The High Court made no order for costs after rejecting Marie Gorman’s application for her legal costs of an unsuccessful company restriction case brought by liquidator Eugene McMahon.
In a ruling delivered on 11 August 2016, Mr Justice David Keane said the court had previously declined to make a restriction declaration against Ms Gorman. The liquidator had not satisfied the court, on the balance of probabilities, that she was a director of Pauraic Larkin and Associates Limited within 12 months before the company’s winding up began.
The earlier decision turned on the date of the members’ winding-up resolution, which was uncertain as between 18 and 19 December 2012. Ms Gorman relied on a handwritten resignation letter dated 19 December 2011. Resolving the uncertainty in her favour, the judge could not find that the winding-up resolution came before 19 December 2012, and so could not find that her resignation fell outside the relevant 12-month period. The judge had raised that issue of his own motion. He did not decide Ms Gorman’s separate argument that she had acted honestly and responsibly.
Ms Gorman sought costs, arguing that Mr McMahon had relied on a Director of Corporate Enforcement letter that referred to an earlier report which did not identify her as a director; had failed to give proper weight to her solicitors’ letter saying she had ceased to be a director in November 2011; and had made an unwarranted assumption about her conduct.
Justice Keane rejected those criticisms. The liquidator had submitted a later report identifying Ms Gorman, and the Director had had almost a year before the application was issued to relieve him of the obligation to apply. The solicitors’ letter was wrong even on Ms Gorman’s account: she said she resigned in December 2011, and did not swear an affidavit setting out that date until June 2015. She exhibited the resignation letter in November 2015. The judge found the liquidator had little hard information when preparing his reports and that his assumptions were not unwarranted.
The judge also distinguished a previous case in which costs had been awarded personally against a liquidator who relied on an unsupported claim that a respondent was a director. Here, Ms Gorman had been recorded as a director by the Companies Registration Office until a Form B10 recording her resignation from December 2011 was received on 13 December 2012, shortly before the winding-up resolution. The judge said earlier clarification of the resignation might have resolved or avoided the application.
Finding that Mr McMahon had brought the case in good faith and on what appeared to be reasonable grounds, the court exercised its discretion under the Rules of the Superior Courts to make no order concerning costs.