The High Court has declined to order a liquidator to pay costs after he unsuccessfully sought to have former Shellware Limited director Eoghan Breslin restricted from acting as a company director.
Mr Justice Barrett gave the ruling on 23 July 2014, considering a costs application brought by Breslin following the earlier dismissal of the liquidator’s application under section 150 of the Companies Act 1990. The earlier case was Taite v Breslin [2014] IEHC 184.
The judge said there was no automatic rule requiring costs to be awarded either for or against a liquidator when a section 150 application fails. The court has discretion under Order 99 of the Rules of the Superior Courts and must assess each case in light of its facts and the statutory scheme.
Breslin argued that costs should be awarded against the liquidator, Declan Taite. His complaints included criticisms of the liquidator’s reports to the Office of the Director of Corporate Enforcement (ODCE), statements about Breslin’s honesty, responsibility and cooperation, and claims about company records and delay. The judge said the reports were made in good faith and that the criticisms did not raise issues of real substance bearing on costs.
The court had previously found that Breslin had substantively cooperated with the liquidator. In the earlier section 150 case, it also found that Shellware had kept comprehensive accounts throughout its existence, although its 2007 accounts were not audited. The judge had concluded that the failure to audit those accounts was open to criticism but did not amount to irresponsible conduct. The earlier judgment also said honesty did not appear to be an issue in that application, which focused on whether Breslin had acted responsibly.
The court noted that section 150 applied to Shellware and Breslin as a director; that the liquidator had put the relevant facts to the ODCE in his reports; and that Breslin had an opportunity to comment or provide information. It found that the proceedings had been commenced in good faith and that the circumstances did not justify a costs order against the liquidator.
The order was limited to refusing the costs sought in this application. The judgment does not alter or restate the outcome of the earlier section 150 proceedings.