High Court of Ireland Decisions

1. These proceedings are the re-entry of a Petition to wind up Genport Ltd (herein called “the Company”). The original Petition was presented on 13th February, 1995 and on 21st November, 1996 I made an Order staying the Petition pending the outcome of an Action in which Crofter Properties Ltd. are Plaintiff and the Company is Defendant. Both this Petition and that Action are part of a long running series of litigation between those two companies and the individuals involved in them. That Action was commenced in January, 1996 claiming certain arrears of rent and insurance payments, but the real issue between the parties is contained in the counter claim whereby the Defendant makes serious allegations against the Plaintiff. For many reasons, most of which are no fault of the parties, that Action has yet to be completed, although it is part heard and evidence has been taken on commission. It would appear likely that, at least in the High Court, it would be concluded within the next six months.

2. The Petitioner was a Defendant in one of the earlier pieces of litigation in this series, and she was successful and was awarded her costs against both the Company and Philip Smyth, who was a co-Plaintiff. Her costs have been taxed and she has chosen to enforce her Order by way of a winding up Petition against the Company. She has neither sought to execute against the assets of the Company nor to proceed in any way against Philip Smyth. It is also asserted, without denial, that she was in fact indemnified against her costs either by Crofter Properties Ltd. or one of its Directors.

3. The only substantial asset of the Company is its interest in certain very valuable premises at Morehampton Road in the City of Dublin. The Company was originally a lessee of those premises, which lease expired on 31st July, 2001, but the Company had been carrying on business in those premises for a number of years, and if all things were equal would almost certainly be entitled to a new lease under the Landlord and Tenant Legislation. It is strongly urged by the Petitioner that all things are not equal, and because the Company is grossly in arrears of rent it may well be refused a new lease. That is something which I cannot determine at this stage, but what is quite clear is that if the Company is wound up, its right to a new lease would immediately cease, leaving the Company with virtually no assets.

4. The powers and duties of a Court in relation to a winding up Petition were considered by the Supreme Court In Re: Bula Ltd. [1990] 1 IR 440. In that case

5. McCarthy J. said at page 448:-

6. In the present case it appears beyond doubt that if a winding up Order is made, the benefit to the Petitioner will be negligible, and the probability is that neither she nor any of the ordinary creditors will recover anything at all. If her motive was to recover the monies due to her, there were a number of other avenues open to her which she has chosen not to take. In particular, she has chosen not to pursue Philip Smyth.

7. On the other hand, the principal beneficiary if a winding up Order is made will be Crofter Properties Ltd. That company will recover vacant possession of very valuable property, and there must be a reasonable prospect that the counter claim against that company which is in the course of hearing would not be pursued by a liquidator. This seems to me to be the motive of seeking a winding up Order at this stage. It may well be said, as was in the Bula case, that the motive is not in itself improper, as the Petitioner is an officer of Crofter Properties Ltd., and indeed Crofter Properties Ltd. is almost certainly the largest creditor of the Company. There is no doubt in my mind that this application is not being brought to benefit the ordinary creditors of the Company as such, but to benefit Crofter Properties in its position as lessor of the property to the Company and as one particular general creditor. In those circumstances, while I am not taking the drastic remedy of dismissing the Petition as was done in the Bula Ltd . case, nevertheless I would propose to adjourn the Petition generally, again with liberty to re-enter.