Patents

• Author: International Law Group

Orlaford Limited filed statutory proceedings in the Irish courts against the three last known directors in which it asked to have the dissolved Deauville Communications Worldwide Limited put back on the Irish Register of Companies. It also requested the court to declare that the officers of Deauville are to be liable for any debts or liabilities incurred by or on behalf of Deauville. In addition, it petitioned to have all legally required annual returns sent to the Registrar of Companies. (The Registrar and the tax authorities were "notice parties.")

At the time Orlaford filed its Irish petition, it had an action pending against Deauville in the Bermuda courts. The Bermuda lawsuit sought damages based on claims that Deauville, with intent to injure Orlaford, conspired with other persons to bring about the breach of a license agreement. The agreement entitled Orlaford to get royalties from the use of the so-called "Rogers patent." In the meantime, Deauville had dropped off the Irish Register of Companies. Orlaford contended that the Section 12(B)(3) action was necessary to a successful result in the Bermuda litigation.

Respondents raised the following two defenses. First, they contended that Orlaford was not a "creditor" of Deauville at the time they filed their petition within the meaning of the applicable legislation, i.e., Section 12 B(3) of the 1982 Principal Act (Companies) Act. Second, it was argued that petitioners had not brought forth enough evidence to show they were acting in good faith. The High Court ruled in Orlaford's favor and granted the requested orders.

On appeal to the Supreme Court of Ireland, the Court dismisses the appeal. On the locus standi issue, respondents had argued that Orlaford was, at best, nothing more than Deauville's "contingent or prospective" creditor. They pointed to other sections of the Act that expressly included such creditors and relied on the absence of such explicitness in Section 12(B)(3). The Court rejects these contentions.

"Unless there were authority to the contrary, I would be inclined to the view that the word 'creditor' in Section 12(B)(3) should be read as extending to contingent or prospective creditors. It would seem unjust that the question whether a person is entitled to have the company restored to the register for the purpose of recovering a judgment against them should be determined by whether their claim against the company is for a liquidated sum - in which case they would...