The High Court found that Jason P. Monson showed a lack of commercial probity or proper standards by allowing director remuneration to rise while JPM CAD Design Limited’s financial performance declined. The judgment concluded that no restriction declaration was required against his wife and fellow director, Tracey A. Monson.
Mr Justice Max Barrett delivered the judgment on 9 December 2014 in an application brought by liquidator Martin Kelly under section 150 of the Companies Act 1990. The company, which provided architectural, engineering and related consultancy services, was incorporated in 2006 and ceased trading around 31 March 2013.
The court noted that the company’s turnover fell from €66,022 in 2010 to €39,841 in 2011, while director remuneration rose from €51,146 to €53,548. In 2012, turnover was €48,936 and remuneration reached €85,870—175 per cent of turnover. The judgment described the remuneration as excessive during a period of overall decline. The liquidator had alleged that decisions about director pay were a significant, if not the entire, cause of the company’s difficulties. The judgment also noted that a broader economic downturn played a part.
The court found that Mr Monson, whom it described as the company’s managing director, had allowed remuneration to increase and be paid at those levels from 2009 to 2012, demonstrating a lack of commercial probity or proper standards. The judgment discusses section 150’s restriction regime, but the supplied text does not record the precise operative order concerning Mr Monson. It therefore does not establish here whether a declaration was ultimately made against him.
As to Ms Monson, the court said she did not appear to have played a significant part in the business, had not drawn a director’s salary and had acted as the required second director while her husband ran the company. It found her conduct neither dishonest nor irresponsible and found no other reason making a restriction declaration just and equitable. The court concluded it was not required to issue a declaration against her.
The judgment also offered general observations about section 150 applications, including the position of directors who consent without contesting proceedings. It said affected directors should attend hearings where possible and suggested that consent letters explain the consequences of a restriction and advise seeking independent legal advice. Those observations are not themselves an order in this case.