The High Court declined to restrict two former directors of DLOK Electrical Services Limited after finding that credible concerns had been raised about a Labour Court order for unpaid employee contributions. It also extended the time for the liquidator’s application under company law.
Mr Justice Max Barrett delivered the judgment on 24 October 2014 in proceedings brought by liquidator Ciaran Kirk against Matthew O’Kane and Brendan Long. The company, which installed electrical wiring and fittings, entered voluntary liquidation in June 2010. The liquidator said its difficulties arose from unpaid sums for completed work and a downturn in construction.
A Labour Court order made on 3 October 2012 found a complaint by the Technical Engineering and Electrical Union well-founded and ordered €192,437.32 in back-contributions for certain named employees to pension and sick-pay schemes. The liquidator said the non-payment first came to his attention when he received notice from the Labour Court.
The directors disputed the basis and process behind that order. They said, to the best of their recollection, they had not been offered an opportunity to appear. They also pointed to confirmations from the company’s auditors and the Construction Workers Pension Scheme that contributions were up to date in 2009, and challenged the number of employees included in the calculation. The judge said the court had not seen the Labour Court notice or the auditor’s letter.
Mr Justice Barrett said the directors had raised significant and credible concerns about the process, underlying facts and details of the Labour Court order. The High Court was not reviewing that order; it had to decide whether the evidence before it justified restricting the directors. The judge concluded it did not establish that either had failed to act honestly and responsibly, or that another just and equitable reason supported restrictions. He stressed that this did not diminish the seriousness of failing to make required welfare contributions.
The liquidator’s application was filed outside the statutory timetable. He attributed the delay to his solicitors’ failure to finalise an affidavit in time. The judge criticised the explanation and noted that applications had not been brought after the liquidator’s first two reports, but said it was unnecessary to decide the delay issue because restrictions would not be imposed.
The court nevertheless granted an extension of time, ruling that the liquidator was not required to commence restriction proceedings until the date the application was commenced. The judgment did not make a finding that the pension contributions had been paid or that the Labour Court order was wrong.