The Supreme Court has upheld the High Court’s refusal to adjourn the winding-up petition against Coolfadda Developers Limited and continue its provisional liquidation. The Court said it had power to grant adjournments in exceptional cases, but that the circumstances here did not justify using it.
Coolfadda, a construction company in provisional liquidation, appealed the High Court’s decision. It had sought time to complete building work at eight development sites before a winding-up order was made. The company argued that this could maximise returns for creditors because employers might be able to terminate construction contracts if the company were wound up.
The High Court refused the application. The Supreme Court appeal concerned that refusal; the issue before the Court was whether the petition could be adjourned while the provisional liquidator remained in place. The Court treated the appeal as urgent because the company wanted the provisional liquidator or an official liquidator to deal with employers with clarity.
Denham J. said the Companies Acts allowed a court, in an exceptional case, to adjourn a winding-up petition from time to time. She cited an earlier case involving companies seeking time to realise a single claim for creditors. But she distinguished it from Coolfadda’s proposal, which involved completing eight developments at different stages, entering into arrangements with suppliers and relying on the assumption that the houses would be completed and sold.
The Court also considered a later affidavit from company director Conor Slattery. He said that, for most contracts, he and Paul Collins were not the employers and could not prevent employers from exercising termination clauses. Slattery further said employers had already started trying to terminate contracts, which he attributed to the decline in the property market making the contracts unprofitable for them.
Denham J. concluded that any misunderstanding by the High Court judge about who the employers were did not undermine her legal analysis. The case did not meet the threshold for the exceptional jurisdiction, so the question of how to exercise discretion did not arise.
The Supreme Court affirmed the High Court judgment and order refusing an adjournment. It said the provisional liquidation should not continue indefinitely. The appeal did not result in an order allowing Coolfadda additional time to finish the developments.