Supreme Court allows appeal against liquidator removal, holding unauthorized filing does not bar proceedings.

THE SUPREME COURT

[Appeal No: 72/2015]

Clarke J.

MacMenamin J.

Dunne J.

In the Matter of Kelly Trucks Limited (in Voluntary Liquidation)

Between/

Costello Transport Limited

Applicant/Respondent

and

Nehall Singh

Respondent/ Appellant

Judgment of the Court delivered the 15th December, 2016.

1. Introduction

1.1 The circumstances which have led to this judgment are highly unusual and potentially disquieting. On the 19th October, 2015, the

Court of Appeal (Kelly J., Irvine J. and Hogan J.) delivered ex tempore judgments in an application brought in these proceedings. As

appears from a note of the judgments concerned, the company which is the subject of these proceedings (“Kelly Trucks”) was placed

in voluntary liquidation in January 2014 when the respondent/appellant (“Mr. Singh”) was appointed as liquidator on the nomination of

the principals of the company being a Mr. and Mrs. Kelly. However, the applicant/respondent (“Costello Transport”), in its capacity as

a judgment creditor of Kelly Trucks, applied to have Mr. Singh removed as liquidator. On the 17th February, 2014 Baker J. made an

order so removing Mr. Singh and appointing in his place a Mr. Gerard Murphy.

1.2 In the course of an application brought by Mr. Murphy as the new liquidator, Mrs. Anne Kelly objected to the standing of the new

liquidator and also drew attention to certain errors in the original order. Ultimately, Cregan J. made an order which had the effect of

correcting the errors concerned.

1.3 A notice of appeal in the name of Mr. Singh was filed in the Court of Appeal. Costello Transport brought an application seeking to

have the appeal dismissed on foot of the inherent jurisdiction of the Court. As noted at para. 9 of at note of the ex tempore judgment

of Kelly J., Mr. Singh, as appellant, had failed to attend on three different occasions but Mrs. Kelly purported to act on his behalf and

did appear before the Court of Appeal. Relying on the judgment of this Court in Re Applications in relation to costs in Intended

Proceedings: Coffey & ors [2013] IESC 11, the Court of Appeal held that a person cannot prosecute an appeal and act on behalf of

another party unless that person is a solicitor.

1.4 In that regard the Court of Appeal was clearly correct. A second issue was identified by the Court of Appeal as having arisen

being that Mrs. Kelly suggested that she was entitled to represent Mr. Singh on foot of what was described as an “assignment under

common law”, a copy of which was produced. That document purported to assign to Mrs. Kelly all of Mr. Singh’s interest in a series of

legal cases including these proceedings.

1.5 The Court of Appeal concluded that any purported assignment was void. At para.14 of the note of his judgment, Kelly J. relied in

that regard on the earlier decision of Hogan J. in Greenclean Waste Management Ltd v. Leahy [2013] IEHC 74 and the decisions of

the Court of Appeal for England and Wales referred to therein (including Simpson v Norfolk and Norwich University Hospital NHS Trust

[2012] Q.B. 640). In a short concurring judgment Irvine J. indicated that she did not consider that Mr. Singh had any interest to

assign to Mrs. Kelly but also agreed with the reasoning of Kelly J. that a bare assignment of a cause of action without the assignee

having a sufficient interest was void. I am again satisfied that the Court of Appeal was clearly correct in that regard.

1.6 Mr. Singh was involved in these proceedings in his capacity as a liquidator and, in particular, in respect of the application which

has led to this aspect of the proceedings, as the respondent to an application to remove him from that position. That is not the sort

of interest in proceedings which can be assigned. It is not necessary, for the purposes of this judgment, to enter into any exhaustive

analysis of the sort of interest in proceedings or potential proceedings which is capable of assignment. One thing is, however, clear. A

party who may have a potential legal liability or enforceable legal obligation to a third party cannot divest themselves of that potential

liability or obligation by assignment certainly without the agreement of the third party concerned. The only possible interest which Mr.

Singh had in these proceedings was to protect his position and reputation as a liquidator. Mr. Singh had, of course, no obligation to

participate. But his entitlement to participate was personal to him and not capable of assignment.

