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You are here: BAILII >> Databases >> Supreme Court of Ireland Decisions >> Framus Ltd & ors v C.R.H plc & ors [2013] IESC 23 (14 May 2013)
URL: http://www.bailii.org/ie/cases/IESC/2013/S23.html
Cite as: [2013] IESC 23
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Judgment Title: Framus Ltd & ors v C.R.H plc & ors Neutral Citation: [2013] IESC 23 Supreme Court Record Number: 445/2012 High Court Record Number: 1996 10658 P Date of Delivery: 14/05/2013 Court: Supreme Court Composition of Court: Denham C.J., Clarke J., MacMenamin J. Judgment by: Denham C.J. Status of Judgment: Approved |
THE SUPREME COURT Appeal No: 445/2012 Denham C.J. Clarke J. MacMenamin J.
Framus Limited, Amantiss Enterprises Limited (In Liquidation) and Wilbury Limited (In Liquidation) Plaintiffs/Appellants and CRH plc, Irish Cement Limited, Roadstone Provinces Limited, Roadstone Dublin Limited, Tradburn Limited, Readymix plc, Kilsaran Concrete Products Limited, and CPI Limited Defendants/Respondents Judgment delivered on the 14th day of May 2013 by Denham C.J.
1. Before the Court were motions brought, or supported, by the eight defendants/respondents, referred to as “the respondents”, in this case. 2. Mr. Paul Sreenan S.C. moved the motion on behalf of the first five respondents. Mr. Brian Murray S.C. moved the motion on behalf of the sixth named defendant. Mr. C. McNamara B.L. moved the motion on behalf of the eighth respondent. The seventh respondent did not bring a separate motion; however, Ms. B. Quigley B.L. appearing on its behalf, informed the Court that the seventh named respondent supported the motions. 3. Essentially, counsel for the respondents all adopted each others submissions. 4. Mr. J. Hennessy S.C. appeared for Framus Limited, referred to as “the first appellant”, and Mr. Seamus Maye, director and shareholder of the appellant companies. The Court was informed that Philip Lee, Solicitors, were on record as solicitors for Amantiss Enterprises Ltd (In Liquidation), referred to as “the second appellant”, and Wilbury Limited (In Liquidation), referred to as “the third appellant”, and that they were served with, and on notice of, the motions. Further, that the liquidator knew of the motions. 5. There was no representation by or on behalf of the liquidator. Motions by first to fifth named respondents
(ii) An order pursuant to Order 58, Rule 8 and/or the inherent jurisdiction of the Court against Seamus Maye in respect of the costs of this motion and the costs incurred by the first to fifth named respondents in connection with the appeal brought by the second and third named appellants. (iii) If necessary, an order joining Seamus Maye as a party to these proceedings for the purposes of making an order for costs against him. 8. He deposed to background facts, including the following:-
(ii) On the 26th September, 2012, a Notice of Appeal to this Court, was served by the three appellants, referred to collectively as “the appellants”, which was filed in the Supreme Court Office on the 2nd October, 2012. (iii) On the 4th October, 2012, the solicitors for the first to fifth named respondents wrote to the liquidator seeking confirmation that he had authorised the appeal, and querying whether he continued to authorise the prosecution of the appeal. (iv) It appears that it was only on the 4th October, 2012, that a copy of the Notice of Appeal was sent by email to the liquidator by Mr Maye. (v) By letter dated the 17th October, 2012, the liquidator responded to Mr. Maye’s email of the 4th October, 2012, querying why the current appeal action had taken place without seeking his approval and consent, and stating that he was not in favour of the appeal proceeding. (vi) Following a reply by Mr. Maye of the 18th October, 2012, the liquidator by email on the 18th October, 2012, stated that he had not given consent to the appeal being brought. (vii) The first to fifth named respondents were not informed of this situation. They understood that the appeal was proceeding. (viii) The solicitors for the first to fifth named respondents issued a security for costs motion on the 26th October, 2012, against the appellants. (ix) On the 16th November, 2012, the solicitor for the appellants wrote to the solicitors for the first to fifth named respondents confirming that they intended to issue a motion to adduce additional evidence. (x) The appellants issued that motion on the 20th November, 2012. (xi) The first to fifth named respondents were unaware that the liquidator had not authorised the appeal until Adams Solicitors, acting for the liquidator, wrote to the respondents’ solicitors on the 21st November, 2012. This letter stated clearly that the liquidator did not authorise the service of the Notice of Appeal or the prosecution of the appeal in the Supreme Court on behalf of the second and third named appellants. It was stated in the said letter that the liquidator had taken a decision to offer to assign the cause of action to the shareholders of the companies and awaited a response to the offer. (x) Mr. Maye has deposed an affidavit on behalf of the appellants. (xi) The solicitors for the respondents sought an explanation from the solicitors of the appellants as to why they had not been informed earlier of the liquidator’s view on the appeal.
