The High Court has made five-year restriction declarations against Declan Doyle and Breda Doyle, directors of Gingersnap Limited and Scappa Limited, after finding that both companies used money owed to the Revenue Commissioners to fund trading over an extended period.
Mr Justice David Keane delivered the judgment on 8 April 2016. The applications were brought by liquidator Eamonn Leahy under section 150 of the Companies Act 1990. The court said the restrictions were mandatory once the statutory conditions were met and no defence applied; it had no discretion to decline to make them.
The court accepted that neither respondent had acted dishonestly. The issue was whether they had acted responsibly in running the companies. The judge found that Gingersnap accumulated €212,611 in tax liabilities between April 2011 and its winding up in March 2013. Scappa accrued about €154,865 in tax liabilities over several years. The first respondent had acknowledged that Gingersnap used the money for running expenses and Scappa used it to keep other group companies afloat.
The judge found these were deliberate, extended uses of money due to Revenue and were, by themselves, enough to justify restriction. He also found Gingersnap had traded for about 21 months without the required liquor licence, and that both respondents had permitted each company to trade while insolvent for years.
The respondents argued that Scappa’s insolvency followed advances to Gingersnap that were never repaid. The judge found insufficient evidence that Scappa had made such advances. He said that even if it had, allowing them could support a finding of responsibility for Scappa’s insolvency and deficiency.
The liquidator also argued that the transfer of Bowe’s public house business to Amatrek, another company controlled by the respondents, was a “phoenix” arrangement. The judge said it was not necessary to decide whether the transfer met that description: the restriction test concerned the directors’ conduct in each insolvent company, regardless of what happened to its business later.
The court considered the respondents’ claims that they had forgone salaries, personally guaranteed Gingersnap’s borrowing, and that the businesses had provided jobs. It found those matters did not displace the findings of irresponsibility. It also concluded that Breda Doyle’s position as a non-executive director did not excuse the lack of oversight.
The court made the requested declarations against each respondent in both proceedings. The judgment does not identify any further order beyond those restriction declarations.