The High Court has ordered Vivian Devlin, a director of Dev Oil and Gas Ltd, to be personally liable for €425,864 of the company’s debts and disqualified him from company management for eight years.
In a judgment delivered on 21 July 2008, Ms Justice Finlay Geoghegan also declared that the company had failed to keep proper books of account as required by the Companies Act 1990. The company was in liquidation, and Devlin was the respondent to an application brought by its Official Liquidator, J.W.R. Jackson.
The application was heard in Devlin’s absence after the court was informed that he knew it was listed and had no further instructions to defend it. The judge proceeded on the evidence submitted by the liquidator and the legal submissions made on his behalf.
Dev Oil sold petrol, diesel, gas and heating oil in Castleblaney, County Monaghan. The judgment found that records for customers described as “cash debtors”—who had received goods, largely petrol, on credit—did not identify them by name and address. The amount owed by those debtors at the start of the winding up was stated as €515,855.21. The liquidator was not given company records that accurately identified everyone who owed that sum. The judge also referred to failures in recording trade debts.
The court concluded that the record-keeping breach contributed to the company’s inability to pay its debts and caused substantial uncertainty about its assets and liabilities. The liquidator said debt recoveries were running at 1.85%, against an expected rate of about 70%; the judge accepted his evidence. The judgment also records that €9,436.52 had been recovered from trade debtors and nothing from cash debtors.
Applying the approach in an earlier case, the judge assessed the company’s debts at the start of liquidation at €626,271 and found, on the balance of probabilities, that 68%—€425,864—had been lost. She found that such losses were reasonably foreseeable to Devlin given the inadequate records. The order makes him personally liable for €425,864. Although the judge found that the breach impeded the orderly winding up, she did not impose liability for additional liquidation costs because evidence of those costs had not been served on Devlin.
The judge separately found that Devlin’s conduct made him unfit to manage a company and ordered an eight-year disqualification under section 160(2)(d).