327 / 346
GAZETTE
JULY/AUGUST
1
third heading listed in Rule 129?
Rule 129 of Order 77 appears
under the heading:
"XXII
Costs and expenses payable out of
the assets of the Company"
The Rule is in the following terms:
"129. (1) the assets of a company in
the winding-up by the Court
remaining after payment of the fees
and expenses properly incurred in
preserving, realising or getting in the
assets, including where the company
has previously commenced to be
wound up voluntarily, such
remuneration, costs and expenses as
the Court may 'allow to a liquidator
appointed in such voluntary
winding-up, shall, subject to any
order of the Court, be liable to the
following payments which shall be
made in the following order of
priority, namely:
First,the costs of the Petition,
including the costs of any person
appearing on the Petition whose costs
are allowed by the Court;
Next, the costs and expenses of any
person who makes or concurs in
making the company's Statement of
Affairs;
Next, the necessary disbursements
of the Official Liquidator, other than
expenses properly incurred in
preserving, realising, or getting in the
assets hereinbefore provided for;
Next, the costs payable to the
solicitor for the Official Liquidator;
Next, the out-of-pocket expenses
necessarily incurred by the com-
mittee of inspection, if any.
(2) No payments in respect of bills
of costs, charges or expense of
solicitors, accountants, auctioneers,
brokers or other persons, other than
payments for costs, charges or
expenses fixed or allowed by the
Court, shall be allowed out of the
assets of the company, unless they
have been duly fixed and allowed by
the Examiner or the Taxing Master,
as the case may be."
The first question asked whether the tax
could be regarded as covered by
"expenses properly incurred in pre-
serving, realising or getting in the assets",
which are contained in the opening para-
graph of the Rule. Carroll J., had
answered this question in the negative.
O'Higgins, C.J. noted that no appeal had
been taken against this decision and
added,
obiter,
that he did not think that
any such appeal could succeed. By reason
of this answer the second question did not
arise.
The third question asked whether the
tax was a necessary disbursement of the
Official Liquidator within the meaning of
the third paragraph. Carroll J. had
answered this question in the negative.
She did so because she was of the opinion
that corporation tax was entitled 10
priority payment only in accordance with
its given priority as an "assessed tax"
under Section 285(2)(ii) of the Companies
Act 1963 (being a priority it was given
under the Capital Gains Tax Act). This
priority was given, however, only in
relation to assessed taxes which were
"assessed on the company up to the 5th
April next before "the winding-up". As
this tax was not so assessed but arose after
the winding-up, it did not qualify for
priority payment under Section 285
(2)(ii). Accordingly, in the view of Carroll,
J., to give it priority under Rule 129 would
be to make the Rule dominate the Section.
While feeling that Carroll J. might well
have been correct in this view, O'Higgins,
C.J. did not think it necessary to base his
judgment on that reasoning.
Jn the view of O'Higgins, C.J., Rule
129, as its heading indicated, was intended
to deal with costs and expenses, and not
with the liabilities of the Company. Each
of the paragraphs dealt with either costs or
expenses incurred by persons involved in
the liquidation. The third paragraph must
have the same meaning since the
"necessary disbursements" there referred
to were expressed to be "other than
expenses properly incurred in preserving,
realising or getting in the assets herein-
before provided for". Such must, there-
fore, be expenses of some other kind such
as necessary maintenance on buildings or
jwages for caretaking or for other purposes.
In the view of O'Higgins, C.J., such could
not include a liability of the Company for
corporation tax and he agreed, therefore,
that the third question should be
answered in the negative as it was so
answered by Carroll J., but for the reasons
indicated by him.
Appeal dismissed.
The Revenue Commissioners v. John
Donnelly.
Supreme Court (per O'Higgins,
C.J., Henchy, Hederman JJ.) 24th
February 1983. Judgment of O'Higgins,
C. J. (nem. diss.) — unreported.
William Earley
Edited by Gary Byme
Copies ofjudgments in the above cases are
available to members on request from the
Society's Library.
xxiv