The Court of Appeal set aside a High Court order replacing Anthony J. Fitzpatrick as liquidator of Eden Further Education Ltd, holding that he had secured the majority in value of votes cast at the company’s creditors’ meeting.
The appeal concerned a voluntary liquidation vote held on 23 May 2014, and how creditors’ claims should be counted under the Companies Act 1963 and the Rules of the Superior Courts. The court’s judgment, delivered by Mr Justice Gerard Hogan on 26 March 2015, was agreed by Peart and Mahon JJ.
Eden had stopped trading on 1 May 2014. Keitumetse Motsumi, a Botswanian national who had paid €2,575 for 52 weeks of tuition, was among students left without the full course. At the meeting, 216 students were represented by proxy. The chair, Eden director Fakir Hossain, admitted claims totalling €639,281 in favour of Fitzpatrick, while other creditors voted for Declan de Lacey, with claims totalling €250,869. Student claims of €337,205 and a Dublin City Council rates claim of €98,846 were disallowed.
The High Court had allowed an appeal against the chair’s decisions and directed that Fitzpatrick be replaced by de Lacey. The Court of Appeal considered the disputed Revenue, council and student claims. It held that Revenue’s €60,166 debt listed in Eden’s statement of affairs was sufficiently established for voting purposes, but that a further disputed assessment, quantified only after the meeting, could not be counted.
The council’s rates bill for Eden’s premises at 6–7 Burgh Quay was €220,943. The court held that the full amount had been levied before the meeting and was an ascertained sum. Eden remained liable for the year’s rate despite the later surrender of its lease. The chair should therefore have admitted the full claim, an additional €98,846 beyond the amount allowed.
The court distinguished between two groups of students. For 190 whose courses had been interrupted, any damages depended on the circumstances and could not be given an objective value at the meeting. Although the legislation included creditors with unliquidated claims, the court found no mechanism to value these claims for the vote; it held that the chair was right to exclude them. Claims by 26 students whose courses had not begun were liquidated refund claims, but the judgment did not find that they changed the voting result.
Allowing Fitzpatrick’s appeal, the Court of Appeal set aside the High Court order and declared that the majority in value at the creditors’ meeting had voted for Fitzpatrick. It held that he was duly elected as liquidator under section 267(3).