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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Truck and Machinery Sales Ltd. v. Marubeni Komatsu Ltd. [1996] IEHC 58 (23rd February, 1996) URL: http://www.bailii.org/ie/cases/IEHC/1996/58.html Cite as: [1996] IEHC 58 |
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1. The
facts, insofar as they are not in dispute, in this case are as follows. The
plaintiff (hereafter “TMS”) is an Irish company engaged in the
business of buying and selling,
inter
alia,
trucks
and contractors’ plant and machinery both in Ireland and abroad. Early in
1992, at a time when the European market for the equipment sold by TMS was
poor, it identified a market for its goods in the United Arab Emirates
(hereafter “the UAE”). The defendant (hereafter “MKL”)
is an English subsidiary of a Japanese company which exports machinery of this
nature manufactured by the Komatsu company in Japan. MKL entered into a written
agreement on the 21st March, 1992, for the sale by MKL to TMS of a consignment
of second hand machinery for a sum of approximately STG £2.9 million. The
agreement was in form a credit sale agreement under which the sums due under
the contract were payable on or before the 31st October, 1992, and it included
a reservation of title clause under which the property in the machinery
remained vested in MKL until payment.
2. The
machinery was in due course shipped from England to Dubai, where TMS had leased
premises from the government in what was called the Jebel Ali Free Zone.
However, the company in the UAE which distributed Komatsu equipment, Galadari
Trucks and Heavy Equipment (PVT) Ltd. (hereafter “Galadari”)
objected to the sale of the equipment on the ground that they were the sole
distributors of Komatsu equipment in the UAE. Although the attitude of the
Komatsu company in Japan was that Galadari’s exclusive distributorship
arrangement did not extend to second hand machinery, such as that proposed to
be sold by TMS, the objections of Galadari prevailed with the local
administration and, as a result, TMS were unable to move the equipment from the
Jebel Ali Free Zone.
3. Despite
efforts by all the other parties concerned to resolve the situation, both
Galadari and the local administration maintained their objection to the removal
of the machinery. Since then, there have been extensive correspondence,
discussion and negotiations (some of them on a “without prejudice”
basis) concerning the outstanding indebtedness of TMS to MKL under the credit
sale agreement and the re-sale of the machinery. As a result, some of the
machinery was shipped back from the UAE and sold at auction in Rotterdam. TMS
also indicated to MKL their intention of instituting legal proceedings in the
UAE against Galadari and the local administration. Sums amounting to STG
£734,837.26 have been paid by TMS to MKL in reduction of their
indebtedness under the credit sale agreement and, in addition, certain trucks
(not part of the consignment sold pursuant to the credit sale agreement) were
returned by TMS to MKL in respect of which MKL gave credit to TMS in the sum of
STG £275,000.
6. A
notice of motion was then served on behalf of TMS claiming an injunction
restraining MKL from presenting a petition and/or an injunction restraining its
advertisement. That motion was grounded on an affidavit of Mr. James Mansfield,
the managing director of TMS, which was responded to by an affidavit by Mr.
Mark Carrington, the sales director of MKL. Two further affidavits having been
sworn by Mr. Mansfield, the motion came on for hearing before me on the 26th
January last.
7. The
affidavits sworn by Mr. Mansfield and Mr. Carrington were lengthy and in
addition there were exhibited with them voluminous correspondence, faxes and
other material. For the purposes of the present application, I need do no more
than refer to certain features of the course of conduct between TMS and MKL on
which counsel placed particular emphasis in the course of their submissions.
8. On
the 22nd December, 1993, Mr. Carrington sent the following fax to a Mr. Tony
Campbell, of Anglo-Irish Bank Corporation, with whom TMS were having
discussions as to the financial difficulties they were experiencing because of
the abortive UAE transaction:-
9. TMS
claimed that the presentation of a winding-up petition by MKL would be a breach
of the agreement which, they said, was reflected in this message.
