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Attorney General Retires On Grounds Of Ill Health


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2 hours ago, piebaps said:

Establishing that JC didn't turn up on time isn't really a victory though. He didn't turn up on time and that is well documented. What will be more difficult is proving that there were losses. If the whole shebang was "hopelessly insolvent" then nothing has been lost. Long way to go yet methinks.

 

"hopelessly insolvent" - but it was a matter of record (according to the Deemster) that there were assets available that could have satisfied the debt, at least in part.  

Seems to me that it was not for JC to assume the company was "hopelessly insolvent". Surely that was for the court to decide. Which it may well have done had he turned up on time.

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171.He had a very good working relationship with Mr Goodwin and indeed had acted for him in his personal capacity. Perhaps Mr Carter ought to have perceived a conflict of interest because it seems to me that Mr Carter's conduct of the case is characterised by his willingness to bend over backwards to be fair to the Government's arguments rather than to be a fearless advocate for his own client.

172.I consider that he was too forgiving of Mr Harding whose inexplicable conduct (as it seems to me) on 24th February 2010 began the regrettable chain of events. Mr Carter's client's interests ought to have come first.

173.To some extent he sat in judgment on the conduct of the Irvings and took the view that in the end "the right thing has happened". It is obvious that this is not the role of an advocate in civil litigation of this type. Provided he did not mislead the court or otherwise behave unethically, it was his job to put his clients' case as forcefully as possible to the court. It was the court's job to determine whether SHL should be wound up and not that of Mr Goodwin, Mr Harding or Mr Carter. There was in my view most definitely an argument to be put on SHL's behalf. The matter was by no means as clear cut as Mr Carter appears to think that it was

246.As for the allegation that the Claimants were contributorily negligent in failing to produce evidence of the solvency of SHL in order to enable an appeal or a set aside application to proceed, it seems to me that the issue of the alleged solvency of SHL is not relevant to the Claimants' causes of action. Their case it seems to me is founded on their loss of a chance of surviving the winding-up proceedings by reason of Mr Carter's breach of duty. Their case is that they were in the process of and may well have obtained alternative financing which would have enabled them to defend the petition, based as it was on an undisputed income tax debt of £182,929.98. Their near certainty of obtaining an adjournment of the hearing and their chance of obtaining a dismissal of the petition were lost by reason of Mr Carter's negligence. "Solvency" is not a word which appears in the winding-up petition or in sections 162 or 163 of the Companies Act 1931. The only live issue on the petition was whether SHL was unable to pay the income tax debt and arguably also the debts of the other Government creditors who appeared at the hearing. Despite the petition having been advertised on 26th and 28th January 2010 no other creditors appeared at that hearing. The damage occurred on the making of the winding-up order and the failure immediately to ensure that Deemster Doyle was appraised of the true position so that he could make an order based on correct information.

247.On the totality of the evidence now before me, I can well see an argument (albeit with the benefit of hindsight) that ultimately SHL will have been wound up at some unknown date after the 24th February 2010. I take into account Mr Irving's admission during the course of R v Harding that SHL was unable to pay its debts at the material time. However, it is impossible to know how matters might have turned out. It is clear from Mr Carter's pleaded case and his own evidence that on 24th February 2010 no one knew the accurate financial position of SHL. There was a distinct possibility that SHL would have survived and there was most certainly an arguable case to be put to Deemster Doyle based on the way in which the Petition was pleaded. The Government's case was that SHL was "unable to pay its debts". The burden of proving this was on the Petitioner. Despite Mr Irving's admission made in other proceedings, the issue is often not a straightforward one. Inability to pay debts is defined or "deemed" by section 163 of the Companies Act 1931 and it is clear from the Petition that reliance was placed solely on the service of a demand for payment of the tax debt and a failure to pay it within three weeks (section 163(1)(1)). Reliance was not placed on section 163(1)(3) which refers to the court being satisfied that the company is unable to pay its debts and in determining that issue, the court "shall take into account the contingent and prospective liabilities of the company". Clearly that subsection requires a wider examination of the company's financial position.

248.The main point surely is that the Claimants were deprived of the chance of SHL surviving and this is something which can properly form the basis of a claim for damages.

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