Wymes v Crowley

• Jurisdiction: Ireland
• Judge: Mr. Justice Murphy
• Judgment Date: 27 February 1987
• Neutral Citation: 1987 WJSC-HC 1221
• Docket Number: No. 6624P/1986
• Court: High Court
• Date: 27 February 1987

WYMES & ORS v. CROWLEY & ORS

BETWEEN

MICHAEL J. WYMES AND OTHERS

PLAINTIFFS

AND

LAURENCE CROWLEY AND OTHERS

DEFENDANTS

1987 WJSC-HC 1221

No. 6624P/1986

THE HIGH COURT

Synopsis:

COMPANY

Debenture

Receiver - Appointment - Effect on directors” powers - Mining company - Ore body - Assets of mining company captured by appointment of defendant receiver by defendant debenture holders - Realisation of assets by receiver affected by action brought by member of mining company's parent company - Member of parent company applied for leave to add mining company as plaintiff in his action and to amend the summons - The leave was granted - The plaintiffs were concerned to ensure that full value was obtained by the receiver on any sale of the assets of the mining company - The plaintiffs also claimed that the receiver had failed to detect, since his appointment in 1985, a systematic and continuing larceny, committed by the owner of an adjoining mine, of ore from the mining company's ore body - Held that the powers of the directors of the mining company to institute an action by that company against the receiver were not affected, in principle, by the appointment of the receiver - Held that the claims of the plaintiffs were not directed to the prevention of the proper exercise of the receiver's powers, and that the interests of the plaintiffs with regard to the price realised on a sale had been safeguarded by the receiver's undertaking to apply to the High Court, on notice to the plaintiffs, for approval of any sale of the assets of the mining company - Held that the plaintiffs” interlocutory application for an order directing the receiver to allow the plaintiffs to enter the lands of the mining company for the purpose of inspecting the same and drilling bore holes there, in order to discover the existence and extent of any trespass by the owner of the adjoining mine, should be granted subject to the terms indicated in the judgment - Rules of the Superior Courts, 1986, order 50, r.4 - (1986/6624 P - Murphy J. - 27/2/87)

|Wymes v. Crowley|

PRACTICE

Property

Inspection - Mine - Ore body - Trespass - Mine vested in receiver - Plaintiffs alleged subterranean trespass and larceny by owner of adjoining mine - The plaintiffs were granted leave to enter certain lands, which had vested in the defendant receiver, for the purpose of inspecting them and drilling bore holes there - Rules of the Superior Courts, 1986, order 50, r.4 - ~See~ Company, debenture - (1986/6624 P - Murphy J. - 27/2/87)

|Wymes v. Crowley|

COMPANY

Debenture

Receiver - Appointment - Effect on directors” powers - Mining company - Ore body - Assets of mining company captured by appointment of defendant receiver by defendant debenture holders - Realisation of assets by receiver affected by action brought by member of mining company's parent company - Member of parent company applied for leave to add mining company as plaintiff in his action and to amend the summons - The leave was granted - The plaintiffs were concerned to ensure that full value was obtained by the receiver on any sale of the assets of the mining company - The plaintiffs also claimed that the receiver had failed to detect, since his appointment in 1985, a systematic and continuing larceny, committed by the owner of an adjoining mine, of ore from the mining company's ore body - Held that the powers of the directors of the mining company to institute an action by that company against the receiver were not affected, in principle, by the appointment of the receiver - Held that the claims of the plaintiffs were not directed to the prevention of the proper exercise of the receiver's powers, and that the interests of the plaintiffs with regard to the price realised on a sale had been safeguarded by the receiver's undertaking to apply to the High Court, on notice to the plaintiffs, for approval of any sale of the assets of the mining company - Held that the plaintiffs” interlocutory application for an order directing the receiver to allow the plaintiffs to enter the lands of the mining company for the purpose of inspecting the same and drilling bore holes there, in order to discover the existence and extent of any trespass by the owner of the adjoining mine, should be granted subject to the terms indicated in the judgment - Rules of the Superior Courts, 1986, order 50, r.4 - (1986/6624 P - Murphy J. - 27/2/87)

|Wymes v. Crowley|

Citations:

NEWHEART DEVELOPMENTS LTD V CO-OPERATIVE COMMERCIAL BANK LTD 1978 QB 814, 1978 2 WLR 636, 1978 2 AER 896

RSC O.50 r4

COOPER V INCE HALL CO 72 WN 24

BENNITT V WHITEHOUSE 28 BEAV 119

Mr. Justice Murphy

1 By motion dated the 7th day of January 1987 three Orders were sought by the Plaintiffs. First, that a company and certain individuals should be joined as Plaintiffs, secondly that the Plenary Summons should be amended and thirdly that the first named Defendant should be directed to permit the Plaintiffs to conduct an inspection of certain lands and the minerals thereunder. Having regard to the urgency of the matter I made the first and second of the Orders sought but postponed giving my reasons for so doing until the conclusion of the hearing of the remainder of the motion.

2 In so far as the first part of the motions sought to have the named individuals Thomas C. Roche, Thomas J. Roche and Richard Wood joined as Plaintiffs no difficulty arose and no serious objection was made by any of the Defendants. However, all of the Defendants disputed the right of the Plaintiffs to join as an additional Plaintiff Bula Limited.

3 Bula Limited is the owner of certain lands and Nevinstown, Co. Meath and it appears to be clearly established that there is a valuable orebody under those lands. The shareholding in Bula Limited is owned as to 49% by the State, 40.8% by Bula Holdings and 10.2% by members of the Wright family. Bula Holdings in turn is effectively owned and controlled by the family interests of Thomas C. Roche, Thomas J. Roche, Richard F. Wood and Michael J. Wymes.

4 The second, third and fourtly named Defendants (the Defendant banks) have loaned sums of money in the order of £16,000,000 for principal and interest to Bula Limited. The repayment of those moneys was secured, inter alia, by means of debentures granted by Bula Limited to the Defendant bankers on foot of which the first named Defendant, Laurence J. Crowley, was appointed Receiver on the 8th day of October 1985.

5 In these proceedings an interim injunction was granted on the 2nd of July restraining the Receiver from selling the assets of Bula Limited on or prior to the 18th of July 1986. On the latter date the interlocutory application came on for hearing and was struck out on consent on the undertaking of the Receiver to apply to the High Court for approval for any offer for the purchase of the assets of Bula Limited and his undertaking to notify the Plaintiffs of such application. It was not contended then or at any time that the appointment of the Receiver was invalid or that there was any defect in the debenture under which he was so appointed. No challange has been made as to the right or power of the Receiver to dispose of the assets of Bula Limited charged by the debentures. The concern of the Plaintiffs has related to the terms on which they are sold and more particularly the price to be obtained for them. No doubt the undertaking of the Receiver not to dispose of the assets charged without the sanction of the Court obtained on notice to the Plaintiffs is a procedure which fully protects the interest of both the plaintiffs and the Receiver.

6 On the 14th of February 1986 a Petition was presented by the Defendant banks for the winding up of Bula Limited. That Petition was contested by Bula Holdings and others and was adjourned from time to time until the 18th of July 1986 when an Order was made by Mr. Justice Costello winding up the Company and appointing Mr. William McCann as Official Liquidator thereof. An appeal was lodged against that Order which is, I understand, listed for hearing on the 10th of March 1987. In the meantime a stay has been placed on the winding up Order.

7 The Defendants properly recognise that the appointment of a Receiver in pursuance of the powers in that behalf contained in a Mortgage Debenture does not terminate the powers vested by law in the directors of the Company. The combined effect of the Mortgage Debenture and the appointment of a Receiver is to appoint the Receiver as the Attorney of the Company to deal with and dispose of the assets charged in accordance with the terms of the contractual documents and subject to certain statutory provisions which are applicable in those circumstances. References have been made to "the residual powers of the directors" notwithstanding the appointment of a Receiver. This expression may be appropriate as in practice the security granted by a Company would ordinarily extend to all of its assets present and future and impose thereon a fixed or floating charge as might be appropriate to the nature of the assets and include in addition - as is done in the present case - a power to carry on the business of the...