The Gazette 1980

GAZETTE

JULY-AUGUST

RECENT IRISH CASES

Summaries of judgments prepared by

John F. Buckley, E. Rory O'Connor,

Barry O'Neill, Peter Quinlan and

edited by Michael V. O'Mahony.

COMPANY LAW -

LIQUIDATION

Purchase of social welfare insurance

stamps in bulk does not constitute

the payment of the "weekly employ-

ment contribution" under Social

Welfare Acts 1952/61, and cost of

these stamps not qualified for

preferential treatment under Section

285 of Companies Act 1963.

During the period between 6 May

and 11 November 1970 Palgrave

Murphy Limited ("the Company")

purchased social insurance stamps at

a number of post offices and paid for

them by cheques totalling £3,947.68.

19 November

1970 the

Company was placed in liquidation

and none of the relevant cheques

were paid.

It was claimed by the Minister for

Social Welfare and the Minister for

Posts and Telegraphs that the

amount unpaid qualified for preferen-

tial treatment under Section 285 of

the Companies Act 1963.

It was submitted on behalf of the

Ministers that the employer makes

contributions to the Department of

Social Welfare through the Depart-

ments of Posts and Telegraphs and as

evidence of such contributions he

receives stamps which can be stuck

upon the employee's insurance cards.

After full consideration of relevant

sections of the Social Welfare Act

1952 and of Statutory Instrument

No. 382 of 1952, entitled Social

Welfare (Powers in relation to

Insurance Stamps) Order 1952, and

S.I. No. 381 of 1952, entitled Social

Welfare (Collection of Contribu-

tions) Regulations 1952, the Court

referred specifically to Article 11(1)

of the latter S.I., which provided as

follows:

"Every

weekly

employment

contribution payable under the

Act shall, except as otherwise

provided in these Regulations, be

paid by the affixing of an

insurance stamp of the appro-

priate value to the insurance card

of the employed contributor in the

space indicated for that purpose

upon the card."

Held

(per Hamilton J.) that the

amount claimed was not due by the

Company as a contribution under the

Social Welfare Acts but was merely

due in respect of the purchase of

insurance stamps which could be

used for the payment of contribu-

tions under the said Acts, and that,

therefore the Minister for Posts and

Telegraphs was not entided to the

priority afforded by Section 285 (2)

of the Compahies Act 1963 and

must rank in the liquidation as an

ordinary unsecured creditor.

In the matter of Palgrave Murphy

Limited and In the matter of the

Companies Act 1963 — High Court

(per Hamilton J.) — 20 February

1979 - unreported.

PRACTICE

- SOLICITORS

COSTS

Costs — liquidated demand —

Solicitor for Plaintiffs (a bank) a

salaried solicitor — Master's Order to

enter

final

judgment

limiting

plaintiffs' costs to outlay and

counsel's fees — application to High

Court to discharge Master's Order

limiting costs and substituting an

Order allowing full costs — Attorneys

and Solicitors Act, 1870, sections 4

and 5.

This was an application to a judge of

the High Court seeking an order

pursuant to O. 63, r. 9 of the Rules

of the Superior Counts (R.S.C.) - (1)

discharging an order made by the

Master of the High Court giving

liberty to enter final judgment for a

liquidated demand, in so far as the

form of such order limited the costs

awarded to the plaintiffs to outlay

and counsel's fees; and, (2) substitut-

ing for the said Master's Order an

order awarding the full costs,

including profit costs,

of the proceed-

ings to the Plaintiffs.

The order made by the Master on

25 May, 1979, gave the Plaintiffs

liberty to enter final judgment for

£3,864.74 on foot of a Summary

Summons and also for costs on that

amount, such costs to be taxed and

"to be limited to outlay and counsel's

fee".

O. 99, r. 43 of the R.S.C. provides

that:

"In cases of judgments for a

liquidated demand under O. 37,

when no step has been taken by

the defendant after appearance,

there shall, unless the Court shall

otherwise order, be added to the

principal sum for which judgment

is marked for costs, the same sums

as are hereinbefore respectively

allowed in case of judgment by

default of appearance, together

with such further costs of the

motion for judgment as the Court

may allow."

O. 99, r. 39 of the R.S.C. provides

that:

"In all cases of judgment by

default of appearance for a

liquidated demand, where the

plaintiff is entitled to costs, there

shall be added to the principal sum

for which the judgment is marked

the respective sum for costs set out

in Appendix W, Part (111)."

The affidavit grounding the Plaintiffs'

motion for the order sought in their

notice of motion averred that the

Master had limited the order for costs

on the amount of the judgment to

outlays and counsel's fee on the

grounds that the law agent of the

Plaintiffs and other members of the

Plaintiffs' law department were

salaried employees of the Plaintiffs

and that the law agent and the law

department did not constitute an

independent firm of solicitors.

Having expressed dissatisfaction

that the Court was being asked to

decide a question of principle arising

on an application without having had

the assistance of argument on behalf

of the Defendant and being also

obliged to assume the reasons under-

lying the limitation on costs imposed

by the Master's Order, the Court

reviewed a number of cases opened

to it by Plaintiffs' counsel and the

relevant statutes.

Section 4 of the Attorneys and

Solicitors Act, 1870(33 and 34 Vic.

C. 28) provides that a solicitor may

make an agreement in writing with

his client in regard to the amount ana

manner of payment of fees, charges

or disbursements in respect of

professional business done or to be

done by such solicitor which may

provide for payment either by a gross

sum or by commission or percentage

or by salary

and either at the same or

a greater or lesser rate as or than the

rate at which he would otherwise be