The High Court has given its reasons for winding up As Fresh As It Gets Ltd, concluding that the company had not shown substantial grounds for disputing a €260,728.77 debt claimed by Donegal Creameries Plc.
The judgment, delivered by Miss Justice Laffoy on 9 May 2011, explains an order made on 15 April. The company had said it intended to appeal to the Supreme Court. The court granted a stay until the Easter term; the judgment records no decision on that appeal.
Donegal Creameries served a statutory demand for repayment in December 2010. After it was not met, the company was deemed unable to pay its debts under section 214 of the Companies Act 1963, and the creamery petitioned for a winding-up order in February 2011. The company disputed the debt. The court found the dispute was not bona fide on substantial grounds and said the petition should not be dismissed on that basis.
Justice Laffoy declined to appoint the liquidator initially nominated by the petitioner because he belonged to the firm that audited it. The petitioner nominated David Walsh of O’Neill Foley, Chartered Accountants, and the court appointed him official liquidator.
The debt arose from milk products supplied to the company up to 3 August 2010. Donegal Creameries said most of the amount claimed related to the final 12 weeks of supply. The judgment said the claim did not include a separate historic debt owed by an earlier company, Dairyland Cuisine South East Ltd.
The company argued that it had overpaid by €306,113.46, partly because of a price increase, and challenged invoices and the allocation of payments. The court accepted the petitioner’s evidence that the company had received the products and accepted liability for them. It found that the company’s spreadsheet omitted two invoices and allocated some payments incorrectly. The invoices omitted from that spreadsheet totalled €78,497, according to the judgment; the judge noted that even if that sum had not been properly charged, the remaining debt was well above the statutory-demand threshold.
Clona Dairy Products Society Ltd, a creditor and supplier to the company, supported the company’s opposition. The judge said she would give that support no weight in light of her view of the company’s opposition. The judgment also said evidence before the court did not establish the company’s current solvency.