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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Unidare Plc (In Vol Liq) -v- Companies Acts 1963-2009 [2012] IEHC 114 (16 March 2012)
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Cite as: [2012] IEHC 114
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Judgment Title: Unidare Plc (In Vol Liq) -v- Companies Acts 1963-2009 Neutral Citation: [2012] IEHC 114 High Court Record Number: 2011 303COS Date of Delivery: 16/03/2012 Court: High Court Composition of Court: Judgment by: Mary Laffoy J. Status of Judgment: Approved |
NEUTRAL CITATION NUMBER [2012] IEHC 114 THE HIGH COURT [2011 No. 303 COS.] IN THE MATTER OF UNIDARE PLC (IN VOLUNTARY LIQUIDATION)
AND IN THE MATTER OF THE COMPANIES ACTS 1963- 2009 AND IN THE MATTER OF AN APPLICATION PURSUANT TO S. 280 OF THE COMPANIES ACT 1963 (AS AMENDED) DAVID HUGHES, LIQUIDATOR APPLICANT Judgment of Miss Justice Laffoy delivered on 16th day of March, 2012. 1. The application 1.2 Section 241 of the Act of 1963 provides:
2. The winding up 2.2 It is also clear from the evidence put before the Court that the Company was not only solvent but in a healthy financial state when it was wound up and that the current position is that the Liquidator has substantial assets to distribute among the members. The problem the Liquidator has encountered arises from the existence, or potential existence, of claims of considerable antiquity which have been made against the Company since it went into liquidation or may possibly be made in the future and which may not be statute-barred. 3. The claims 3.2 As regards the knowledge the officers of the Company had in relation to such claims prior to the liquidation of the Company, the Liquidator has exhibited a letter from the secretary of the Company which confirms that neither the executive chairman, nor the former senior independent director of the Company, nor the secretary was aware of any asbestosis/mesothelioma related personal injuries claims against the Company in the period prior to the announcement of the Company's liquidation in May 2006. The Liquidator has confirmed that there is not among the books and records of the Company which were provided to him any lists of employees of the Company or of its predecessor companies for the period from 1950 to 1980, which he considers to be the relevant period. He has pointed out that the Company acted as a non-trading holding/investment company for some time prior to the liquidation, and the employees employed by the Company during that period are not material in the context of the types of claim which necessitated the bringing of this application by the Liquidator. 3.3 The Liquidator has also carried out a thorough investigation of the Company's insurance position in relation to the relevant period, to the extent that he has engaged Insolutions Ltd., a firm of insurance archaeologists, to examine the Company's historic employers' liability cover. He has been able to identify the Company's insurance brokers for the period from 1986 to the date of liquidation. As a result of the work of Insolutions Ltd. he has been able to establish that cover existed back to 1975. However, for the years 1975 to 1977 the excess is unknown and, as regards later periods, although the excess is known, the amount utilised is not, meaning, as I understand the position, that the full excess may have to be funded by the insured for any claims covering the relevant period. It has been intimated that the Court can be provided with the specific details if required. The Liquidator has averred that, despite the research carried out, he has not been able to establish the insurance position prior to 1975, the period to which most of the claims which have emerged relate. Finally, the Liquidator has not been able to purchase cover since his appointment for the relevant period. 3.4 What I deduce from all the matters set out in the next preceding paragraph, although this was not specifically alluded to by counsel for the Liquidator, is that there is no insurance policy fund which could be "ringfenced" by virtue of s. 62 of the Civil Liability Act 1961 to adequately meet valid employer's liability claims against the Company in liquidation, which are not statute-barred. Insofar as it is relevant, s. 62 provides:
