Stafford v Beggs and Others

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Sean O'Leary
• Judgment Date: 14 July 2006
• Neutral Citation: [2006] IEHC 258
• Date: 14 July 2006

[2006] IEHC 258

THE HIGH COURT

[COS.459/2003]

STAFFORD v BEGGS & ORS

IN THE MATTER OF DOHERTY ADVERTISING LIMITED

(IN OFFICIAL LIQUIDATION)

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

BETWEEN

JAMES STAFFORD

APPLICANT

AND

MARK BEGGS ANTONY MARTIN PASCAL TAGGART SHAY MORAN LIAM GASKIN

RESPONDENTS

COMPANIES ACT 1990 S150

MURPHY v MURPHY & ORS 2003 4 IR 451

COMPANY LAW ENFORCEMENT ACT 2001 S41

RSC O.99 r1

USIT WORLD PLC, RE UNREP PEART 16.11.2005 (TRANSCRIPT UNAVAILABLE)

COMPANIES ACT 1990 S150(4)(B)

RSC O.99 r1(4)

COMPANY LAW

Directors

Restriction - Costs follow event - Discretion of court - Unsuccessful application to restrict directors - Whether court had discretion to award costs in unsuccessful application to restrict directors - Whether general rule that costs follow event was applicable in cases where director satisfies court that he should not be restricted - No order as to costs - (2003/459Cos - O'Leary J - 14/7/2006) [2006] IEHC 258

Re Doherty Advertising Ltd; Stafford v Beggs

Facts: The third and fourth named respondents applied for costs consequential to a decision of the High Court pursuant to s. 150 Companies At 1990, as amended, deciding that the second to fifth named respondents should not be restricted. The question arose as to the interpretation of s. 150(4B) of the Act of 1990, as amended, and the discretion of the Court to award costs.

Held by O’Leary J., that s. 150(4B) of the Act of 1990, as amended did not remove the court’s discretion to award costs pursuant to O. 99 r. 1 RSC. Costs would not normally be awarded to a director against whom a restriction order was not made and no order as to costs would be made.

Reporter: E.F.

1 JUDGMENT of Mr. Justice Sean O'Leary delivered on the 14th day of July 2006

2 This is an application for costs by the third and fourth named respondents which arises consequential to a decision of this Court made in respect of an application under s. 150 of the Companies Act, 1990. The substantive application was brought by the applicant, who is the liquidator of Doherty Advertising Limited ("the Company") having been so appointed by order of the High Court of 24 ^th September, 2003. On that application the Court decided that the second to fifth named respondents should not be restricted as the Court was satisfied that they had shown that they had acted responsibly and honestly and that there was no other reason why they should be restricted.

3 In Visual Impact and Displays Limited (in Liquidation) v Murphy & Others [2003] 4 I.R. 451 Finlay Geoghegan J decided that the combined effect of the original provisions of s.150 of the Companies Act 1990 and the amendment of that Act by the insertion of s150 (4B,) as provided by s. 41 of the Company Law Enforcement Act 2001 did not remove the court's discretion to award costs in accordance with the normal rule dealing with costs i.e. O, 99. r. 1.

4 This reasoning was followed by Peart J in In the Matter of USIT Limited and in the Matter of The Companies Acts 1963-2003 [2002 No 25 Cos] and also In the Matter of USIT World PLC and in the Matter of The Companies Acts 1963-2003 [2002 No 38 Cos] (unreported, High Court, Peart J,, 16 ^th November,2005).

5 This Court sees no reason to depart from the aforementioned decisions.

6 Further, the Court rejects any application that the effect of s 150 (4B) is to limit the discretion of the court in applications falling outside the terms of that section. Specifically the Court rejects any suggestion that it is obliged, by the enactment of s.150 (4B), to award costs to a director who discharges the onus of proof. If such a departure from normal practice was intended the matter would have been addressed at the time s 150 (4B) was...