The High Court has ruled that Ashcoin Ltd.’s claim against Moriarty Holdings Ltd. may proceed in reconstituted proceedings, rejecting the defendant’s preliminary objection that doing so would amount to an abuse of process.
The ruling, delivered by Mr Justice Hogan on 16 January 2013, concerns a disputed share of a €328,500 grant paid in June 2008 by Sustainable Energy Ireland to Moriarty Holdings for a housing development at Spicers Mill, Balbriggan, Co. Dublin. Ashcoin had provided engineering solutions for the heat-efficient homes. It contends the companies agreed in June 2007 to divide the grant proceeds equally, and that its share remains unpaid. The court did not determine the merits of that claim.
The proceedings were first brought by Kieran Wallace as receiver of Ashcoin under a debenture. In an earlier judgment, the court held that any amount due to Ashcoin would be a “book debt” excluded from that debenture, so the action was not maintainable in its original form. That decision addressed how the proceedings were constituted, not whether Ashcoin was entitled to the money.
In the reconstituted case, Wallace’s asserted standing derives from an invoice discounting agreement between Ashcoin and Ulster Bank Commercial Services Ltd. (UBSC), which has since ended. The parties do not dispute that UBSC is owed about €121,000 including VAT under the agreement, or that it purchased the entirety of the debt allegedly due from Moriarty Holdings. UBSC has agreed to return any recoverable balance, after costs, expenses and preferential claims, to Ashcoin’s liquidator for the company’s liquidation.
Moriarty Holdings argued that Ashcoin should not be permitted to pursue the same alleged debt on a different legal basis after the first proceedings failed. The court accepted that the Henderson v. Henderson rule, which can prevent a party from holding back an available argument for later proceedings, could apply. It said the rule would have barred the reconstitution if Ashcoin had deliberately withheld the alternative basis for strategic reasons.
But the judge found no evidence of an intention to overreach, act oppressively or circumvent an adverse ruling. He said Ashcoin had taken a legitimate, though incorrect, view that the alleged debt was not a book debt. The first proceedings had already resulted in a costs award against the plaintiffs, and the court considered that barring the claim from ever being heard on its merits would be too dogmatic.
The court therefore held that the Henderson rule did not bar Ashcoin’s application to reconstitute the proceedings. The ruling permits the claim to be pursued; it makes no finding on whether the alleged agreement existed or whether any money is owed.