order).
In any event, at some point which is at present unclear, within the 2016 proceedings (which I shall term ‘the negligence proceedings’), Ms. Walsh's solicitors (Messrs Beauchamps) came off record. Thereafter, Ms. Walsh personally (when she was a lay litigant) served the defendants on the 20th day of December, 2017 and has sworn an affidavit of service to that effect.
It appears that, within the 2016 proceedings, appearances have been entered in the usual course – the appearance for the second named defendant is dated the 3rd day of January, 2018 and requests, in the usual form, delivery of a statement of claim. The second named defendant is the relevant defendant to the present application.
The applicant's present solicitors filed a notice of change of solicitor on the 13th day of June, 2019, so she was without legal representation from some time in 2017 to this June 2019 date.
This motion concerns only the second named defendant to the 2016 proceedings. This issue has arisen due to the fact that the second named defendant was, on the 26th day of October, 2016 by member's special resolution, wound up voluntarily and Mr. Michael Sargent appointed as its liquidator. In the usual form this was entered in the CRO on 1st day of November 2016. The necessity for its winding up arose because, following a competitive tender process, the licence for the operation of the State National Lottery was awarded to the third named defendant and, accordingly, the second named defendant company no longer carries on that business.
Therefore, by the time the negligence proceedings issued on the 22nd of December 2016 the second named defendant to those proceedings was in voluntary liquidation and any entity wishing to issue proceedings against it must comply with the requirements of s. 678 of the Companies Act, 2014 (‘s. 678’), which is set out below.
In such circumstances RSC O.74 r. 83 clearly requires, in an application pursuant to s. 678 in the case of a voluntary winding up, that it is made by way of an originating notice of motion. No originating notice of motion was issued within the 2016 negligence proceedings (a notice of motion was issued but not an originating notice of motion). Thereafter, arising from correspondence between the parties, it was accepted that an originating notice of motion would be issued. That was done and comprises of the present application, which bears the 2019 record number set out above and in respect of which the only defendant named is the company in voluntary liquidation. However, all of the affidavits filed in support of this application are filed within the 2016 negligence proceedings.
This originating notice of motion is therefore solely related to the leave application in respect of the second named defendant within the 2016 negligence proceedings. Whilst this is certainly irregular, it was agreed that it would proceed on that basis.
Section 678 of the Companies Act, 2014 is clear in its terms. It is headed “Actions against Company staying on Winding Up Order” and states: -
“678.(1) When in relation to a company–
(a) a winding-up order has been made,
(b) a provisional liquidator has been appointed, or
(c) a resolution for voluntary winding up has been passed,
no action or proceeding shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose.”
Its predecessor, s. 222, was in identical terms, save that s. 678 provides for the insertion of a new category at (c) above. In short, the requirement for leave of the court in respect of a voluntary winding up was added. Specifically, no amendments have been made within s. 678 as to whether, in a voluntary winding up, any such application can, if successful, have retrospective effect, or if any other criteria should be considered in respect of that form of winding up
In any event, before I can determine that the application can be made retrospective or otherwise, I also have to consider whether leave should be granted.
The case relied upon by both parties is that of Finlay Geoghegan J. in Re MJBCH Ltd (In Liquidation) [2013] IEHC 256 (‘ MJBCH’). Self-evidently, this decision was prior to the introduction of s. 678.
In that case the court had to consider whether it had jurisdiction to make an order granting leave for the commencement of proceedings (concerning an accident at a hotel complex where the occupier of the premises had been the subject of a winding up order) and whether, in such circumstances, the court had jurisdiction to make an order with retrospective effect, pursuant to s. 222 of the Companies Act, 1963. The company's official liquidator stated he was taking a neutral stance on the application (that is not the position here). The court stated: -
“The primary issue on this application is whether or not the Court has jurisdiction pursuant to s. 222 to make an order granting leave for the commencement of proceedings which has retrospective effect. Put another way, the question is whether or not the Court has jurisdiction to make an order, the effect of which is to validate proceedings commenced after the making of a winding up order but without the prior leave of the Court. If the Court does have jurisdiction, there is the further issue as to whether it should grant the order sought.”
In considering the issue, the court had to consider whether the issuing of such proceedings against a company, the subject of a winding up order, was merely an irregularity or a nullity.
In pointing out that voluntary liquidations were not ‘caught’ by s. 222, Finlay Geoghegan J. stated that, in her view, its purpose could not simply be the protection of creditors but primarily, as set out by Black L.J. in the Northern Irish case of Boyd v. Lee Guinness Limited [1964] NI 49,...
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