Asset Adjustment
In McNamara v McCann
[2016] IEHC 443JUDGMENT of Mr. Justice Binchy delivered on the 21st day of July, 2016
1. This is an appeal from an order of the Circuit Court dated 12th March, 2015 whereby Linnane J. made a declaration in favour of the plaintiff pursuant to s. 74(3) of the Land and Conveyancing Law Reform Act 2009. By way of conveyance dated 5th November, 2010 the first named defendant and the second named defendant did convey to the second named defendant:
“ALL THAT AND THOSE that part of the lands of Shankill containing three acres statute measure or thereabouts together with the dwelling house erected thereon known as Kilmurray House, Falls Road, Shankill, in the Barony of Rathdown and County of Dublin, which said premises are more particularly delineated on the map endorsed on a certain indenture of lease dated 9th September, 1947 and made between Charles Spottiswoode Weir and others of the one part and William J. Rooney of the other part and thereon edged red.”
It is argued on behalf of the plaintiff that the said conveyance is void by reason of it having been made with the intention of defrauding the plaintiff, a creditor of the first named defendant and that the plaintiff was prejudiced by the said conveyance. On the same day the Circuit Court found the said conveyance to be void and made a further order setting aside same.
2. The background to these proceedings is that on 15th May, 2012, the plaintiff obtained judgment in default of defence in the Central Office of the High Court in the sum of €411,845.22, as against the first named defendant. Thereafter, the first named defendant sought to dispute the judgment and issued a motion pursuant to Order 13 rule 11 of the Rules of the Superior Courts seeking, inter alia, an order setting aside the judgment obtained by the plaintiff. This Court, O’Neill J., refused the reliefs sought by the said motion. That decision was upheld by the Court of Appeal in a decision delivered on 22nd October, 2015.
3. The background to the judgment obtained by the plaintiff against the first named defendant is that the plaintiff is a solicitor practising under the style of Murphy McNamara Solicitors, and he had provided very extensive legal services to companies owned by the first named defendant, in connection both with conveyancing contracts and litigation in which those companies were involved. In 2008, a very significant transaction in which those companies were involved ran into difficulty. The plaintiff gave evidence before this Court that those difficulties were of a kind that caused him to fear reputational damage to his firm and he and his partners decided to cease acting on behalf of the companies, which were owned and controlled by the first named defendant. The plaintiff gave evidence that he met with the first named defendant to discuss this and that the first named defendant urged the plaintiff to continue acting on his behalf and, importantly, that the first named defendant assured the plaintiff that he personally would indemnify the plaintiff and his firm in respect of any legal costs due to the plaintiff’s firm by any of the companies on whose behalf the plaintiff had acted. According to the plaintiff, this was in July, 2008. The plaintiff acknowledged however that he did not request the first named defendant to complete an indemnity in writing, nor did he write to the first named defendant or keep any written attendance note of this promise of indemnity. He said he did not do so because he trusted the first named defendant having worked on his behalf since the mid 1990s, and because he had at all times enjoyed a very good working relationship with the first named defendant. Having discussed the matter with his partners, the first named defendant agreed to continue providing services to the companies of the plaintiff on the basis that such an indemnity in respect of fees would be provided.
4. The plaintiff said in evidence that the two year period following July, 2008 was his busiest period acting on behalf of the plaintiff and his companies. There were 28 litigation cases involved and a solicitor was specifically assigned to the affairs of the first named defendant and his companies.
5. The companies went into liquidation in May, 2010. On 9th August, 2010 the plaintiff wrote to the first named defendant in relation to fees. In this letter, he referred to efforts that he had made to contact the plaintiff by telephone to discuss the same and also to text messages that he had sent the first named defendant, as well as to a meeting that they had had together in Cashel, Co. Tipperary, when they discussed the issue of fees. In this letter the plaintiff referred to the personal assurances given by the first named defendant in relation to discharge of fees.
6. The plaintiff sent a further letter to the first named defendant on 17th August, 2010 referring to “specific personal assurances with regard to fees”. He stated that:
“under no circumstances would we have continued to work to any extent where those personal assurances not forthcoming (sic). In fact on the last occasion that such personal assurances were forthcoming was at our meeting in Cashel when you were to follow up the proposal.”
This letter concluded by stating that unless adequate proposals to discharge fees were forthcoming, then the plaintiff would have to institute proceedings against the first named defendant for recovery of the same.
7. A further letter was sent to the first named defendant on 18th August, 2010, apparently in response to a fax sent by the first named defendant to the plaintiff. In this letter the plaintiff stated:
“It is completely clear that you are attempting to renege fully on the continual assertion furnished by you in relation to all works completed by this office on your behalf.
You are aware that over the years you continually confirmed your assurances in this respect, such assurances were furnished more particularly in later years when it was clear that there were major difficulties with the recovery of any fees following the difficulties that Cork Corporation had with your workmanship. You requested that we would maintain the same level of commitment to you since that dreadful meeting with Cork Corporation in 2008, to suggest otherwise by you now is completely wrong (sic) and purely for the purposes of trying to reduce or evade your personal exposure.
I have met now with my partners in this office and I am afraid that your recent correspondence has left us with no option but to immediately institute legal proceedings against you for recovery of all sums due and owing by you personally to this firm.
Unless we hear from you with a satisfactory response immediately we will have no option but to have these proceedings issued and served on you personally.”
8. Further correspondence ensued between the parties in relation to payment of the fees. While the first named defendant did send the plaintiff an email on behalf of Lance Properties, one of the companies concerned, acknowledging a liability to the plaintiff in the sum of €200,000, no payment was forthcoming and this email did not commit the plaintiff personally to payment of any of the fees.
9. Eventually, the plaintiff issued proceedings on 30th May, 2011. An appearance was entered on 19th July, 2011. The plaintiff delivered a statement of claim on 9th August, 2011 and, following upon the failure of the first named defendant to deliver a defence, the plaintiff obtained the judgment referred to above on 15th May, 2012.
10. The first named defendant in these proceedings expressed enormous dissatisfaction with the manner in which judgment was obtained against him, complaining in particular that he was deprived of the opportunity to have a full hearing into the plaintiff’s claim. Arising out of this complaint, the first named defendant has issued proceedings against the Minister for Justice and Equality, Ireland and the Attorney General by way of plenary summons issued on 15th March, 2016 in which he seeks, inter alia, declarations that the Rules of the Superior Courts and in particular, Order 27 thereof (whereby judgment was obtained against the first named defendant) are repugnant to Articles 38, 40.3 and 43 of the Constitution and Article 6 and protocol 1, Article 1 of the European Convention on Human Rights (“the Convention”). The Court was informed that the first named defendant intends to issue a motion joining the plaintiff to those proceedings. It should be observed that the first named defendant first raised a complaint under the Convention when delivering his defence in the Circuit Court in these proceedings, in June, 2013 – two years and nine months before he issued proceedings in the High Court claiming relief under the Convention.
