Re Burren Springs Ltd

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 19 December 2011
• Neutral Citation: [2011] IEHC 480
• Court: High Court
• Date: 19 December 2011

[2011] IEHC 480

THE HIGH COURT

[No. 514 COS/2011]

Burren Springs Ltd, In re

IN THE MATTER OF BURREN SPRINGS LIMITED

AND

IN THE MATTER OF THE COMPANIES ACTS 1963 - 2009

COMPANIES ACT 1963 S214

TAXES CONSOLIDATION ACT 1997 S766

COMPANIES ACT 1963 S216

MACCANN & ORS COMPANIES ACTS 1963-2009 2010ED

COOLFADDA DEVELOPERS LTD, IN RE UNREP LAFFOY 25.5.2009 2009/9/263 2009 IEHC 263

GENPORT LTD, IN RE UNREP MCCRACKEN 21.11.1996 1997/3/1050

DEMAGLASS HOLDINGS LTD, IN RE 2001 2 BCLC 633 2001 AER (D) 382 (JUL)

MINREALM LTD, IN RE 2008 2 BCLC 141 2007 AER (D) 320 (DEC) 2007 EWHC 3078 (CH)

BULA LTD, IN RE 1990 1 IR 440

COMPANY LAW

Winding up

Revenue - Deemed insolvent - Claim for research and development credit pending - Whether unfair to allow Revenue to benefit from failure to make determination on claim for credit - Whether court should exercise discretion - Whether court would be acting in principled manner if it adjourned petition - Re Coolfadda Developers Ltd [2009] IEHC 263, (Unrep, HC, Laffoy J, 25/5/2009); In re Bula Ltd [1990] 1 IR 440 and Re Genport Ltd (Unrep, HC, McCracken J, 6/11/2001) considered - Companies Act 1963 (No 33), ss 214 and 216 - Taxes Consolidation Act 1997 (No 39), s 766 - Winding up order made (2011/514COS - Laffoy J - 19/12/2011) [2011] IEHC 480

In re Burren Springs Ltd

1 Judgment of Miss Justice Laffoy delivered on 19th day of December, 2011.

2 1. On 8 ^th September, 2011 Gerard Harrahill (the Petitioner), the Collector General of the Revenue Commissioners, presented a petition to wind up Burren Springs Ltd. (the Company). The petition was returnable for 10 ^th October, 2011. At the request of the Company it was adjourned from time to time. On 12 ^th December, 2011 the Petitioner insisted that the petition be heard, despite the fact that the Company was seeking a further adjournment in the light of the facts which I will outline.

3 2. The petition was founded on a demand under s. 214 of the Companies Act 1963 (the Act of 1963), which was dated 14 ^th March, 2011, and was served on the Company on 18 ^th March, 2011. In the s. 214 demand, the Petitioner demanded payment of the sums summarised in the following table:

Value Added Tax	€99,430.00
PAYE/PRSI	€35,798.96
Interest	€3,876.51
TOTAL	€139,105.47

4 The Company did not comply with the demand within three weeks and, accordingly, by virtue of the operation of s. 214 there was a deemed insolvency.

5 3. In broad terms, the basis on which the Company sought to resist the making of a winding-up order was that it had a claim pending before the Revenue Commissioners for a research and development tax credit which, if allowed, would wipe out its indebtedness to the Revenue Commissioners. The detail of that claim has been outlined in an affidavit sworn by Brendan O'Mara, a director of the Company, on 8 ^th December, 2011.

6 4. It is important to point out that, as invariably happens on petitions by the Petitioner, the proofs are in order and, but for the position of the Company, a winding-up order would be made. No creditor of the Company indicated to the Petitioner an intention to appear at the hearing of the petition, and no creditor or interested party, apart from the Company, appeared on the hearing of the petition.

7 5. Mr. O'Mara's affidavit sets out the factual position in relation to the claims for research and development tax credit under s. 766 of the Taxes Consolidation Act 1997 (the credit). Mr. O'Mara averred that the application for the credit for the accounting year ended 30 ^th June, 2010 was submitted to the Revenue Commissioners on 17 ^th June, 2011 and that the claim for the accounting year ended 30 ^th June, 2011 was submitted on 26 ^th September, 2011. The following table summarises the effect of the credit for each accounting year, if allowed, and the breakdown of the amount for each accounting year as regards the date on which the credit will be available:

Date on which credit available	Accounting y/e 30 th June, 2010	Accounting y/e 30 th June, 2011	Total
	€	€	€
23 rd March, 2011	43,389.00	-	43,389.00
23 rd March, 2012	44,046.00	45,928.00	89,974.00
23 rd March, 2013	5,475.00	24,167.00	29,642.00
TOTAL	92,910.00	70,095.00	163,005.00

8 The above figures are the figures which are set out as representing the available credits in a letter dated 1 ^st December, 2011 from the Revenue Commissioners to the Company, which I surmise was issued in anticipation of the petition being before the Court on 5 ^th December, 2011. However, the basis on which the letter issued was that a decision had not been made by the Revenue Commissioners on the claims of the Company for credits and the figures were based on the assumption that the claims would be accepted in full. It was stated that the figures were based on figures submitted by the Company to the Revenue Commissioners on 17 ^th June, 2011 and 26 ^th September, 2011 and were also based on the contention of the Company that no corporation tax was due by it for the accounting years concerned. Accordingly, the figures which were furnished were provided in the interests of clarity but were subject to the qualifications set out above and, in particular, the qualification that they were subject to the claims being accepted in full.

9 6. In his affidavit Mr. O'Mara has acknowledged that, as of the date of swearing of the affidavit, the sum due to the Revenue Commissioners by the Company in respect of all taxes and interest had increased to €152,124. However, the position of the Company is that the credits to which it is entitled, which aggregate...