Murray Browne Mulcahy Ltd

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 12 April 2010
• Neutral Citation: [2010] IEHC 112
• Docket Number: [No. 57 COS/2010]
• Court: High Court
• Date: 12 April 2010

[2010] IEHC 112

THE HIGH COURT

[No. 57 COS/2010]

Murray & Ors v Mulcahy

IN THE MATTER OF SECTION 371 AND 371A OF THE COMPANIES ACT 1963

IN THE MATTER OF THE COMPANIES ACTS 1963 - 2005

AND

IN THE MATTER OF MURRAY BROWNE MULCAHY LIMITED

BETWEEN

KEVIN MURRAY, PAUDIE MURPHY AND ALAN BROWNE

APPLICANTS

AND

DONAL MULCAHY

RESPONDENT

COMPANIES ACT 1963 S371(1)

COMPANIES ACT 1963 S371A

COMPANIES ACT 1963 S371

COMPANIES ACT 1963 S371(4)

COMPANIES ACT 1990 S202

COMPANIES ACT 1990 S202(8)

COMPANIES ACT 1990 S202(6)

BROSNAN & ORS v SOMMERVILLE 2007 4 IR 134 2006/7/1290 2006 IEHC 329

COMPANIES ACT 1990 S202(10)

COMPANIES ACT 1963 S119

COMPANIES ACT 1963 S195

COMPANIES ACT 1990 S59

COMPANIES ACT 1990 S60

COMPANIES ACT 1963 S311A

COMPANY LAW

Directors

Direction to comply with Act - Default in filing annual returns - Company dissolved - Books of account - Whether applicants members of company - Whether respondent in possession of certain registers - Whether respondent obliged to provide books of account - Whether respondent in default of obligation to provide books of account - Brosnan v Sommerville [2006] IEHC 329, [2007] 4 IR 134 considered - Companies Act 1963 (No 33), ss 119, 195 & 371 - Companies Act 1990 (No 33), ss 59, 60 & 202 - Relief granted subject to condition (2010/57COS - Laffoy J - 12/4/2010) [2010] IEHC 112

Murray v Mulcahy

Facts The applicants sought an order pursuant to s. 371(1) of the Companies Act 1963 (the Act of 1963) directing the respondent to make available to the applicants all the books of accounts of the company and allowing copies to be taken of all such books of account. The company had been incorporated to carry out the business of auctioneers and estate agents. The applicants and the respondent were directors of the company. The company had been dissolved for the failure to file annual returns. On behalf of the respondent it was contended that all the books were with the respondent's accountant for the purpose of preparing trading accounts and would be made available to the applicants when the exercise had been finalised and that in addition other documents sought had never been in the possession of the respondent. There was also a dispute as to when the company ceased trading. Financial statements had been furnished but the second named applicant maintained that these were insufficient to enable the applicants to make proper returns.

Held by Laffoy J in making the following decision. The respondent was a director of the company and an order could be made under s. 371 in respect of him. While the court was satisfied that the three applicants were directors of the company it was unclear whether they were members or creditors of the company as required under section 371. In addition no effort had been made by the applicants or their legal representatives to identify the default in the Companies Acts the respondent was responsible for. The default in question appeared to be section 202 of the Companies Act of 1990. Subject to the applicants proving that they had standing to bring the application under s. 371, it would be proposed to make an order under s. 371 directing the respondent to make good his default in complying with s. 202(8) of the 1990 Act.

Reporter: R.F.

Miss Justice Laffoy

1 On this application, on foot of the notice of motion dated 28^th January, 2010, the applicants seek an order pursuant to s. 371(1) of the Companies Act 1963 (the Act of 1963) directing the respondent to make good his default as set out in a statutory notice dated 10^th June, 2009. Although s. 371A of the Act of 1973 is invoked in the title to the proceedings, it is of no relevance because it applies to an application by the Director of Corporate Enforcement (the Director).

2 The application was grounded on the affidavit of Paudie Murray, who described himself as the second named applicant, which was sworn on 20^th January, 2010. I assume that there is an error in the title to the proceedings and the second named applicant should be named as Paudie Murray rather than Paudie Murphy. The order of the Court will include rectification of the title of the proceedings.

3 The company was incorporated on the 7^th July, 2005 as a company limited by shares with the principal object of carrying on the trade or business of auctioneers, estate agents and suchlike. The applicants were directors of the company, as was the respondent and also John Butler, who is not a party to these proceedings.

4 The company was dissolved on 17^th April, 2009 for failure to file annual returns in the Companies Registration Office (CRO). According to a CRO search dated 25^th January, 2010 exhibited in the grounding affidavit, the last annual return was filed on 7^th January, 2007 and the last accounts filed were to 30^th June, 2006. The search gives the registered address of the company as "Main Street, Macroom, County Cork", although I note from the search that on the 27^th March, 2008 the CRO received a Form B2 dated 3^rd September, 2007 giving notification in the change in the situation of the registered office of the company. There is an apparent conflict on the evidence as to where the registered office of the company is located, the applicants' contention, which coincides with the record in the CRO, is that it is at the respondent's address at Main Street, Macroom, County Cork, whereas, according to a letter dated 18^th June, 2009 from the respondent's solicitor, in reply to the s. 371 notice, the respondent's position was that it was at 85, South Mall, Cork. In his replying affidavit, the respondent has averred that, when the company was incorporated, the registered office was 85, South Mall, Cork, the address from which the second applicant traded as Cork Mortgage Centre. None of the deponents adverted to the Form B2 lodged on 3^rd September, 2007.

5 In the s. 371 notice, which was dated 10^th June, 2009 and was sent by the applicants' solicitors, on their behalf, to the respondent, the respondent was required to make good his alleged default in complying with the provisions of the Companies Acts, with fourteen days after the service of the notice by:

6 (a) making available to the applicants "inspection of all books of accounts of [the company]" and allowing copies to be taken of all such books of account; and

7 (b) making available to the applicants "inspection of the Register of Members, Register of Directors, and the Register of Directors' and Secretary's interests in shares in [the company]".

8 6. There was a formal response from the respondent's then solicitors dated 18^th June, 2009 to the, notice in which the respondent's position was set out as follows:

9 (a) All books of account were then currently with the respondent's accountant for the purpose of preparing trading accounts for the years ended June 2008 and June 2009 and those documents would be made available to the applicants together with a copy of the trading accounts as soon as the exercise had been finalised.

10 (b) The documents listed at (b) in the notice were not, and never had been, in the possession of the respondent, whose view, as I have stated, was that the registered office of the company was at 85, South Mall, Cork and that all company documentation had been sent to that address either for the attention of the third applicant or the first applicant.

11 In the letter of 18^th June, 2009, it was stated that the documents referred to at (a) were being furnished under duress, on the basis that the respondent's position was that the applicants had no entitlement to them because, it was alleged, they, along with Mr. Butler, had agreed to resign as directors of the company in August 2007. That is disputed by the applicants. However, it is common case that after August 2007 the applicants had little or no input into the operation and management of the company or running its business and the respondent had complete control of the company's books and records. There is a dispute, however, as to when the company ceased trading. The position of the respondent is...