The High Court has set aside an order that gave an unpaid tax liability of Harley Mechanical Services Limited priority as an examinership expense. The court held that it had no jurisdiction to confer that statutory status on the debt, and that Revenue’s application came after the company had already been wound up.
The ruling concerns a P30 return for July 2017, which was due to be filed and paid by 23 August. The company had undertaken to meet current tax liabilities as they fell due while under court protection. The return was not filed and the liability remained unpaid. At the hearing, Revenue’s counsel put the tax due at about €107,000.
The company entered examinership after presenting a petition on 28 June 2017. Aengus Burns was appointed interim examiner and later examiner. On 5 September, after no funding was secured for a proposed scheme of arrangement, the court lifted protection, ordered the company wound up and appointed Burns liquidator.
Later that day, Revenue applied without notice to have the July tax debt treated as an examinership expense. The court granted the request and gave the liquidator liberty to apply. That status would have put the debt ahead of claims in the liquidation, including the liquidator’s costs and expenses. Burns later sought to have that part of the order set aside.
Justice Baker rejected allegations that either Revenue or Burns had acted without candour. She found that Burns’s report to the court disclosed the unpaid liability, although it mistakenly said the return had been filed. She also found that Revenue’s counsel had explained the nature of the order sought.
The judge said the undertaking was given to the court, but did not guarantee payment or improve Revenue’s statutory priority. Under the Companies Act 2014, qualifying liabilities can receive examinership expense status if the examiner certifies them in writing when incurred and the statutory conditions are met. The July liability had not been certified. The court said it had no standalone statutory or inherent power to deem it a qualifying expense.
The application also came too late: by the time Revenue sought the order, the company was already in liquidation and the examiner’s role had ended. The court therefore set aside the part of the 5 September order treating the July 2017 P30 tax debt as an examinership cost or expense. The judgment does not determine any further payment or recovery of that debt.