The Court of Appeal has refused an appeal by Decobake Limited’s directors and affirmed the High Court order winding up the company. The appeal concerned the order made on 24 July 2017; the Court of Appeal did not revisit the earlier appointment of a provisional liquidator.
The winding-up petition was presented on 29 June 2017 by Denis McHugh, a rates collector appointed by Dublin City Council. The directors, Paul Coyle and Margaret Coyle, argued that the demand had not been properly served, that the company was not insolvent, and that the High Court should have allowed more time to pay. The appeal was heard by the Court of Appeal, with judgment delivered by Ms Justice Costello on 25 June 2019.
The court upheld the High Court’s finding that a 21-day demand was left at the company’s registered office. The process server said he placed it in the letterbox at Claddagh Cottage, Hortland, Donadea, after unscrewing the box, which had been screwed shut. The court found the company could not frustrate statutory service by keeping the registered-office letterbox closed. It also said any question about whether the process server acted unlawfully would be a matter for separate proceedings and did not prevent the court from accepting his evidence of service.
The demand sought €57,326.87. The company did not pay within 21 days, before the petition was presented, or before the petition hearing. The Court of Appeal held that the statutory conditions deemed the company unable to pay its debts. It said the High Court did not also have to determine whether the company was insolvent on a broader assessment of its finances. An accountant’s report asserting solvency did not alter that conclusion.
The directors’ offer to pay after the petition was presented did not require the High Court to adjourn the matter. The Court of Appeal said the decision to refuse more time was within the trial judge’s discretion, particularly given evidence of other unpaid creditors. A provisional liquidator’s report listed immediate debts totalling €306,778 and a bank balance of €45,512, and recorded that several creditors supported the petition. The report also described serious deficiencies in the company’s accounting records.
The court rejected the remaining grounds, including arguments about creditor and shareholder wishes, employees’ interests, and the trial judge’s reliance on the provisional liquidator’s report. It concluded that the directors had established no basis to reverse the winding-up order, refused the appeal and affirmed the High Court order.