Company Law

RULE 4.228 OF THE INSOLVENCY RULES 1986

NOTICE TO THE CREDITORS OF AN INSOLVENT COMPANY OF THE RE-USE OF A PROHIBITED NAME

THE HARLEY MEDICAL CENTRE LIMITED
(Company Number 01728619)
I, Melvin Braham, of 11 Queen Anne Street, London W1G 9LJ was a Director of the above named company on the day it went into administration. I give notice that I am acting and intend to continue to act in one or more of the ways to which Section 216(3) of the Insolvency Act 1986, would apply if the above-maned Company were to go into insolvent liquidation connection with or for the purposes of, the carrying on of the whole or substantially the whole of the business of the above-named Company under the following name: Aesthetic and Cosmetic Surgery Limited trading as the Harley Medical Group

Did you receive a notice from Mr. Melvin Braham, Mr. Pierre Guillot or Ms. Louise Braham, in the terms set out above?

Are you an Irish client of The Harley Medical Group, with PIP breast implants?

What is this notice, you ask?

Read on.

The Insolvency Rules

Under the Rules contained in the UK Insolvency (Amendment) Rules 2007, directors of companies such as The Harley Medical Centre Ltd. are obliged to publish a prescribed notice in the London Gazette

and

to notify every creditor of the company whose name and address is known [to the director] or is ascertainable by him on the making of such enquiries as are reasonable in the circumstances.

The Harley Medical Group was a trade mark of The Harley Medical Centre Ltd. of 11 Queen Anne St. in London.

The Harley Medical Centre Ltd. went into administration in the UK on 9th November 2012. The administrators sold some or all of the business of The Harley Medical Centre Ltd. to another company, Aesthetic and Cosmetic Surgery Ltd.

The “Harley” Notice

On 7th December 2012, Mr. Melvin Braham, Mr. Pierre Guillot and Ms. Louise Braham, all directors of The Harley Medical Centre Ltd. and also directors of Aesthetic and Cosmetic Surgery Ltd., published a notice in the London Gazette in the form seen HERE.

The Liquidation of The Harley Medical Centre Ltd t/a The Harley Medical Group

Subsequently, as it happened, The Harley Medical Centre Ltd. went into insolvent liquidation. (It also changed its name to THMC Realisations (2012) Ltd.)

Clearly, the “Harley” notice was intended to comply with the terms of the UK Insolvency (Amendment) Rules 2007 (seen HERE).

Did you receive the “Harley” notice?

McGarr Solicitors would like to hear from every Irish client of The Harley Medical Centre Ltd. to check the extent of compliance of Mr. Melvin Braham, Mr. Pierre Guillot and Ms. Louise Braham with the UK Insolvency (Amendment) Rules 2007.

EMAIL US!

We look forward to hearing from you by email at info@mcgarrsolicitors.ie

A while ago I wrote to Mr. Frank Cullen trading as National Newspapers of Ireland, seeking to make a Data Subject Access Request.

I have recieved a response to that request on NNI headed paper (albeit one which will be the subject of future correspondence).

However, as part of that response came the following assertion;

“Your access request was addressed to “Mr Frank Cullen trading as National Newspapers of Ireland”. Please note that Mr. Cullen does not “trade as” National Newspapers of Ireland.”

I found this a mysterious statement. After all, if you do a search in the Companies Registration Office you find that the National Newspapers of Ireland is not a company registered with the Irish CRO. And their own headed paper on which that assertion was printed doesn’t cite any body corporate for the NNI.

However, the Companies Registration Office search does reveal that the National Newspapers of Ireland (NNI) is a registered trading name of an individual- Mr. Francis Malachy Cullen. You may see a copy of this printout below.

If “Mr. Cullen does not “trade as” National Newspapers of Ireland” as the letter states, who does?

Business Name Printout for National Newspapers of Ireland (NNI) by Simon McGarr

It is not usual to have a very clear piece of balderdash in an Act.

