The High Court has declined to restrict Peter Caffrey and Patricia Caffrey from acting as company directors after finding that the conduct identified by Gleneagle Woodcrafts Limited’s liquidator did not establish that either had acted other than responsibly.
Mr Justice Barrett delivered judgment on 22 July 2014 in an application under section 150 of the Companies Act 1990. Gleneagle, which made solid pine furniture, ceased trading in 2008 and entered liquidation. The liquidator relied on three concerns: delay in taking steps after trading stopped, failure to file an annual return and abridged accounts for the year ended 31 October 2009, and debt owed by a related company.
The judge said the liquidator had not explained why the delay in seeking an examiner, appointed in April 2011, should be considered irresponsible. Peter Caffrey said efforts had been made to save the company during that period, which the court considered a reasonable explanation. The court also found that the liquidator had not shown why the missed filing crossed the line from reproachable conduct to conduct that was less than responsible.
On the related-company debt, the court said directors must act lawfully and properly, but business involves risk and directors cannot be expected to predict the future with complete accuracy. On the information before it, the court found no basis to conclude that the respondents’ conduct regarding the debt was less than responsible.
Patricia Caffrey said she had served as a director only to meet the statutory minimum of two directors and had no role in the company’s affairs. The court said it did not need to decide that contention because it had found no basis for a restriction order against either respondent. It added that the evidence did not disclose “real moral blame” on her part that would justify restriction.
The court concluded that it was not satisfied a section 150 declaration was required and declined to make one. Separately, it granted the liquidator an extension of time to bring the application. The delay was three days and resulted from a clerical error in the stamping of a document. The extension order did not alter the court’s refusal to restrict the directors.