Decobake Ltd v Companies Act

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Cregan
• Judgment Date: 16 March 2023
• Neutral Citation: [2023] IEHC 231
• Docket Number: [2017/225 COS]

In the Matter of Decobake Limited (In Liquidation)

And in the Matter of the Companies Act, 2014

[2023] IEHC 231

[2017/225 COS]

THE HIGH COURT

JUDGMENT of Mr. Justice Cregan delivered on 16 ^th March, 2023

Introduction

1 . There are two applications before the court:

• (1) an application by the liquidator for an Isaac Wunder order against Mr. Paul Coyle and Mrs. Margaret Coyle; and

• (2) an application by Dublin City Council (and various individuals who currently work or formerly worked with Dublin City Council) for an Isaac Wunder order against Mr. Coyle and Mrs. Coyle.

2 . The affidavits filed by the liquidator and Dublin City Council set out an appalling litany of behaviour by Mr. Coyle (supported by his wife, Mrs. Coyle) from which it is clear that Mr. Coyle has engaged in an entirely malicious and unacceptable vendetta against the liquidator of Decobake and Dublin City Council (and some of its employees) for a period of about six years. He has launched failed application after failed application – all of which have been dismissed by the High Court, the Court of Appeal and/or the Supreme Court. In many of these applications, costs have been awarded against him personally but as he is – apparently – impecunious, there is no reasonable prospect of the liquidator or Dublin City Council recovering their costs. It was submitted by counsel for Dublin City Council that the actions of Mr. Coyle have cost Dublin City Council hundreds of thousands of euros of taxpayers' money on legal costs defending utterly unmeritorious applications brought by Mr. Coyle. It was also submitted by counsel for the liquidator that the liquidator has also had to spend similar sums of money defending all these applications brought against him by Mr. Coyle which has reduced the amount of funds available in the company to pay other creditors.

3 . Before setting out the facts which led the liquidator and Dublin City Council to bring these applications, it is necessary to set out some of the background to this matter.

Background – failure to pay rates

4 . The company, Decobake Ltd. (in liquidation) (“the company”), had as its business, the sale of baking products. It carried on business from a number of premises including premises at 3–4 Bachelors Walk and 26 Bachelors Walk, Dublin 1.

5 . The respondents to this application, Mr. Paul Coyle and Mrs. Margaret Coyle, were directors of the company until its liquidation.

6 . The company failed to discharge any of the local authority rates in respect of the premises despite numerous demands for payment by Dublin City Council.

7 . Ultimately, Mr. Denis McHugh, a rate collector for Dublin City Council, had no option but to issue proceedings seeking decrees in respect of the company's indebtedness. The first decree/warrant for execution in the amount of €13,878 was granted on 7 ^th May, 2015 by a judge of the District Court.

8 . Despite the fact that the company and its directors were fully on notice of the proceedings leading to the first decree, the company (through Mr. Coyle) issued a motion later in 2015 seeking to set aside that decree on the grounds of lack of notice. The application came on before the Dublin District Court on 22 ^nd November, 2016. Mr. Coyle appeared in court on that date and sought to represent the company on the basis that he was a director. On being informed by the judge that he was not entitled to represent the company, Ms. Quinn for Dublin City Council said (in her grounding affidavit (at paragraph 10) in this application) that “Mr. Coyle began shouting at the judge and then walked out of court.”

9 . The District Court concluded that the company had been on notice of the hearing in May 2015 on foot of which the first decree was obtained and dismissed the application to set aside that decree.

10 . Two further sets of summary proceedings which Mr. McHugh issued before the District Court in respect of additional unpaid rates for later periods were listed for hearing on 22 ^nd November, 2016. The District Court granted two further decrees/warrants for execution in the amounts of €27,020 and €15,488 respectively (which came to a combined total of €57,326.)

11 . When Dublin City Council had obtained decrees in these amounts, Mr. McHugh then requested the city sheriff to execute against the company's assets in December, 2016. The sheriff's agents attended at the company's premises on Bachelors Walk on 14 ^th December, 2016 at which time they were accompanied for their own safety by a number of members of An Garda Síochána. According to the affidavit of Ms. Quinn, the sheriff's agents were confronted at the premises by a number of aggressive and physically intimidating individuals who had clearly been retained by Mr. Coyle to prevent the sheriff's agents from taking possession of the company's goods in satisfaction of the debts owed in respect of Dublin City Council's rates. Those individuals “forcibly refused to permit the sheriff's agents to enter the premises and threatened violence towards the sheriff's agents.” As a result, the sheriff's agents were required to withdraw for their own safety. (See affidavit of Ms. Kathy Quinn sworn on 28 ^th September, 2020 para. 13.)