Here is one in the Credit Institutions (Stabilisation) Act 2010.

Section 4 of the Act recites the purposes of the Act, including:

(c) to continue the process of reorganisation, preservation and restoration of the financial position of Anglo Irish Bank Corporation Limited begun with the Anglo Irish Bank Corporation Act 2009

Anglo Irish Bank no longer exists. It is now called Irish Bank Resolution Corporation Ltd. and it will never be “restored” to its “financial position” or any other position.

1. The solicitors of Ireland are going to decide an issue (on a postal poll).

2. The issue is whether they should assume responsibility to indemnify some negligent solicitors against claims made, or to be made, against those solicitors. The solicitors are (or were) solicitors “insured” by the Solicitors Mutual Defence Fund Ltd. (SMDF) and against whom successful claims for professional negligence have or will be made.

3. The Council of the Law Society of Ireland is in favour of this idea and sought to get authority to impose the responsibility on the profession by convening a meeting of Law Society members in the City West conference centre in Dublin.

4. There were sufficient members of the Society opposed to the Council’s idea to stymie its plan. The opposition, invoking the Society’s rules, undermined the Council’s meeting and forced remittance of the matter to a decision by postal poll. (Contrary to press report, the “meeting”[which convened anyway] in City West did not remit the matter to the poll).

5. Every practicing solicitor in Ireland is, nowadays, obliged to have insurance cover (PI insurance) for claims arising from the professional negligence of the solicitor.

6. There are a number of entities offering cover of this kind, the SMDF having been one.

7. “Entities” is used here to distinguish SMDF from its rivals, or competitors; they, unlike it, are all authorised insurers, regulated, nominally at least, by the Central Bank of Ireland. The SMDF was not like that. It appears to have been modeled on the structure of UK medical professional defence bodies current at its formation. Those bodies, at that time, denied that they “insured” member doctors, in the contractual sense; they indemnified them in practice, but denied an obligation to do so.

8. It is an astonishing fact that solicitors in Ireland accepted “cover” of such a weak kind, (from SMDF) to protect them when they most need help, but they did.

9. The cover was weak for two reasons; it was discretionary and it was, it seems, unregulated. (Being unlike its rivals/competitors, SMDF liquidators [if appointed] will be unable to access the Insurance Compensation Fund to make up shortfalls).

10. In principle the Law Society’s proposal is very odd. It overlooks the fact that every individual solicitor has paid for professional indemnity insurance. It seems to take for granted that solicitors should be collectively responsible for the negligence of any individual solicitor. This is a new principle; before PI insurance became compulsory, the only person answerable for a solicitor’s negligence was the solicitor at fault (and his/her partners, if any).

11. That SMDF has failed is, of course, of great concern. It was promoted by the Law Society of Ireland. Its directors were, invariably, past Presidents of the Law Society. Arguably, the failure of the SMDF is a failure of the Law Society. But that is not to say that the Law Society’s members are responsible for that failure. The members had no method of seeking accountability for the activities of the SMDF or the Law Society’s failures relating to it. (Even the High Court is constrained here; the Law Society of Ireland is a corporate body, but a very unusual one; it is not subject to the provisions of the Companies Acts. Most of the jurisdiction of the High Court over corporate bodies is derived from those Acts).

12. The Law Society’s proposal is not just odd in principle; it is unsustainable even on a cursory examination of its terms. It assumes that the Law Society or its members has the legal authority to impose a charge on solicitors.

13. The Law Society, in its proposal, intends to make the charge on solicitors a condition of furnishing the annual practicing certificate. In short, it will withhold the certificate if the charge is not paid.

14. The power of granting the certificate is one conferred on the Law Society by statute (the Solicitors Acts 1954-2002).

15. That such a refusal would be unlawful is immediately obvious, for this reason; solicitors do not have to be members of the Law Society.