10. In
addition, while it was accepted on behalf of TMS that Galadari were not the
agents of MKL, and that the latter were not in a position to compel Galadari or
the local administration in Dubai to consent to the sale of the machinery in
the UAE, they (TMS) claimed that they had nevertheless entered into the credit
sale agreement on the faith of representations by or on behalf of MKL that
there would be no difficulty in selling the machinery in the UAE. They say that
these assurances were misleading and that, in the event, MKL refused to
co-operate in the proceedings which TMS wished to institute in the UAE. They
referred in this connection to an extract from a legal opinion furnished to MKL
which stated
inter
alia:-
11. TMS
claim that this demonstrates that the representations allegedly made prior to
the agreement of March, 1992, to the effect that MKL would give all possible
assistance to the sale of the machinery in Dubai were false.
12. On
behalf of MKL, it was said that the message of the 23rd December, 1993, to the
Anglo-Irish Bank Corporation was not intended to be a waiver of the debt due to
MKL and that this was well known to, and accepted by, Mr. Mansfield. Mr.
Carrington said that Mr. Mansfield had written to him informing him (Mr.
Carrington) that he had decided to place a “very large portion” of
the MKL equipment (which had, by then, been released by the UAE authorities)
into auction in Rotterdam on the 3rd June, 1993. In the course of that letter,
Mr. Mansfield said that:-
13. Mr.
Carrington said that, in response to a query from him, Mr. Mansfield said in a
letter of the 20th May, 1993, that the proceeds of sale from this auction would
be transmitted to TMS within 21 days of the auction at the latest. Mr.
Carrington says that the period of 21 days passed without the payment of any
money to MKL. He said that, finally, after a number of letters written by him,
Mr. Mansfield wrote to him (Mr. Carrington) on the 29th July, 1993, stating
that all the proceeds of sale had been used up. He said that Mr. Mansfield then
offered the prospect of an imminent payment of IR£1
.5
million
to be paid to MKL from the proceeds of a loan which was to be provided by
Anglo-Irish Bank Corporation. In the course of that letter, Mr. Mansfield said:-
14. Mr.
Carrington said that, following upon the failure of TMS to remit any of the
proceeds of the auction to MKL, proposals were put forward on behalf of TMS for
a part payment of £1.5 million which was to be financed by a loan from
Anglo-Irish Bank Corporation and which was to be accompanied by the provision
of security for the balance. He said that this sum never materialised, but in
December of that year he was told by Mr. Campbell of Anglo-Irish Bank
Corporation that sums would be transferred to MKL, but only from £750,000
to £1 million. He said that the bank required some degree of reassurance
from MKL as to their attitude in the event of such a payment being made and
that, in that context, he sent the fax of the 23rd December, 1993. He said that
the sole purpose of the letter was to assist TMS to obtain the release of
moneys from the bank and that it was not intended to constitute a waiver of any
kind.
15. Mr.
Carrington went on to say that the course of dealings between MKL and TMS
subsequent to the fax of the 23rd December, 1993, made it abundantly clear that
the arrangements mentioned in that fax were not intended in any sense to
constitute a waiver of the balance of the debt owing to MKL. He said that, in
particular, TMS confirmed on the 25th March, 1994, that the balance of the
equipment held by TMS was to be auctioned in Amsterdam and that the auctioneers
had been instructed to transfer the proceeds, less expenses, into an account of
MKL, details of which Mr. Carrington had previously supplied at the request of
Mr. Mansfield. He said that in purported pursuance of this arrangement which,
he said, was wholly inconsistent with the claim that the balance of the debt
was being waived, a cheque for £500,000 was sent by TMS to MKL which
cheque, however, was returned marked “payment stopped”. Mr.
Carrington said that there were further “without prejudice”
discussions and correspondence in an attempt to secure the payment of the sums
still due to MKL all of which were inconsistent with the claim by TMS that the
balance had been waived.