3.5 On the evidence before the Court, the Liquidator has taken the following steps to ascertain the creditors' claims against the Company. In May 2006, notice of the winding up and the appointment of the Liquidator was given in Iris Oifigiuil, as required by the Act of 1963. More importantly, notice was given in the Irish Times (25th May, 2006 and 29th June, 2006) and in the Irish Independent (25th May, 2006) requiring creditors to furnish details of their claims to the Liquidator. The advertisement followed Form No. 35 of Appendix M of the Rules of the Superior Courts, 1986, adapted to suit a voluntary liquidation. At a time when the Liquidator believed that it was appropriate to proceed to a final meeting of members and the dissolution of the Company, in September 2009 he gave notice of the convening of the final meeting in the Irish Times and the Irish Daily Mail, which was to be held on 6th November, 2009. That meeting was adjourned until January 2010 and the adjournment was re-advertised in December 2009 in both the Irish Times and the Irish Daily Mail. Following the re-advertising, the last of the six claims emerged and that claim, the circumstances of which will be outlined later, has been disposed of. 3.6 The two claims which have not been disposed of were the subject of letters in July 2008 from the same firm of solicitors on behalf of two claimants. Proceedings have not been initiated in relation to those claims, despite the fact that in September 2009 and October 2009 the solicitors were notified by the Liquidator of the imminence of the conclusion of the liquidation and the dissolution of the Company. 4. The law 4.2 The earliest of the authorities referred to by counsel was a decision of the Chancery Division of the English High Court in Pulsford v. Devenish [1903] 2 Ch 625. The effect of the judgment of Farwell J. is succinctly summarised in the head note, where it is stated:
Sect. 133 of the Companies Act, 1862 imposes a statutory duty on the liquidator to pay the debts of the company pari passu, and, subject thereto, to distribute the property of the company amongst the shareholders; and whilst the liquidation continues a contributory ... and a creditor can apply ... to the Court for relief in respect of his rights. When the company is dissolved the statutory remedy is gone, but the duty remains, and a contributory or creditor has a remedy at common law for injury caused to him by a breach of the liquidator's statutory duty." 4.3 A similar approach in relation to the duty of a liquidator as regards ascertainment of claims against the company was adopted by the Chancery Division of the English High Court in In Re Armstrong Whitworth Securities Company Ltd [1947] 1 Ch. 673. On the facts of that case the company had been its own insurer until 1st June, 1933 in respect of its liability under the Workmen's Compensation Acts. The company was voluntarily wound up in September 1943. The liquidator advertised for creditors. However, no steps, other than this general advertisement for claims, were taken to ascertain the company's position in regard to contingent claims of former employees under the Workmen's Compensation Acts. A final meeting of the company was held in October 1945 and the accounts of the company were duly passed. The liquidator proceeded to distribute the surplus amongst the shareholders but he had not completed the distribution before his death. After the final meeting, four former employees of the company had put in claims for compensation under the Workmen's Compensation Act, 1925 in respect of accidents which occurred before 1st June, 1933. In each case, the incapacity had arisen since the company went into liquidation. In fact, complete records had been kept from 1918 onwards of accidents to employees. Having outlined the information which was available in the records, Jenkins J. stated (at p. 691):
4.4 Both of the decisions referred to above were applied in Austin Securities v. Northgate [1969] 1 WLR 529, which was a decision of the Court of Appeal of England and Wales on an application to stay an action based on a contractual claim on the grounds that the company was being wound up and for want of prosecution by the plaintiffs. Apropos of the duty of a liquidator, Lord Denning M.R. stated (at p. 532):
'.. I consider to be the duty of a liquidator, namely, not merely to advertise for creditors, but to write to the creditors of whose existence he knows, and who do not send in claims, and ask them if they have any claim ... In In re Armstrong Whitworth Securities Co. Ltd ..., at p. 689 Jenkins J. stated: 'the cardinal principle that in a winding up shareholders are not entitled to anything until all the debts have been paid'; and said, at p. 691, that the duty of the liquidator 'was to take all steps reasonably open to him ...to ascertain whether any of the former employees concerned did make any such claim.' Now in this case the liquidators did not fulfil that duty. They had knowledge of this claim by the plaintiffs and yet they did not deal with it." 5. Conclusions 5.2 One of those two claims was a claim against Wessel Energy Cables Ltd. (Wessel), which purchased the business and assets of Unidare Cables Ltd. (later known as Unidare Conductors Ltd.). The former employee's claim against Wessel was disposed of, apparently, before the winding up of the Company. The extant claim against the Company appears to be a claim by Wessel, presumably, for indemnity. While a plenary summons issued on 13th March, 2007, it