16. To be a solicitor and to be a member of the Law Society is not one and the same thing. Consequently, what the members of the Law Society decide is irrelevant to the solicitors’ profession.

17. Consequently, it would be unlawful of the Law Society to deny a solicitor a practicing certificate unless he/she paid for the SMDF shortfall.

18. There are other good reasons to question the Law Society’s idea. The profession has no information as to why SMDF is insolvent. It has no information on any investigation, proposed or actual, into the management of SMDF. Without information like that, it is not possible to know exactly who is going to benefit from the Law Society’s proposal. By definition, only solicitors who have been negligent will benefit. Furthermore, given that SMDF asserts that it operates on a “claims made” basis for indemnity and that cover is yearly only and the only possible uncertainty lies with respect to claims which may be made before the end of 2011, the identities of the negligent solicitors in question are known to every practicable degree.

19. Who are they, that the Law Society is anxious to protect them?

*This article was first published in the Irish Times on April 23rd 2010*

The Your Country, Your Call competition has a week to go before submissions close and the judges start to consider which of them will be awarded €100,000. The stated aim of the competition is far reaching and radical – nothing less than to “create prosperity and jobs at an entirely different level from what currently exists”, as Pádraig McKeon, Drury Communications managing director and Your Country steering group member, has said.

It has been supported by many of the pillars of the establishment. However, it is surprising given the scope of this ambition – and access to specialist knowledge – that there are still plenty of questions unanswered since the competition was launched.

Firstly, is the competition equitable to participants?

Under section 7.1 of the terms and conditions of the competition, every participant grants a “worldwide, perpetual, irrevocable, transferable, unencumbered, royalty-free, fully paid-up, non-exclusive licence” to An Smaoineamh Mór, the limited liability company running the competition.

For the winners, the consequences are total loss of ownership of their idea. Section 7.2 says that the winner (or winners) “shall irrevocably transfer, convey and assign to the promoter (or such party that the promoter may direct) all right, title and interest in and to the winning proposal and all intellectual property rights therein.”

After they pocket their €100,000, they lose all interest in an idea which will, by the organisers’ own description, “create prosperity and jobs” to an unprecedented degree. That’s a return on €100,000 of which any private venture capital company would be proud. We can imagine the winners might, as that prosperity grows in An Smaoineamh Mór Ltd’s bank account, come to feel rather like the creators of early comic book characters: cut out of the fortunes their imaginations summoned into being.

Secondly, where is all the money for this competition coming from and why?

At first glance this question seems to have been answered quite clearly. McKeon told the Value Ireland blog on March 6th: “A cash fund of just under €2 million has been accumulated via donations from 13 parties (companies and individuals) which has been lodged in the accounts of the company, An Smaoineamh Mór . . . the promoters formally presented the project to Government late last summer and asked for support in three ways – a contribution to the fund referred above; a request that the competition would have access if it needed it to the services of the State enterprise agencies in the evaluation process (if such help were required); and a commitment that Government would engage with the process of developing the two winning proposals, particularly with reference to any legislative issues that might need to be addressed. It agreed to all three requests – it will be contributing 15 per cent of the fund.”

But on March 23rd, in response to a parliamentary question from Ciarán Lynch who asked the then minister for enterprise Mary Coughlan whether she had “given or [had] undertaken to give public money” to the project, she told the Dáil: “My department is currently examining a proposal to provide funding of up to €300,000 to the Your Country, Your Call initiative from within existing resources. No funding has yet been paid by my department in respect of the initiative.” And she went on to say that “if funding is made available” she would want to ensure that it was accounted for properly.

Which is odd. Because it shows (a) the minister hadn’t made a decision to give An Smaoineamh Mór any money and (b) that the amount of money she was considering paying is any figure “up to” €300,000. It also raises questions as to what conditions may be placed on any funding. So, has An Smaoineamh Mór Ltd got €300,000 of public money in a bank account? Or not?

