Industrial Services Company (Dublin) Ltd. (in liquidation), Re. [2002] IEHC 57 (15 May 2002)

Industrial Services Company (Dublin) Ltd. (in liquidation), Re. [2002] IEHC 57 (15 May 2002)

Payments made in the ordinary course of business for current debts, whether before or after advertisement of the winding-up petition, should be validated as they benefit the general body of creditors. Payments not made in the ordinary course of business, particularly those to directors or connected persons, should not be validated. The bank is ordered under Section 236 of the Companies Act, 1963 to pay to the liquidator the sum of £13,878, representing moneys which are prima facie an asset of the company.

Citation
[2002] IEHC 57
Parties
Company in Liquidation: Industrial Services Company (Dublin) Limited (in liquidation); Bank: Ulster Bank Ltd.; Liquidator: Liquidator of Industrial Services Company (Dublin) Limited
Jurisdiction
Ireland
Judgment Date
15 May 2002
Procedural Posture
Company Liquidation Application / Application for Validation of Payments Under Section 218 of the Companies Act, 1963
Outcome
partially validated payments; order for payment to liquidator
Legal Topics
Validation of Dispositions, Winding Up, Preferential Payments, Bank Liability in Liquidation
Company Law Insolvency Law Validation of Dispositions Winding Up Preferential Payments Bank Liability in Liquidation

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Parties

Industrial Services Company (Dublin) Limited (in liquidation)

Company in Liquidation

Ulster Bank Ltd.

Bank

Liquidator of Industrial Services Company (Dublin) Limited

Liquidator

Procedural Posture

Company Liquidation Application / Application for Validation of Payments Under Section 218 of the Companies Act, 1963

Legal Issues

  1. 1 Whether payments into and out of the company's bank account after the presentation of the winding-up petition are void dispositions under Section 218 of the Companies Act, 1963
  2. 2 Whether such payments should be validated by the court
  3. 3 Whether the bank should be ordered to pay invalid dispositions to the liquidator

Ratio Decidendi

Payments made in the ordinary course of business for current debts, whether before or after advertisement of the winding-up petition, should be validated as they benefit the general body of creditors. Payments not made in the ordinary course of business, particularly those to directors or connected persons, should not be validated. The bank is ordered under Section 236 of the Companies Act, 1963 to pay to the liquidator the sum of £13,878, representing moneys which are prima facie an asset of the company.

Court Disposition

partially validated payments; order for payment to liquidator

Orders

  • Payments in the ordinary course of business for current debts validated up to £2,125.57.
  • Payment into the bank account of £2,125.57 validated.