The High Court has ordered Petrolo Limited and Jeffrey Stokes to pay €21,049 to the liquidator of Citywest Hire Limited, after finding that €63,048.25 in restaurant takings belonging to Citywest had been transferred to Petrolo’s bank account.
Ms Justice Finlay Geoghegan made the order under section 139 of the Companies Act 1990. She found that transferring the money deprived Citywest of receipts from its business and amounted to a fraud on the company within the meaning of that section.
Citywest traded Il Segreto on Merrion Row, Dublin, until it ceased trading on 9 June 2013. The judgment records that no cash or credit card sales were lodged to Citywest’s AIB account from 30 May to 9 June. Citywest’s cash sheets instead recorded takings as lodged to Petrolo’s account. The landlord repossessed the premises on 10 June, and Petrolo then traded the Unicorn Restaurant nearby.
The court said the transferred money was Citywest’s property and had been lodged to Petrolo’s account; those points were not disputed for the application. The judge was satisfied that Stokes appeared to have had at least control over the money, although he was not a Petrolo director. The court found Petrolo had had its use and possession.
The respondents argued that the full €63,048.25 had been used to pay Citywest’s liabilities. The judge found, on the balance of probabilities, that €29,334.92 went to Citywest employees for work up to and including 9 June, and €12,664.31 went to Citywest suppliers for continued trading at Il Segreto. She excluded those payments from the order as just and equitable. The respondents did not establish that further payments were made exclusively for Citywest’s benefit. The remaining amount ordered was €21,049.
The judge said she would hear counsel before fixing the payment deadline. She did not determine the liquidator’s alternative or additional claim against Stokes under section 298 of the Companies Act 1963, alleging misfeasance or breach of duty. She said that claim could not fairly be decided on affidavit evidence alone, but declined to direct a further hearing or cross-examination. Even if the claim were established, she said, she would not make a monetary order against Stokes exceeding €21,049 in light of her findings about how the money was used.