The High Court has declared that former Granja Limited managing director Gerard Feehily is restricted for five years from acting as a director or secretary, or taking part in forming or promoting a company, unless it meets the requirements in section 819(3) of the Companies Act 2014.
Mr Justice Quinn made the declaration after finding that Feehily had not discharged the burden of showing he acted honestly and responsibly in the affairs of Granja, which was wound up in 2019. The application concerned Feehily alone; restriction declarations had already been made against the other three respondents in May 2022, at an uncontested hearing.
Granja’s sole activity was an attempt to buy land at Kilpeddar, County Wicklow, for a proposed data centre. The court relied on findings in earlier proceedings that the company was used as a front for Brian McDonagh, one of the landowners, and that the purported heads of agreement did not create a binding sale contract. Those findings followed a contested trial and were upheld on appeal. Feehily was not a party to that case and did not give evidence there.
Feehily was Granja’s managing director until he became ill during a 2018 trial over the proposed land purchase. He argued that he ceased to be a director then, but the court found he remained a director until his resignation took effect in March 2019, within 12 months before the company’s winding up. The judge said Feehily could not be faulted for events after March 2018, when he stopped participating in the company’s activities.
The judge found Feehily had actively pursued Granja’s claim to the land while company funds were paid out through its solicitors’ and his accountancy firm’s client accounts. By the second day of the specific performance trial, the solicitor’s client account had been emptied. The court noted that €608,502 was paid to McDonagh and €124,301 to Feehily through the accountancy firm. A separate summary judgment requiring Feehily to repay €124,301 was under appeal at the time; Justice Quinn said he did not rely on or anticipate that appeal’s outcome.
The judge also found the company’s 2015 accounts misleading in describing the disputed land as investment property valued at €1.5 million, and cited the failure to file corporation tax returns as a failing by the directors. Other complaints, including missing company records, were not decisive as to Feehily given his departure from active involvement.
The judgment separately criticised the liquidator’s retention of a solicitor who had acted for the petitioning bank, given the long contentious history between the bank, the company and its directors. The judge said an application for court leave should have been made in such circumstances. That criticism did not absolve Feehily from the failure to meet the statutory test, and the five-year restriction declaration was made.