11. The plaintiff went on to give evidence to the effect that following the liquidation of the first named defendants’ companies, he had corresponded with the liquidator and also with the receiver appointed over the assets of those companies and established very quickly that there would be no assets to discharge his fees. Having obtained his judgment against the first named defendant, the plaintiff then carried out searches with a view to identifying assets of the first named defendant. These searches disclosed that on 11th January, 2011 a deed described as a deed of conveyance and rectification dated 5th November, 2010, between Peter McCann and Joan McCann (as grantors) of the one part and Joan McCann (as grantee) of the other part in respect of property described as premises at Falls Road, Shankill, Rathdown, Co. Dublin, was registered in the registry of deeds. It is common case that the property therein described is the family home of the defendants.
12. The plaintiff’s case is that this conveyance was executed by the defendants for the express purpose of avoiding the debt due by the first named defendant to the plaintiff.
13. The plaintiff called in evidence Mr. Thomas Menton, the solicitor who acted on behalf of the religious order which sold the property to the defendants in 1993. He confirmed that he prepared the contract for sale to the defendants and that the contract was between his client and both defendants. He also approved the draft deed of conveyance of the property into the joint names of the defendants, which he would have received from the solicitors then acting on behalf of the defendants. He confirmed he would have prepared what are known as the PD Forms for stamp duty purposes, and these forms would have shown both the defendants as the purchasers of the property. He further confirmed that it was never suggested to him up until these proceedings that there was any error as regards the names into which the property was conveyed, and he believed he would recall if this was ever suggested. He also stated that there was never any communication with him or his office in relation to the rectification of an error.
14. The defendants do not dispute the occurrence of this conveyance. In his evidence to the Court in this appeal, the first named defendant denies that he ever gave an assurance to the plaintiff that he personally would discharge the liabilities of his company to the plaintiff. He also took the opportunity in evidence to complain that he had not received adequate particulars of amounts claimed by the plaintiff, that he had never entered into an agreement in writing with the plaintiff in relation to fees and that the disputed a considerable amount of the amounts claimed. However, he did acknowledge that some of the accounts were due by him personally, in relation to services provided to him personally.
15. The first named defendant denied knowing that the plaintiff was pursuing him personally in respect of liabilities due by his companies at the time that the deed of conveyance was completed. In his direct evidence he explained that the title deeds to the property were returned by the bank where they were held towards the end of 2009. This was a large bundle of title documents which he and the second named defendant were keeping at home. He recalled a number of people saying to him at the time that it might not be secure to keep his title documents at home and these people suggested having title to the property registered in the land registry.
16. He said that at about this time, the defendants noticed that the property appeared to be registered in their joint names and that this was not correct; he said that the property was acquired with funds provided by the second named defendant from the sale in 1993 of a house in Leixlip that she owned outright in her own name, together with other funds provided by the second named defendant from an investment in a company in Temple Bar, in which the first named defendant, was also a shareholder. He said that it was only at this time that they realised that an error had been made and that the property should always have been registered in the sole name of his wife. Accordingly, he says, he arranged for the second named defendant to meet with a solicitor with whom he was acquainted, with a view to rectifying the title. This was in early 2010. The deed was not ultimately completed until November, 2010 and registered in January, 2011. The property was never registered in the land registry and remains an unregistered title.
17. The first named defendant was also cross-examined about a transaction that took place at the same time the property was originally acquired, whereby a portion of the same was sold onwards to a Mr. Stewart Malcolm. He explained that this was by agreement with a Mr. Malcolm who owned an adjacent property, at the time that the property was acquired by the second named defendant. The conveyance in favour of Mr. Malcolm was completed by both defendants. The first named defendant said he did not look at any of the documents that he signed at the time the property was acquired, or the time a portion of the same was sold to Mr. Malcolm.
18. The defendants had agreed to make voluntary discovery of documents in the course of the Circuit Court proceedings. Two headings of documentation were initially agreed:
1. The deed of conveyance and;
2. Any documents predating commencement of the proceedings, i.e. before 22nd May, 2013 concerning:
i. The deed of conveyance;
ii. The circumstances whereby it was entered into by the defendants and;
iii. The intended purpose of the deed, to include all records of any instructions given by the defendants or either of them to their legal advisors concerning the deed of conveyance.
19. The first named defendant then swore an affidavit of discovery in which the only document discovered was the deed of conveyance. No other documents from the file of the solicitor (a Mr. Galligan) acting in the transaction were discovered. The first named defendant said he requested whatever documents were available and all he was given was the deed of conveyance.
20. Subsequently a further request for discovery was made by the plaintiff and agreed to by the first named defendant. This request involved three further categories of documentation:
1. The contract for sale whereby the defendants or the second named defendant acquired the property;
2. Any records regarding the source of funds used to acquire the property and;
3. Any records from 1993 as to the intentions of the defendants regarding who should be the legal owner of the property.
21. The first named defendant swore an affidavit of discovery dated 18th December, 2013 saying that he had no documents within his power, possession or procurement, and never had any such documents, within these agreed categories. He did confirm in evidence that the defendants had in their possession all of the title documents relating to the property but it appears the view was taken that none of these documents fell within the categories discovery of which was requested and agreed. The title documents were not produced in court.
22. The second named defendant gave evidence substantially corroborating the evidence of the first named defendant. She, of course, was a stranger to the issue of the indebtedness of the first named defendant to the plaintiff. She confirmed that house was purchased by her with funds from the sale of her house in Leixlip and the sale of an investment in Temple Bar. The combined sale proceeds, she said, equated to the purchase price of the property. She said that all utility bills for the house were in her sole name.
23. While she confirmed attending with Mr. Galligan for the purposes of instructing him to rectify the title to the property, she had no recollection of seeing him generate any documentation regarding the transaction. She said that she did not discuss the making of discovery of documentation with the first named defendant. Her recollections of her dealings with Mr. Galligan were scant.
24. She confirmed the evidence of the first named defendant in relation to the return of the title documents in 2009 and the subsequent decision to rectify the title. She was asked if she was aware that the plaintiff was claiming monies from her husband before November, 2010 and she said she was unsure when she became aware of that, although she did recollect the first named defendant attending a meeting with the plaintiff in Cashel in August, 2010. She was asked if she was aware that at that meeting the plaintiff sought payment from the first named defendant of monies due, and she confirmed that she was so aware, but she said that the first named defendant did not owe the plaintiff any money.
