The High Court found that the two directors of Wood Products (Longford) Ltd were unfit to manage a company, but deferred deciding how long they should be disqualified. Mr Justice Robert Haughton said the misconduct was serious but not egregious and indicated a preliminary range of five to 10 years, with the first respondent facing a period nearer the upper end.
The judgment, delivered on 18 May 2017, arose from an application by liquidator Tony McBride under the Companies Act 2014. The first respondent did not oppose the application. The second, accountant Vincent Fox, contested it. The court said it was unnecessary to decide whether Fox should also be restricted from acting as a director, while noting that it would have been satisfied restrictions were just and equitable.
Wood Products traded from 1975 until it was wound up by court order on 1 May 2014, following a petition by the Revenue Commissioners. The company had previously been struck off in 1999 and 2011 for failing to file annual returns. It continued to trade after both dissolutions; the court described the conduct after the 2011 strike-off as particularly serious. A creditor, rather than the directors, applied to restore it in 2013.
The court found strong evidence that the company continued trading while clearly insolvent from at least 2009, with substantial tax claims effectively uncontested and no counterclaim pursued. At liquidation, tax debts exceeded €1.1 million. Annual returns were not filed after 2005, despite Fox remaining a director. The court said he had a duty to ensure compliance and could not avoid that responsibility by describing himself as a passive director.
The judgment also addressed a €10,000 payment to Fox shortly before the winding-up order. Fox said it was to fund legal and accountancy costs and referred to an €8,000 contribution by Patricia McGowan. The court found the explanation unsatisfactory because supporting documents were not provided and the payment coincided with a €10,491.90 lodgement. It found the payment demonstrated a lack of commercial probity, while not making a finding that the plant and machinery transfer discussed in the judgment amounted to misconduct by Fox.
The court separately found that Fox was responsible for an inaccurate statement of affairs filed in July 2014, which listed trade debtors largely comprising dissolved or insolvent entities. It inferred he had the necessary financial information when preparing it. The court did not find that any failure by Fox to cooperate with the liquidator amounted to misconduct.
Haughton J found both directors’ conduct made them unfit under section 842(d), and also disqualified both on the court’s own motion under section 842(f) for persistent default in relevant Companies Acts requirements. The judgment records a preliminary view on the disqualification period and says the parties would be heard further before the appropriate duration was set.