The Supreme Court allowed an appeal in proceedings concerning Worldport Ireland Limited, which was in liquidation, holding that the disqualification provision in section 150 of the Companies Act 1990 applies to human persons and not to corporate bodies.
In a judgment delivered on 16 December 2008, Geoghegan J. said he had read and fully agreed with the judgment of Fennelly J. He also set out additional reasons supporting that conclusion. The source does not include Fennelly J.’s judgment or identify the parties to the appeal.
Geoghegan J. considered how the statutory provisions on shadow directors fit with section 150. He said section 149(5), which provides that the chapter applies to shadow directors as it applies to directors, should be read in context as referring to human shadow directors. He noted that the chapter concerns restrictions on directors of insolvent companies and that section 150’s contemplated order begins with a prohibition on acting as a director. The judgment also observed that section 176 of the Companies Act 1963 prohibits bodies corporate from being company directors.
The judge accepted that companies could be shadow directors, referring to earlier rulings by O’Leary J. and Laffoy J. But he said it was not intended that the chapter containing sections 149 and 150 would apply to corporate shadow directors in the same way as it applies to directors.
He also questioned whether section 150 authorised an order expressly barring a human shadow director from acting as a shadow director. If an adapted order could be made against a company, he said, it might logically bar the company from being a shadow director. Geoghegan J. considered that result inconsistent with the absence of such an express prohibition for human shadow directors. He described a possible alternative restriction, relating to acting as secretary or participating in a company’s promotion or formation, as a major alteration to the subsection’s apparent purpose.
The judgment noted that an earlier judge had been asked to decide two issues and had not needed to draft an order. Geoghegan J. said that, as far as he knew, no order had been made pending the final outcome of the proceedings. He concluded that the appeal should be allowed. The source does not state the precise terms of any consequential order.