The Gazette 1992

SEPTEMBER 1992

GAZETTE

Recent Irish Cases Compiled by Raymond Byrne, BCL, LLM, BL, Lecturer in Law, Dublin City University. The following case summaries have been reprinted from the Iriah Law Tlmaa and Sollcltora Journal with the kind permission of the publishers.

THORISING EXAMINER TO BORROW FOR SPECIFIED PURPOSES—WHETHER BORROWINGS MAY BE BASED ON ASSETS SUBJECT TO FIXED CHARGE — INTERPRE- TATION — Companies (Amendment) Act 1990, ss.2,9, 11,29 In the High Court, an examiner had been appointed to the company under the 1990 Act. Lardner J held that the test under s.2 of the 1990 Act as to whether an examiner should be appointed was whether the company had a reasonable prospect of survival. He also authorised the examiner, under s.9 of the 1990 Act, to exercise the power of borrowing sums not exceeding £429,000 for the purpose of continuing the company, and that monies so borrowed be treated as expenses properly incurred in the examinership under s.29 of the 1990 Act and be repaid in full out of the assets of the company in priority to any other claim, whether secured or unsecured. Among the company's assets was a sum of £229,000 in an account with the Bank of Ireland, which was subject to a fixed charge held by the Bank. The Bank was authorised by the High Court to have recourse to this sum in facilitat- ing borrowing by the examiner. The Bank appealed against the order appointing the examiner and also against the order authoris- ing the borrowing. Held by the Supreme Court (Finlay CJ, Hederman, McCarthy, O'Flaherty and Egan JJ) dismissing the appeal: (1) since the terms of s.2 of the 1990 Act were strongly in favourof granting the appointment of an examiner, the test as to whether an examiner should be appointed was simply whether the company had a prospect of sur- vival, and it was not appropriate at the date of appointment for the court to enquire whether the company had a reasonable prospect of survival. Per McCarthy J (concurring in the order): the Court should not consider the question of prospect of survival at all. Passage in Keane, Company Law in Ireland, 2nd ed, p.455 discussed; (2) the High Court was cor- rect in authorising the examiner's borrowing under s.9 of the 1990 Act, and in allowing such to repaid in priority to all other claim under s.29of the 1990 Act; and although s.11 of the 1990 Act referred to the sale of assets subject to fixed charges and to repayment of the proceeds of such sale to the holder of the fixed charge, the order made in the instant case was not affected by s.11; and any inter- pretation of s.11 which would limit the bor- rowing power of the examiner would allow the holder of a fixed security to prevent the examiner exercising any effective power to borrow and would be inconsistent with the plain intention of the 1990 Act. In re Jetmara Teo High Court 10 May 1991 COMPANY — EXAMINER — REPORT — WHETHER CREDITOR HAVING STANDINGTOOBJECTTOSCHEME SUGGESTED BY EXAMINER — BANK'S ENTITLEMENT TO REPAYMENT DEFERRED BY SCHEME — FRAUD BY DIRECTOR OF COMPANY PRIOR TO AND AFTER AP- POINTMENT OF EXAMINER — WHETHER SCHEME SHOULD BE APPROVED — Companies (Amendment) Act 1990, ss.22, 29. An examiner was appointed to the company

