The High Court disqualified Alan Barrett from acting as a company director for five years and made a restriction declaration concerning Ron Downey after considering the liquidation of Eventelephant Limited.
The judgment, delivered by Mr Justice Tony O’Connor on 27 July 2016, records that joint liquidators Joseph Walsh and Neil Hughes applied to disqualify Barrett and restrict Downey under company law. The court said Eventelephant ran an online event-registration and ticket-sales website, processing payments and taking commissions.
The judge said Barrett did not dispute the liquidators’ account that he diverted significant amounts of customer income through a company PayPal account and then into a Permanent TSB account in his own name and control. The liquidators identified €967,276.71 in transfers to the PayPal account between 8 May 2009 and 6 August 2013. The court described the diversion as wrongful and said it deprived charities and event organisers of income.
The court said Barrett’s counsel accepted that disqualification was inevitable. The judge ordered disqualification for five years, which he described as the minimum period generally applied save in exceptional circumstances. The judgment records that Barrett had pleaded guilty to nine charges of making incorrect VAT returns and one charge relating to PAYE records; sentencing was then scheduled for 25 October 2016. The court did not determine sentencing in this proceeding.
On Downey’s application, the liquidators raised failures involving company books and records, a statement of affairs, cooperation with the liquidation and a Companies Registration Office return. The judge accepted that Barrett’s conduct hindered Downey and that Downey gathered and delivered company records to the liquidators. Only one annual return, for the year ending 30 June 2012, remained outstanding.
But the court was not satisfied that Downey had acted responsibly as a director in 2011–2013. It found he should have sought more than oral assurances from Barrett about the company’s sales and finances, particularly as losses and chargeback problems continued. The judge said Downey should have asked harder questions and sought corroborating evidence.
The court therefore made the declaration required by law in the terms sought in the liquidators’ motion, directing that the order refer to section 819(3) of the Companies Act 2014, with capital requirements specified under the 1990 Act. The judgment noted that Downey could apply for relief from the resulting restrictions under section 822 of the 2014 Act if circumstances warranted.