12 . Despite the fact that Mr. Coyle was present in court on 22 ^nd November, 2016, the company (through Mr. Coyle) again applied to set aside the decrees granted on 22 ^nd November, 2016, again on grounds of lack of notice.

13 . The company's application came on before the Dublin District Court on 27 ^th June, 2017. Again the court concluded that the company had been on notice and dismissed the application to set aside the decrees.

14 . In his decision on this matter, the District Court judge (Judge Brennan) stated that Mr. Coyle had played “ducks and drakes” with legal procedure and had acted in a “devious and mischievous” fashion in relation to the proceedings generally.

15 . Following the failure to execute the decrees through the city sheriff, Dublin City Council, through its solicitor served a Statutory Notice (pursuant to section 570 of the Companies Act, 2014) in May 2017 calling on the company to pay the said sum. No payment was made on foot of this demand.

Petition to wind up company

16 . Because the company continued to fail to pay the debts in respect of the rates, Dublin City Council concluded that it had no option but to petition for the winding up of the company. Dublin City Council also concluded that an application for the appointment of a provisional liquidator was necessary because there was a risk, in its view, that the company would seek to dissipate its assets and/or place them beyond the reach of creditors.

17 . It appears that around this time Mr. and Mrs. Coyle put Dublin City Council on notice that in November 2016 they had registered purported charges in their favour and in favour of other family members over the company's assets which, in the view of Dublin City Council, had been created with a view to frustrating claims of creditors including Dublin City Council.

18 . An application for the appointment of Mr. Declan de Lacy as provisional liquidator of the company was made before the High Court (Mr. Justice Gilligan) on 29 ^th June, 2017 and Mr. de Lacy was duly appointed provisional liquidator of the company.

19 . The following day, on 30 ^th June, 2017, solicitors acting on behalf of Mr. and Mrs. Coyle brought an application before Mr. Justice Gilligan to set aside the order appointing the provisional liquidator which application was refused.

20 . The petition for the liquidation of the company and the appointment of Mr. de Lacy as liquidator came on for hearing before the High Court (Mr. Justice Keane) on 24 ^th July, 2017. The petition was opposed by Mr. and Mrs. Coyle who were represented by solicitor and counsel at this hearing. This hearing lasted for several hours and numerous legal points were canvassed on behalf of Mr. and Mrs. Coyle.

21 . However, at all times, counsel on behalf of Mr. and Mrs. Coyle conceded to the court at the petition that the monies claimed by Dublin City Council were due and owing by the company and had not been paid.

22 . Indeed Mr. Coyle swore an affidavit on 20 ^th July, 2017 in which he stated:

“ I say the reason the company did not initially discharge its rates obligations was because we had temporary cashflow difficulties. I now realise the company should have paid the said sum”.

23 . At para. 8 of his affidavit he states:

“ At all times the company was in a position financially to pay the rates but chose not to pending the resolution of the dispute. I now acknowledge we should have paid the rates”

24 . Having heard the submissions, the High Court put the company into liquidation and appointed Mr. de Lacy as liquidator of the company on 24 ^th July, 2017.

25 . Following the liquidation of the company, Mr. Coyle set up a business in direct competition with the company.

First appeal to the Court of Appeal

26 . Mr. and Mrs. Coyle appealed the High Court order appointing the liquidator by notice of expedited appeal filed on or about 26 ^th July, 2017.

27 . On the same day Mr. and Mrs. Coyle issued an application to the Court of Appeal for a stay on the order appointing the liquidator.

28 . The stay application was heard by the Court of Appeal on 28 ^th July, 2017. Mr. and Mrs. Coyle were represented by solicitors and counsel at the hearing of this application. This application was refused by the Court of Appeal (Ryan P.) on 28 ^th July, 2017.

29 . Mr. and Mrs. Coyle subsequently discharged their solicitors and counsel and represented themselves for the remainder of the appeals process and all other applications since then.

30 . The hearing of Mr. and Mrs. Coyle's appeal against the making of the winding up order was fixed for hearing on 31 ^st May, 2019. Mr. Coyle sought to adjourn the hearing of his own appeal on three occasions but all...