16. Mr.
Carrington also said in his replying affidavit that TMS were clearly insolvent.
In that connection, he referred to a letter of the 31st August, 1994, from Mr.
Mansfield to him in which the latter said:-
17. A
statement of affairs of TMS was produced as of the 31st October, 1994, which
included among the current liabilities a debt due to MKL of
“£2,600,000”. That statement of affairs showed an excess of
current liabilities over current assets of £4,402,918. It also appears
that the last accounts furnished to the Companies’ Office with the annual
return of TMS were for the year ended the 31st March, 1992, and, at that stage,
showed current liabilities exceeding current assets by £715,045. In their
report annexed to the accounts in accordance with s. 18, sub-s. 3 of the
Companies (Amendment) Act, 1986, the auditors said that they were unable to
form an opinion as to whether the financial statements gave a true and fair
view of the state of the company’s affairs as of the 31st March, 1992,
and whether a financial situation existed which would require the convening of
an extraordinary general meeting of the company in accordance with s. 40,
sub-s. 1 of the Companies (Amendment) Act, 1983. In a short replying affidavit,
Mr. Mansfield said that the company had paid and was continuing to pay its
creditors as they fell due and continued to enjoy the full support of its
financial institutions, meeting its loan repayments on time and without delay.
He said that he understood from the auditors that the 1993 and 1994 accounts
would be ready for filing shortly in the Companies’ Office.
18. Mr.
Shipsey, on behalf of TMS submitted that the affidavits demonstrated that the
debt, the payment of which was demanded in the letter from the solicitors for
MKL dated the 26th July, 1995, had at all times been disputed by TMS in good
faith and on substantial grounds and, accordingly, the presentation of the
petition should be restrained by the court on the grounds that it would
constitute an abuse of the process of the court. He relied in support of this
submission on the decisions in
In
re Pageboy Couriers Ltd.
[1983]
I.L.R.M. 510 and of the English Court of Appeal in
Stonegate
Securities v. Gregory
[1980]
Ch. 576. He said that, put at its lowest from the plaintiff’s point of
view, a serious question had at least been raised as to whether the sum claimed
in that letter was at present due and owing by TMS and that, since any conflict
that might arise could not be resolved on the affidavits but would have to
await a plenary hearing, the plaintiff was entitled, on the balance of
convenience and to preserve the
status
quo,
to
have the presentation of the petition restrained until the hearing of the
action. He relied in support of this submission on the decision of the Supreme
Court in
Campus
Oil Ltd. v. The Minister for Industry and Energy (No. 2)
[1983]
I.R. 88 and of the House of Lords in
American
Cynamid Co. v. Ethicon Ltd. [1975]
A.C.
396.
19. Mr.
Shipsey, while accepting that MKL might be regarded as a contingent or
prospective creditor within the meaning of s. 215 of the Companies Act, 1963,
and as such would have, absent any other considerations,
locus
standi
to
present a petition provided the requirements of sub-paragraph (c) were met,
submitted that, in the present case, they were at least arguably estopped from
presenting such a petition by virtue of the agreement reflected in the message
of the 23
rd
December, 1993. Since there was also a fair question to be tried between the
parties in this context, TMS was entitled to an interlocutory injunction
restraining the presentation of any petition until the hearing of the action.
