The High Court has stopped the main contractors on the Nenagh Bypass from pursuing a winding-up petition against earthmoving and haulage subcontractor Donal Rigney Limited over a disputed €156,214.31 payment.
Donal Rigney Limited, trading as Hiredepot, worked on the County Tipperary road project between April and December 2008 for three Portuguese construction companies trading together as RAC Eire.
The subcontractor accepted that four invoices totalling €156,214.31 had effectively been paid twice. The dispute was whether that money nevertheless could be retained or set off against a separate claim for downtime caused by adverse weather and delays.
Relations between the companies had already resulted in a settlement agreement dated December 18, 2008. Under it, RAC Eire paid Donal Rigney Limited €158,863.04 in January 2009 in settlement of claims made by the subcontractor.
After identifying the duplicated payments, the contractors demanded repayment of €156,214.31. A statutory demand followed in May 2009 and, when payment was not made, a High Court winding-up petition was presented on August 20.
Donal Rigney Limited argued that it had a substantial downtime claim of €156,223.75 and that the earlier settlement was intended to bring outstanding matters between the parties to an end. It maintained that the disputed overpayment could therefore be set off against the downtime claim.
Ms Justice Laffoy found that RAC Eire was prima facie a creditor and had been entitled to serve the statutory demand. However, that did not decide whether the alleged debt could properly support a winding-up petition.
The court held that the subcontractor had demonstrated a genuine and substantial dispute about liability. A winding-up petition is not an appropriate mechanism for enforcing a debt that is genuinely disputed on substantial grounds.
The contractors were therefore restrained from advertising or proceeding with the petition. The petition itself was not removed from the High Court file. Any attempt to recover the disputed sum would instead have to be pursued through ordinary litigation.