Court's Discretion In Company Restoration Applications Clarified

Author:Mr John O'Riordan and Shahinaz Keating
Profession:Dillon Eustace
 
FREE EXCERPT

Court of Appeal overturns order requiring National Asset Loan Management Limited ("NALM") to pay accountancy fees associated with restoring struck off company to the register.

It was previously thought that the court had wide discretion to make ancillary orders when making an order under the Companies Acts to restore a company to the register. In the case of National Asset Loan Management Limited v Middleview Limited and Garrett Kelleher [2017] IECA 290 the Court of Appeal has clarified the ancillary orders that can be made in restoration applications.

Background

Middleview Limited ("the Company") had been struck off by the Companies Registration Office for failing to file annual returns. On the same day, following default by the Company in repayment of money due, NALM appointed receivers over certain assets of the Company. NALM subsequently applied to the High Court to restore the Company to the register so that it could realise the Company's assets. Evidence was presented to the court that there was an agreement between the Company and NALM that NALM would pay the accountancy fees associated with bringing the Company's accounts up to date in order to protect its security. The scope of this agreement was in dispute between the parties.

High Court

In restoring the Company, the court referred to section 12(B)(3) of the Companies (Amendment) Act 1982 ("the 1982 Act") which allowed the court to give directions and to make provisions when restoring a struck off company so that the company would be in the same position as if it had not been struck off. As NALM had agreed to bear the costs of the accountancy fees for 2010 and 2011 the court decided that it was "more likely than not" that NALM would have again covered these fees for 2012 and 2013 and ordered that these costs should be split 50/50 between NALM and Garrett Kelleher (who was a director of the Company and who had been joined as a Notice Party to the application).

NALM argued that this, in effect, granted specific performance of a disputed agreement and that Mr Kelleher could pursue a claim on foot of the funding agreement in separate proceedings. The court was of the view that the suggestion of separate proceedings was "wasteful of costs and court time" where the court had jurisdiction to deal with this matter as part of the restoration application.

Court of Appeal

The President held that it was clearly established on the authorities that any directions or provisions included in a...

To continue reading

REQUEST YOUR TRIAL