(ii) The liquidator never authorised an appeal by the second and third named appellants. (iii) The liquidator was not aware that the judgment had issued, and he was not aware that the appeal had been filed. (iv) In advance of Mr. Maye writing to him on the 4th October, 2012, attaching the Notice of Appeal, the liquidator was not aware of the outcome of the High Court case or that Mr. Maye had lodged an appeal. (v) The liquidator set out his position clearly to Mr. Maye in his letter of the 17th October, 2012. 11. It appears that the liquidator of the second and third named appellants has offered to assign the cause of action to the shareholder of those companies for the price of €219,618. 12. However, the issue then arises that, even if such an assignment is made, would this cure any illegality in the filing of the notice of appeal on behalf of the second and third named appellants without the authorisation or consent of the liquidator. 13. It was submitted that the first to fifth named respondents have incurred expenses in defending the appeal and bringing a motion seeking security for costs in circumstances where the liquidator had not authorised the appeal. 14. The first to fifth named respondents seek costs to be awarded against Mr. Maye, and, if necessary, to join him as a party so that an order for costs may be made against him. Motion by Readymix 16. The motion was grounded on the affidavit of the 30th November, 2012, of Helen O’Connor, Solicitor, of McCann Fitzgerald Solicitors, solicitors for Readymix, in which she deposed that the liquidator, Mr. Des Donegan, acting on behalf of the second and third named appellants, did not authorise the service of the notice of appeal, or the prosecution of the appeal, and did not consider that the appeal was in the best interests of the creditors of the second and third named appellants; that the liquidator has offered to assign the cause of action to the shareholders of the second and third named appellant, and a response was awaited. 17. Readymix has incurred costs in successfully defending the pleadings in the High Court, and in the course of steps taken to meet the appeal of the appellants, and did not wish to incur any further unwarranted costs in defending the appeal of the second and third named appellants. Motion by CPI
(ii) Further and other orders, and (iii) Costs. 20. On the 27th September, 2012, CPI had been served with a notice of appeal, and a motion returnable to the 5th October, 2012, that sought to extend the stay on the High Court order until the determination of the appeal. 21. CPI indicated that they would oppose the application for a stay and would apply for security for costs. 22. The appellants indicated that they wished to issue a motion of additional evidence before the Supreme Court, to support their first ground of appeal that the judgment of Cooke J. was tainted by objective bias. 23. On the 21st October, 2012, CPI issued a motion to compel the appellants to provide security for costs. 24. On the 22nd November, 2012, CPI received information that the liquidator, Mr. Des Donegan, had not authorised the appeal that was being prosecuted on behalf of the second and third named appellants, of which he is the liquidator, and that he did not support the prosecution of the appeal. However, he had offered to assign the claims of the second and third named appellants to its shareholder. 25. It was deposed that it appeared that Mr. Des Donegan never gave instructions to Mr. Maye, or Philip Lee, the solicitors on record for the appellants, to prosecute an appeal in the name of the second and third named appellants. 26. It was submitted that proceedings cannot be instituted, or maintained, in a court by a company in voluntary liquidation without the authority of the liquidator. 27. It was submitted that the continued maintenance of the appeals by the second and third named appellants represents an abuse of process and that they should be struck out. Liquidator Conflict 30. One of the letters opened before the Court was from the solicitors for the liquidator. By letter dated the 21st November, 2012, Adams, Solicitors, for the liquidator, wrote to Arthur Cox stating, inter alia:-
Our instructions are that our client did not authorise the service of the Notice of Appeal or the prosecution of the appeal to the Supreme Court on behalf of the Second and Third Named Plaintiffs (“the Companies”). Our client does not support the Appeal as it is not in the best interests of the creditors of the Companies. We apologise for the delay in reverting to you, however our client has had to give consideration as to what would be in the best interests of the creditors of the Companies. In this regard, our client has taken a decision to offer to assign the within cause of action as it subsists to the shareholder of the Companies and awaits a response to this offer.”
1. All plaintiff costs in the proceedings would be to the account of Framus Limited; responsibility for such costs would not attach to your client.
