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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Revenue Commissioners -v- Ladaney Ltd & Anor [2014] IEHC 438 (26 August 2014)
URL: http://www.bailii.org/ie/cases/IEHC/2014/H438.html
Cite as: [2014] IEHC 438
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Judgment Title: Revenue Commissioners -v- Ladaney Limited & Anor Neutral Citation: [2014] IEHC 438 High Court Record Number: 2014 377 COS Date of Delivery: 26/08/2014 Court: High Court Composition of Court: Judgment by: Herbert J. Status of Judgment: Approved |
Neutral Citation: [2014] IEHC 438 THE HIGH COURT [2014 No. 377 COS] IN THE MATTER OF LADANEY LIMITED (IN VOLUNTARY LIQUIDATION) AND IN THE MATTER OF THE COMPANIES ACTS 1963 - 2013 AND IN THE MATTER OF SECTIONS 267 AND 282 OF THE COMPANIES ACTS 1963 BETWEEN REVENUE COMMISSIONERS APPLICANT AND
LADANEY LIMITED (IN VOLUNTARY LIQUIDATION) AND ANTHONY FITZPATRICK RESPONDENTS JUDGMENT of Mr. Justice Herbert delivered the 26th day of August 2014 1. This an application for an order pursuant to the provisions of O. 74, r. 71 of the Rules of the Superior Courts 1986, commonly referred to as the “Winding-Up Rules”. The order sought is by way of an appeal from a decision of the chairman appointed at the meeting of creditors of Ladaney Limited, the company named in the title of this judgment, held on the 15th July, 2014, to disallow for the purpose of voting the applicants proof of €371,785 and, not to disallow as invalid for the same purpose, the proxies submitted by Roken Construction Limited, O’Hara, Dolan and Company Limited, Devery Farrell and Company, Michael Walsh and Son Limited and Avonlee Soap Company Limited. 2. The applicants further claim an order pursuant to the provisions of s. 276(2) of the Companies Act 1963, appointing Mr. Barry Donohue, Chartered Accountant to be liquidator of the company instead of Mr. Anthony J. Fitzpatrick, Chartered Accountant who was appointed liquidator at the said meeting. 3. The applicants claim in the alternative an order that the company be wound up under the supervision of this Court. 4. It was submitted on behalf of the company and Mr. Anthony J. Fitzpatrick at the hearing of this application that by virtue of the provisions of O. 74, r. 68 of the Winding-Up Rules, the applicant was expressly prohibited from voting in respect of the sum of €371,785 as it was a debt, the value of which had not been ascertained. The Rule provides that:-
6. As set out at paras. 3 and 4 of the affidavit of Elizabeth Griffin an executive officer with the Office of the Collector General, sworn on the 23rd July, 2014, the applicants claim that the company is indebted to them in the sum of €371,780. This sum is made up of €39,308.64 for VAT and €151,297.23 for PAYE and PRSI for the years 2000 to 2013 inclusive, together with €7,951.02 interest on VAT and €30,273.95 interest on PAYE/PRSI and penalties of €142,954.40, calculated at 75% of the total tax liability of €190,605.87, for deliberate default. These figures were calculated following an audit of the company carried out by the applicants in the last quarter of 2013. 7. At para. 5 of this affidavit, it is stated by the deponent that a meeting to discuss “the audit liabilities” took place on the 2nd July, 2014, between Ann Carter a director and secretary of the company and her advisers and the Revenue auditors. Elizabeth Griffin goes on to state that:-
9. At para. 15(xi) of her said affidavit, it is stated by Elizabeth Griffin that:-
11. In Sidebottom v. Sidebottom L.R. 5 P & D 365, it was held that “ascertained” has two meanings “known” and “made certain”. In the present case there was and could not be any debt due to the applicants, the value of which is either “known” or “made certain” until the statutory appeal process, invoked within time by the company, has been completed or abandoned or a settlement has been agreed between the company and the applicants. There was not here any doubt as to whether or not the applicant’s proof should be admitted or rejected. The chairman through Mr. Dooley stated that the amount claimed by the applicants was not admitted and was under appeal. It was not therefore “ascertained” and the applicants were expressly prohibited by the statutory instrument from voting in respect of this sum of €371,785. 