The High Court ruled that the Companies Acts’ reporting and director restriction regime did not apply to directors of Newbridge Credit Union Ltd (in liquidation). The decision resolved a preliminary issue about the court’s jurisdiction; it did not decide whether the respondent directors had acted improperly or should be restricted on the merits.
The credit union was wound up by High Court order on 16 December 2013, and Jim Luby was appointed official liquidator. The liquidator later applied to the Director of Corporate Enforcement to be relieved from seeking restriction orders against the directors. Relief was granted for two directors appointed shortly before the liquidation, but not for the other named respondents. The liquidator then brought this application under sections 682, 683 and 819 of the Companies Act 2014, or alternatively under the earlier reporting and restriction provisions.
The Director of Corporate Enforcement supported the view that the regime applied. Maria McDonald, the only respondent who appeared at the hearing, opposed that position, as did the Credit Union Development Association, which participated as amicus curiae. Their submissions relied on credit unions’ distinct statutory and regulatory framework and argued that the Companies Acts did not extend the restriction regime to credit union directors.
Justice Robert Haughton concluded that Part 7 of the Central Bank and Credit Institutions (Resolution) Act 2011 did not create a separate winding-up framework. It added provisions that also applied to windings-up under the Credit Union Act 1997. The court therefore found that section 134(4) and (5) of the 1997 Act applied to this liquidation, alongside the relevant provisions of the 2011 Act.
On the restriction question, the judge held that sections 134(1) of the 1997 Act and 76 of the 2011 Act could not be read as applying the Companies Acts’ reporting and restriction regime to credit union directors. He cited the absence of an express extension, the specific treatment of certain Companies Acts provisions in section 134(5), and the differences between company and credit union directors’ roles and regulatory arrangements. The court also noted that a restriction order under the Companies Acts would not prevent a person from serving as a credit union director.
The court had earlier declined to hear constitutional arguments in this preliminary module because they had not been formally pleaded and the Attorney General had not been notified. Given its interpretation of the legislation, it said it was unnecessary to consider whether further constitutional pleadings or the Attorney General’s joinder should be permitted.
The preliminary issue was determined against the liquidator. The court held it had no jurisdiction to grant the requested restriction declarations and struck out the application. It did not determine any separate question about the directors’ conduct.