curred until March 1987 when the seizures were further investigated and the plaintiff was interviewed in relation to 41 files in June and October 1987. During these interviews, it was put to the plaintiff that he had, inter alia, understated the value of vehicles seized and had fictionalised certain reports. By letter dated 25 January 1988, the plaintiff was in- formed that he was suspended form duty as it appeared he was guilty of grave irregularity and misconduct. His solicitors immediately wrote inquiring about the nature of the mat- ters for which he was suspended, and were informed that details would be given at the end of March 1988. No details were fur- nished, and the solicitors wrote again in Oc- tober 1988 seeking details. Details were fur- nished in January 1989, involving 18 sepa- rate transactions. The plaintiff issued pro- ceedings contending, inter alia, that the sus- pension was invalid, that he was entitled to transcripts of the interviews conducted in June and October 1987 and to be legally represented at the oral hearing of the charges. Held by Blayney ): (1) although the plaintiff had not been informed in January 1988 of the reason for the suspension, it was not invalid for this because the plaintiff must have been well aware of the basis for the suspension, and this was confirmed by the delay in seek- ing particulars of the reasons for the suspen- sion. Flynn vAn Post |1987) IR 68 applied; (2) the suspension after May 1988 was invalid. Flynn v An Post [1987) IR 68 applied; (3) unlike the situation involved in delays in the processing of criminal charges, the delay in proceeding with the disciplinary charges against the plaintiff was not a ground for prohibiting them, as the issues raised were not criminal in nature but involved the law of master and servant; however, the investiga- tion should have been completed very much sooner and the delay shou Id be considered by the Revenue authorities in the hearings them- selves in connection with the plaintiff's abil- ity to deal adequately with the details of the charges. The State (O'Connell) v Fawsitt [19861 IR 362 and The State (Cuddy) v Mangan [1988] ILRM 720 distinguished; (4) the plain- tiff was entitled to full disclosure of the tran- scripts of the interviews conducted in June and October 1987 and also the evidence to be tendered against him; (5) having regard to the extremely serious consequence of dis- missal for the plaintiff if the charges against him were establ ished and to the large number of charges against him and that further crimi- nal proceedings could, ultimately, result he was entitled to legal representation at the disciplinary hearing. Dicta in Flanagan v University College Dublin 11989] ILRM 449 applied. In re Atlantic Magnetics Ltd Supreme Court 5 December 1991 COMPANY — EXAMINER — APPOINTMENT — WHETHER COURT TO CONSIDER WHETHER COM- PANY HAS PROSPECT OF SURVIVAL — ORDER AU-

Rooney v Minister for Agriculture and Food and Ors Supreme Court 19 December 1991 ADMINISTRATIVE LAW — ANIMAL DISEASE — ACT PERMITTING STATUTORY SCHEME OF COMPENSA- TION — REQUIRING MINISTERIAL ORDER FOR IMPLE- MENTATION —ABSENCE OF ORDER — NON-STATU- TORY GRANT SCHEME IN OPERATION — WHETHER IN BREACH OF CONSTITUTIONAL RIGHTS — Diseases of Animals Act 1966, ss. 17, 22 — Bovine Tuberculosis (Attestation of the State and General Provisions) Order 1978. In 1984,20 of the plaintiff farmer's cattle were slaughtered as 'reactor' cattle, that is, they were deemed to be infected with bovine TB in accordance with the procedures provided for under the 1978 Order. Under a non-statutory scheme operated by the defendant Minister, the plaintiff was paid certain sums in relation to each head of cattle so slaughtered. The plaintiff instituted proceedings claiming, in- ter alia, that the sums so paid were inadequate and thus in breach of the terms of the Consti- tution and that he should have been paid full compensation under the terms of the 1966 Act. Ss. 17 and 22 of the 1966 Act provide that the defendant Minister may institute a scheme of compensation by which the appropriate levels of compensation for slaughtered ani- mals could, in the event of disagreement between the owner and the Minister, be re- ferred to arbitration. No such statutory scheme had been instituted. In the High Court, the plaintiff's claim was dismissed by Lavan J. On appealed Held by the Supreme Court (McCarthy, O'Flaherty and Egan JJ) dismiss- ing the appeal: si nee the non-statutory scheme constituted a reasonable scheme for provid- ing a measure of assistance to owners of diseased cattle, the Court had no power to review the course of action adopted by the Minister in the instant case; and indeed it might be that the Court had no function to enjoin the Minister to introduce a statutory scheme under s.20 of the 1966 Act. Pine Valley Developments Ltd v Minister for the Environment [1987] ILRM 747; (1987} IR 23 and The State (Sheehan) v Government of Ireland [1987] IR 550 applied. Semble: the Minister was providing a reasonable measure of compensation in the non-statutory scheme, and this complied with any constitutional requirements in this regard, if any general constitutional right to compensation existed. Gallagher v Revenue Commissioners High Court 11 January 1991 ADMINISTRATIVFLAW — FAIR PROCEDURES — SUS- PENSION FROM EMPLOYMENT — CIVIL SERVANT — WHETHER SUSPENDED PERSON AWARE OF REASONS FOR SUSPENSION—WHETHER SUSPENSION BECAME INVALID — WHETHER DELAY IN PROCEEDINGS IN- VALIDATES FURTHER ACTION DISCOVERY OF DOCUMENTS —WHETHER LEGAL REPRESENTATION AT DISCIPLINARY HEARING TO BE GRANTED. The plaintiff, an officer of customs and excise, was interviewed in July 1985 about the sei- zure of certain vehicles for non-payment of relevant duties. The plaintiff was moved to other duties at that time. The officer investi- gating the seizures completed a written report in December 10985. Nothing further oc-

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