1.7 Be that as it may, the decision of the Court of Appeal was to dismiss Mr. Singh’s appeal on the basis of his failure to attend on

three occasions.

1.8 Thereafter, a document was filed in the office of the Supreme Court seeking leave to appeal from the decision of the Court of

Appeal. It will be necessary to return to that document in due course. However, this Court, for the reasons set out in a determination

of the 8th March, 2016 (Costello Transport Ltd v. Singh [2016] IESCDET 36), declined to grant leave to appeal. Thereafter the

solicitor for Costello Transport, (relying on para.15(1) of the Statutory Practice Direction issued by the Chief Justice under s.7(7) of

the Courts (Supplemental Provisions) Act, 1961 which was inserted by s.44(a)(iv) of the Court of Appeal Act, 2014), addressed a

letter to the Registrar of the Supreme Court seeking the costs of the failed application for leave. The panel dealing with that

application decided that it would be appropriate to give Mr. Singh an opportunity to make whatever submissions he might consider

appropriate as to why costs should not be awarded against him and directed that Mr. Singh be written to in that regard. It is the

sequence of events which followed on from that letter that led to the oral hearing which is the subject of this judgment.

2. The Sequence of Events

2.1 On the 12th April, 2016 Mr. Singh replied and contended that he did not bring or prosecute or attempt to prosecute any

proceedings before this Court. That assertion led to a most unusual situation. The application for leave to appeal document filed in

the Supreme Court office describes the applicant/appellant as “Nehall Singh”. The document has a signature which purports to be

that of Mr. Singh. There is nothing in that document which suggests that it was filed by any person on behalf of Mr. Singh. On the

contrary, the document purports to be Mr. Singh’s document and his alone. Against that backdrop Mr. Singh’s assertion that he did

not bring, prosecute or attempt to prosecute any proceedings before this Court was extremely disquieting. A document purporting to

be signed by him and naming him as the party seeking to bring an appeal was filed in the Supreme Court office. Either that document

was genuine, in the sense that it truly was a document prepared and filed either by Mr. Singh or with his authority, or it was not. If it

was filed either by him or with his authority then his assertion that he had nothing to do with bringing or prosecuting any proceedings

before this Court would be entirely misleading to the point of being disingenuous. On the other hand, if it transpired that some person

had, without his authority, purported to file an appeal in his name and appearing, falsely, to bear his signature, then that too would

be an even more serious issue for it would arguably amount to a potential offence.

2.2 It was in that context that the Court directed the Registrar to write to Mr. Singh by letter of the 28th July, 2016. The letter in

question drew attention to the position adopted by Mr. Singh in his letter of the 12th April, 2016 to which reference has already been

made. The letter also noted the contents of the relevant parts of the application for leave to appeal. The letter went on to record

that the contact details given in the application in question included an email address which was the same email address which was

identified on the letterhead of the letter of the 12th April, 2016 from Mr. Singh. The letter also recorded previous correspondence

from the office of the Supreme Court sent to Mr. Singh at that address on various dates between the 17th November, 2015 and the

26th February, 2016. It is also noted that the letter of the 12th April, 2016, to which reference has already been made, was expressly

in reply to a final reminder of the 6th April, 2016 again sent to that address.

2.3 Furthermore, a number of emails between the 19th November, 2015 and the 14th April, 2016 were received by the office of the

Supreme Court from the email address referred to. One of those emails refers to discussions between an officer of the Supreme Court

and Mrs. Kelly purportedly acting on behalf of Mr. Singh.

2.4 Against that background the Court required Mr. Singh to confirm whether it was his assertion that none of the contact detailed in

the letter took place with his knowledge, whether direct or indirect, or authority. Mr. Singh was also required to confirm when he first

became aware, either directly or indirectly, that an application for leave to appeal had been brought in his name.

2.5 Finally, it was said that, in the event that Mr. Singh asserted that none of the relevant events were carried with his knowledge,

direct or indirect, or authority whether express or implied, then an affidavit should be sworn verifying that fact and setting out any

information which Mr. Singh might have concerning how the documents and interactions in question came about. Finally, attention

was drawn to the fact that the Court would regard the unauthorised filing of documentation in the court office to be a matter

warranting a criminal investigation.