20. Mr.
Finlay, on behalf of MKL, submitted that where, as here, the interlocutory
relief sought was an order restraining the presentation of the petition for
winding-up the criteria laid down in
Campus
Oil Ltd v. The Minister for Industry and Energy
[1983]
I.R. 88 were not relevant. He said that, in order to obtain such relief, TMS
would have to establish that the presentation of the petition was in fact an
abuse of process and that it was bound to fail or, at the least, that there was
an alternative remedy available, citing in support of these propositions the
decisions of the English Court of Appeal in
Bryanston
Finance Ltd v. De Vries (No. 2)
[1976]
Ch. 63 and
Coulson
Sanderson & Ward Ltd v. Ward
(1986)
2 BCC 99,207. He submitted that in the present case there was no evidence
whatever that MKL was seeking to wind-up TMS for any collateral or improper
motive and said that, on the contrary, they wished to wind-up TMS in order to
secure the proper administration of the company’s assets for the benefit
of all the relevant class of creditors. Mr. Finlay further submitted that where
only part of the debt was disputed, a petitioning creditor could not be
restrained from presenting a petition, citing the decision in
In
re Tweeds Garage Ltd
[1962]
Ch. 406 affirmed by the Court of Appeal in
Taylor’s
Industrial v. M & H Plant Hire
[1990]
B.C.L.C. 216. He further submitted that where, as here, the would-be petitioner
was, at the very least, a contingent or prospective creditor, the court should
not decide the question as to whether the requirements of sub-paragraph (c) had
been satisfied, but should leave that to the court which heard the petition. He
relied in support of the latter submission on
Holt
Southey Ltd v. Catnic Components Ltd
[1978]
1 W.L.R. 630.
21. While
Mr. Finlay accepted that the court could restrain the presentation of the
petition even where the company appears to be insolvent, he submitted that the
question of whether it was insolvent was an important circumstance to which the
court had to have regard in the exercise of its discretionary jurisdiction. He
said that where, as here, there was overwhelming evidence as to the insolvency
of TMS, the court should accord priority to the interests of the creditors over
the shareholders in the company, citing in support the observations of Street
C.J. in
Kinsela
v. Russell Kinsela Ply. Ltd (in liquidation)
[1986]
4 N.S.W.L.R. 722 at 730, expressly approved by both the High Court and Supreme
Court in
In
re Frederick Inns Ltd
[1991]
I.L.R.M. 582 and [1994] 1 I.L.R.M. 387.
22. Finally,
Mr. Finlay submitted that there was in fact no evidence of any agreement in
December, 1993, to waive the entire debt and it was also clear that TMS never
relied on any such agreement. In any event, he submitted, the agreement itself
was unenforceable for want of consideration, since it was settled law that
payment of a lesser sum than the amount of the debt due cannot be
consideration, unless there is some benefit added so that there is accord and
satisfaction, citing the leading case of
Foakes
v. Beer
(1884) 9 App Cas 605.
23. It
is clear that where the company in good faith and on substantial grounds,
disputes
any
liability
in respect of the alleged debt, the petition will be dismissed, or if the
matter is brought before the court before the petition is issued, its
presentation will in normal circumstances be restrained. This is on the ground
that a winding-up petition is not a legitimate means of seeking to enforce
payment of a debt which is
bona
fide
disputed.
That was the effect of the decision of Ungoed-Thomas J. in
Mann
v. Goldstein
[1968] 1 W.L.R. 1091, which was subsequently approved of by the Court of Appeal
in
Stonegate
Securities v. Gregory
[1980] Ch. 576, both of which decisions were expressly adopted by
O’Hanlon J. in
In
re Pageboy Couriers Ltd.
[1983] I.L.R.M. 510.
24. The
words “any liability” are, however, important: where a company
admits its indebtedness to the creditor in a sum exceeding £1,000 but
disputes the balance, even on substantial grounds, the creditor should not
normally be restrained from presenting a petition. That was the view taken by
Plowman J. in
In
re Tweeds Garage Ltd.
[1962] Ch. 406 which was upheld by the Court of Appeal in
Taylor’s
Industrial v. M & H Plant Hire
[1990]
B.C.L.C. 216. It would appear from the decision of Morris J. in
Clandown
Ltd v. Davis
[1994]
2 I.L.R.M. 536
that
he was prepared to restrain the presentation of the petition even where part
only of the debt was disputed, but it does not appear from the report that
either of the two English authorities to which I have referred were cited to
the court. I was also referred during the course of the argument in the present
case to an
ex
tempore
judgment
I delivered in
Patrick
Butterly & Sons Ltd v. Top Security Ltd
(Unreported,
High Court, Keane J., 27th September, 1995) and in which I applied the
principle in
In
re Tweeds Garage Ltd.
