The High Court ordered declarations restricting Shiv Kumar Sharma and Geeta Sharma as directors of Fortwilliam Catering Limited, which was in liquidation. It declined to make restriction declarations against Trisha Sharma and Kavita Sharma.
Mr Justice Max Barrett delivered the judgment on 13 January 2015 on an application by the company’s liquidator, Anthony J. Fitzpatrick, under section 150 of the Companies Act 1990. The court’s decision concerned the four respondents’ roles as directors of Fortwilliam; it said it had regard exclusively to those roles, while also considering the company’s apparent status as a “phoenix” business.
Fortwilliam was incorporated in July 2010 to operate the Woodstock Hotel near Ennis, County Clare. The judgment said the company made substantial losses from the outset and traded for a time without an intoxicating liquor licence. It entered liquidation in January 2013 owing money to creditors, including the Revenue Commissioners and Clare County Council. Its tax liabilities were almost a quarter of a million euro, the judgment said.
The court found that Shiv Sharma, who directed the hotel’s general manager, had not acted responsibly in the company’s affairs. It cited Fortwilliam’s establishment as a phoenix company, its losses, trading without a liquor licence and continued trading after the point when, in the liquidator’s reckoning, it should have ceased.
Geeta Sharma had been appointed a director in February 2012. The liquidator said she had no role in the company’s management or hotel operations and appeared to have been appointed to meet the requirement for two directors. The court found that “real moral blame” attached to her acting as the required second director in establishing the phoenix company, and held that it was just and equitable to restrict her.
Trisha and Kavita Sharma had served as directors from July 2010 to February 2012. The court said they appeared to have done nothing as directors beyond accepting appointment, and described that as unwise. However, it found no want of honesty or responsibility requiring restriction and no other reason making such declarations just and equitable. It also questioned the liquidator’s submission that the two had facilitated the business, noting that Geeta Sharma was the second director required.
The court concluded that restriction declarations were required against Shiv Kumar Sharma and Geeta Sharma under section 150, but not against Trisha Sharma or Kavita Sharma.