25. One other matter of relevance is that there was handed into court a certified extract from the valuation lists issued on behalf of the commissioner of valuation. The certificate which is dated 12th March, 2015, refers to a date of issue of the certificate of 10th May, 1994 and the certificate identifies that first named defendant as the occupier of the property. While it was unclear as to how the certificate came to be issued in May, 1994, it was suggested that it may have come about as a result of the splitting of the property following the disposal to Mr. Malcolm; but in any case it discloses first named defendant as the occupier of the property in 1994, for rating purposes.
Decision
26. At the outset it must be observed that I emphasised to the parties in the course of this hearing that I did not consider that it was any part of the adjudication of the issues arising in these proceedings, for this Court to re-open the judgment already obtained by the plaintiff as against the first named defendant. That judgment has already been affirmed by a decision of this Court. Insofar as the plaintiff has a grievance about the manner in which the judgment was obtained, and is now pursuing that grievance by way of the proceedings issued against the Minster for Justice and Equality, Ireland and the Attorney General, those proceedings have no bearing upon the matter at issue in these proceedings and should not be allowed to defer the outcome of these proceedings, as was suggested by counsel for the first named defendant, not least because the first named defendant waited almost three years to issue those proceedings from the time he first articulated a complaint under the Convention when filing his defence to these proceedings in the Circuit Court.
27. I am fully satisfied from the evidence given by all of the parties that, at the time that they executed the deed of conveyance, the defendants were aware that the plaintiff was intending to pursue the first named defendant personally for debts incurred by the first named defendant’s companies to the plaintiff.
28. I am further satisfied that this was the motivation behind the decision to have the property conveyed into the sole name of the second named defendant. No evidence at all was produced to the Court to support the oral testimony of the defendants that the conveyance of the property into their joint names in 1993 was a mistake. Not only that, it is quite simply incredible that the defendants do not have any other documentation in their power, possession or procurement within the categories of documentation in respect of which discovery was agreed, other than the deed of conveyance itself. It is also in my view very unsatisfactory that the title documents to the property were not produced either to the plaintiff or in Court, even though these were available to the defendants. Not all of these may have fallen precisely within the categories of documentation, discovery of which was agreed, but it is likely that some of them would. Acknowledging that that is somewhat speculative, however, this latter issue does not form any part if the ratio of this decision.
29. Section 74(3) of the Land and Conveyancing Law Reform [2009] Act 2009 provides as follows:
“(3) Subject to subsection (4), any conveyance of property made with the intention of defrauding a creditor or other person is voidable by any person thereby prejudiced.”
Section 74(4) of that Act has no application to the circumstances of this case.
30. In the case of Keegan Quarries Limited v. Michael McGuinness & Marie McGuinness [2011] IEHC 453, Finlay Geoghegan J. interpreted and applied s. 74 of the Act of 2009. Noting that the Act of 2009 repealed the Irish Statute of fraudulent conveyances 1634 and that the leading authority on the fraudulent intention required to bring a conveyance within the scope of s. 10 of the Act of 1634 was the case of Re Moroney [1887] 21 LRIR 27 in which Palles C.B. stated at p.61:
“Therefore to bring a conveyance within the statute, first, it must be fraudulent; secondly, the class of fraud must be an intent to delay, hinder or defraud creditors. Whether a particular conveyance be within this description may depend upon an infinite variety of circumstances and considerations. One conveyance, for instance, may be executed with the express intent and object in mind of the party to defeat and delay creditors, and from such an intent the law presumes the conveyance to be fraudulent, and it does not require or allow such fraud to be deduced as an inference of fact. In other cases, no such intention actually exists in the mind of the grantor, but the necessary or probable result of his denuding himself of the property included in the conveyance, for the consideration, and under the circumstances actually existing, is to defeat or delay creditors, and in such a case…the intent is, as a matter of law, assumed from the necessary or probable consequences of the act done; and in this case, also, the conveyance, in point of law, and without any inference of fact being drawn, is fraudulent within the statute. In every case, no matter what its nature, before the conveyance can be avoided, fraud, whether expressly proved as a fact, or as an inference of law from other facts proved, must exist.”
31. Finlay Geoghegan J. noted that these principles were applied more recently by Costello P. in the case of McQuillen v. Maguire [1996] 1 I.L.R.M. 394,399 and Laffoy J. in the Motor Insurers Bureau of Ireland v. Stanbridge [2008] IEHC 389 and she also expressed the view that these principles apply to s. 74(3) of the Act of 2009.
32. I am satisfied, on the evidence set out above, that it was an express intent and object in the minds of the defendants when conveying the property into the sole name of the second named defendant, to defeat any potential claim of the plaintiff and accordingly I find that the plaintiff has proved a fraudulent intent on the part of the defendants, in the execution of the deed of conveyance, as a fact. I also conclude that as “the necessary or probable consequences of the Act done” was to defeat, delay or hinder the plaintiff as a creditor, as a matter of law the court should infer fraud from the fact of the deed of conveyance in accordance with the above principles.
33. Accordingly, the plaintiff is entitled to a declaration that the deed of conveyance is void, and an order setting the same aside pursuant to s. 74 of the Land and Conveyancing Law Reform Act 2009. I therefore affirm the order of the Circuit Court and dismiss the appeal.
Sanders v. Crossley.
[1919] IR 73
Appeal.
RONAN L.J. :
In his evidence Mr. Crossley says that his “only object” (in executing the deed) “was that his wife and family would be left in possession of everything I had in his absence, that she might have absolute freedom of action for the benefit of herself and her children.”He had a solicitor in he transaction; bearing that in mind it seems to me absolutely impossibleif Mr. Crossley is telling the truth to understand why the deed was confined to the furniture. According to Mr. Crossley the furniture was worth about £400, not more than one-fourth of his property.
If he wanted to secure everything to his wife for the benefit of herself and the children, and had a solicitor acting for him, why did be not convey all to a trustee in trust for them? or, if what he apprehended was death, why did he not, as the Master of the Rolls suggests, make a short will? The fact that the deed is confined to the furniture is, to my mind, the most conclusive fact as to his intention.
However, there is another ground on which I wish to rest my judgment, and the Master of the Rolls has asked me to deal with this branch of the case. I am of opinion that the deed is void under the Bills of Sale Acts. I will state shortly my reasons. The question is whether this deed (admittedly a bill of sale, and the sole foundation of the claimant’s alleged title to the goods) is void as against the plaintiffs under sect. 8 of the Bills of Sale (Ireland) Act, 1879 (42 & 43 Vict. c. 50).
