The High Court refused Airscape Limited’s application to have the property of two directors of Powertech Logistics Limited sequestered over late company filings, after the outstanding annual returns were submitted. It also refused the creditor’s request to examine the directors, finding that Airscape had not shown the examinations would probably benefit it.
In a judgment delivered on 5 February 2007, Miss Justice Laffoy said the returns for 2002 to 2006 had been filed by the time the enforcement motion was heard. Airscape had sought sequestration against the directors’ property under the court rules, following a July 2006 order requiring the company to file its outstanding returns within 12 weeks. Airscape abandoned an alternative request for attachment and committal.
The judge said sequestration would serve no enforcement purpose once the order had been complied with and would instead punish the directors for delay. She also found that a required procedural notice had not been served. In addition, Airscape had not proved beyond reasonable doubt that the failure to meet the filing deadline was wilful. The sequestration application was refused.
Airscape’s wider motion sought several forms of relief, including personal liability orders against the directors for the company’s unpaid debt and alleged failure to keep proper records, inspection of company records, and director disqualification. At the hearing, however, Airscape pursued only its request under section 245 of the Companies Act 1963 to examine the directors, asking that its other applications be adjourned.
The company had an unsatisfied judgment against it for €289,548.94 plus costs, relating to licence fees for a warehouse used in its distribution business. Its appeal against that judgment had been struck out for want of prosecution. The parties agreed that Powertech was insolvent. The judge found that it was not being wound up because its assets were insufficient, so the relevant provisions of section 251 of the Companies Act 1990 applied.
But the section 245 examination power was discretionary. The judge said a creditor seeking an examination of a company not in liquidation had to show it would probably obtain a benefit, and Airscape had wholly failed to do so. She characterised the proposed inquiry as a “fishing expedition” and said a public-interest purpose did not by itself justify an examination.
The court made an order in the terms of paragraph 1 of the second motion and refused the applications in paragraphs 2, 3 and 4. The judgment did not determine the remaining reliefs; the judge said she would hear submissions on what should happen to them.