12. The second part of O. 74, r. 71, has no application on the facts of the instant case. 13. In the case of disputed values of a debt, the correct procedure for the chairman of the creditors meeting to follow is to allow the creditor to vote for the full amount claimed by the creditor having marked the proof “objected to”. This is what occurred in the case of In the matter of Jim Murnane Limited (In liquidation) and In the matter of the Companies Act 1963 - 2006 [2009] IEHC 412). In that case the proxy for Mr. Murnane claimed that the amount of €527,518 included, in compliance with s. 266(3)(a) of the Companies Act 1963, in the estimated statement of affairs as due to him was absolutely wrong and he was owed in the region of €1m. The chairman incorrectly, as the court held, ruled that Mr. Murnane could vote only to the value of the debt as included in the estimated statement of affairs. That was clearly a case where there were disputed values of a debt. 14. In marked contrast, in the instant case, the applicants could place no value at all on the amount claimed due to them unless or until the statutory appeal process invoked within the permitted time by the company had been concluded or abandoned or a settlement as to the amount due had been concluded between the applicants and the company. The fact that the estimated statement of affairs included the applicants in the list of creditors and estimated the amount of their claim at €75,375 did not entitle the applicants to vote up to this amount pending the outcome of the appeal process, as up to that point the value of any debt due to them remained unascertained so that the provisions of O. 74, r. 68 of the Winding-Up Rules applied. 15. Order 74, r. 74 of the Winding-Up rules provide that a creditor or a contributory may vote either in person or by proxy. Rule 75 provides, that every instrument of proxy shall be in either Form 21 or Form 22, the former being a general proxy and the latter a special proxy. 16. Rule 2 on Form 21 referring to signature states that:-
18. In my judgement, it must follow that the same is also true of a firm. Laffoy J. held that where proxy forms are not properly executed, the chairman of a creditors meeting may not accept the appointees of those creditors as proxies for the purpose of voting. 19. I find that the general proxies submitted by Michael Walsh and Son Limited (duly authorised signatory, but failing to identify the signatory as an officer of the company), Roken Construction Limited (signatory not identified as a duly authorised officer of the company), O’Hara Dolan and Company Limited (director not stated to be duly authorised), Avonlee Soap Company Limited (not stated to be a duly authorised officer of the company), were invalid and, the chairman of the creditors meeting should not have accepted the appointees of these creditors as proxies for the purpose of voting. 20. It is admitted by the applicants that the general proxy submitted by Mary Molyneaux, a former employee of the company, was valid. I find that the general proxy submitted by Devery Farrell and Company, a partnership, was also valid. It is signed by “Paul Devery, partner of Devery Farrell and Company”. This in my judgement is in no way materially different from “Paul Devery a partner in the said firm”, the firm’s trading name having been already stated in the form. The “chairperson” as nominated general proxy of Mary Molyneaux and Devery Farrell and Company, the majority in value of the creditors present personally or by valid proxy and entitled to vote, voted for the appointment of Mr. Anthony J. Fitzpatrick as liquidator of the company. 21. In these circumstances, I am satisfied that Mr. Anthony J. Fitzpatrick, Chartered Accountant of Clonmoney House, Newenham Street, Limerick, was validly and lawfully appointed as liquidator of the Ladaney Limited (in voluntary liquidation). 22. At para. 37 of her affidavit, Elizabeth Griffin states as follows:-
24. I am satisfied on the whole of the affidavit evidence that there is no reason whatsoever to consider that he will not carry out and complete this liquidation in an efficient and proper manner under the supervision of the Creditors Committee of Inspection, of which the applicants are part. 25. I find that it would be altogether inappropriate on the facts of this case, in particular having regard to the paucity of assets, to make an order pursuant to the provisions of s. 282 of the Companies Act 1963, that the company be wound-up under the supervision of the court. |