The High Court has ordered Heatsolve Limited to be wound up after finding that the company owed the Revenue Commissioners €84,295.75 and had failed to pay the debt. Mr Justice Hogan delivered the judgment on 9 September 2013.
The Revenue Commissioners had sought winding up after sending a statutory demand for €149,134.59 in unpaid taxes, including VAT and employee PRSI. Heatsolve later paid a substantial part of that sum, reducing the balance to €84,295.75. The court said the debt and the resulting insolvency were not disputed.
Heatsolve asked the court to adjourn the petition. Its counsel argued that the company expected a new income stream after moving manufacturing from Ballina, County Mayo, to China, and could repay the Revenue debt over about 18 months. The company’s managing director had sworn that income was expected within about a month. Other creditors, including the Western Development Corporation and United Air Freight Services, supported giving the company time to continue trading.
The court rejected an argument that the Revenue Commissioners were prevented from pursuing the petition because they had accepted a payment just short of €40,000. The judgment found that the Revenue had only agreed to consider a deferred payment proposal once the payment and outstanding tax returns were received; it had not promised to accept the proposal or stop the winding-up process.
Mr Justice Hogan said the court had discretion to adjourn or refuse a winding-up petition, but that such discretion should be used sparingly and where good cause was shown. He distinguished an earlier case in which a creditor was found to have contrived a company’s insolvency. Here, he said, the Revenue debt was real and had not been brought about by the petitioner.
The judge also concluded that allowing a company time to trade out of its difficulties would risk turning winding-up proceedings into a substitute for examinership, which has safeguards including an independent accountant’s report on the prospects of survival. He said a short adjournment, perhaps for weeks, could be appropriate to allow a company to raise funds or receive an expected payment, but the broader breathing space sought by Heatsolve was not justified.
The court declined to adjourn the petition and made the winding-up order under section 213(e) of the Companies Act 1963. The judgment does not state further implementation details of the order.