The High Court has allowed the Director of Corporate Enforcement to join an application by two former directors of CMC (Ireland) Limited seeking relief from company directorship restrictions.
In a judgment delivered on 24 October 2005, Ms Justice Finlay Geoghegan ruled that section 152(4) of the Companies Act 1990 did not prevent the court from adding the Director as a notice party. The order allows the Director to participate in the pending application. It does not determine whether the two applicants should receive relief from the restrictions.
Gary Carolan and Niall Cosgrave were made subject to declarations of restriction by the High Court on 4 March 2005 under section 150 of the Act. They applied under section 152 on 22 April for relief from the terms of that order. The restriction application had been brought by Ken Fennell, the company’s liquidator.
The Director applied to join the relief proceedings in August 2005. The applicants opposed the request, arguing that section 152(4), which gives a right to appear and give evidence to the liquidator and any creditor or contributory, excluded other participants. The Director argued that the court retained its general power to add parties where their presence would help it resolve the issues.
The judge held that section 152(4) gives the listed groups a statutory right to appear, but does not exhaustively identify everyone the court may allow to participate. She distinguished an earlier decision concerning who may initiate restriction proceedings under section 150, finding that it did not limit the court’s power to add a party to an existing section 152 case.
In deciding that the Director’s participation was necessary and desirable in this application, the judge noted that the liquidator did not plan to present evidence and that no person with a right to appear intended to test the applicants’ evidence or submissions. The applicants had relied, among other matters, on their roles in three other trading companies said to employ about 17 people, and on the financial burden of investing approximately €190,000 to remain directors. The Director said he could provide relevant evidence and submissions about those companies and the applicants’ circumstances.
The judge stressed that the ruling did not mean the Director should be joined in every section 152 application. Whether to join him would depend on the facts of each case and the interests of justice.