2.6 Rather than providing any satisfactory answer to the Court’s questions, Mr. Singh sent a highly unsatisfactory and, indeed,

obfuscatory letter which bears the date 19th September, 2015 but which, given that it is a reply to a letter of 28th July, 2016,

clearly should be dated 19th September, 2016. Instead of answering the first question Mr. Singh asked his own question in the

following terms:-

“Are you suggesting that you and your Court believe that I am/was unaware of said communications? And Why are you

of such belief?”

2.7 That response is entirely disingenuous. The reason why the Court raised the question was precisely because Mr. Singh had himself

denied any involvement in the proceedings. If Mr. Singh had not made that blanket denial of any involvement then the Court would

indeed have had no need to raise any queries. However, in circumstances where a document was filed purporting to come from Mr.

Singh and where Mr. Singh was denying any involvement in the prosecution of an appeal before this Court, it is perfectly obvious why

the Court would be concerned to ascertain with some precision the position which Mr. Singh was maintaining. The reason why the

Court was concerned as to whether Mr. Singh was unaware of the prosecution of an appeal in his name was because he himself had

sent an unequivocal letter to the Court denying any involvement in the prosecution of an appeal. It was that denial on the part of Mr.

Singh which raised question marks in respect of which the Court required answers.

2.8 In addition, Mr. Singh, again disingenuously, asked, in his letter of the 19th September, 2015, why the Court would seek the

relevant information “when our previous correspondences are so well detailed by your good self in the same letter”. However, the

whole point of the letter written by the court’s registrar was to afford Mr. Singh an opportunity to explain how he could reconcile his

assertion that he had nothing to do with any appeal to this Court with the various items identified in the letter and referred to earlier

in this judgment.

2.9 The Court is aware from the judgment of the Court of Appeal that Mrs. Kelly purported to hold some form of authority from Mr.

Singh. The Court is also aware from correspondence presented to it at an oral hearing, to which this judgment will shortly turn, that

Mr. Singh has, in the past, suggested that Mrs. Kelly holds a power of attorney from him.

2.10 Whatever may be the legal relationship between Mr. Singh and Mrs. Kelly the fact remains that the issue of costs before a court

is an issue which is primarily the business of the parties to the proceedings. The notice of application for leave to appeal to this Court

describes Mr. Singh as the applicant/appellant and, therefore, as a party. If that notice was filed with his knowledge and authority

then he must accept the consequences thereof. Whether he might have some form of indemnity from or other arrangement with Mrs.

Kelly is a matter between them. However, unless the application for leave to appeal was filed without his authority then he, and not

anyone else, is the party to the proceedings against whom a potential order for costs can be made in accordance with para.15 of the

Statutory Practice Direction.

2.11 In the light of that wholly unsatisfactory response from Mr. Singh, the Court directed that there would be an oral hearing on the

question of the costs of the leave application and the parties were notified of that fact by letters dated the 5th October, 2016. The

letter to Mr. Singh was sent both to the address which had been given previously in the proceedings as his address (and which is also

the address on the letterhead to which reference has also been made) and also to the email address which had been used in the past

to correspond with Mr. Singh and from which he had replied.

2.12 When the matter came before the Court on the 13th December, 2016, counsel appeared on behalf of Costello Transport but

there was no appearance by or on behalf of Mr. Singh. In the light of the sequence of events detailed above the Court determined

that the matter should go ahead. The Court was of the view that Mr. Singh had been given more than adequate opportunity to put

forward any case which he might wish as to why he could not properly be said to be a party to the proceedings (and thus amenable

to an order for costs) or as to why an order for costs should not be made in any event.

2.13 Having heard counsel for Costello Transport, the Court indicated that it would make an order in favour of Costello Transport and

against Mr. Singh in respect of the failed application for leave and would further direct that the costs concerned would include the

costs of the oral hearing necessitated by the obfuscatory nature of Mr. Singh’s correspondence. The Court indicated that it would

give its reasons for coming to that view in a written judgment to be delivered in due course. The purpose of this judgment is to set

out those reasons.

3. The Reasons

3.1 Ultimately the reasoning of the Court can be simply stated. A document naming Mr. Singh as the applicant/appellant for leave to

appeal was filed in the Supreme Court office. Mr. Singh was a party to these proceedings generally and thus was a person who would

have been entitled to seek leave to appeal.

