Irish Gold and Silver Bullion Ltd v Companies Act (Approved)

Factual and Procedural Background

The Applicant is the liquidator of Company A, which was placed into liquidation by order of the High Court on 14th June 2021, with the Applicant appointed liquidator on that date. The Applicant has conducted the liquidation since then. The Applicant initiated disqualification proceedings against one of the company's directors, resulting in a High Court order disqualifying that director for seven years due to fraudulent management, including operating a Ponzi scheme.

The Applicant discovered that the Respondents, a firm of English solicitors, had provided legal services to the disqualified director personally but were paid by Company A. Two specific payments made by the company to the Respondents were identified: €84,250 and £66,673 sterling. The Applicant requested repayment of these sums from the Respondents, who declined. Additionally, the Respondents hold a gold bar, which the disqualified director agreed to have released to the Applicant, but the Respondents have not yet released it, requiring payment of fees.

Consequently, the Applicant issued a motion pursuant to section 608 of the Companies Act, 2014, seeking a High Court order directing the Respondents to deliver any gold bars in their possession and to pay the specified sums to the Applicant.

The proceedings were commenced by an originating notice of motion served on the Respondents at their London office. The Respondents challenged the validity of this service, arguing that the Applicant should have sought leave under Order 11 rule 1 of the Rules of the Superior Courts (RSC) to serve outside the jurisdiction, given the Respondents are based in the UK, which is no longer subject to the Brussels 1 Recast Regulations. The Applicant accepted that the application should have been brought by motion on notice within the winding up proceedings under Order 74 rule 83 RSC, rather than by originating notice of motion, and sought to amend the proceedings accordingly.

Legal Issues Presented

1. Whether the Respondents were validly served with the originating notice of motion without the Applicant first obtaining leave under Order 11 rule 1 RSC to serve outside the jurisdiction.
2. The proper procedural mechanism for bringing an application under section 608 of the Companies Act, 2014 in the context of winding up proceedings.
3. The interpretation of the phrase "any person" in section 608(2) of the Companies Act, 2014, specifically whether it includes persons domiciled or resident outside Ireland.
4. The extent of the High Court’s jurisdiction over persons outside the jurisdiction in insolvency proceedings under section 608.
5. The adequacy of notice and service to the Respondents in these proceedings.
6. Whether the Applicant’s proceedings should be amended from originating notice of motion to notice of motion.

Arguments of the Parties

Respondents' Arguments

• The Respondents contend that service of the proceedings was not properly effected as the Applicant failed to obtain leave under Order 11 rule 1 RSC to serve outside the jurisdiction, given that the Respondents are based in the UK and the UK is no longer subject to the Brussels 1 Recast Regulations.
• The Respondents assert that the proceedings should have been commenced by plenary summons with appropriate leave for service out of jurisdiction.
• They argue that no specific rule permits service of a notice of motion outside the jurisdiction in these circumstances, rendering the service invalid and the court unable to exercise jurisdiction under section 608.

Applicant's Arguments

• The Applicant accepts that the application should not have been brought by originating notice of motion but by motion on notice within the winding up proceedings under Order 74 rule 83 RSC.
• The Applicant argues that section 608 applications are statutory motions within the winding up proceedings and do not require leave under Order 11 rule 1 RSC for service out of jurisdiction.
• The Applicant submits that the Irish High Court already has jurisdiction over the winding up and all related applications, including those against persons outside the jurisdiction.
• The Applicant contends that the phrase "any person" in section 608 includes persons domiciled or resident outside Ireland, thus the Respondents fall within the court’s jurisdiction.
• The Applicant maintains that service by a process server at the Respondents’ London office constituted sufficient notice and service in accordance with principles of natural and constitutional justice.
• The Applicant seeks amendment of the proceedings to substitute "notice of motion" for "originating notice of motion" to reflect the proper procedural form.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by recognizing that the Irish High Court already has jurisdiction over the winding up of Company A and all related applications, including those under section 608 of the Companies Act, 2014. The court clarified that section 608 applications are statutory motions within the winding up proceedings and not plenary summons requiring leave under Order 11 rule 1 RSC for service out of jurisdiction.

The court rejected the Respondents’ argument that service was invalid due to lack of leave, emphasizing that the jurisdiction arises from the winding up order and the liquidator's statutory powers. The court reasoned that the phrase "any person" in section 608 must be interpreted broadly to include persons resident or domiciled outside Ireland, to prevent non-resident parties from evading liability for fraudulent transactions involving company property.

The court reviewed relevant precedents, including Euroking and Paramount Airways, which supported this expansive interpretation of jurisdiction. It also considered principles of natural and constitutional justice, requiring that affected parties be given notice and an opportunity to be heard. The court found that service by process server at the Respondents’ London office was sufficient to satisfy these requirements.

The court acknowledged the procedural error in commencing the application by originating notice of motion rather than motion on notice within the winding up proceedings, attributing this to inadvertence. Applying Order 124 RSC, the court held that non-compliance with procedural rules does not render proceedings void unless the court so directs and found that amending the proceedings was appropriate to avoid wasteful costs and prejudice.

Holding and Implications

The court refused the Respondents' application to set aside service, holding that the service of the liquidator’s application was valid and that the Irish High Court has jurisdiction over the Respondents under section 608 of the Companies Act, 2014.

The court granted the Applicant’s application to amend the proceedings, substituting "notice of motion" for "originating notice of motion" and directing that the record number be amended to reflect the proper procedural context within the winding up.

The direct effect of this decision is that the liquidator’s application will proceed against the Respondents, who are subject to the jurisdiction of the Irish courts despite being based outside Ireland. No new precedent was established beyond confirming established principles regarding jurisdiction in insolvency proceedings and procedural fairness in service.