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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Re Hussey (a Bankrupt) [1987] IEHC 26 (13 September 1987) URL: http://www.bailii.org/ie/cases/IEHC/1987/1987_IEHC_26.html Cite as: [1987] IEHC 26 |
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Re Hussey (a Bankrupt) [1987] IEHC 26 (13 September 1987)\
THE HIGH COURT BANKRUPTCY
IN THE MATTER OF SEAN HUSSEY,
14 GROVE LAWN, MALAHIDE, CO. DUBLIN
A BANKRUPT
Judgment of the President of the High Court delivered on the 23rd
day of September 1987
The Bankrupt in the title hereof was adjudicated a bankrupt on the 13th day of September 1985 as a result of a petition submitted by the Petitioning Creditor, Clondalkin Concrete Limited, (hereinafter referred to as the Petitioning Creditor) on the 9th day of September 1985.
The Bankrupt has now applied to this Court for an order setting aside the said adjudication on the basis that:
(1) It was improper and resulted in documentation containing inaccurate and misleading averments being furnished by the Petitioning Creditor and/or their lawful agents and
(2) In breach of the Articles of Association of the Petitioning Creditor as the seal of the company was not affixed to the aforesaid petition in the presence of two Directors and the Secretary of the Petitioning Creditor.
This application is grounded on the affidavit of the Bankrupt sworn on the 15th day of May 1987, the documents exhibited therein and the affidavit of Andrew F. Smyth, the Bankrupt's solicitor, sworn on the 27th day of May 1987.
Before dealing with the application made on behalf of the Bankrupt, it is necessary to outline very briefly the steps which have been taken in the bankruptcy proceedings to date.
The debtors summons herein was issued on the 1st day of May 1985 and was served personally on the Bankrupt on Monday, 13th day of May 1985.
The petition seeking the adjudication of the Bankrupt as a bankrupt was presented on the 9th day of September 1985 and accompanied by affidavits for proof of debt and of non-compounding sworn by one Neville Atkinson, Secretary of the Petitioning Creditor, on the 9th day of September 1985.
The seal of the Petitioning Creditor was affixed to the said petition.
On the 13th day of September 1985, the Bankrupt in the title hereof was adjudged bankrupt.
On the 16th day of September 1985, a duplicate order of adjudication was served on the Bankrupt by the Court Messenger by leaving same with the Bankrupt's wife at 14 Grove Lawn, Malahide, in the County of Dublin. A notice of intention to show cause against the adjudication was served by the Bankrupt on the 25th day of September 1985 was appointed as the date for hearing before the Court of the cause against adjudication. This notice was issued on the 17th day of September 1985 by Messrs. Nugent & Co. Solicitors for the Bankrupt.
On the 25th day of September 1985, it was ordered that the matter be referred to the Examiner to report the proceedings with a view to the annulment of the bankruptcy.
On the 25th day of November 1985, it was ordered that the motion to show cause against adjudication be dismissed and that the bankruptcy do proceed.
The Solicitors for the Bankrupt were present at the said hearing. The public sittings were held on the 17th day of February and the 3rd day of March 1986. On the 14th day of February 1986 a notice of change of solicitors was served on the Bankrupt, was then represented by Messrs. Gerard Scallan & O'Brien.
On the application of the Bankrupt, an order was made on the 18th day of March 1986 giving the Bankrupt liberty to continue in his own name proceedings which had been instituted by him against Kieran Doherty, Ireland and The Attorney General and the Court approved the settlement reached in the said proceedings on the basis that the Defendants name therein would pay the sum of £25,000 to the Bankrupt together with the cost of the said proceedings.
The amount of the settlement and the costs were lodged with the Official Assignee in bankruptcy to the credit of the Bankrupt's estate.
On the 29th day of May 1986, a public sitting in this matter was held before the Examiner for the proof and admission of debts and for the vouching of the Official Assignee's account.
Various affidavits were sworn by the Bankrupt and his wife in connection with these matters.
On the 13th day of October 1986, the Official Assignee was granted liberty to pay to the Solicitors who had acted for the Bankrupt in the above-mentioned proceedings the sum of £7,506.85 being the cost thereof.
By order made on the 1st day of December, 1986 it was ordered, inter alia, that a first dividend of 42p in the pound be declared on the sum of £37,221.11 being the amount of the debts due to the creditors proved and admitted. The Official Assignee was directed to pay the same to the said creditors accordingly after payment of which dividend amounting to £15,632.87 there remained a balance, of £2,840.74 to be carried to the next account.
