The High Court has ordered three former directors of Custom House Capital Limited to pay €181,461.50 jointly and severally for legal costs and the costs of investigating their conduct and collecting evidence for a disqualification application.
Mr Justice David Keane made the order on 29 June 2017, following a separate order on 2 December 2016 that disqualified the three directors under section 842 of the Companies Act 2014. The earlier disqualification periods were 14 years for Harry Cassidy, 10 years for John Whyte and 12 years for John Mulholland. The June 2017 hearing concerned the liquidator’s application for costs, not a new determination of the disqualification application.
The liquidator sought costs under section 160(9B) of the Companies Act 1990 or, alternatively, section 846 of the 2014 Act. The court found the claimed investigation fees and evidence-collection fees reasonable. It measured the legal costs at €38,000, using the amount estimated to tax on a party-and-party basis rather than the higher solicitor-and-client amount sought.
The resulting award comprised €38,000 in legal costs, €86,075.50 for investigation and €57,386 for collecting evidence. The court ordered the total to be paid forthwith and made all three respondents jointly and severally liable.
Cassidy did not appear at the costs hearing. The judgment records that his correspondence included assertions that he lacked funds to retain legal representation, but says those assertions had no evidential value; he could have appeared in person. Whyte’s solicitors said they had no instructions, and neither they nor Whyte took any further part. Mulholland opposed the costs application, relying on his cooperation with the investigation, his decision not to contest the disqualification application on its merits, and the asserted unfairness of joint liability.
The judge rejected those submissions, referring to findings made in the earlier disqualification judgment, including findings of fraud against Mulholland and that he had personally benefited from wrongful commissions. The judge also cited the inspectors’ report, which put potential client losses at €66.55 million as of 19 October 2011. The court held that the respondents’ cooperation and approach to the earlier application had already been taken into account, and that joint liability allowed the injured parties to seek recovery from any wrongdoer, leaving contribution between wrongdoers to be pursued separately.