The High Court has declared that John Cooke failed to act responsibly in the affairs of Cherby Limited, which went into liquidation in 2003. The court granted the declaration sought by the company’s liquidator under section 150 of the Companies Act 1990.
The judgment, delivered by Mr Justice John MacMenamin on 29 June 2005, concerned only Cooke, one of the company’s directors. The court said the application arose from concerns about the company’s financial records, unpaid Revenue liabilities, and transactions involving related companies. The judgment records a declaration under section 150; it does not specify in its final paragraph the duration or detailed terms of any restriction.
Cherby operated Cookes Café on South William Street in Dublin and later ran other restaurant operations. It ceased trading in March 2002 and was wound up on 1 May 2003. The liquidator said the company’s books and records had been destroyed in a fire at the Liffey Trust Centre in November 2002, leaving him without enough material to establish the company’s financial position for its final years.
The court noted that no statutory accounts had been filed after the year ending May 2000, and that no annual returns were made. It also found that Revenue liabilities had accumulated over several years and that Cherby had incurred VAT, PAYE and PRSI liabilities for Cookes Events Company Limited after that company was incorporated in 2002. The judge described Cherby as having been used to allow the new company to trade.
Cooke disputed aspects of the liquidator’s account. He attributed the company’s difficulties to rising costs and tax arrears, and said he had sought professional advice and taken steps to manage the business. He said errors in the statement of affairs, including the treatment of a leasehold interest and a debt involving Cookes Bakery Limited, resulted from haste. His counsel argued that the evidence did not show systematic irresponsibility or that Cooke’s conduct caused the insolvency.
The court rejected those explanations. It found that the discrepancies in the statement of affairs had not been satisfactorily explained, and that the handling of transactions between Cherby and Cookes Bakery showed that Cooke operated through several companies in an interchangeable way. The judge also said delegation did not remove a director’s duty to supervise delegated functions.
The court concluded that Cooke was responsible for Cherby’s insolvency and the deficiency in its assets, and that he had failed in his fiduciary duty to the company. It granted the declaration sought. The judgment records no separate finding against Paul Cooke, the other named respondent.