The High Court has refused an application to restrict Thomas Kevin O’Callaghan from acting as a company director, finding that McSweeney Civil Engineering Ltd was solvent and had not traded while insolvent.
Mr Justice Gilligan delivered the judgment on 3 November 2015. The application was brought by the company’s liquidator, Tom Keane, under section 150 of the Companies Act 1990. It sought a five-year restriction on Mr O’Callaghan acting as a director, subject to the statutory exception for companies meeting specified capital requirements.
The company ceased trading in 2006. The dispute that led to its winding up began when Austin Connole obtained an uncontested judgment for €10,018 plus costs over a claimed debt for stone deliveries. Mr O’Callaghan disputed the debt, but it remained unpaid and a liquidation petition followed. The judgment and costs were later paid in full.
Mr Keane said the company was owed substantial inter-company debts and alleged that Mr O’Callaghan had failed to keep proper records, given a misleading statement of affairs, delayed the liquidation work and acted irresponsibly. Mr O’Callaghan disputed those claims. Among other matters, he said an inter-company debt had been forgiven. A related dispute over an alleged €291,000 debt led to a separate winding-up order against McSweeney Building and Civil Engineering Ltd; that company later paid €180,000 to the liquidator under a court-approved settlement. The parties also settled a dispute over company assets at a stated value of €600.
The judge reviewed the legal principles governing director restrictions, including the need to assess directors’ statutory and common-law duties. He noted that the purpose of section 150 is to protect the public and companies from directors whose record in insolvent companies shows they pose a danger to creditors, rather than to punish them.
Mr Justice Gilligan said the respondent had brought trouble upon himself through his approach to the creditor’s claim and his conduct after the liquidator’s appointment, causing substantial inconvenience and expense. But he found the company had never traded while insolvent, was tax compliant, and that no third party had suffered financial loss arising from the respondent’s directorship. The liquidator’s costs and expenses had also been discharged.
The court refused the requested relief. It did not make a restriction declaration against Mr O’Callaghan, reasoning that section 150 had no role where the company concerned was solvent.