On the 6th day of February 1987 a notice was issued on behalf of the Applicant seeking an order in the following terms;
"(1) Placing a stay on further seizures or realisation of the Bankrupt's assets pending the presentation to the creditors of a composition after bankruptcy or until further order".
This application was adjourned until the 23rd day of February 1987 and was grounded on the affidavit of the Bankrupt sworn on the 9th day of February 1987.
In his said affidavit, he states inter alia that:
"I say and believe that there is a sum of approximately £5,500 presently to the credit of my estate and that it is my intention to propose a composition after bankruptcy to my creditors of 50p in the pound."
He further avers that:
"Whilst I appreciate that there are formalities to be adhered to in any composition, I say and believe that from informal enquiries made by me a number of other creditors would be prepared to accept a compromise of 50p in the pound. My family have instructed Messrs. Eugene F. Collins & Sons, Solicitors of 61 Fitzwilliam Square, Dublin 2 to carry out the necessary procedure".
He further averred that:
"I have recently been notified by Messrs. James H. North & Co. Ltd., Auctioneers of 55 Dame Street, Dublin 2 who are the agents appointed by the Official Assignee that they will be attending at my home on Monday, 9th February 1987 at 2.30 p.m. for the purpose of removing, storing and ultimately disposing of certain items listed on the Court Messenger's inventory I say and believe that in view of the impending composition it would be most unreasonable if further seizure and realisation were to take place and would also be most disruptive to my wife and family who also reside in the home."
On the 23rd day of February 1987, an order was made providing that the realisation of the Bankrupt's assets be stayed for a period of two weeks from the date of the order and the Bankrupt was given liberty to trade for this period and liberty to continue to negotiate with his creditors with a view to making a formal offer of composition.
It is against the foregoing background and the other steps taken in the course of the bankrupt's proceedings which I have not outlined herein that the application now made by the Bankrupt must be considered.
An affidavit was sworn by the Solicitor for the Petitioning Creditor on the 18th day of June 1987 in the course of which she deals with certain matters deposed to by the Bankrupt in his affidavit sworn on the 15th day of May 1987.
Order 76 Rule 30 (2) of the Rules of the Superior Courts provide that:
"A creditors petition by a limited company or body corporate shall be sealed with the seal of the company or body corporate and signed by two directors or by one director and the secretary, Such seal and signature shall in all cases be attested".
This rule, however, does not give to a company powers which it does not have pursuant to its own Articles of Association.
Article 37 of the Articles of Association of the Petitioning Creditor provides that:
"The seal of the company shall only be affixed for any instrument in the presence of at least two directors and the secretary or acting secretary for the time being, and in pursuance of a resolution of the Board".
It is submitted on behalf of the Bankrupt that the seal of the company was not affixed to the petition upon which the adjudication of bankruptcy was made in accordance with the provisions of the Articles of Association of the Petitioning Creditor. And consequently, that all proceedings on foot thereof are void.
In her affidavit the Petitioning Creditors solicitor states that:
"The petition was sealed by Clondalkin Concrete Ltd. In the presence of two directors and a secretary, Neville Atkinson being both a Director and Secretary of the said company."
In my view, the seal of the company was not affixed to the petition dated the 9th day of September 1985 in accordance with the requirements of Article 37 of the Articles of Association of the Petitioning Creditor.
Though Mr. Atkinson may be a Director of the Company he did not presume to so act on the occasion of the fixing of the seal to the petition because he merely signed the petition in his capacity as Secretary and not as a Director.
Neither does it appear from the affidavits before me that the seal of the Petitioning Creditor was affixed to the petition in pursuance of a resolution of the Board of the Petitioning Creditor.
Neither does it appear that the seal and signatures on the petition were properly attested in accordance with the requirement of Rule 30(2) of Order 76.
However, I am satisfied that it is not open to the Bankrupt to rely on this point at this stage to have the adjudication of bankruptcy annulled.
He did not raise this point on the motion to show cause, allowed the bankruptcy to proceed, allowed the realisation of the assets to proceed, allowed the proof of debt sittings to proceed, allowed the interim dividend herein before referred to be paid, negotiations with his creditors for the purpose of making an offer of composition after bankruptcy and generally the bankruptcy to proceed in the ordinary way, and allowed the Official Assignee to continue to fulfil his statutory functions in this regard from the date of adjudication.
I am satisfied that he is thereby estopped from raising this or any other point with regard to his original adjudication at this stage.
The time for making objections as to the adjudication of bankruptcy is on the motion to show cause and not at this stage of the proceedings.
Consequently, I have no alternative but to dismiss his application.
