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Company law – Appointment of receivers – Injunctions – Appellant seeking injunctions restraining the alteration by the respondent, of its status and recording that notification had been received from the lender that receivers had been appointed over prope

Posted 10/11/2016

Company law – Appointment of receivers – Injunctions – Appellant seeking injunctions restraining the alteration by the respondent, of its status and recording that notification had been received from the lender that receivers had been appointed over property – Whether respondent is given administrative discretion in the manner in which information is organised on the register

Facts: Following an appearance in action entered by the defendants, the plaintiff sought liberty to enter final judgment against each of the three defendants. The plaintiff’s claim against each of the defendants was for a sum, plus the appropriate interest on foot of guarantees in writing referable to an advance of money to the borrower. The plaintiff contended that the defendants had no bona fide defence to the proceedings and that the appearances entered were solely for the purpose of delay. The defendants raised many defences, including the absence of legal advice, personal issues, etc.
Held: Mr. Justice Hunt held that the plaintiff would have liberty to enter the final judgment against each of the defendants. The Court found that the issues raised by the defendants were simple and easily determined and that the defendants failed to raise any bona fide and arguable defence to the claim of the plaintiff. The Court held that the absence of independent legal advice in commercial context did not establish an arguable defence as there was no duty of care on the lender to advise the borrower about the necessity of availing of the legal advice prior to the execution of relevant documents. The Court held that mere difficulties would not be sufficient to avoid liability unless they were of a nature to adversely impact the capacity to contract. 
Allied Irish Banks PLC v Meade, Adrian and ors
3/10/2016 No. 2014/2784 S [2016] IEHC 562


Company law – Appointment of receivers – Injunctions – Appellant seeking
injunctions restraining the alteration by the respondent, of its status and recording that notification had been received from the lender that receivers had been appointed over property – Whether respondent is given administrative discretion in the manner in which information is organised on the register

 Facts: The appellant, Independent Trustee Company Ltd, in the High Court sought injunctions restraining the alteration by the respondent, the Registrar of Companies, of its status from “normal” and recording on the Register of Companies that notification had been received from the lender, West Bromwich Commercial Ltd, that receivers had been appointed over property, namely Gloucester House, Silbury Boulevard, Milton Keynes, England. It also sought declarations that ss. 107(1) and 317(1) of the Companies Act 1963 did not apply to the appointment of the receivers over the property. On the 16th January, 2015, the trial judge (Hunt J) dismissed all the claims. He held that the appellant held an interest in the property susceptible to the provisions of s. 99(1) of the 1963 Act; that s. 107(1) applied to the appointment of the receivers over the property and that s. 370(1) applied notwithstanding that the appellant was only the legal owner of the property and held it on trust for the unit holders of the sub-fund, Delta Fund 704530, a subdivision of the Delta Fund established by a declaration of trust made on the 2nd January, 2002, and later modified. The trial judge also decided that the respondent was not acting in excess of the powers granted her by the Companies Acts in applying a “status label” to a company. The appellant appealed to the Court of Appeal against the High Court judgment, focusing on the alleged error of the trial judge in deciding that the respondent's practice of recording the “status” of a company is not ultra vires her powers and that even if intra vires the designation “receivership” does not accurately represent the position in relation to the appellant in this case. The appellant also contended that the trial judge was in error in his construction of ss. 99, 107(1) and 317(1) of the 1963 Act. 
Held by Finlay Geoghegan J that the respondent has the statutory power and duty to organise the information on the electronic Register (and the paper Register if that is applicable) in a clear, organised and accessible manner and is given some administrative discretion in the manner in which that is undertaken. Finlay Geoghegan J held that the respondent is authorised to summarise in a clear way the fact of notifications including that of the appointment of a receiver to all or part of the property of a company (including that of which it is the legal owner and holds on trust) and in the summary to direct a person to the form of notification for the relevant details. Finlay Geoghegan J held that it is, however, impermissible to do so in a manner which implies that an appointment of a receiver to property of a company causes a change or a pending inevitable change in the status of the company. Finlay Geoghegan J held that the appeal should be allowed in part; the respondent remained entitled to file the E8 received in respect of the receivers appointed over the property of the plaintiff, but was not permitted to change the “status” of the appellant from “normal” to “receivership”. Finlay Geoghegan J proposed that the Court should hear the parties as to the precise form of relief in accordance with this judgment. Appeal allowed in part. 
Independent Trustee Company Limited v Registrar of Companies 
13/10/2016 No. 2015/165 [2016] IECA 274

 

Company law – Appointment of receivers – Injunctions – Appellant seeking injunctions restraining the alteration by the respondent, of its status and recording that notification had been received from the lender that receivers had been appointed over property – Whether respondent is given administrative discretion in the manner in which information is organised on the register

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