Re Kelly Trucks Ltd (in Voluntary Liquidation) and The Companies Acts 1963-2012

JurisdictionIreland
JudgeMs. Justice Murphy
Judgment Date15 January 2019
Neutral Citation[2019] IEHC 6
Docket Number[no. 2014/333COS; 2014/484COS]
CourtHigh Court
Date15 January 2019

IN THE MATTER OF KELLY TRUCKS LIMITED (IN VOLUNTARY LIQUIDATION) AND IN THE MATTER OF THE COMPANIES ACTS 1963-2012 AND IN THE MATTER OF THE COMPANIES AMENDMENT ACT 1990

BETWEEN
GERARD MURPHY
APPLICANT
AND
JAMES KELLY

AND

ANNE KELLY

AND

THOMAS CLARKE

AND

NEHAAL SINGH

AND

KELLY TRUCKS STROKESTOWN LIMITED

AND

KELLY TRUCKS (BALLAGHADEREEN) LIMITED
RESPONDENTS

[2019] IEHC 6

[no. 2014/333COS; 2014/484COS]

THE HIGH COURT

Debt – Property – Disqualification – Applicant seeking an order that the respondents are personally responsible for the debts of the company – Whether the respondents were personally liable

Facts: The applicant, Mr Murphy, was the liquidator of Kelly Trucks Ltd. The first and second respondents, Mr and Ms Kelly, were the sole directors of the company. The third respondent, Mr Clarke, was an accountant retained by the company in 2013. The fourth respondent, Mr Singh, was appointed liquidator of the company at a creditors’ meeting on 3rd January, 2014. The fifth respondent, Kelly Trucks Strokestown Ltd, was a company incorporated in July, 2013 of whom the directors were children of the first two respondents. The sixth respondent, Kelly Trucks (Ballaghadereen) Ltd, was another company incorporated in July, 2013, whose directors were initially the first and second respondents, but who had since been replaced by their children. The applicant applied to the High Court seeking: 1) an order that Mr and Ms Kelly are personally responsible, without any limitation of liability, for the debts of Kelly Trucks Ltd and that the first and second respondents be held liable for fraudulent and reckless trading; 2) an order directing Kelly Trucks Strokestown Ltd to deliver to the applicant all property and assets of whatsoever nature of Kelly Trucks Ltd and/or pay such sum to the liquidator on such terms or conditions as to the court seems fit; and 3) an order for the disqualification of the first and second respondents or in the alternative an order for restriction on the grounds that the conduct of the respondents was such as to warrant disqualification as directors or restriction for such period as to the court shall seem meet.

Held by Murphy J that the court would grant a declaration pursuant to s. 610 of the Companies Act 2014 that the first and second respondents be held personally liable for the debts of Kelly Trucks Ltd. Secondly, the court directed pursuant to s. 608 of the said Act that the directors of Kelly Trucks (Strokestown) Ltd deliver to the applicant the sum of €40,820.64 paid by Kelly Trucks Ltd to Kelly Trucks (Strokestown) Ltd between 9th August, 2013 and 25th November, 2013 . The court further ordered that they deliver to the liquidator the nineteen vehicles registered to Kelly Trucks Ltd as of July, 2013 or in the alternative pay to the liquidator the book value of those vehicles as of 31st July, 2013. The court considered that it was just and equitable to order the second respondent to deliver to the liquidator the Audi A4 in her possession which was the property of Kelly Trucks Ltd, or alternatively the book value of that vehicle as of 31st July, 2013.

Murphy J held that the court would, pursuant to s. 842 of the Act, disqualify Mr and Ms Kelly from being appointed or from acting as directors or other officers, or being in any way, whether directly or indirectly, involved in the promotion, formation or management of a company or society within the meaning of the Act, for a period of seven and a half years from the date of perfection of the court’s order.

Application granted.

JUDGMENT of Ms. Justice Murphy delivered on the 15th day of January, 2019
1

The applicant is the liquidator of Kelly Trucks Limited. The first and second-named respondents are the sole directors of the company. The third-named respondent is an accountant retained by the company in 2013. The fourth-named respondent was appointed liquidator of the company at a creditors” meeting on 3rd January, 2014. The fifth respondent is a company incorporated in July, 2013 of whom the directors are James Kelly Junior and Patricia Kelly, children of the first two respondents. The sixth respondent, Kelly Trucks (Ballaghadereen) Limited, is another company incorporated in July, 2013, whose directors were initially the first and second-named respondents, but who have since been replaced by James Kelly Junior and Patricia Kelly.

2

These proceedings were initiated under the Companies Acts 1963-2012 but are now being maintained under the relevant provisions of the Companies Act 2014. The applicant seeks 1) an order that James Kelly and Anne Kelly are personally responsible, without any limitation of liability, for the debts of Kelly Trucks Limited (in Voluntary Liquidation) and that the first and second-named respondents be held liable for fraudulent and reckless trading; 2) an order directing Kelly Trucks Strokestown Limited to deliver to the applicant all property and assets of whatsoever nature of Kelly Trucks Limited and/or pay such sum to the liquidator on such terms or conditions as to the court seems fit and 3) an order for the disqualification of the first and second-named respondents or in the alternative an order for restriction on the grounds that the conduct of the respondents is such as to warrant disqualification as directors or restriction for such period as to the court shall seem meet.