When I posed that question online, McKeon showed a new reticence compared to his earlier statement: “As to the status of the account today, we will not be publishing that detail during the competition.”

Actually, there are lots of “details” we don’t know about An Smaoineamh Mór’s accounts. We don’t know who those earlier-mentioned 13 parties (companies and individuals) are. A list of 87 names is provided on the Your Country, Your Call website as a non-exhaustive indicator of contributors, but not all have given money. We don’t know which of the named and unnamed contributors have provided money and if so, how much. We don’t know what the financial contributors’ relationship with the State is, though we do know from public records that two of the State-supported banks, AIB and Bank of Ireland, are in there somewhere. We don’t know, therefore, how much public money is in that €2 million “cash fund”.

That’s a lot of don’t knows. We’ve been promised since February that they would all be revealed “in the coming weeks”. Those weeks are still coming.

Finally, is the competition equitable to taxpayers? An Smaoineamh Mór Ltd is recognised as a charity by the Revenue Commissioners on the basis of its memorandum and articles of association. But those same documents allow for the company to establish for-profit subsidiary companies.

As already mentioned, it will own all the intellectual property in the winning entry or entries. It intends to establish a vaguely defined “something” to create jobs, and prosperity. But jobs and prosperity don’t occur in the abstract. They are the happy side effect of a highly profitable business.

Under what statutory power is the Minister considering funding a privately owned company (backed by undisclosed persons) with public money – completely outside the normal enterprise support institutions and structures – with the intended aim of developing a vastly profitable business or industry without any known provision for a return on that investment for the State?

And if there is such a power, how could it be in the public interest to use it?

Here are some issues not addressed so far (in the papers I read).

(A) Quinn Insurance has a board of Directors. Sean Quinn is not on that board. The board has said nothing about the seizure of the company by the Provisional Administrators. Sean Quinn never stops talking about it and issuing press releases and public statements, including TV interviews.

Is he in fact in charge of Quinn Insurance?

This is possible. Under Section 27 of the Companies Act 1990:-

“…a person in accordance with whose directions or instructions the directors of a company are accustomed to act (in this Act referred to as “a shadow director”) shall be treated for the purposes of this Part as a director of the company…”

Does the Financial Regulator know anything about this that we don’t?

(B) Quinn Insurance has been accepting professional indemnity business from British solicitors. The mind boggles. Every now and again a wave of mortgage fraud sweeps Britain. Irrespective of whether the solicitors are complicit, the claims are numerous and large. It is very difficult to calculate the proper premium to match the risk. It is not easy, either, to refuse indemnity; the insured solicitors can fight.

Auditors are “watchdogs, not bloodhounds” said the court in Re Kingston Cotton Mill Co. (No. 2) [1896] 2 Ch 279 CA. Even at the time this was a very limited view of what we can expect of auditors or their like. (It was also infelicitous; auditors are not and never were, even metaphorically, like “watchdogs”). Considering that Sherlock Holmes was an available “example” (1880 to 1907), it is surprising the judge did not feel more could be expected of the auditors of his day than he settled for.

The job of an auditor is to ascertain if the accounts provide “a true and fair view” of the company’s financial position. However, the auditor’s judgment on this is not, and should not be, absolute. After all, the auditor should not be the equivalent of an insurer where he pays if there is something wrong and loss accrues. In modern times the profession, as always, determines the liability of auditors. The profession has issued guidelines for auditors. Those guidelines now impose a higher standard on auditors than Re Kingston.

