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1. This is a Petition by Oriel Poultry Co-operative Society Limited ("the Petitioner") for an Order that Eurochick Ireland Limited (in voluntary liquidation) ("the Company") should be wound up by the Court pursuant to the provisions of Section 213 of the Companies Act, 1963.

2. The Company had a short and somewhat disastrous life. It was incorporated on 29th December, 1995 and commenced trading in June 1996. On 21st April, 1997 the Companies Bankers appointed a Receiver and Manager and the Company ceased trading. At the end of the receivership there remained assets in the hands of the Receiver in the sum of £18,885, and these are the only liquid assets of the Company. On 24th October, 1997 statutory meetings were held of the members and of the creditors of the Company and it was resolved that the Company be wound up voluntary as it was unable to pay its debts. A Statement of Affairs was produced at that meeting which showed a deficiency of £653,198. By far the largest creditor was the Petitioner who is shown in the Statement of Affairs as being owed £514.384. The Petitioner in fact claims to be owed a considerably larger sum, but at the moment it is sufficient to say that the Company is grossly insolvent, and it is quite clear that ultimately the ordinary Creditors will receive little or nothing from this liquidation.

3. At the Extraordinary General Meeting of the Company which proposed the winding up, it was also proposed that Mr. John Edison should be Liquidator. At the subsequent Creditors' meeting his appointment was confirmed by ten votes to three, one of those opposing being the Petitioner. The Petitioner now alleges that there are a number of matters relating to the Company which ought to be investigated, and that this should not be done by the Liquidator appointed by the members of the Company. However, the Petitioner makes it quite clear that there is no criticism being made of Mr. Edison personally, either as to his ability to act as Liquidator or as to his impartiality. All that is being said is that the Petitioner has a legitimate sense of grievance, and that this justifies it in seeking a winding up by the Court. It should be noted that none of the other Creditors have appeared to this Petition, either to support or oppose it, other than Mr. David Coleman who is opposing the Petition, and therefore it cannot be said that there is any sense of grievance among the Creditors generally, as opposed to the sense of grievance which the Petitioner may feel.

4. The Petitioner is a Co-operative Society of poultry growers which was formed in September 1994. The grounding affidavit to the Petition is sworn by Mr. Peter Smith, who is the Chairman of the Petitioner. Initially a Ms. Elizabeth McConnon was appointed Secretary and Mr. Dermot Crinion became manager of the Petitioner, and subsequently in July 1995, the Petitioner's Solicitor, Mr. David Coleman, became Chief Executive. These three persons in effect constituted the management of the Petitioner, and conducted its day-to-day affairs.

5. I think it is quite clear that the Company was set up at the instigation of the management of the Petitioner. It was incorporated in December 1995, but only two shares were issued, one to Mr. David Coleman and one the Mr. Seamus Crinion, a brother of Mr. Dermot Crinion. The purpose of the Company appears to have been to process chickens sold to it by the Petitioner. It operated from the same offices as the Petitioner and in effect had the same management. While there was never any formal agreement as to the beneficial ownership of the shares in the Company, and no further shares were ever issued, it is quite clear that it was always intended that the Petitioner would beneficially own either all or a substantial part of the Company. The Company never had any premises of its own, but entered into an agreement with a Company called Hannons Poultry Export Company Limited whereby it would carry out the processing of the chickens, but the Company provided and installed a considerable amount of machinery in its premises. The Company started trading in June 1996, and management accounts to 30th September, 1996 showed sales in the three months of over £700,000, and a very small profit of £1,897.. However, the Company suffered serious losses in the months immediately succeeding this period, and management accounts again show that in the six months period to 31st December, 1996 there were sales of over £1,700,000 but an operating loss of almost £130,000. At that stage the management accounts showed that the Petitioner was owed over £500,000.

