The High Court has ruled that NAMA/National Asset Loan Management (NALM) must bear the costs of preparing Middleview Ltd’s audited accounts for the years ended 2010 and 2011, and share the costs for 2012 and 2013 equally with director Garrett Kelleher and the directors.
The judgment by Mr Justice Cregan addresses the costs of bringing the company’s accounts up to date after its restoration to the register. The judge said the question was what arrangements would place the company and other affected people as nearly as possible in the position they would have occupied had it not been struck off.
Middleview, an investment property company, was struck off in March 2014 for failing to file annual returns. NALM had sought its restoration so receivers could realise company assets against debt. The High Court ordered restoration on 2 March 2015. The costs issue was considered afterward as part of that restoration application.
Kelleher argued that NAMA controlled the company’s rental income and had arranged funding for the accounting work. NALM disputed that it had assumed responsibility for the directors’ filing duties, but accepted that it had approved funding for audit fees covering 2010 and 2011. The judge found the affidavit evidence established an agreement to fund the KPMG fees for those two years.
For 2012 and 2013, the judge found no evidence of a specific funding agreement. He nevertheless considered it more likely than not that NAMA would have continued funding the accounts, given its interest in maintaining the company’s registration and protecting its security. Because that outcome was not certain, and the directors also had responsibility for ensuring the company could pay its auditor, he ordered a 50/50 division of the costs for both years.
The judgment also records that the judge found NALM’s evidence about the receivers’ appointment incorrect: documents showed they were appointed on 28 March 2014, the day the company was struck off. The court’s conclusion dealt with the allocation of the specified accounting costs within the restoration application; it did not order NAMA to pay every cost associated with the company or its restoration.