These guidelines were quoted in Moore Stephens (a firm) v Stone & Rolls Limited (in liquidation) [2009] UKHL 39

”Auditing Standard SAS 110 (issued January 1995) deals with fraud and error. It contains statements of auditing standards (SAS) and explanatory text in numbered paragraphs. SAS 110.1 states: “Auditors should plan and perform their audit procedures and evaluate and report the results thereof, recognising that fraud or error may materially affect the financial statements”. SAS 110.10 (para. 50) states that, on becoming aware of a suspected or actual instance of fraud, auditors
“should (a) consider whether the matter may be one that ought to be reported to a proper authority in the public interest; and where this is the case (b) except in the circumstances covered in SAS 110.12, discuss the matter with the board of directors, including any audit committee”.
SAS 110.12 (para. 52) provides that
“When a suspected or actual instance of fraud casts doubt on the integrity of the directors auditors should make a report direct to a proper authority in the public interest without delay and without informing the directors in advance.” “

The fact that the auditors in that case escaped by the skin of their teeth shows life is going to get difficult for the profession.

1. It was (arguably) beyond the remit of the High Court inspector to make exhaustive comment on the giving of legal advice to Mr. Jim Flavin (“Flavin”) on the legality of the sale by Flavin of Fyffes’ shares.

2. However, the advice was wrong, the inspector says. (He could hardly say anything else, given that the Supreme Court effectively said the same thing).

3. Consequently, the question as to whether the solicitor who gave that advice was negligent could arise. Hopefully, the solicitor knew this and qualified the advice with the use of some formulation like “…on the one hand this… on the other hand that…”.

4. But then Flavin would have been in a quandary. He would not have been able to sleep with worry about the possibility that he was about to commit a crime.

5. But what of the solicitor? Is his sleep of no consequence? If he says, positively, that the sale of shares is legal; is not a crime, and is nonetheless wrong, is he not liable to the client? How can he sleep with the worry that his advice will prove to be wrong?

6. Even if he has nerves of steel and a will of iron, what can he say to the client who returns to him after the trauma of even a successful defence of the client’s actions? Did he not advise the client of the possibility, indeed the likelihood of litigation? If he did, surely the client had grounds to doubt the legality of what was proposed and if he did not surely the client, learning of the decision in C. W. Dixey and Sons Ltd. v Parsons [1964]192 E G where the court said;

“In the present circumstances the solicitor owed a duty of care to his client to take reasonable care, not only to protect his client against committing a breach of the law but to protect him against the risk of being involved in litigation… It would not do for him to say that in his view it was all right. There was an obvious danger that a different view might be taken. In the present circumstances the ordinary careful solicitor would have gone to see his clients and advised them not to sign.”

would be rightly aggrieved at the advice the solicitor had given.

7. Of course, there is another way of seeing the situation. There are some things upon which a solicitor should not venture an opinion or advice and clients should not seek such opinion or advice.

If a trade supplier receives a Notice of a Creditors’ Meeting it means bad news. The money owing to the creditor is in jeopardy.

On receipt of the notice, check to see if it is valid. Under the Companies Acts, the notice must be sent at least 10 days prior to the date of the meeting. The notice must be accompanied by proxy forms. (The proxy forms are important; the Directors will seek to control the meeting with proxies in their favour).

The notice must also be advertised in two daily newspapers circulating in the vicinity of the registered office or principal place of business of the company. Purchase a copy of all such newspapers, promptly. A failure to comply with this obligation will undermine the validity of acts done at the Creditors’ meeting. (The advertisement is intended to alert creditors who have not received notice in the post; if they had attended they could have altered the outcome of the meeting). It is a criminal offence to fail to give proper or adequate notice of the meeting.

The company will have appointed a liquidator at the members’ EGM. That liquidator will attend the Creditors’ meeting. The creditors may propose a different person as liquidator. If a majority of creditors carry that proposal, the “company’s liquidator” will be supplanted by the new nominee. There should not, of course, be a “company’s liquidator”; a liquidator is required by law to be independent of the company or its directors.

Creditors should prepare for the Creditors’ meeting. At McGarr Solicitors we will advise on the questions to be asked by creditors at the meeting and will attend to represent the interests of creditors if asked to do so.