[1962]
Ch. 406. I have not been persuaded by anything I have heard in the arguments in
the present case to depart from that view.
25. It
is also clear that, even where the company appears to be insolvent, the court
may nonetheless, in the exercise of its equitable discretion, restrain the
presentation of the petition where it is satisfied that the petition is being
presented for an ulterior or collateral purpose and not in good faith by a
creditor forming part of a class of creditors which seeks the administration of
the assets of the company for the benefit of that class in an orderly manner
under the supervision of the court: see
In
re a Company
[1983]
B.C.L.C. 492.
26. I
am also satisfied, however, that the jurisdiction to restrain the presentation
of the petition is one to be exercised only with great caution. In
Bryanston
Finance Ltd v. De Vries (No. 2)
[1976] 1 Ch. 63, Buckley L.J., with whom the other members of the court agreed,
observed at p. 78 of the report that:-
27. It
is also clear that, while the form of the relief sought in such cases is
normally, as here, interlocutory in nature, the principles laid down by the
Supreme Court in
Campus
Oil Ltd v. Minister for Industry and Energy (No. 2)
[1983] I.R. 88 as to the factors to which the court must have regard in
granting or withholding interlocutory injunctive relief are not necessarily
applicable. Typically in an application for an interlocutory injunction, the
court is invited to restrain an action which is alleged to be a violation of
the plaintiff’s rights where there is a fair question to be tried, where
damages will not be an adequate remedy and where the balance of convenience
(including the desirability of preserving the
status
quo
pending
the determination of the action) points to the granting of such relief.
Different considerations entirely apply where, as here, the object of the
application is to prevent the respondent from exercising his right of access to
the courts, whether by way of ordinary process or a winding-up petition. In
such a case, the factors which the court should take into account were also
identified in
Bryanston
Finance Ltd v. De Vries (No. 2)
[1976] Ch. 63. Thus, Buckley L.J. said at p. 76 that:-
28. In
the same case, Stephenson L.J. expressly rejected the
American
Cynamid Co. v. Ethicon Ltd
[1975] AC 396 criteria as being applicable and went on to say that it was for
the plaintiff company “to prove that the defendant’s exercise of
his right to bring legal proceedings is in fact an abuse of process.”
30. The
approach in that case was also adopted by the Court of Appeal in
Coulson
Sanderson & Ward Ltd v. Ward
(1986) 2 B.C.C. 99, 207. In that case, Slade L.J. said:-
31. I
am satisfied that this is the approach which should also be adopted in this
jurisdiction. The constitutional right of recourse to the courts should not be
inhibited, save in exceptional circumstances, and this applies as much to the
presentation of a petition for the winding-up of a company by a person with the
appropriate
locus
standi
as
it does to any other form of proceedings. The undoubted power of the courts to
restrain proceedings which are an abuse of process is one which should not be
lightly exercised. In the context of winding-up petitions, I have no doubt that
it should be exercised only where the plaintiff company has established at
least a
prima
facie
case
that its presentation would constitute an abuse of process. In many cases, a
prima
facie
case
will be established where the plaintiff adduces evidence which satisfies the
court that the petition is bound to fail or, at the least, that there is a
suitable alternative remedy. It would not be appropriate to apply the
principles laid down by the Supreme Court in
Campus
Oil Ltd v. The Minister for Industry and Energy (No. 2)
[1983]
I.R. 88 in cases of this nature where it is the creditor’s right to have
recourse to the courts, rather than any right of the plaintiff company, which
is under threat.
