The High Court has refused to extend the statutory deadline protection available to the liquidator of Higgins Civil Engineering and Construction Limited after finding prolonged and inadequately explained delays in bringing a directors’ restriction application.
Conor Boyle was appointed liquidator of the insolvent company in April 2008. He reported to the Director of Corporate Enforcement that October. In January 2009, the Director informed him that he was not being relieved of his obligation to seek restriction orders concerning directors Gary Higgins, Laura Higgins and Rory O’Mara.
Under section 56 of the Company Law Enforcement Act 2001, the liquidator had a limited period in which to make that application without exposure to the statutory consequences of delay. Mr Justice Herbert calculated that the period expired on March 14, 2009.
Mr Boyle had instructed solicitors in January. They immediately told him that they needed a copy of his report to the Director. He did not send it until April 8, describing the delay as an oversight.
Further delays followed. Application papers sent to him by email on July 4 were, he said, accidentally deleted as spam. His solicitors sent a reminder in August, but the section 150 motion was not issued until March 26, 2010.
The judge held that an extension requires grounds which, in fairness and justice, warrant relieving a liquidator from the statutory consequences of missing the deadline. Simple inaction is not enough, and liquidators are expected to act proactively given the short statutory window.
Mr Justice Herbert found the explanations inadequate. He described the account of the deleted email as unsatisfactory and noted that no details or documents supported the assertion that later delays resulted from communications about settling the papers.
The application for an extension was refused. The ruling concerned the liquidator’s protection from the consequences of delay, not whether the restriction proceedings against the directors could themselves continue.