has not been served. The evidence is that Wessel was dissolved on 14th September, 2007, although the basis on which it was dissolved is not clear, save that the notice given in Iris Oifigiuil on 14th September, 2007 indicates that it was pursuant to s. 311(5) of the Act of 1963. Unidare Conductors Ltd. has also been dissolved. The evidence put before the Court by the Liquidator is that there is no evidence that the former employee had been employed by the Company. Even though Wessel has been dissolved for in excess of four years, it seems to me that prudence dictates that the Liquidator should notify in writing the solicitors who formerly acted for Wessel, Arthur Cox, of the decision of the Court on this application, given that the time limit set cut in s. 311(8) for bringing an application for a restoration order is twenty years. 5.3 The other of those two claims, which I infer was not prompted by the Liquidator's advertisements, was the final claim received by the Liquidator from Frank Ward & Co. on behalf of the claimant in a letter dated 23rd December, 2009, the timing of which was obviously connected to the fact that the former employee had died on 9th September, 2008 and that the Coroner's inquest into his death held on 23rd November, 2009 concluded that he had died from malignant mesothelioma. It was because of the existence of that claim that the adjourned final meeting advertised for 11th January, 2010 was further adjourned. As I have stated, that claim has been disposed of, although it was not ruled, as was necessary, by the Court when the application was heard. However, Frank Ward & Co. were notice parties on this application and consented to the making of the order sought. 5.4 Aside from the unusual features of the asbestosis/mesothelioma related personal injuries claims which require special consideration, I am satisfied that the Liquidator has taken all steps reasonably open to him to establish the debts of, and claims against, the Company. The Liquidator has also used his best endeavours to ascertain whether any former employees of the Company have personal injuries claims against the Company, which are not statute-barred. The officers of the Company are not aware of the existence of any such claims against the Company prior to its liquidation. There are no employee lists available for the relevant period. The question the Court has to ask is whether there is any other avenue of inquiry open to Liquidator, given that it is generally recognised that asbestos related injury can be symptomless for up to forty years, as was noted recently by the Law Reform Commission in its Report on "Limitation of Actions" (LRC 104 - 2011). 5.5 I am also satisfied that the Liquidator has taken all steps reasonably open to him to establish the position in relation to employers' liability insurance. Further, I think it is understandable that he has not been able to obtain cover recently. However, it would be helpful to the Court to know what, if any, acknowledged insurance cover there is to meet non-statute-barred personal injuries claims. 5.6 In relation to the two claims referred to in para. 3.6, which have been made but which have not been pursued, the Liquidator has kept the solicitors who made the claims apprised of the position in relation to the liquidation. It is difficult to see what more he could do, although, for what it is worth, the claimants' solicitors should be notified of the order the Court intends to make. 5.7 As regards the first limb of the relief sought by the Liquidator, I propose making an order fixing Friday, 4th May, 2012 as the date by which creditors and claimants are to prove their debts or claims against the Company or, subject to any further order of the Court, are to be excluded from the benefit of any distribution made before those debts are proved. The order will contain directions that the Liquidator-
(b) give notice in writing of the making of the order to Arthur Cox, Solicitors, in relation to the claim of Wessel and to the solicitors acting for the two claimants whose claims have not been disposed of referred to at paras. 3.6 and 5.6 above, in each case the notice to be given by letter dispatched not later than the 30th day of March, 2012. 5.9 I propose adjourning the remainder of the application until a date after 4th May, 2012, which is convenient to the Liquidator, so that the Liquidator can update the Court in relation to the outcome of the advertising and service of the notices referred to at para. 5.7 above and the inquiries referred to at para. 5.8. At that stage it would be helpful if the Liquidator could indicate the attitude of the insurers who provided cover post-1975 and put before the Court any proposal he has to allay the residual concerns in relation to the possible existence of non-statute-barred personal injuries claims against the Company.
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