32. It
is also clear that, where the would-be petitioner is a contingent or
prospective creditor, the court which is asked to restrain the petition is not
concerned with whether the creditor will be able to meet the requirements of
the proviso in s. 215, under which such a creditor must give security for costs
and satisfy the court that
a
prima facie
case
for winding-up has been established. I agree entirely with the view expressed
by Goulding J. in
Holt
Southey v. Catnic Components Ltd
[1978] 1 W.L.R. 630 that, where it is shown that the would-be petitioner is a
prospective or contingent creditor, it is for the court which hears the
petition to determine whether the statutory requirements for the granting of
the relief sought in the petition have been met.
33. Although
the fact that the company is insolvent is not, of itself, a ground for allowing
a petition to proceed which is clearly an abuse of process, it remains an
important factor in every case where the court is exercising its equitable
discretion in granting or withholding injunctive relief. The court must
approach the position of such a company with the interests of the creditors
particularly in mind. As Street C.J. put it in
Kinsela
v. Russell Kinsela Pty. Ltd (in liquidation)
[1986]
4 N.S.W.L.R. 722:-
34. This
statement of the law has been expressly approved by both the High Court and
Supreme Court in
In
re Frederick Inns Ltd.
[1991]
I.L.R.M. 582 and [1994] 1 I.L.R.M. 387.
35. In
the present case, it is submitted that MKL should be restrained from presenting
a petition, even as a contingent or prospective creditor, since their doing so
would constitute a breach of the agreement which, it is alleged, was concluded
between them and TMS and is reflected in the fax message of the 23rd December,
1992. Alternatively, it is submitted that they are in any event estopped from
so doing. On behalf of MKL, it is urged that there was no consideration to
support the alleged agreement and that the necessary conditions do not exist to
give rise to an estoppel.
36. It
has been settled law since the decision of the House of Lords in
Foakes
v. Beer
(1884) 9 App Cas 605
that
a promise to pay part of a debt is not good consideration in law. Its
applicability in circumstances such as the present was considered by the
English Court of Appeal in
In
re Selectmove Ltd.
[1995]
2 All E.R. 533, where a company claimed that it had come to an arrangement with
the Revenue as to the payment of arrears. The Court of Appeal unanimously held
that it was bound by the decision in
Foakes
v. Beer
to
reject the argument that a promise to pay a sum which the debtor was already
bound by law to pay to the promisee could afford any consideration to support
the contract. In the course of his judgment, Peter Gibson L.J. referred to
another decision of the Court of Appeal,
Williams
v. Roffey Brothers & Nicholls (Contractors) Ltd.
[1991] 1 QB 1; in which an agreement by one party to a contract to pay additional
sums to the other, provided that the other performed services which he had
already undertaken to perform, was enforceable. Apart from any other
consideration, that decision appeared to be inconsistent with the law as laid
down by Lord Ellenborough C.J. in the leading case of
Stilk
v. Myrick
(1809)
2 Camp. 317. In addition, however, as Peter Gibson L.J. pointed out, if it was
to be extended to a case where the obligation was to make payment rather than
provide services, it would leave the principle in
Foakes
v. Beer
without
any application. Accordingly, the Court of Appeal in
In
re Selectmove Ltd.,
although
noting Lord Blackburne’ s powerful reservations in
Foakes
v. Beer,
considered
that the latter decision, consistently with the doctrine of precedent, could
not be disturbed by the Court of Appeal and that, if any extension in the law
was to be made, it should be made by the House of Lords or, perhaps even more
appropriately, by Parliament after consideration by the Law Commission.
37. In
the present case, it has not been urged upon me that I should depart from the
authority of
Foakes
v. Beer
(1884) 9 App Cas 605 (which itself, it should be remembered, was merely the
application of a principle which goes back to
Pinnel’s
Case
(1602)
5
Co.
Rep. 11 7a). I am, accordingly, satisfied that I should adopt in this case the
same approach as that taken by the Court of Appeal in
In
re Selectmove Ltd.
[1995] 2 All ER 531.
