The High Court disqualified six company directors after finding that the Director of Corporate Enforcement had established the statutory basis for orders in three applications concerning companies struck off the register.
In a judgment delivered on 15 March 2005, Finlay Geoghegan J said the Director had to prove that a qualifying strike-off process followed a letter sent after 1 March 2002, and that the respondents were directors when it was sent. The respondents could avoid an order by showing that the company had no liabilities when struck off, or that its liabilities had been discharged before the application.
The judge set out general guidance for these applications. Where the minimum proofs were established and directors offered no evidence about their role, the strike-off or company liabilities, a disqualification would generally be justified. In the absence of relevant evidence, a five-year period was appropriate, though the court should consider evidence about the directors’ circumstances and the liabilities involved.
The applications concerned Cautious Trading Limited, Shinrone Food Market Limited and Clawhammer Limited. Cautious Trading’s directors gave no evidence. The company was struck off in May 2003, and the judge ordered each director disqualified for five years.
In the Shinrone Food Market case, one respondent wrote to the Director describing the couple’s near-retirement age, personal assets and significant liabilities, and referring to an uninsured fire. The judge said it was unclear whether the liabilities were personal or company debts, and the information did not show that the company had only minimal liabilities or explain why it was struck off instead of being wound up. Each respondent was disqualified for five years.
Clawhammer’s directors said in a joint affidavit that the company stopped trading in October 2001. They listed three debts that had been paid and a Revenue debt of €7,442 that remained unpaid, and said there were no other debts. The judge noted that annual returns or accounts had not been filed after February 1999 and that commercial creditors had been paid while Revenue remained unpaid. He described the remaining debt as relatively small and ordered each director disqualified for one year.
The Director sought costs in all three cases. The judge ordered the Clawhammer and Shinrone respondents jointly and severally to contribute €2,000 in each case. In Cautious Trading, where the respondents had not engaged with the Director or put evidence before the court, costs were awarded jointly and severally, to be taxed if not agreed.