Hughes v Duffy

• Jurisdiction: Ireland
• Judge: Ms. Finlay Geoghegan
• Judgment Date: 19 April 2005
• Neutral Citation: [2005] IEHC 145
• Docket Number: [1991 No.14268P]
• Court: High Court
• Date: 19 April 2005

[2005] IEHC 145

THE HIGH COURT

[No:14268P/1991]

HUGHES v DUFFY & HANRATTY

IN THE MATTER OF SUPREME OIL COMPANY LIMITED

(IN LIQUIDATION)

AND IN THE MATTER OF THE COMPANIES ACTS 1963– 2001

AND IN THE MATTER OF SECTION 150 OF THE COMPANIES ACT 1990

BETWEEN

DAVID HUGHES

APPLICANT

and

SEAMUS DUFFY AND EUGENE HANRATTY

RESPONDENTS

COMPANIES ACT 1990 S150(3)

COMPANIES ACT 1990 S150(1)

DUIGNAN v CARWAY 2001 4 IR 550

PRIMOR PLC (PMPA) v OLIVER FREANEY & CO & STOKES KENNEDY CROWLEY 1996 2 IR 459 1995/20/5287

COMPANIES ACT 1990 S152

COMPANY LAW

directors

Restriction - Delay - Jurisdiction to dismiss application on grounds of delay - Inordinate and inexcusable delay - Duignan v Carway [2001] 4 IR 550; Primor plc v Stokes Kennedy Crowley [1996] 2 IR 459 considered - Companies Act 1990 (No 33), s 150 - Application struck out

Facts: This was an application for declarations of restriction pursuant to s. 150 of the Companies Act 1990. The application was made pursuant to a petition presented in 1991 and the winding up was deemed to have commenced on that day. The respondents raised a preliminary point. They sought to have the applications dismissed by reason of the delay in bringing the application.

Held by Finlay Geoghegan J. in striking out the application against each respondent that if the Court were to permit the application to proceed and put the respondents at jeopardy of a declaration of restriction against them that it would be in breach of their constitutional rights to fair procedures.

Reporter: R.W.

1 Judgment of Ms. Finlay Geoghegan delivered on the 19th day of April 2005.

2 The applicant is the Official Liquidator of Supreme Oil Company Limited (in Liquidation) ("The Company") having been so appointed by order of the High Court of the 25th November 1991. The application was made pursuant to a petition presented on the 4th November 1991 and the winding up is deemed to have commenced on that day.

3 The respondents do not dispute that they were directors of the Company at the date of commencement of winding up nor do they dispute that the Company is insolvent and accordingly s. 150 of the Act of 1990 applies to both the Company and the respondents.

4 The application is for a declaration that each respondent shall not for a period of five years be appointed to act in any way, whether directly or indirectly, as a director or secretary or be concerned or take part in the promotion or formation of any company unless that company meets the requirements set out in s. 150 (3) of the Act of 1990.

5 The respondents raise a preliminary point. They seek to have the application dismissed or refused by reason of the delay in bringing the application.

6 The facts relevant to the delay issue appear to be as follows.

7 The Company was incorporated on the 15th April 1987. It traded in oil and petroleum products from a yard at Longfield, Castleblayney Co. Monaghan until the 8th November 1991. A petition was presented to wind it up on the 4th November 1991 and the order made on the 25th November 1991. Petition was presented by the Revenue Commissioners.

8 A meeting was held between the Official Liquidator and the first named respondent on the 4th December 1991 when certain books and records of the Company were handed over. These did not comprise a full set of books and records for the Company. The first named respondent claimed that books and records of the Company had been seized previously by the Customs and Excise Authorities.

9 In February 1994 the Official Liquidator made a report to the Revenue Commissioners. Between September 1994 and October 1995 there was correspondence between the Official Liquidator, the first named respondent and solicitors acting on his behalf in connection with his outstanding obligation to furnish a statement of affairs and the obtaining of copies of the books and records of the Company for the purpose of doing this.

10 On the 5th December 2003 the motion with the herein application was issued returnable for the 19th January 2004. Affidavits were sworn by each of the respondents on the 13th February 2004 raising the issue of delay. A further affidavit was sworn by the Official Liquidator on the 27th February 2004. The Liquidator asserts that by reason of the failure of the respondents to cooperate and deal with the preparation of a statement of affairs that they have nor been prejudiced by the time which has elapsed before bringing the application. No explanation is given for the failure to bring the application prior to December 2003.

Applicable law

11 Section 150 of the Act of 1990 came into force on the 1st August 1991. As originally enacted, and as applying to this application it did not contain any express provision requiring a liquidator to bring an application for a declaration of restriction to the High Court. Notwithstanding, it imposed a mandatory obligation on the High Court to make a declaration of restriction where s.150 applied, unless the directors satisfied the Court of the matters specified in s. 150 (2). By reason of such lacuna a practice direction was issued in the early 1990s requiring official liquidators in compulsory liquidations such as this to bring a motion before the court seeking a declaration of restriction. This...