38. It
is also clear that, where parties to a contract enter into a course of
negotiations which has the effect of leading one of the parties to suppose that
the strict rights arising under the contract will not be enforced, or will be
kept in suspense, the person who might otherwise have enforced those rights
will not be allowed to enforce them where it would be inequitable having regard
to the dealings which have taken place between the parties. This doctrine,
sometimes referred to as “promissory estoppel”, first appeared in
English law in
Hughes
v. Metropolitan Railway Co.
(1877)
2 App. Cas. 439 and was given renewed life by
Central
London Property Trust Ltd v. High Trees House Ltd.
[1947] K.B. 130. A not dissimilar approach was adopted by the Supreme Court in
Webb
v. Ireland
[1988] IR 353.
39. One
cannot help sympathising with TMS, having regard to the situation in which they
found themselves in this case. They had purchased equipment for, on any view, a
large sum of money and found themselves unable to sell it in the UAE, through
no fault of theirs, but because of the attitude adopted by Galadari and the
local administration. Their difficulties were added to by the sort of problems
which beset many Irish businesses during the recent devaluation crisis. As
against this, it must also be said that MKL recognised that the difficulties
which TMS were experiencing were in some ways not of their own making and
adopted a patient and understanding attitude. However, I am solely concerned
with the question as to whether, in the circumstances which have now arisen,
TMS are entitled to an injunction restraining MKL from presenting a petition
for the winding-up of TMS. I am satisfied that, in the light of the legal
principles which I have already stated, such an injunction should not be granted.
40. In
the first place, TMS have failed to establish
a
prima facie
case
that the presentation of the petition would be an abuse of process. No doubt,
if the fax message of the 23rd December, 1992, was to be read in isolation, it
might be said to afford grounds on which TMS might dispute the debt claimed in
the statutory demand. However, when one reads the entire correspondence, it
becomes clear beyond argument that MKL at no stage waived the balance of the
purchase price due to it. Nor were TMS left under any illusion that it was
being waived: their tendering of a cheque for £500,000 (payment of which
was subsequently stopped) is wholly inconsistent with any such belief. I am
satisfied that TMS have totally failed to demonstrate that the petition, if
presented, is bound to fail. Nor, at this stage, is there any alternative
remedy available to MKL.
41. Even
if it could be said that the debt is disputed in good faith and on substantial
grounds (and I am satisfied that it is not), MKL would remain, at the least, a
prospective or contingent creditor. If the fax message of the 23rd December,
1992, stood alone and constituted a fully enforceable legal agreement between
TMS and MKL, it envisaged that the balance of the debt would be paid when the
proceedings in Dubai had been finalised. In the light of the legal principles
to which I have referred, it is clear that it is not the function of the court
at this stage to determine whether a contingent or prospective creditor will
meet the requirements of section 215. That will be a matter for the judge who
hears the winding-up petition.
42. That
is sufficient to dispose of the present application for an interlocutory
injunction. However, even if I were satisfied as a matter of fact that the fax
message of the 23rd December, 1992, reflected an agreement of the kind alleged
on behalf of TMS, it would seem clearly unenforceable in the light of the legal
principles to which I have already referred. Nor could it be said that the
course of negotiations between the parties was such that it could have left any
reasonable person under the impression that MKL were waiving its entitlement to
the balance of the debt. On the contrary, the correspondence indicates that the
repeated requests from MKL for payment of its account were met with a
succession of proposals from TMS which, for the most part, were never
implemented by the latter. To hold, at this stage, that MKL should be estopped
from taking legal proceedings to enforce its right would, in the light of the
correspondence, be a negation of equity.
43. There
is finally the question of the insolvency of TMS. This may be a matter for the
judge hearing the winding-up petition to consider. It is, however, sufficient
to say that the indications that TMS is insolvent are so clear that, if it were
a case in which there might be some doubts as to how the discretion of the
court should be exercised, those indications would be decisively in favour of
refusing the injunctive relief sought.