2. Framus Limited would have carriage of the proceedings; and
3. Your client reserved the right to discontinue the proceedings at any time he deemed appropriate.
Periodically, your client was informed of the progress of the proceedings by Mr. Seamus Maye, Director of Framus Limited and of Amantiss Enterprises Limited and Wilbury Limited. Most recently, Mr. Maye met with Mr. Donegan on 26 June 2012. During their meeting, the question of an appeal against the then pending Judgment of Mr. Justice Cooke was openly discussed. Mr. Maye specifically stated that, if the Judgment went against the Plaintiffs, then, subject to the content of the judgment, they would have little option but to appeal. No objection was made by your client. Nor did he voice any objection to the steps taken to prosecute the proceedings up to that point.” 32. An additional factor is that a creditors’ meeting was called, pursuant to the order of Laffoy J. made on the 22nd January, 2013, to obtain the views of the creditors as to the appeal. The Court was informed that the creditors were in favour of the appeal proceeding. A general case Circumstances 35. In this case the circumstances include a letter from Arthur Cox to Mr. Des Donegan, Donegan and Associates, the liquidator, dated the 4th October, 2012, which stated:-
We note that you were appointed liquidator to the Second Named Plaintiff, Amantiss Enterprises Limited (in Liquidation) and the Third Named Plaintiff, Wilbury Limited (in Liquidation) in these proceedings on 1 April 1994. We were passed a copy of your solicitor's letter addressed to Philip Lee & Associates solicitors dated 27 November 1996, wherein it was confirmed on your behalf that "...it is now in order... to issue proceedings... ". As you may be aware, following motions issued by the defendants to dismiss the proceedings for delay in their prosecution, Mr Justice Cooke ordered that the proceedings stand dismissed on 19 July 2012. The Plaintiffs then served a Notice of Appeal to the Supreme Court on the defendants on 25 September 2012 ("the Appeal"). In these circumstances, please confirm by return whether you continue to authorise the progression of these proceedings and in particular whether you authorised the service of the Notice of Appeal and continue to authorise the prosecution of the appeal to the Supreme Court on the part of the Second and Third Named Plaintiffs. We must advise you that it is our clients' intention to apply for security for the costs of defending the Appeal. In the event that there is any shortfall in any costs in relation to the Appeal, our clients will be seeking an Order from the Court that will entitle our clients to hold any third party funder of the litigation responsible for any shortfall in costs to our clients. Our clients will also seek to hold you personally liable for any shortfall in any costs in relation to the Appeal that are not recovered from the Plaintiff companies insofar as you are liquidator and authorise the prosecution of these proceedings. This letter is without prejudice to our clients rights to pursue you personally in respect of costs already awarded in the High Court against the Second and Third Named Plaintiffs (in liquidation). We await hearing from you.” 37. Also, the creditors’ meeting and views supporting an appeal are relevant. 38. The fact that the liquidator was neither in court or represented in court, but was on notice of the hearing, is also a relevant circumstance. Order
(ii) The period of three months is designed to afford a realistic timeframe within which the jurisdiction of the High Court may be invoked, and any order which the High Court may be persuaded to make, be implemented.
(b) it must be demonstrated by affidavit evidence that all steps within the power of the applicant connected with seeking to invoke and implement the supervisory jurisdiction of the High Court were taken in a very timely fashion consistent with the intent of this Court that the entire process be completed and implemented (if the High Court is persuaded that any measures should be adopted) within a three month period; (c) that it remains the case, in the light of the progress of any relevant application, that there is a realistic possibility that suitable measures (which would allow the appeals to progress lawfully) may be achieved at the end of the day. (iv) In the event that measures have been put in place which, it is contended, allow these appeals to be prosecuted in a lawful manner, liberty to any person claiming to be lawfully able to conduct the appeals on behalf of or in the name of the second and third appellant, to apply for any order deemed appropriate. Such application, again, to be brought within the relevant period of three months or any extension thereof given in accordance with the preceding paragraphs. Such application to be grounded on an affidavit specifying any orders or directions of the High Court given and any measures adopted either as a result of any such orders or directions or otherwise so as to demonstrate that the appeal can lawfully progress. Again, such application should be on notice to the moving parties who will have the opportunity to oppose. (v) For the avoidance of doubt an application will be taken to have been brought when it has been issued and served. In the event that no such application for extension of time is brought within the three month period referred to, the appeal, so far as Amantiss and Wilbury are concerned, will be struck out. In the event that any such application is brought within that three month period but remains pending before this Court then, in the absence of any order to the contrary made by this Court, the stay will remain in place until this Court has an opportunity to consider the merits of any application thus pending. |