The High Court has declared Patricia Courtney restricted from acting as a company director after finding that her unexplained private purchases on a company credit card showed a lack of responsibility. The court declined to make the same order against her husband, Gerard Courtney, in proceedings concerning Mint Restaurant Limited, which went into voluntary liquidation in 2009.
Mr Justice Barrett delivered judgment on 25 July 2014 on an application by liquidator Patrick McCoy under section 150 of the Companies Act 1990. The provision allows the court to restrict a person from acting as a director. The court said no “just and equitable” grounds for an order had been alleged, and assessed whether each respondent had acted honestly and responsibly.
The liquidator identified concerns including unpaid tax, deficient company records, repayments of loans owed to the directors, non-business purchases on the company credit card and some lack of cooperation with the liquidation. He also set out mitigating factors. The directors had invested more than €400,000 in the company, and their total losses exceeded €472,000, according to his affidavit. He considered that the recession had contributed to Mint’s financial difficulties and said fuller records were unlikely to have increased creditor returns.
The court found that Mint’s tax failures were limited and did not amount to a total disregard of revenue obligations. It described the deficient records as unwise and reproachable, but not irresponsible, relying on the liquidator’s assessment of their likely effect on creditor returns. It also found no basis on the information before it to conclude that repayments of about €23,000 on loans from the directors involved dishonesty or irresponsibility.
The court viewed improper use of company funds seriously. It said no explanation had been offered for Ms Courtney’s non-business purchases and concluded that they showed at least a want of responsibility in her capacity as a director. It found no indication that Mr Courtney had been party to those purchases.
Although the court said directors should cooperate fully with a liquidator, it considered the shortcomings in cooperation in this case reproachable but not irresponsible. It did not decide whether a passive “helpful spouse” could avoid restriction: Ms Courtney’s use of the card meant that issue would not affect the outcome.
The court was not satisfied that a section 150 declaration was required for Mr Courtney. It issued the declaration against Ms Courtney on the terms provided by the legislation. The judgment does not specify the duration of the restriction.