The 15th section of the amending Act of 1883 (46 Vict. c. 7) repeals this section, but sect. 3, sub-s. 2, of the latter Act provides that the Act shall not apply to bills of sale “given otherwise than by way of security for the payment of money.” It has been held in Swift v. Pannell (1) and in Heseltine v. Simmons (2),on the corresponding sections of the two English Acts, that the joint effect of sects. 3 and 15 of the Act of 1883 (46 Vict. c. 7) is that the repeal of sect. 8 of the Act of 1879 (42 & 43 Vict. c. 50) by sect. 15 of the Act of 1883 is confined to bills of sale “given by way of security for the payment of money.”
Section 8 of the Act of 1879 (42 & 43 Vict. c. 50) therefore applies to the present case, and it is admitted that it avoids the deed if at the time of the execution of the process the chattels comprised in the bill of sale were “in the possession or apparent possession of the person making such bill of sale.” I have stated the effect of the sections in general terms, as this branch of the case really depends entirely on the words which I have put in inverted commas above.
It will be observed that there are two distinct alternatives (a) in the possession of the person making such bill of sale, (b) in the apparent possession of that person. There is no definition of (a) in the Act: it is left to its ordinary meaning; but there is a very specific clause as to (b), viz., sect. 4, sub-s. (3), which is as follows:”Personal chattels shall be deemed to be in the apparent possession of the person making or giving a bill of sale so long as they remain or are in or upon any house . . . occupied by him or are used and enjoyed by him in any place whatsoever,
notwithstanding that formal possession thereof may have been taken by or given to any other person.”
It will be seen that the words “in the apparent possession of the person making such bill of sale” in sect. 8 of 42 & 43 Vict. c. 50 are the very words of sect. 4, sub-s. 3, of the Act. Section 4, sub-s. 3, is taken from sect. 7, sub-s. 3, of the Irish Act of 1854 (17 & 18 Vict. c. 55), and sect. 8 from sect. 1 of that Act.
The corresponding English enactments are sect. 4, sub-s. 3, and sect. 8 of the Act of 1878 (41 & 42 Vict. c. 31), and sect. 7, sub-s. 3, and sect. 1 of the English Act of 1854 (17 & 18 Vict. c. 36). The latter Act is the earliest Act, and its title is “An Act to prevent frauds on creditors by secret Bills of Sale of personal chattels.”Those clauses as to “apparent possession” were therefore in force in both countries from 1854 to 1878 and 1879, and were then re-enacted without any practical variation.
The question, therefore, seems to me to be simply this: Did these chattels “remain in a house occupied by” Crossley? If they did, the Act says in terms “they shall be deemed to be in his apparent possession,” and if so they are within sect. 8 of 42 & 43 Vict. c. 50. Is there any possible doubt that they did so remain, or that the house was occupied by him? It was his property and his residence. His wife had no title to it, nor any interest in it. It seems to me impossible to contend that a man does not occupy his own dwelling-house because his wife lives with him. I can, however, in this case see no other ground on which it can be contended that this case is not within sect. 4, sub-s. 3, of 42 & 43 Vict. c. 50.
During the argument I tried more than once to induce counsel to deal with sect. 4, sub-s. 3, and sect. 8, but did not succeed. The case of Ramsey v. Margrett (1) was referred to. The facts and the question in that case are wholly different from the present case. In that case the wife, who had separate estate, agreed to purchase from her husband some furniture and other personal chattels belonging to him which were in the house in which she lived with him. She stipulated that a receipt for the purchase-money should be given to her, and instructed her solicitor to draw the receipt. After the purchase-money had been paid to the husband he signed a receipt which the wife’s solicitor had prepared. This document acknowledged the receipt from the wife of the agreed sum, as the purchase-money “for all my furniture, plate, &c., which I hereby acknowledge are now absolutely her property.” There was no formal delivery of the goods by the husband to the wife, but they remained, as they had previously been, in the house in which the husband and the wife were living together. She subsequently sent part of the goods to her own bankers, and the remainder were afterwards taken in execution by a judgment creditor of the husband. There are dicta to the effect that the wife had sufficient possession of the goods to take the case out of the Act, for the situation of the goods being consistent with their being in the possession of either the husband or the wife, the law would attribute the possession to the wife, who had the legal title; but sect. 4, sub-s. 3, of 41 & 42 Vict. c. 31, is not referred to from the beginning to the end of the case, though sect. 4, sub-s. 1, is.
The decision was that it was not a case of a bill of sale, and Lopes L.J. confined his judgment to this. If the dicta of Lord Esher and Davey L.J. are carefully examined, they will be found to deal with “possession,” not with “apparent possession” or its statutory definition. Lord Esher in his judgment says:”The goods were in the house in which the husband and the wife were living together, and in that state of things you could not say which of them had the actual possession of the goods. What is the rule of law as to possession in such a case? When the possession is doubtful it is attached by law to the title. Therefore, the law considers the goods to be in the possession of the wife, who has the legal title to them.” That is, she had the legal title by her purchase wholly apart from any bill of sale. Lord Esher’s remarks, therefore, do not apply to this case1, because here the claimant had no legal title apart from this impeached bill of sale; 2, because Lord Esher does not deal with “apparent possession” as defined by the Act, but with possession under the general law.
Lopes L.J. mentions “apparent possession,” but expresses no opinion on the question. Davey L.J. says”In the present case the question of ‘possession’ arises.” He cites Pollock and Wright on Possession:”Where ‘possession’ in fact is undetermined? possession in law follows the right to possess.” He then cites Charlesworth v. Mills (1) to the effect that if the Act of 1878 applied, ostensible possession might be important, “but it is not of the slightest importance in the present case,” i.e., in Charlesworth v.Mills (1). Why? Because the Act of 1878 did not apply at all in that case except sect. 3, sub-s. 1. Later on he says:”The fact that the goods remained in the house as before was equally consistent with their being in her possession as in his possession. If there had been a formal delivery of the goods to the wife, there could have been no question.” The last sentence seems to show conclusively that Davey L.J. cannot have had his attention called to the distinction between “possession” and “apparent possession” and the statutory definition of the latter in the Act of 1871, as the final clause of sect. 4, sub-s. 3, makes the “formal”giving of possession immaterial in the case of “apparent possession.”
