The High Court declared that Michael Taggart and John Taggart, former directors of Tailored Homes (Navan) Limited, were restricted for five years from acting as directors or secretaries or taking part in forming or promoting a company, unless it meets the capital requirements in section 819(3) of the Companies Act 2014.
Mr Justice Max Barrett delivered judgment on 15 February 2017, on an application by the company’s liquidator, Brendan O’Donoghue. The court had to make the declaration unless satisfied that each respondent had acted honestly and responsibly, cooperated as far as reasonably expected with the winding up, and that no other reason made restriction just and equitable.
The company was set up in 2008 to develop a site in Johnstown, County Meath. It ceased trading at the end of 2010 and entered liquidation in November 2012. The judge rejected the liquidator’s contention that houses had been sold at significant losses: sales of about €3 million produced an overall difference of roughly €1,000 from appraised values. He also found no evidence that trade creditors had been adversely affected in the way alleged.
The judgment did not find dishonesty, underhand dealing or a failure to cooperate with the liquidator. It accepted the brothers’ explanation for excluding unsold work in progress from the statement of affairs, and noted the liquidator’s reports that they cooperated from May 2013. The court also found a commercial explanation for the handling of sales proceeds, which were directed to the bank under the financing arrangements. It attributed the company’s insolvency principally to the collapse of the property market.
But the judge found the directors had delayed liquidation despite clear warning signs. The company accumulated unpaid PAYE/PRSI over three successive years: €11,711 in 2010, an estimated €37,787 in 2011 and just over €44,000 in 2012. The court found no evidence that the brothers had tried to agree a payment plan with the Revenue Commissioners, who were seeking payment. The company also failed to file annual returns and accounts for 2010 and 2011. The court found a want of responsibility in both the prolonged tax arrears and the filing failures.
Because the court was not satisfied on every statutory defence, it had to make the five-year declaration. Justice Barrett said he might have imposed a shorter period if the law gave him that discretion, but it did not.