The High Court has ordered former liquidator Anthony J. Fitzpatrick to pay the costs of the Revenue Commissioners’ successful application to remove him from Ballyrider Limited’s liquidation. Payment of the costs, once taxed or ascertained, is stayed pending the determination of Mr Fitzpatrick’s appeal against the removal decision.
In a judgment delivered on 27 October 2015, Ms Justice Murphy considered who should bear the costs of the proceedings. The Revenue Commissioners sought an order against Mr Fitzpatrick personally and a declaration under section 280 of the Companies Act that the costs were not properly incurred in the liquidation.
The court had already ruled on 21 July 2015 that Mr Fitzpatrick should be removed as liquidator for cause shown. The earlier decision followed the court’s finding that he had not conducted the liquidation efficiently or cost effectively, and that the Commissioners had raised multiple issues of genuine concern. The court’s current judgment addressed costs; it did not revisit the removal decision.
Applying the usual rule that costs follow the event, the judge found that the Commissioners had succeeded in their application. She held that Mr Fitzpatrick had defended it to protect his own interests, because his conduct of the liquidation was in issue. In those circumstances, he could not be treated as acting as the company’s agent so as to make the company responsible for his costs.
The judge also said the application had been brought to preserve company assets for creditors. It would be anomalous, she said, for the unsuccessful respondent to recover his costs, and those of the successful creditor, from that fund. The court therefore made Mr Fitzpatrick personally liable for the application’s costs and declared that neither his costs nor the Commissioners’ costs were properly incurred in the liquidation under section 280.
Mr Fitzpatrick had appealed the original removal decision to the Court of Appeal, which had stayed the removal order on certain conditions. He asked the High Court to stay its costs order until the appeal was decided. The court declined to prevent the Commissioners from raising and taxing their bill of costs in the meantime. Instead, it stayed payment of costs once taxed or ascertained, pending the appeal’s determination.