The Supreme Court allowed an appeal by Tegral Pipes Limited and six named individuals and ordered Sean Fay’s proceedings struck out. The appeal followed a High Court decision refusing the defendants’ application to strike out the action. The Supreme Court’s order ended the proceedings; it did not decide a trial of the underlying asbestos injury allegations.
Fay worked at a cement-pipe factory in Drogheda from July 1965 until he was made redundant in June 1989. The judgment says he was exposed to asbestos fibres at work. In late 1998 or early 1999, he was advised that he had symptoms indicating significant asbestos scarring in his lungs and faced a risk of developing an asbestos-associated cancer. He issued proceedings in March 1999.
The company named in the action had been wound up in 1994. An associated company changed its name to Tegral Pipes Limited, while the former company took the associated company’s previous name. Fay alleged that the renamed company had assumed the former company’s liabilities and that the company arrangements were intended to put assets beyond the reach of potential claimants. The Court found no evidence that the winding-up was intended to deprive creditors of compensation. It accepted that using the former company’s name to preserve goodwill was a legitimate commercial practice, and said there was no evidence Fay or another former employee had been misled.
Fay also alleged that former directors were personally negligent in exposing him to asbestos and had breached duties connected with the company’s solvency and winding-up. The Court said directors are not personally liable for a company’s wrongdoing merely because they held office; an individual duty of care must be established. The statement of claim did not plead that the directors had sufficient personal proximity to Fay or control over health and safety measures. An affidavit stating they were not involved in day-to-day management was not denied.
On the declaration of solvency, the Court noted that creditors were paid in full within 12 months, as required, and that an independent accountant’s report supported the declaration. It found no evidence from which wrongdoing could reasonably be inferred. It also held the pleaded reckless-trading claim under section 297A of the Companies Act 1963 was not stateable: it was raised years after the winding-up had ended, and the Court said unknown, unquantifiable future claims by unidentified people did not amount to contingent debts requiring provision.
The Supreme Court therefore allowed the appeal and struck out the proceedings. The judgment does not determine whether Fay’s alleged asbestos exposure caused his symptoms or whether he would otherwise have been entitled to damages.