The Court of Appeal refused Lobar Limited’s application to continue a stay on its winding-up order, leaving the company in liquidation while its appeal proceeds. The court found that the application had not been sanctioned by the company’s creditors or approved by the liquidator, and that the balance of justice favoured refusing the stay.
The High Court ordered Lobar wound up on 29 January 2018 and appointed chartered accountant Myles Kirby as liquidator. An amended order followed on 5 February. The High Court’s stay was to continue until the first directions hearing in the Court of Appeal. That hearing took place on 20 April 2018, but Lobar did not seek an extension then. By the time the Court of Appeal heard the stay application, the stay had expired and the liquidator had been appointed.
Lobar’s appeal challenges whether Michael Gladney, the petitioner and an officer of the Revenue Commissioners, was entitled to petition for the company’s winding up. Its grounds also dispute whether the Revenue Commissioners were creditors and whether Gladney could act as their agent for that purpose. Those are grounds of appeal, not findings made in this stay decision.
Lobar relied on an affidavit from its solicitor, John Quinn, who relayed information from director Patrick Maguire about the company’s finances and building work. Quinn said Lobar expected to trade out of its difficulties, reduce its tax liabilities and complete existing contracts. He proposed paying tax liabilities as they fell due, supplying an asset list and providing bank statements every two weeks.
In reply, Catherine Shivnan, on behalf of the Collector General, said €178,441.90 remained owing to Revenue and that the company’s insolvency was not disputed. She said the first tax repayment since 29 August 2016 had been €13,592.85, paid on 10 April 2018. She argued that continued unsupervised trading risked further debt and harm to creditors.
The court upheld the respondent’s preliminary objection: after the liquidator’s appointment, the directors’ powers had ceased, and the application lacked the required creditor sanction and liquidator approval. The judge nevertheless considered the merits in case that legal conclusion was wrong. She described Lobar’s appeal grounds as barely sufficient to pass the arguability threshold, but did not rule that they were unstateable.
The judge refused the stay because Lobar was insolvent and unable to pay debts as they fell due. She said allowing unsupervised trading could seriously prejudice creditors, and that a stay potentially lasting a year could cause irreparable damage. She also considered that a later unsuccessful appeal could complicate and increase the cost of the liquidation. The ruling decided only the stay application; it did not determine the appeal against the winding-up order.