The High Court has refused an application by John McKeogh to strike out or stay proceedings seeking a restriction declaration against him over the affairs of companies in the Whelan Group.
Mr Justice Quinn ruled that the documentary gap complained of by Mr McKeogh did not justify halting the case, in part because he had not taken up repeated opportunities to inspect company records. The ruling does not decide whether he acted honestly and responsibly or whether a restriction declaration should be made. The substantive application remains to be heard.
Official liquidator Carl Dillon brought the restriction proceedings in February 2015. The application concerns Whelan Limestone Quarries Limited and Whelan Limestone Quarries (Contracts) Limited. The liquidator alleges, among other matters, that invoices generated by Contracts were notified to Bank of Scotland under an invoice discounting arrangement with Quarries, and that invoices were duplicated to deal with aged debts. He also alleges that the companies continued trading while insolvent and lacked adequate financial controls. These remain allegations for the substantive proceedings.
Mr McKeogh sought records and other material to answer the claims. The judge criticised the liquidator’s delay in responding to early requests and his failure to ensure company records were retained while the proceedings were ongoing. Some records were later unavailable after the receiver sold the premises where they were held; correspondence said they had presumably been destroyed, but the court was not told precisely when or by whom.
The judge also found that Mr McKeogh had contributed materially to the documentary deficit. The liquidator had offered inspection opportunities, and in November 2017 the High Court refused Mr McKeogh’s discovery application, noting that he could inspect records held by the receiver or seek documents from other sources. The Court of Appeal later upheld that decision. Mr McKeogh did not take up the inspection offers before appealing; after the appeal was dismissed, the records were no longer accessible.
The court said the missing documents would not prevent Mr McKeogh from giving sworn evidence about his conduct or referring to relevant gaps in the records when the restriction case is heard. It refused the application to strike out or stay the proceedings and said it would hear the parties on directions for further affidavits and the form of the order.