The only other case we were referred to was In re Satterthwaite, Ex parte the Trustee (2). It was only mentioned as being to the same effect as Ramsey v. Margrett (3). On reading it, I find it was an express decision on “apparent possession” and its definition in sect. 4, sub-s. 3, of 41 & 42 Vict. c. 31. It was a motion by the trustees in bankruptcy to have a settlement, comprising inter alia certain furniture, declared void under the provisions of the Bankruptcy Acts and the Bills of Sale Act, 1854. The settlement in question was a post-nuptial settlement, by which the furniture was assigned by the husband to trustees upon trust for the wife absolutely. By an earlier post-nuptial settlement the husband had assigned a leasehold house at Springfield on similar trusts. The evidence showed that the husband lived with his wife in the house at Springfield, but the wife out of her own property kept up the house, paid the wages, and in particular dealt with the furniture as her own, selling some articles and buying others out of her own pocket, or getting them repaired. Vaughan Williams L.J. in his judgment says:”Even supposing that the Act does apply, it only applies if, possession having been given, the goods remain in the apparent possession of the grantor. Look at the definition.” [His Lordship read sect. 4, sub-s. 3, and continued:] “Here the goods were not in any place occupied by the grantor. Springfieldthe place where they werewas occupied by the wife . . . The occupation was the occupation of the wife and not of the husband.”
It is quite plain on the Act that even if the wife was in possession in point of law, still if the husband was in apparent possession as defined in sect. 4, sub-s. 3, sect. 8 would apply and avoid the deed.
In this case the house was and is the husband’s, and his alone. He has always occupied it. The chattels have always remained there.
Every fact on which Lord Justice Vaughan Williams based his decision in that case is absent in the present case, and the dicta in Ramsey v. Margrett (1) do not apply to “apparent possession” at all. In my opinion the present case is within sub-s. 3 of sect. 4 of the 42 & 43 Vict. c. 50, and the deed is void under the 8th section of that Act.
Re Crawley
[1959] IR 330
In the Matter of MICHAEL CAWLEY, a Bankrupt. JOHN W. CLANCY, Chargeant, and THE MUNSTER AND LEINSTER BANK, LIMITED Dischargeant.
28 Nov. 1958
BUDD J. :
In this matter the Munster and Leinster Bank Limited seek to be admitted as proving creditors of the bankrupt in respect of a sum of £1,420 9s. 9d. owing to them by the
[1959]
1 I.R. In re Cawley, a Bankrupt.
Budd J. 331
bankrupt on foot of advances made by the Bank to the bankrupt before his bankruptcy. This sum was in fact paid by the bankrupt to the Bank; but, as it was paid by him within a period of three months before his adjudication, it was agreed between the Bank and the Official Assignee that the payment constituted a fraudulent preference of the Bank’s debt by the bankrupt and was void under the provisions of s. 53 of The Bankruptcy (Ireland) Amendment Act, 1872. The Bank further agreed that the moneys would have to be repaid to the Official Assignee, and this was done in compliance with the terms of a consent which was made a rule of Court on the 6th June, 1958. The Official Assignee now contests the Bank’s claim to be allowed to prove for this sum of money in the bankruptcy in the same way as any other creditor. The contention put forward on behalf of the Official Assignee is that at the time of the bankruptcy there was no debt due to the Bank; the Bank had been paid in full, even though the payment was void because it amounted to a fraudulent preference of a creditor. Accordingly it is contended that, as the Bank were not creditors at the date of the bankruptcy, they cannot prove in the bankruptcy and, although forced to repay this sum of £1,420 9s. 9d. to the Official Assignee, must seek repayment in some proceedings outside the bankruptcy.
Mr. Liston, on behalf of the Bank, illustrates the practical effect of this contention by a simple example. He takes the case of a grocer, a baker, and a butcher to each of whom a customer is indebted in a sum of £100. The customer decides to prefer the debt due to the grocer and he pays him his £100. The butcher and the baker hearing of this have their customer adjudicated a bankrupt within a period of three months of the payment to the grocer. Thereupon the payment to the grocer becomes a fraudulent preference of the creditor; the grocer has to pay the £100 to the Official Assignee, whereupon the butcher and the baker, if the only creditors, will each get paid something near to £50 of the grocer’s money, but the grocerif the contention of the Official Assignee is correctcannot prove in the bankruptcy and gets no part of the £100. Mr. Liston points out that the effect of this procedure would be that the creditor’s preference having been avoided under the Act, the Court would substitute its own preference in place of that attempted by the bankrupt, by preferring the claims of the butcher and the baker to that of the grocer, and, furthermore, might leave the grocerwho could be an entirely innocent recipient of the £100without any practical means of recovering any part of his debt.
It appears that there are no decided cases directly dealing with the contentions put forward on behalf of either party in this matter. In these circumstances I am at liberty to approach the matter from the point of view of what is the just way of dealing with these opposing claims. On the facts I find, first, that the debt was owing to the Bank; second, that it has not been paid, in as much as the Bank is out of pocket the sum of £1,420 9s. 9d., as it has had to pay that sum back to the Official Assignee in the bankruptcy matter. The question then is whether this unpaid creditor is to be allowed to prove for the debt or not. Mr. Liston says that the matter can be approached in two ways under s. 53 of the Act of 1872. The section is in the following terms:
“53. From and after the commencement of this Act, every conveyance or transfer of property, or charge thereon made, every payment made, every obligation incurred, and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own moneys in favour of any creditor, or any person in trust for any creditor, with a view of giving such creditor a preference over the other creditors, shall, if the person making, taking, paying, or suffering the same to become bankrupt within three months after the date of making, taking, paying, or suffering the same, be deemed fraudulent and void as against the assignees or trustee of such bankrupt appointed under the said Act or this Act; but this section shall not affect the rights of a purchaser, payee, or incumbrancer in good faith and for valuable consideration.”
Mr. Liston says in the first place that it would seem that the payment was void ab initio, even though the Court might not pronounce the payment void until after the adjudication in the bankruptcy. If so the debt still exists at the date of adjudication. As an alternative he argues that the payment became void as of the date of adjudication, and that it therefore cannot be said that the debt was not due and owing at the time of the bankruptcy. In the result, he contends that whatever refinement of construction is to be used in regard to the interpretation of the section, the effect is that the debt has never been paid, or that it revives at the moment of adjudication of the bankrupt.
