The Court of Appeal has ordered that Barry Donohue replace Anthony Fitzpatrick as liquidator of Ladaney Limited, after finding that Revenue was entitled to vote at a creditors’ meeting on a debt valued at €75,375.
The appeal concerned the appointment made at a creditors’ meeting on 15 July 2014, following the company’s decision to enter voluntary liquidation. The company’s directors had nominated Fitzpatrick. Revenue proposed Donohue and said it was owed €371,785. The company’s statement of affairs listed a Revenue debt of €75,375.
The meeting chair accepted the proxies presented, including Revenue’s, and recorded votes worth €81,324 for Fitzpatrick and €75,375 for Donohue. Fitzpatrick was declared elected. Revenue challenged the acceptance of several creditors’ proxies and the refusal to count its larger claimed debt.
The High Court found four creditors’ proxies invalid, involving debts totalling €34,229. It also ruled that the Revenue debt was not sufficiently ascertained for voting purposes, including the €75,375 listed in the statement of affairs. It refused Revenue’s application to replace Fitzpatrick.
On appeal, the Court of Appeal said the High Court had no jurisdiction in Revenue’s application to overturn the chair’s unchallenged decision to allow a vote based on the €75,375 figure. It concluded that the valid vote totals, after excluding the invalid proxies, were €47,095 for Fitzpatrick and €75,375 for Donohue. Donohue therefore had the majority in value required under the Companies Act 1963 to be treated as the creditors’ nominee.
The court also explained that a debt capable of being objectively valued by the debtor or creditor could be counted even if its amount was disputed. It said the €75,375 estimate for PAYE and VAT was a liquidated debt capable of ascertainment. The judgment did not decide whether Revenue could vote on the further amount claimed, including disputed taxes, interest and penalties; the court said that issue raised further questions it did not need to resolve.
The Court of Appeal allowed the appeal and ordered Donohue appointed liquidator in place of Fitzpatrick, with the order taking effect on 1 April 2015. The court noted that Revenue had made no complaint about Fitzpatrick’s conduct of the liquidation.