THE HIGH COURT
		1984 No.  3716P

IN THE MATTER OF CHIPBOARD PRODUCTS LIMITED (IN LIQUIDATION)
AND IN THE MATTER OF THE COMPANIES ACTS, 1963 - 1983

JUDGMENT of Miss Justice Laffoy delivered on the 27th day of February, 1997.

	On this application, which is on notice to the Minister for Justice, the Official Liquidator of Chipboard Products Limited (In Liquidation) (the Company) seeks directions as to whether fees are payable in accordance with paragraph 22 of Part III of the First Schedule to the Supreme and High Court (Fees) Order, 1989 (S.I. No. 341 of 1989) (the 1989 Order) on cash paid to the Official Liquidator by the Receiver appointed by the Governor and Company of the Bank of Ireland (the Bank) over assets of the Company.
	When the winding-up order in relation to the Company was made on 23rd July, 1984, the Company was already in receivership, the Receiver having been appointed by the Bank on foot of the powers contained in a debenture given by the Company to the Bank on 13th October, 1981.  During the course of the receivership, which continued until 1991, the Receiver collected debts due to the Company and sold land, buildings, plant and stock.  Having discharged the costs and fees of the receivership, the preferential creditors and amounts due to secured creditors, including the Bank, the Receiver transferred to the Liquidator sums aggregating £1,958,702, which the Receiver certified to the Official Liquidator as representing -

     (a)	as to £1,858,203, the proceeds of book debts, which were the subject of fixed charges, and

     (b)	as to the balance, £100,499, the proceeds of assets which were subject to floating charges.

	By virtue of paragraph 22 of Part III of the First Schedule to the 1989 Order, a fee of £2.50 is charged in the Examiner's office -

     	"On taking account of monies received by a person liable to account for same - for every £100 of the amount received or in the case of a company being wound up by the Court for every £100 of the monies received by the Liquidator in realisation of the assets of the company".

In this case the Examiner has assessed the fees due by the Official Liquidator in respect of the accounts of the Official Liquidator for the years 1986/1991, 1991/92, 1992/93 and 1993/94, which are payable by means of impressed stamps on the Examiner's certificate on the Official Liquidator's accounts in relation to the foregoing periods, at £65,175.  Of this sum only £25,810 remains in issue between the Official Liquidator and the Minister for Justice.  It is common case that £15,956.42 portion of the fees assessed by the Examiner represents the fees purportedly chargeable on sums in respect of interest and gains earned on the maturity and sale of Exchequer bills, on which sums it is now agreed that fees are not chargeable under paragraph 22 in consequence of two decisions of this Court:  the decision of Murphy J. in In the Matter of Private Motorists Provident Society Limited (In Liquidation) and In the Matter of the Companies Acts, 1963 - 1983 and In the Matter of the Industrial and Provident Societies Acts, 1893 - 1978 Between William J. Horgan, Applicant and the Minister for Justice, Respondent, in which a reserved judgment was delivered on 23rd June, 1995;  and a decision of Costello J., as he then was, in In the Matter of Hibernian Transport Companies Limited, in which judgment was delivered on 4th July, 1995.   £23,409 portion of the fees assessed by the Examiner has already been paid, this portion representing the fees payable on the agreed sum payable to the Minister for Finance in consequence of an order of this Court made on 20th October, 1994 to the effect that the Minister for Finance was entitled to be subrogated to the fixed charge on book debts in the Bank's debenture, which fees were paid by the direction of the Minister for Finance, who accepted 97.5% of the agreed sum due to him in full satisfaction of his claim.
	The issue of principle which arises for consideration here is whether the monies received by the Official Liquidator from the Receiver, other than the monies which represented interest and gains earned on the maturity and sale of Exchequer bills, were "monies received by the Liquidator in the realisation of the assets of the Company" within the meaning of paragraph 22.
	Paragraph 22 has been considered by this Court previously on two occasions:  by Murphy J. in his judgment in In the Matter of Private Motorists Provident Society Limited (In Liquidation) referred to above and by Costello J., as he then was, in In the Matter of Hibernian Transport Companies Limited referred to above.
	In his judgment Murphy J. stated that he did not accept that the word "realisation" as used in paragraph 22 necessarily involves the sale of assets nor is the converse true.  He went on to deal with the role of an Official Liquidator in the following passage:-

	"An Official Liquidator is appointed under Section 225 of the Companies Act, 1963 to perform, inter alia, the statutory duty imposed on the Court by Section 235 of that Act which provides that the Court shall cause 'the assets of the company to be collected and applied in discharge of its liabilities'.   How assets will be 'collected' will depend upon the nature of the particular assets and the circumstances of the case.  The task may include litigation, sale or simply the reduction into possession by the Official Liquidator of  'cash in hand'.  It seems to me that all or any of such procedures would be appropriate to make the assets of the company available for the discharge of its liabilities and indeed the payment of costs and expenses of the liquidation.  All such procedures which make the assets of the company available for that purpose in my view constitute a 'realisation' whether or not a sale of the assets is required.  On the other hand, stock in trade constituting assets of the company may be sold by the Liquidator in the course of carrying on the business of the company (with the sanction of the Court) insofar as the sale may be necessary for the beneficial winding-up of the company.  However, the sale of assets in that context does not make the proceeds available to meet the claims of the creditors of the company as at the date of the commencement of the winding-up thereof.  As long as the business is carried on by the Liquidator the proceeds will be applicable in purchasing additional stock or otherwise discharging the costs and expenses of carrying on the business.  It is only when the business is sold as a going concern or its assets finally liquidated that it can be said that the same have been 'realised' in the context in which the word in used in relation to the winding-up of a company by the Court".