Although neither is a direct authority in his favour,obiter in two cases support his contention. In the case of Ex parte Hyndman & Co. Re Lavender, a Bankrupt (1)the point with which I am concerned was not argued but the attitude of the very experienced bankruptcy lawyer and judge who decided that case is significant as to his views in a similar situation. It was a case of alleged fraudulent preference under the same section. Judge Miller in his decision is reported as being “of opinion that Hyndman came within the words of the 53rd section of the Act of 1872, and that the payment was made ‘with a view to give a preference’ to Hyndman over his fellow-creditors, and he was not a ‘payee in good faith'” butand this is the significant feature of the casehe ordered “that Hyndman & Co. be admitted to proof of their debt.” From this statement it is clear that Judge Miller considered that the preferred creditor was entitled to prove in the bankruptcy and, in fact, he made an order admitting the debt then and there. The other case referred to was that of In re Stevenson. Ex parte Official Receiver (1). In that case a debtor executed an assignment of his property to a trustee for the benefit of his creditors. The deed provided for the distribution by the trustee of the assets of the debtor rateably among all the creditors, and contained a covenant by which “in consideration of the premises” the creditors, parties to the deed, agreed to “release the debtor from all claims and demands” against him. The debtor was adjudicated a bankrupt upon the petition of a non-executing creditor, the act of bankruptcy proceeded upon being the execution of the deed. It was held by Cave and Grantham JJ. that the release was not intended to bind the executing creditors in the event of a bankruptcy, and that they were entitled to prove. Mr. Liston relies in particular on certain observations of Cave J. At p. 542, he says:”A creditor who has accounted to the trustee for a sum received under a fraudulent preference, is surely not prevented from proving in bankruptcy.”And again, at p. 543, he says this:”In the case of a fraudulent preference the creditor can seldom intend that the acceptance of a payment by way of fraudulent preference shall be a valid release to the debtor, such as, if the payment is set aside, to disentitle the creditor to prove in bankruptcy.”From these passages it is clear that Cave J. was of opinion that, where a debt had been fraudulently preferred, the creditor whose debt had been preferred and later repaid was entitled to come in and prove in the bankruptcy.
In my view on the true construction of the section a payment made to a creditor with a view to giving him a preference is rendered void if the debtor becomes bankrupt within three months of the payment. It does not matter when the Court makes the necessary finding; the creditor is then in just the same position as he would have been if no payment had ever been made. Accordingly, the debt is one still subsisting at the date of adjudication, and I am satisfied that such a debt should be admitted to proof in the bankruptcy. This construction of the section gives a more rational and just result than the interpretation contended for by Mr. O’Neill on behalf of the Official Assignee and appears to be in accord with the views of the learned judges referred to above. I find accordingly that the Bank is entitled to prove the debt in the bankruptcy. As this was an exceptional ease involving a matter of principle upon which there was no decision in this country, I consider that the Bank should be allowed the costs of the proceedings before me.
In re Clancarty.
[1921] IR 384
Pim J. 377, 384
PIM J. , having stated the facts, proceeded:
There was in the bankrupt at the time of his adjudication an equity of redemption in the policies, which, even at that time, had a very considerable value. This equity of redemption, to which the applicant had a legal right, remained in the order and disposition of the bankrupt, inasmuch as the applicant had given no notice of his mortgage.
Mr. M’Gonigal, on behalf of the applicant, quoted two cases, one in Ireland and the other in England, as authority for his contention that the interest in the policies was in the first mortgagee, and, therefore, that there was nothing in the bankrupt which could pass to the assignee.
I will deal with the English case first. It is a case of Freshney v. Carrick (6), In that case a trader assigned certain goods by way of bill of sale to the plaintiffs, and due notice thereof was given under the Bills of Sale Act. Previously thereto he had made an absolute assignment of the same goods to one Ward, with power to repurchase them at a future time. It was held by the Court that Ward was the real owner of the goods, and that the goods having been left with the bankrupt, they were in his order and disposition with the consent of Ward, the true owner. The judgments in the case are not very clear, but, so far as I can understand them, I think I have correctly summarized them. I fail to see how that case is any authority for Mr. M’Gonigal’s contention.
The Irish case is somewhat different, and very much more in the applicant’s favour. It is a case of Fenelon v. Baker (1),decided by Lord Chancellor Maziere Brady in the year 1855. In that case the insolvent assigned a policy of insurance for £500 to a man called Sparks to secure a debt of £82. Sparks gave notice of the assignment to the company, and subsequently, at the request of the insolvent, deposited the policy with a man called John Taylor Crooke, to secure a debt due by the insolvent to Crooke. No notice was given of this second mortgage (I assume it to have been a second mortgage, but indeed the facts are somewhat obscure). The representatives of Crooke were the respondents in the case. The usual application was made to have the policy held to be in the order or disposition of the insolvent at the time of the insolvency, and the Lord Chancellor stated that in his opinion the policy was not in the order or disposition of the insolvent, and that in consequence of the notice served by Sparks on the insurance company no creditor making inquiry could be misled as to some disposition of the policy having been made.
Now it will be noted that that decision only deals with the ownership of the policy, and the fact of there being an interest left in the insolvent under the equity of redemption does not appear to have been considered at all. In so far as the case decided that the policy itself was not in the order and disposition of the insolvent, it is clearly correct, but, although the representatives of Crooke were successful, it is no real authority for the applicant’s present contention, for the point was not even raised. The case is an old one, and there have been great developments in the interpretation of the 313th section since that time, and I cannot take it to be a decision binding upon me in this case. The point is still open whether an equity of redemption is not an interest which passes to the assignee, and which, if at the moment of the bankruptcy it is in the possession of the bankrupt, is not caught by the 313th section as being “goods or chattels” in the bankrupt’s possession, order, or disposition.
But Mr. M’Gonigal has further argued that, even if an equity of redemption were something which was in the order or disposition of the bankrupt, it could not be held to come within the words “goods and chattels” within the meaning of those words in the section. Now, there have been a great many decisions on the meaning of the words “goods and chattels,” both under the English Acts and under our own Acts. Choses in action have been held, again and again, to come under the words; so have bills of exchange and promissory notes, shares in companies, policies of insurance, annuities, furniture, money, notes, and generally all kinds of personalty, even though the bankrupt’s interest was merely a reversionary one. It has even been held that the right to publish a paper came within these words, and I would like for a moment to refer to the curious case in which that was held. It is a case of Longmans v. Tripp (1). I quote it, not only for the facts, but for the statements contained in the judgments. It appears that a printer in Bristol named William Bulgin, being indebted to the plaintiff for goods sold to him, assigned to him his interest in a certain newspaper, then printed and published in Bristol aforesaid, called “The Bristol Mercury.” There was no assignment of the presses, types, or other implements for printing, but merely of the right to print a newspaper under the title of “The Bristol Mercury.” Bulgin continued, with the permission of the plaintiff, to print and publish the newspaper down to the time of his becoming a bankrupt in the month of February, 1804, and the question then arose whether the interest in the newspaper was not within the order or disposition of the bankrupt with the consent of the true owner. Sir James Mansfield, the Chief Justice, said, dealing with the argument that this interest was not “goods and chattels” within the meaning of sect. 11, c. 19, of the statute 21 Jas. 1: “It is to be remembered that all things are to be largely and beneficially expounded under that statute for the advantage of the bankrupt estate.” And further on he said: “As to the question whether the right to this newspaper passed under the assignment, can any case be found in which it has been held that property of this description would not pass under a commission of bankrupt?”
