The Supreme Court has dismissed an appeal by Eteams International (in liquidation) over who should pay the costs of an earlier appeal, affirming an order that the company’s liquidator, Anthony Fitzpatrick, pay those costs personally and have no recourse to company assets to satisfy the order.
The appeal concerned costs only. The Court did not revisit the underlying dispute about whether a debt purchase agreement between Eteams and the Governor and Company of the Bank of Ireland was a true sale of debts or a loan secured on them. The Court of Appeal had upheld the High Court’s decision that the agreement was not invalid for non-registration as a charge. The Supreme Court had granted leave on the costs issue alone.
The company had brought proceedings under section 280(1) of the Companies Act 1963, seeking to challenge the Bank’s claim to money collected under the agreement. The Supreme Court said the section allowed an application by a liquidator, creditor or contributory, but not by a company in liquidation. Eteams therefore lacked standing to bring the proceedings in its own name.
The Court considered that the liquidator had instructed the appeal and had been warned well in advance that the Bank would seek to make him personally liable for costs. It rejected the argument that the Bank’s failure to formally join him as a party before the costs order defeated that application.
The judgment noted gaps in the evidence, including the company’s overall assets, consultation with creditors and the legal advice received. It said allegations of bad faith, self-interest or misconduct on either side were not supported by clear and cogent evidence. The Court based its decision on the company’s lack of standing and the liquidator’s notice of the Bank’s costs claim.
The order leaves the Court of Appeal’s costs award in place. The liquidator is personally responsible for the costs of that appeal and cannot recover those costs from Eteams’ assets. The Supreme Court did not make a new finding that the liquidator acted in bad faith or fraudulently.