Cloud computing is rapidly becoming a buzzphrase in IT-reliant businesses. Its proponents include some of the largest technology companies in the world. But while enterprises may be able to save money by moving into the cloud it is difficult to see how they can do so with their customer’s personal information without breaching EU data protection law.

Household names like Google, Amazon and Microsoft are racing each other to create rival global platforms for the storage and manipulation of data. They have sent their marketers out amongst us to proclaim the Good News- Cloud Computing will reduce costs and improve service when compared to the traditional self-built and run server rooms most significant organisations are used to.

McKinsey Consulting helpfully offered a definition of Cloud Computing in a recent report on the topic : “Clouds are hardware based services offering compute, network and storage capacity where; hardware management is highly abstracted from the buyer, buyers incur infrastructure costs as variable OPEX, and infrastructure capacity is highly elastic”.

Or, as the rest of us might understand it, that you get to sub-contract out part, some or most of your storage and information processing requirements to an already vastly tooled up company and you access it as you need it across the internet.

Clouds, being amorphous, fuzzy and everywhere, were chosen as the perfect metaphor for this kind of service. But a metaphor can obscure the reality of what’s being offered- to send data out to external companies and store it in their datacentres across the world, without any transparency as to what jurisdictions the data now resides.

Ireland has a particular interest in the development of cloud computing. Google, Microsoft and Amazon have all located major data centres around Dublin. It has been mooted that having these services available will enable Ireland’s entrepreneurs launch global web-based businesses without having to make enormous capital investment.

The difficulty arises when we apply the cloud computing model, developed in the US, to data relating to people in the EU. There is a gap in privacy standards between the two jurisdictions, with the EU protecting its citizens’ personal data in legislation.

Personal Data is defined by Directive 95/46 as “any information relating to an identified or identifiable natural person” and processing same as “collection, recording, organization, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction”.

Ireland’s Data Protection Acts implement this European law into local legislation. The Irish Data Protection Commissioner helpfully defines a Data Controller so that you might more readily recognise if you are one; “A data controller is the individual or the legal person who controls and is responsible for the keeping and use of personal information.” So, the controllers are the people who have the responsibility for the data as it is being processed, no matter where or by whom. The entities they pass the data on to to be dealt with in a specific way are defined as data processors. Cloud computing providers would fall into this class.

But though Irish enterprises work under these European-wide legislative protections of our personal data, the cloud computing model is less sympathetic to our data controllers’ responsibilities.

The FAQ for Amazon’s Cloud offering, called S3, baldly announces that “Amazon S3 allows customers of Amazon S3 to store their data in the EU; however, it is up to the customers of Amazon S3 to ensure that they comply with EU privacy laws.” Furthermore, their Terms of Service states, in all caps for emphasis, that they do not warrant “THAT THE DATA YOU STORE WITHIN THE SERVICE OFFERINGS WILL BE SECURE OR NOT OTHERWISE LOST OR DAMAGED.”

This ‘as-is’ approach clashes fundamentally with the responsibility of a Data Controller to ensure the security of the data they pass on to a data processor. There is the additional complication that, unlike Amazon, not all the cloud computing service providers will promise to keep the data uploaded from the EU in the EU. The result is the possibility of breaching the laws which prevent EU citizen’s personal data being exported to jurisdictions with less stringent protections.

The Irish Data Protection Commissioner’s office is under-resourced, having only a handful of investigations officers for the entire country. It is hardly likely that he will prioritise clamping down on cloud computing providers who are creating high-value employment in Ireland. Nonetheless, for Irish entrepreneurs and IT professionals who are considering taking the cloud computing route , it is important that they do so with an awareness of the difficulties it could throw up later in a due diligence situation.

Buying or selling a company is like a house purchase. Before the buyer closes the deal, they’re going to want to be reassured that the last owner didn’t do anything that might see them inheriting a legal headache. It may only be when the first wave of early-adopter companies start to be acquired that we will get a clear picture of the full cost of moving to cloud computing.