The High Court has ordered the liquidator of Lucca Food Trading Company Limited to pay €42,116.31 to the Revenue Commissioners after fixing his remuneration and expenses at €37,883.69, including VAT.
Mr Justice Allen made the order in an application under section 280 of the Companies Act 1963 concerning the company, which was in voluntary liquidation. The dispute was about what the liquidator could retain from the company’s assets for his work and expenses, including payments for consultancy and legal and professional services.
The company had operated pizza and pasta restaurants at two locations in Salthill, County Galway. It ceased trading in March 2012 and entered voluntary liquidation. Before the liquidation, it had agreed to sell its assets and undertaking for €100,000 in instalments. The liquidator collected €80,000 from the sale. He also received €19,565.65 for employee claims and paid that amount to employees.
The liquidator claimed the full €80,000 balance for his remuneration, consultancy and other fees. The Revenue objected, saying the remuneration was excessive and that some costs were not adequately explained. It proposed that he retain €36,000 plus VAT.
Justice Allen found that the liquidator had not justified the hours claimed. The court said he had produced no contemporaneous time records and had not provided the section 56 report or other work product that would allow the work to be assessed. The judge also found that the hours claimed for routine tasks and for the section 56 report and directors’ restriction application were excessive. The Revenue had not criticised how the liquidation was conducted; its argument concerned the work done and its value.
Of €10,080.83 claimed for legal and professional fees, the court allowed €2,700.33 for solicitors’ and counsel’s fees on the restriction application. It disallowed €5,535 paid to the company’s former accountants because the work was not explained, and €1,845 paid in error. Of €9,790.80 claimed for consultancy, the court allowed €4,895.40 as the reasonable amount for the work attributed to the consultant.
The court fixed the total amount the liquidator could retain, including expenses and VAT, at €37,883.69. It directed him to pay the Revenue Commissioners €42,116.31 forthwith and ordered him to pay the costs of the proceedings. The judge left the question of interest under the Courts Act for a further hearing.