The High Court has declared that Daragh Heagney cannot act as a director or company secretary, or take part in forming or promoting a company, for five years unless the company meets the requirements in section 819(3) of the Companies Act 2014. The declaration followed a restriction application concerning Adalbert Limited, which operated a coffee stall at Howth Market.
In a judgment delivered on 23 April 2020, Mr Justice Quinn said the case was at the lower end of the scale in terms of the company’s size, debts and the director’s conduct. But he was not satisfied that Heagney had acted responsibly in the company’s affairs or cooperated with the liquidator as far as could reasonably be expected.
Heagney became a director in September 2016. The company stopped trading in May 2017, after its landlord re-entered the premises. Heagney said the loss of the premises abruptly deprived the company of its income. The court noted, however, that the lease had expired in August 2016, the company was not named as tenant, and the landlord had no obligation to renew it. The liquidator’s evidence was that rent payments stopped in December 2016 and a termination notice was served in March 2017.
The judge found that the company had tax arrears and was unable to pay rent by November 2016, but continued trading until the landlord intervened. Heagney did not show that he had taken steps to regularise the company’s position with Revenue or other creditors, or to arrange an orderly winding up. The Revenue Commissioners later petitioned to wind up the company, and the High Court appointed Aiden Murphy as liquidator on 18 June 2018.
The judgment identified several failures during Heagney’s directorship: no satisfactory financial statements or Revenue returns, inadequate company books and records, and no timely steps to wind up the insolvent company. A statement of affairs was delivered to the liquidator about six months late, was deficient, and was not filed in court as directed. The liquidator’s questionnaire took six months to return, and requested records were not provided.
The court also addressed an earlier five-year restriction imposed on Heagney in relation to Balmain Limited, which had expired in January 2016. The liquidator had raised a question about whether Heagney acted as a shadow director of Adalbert while that earlier restriction was in force. The judge said there was insufficient evidence to reach a conclusion on that issue; it was not a finding underpinning the order in this case.