The High Court refused to make restriction declarations against Tadhg O’Conaill and his mother, Mary O’Conaill, after considering a liquidator’s application over unpaid construction workers’ pension contributions.
Mr Justice Max Barrett delivered the judgment on 13 January 2015. He said the company owed the Construction Workers’ Pension Scheme (CWPS) €61,959.92 when it entered voluntary liquidation in June 2011. The liquidator argued that the company’s failure to remit contributions within the required period showed the directors had not acted honestly and responsibly.
The company, Tadhg O’Conaill Heating and Plumbing Limited, had paid contributions up to September 2009. The judgment records that cash-flow difficulties then led to arrears. An instalment arrangement was agreed in August 2010, and the company paid €41,714.44 towards arrears between September 2010 and February 2011. It could not keep up current payments, and the company went into liquidation the following June. The judgment says unpaid contributions were used to pay wages and suppliers.
Mr O’Conaill accepted that the contributions were overdue. He said he had tried to keep the business afloat, paid employees and suppliers, and entered the repayment arrangement in good faith. In an affidavit, he said he had put about €1 million of his own money into the company and had sold two houses in efforts to save it. These were his submissions, as set out in the judgment.
The judge described the non-payment as a serious misjudgment and said it was unacceptable for a company to default on pension contributions. But he concluded that, in the circumstances, Mr O’Conaill’s conduct did not show the irresponsibility or dishonesty that required a restriction declaration. The court considered the company’s otherwise proper management, efforts to address the arrears, its long trading history and the severe economic downturn after 2008. The decision turned on the facts of this case; the court did not excuse the default as a general matter.
The court also refused a declaration against Mary O’Conaill. It found that she had agreed to be the second director in 2000 because she was her son’s mother, had no part in running the company and received no direct benefit from its operation. The judge found no real moral blame on her part and said a restriction would not be just and equitable. He added that even if she were treated like any other director, the factors that led him to refuse a declaration against her son would also apply to her.
The ruling concerned the liquidator’s application for restriction declarations under section 150 of the Companies Act 1990. The judgment refused those declarations; it does not state that the pension arrears were paid or otherwise resolve the company’s debts.