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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Frank Bell & Sons Ltd -v- Shaw & ors [2015] IEHC 108 (18 February 2015)
URL: http://www.bailii.org/ie/cases/IEHC/2015/H108.html
Cite as: [2015] IEHC 108
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Judgment
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Neutral Citation: [2015] IEHC 108 THE HIGH COURT [2014 No. 89 COS] IN THE MATTER OF THE COMPANIES ACT 1963 TO 2013 AND IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 106 OF THE COMPANIES ACTS 1963 AND IN THE MATTER OF FRANK BELL & SON LIMITED AND IN THE MATTER OF AN APPLICATION MADE BY DENIS F. SHAW, JOHN SHAW, SEAMUS TUNNEY AND KATHY GARVEY PRACTISING UNDER THE STYLE AND TITLE OF J.A. SHAW & CO., SOLICITORS JUDGMENT delivered the 18th February, 2015 by Mr. Justice Michael White 1. J.A. Shaw & Co., Solicitors (the Applicants) have applied by way of originating notice of motion for an order pursuant to Section 106 of the Companies Act 1963 extending the time for the registration of a charge created by deed of mortgage and charge dated the 25th April, 2003 between Frank Bell & Son Limited as mortgagor and Bank of Scotland (Ireland) Limited as mortgagee. The mortgage and charge relates to an industrial unit at Number 12 Mullingar Business Park, Mullingar, Co. Westmeath registered on Folio 11661F of the Register County Westmeath. History 3. The Applicants gave a Solicitor’s undertaking in the standard Law Society form on the 26th February, 2003. 4. Mr. Seamus Tunney on behalf of the Applicants in his affidavit sworn on the 12th February, 2014 stated that due to inadvertence the deed of mortgage and charge was not registered, and there was a failure to deliver particulars of the charge to the Registrar of Companies within 21 days, in compliance with Section 99 of the Companies Act 1963. The charge was registered on the folio on the 27th August, 2013. 5. The Company received a further loan facility on the 26th January, 2005 from Bank of Scotland (Ireland) Limited for €500,000. The amount advanced to the Company on the original facility of 9th December, 2002 was discharged in full by the Company by the 10th October, 2005. The loan facility of the 26th January, 2005 had also been repaid by July 2005. 6. A subsequent facility letter of the 22nd June, 2006 was offered by Bank of Scotland (Ireland) Limited to the Company for an amount up to €400,000 over a term of five years. The security was an extension of the Charge on No. 12 Mullingar Business Park, Mullingar, Co. Westmeath. This facility offer was accepted by the directors of the Company and signed on 26th June, 2006. There is still an outstanding sum due to Bank of Scotland (Ireland) Limited on amounts advanced by this facility. 7. An original charge registered on Folio 11661F in favour of ACC Bank was cancelled on the 8th July, 2013. 8. Frank Bell a director of the Company registered a charge in the Companies Office on the 9th September, 2013 which had been created on the 28th August, 2013 for an amount of €842,925 in his favour. Subsequently a charge in his favour was registered on Folio 11661F on the 11th September, 2013. 9. The Applicants had acted for the company over many years and had been involved in many transactions. Their professional relationship broke down, as evidenced by a letter of the 9th July, 2013 from Denis F. Shaw of the Applicant’s firm to Mr. Frank Bell. 10. It is acknowledged by the Applicants that in order to register the original deed of mortgage and charge, the reference to the Gaelscoil property at Grange, Mullingar was deleted, as Bank of Scotland (Ireland) Limited by letter of the 8th November, 2005 to the Applicants had released their charge over this property. Jurisdiction to Permit Late Registration. “ 11. The relief is discretionary on the court being satisfied:-
• It will not prejudice the position of creditors or shareholders of the Company or • That it is otherwise just and equitable to grant relief. 13. Section 99 (1) provides that any charge created by the Company shall insofar as any security on the Company’s property undertaking is conferred thereby could be void against the Liquidator and any Creditor of the Company….. “unless the prescribed particulars are registered within 21 days after the date of its creation. 14. Courtney the Law of Companies 3rd Edition 2012 at 19.08 states:-
17. Courtney the Law of Companies 3rd Edition 2012 at 19.094 states:-
The Allegation of Mala Fides against Frank Bell 19. In particular at paragraph 12 of his Affidavit of the 24th March, 2014 Mr. Tunney views with considerable scepticism the assertion by Mr. Bell that he had been engaged in financial planning in 2012 and had taken advice as to how his loan to the Company could be protected. 20. There is also considerable controversy between the Applicants and Frank Bell, as to the continued existence of a charge on Folio 11661F. Mr. Bell has stated in his affidavits that on a number of occasions he had discussions with Bank of Scotland (Ireland) Limited and with the Applicants about security held over various company properties. He states in his affidavits that his understanding was that the industrial unit 12 was no longer the subject of a charge from Bank of Scotland (Ireland) Limited, as he had sought to engage the bank with providing alternative security by way of other property development sites. 21. In his affidavits Frank Bell has exhibited a number of documents to support his bona fides in registering the charge on the Folio and in the Companies Office. 22. The documents are:-
(2) A letter of the 6th May, 2011 from the Applicants to the Company, when at sub paragraph 8 to the letter states “Folio 11661F Co. Westmeath registered to Frank Bell & Son Limited, this comprises Unit 12 Mullingar Business Park. This property is subject to a mortgage with ACC from 2001 and it is to be clarified if this mortgage has been fully cleared and if so we can take up a discharge as referred to in respect of the previous charges”. (3) An extract from his own diary of the 28th November 2011, wherein he notes “Denis, what undertaking has he on €400,000 with BOS and how long, it was six sites in Ardmore and they had an undertaking with Shaws”. The Company contends, that reflects the position as Mr. Bell understood it, that the security held by Bank of Scotland (Ireland) Limited was over six sites in Ardmore rather than Unit 12 Industrial Estate, Mullingar. (4) Counsel’s Opinion of the 5th December, 2012 where advice was tendered to Frank Bell about securing loans advanced to the Company of €500,000 to €600,000, when he was advised that it was appropriate to register a charge. Conclusion 25. However the facility letter of the 22nd June, 2006 sets out at Paragraph 3 (i) “an extension of Bank of Scotland (Ireland) Limited’s first specific Charge over the freehold land and premises of the Borrower consisting of an industrial unit at No. 12 Mullingar Business Park, Mullingar, Co. Westmeath”. That facility letter was signed by Frank Bell on the 26th June, 2006. The Company’s opposition to the extension of time to register the charge is thus unreasonable. 26. The Applicants have not established mala fides against Frank Bell. He took financial advice in early 2012 about his loans to the Company and sought legal and Counsel’s advice. He could well have been confused as to what security was held against Unit 12 Industrial Estate, Mullingar, even though he had signed the facility letter of the 22nd June, 2006. 27. It is appropriate to extend the time to register the charge in the Companies Office without prejudice to the rights of Frank Bell. The charge should have priority in the Companies Office from the date of the application to this Court, the 13th February, 2014. It is appropriate that time be extended for a period of 21 days from the date of perfection of the order to allow the charge to be registered in the Companies Office. |