And Mr. Justice Chambré said: “The words are ‘goods and chattels.’ To be sure, this interest is not tangible, but it would be a very narrow construction to confine the operation of the statute to tangible property. It is true that the future labour of the bankrupt cannot be transferred, but where there is some sort of interest, it appears to me that it may be transferred.”
Now, what is an equity of redemption? The cases to which I am about to refer all deal with an equity of redemption in land, but, “mutatis mutandis,” I think they all equally refer to an equity of redemption in a policy of insurance. Lord Hardwicke, in a case of Casborne v. Carfe (1), says that “an equity of redemption has always been considered all estate in the land, for it may be devised, granted, or entailed with remainders, and such entail and remainders may be barred by a fine and recovery, and cannot be considered as a mere right only, but such an estate whereof there may be a seisin. The person, therefore, entitled to an equity of redemption is considered as an owner of the land, and a mortgage in fee as personal assets.”
Vice-Chancellor Sir John Leech, in the case of Lloyd v.Lander (2), says that an equity of redemption is not an estate but an interest. This case came before the Court of Bankruptcy, and I shall have to refer to it again later on.
Chief Baron Hale, in Pawlett v. Attorney-General (3), says”a power of redemption is an equitable right inherent in the land, and binds all persons in the post or otherwise”; and he adds, “and it is of such consideration in the eye of the law that the law takes notice of it, and makes it assignable and devisable.”
Now, which of these three definitions of an equity of redemption may be the more correct I do not pause to consider. Possibly they are all three correct. But one thing is quite clear from the decisions, namely, that an equity of redemption, whether it be called “an estate,” or “an interest,” or an “equitable right,” is a real thing of the nature of property which will vest in the assignee. And, to quote the words of Sir John Leech in the case of Lloyd v. Lander (2), “the equity of the bankrupt no longer remains in him, but it is actually or potentially in his assignees”; and, again, “the equity of redemption is not an estate but an interest, and may well be considered as substantially vested in the assignees before a bargain and sale.”
Now, this “interest,” or “equitable right,” or “estate,” was in the bankrupt in this case at the date of his bankruptcy. If the applicant here had given notice under sect. 3 of the Policies of Assurance Act, 1867 (30 & 31 Vict. c. 144), this equity of redemption, by force of that notice, would no longer have been in the order and disposition of the bankrupt, but would have become the property of the second mortgagee, leaving in the bankrupt another equity of redemption subject to the two earlier mortgages.
I have come to the conclusion that this equity of redemption in the policies of insurance is an interest or equitable estate in the said policies, and comes within the meaning of the words”goods or chattels” in the 313th section; and, agreeing with the statement of Mr. Justice Chambré in Longmans v. Tripp (1),that “where there is some sort of interest, it may be transferred,’I hold that it vested in the assignee at the date of the bankruptcy. I further hold that it was in the possession of the bankrupt at the date of his bankruptcy, with the consent of the true owner, the present applicant. That being so, the application must fail, and the declaration already made must remain.
It has been suggested that, inasmuch as what was ordered to be sold by order of the Court was the policy itself, and not the equity of redemption, the section has not been complied with, and that I should grant the application. I am not of that opinion. The order is a mere formal one, necessary as a preliminary to the declaration which has been made. The policy had, before the order was made, been surrendered, and the surrender value paid into Court. In any case, the order was for the sale of the policy, and it governs all things therein comprised, including the equity of redemption.
This decision concludes the case, but as it has been argued before me that, even if the order and disposition section did not apply, the Statute of Limitations prevents the applicant from succeeding, I will deal shortly with this contention. I am of opinion that the Statute of Limitations does not apply. In the first place, I am satisfied that the statute was stopped running by the proceedings in bankruptcy, and, secondly, even if it had not been stopped running, that there is no statute of limitations dealing with policies of insurance. Mr. Herbert Wilson has suggested that the doctrine of Sutton v. Sutton (1) and Fernsidev. Flint (2) would rule this case, inasmuch as the mortgage deed conveyed land belonging to the bankrupt as well as the policies of insurance. I do not think so. Where the remedy against the land is lost, it may well be that the remedy under the covenant is also gone; but I cannot extend that to holding that because the remedy against the land is gone, the remedy against the policy of insurance is also gone. That would be to extend the doctrine far beyond what the cases authorize.
In re Samuel Thompson
In re J. Campbell Low
Local Bankruptcy.
14 December 1891
[1892] 26 I.L.T.R 15
The Recorder
In these cases I have been asked to allow the landlords of premises, of which the bankrupts were lessees, rent or compensation for the occupation of the premises from the gale day previous to the adjudication until the premises were disclaimed by the official assignee, or, at least, up to the adjudication. The bankrupts continued in the occupation of the premises after the adjudication, with the articles which they were entitled and permitted by the official assignee to retain, until he obtained orders permitting him to disclaim. In the absence of an election by the assignee to take the premises, the landlord cannot derive any assistance from 20 & 21 Vic., c. 60, ss. 267, 268, and 271 (the Bankruptcy Act, 1857). The landlord may, under s. 271, apply to the Court for an order requiring the assignee to elect whether he will accept or decline the premises. If he declines, the section gives the Court power to direct the lease or instrument under which the bankrupt held and the possession of the premises to be delivered to the landlord. Until the assignee elects to take the premises they remain vested in the bankrupt. The assignee ought not to elect to take an interest subject to rent and onerous covenants, unless beneficial to the creditors of the bankrupt. In Copeland v. Stephens (1 B. & Ad. 593), where a similar question arose on the 49 Geo. III., c. 121, Lord Ellenborough says:—“The assignees of a bankrupt are not bound to accept a term of years that belonged to a bankrupt subject to the covenants, for the object of the statute being the payment of the bankrupt’s debts, and the assignees being trustees for that purpose, the acceptance of a term which, instead of furnishing the means of such payment, would diminish the fund arising from other sources, cannot be within the scope of their trust or duty.” The law on this subject has been very clearly and concisely stated by Lord Chief Baron Palles, in Hanway v. Taylor (8 Ir. L. T. Rep. 98, Ir. Rep. 8 C. L. 260), thus:—“The acceptance of a burthensome lease, in such a mode as to onerate the estate, would … be outside the trust or duty of the assignees. The event, upon which the non-liability of the bankrupt or insolvent to rent and covenants is made dependent under the 20 & 21 Vic., c. 60—viz., the election of the assignees to take the lease—is the same event as is mentioned in the 49 Geo. III., c. 121, s. 13, upon which Copeland v. Stephens was decided.” Upon the authority of the cases to which I have referred, in the absence of election by the assignee, he is not liable under the provisions of the Act of 1857 for the rent which was accruing at the time of the adjudication.
