The Court of Appeal has dismissed an appeal by Fergus Appelbe against a five-year restriction on acting as a company director or secretary, or taking part in forming or promoting a company, unless the company meets the statutory requirements in section 819(3) of the Companies Act 2014.
The restriction was imposed by the High Court in October 2020 after an application by the liquidator of Alvonway Investments Limited, which owned Wilton Shopping Centre in Cork. The Court of Appeal, in a judgment delivered by Ms Justice Faherty on 12 July 2022, found no error in the High Court’s decision. Justices Costello and Haughton agreed. The appeal court’s order remained subject to a 21-day opportunity for either party to seek a different costs order; if no request was made, the proposed order, including costs, would be perfected.
Alvonway was wound up in 2014 after NAMA-related lenders demanded nearly €420 million. A 2013 statement of affairs showed assets of about €49.1 million and liabilities of about €122.6 million, excluding guaranteed obligations. The judgment records that the company was insolvent when the liquidator was appointed.
The liquidator’s application focused in part on two payments totalling €450,032 made from the company’s account on 27 August 2013, the day before a statutory receiver was appointed: €300,000 to an accountancy firm and €150,000 to Joseph O’Donovan. The High Court found that Appelbe and fellow director Brendan O’Brien did not know about the payments and were not to blame for them. The appeal judgment did not disturb those findings. It also clarified that Appelbe had not been found dishonest; the restriction application concerned alleged irresponsibility.
Appelbe argued that the liquidator had not set out a sufficient case against him and that his limited response reflected that omission. The Court of Appeal rejected the argument. Under section 819, it said, a director of an insolvent company must satisfy the court that he or she acted honestly and responsibly, cooperated as far as reasonably expected with the winding up, and that there was no other reason to impose a restriction. The liquidator must set out relevant facts, but the director must also put forward relevant information about their conduct over their tenure.
The court said Appelbe, a director from 2005 until liquidation, had not explained what steps he took to learn about Alvonway’s affairs, its substantial debts or its engagement with NAMA. His evidence that he had little knowledge of the company did not establish that he had acted responsibly. The court distinguished him from O’Brien, whose evidence described his understanding of the company and his role. The decision was about Appelbe’s failure to meet the statutory test, not a finding that he caused Alvonway’s insolvency.