Greenmount Holdings Ltd -v- Companies Act, [2007] IEHC 246 (2007)

Docket Number:2005 350 COS
Party Name:Greenmount Holdings Ltd, Companies Act
Judge:McGovern J.
 
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THE HIGH COURT

[2005 No. 350 COS]IN THE MATTER OF GREENMOUNT HOLDINGS LIMITED (IN LIQUIDATION)

AND IN THE MATTER OF SECTION 150 OF THE COMPANIES ACT 1990 AND SECTION 56 OF THE COMPANY LAW ENFORCEMENT ACT, 2001

BETWEENJAMES STAFFORD AS LIQUIDATOR OF THE COMPANY IN THE WITHIN PROCEEDINGSAPPLICANTAND

ANN O'CONNOR, SEAN CARBERRY, BARBARA CARBERRY, MICHAEL KELLY AND DARRAGH KELLYRESPONDENTSJUDGMENT of Mr. Justice Brian McGovern delivered Tuesday 31st July, 2007.

  1. This is an application brought by the liquidator of Greenmount Holdings Limited ("the Company") for a declaration that the respondents, being persons to whom chapter 1 of part VII of the Companies Act, 1990 applies, shall not for a period of 5 years be appointed or act in any way, whether directly or indirectly as a Director or Secretary or be concerned or take part in the promotion of formation of any company unless that company meets the requirements set out in sub.s (3) of s. 150 of the Companies Act, 1990 (as amended).

  2. The company was incorporated on the 11th November, 1994. From the 11th November, 1994 until the 27th July, 2005 the Directors were the first and second named respondent. The first respondent resigned as director on the 12th November, 2004. The third named respondent was appointed a director on the 12th November, 2004. The second and third named respondents resigned as directors on the 27th July, 2005 on which date the second named respondent sold his interest in the company to the fourth named respondent. The fourth named respondent was at the time an undischarged bankrupt. Subsequently the fifth named respondent became a Director.

  3. These proceedings only concern the first, second and third named respondents. The fourth and fifth named respondents have already submitted to a restriction order.

  4. Background.

    The company was incorporated on the 11th November, 1994. The company operated serviced office facility under the trade name "Executive Suites" at the Harcourt Centre, Dublin 2 on a short term licensed basis. The company leased the premises from Damovo. The company had sufficient space to offer 22 offices available for rent at any one time. On the date of the appointment of the official liquidator 17 offices were occupied by licensees or tenants. Three were vacant and two were occupied by companies related to either the first or second named respondent. One of the company's key tenants which occupied seven of the offices on the third floor had given notice to vacate the premises from October, 2005.

  5. The company also owned an apartment in the International Financial Services Centre as an investment property. This was sold by the liquidator following his appointment. The company became insolvent and the liquidator was appointed on the 21st September, 2005 pursuant to a petition presented by Damovo Ireland (Limited) on 30th July, 2005

  6. For some years prior to the commencement of the winding up relations between the first and second named respondents broke down. The last set of audited accounts filed in the Companies Registration Office was for the year 30th June, 2000. Due to the breakdown of relations between the first and second named respondents no further audited accounts were prepared by the company. The first and second named respondents blamed each other for this. The first named respondent says that she attempted to ensure that books and records were prepared at all times and made every effort to rectify the deficiencies. She said that she employed Farrell Grant Sparks at her own expense in order to bring the books and records up to date prior to her resignation as a Director in November, 2004. From the time it commenced trading the company employed a Book Keeping firm, G.M. Financial Services, to write up the books and financial records on a monthly basis. The company also employed Mr. Gerard T. Murphy to audit the company's accounts. The first named respondent says that in 2002 in emerged that no day to day book keeping was carried out and she was informed that Mr. Gerard T. Murphy refused to accept the figures of Mr. Gerry Doyle, the person responsible for preparing the monthly accounts. For that reason Farrell Grant and Sparks were employed by her to bring the company books up to date. There were disputes between the first and second named respondent over the second named respondent's removal of books and records of the company from the possession of Farrell Grant and Sparks. In mid 2002 the first named respondent discovered that Mr. Murphy had forged her signature on accounts submitted to the Companies Registration Office and to the Revenue Commissioners. She made a complaint to the ICAI which was upheld and Mr. Murphy was severely reprimanded and fined. At a board meeting on the 10th March, 2003 Mr. Murphy was dismissed as auditor of the Company and Oliver Freeney & Company were appointed auditors. A dispute arose as to the level of fees...

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