The High Court struck out an application to restrict two former directors of Supreme Oil Company Limited after finding that it had been brought following inordinate and inexcusable delay.
Official liquidator David Hughes had sought a declaration that Seamus Duffy and Eugene Hanratty be barred for five years from acting as directors or secretaries, or taking part in the promotion or formation of a company unless it met statutory requirements. The respondents did not dispute that they were directors when the company’s winding up began, or that the company was insolvent. They argued as a preliminary matter that the application should be dismissed because of the delay.
The company was incorporated in 1987 and traded in oil and petroleum products from a yard at Longfield, Castleblayney, County Monaghan, until November 1991. A winding-up petition was presented on 4 November 1991, and the High Court made the winding-up order on 25 November that year. The company’s winding up was deemed to have commenced on the petition date.
The liquidator met Duffy in December 1991 and received some company records, but not a complete set. Duffy said that Customs and Excise authorities had previously seized records. The liquidator later corresponded with Duffy and his solicitors about a statement of affairs and copies of company records; that communication appears to have ended in October 1995. The judge said there appeared to have been no contact with Hanratty after shortly after the winding up began.
The application motion was issued on 5 December 2003, more than 12 years after the winding up began. The liquidator argued that the respondents had not been prejudiced because they had failed to cooperate with preparation of a statement of affairs. The judge noted that no explanation had been given for waiting until December 2003 to bring the application.
Justice Finlay Geoghegan held that the delay was both inordinate and inexcusable. She found that the liquidation had no assets, had made no progress and had been allowed to remain dormant rather than be finalised, while the section 150 application was overlooked. She concluded that allowing the case to proceed would breach the respondents’ constitutional right to fair procedures, given the elapsed time and the absence of contact for more than eight years before the motion was issued.
The judge therefore struck out the application against both respondents. Having reached that conclusion, she did not decide whether the delay had also put a fair hearing at risk. The court made no determination on whether the respondents had acted honestly and responsibly in the company’s affairs, or whether restriction declarations should otherwise have been made.