6. When the Company collapsed in April 1997 and a Receiver was appointed, Mr. Coleman, Mr. Crinion and Ms. McConnon all severed their connection with the Petitioner. Investigations took place which have thrown up four specific matters complained of by the Petitioner. If these matters are correct, they all appear to show that the Petitioner was in fact funding Eurochick in various unorthodox ways which would not appear or might not appear in the accounts of either Company. The result of this would be that the Company in fact owes the Petitioner more than either the books of the Company or the Statement of Affairs would show. Whether the Liquidator is Mr. Edison or a Liquidator appointed by the Court, the Petitioner will still have to prove its debt, but certainly the relationship between the Petitioner and the Company does not seem to have been a normal arms length relationship, and indeed is much more consistent with the Company being regarded almost as a division of the Petitioner.

7. A number of English cases have been cited to me which are put forward to establish a principle that, while the making of a Winding-Up Order in these circumstances is discretionary, the Order should be made if the creditors otherwise have a legitimate sense of grievance, or put another way, that justice must not only be done but must be seen to be done.

8. See for example Re: Magnus Consultants Limited (1995) 1 BCLC 203 and Re: Falcon R. J. Development Limited (1987) BCLC 437. Such a principle certainly appears to run through these cases, although I am not sure that it is supported by any case in this jurisdiction. However, those cases are based on circumstances where it can be shown that there is some wrongdoing by the Company itself which needs to be investigated, or perhaps can be shown that the Directors of the Company were removing assets from the Company before the winding up. There is nothing of that nature in the present case. What the Petitioner really is complaining about is the conduct of its own affairs by its own management, and by extension the conduct of the relationship between the Petitioner and the Company by its common management. Any wrongdoing by the management appears to be wrongdoing in their capacity as management of the Petitioner, in that they may have used funds of the Petitioner to support the Company, but there is no suggestion that they benefited personally in any way, or that they were guilty of any act which would reduce the assets of the Company or increase its liability to its creditors, other than to the Petitioner.

9. I also think it is very relevant that while the Petitioner talks vaguely of inquiries being necessary, it does not suggest any action which might be taken by a Liquidator which would improve the position of the creditors of the Company. In fact, all that would happen would be that the Petitioner would be owed a greater sum of money, which of course would be to the detriment of the other creditors. I also find it significant that there is no suggestion from the Petitioner as to how any such investigations might be funded. I have been furnished with a report by Mr. Edison dated 30th January, 1998 in which he states that the only liquid funds realised are the balance of the monies remaining after the receivership, namely, £18,885. He further concludes that the other principal asset of the Company would not be realisable in practice. If a Court liquidation takes place, the work done by Mr. Edison to date will have to be duplicated, and investigations would have to take place under the auspices of the Court, which would appear to me to be highly unlikely to benefit the ordinary creditors but would merely be done at their expense.

10. The only Irish cases cited to me are the judgment of O'Hanlon J. in In the Matter of Gilt Construction Limited (1994) 2 I.L.R.M. 465 and my own unreported judgment delivered on 13th February, 1995 In the Matter of Naiad Limited. In the latter case I quoted with approval from the judgment of O'Hanlon J. at page 458 of the report, and I can do no better than to quote it again. He said:-

11. I can only repeat that it appears to me that the mala fides alleged in this case are the mala fides of the management of the Petitioner itself, and it is not for the Liquidator to investigate that matter. The assets in this case are very small compared with the liabilities, and I do not think there is any sense of grievance among the creditors generally which would justify the application of the principles in the English cases.

12. A final relevant matter is that at the creditors' meeting at which Mr. Edison's appointment was confirmed, the creditors also appointed a Committee of Management, which in fact consists of representatives of the Petitioner. While the powers of a Committee of Management are very vague and general, it does mean that in effect the Petitioner can oversee the actions of Mr. Edison, and could ask him to seek the directions of the Court under Section 280 of the Companies Act, 1963 should they think it necessary, which ought to be a perfectly sufficient and adequate protection for the Petitioner.

13. Accordingly, I would refuse to make a Winding-Up Order on foot of this Petition.