3

The applicant has chosen not to seek relief against either the third or fourth-named respondents and the court notes that in fact he applied to have the application in respect of them struck out in a motion first listed on 20th January, 2015. The status of the sixth respondent is uncertain, as an application to amend its title, also made on the 20th January 2015 has been adjourned generally.

4

In one guise or another this application has come before six different High Court judges and the progress of the application as set out below illustrates the wisdom for case management purposes of having one judge retain seisin of potentially complex and evolving applications.

General background
5

Kelly Trucks Limited (‘the company’) was incorporated on 20th March, 1989. It is a family company that is in the business of truck sales, servicing, repairs and testing. The company is run by the first-named respondent Mr. James Kelly, an expert mechanic, along with his wife, the second-named respondent Mrs. Anne Kelly, who looks after the administration of the business. Mr. and Mrs. Kelly each hold a 50% shareholding in the company.

6

The current controversy stems from a dispute over a defective truck which came before the courts in 2012. The plaintiff in those proceedings was a company called Costello Transport Limited. Following a fully contested hearing, the company Costello Transport Limited was granted a judgment of €32,000 plus costs by order of McCarthy J. on 5th November, 2012.

7

On 21st January, 2013 Mullins Lynch Byrne, solicitors for Costello Transport Limited, issued Kelly Trucks Limited a twenty-one day demand letter pursuant to s. 214 of the Companies Act 1963 for the judgment sum of €32,000 plus costs of €55,904. The letter advised that in default of payment, Costello Transport Limited intended to present a creditors” petition to have the company wound up. The letter also advised that failure to pay would be taken as evidence that the company was unable to pay its debts as they fell due. A further letter of demand was sent on 22nd March, 2013 which, having noted that the amount was still outstanding, again threatened a petition to wind up the company if the amount due was not paid within a further seven days.

8

On 29th April, 2013 the company, Kelly Trucks Limited issued a notice of motion seeking leave to appeal the order of McCarthy J. made almost six months earlier. The company having failed to take such steps within the prescribed time period, sought an extension of time for service of a notice of appeal pursuant to O. 58, r. 3(4), together with an order staying the proceedings pending the outcome of the appeal. The respondents sought consent from Costello Transport Limited to this course of action. Consent was refused. Before the notice of motion was served a Mr. Edward O'Brien who had replaced Callan Tansey as solicitors for Kelly Trucks Limited informed Mullins Lynch Byrne solicitors for Costello Transport Limited that they had received instructions to proceed with the appeal.

9

On 7th May, 2013 Callan Tansey solicitors who had acted for Kelly Trucks Limited in the proceedings with Costello Transport Limited wrote to the company claiming to be owed a sum of €55,986. They wrote again on 12th August, 2013 saying that they would not tolerate delay in payment and giving the company a further seven days to pay.

10

It appears that on 7th June, 2013 the motion seeking leave to appeal the decision of McCarthy J. was refused by order of the Supreme Court. Costs of the motion were awarded against the defendants. As of that date, the company had a judgment liability of €32,000 and a claim for legal costs of approximately €120,000, made up of the plaintiff's costs of the action and the failed motion seeking an extension of time for appeal together with their own solicitors costs of the main action

11

On 11th June, 2013 the judgment order was sent to the Roscommon County Sheriff's Office for execution. Notice was sent to the debtor requesting payment of the amount due. The sum was not paid.

12

On 26th June, 2013 both the costs of the High Court and Supreme Court proceedings came before the Taxing Master. The untaxed bill for High Court costs was now €52,619.97, and the untaxed bill for the Supreme Court hearing was €8,507.12. Mrs. Kelly appeared on this date and applied for an adjournment on the basis that she had just dismissed Callan Tansey solicitors that morning; wished to represent the company herself and needed to obtain the relevant papers. The Taxing Master...

To continue reading

Request your trial
3 cases
  • Costello Transport Ltd v Singh No.2
    • Ireland
    • High Court
    • 7 March 2019
    ...are the subject matter of the judgment and orders of Murphy J. of 15 January 2019, In re Kelly Trucks Ltd (In Voluntary Liquidation) [2019] IEHC 6 by which she dealt with: (i) proceedings bearing Record No. 2014/333 COS brought by Mr Murphy by originating notice of motion dated 2 July 2014......
  • Kelly Trucks Ltd (in Voluntary Liquidation)
    • Ireland
    • Court of Appeal (Ireland)
    • 23 July 2019
    ... ... IN THE MATTER OF KELLY TRUCKS LIMITED (IN VOLUNTARY LIQUIDATION) AND IN THE MATTER OF THE COMPANIES ACTS 1963-2014 ... BETWEEN: COSTELLO TRANSPORT LIMITED APPLICANT/RESPONDENT - AND - ... ...
  • Kelly v Gerard Murphy Purported Liquidator of Kelly Trucks Ltd ((in Liquidation)) No.1
    • Ireland
    • High Court
    • 17 July 2020
    ...does rely upon a booklet of judgments, orders and affidavits and in particular the judgment of Murphy J. bearing the neutral citation [2019] IEHC 6. 6 I carefully considered the motion, the affidavit, and the relevant exhibits to the affidavit of Ms. Kelly grounding the application before m......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT