The High Court has appointed an inspector to investigate the affairs of WFS Forestry Ireland Limited after a creditor alleged that investors’ money had not been repaid and questioned whether promised forestry projects existed as described.
In a judgment delivered on 19 July 2022, Mr Justice Quinn said the evidence disclosed matters warranting investigation, including the company’s interest in lands cited in investment documents, the application of loans and advances, and the status of funding said to be sought from another entity. He found prima facie evidence of wrongdoing, unlawfulness or other irregularity, while stressing that the disputed facts could not be determined on the application.
The applicant, John Kearney, said he made five investments totalling €157,360. Three loans for an online Christmas tree retail platform, Jingletree, totalled €53,500 and were due for repayment in 2021, with €72,760 claimed due including the promised returns. He said those loans had not been repaid. The judgment records that the company’s director, Craig Hands, acknowledged repayment delays in correspondence but attributed the company’s difficulties to circumstances including the pandemic and a prospective €5 million investment that did not materialise.
Other investors filed affidavits describing unpaid investments and disputes over the land and plantations identified in their agreements. Hands denied wrongdoing and disputed aspects of their accounts. The judge noted conflicting explanations about land and alleged substitutions of one location for another without investor agreement. He also identified evidence concerning overdue repayments, company transactions with related entities, financial statements showing a balance-sheet deficit, and potential breaches of company filing and director-related requirements. These were matters for investigation, not final findings of liability or fraud.
The Director of Corporate Enforcement and the Minister for Justice did not oppose appointing an inspector, though they argued that liquidation could be more suitable and raised the public cost. The judge concluded the application had a wider dimension because at least 18 investors were said to be affected, with investments exceeding €1.4 million. He declined to require the applicant to provide security for the investigation expenses.
The court appointed Declan DeLacey as inspector and directed him to investigate and report on whether the company’s affairs involved fraud, an unlawful purpose, unlawful conduct or unfair prejudice to creditors, and whether the company was formed for a fraudulent or unlawful purpose. The court did not order Hands to produce documents or attend before the inspector at this stage. It said compulsory orders under section 757 could follow only after the statutory process for alleged non-cooperation had been completed. Further submissions were to be heard before the order was finalised.