Murphy J. then went on the deal with thirteen categories of receipts which were in issue in that case.  One of the categories he was concerned with is particularly pertinent to the issue which arises here and appropos of that category he stated as follows:-

	"The sum of £1,853,509 was the total of the cash balances including interest (other than trust cash balances) paid by the Receiver (Mr. Kelly) to the Society between the 5th day of December, 1983 and the 25th day of May, 1987 again represented, for the greater part at any rate, assets of the Society collected in the first instance by the Receiver and partly as a result of negotiations and partly as a result of litigation instituted by the Official Liquidator.  It is correct to say that this sum included an amount of £94,351 earned by the Receiver on what was described as 'the retained fund' and might appear to derive from the activities of the Receiver rather than the assets of the Society.  In my view that is not correct.  Viewed from the standpoint of the Official Liquidator all of the monies in the hands of the Receiver were assets of the Society wrongfully retained by the Receiver.  It was only when they were got in by the Liquidator that they could be said to be realised by him.  Interest accruing thereon subsequently would, however, be excluded from aggregation for the purpose of calculating the duty payable. .......".

	In In the Matter of Hibernian Transport Companies Limited, Costello J., as he then was, was concerned with the issue of whether Court fees were payable under the provision in The Supreme Court and High Court (Fees) Order, 1986 (S.I. No. 375 of 1986) (the 1986 Order), which corresponded with and was in identical terms to paragraph 22, on items in the Official Liquidator's account in that case which related to interest on sums placed on deposit and capital accretions arising from the purchase and sale of Exchequer bills and he held that Court fees were not payable on those items.  He stated that he had had the advantage of reading the judgment of Murphy J. in In the Matter of Private Motorists Provident Society Limited (In Liquidation) and that he approached the construction of the provision he was concerned with in the same way as had been done by Murphy J.
	It was submitted on behalf of the Official Liquidator that in this matter, there having been a mere transfer of monies by the Receiver to the Official Liquidator, the receipt and taking possession of the monies by the Official Liquidator did not constitute the receipt of monies "in realisation of the assets of the company"  within the meaning of paragraph 22.  The word "realisation" in its ordinary meaning means turning a non-money asset into money.  Realisation, as distinct from receipt, requires something active on the part of the Liquidator, not merely passivity.  Moreover, the context in which the word "realisation" is used in paragraph 22, it was argued, evinces an intention to distinguish between receipt, on the one hand, and realisation, on the other hand:  a charge arises under paragraph 22 only in the case of a receipt "in realisation of the assets of the company".   It was also submitted on behalf of the Official Liquidator that in construing paragraph 22 it is instructive to contrast that paragraph with the corresponding provision of the Supreme Court and High Court (Fees) Order, 1984 (S.I. No. 19 of 1984), paragraph 34 of Part III of the First Schedule of which provided that a fee was chargeable at the rate of £2 for every £100 of the amount received "on taking account of monies received by a person liable to account for same".   It is true that with the introduction of the provision of the 1986 Order, which was in identical terms to paragraph 22, fees chargeable on the Examiner's certificate on the accounts of an Official Liquidator became chargeable on an entirely different, and considerably reduced, basis.  Thenceforth, the Official Liquidator was to be "chargeable in respect of monies received ...... in realisation of the assets of the company", whereas hitherto he had been chargeable in respect of "the amount received".  This fact is clearly recognised in the judgment of Costello J., as he then was, in In the Matter of Hibernian Transport Companies Limited.  Its practical implications are clearly discernible in the judgment of Murphy J. in In the Matter of Private Motorists Provident Society Limited, where various categories of amounts received by the Official Liquidator were held not to constitute monies received by him "in realisation of the assets of the company", for instance, a Value Added Tax refund representing the reversal of a liability created during the course of the liquidation and a rebate of statutory redundancy paid by the Liquidator.
	Counsel for the Official Liquidator was constrained to argue that as regards the treatment by Murphy J. of receipts by the Official Liquidator in In the Matter of Private Motorists Provident Society Limited from the Receiver, this matter is distinguishable on the facts.  He pointed that the judgment in In the Matter of Private Motorists Provident Society Limited indicates that the Official Liquidator of the Society had to resort to negotiations and litigation, the entitlement of the Official Liquidator to the monies was contested by the Receiver and would have been properly perceived by the Official Liquidator as being wrongfully retained by the Receiver, by contrast to the situation which arose in this matter, where the Receiver voluntarily transferred the surplus monies he held.  Counsel for the Minister for Justice responded that the degree to which an Official Liquidator has to pressurise a Receiver to get in proceeds of assets of the company which the Receiver is not entitled to retain should not be the determinant as to whether monies are received by the Liquidator "in realisation of the assets of the company".
	In my view, the receipts by the Official Liquidator from the Receiver appointed by the Bank in this matter are not materially distinguishable from the receipts by the Official Liquidator of the Private Motorists Provident Society Limited from the Receiver of that Society.  I respectfully agree with Murphy J's analysis of the role of an Official Liquidator under the Companies code and what constitutes a "realisation" of the assets of the Company within the meaning of paragraph 22.  Although the Receiver appointed by the Bank, in pursuance of the powers conferred on him by the debenture under which he was appointed, collected in property charged by that debenture, including book debts and other assets, and converted the property into money, so that in complying with his statutory duty to collect the assets of the Company so as to render them available for application in discharge of its liabilities the Official Liquidator had to do no more than receive cheques from the Receiver and lodge them to the Liquidator's account, nonetheless, in my view, the monies represented by those cheques were received by the Official Liquidator "in realisation of the assets of the company".
	Accordingly, there will be a declaration that pursuant to paragraph 22 fees are payable to the Minister for Justice on cash paid to the Official Liquidator of the Company by the Receiver appointed by the Bank over the assets of the Company, other than money which represents interest and gains earned on the maturity and sale of Exchequer bills.