A question of some difficulty arises in the cases before me as to whether the assignee has elected to take the premises. The act of election must be unequivocal. In Goodwin v. Noble (8 El. & Bl. 587) Lord Campbell says:—“The result of the various cases upon this subject seems to be, that the assignees of the bankrupt are not liable as assignees of the term unless they have done some act which unequivocally indicates to the lessor that they have elected to take the benefit of the lease.” By section 97 of the Bankruptcy Amendment Act (Ireland), 1872, it is enacted that when any property of the bankrupt, acquired by the assignees under the Act of 1857, as amended by that Act, is burdened with onerous covenants, the assignees, notwithstanding that they have endeavoured to sell, or have taken possession of the property, or exercised any act of ownership in relation thereto, may by writing disclaim such property, and upon the execution of such disclaimer the property disclaimed shall, if the same is a contract, be deemed to be determined from the date of the adjudication, and, if a lease, to have been surrendered on the same date. A contest has been raised in the two cases before me as to whether the assignee did, in fact, elect to take the premises. If the assignee did not elect to take the premises under the Act of 1857, I cannot see how he acquired them under the Act of 1872, or why he applied to the Court, under General Order 114, for orders permitting him to execute disclaimers, under section 97, of premises which were not in any way vested in him, if he had not elected under the Act of 1857 to take them. The disclaimers executed by the assignee operate under section 97 as a surrender of the tenancies as from the date of the adjudication, thus freeing the bankrupts from the tenancies, it may be to the prejudice of the landlords. I must hold that the assignee is bound by election to take in both cases. The landlords are entitled to prove as creditors under section 97 for any injury sustained by them from its operation. It was decided in Re Hudson (1 L. R. Ir. 6) that the assignees were bound to pay to the landlord all rents received from occupying tenants between the adjudication and the disclaimer, but it has been laid down by the Court of Appeal in Ex parte Isherwood, In re Knight (22 Ch. D. 384), that the landlord is not entitled to any compensation for the use and occupation of the premises unless under special circumstances. This was a decision upon the English Bankruptcy Act of 1869, under which leasehold interests rest without any election in the assignee, as was decided by the same Court in Titterton v. Cooper (9 Q. B. D. 473); and yet it was held that the landlord was not on disclaimer, as of right, entitled to compensation for the period during which the lease was legally vested in the assignees. I cannot see any special circumstances in the cases before me entitling the landlords to compensation for the period between the adjudication and disclaimer. Nothing has been received out of the premises as in Re Hudson (ut supra), and there was nothing to prevent the landlord’s applying under section 271 of the Act of 1857, requiring the assignee to elect, and, in case of refusal, for an order requiring the bankrupt to deliver up the lease and the possession of the premises; or they might have required the assignee, under section 98 of the Act of 1872, to decide whether he would disclaim or not; and on disclaimer they might have have applied under section 97 for possession. They did nothing and allowed the bankrupts to continue in possession, and they probably would have found it *16 difficult to prove election by the assignee to take if they were not assisted by the orders of disclaimer obtained by the assignee.
Another question arises as to whether the landlord is entitled to the proportion of the current gale up to the adjudication. The disclaimer operates as a surrender as of the date of the adjudication, and the rent being made by section 2 of the Apportionment Act of 1870 to accrue from day to day, and to be apportionable, the proportion up to adjudication is, in my opinion, a debt due to the landlord for the bankrupt’s occupation, and for which the landlord is entitled to prove. In the Swansea Bank Limited v. Thomas (4 Ex. Div. 94), the trustee in liquidation was held liable by reason of the Apportionment Act for the proportion of rent which accrued previously to the lease. This is a stronger case than those before me, in which the leases have been actually surrendered on the date of the adjudication by the operation of section 97 and of the disclaimers. Section 35 of the English Act of 1869 expressly enables the landlord to prove for a proportion of the rent to the day of adjudication. I cannot find any similar provision in the Irish Acts. I shall allow the applicants in each case to prove in the bankruptcy for the proportion of…
In the Matter of M. Power & Sons Limited and in the Matter of The Companies Act, 1963
Peter Henry Grant v Aston Limited
High Court
18 December 1967
[1969] 103 I.L.T.R 39
Kenny J.
..the liquidation took place in July and it was now December. In the circumstances the plaintiff should pay the rent from the date of the order. He would give liberty to the defendant to prove in the liquidation for damages for breach of covenant, and would make a vesting order. The plaintiff would have to pay the costs.
The following is the curial part of the order made by Mr. Justice Kenny.
IT IS ORDERED that the plaintiff as liquidator of M. Power and Son Limited on the terms that he do pay to the defendants the rent accrued during the period from 13th day of July, 1967, to the 13th day of December, 1967, be at liberty to disclaim under section 290 of the above mentioned Act all the property comprised in the lease made on the 1st day of March, 1956, between Raglan Partners and Company of the one part and M. Power and Son Limited of the other part being the premises known as 20 Back Lane in the City of Dublin.
AND IT IS ORDERED that the plaintiff do have the rent so paid as part of his costs and expenses of the liquidation of M. Power and Son Limited.
AND IT IS ORDERED that the defendants be at liberty to prove in such liquidation for damages for breach of covenant.
AND IT IS ORDERED under section 290 aforesaid on the application of the defendants that all the interest of M. Power and Son Limited in the said premises under the said lease when disclaimed as aforesaid do vest in the defendants for the residue of the terms of years demised by the said lease and so that the same may merge in the interest which the defendants already have in the said premises.
AND IT IS ORDERED that the plaintiff do pay to the defendants their costs of these proceedings and this order when taxed and ascertained and do have the amount so paid as part of the costs and expenses of the liquidation.
And the Court doth declare the plaintiff entitled to his costs of these proceedings and this order when taxed and ascertained as between solicitor and client payable out of the assets of M. Power and Son Limited.
Liberty to all parties to apply.