3.2 However, Mr. Singh flatly denied, in the April correspondence to which reference has been made, that he had had any role in

these proceedings so far as their prosecution in this Court is concerned. Against that backdrop the Court wished to afford Mr. Singh

an opportunity to explain how it transpired that a document, purporting to be signed by him and naming him as a party, was filed in

this Court if he did not, as he asserted, have any part in the proceedings at the level of this Court. As noted earlier the position in

law is clear. If the document was filed with Mr. Singh’s authority then, at least as and between him and Costello Transport and indeed

the Court, he had authorised an application for leave to appeal and must thus take the consequences of being a party. Whatever

arrangements he may or may not have had with Mrs. Kelly or any other person, his potential liability to Costello Transport for costs

would arise in his capacity as a party to the proceedings. That is a burden which he cannot transfer to any third party in any way

which would deprive Costello Transport of their entitlement to seek costs against him. It is, of course, possible to enter into legally

binding arrangements whereby a third party may agree to indemnify a party to proceedings against any adverse consequences. But

such arrangements are between the party and the person or body who agrees to give the indemnity. Such arrangements cannot

exclude the relevant party from the primary liability for any adverse consequences of the litigation. The nature of any arrangements

between Mr. Singh and Mrs. Kelly are not, therefore, of any relevance to the question of whether Mr. Singh is properly a party to the

proceedings and, therefore, a person liable to have an order for costs made against him.

3.3 It would, of course, be entirely different if the application for leave to appeal had been filed without any authority from Mr. Singh.

In such a circumstance he could not properly be regarded as a party, an order for costs could not be made against him, and he would

have correctly asserted that he had never prosecuted any proceedings before this Court.

3.4 However, in the light of the matters set out in the letter from the Registrar to Mr. Singh of the 28th July last, there were certainly

materials from it might be inferred that Mr. Singh did bring or, either expressly or by implication, authorise the bringing of an

application for leave to appeal in his name. Mr. Singh was given an opportunity both by that letter and by the convening of an oral

hearing to put forward any evidence, materials or argument which might suggest that it would not be appropriate to regard him as a

party. Rather than taking that opportunity Mr. Singh chose to write a disingenuous letter and failed to appear. In the absence of any

explanation by Mr. Singh as to how the various items identified in the letter from the Court’s registrar could be explained in a manner

consistent with his not having authorised the application for leave to appeal, the Court concluded that the evidence was

overwhelmingly to the effect that Mr. Singh at a minimum either expressly or by implication must be taken to have authorised the

application in question. In those circumstances there was no basis for not treating Mr. Singh as a party. It followed that he, as the

named party, and in the absence of putting forward any basis to substantiate his allegation that he had no part in the proceedings,

was liable in respect of any costs properly awarded.

3.5 So far as the merits of the costs issue itself were concerned, it should be noted that para.15(d) of the Statutory Practice

Direction makes clear that the costs of objecting to an unsuccessful application for leave to appeal “will normally be awarded to the

respondent” subject to the discretion of the court. The default position is, therefore, that costs should be awarded unless there is

some good reason to take another course. No good reason having been put forward, the Court was of the view that the normal order

must follow and thus ordered that the reasonable costs of opposing the application for leave to appeal should be awarded in favour of

Costello Transport and against Mr. Singh. Furthermore, given that it was necessary to conduct an oral hearing on this matter only

because of the obfuscatory position adopted by Mr. Singh, the Court had no hesitation in directing that the costs of opposing the

application for leave to appeal should include the costs of the oral hearing.

4. A Final Matter

4.1 However, the Court remains unclear, because Mr. Singh has chosen not to enlighten the Court, as to how a document purporting

to be his came to be filed in the Supreme Court office in circumstances where he felt able to assert, in his April letter, that he had

taken no part in the proceedings. If it were to transpire that a document, such as an application for leave to appeal, was filed in the

name of a party without the authority of that party, then that would, in the Court’s view, be a very serious matter indeed. In those

circumstances it is the intention of the Court to refer all of the documents and materials at its disposal to the Commissioner of An

Garda Síochána for the purposes of inquiries being carried out to ascertain whether there is evidence that any criminal activity may

have taken place.