The High Court has ruled that two directors of Carroll Ryan Pharmacies Ltd should be examined about the company’s affairs, after a liquidator said their replies left important questions unanswered. The precise form of the order and the motion’s costs remain to be dealt with.
In a judgment delivered on 28 July 2022, Mr Justice Brian O’Moore said the liquidator was entitled to full information on matters raised in an email to the respondents. The motion sought orders summoning Michael Carroll and Darragh Carroll for examination under section 671 of the Companies Act 2014, and sought sworn statements of the company’s affairs.
The liquidator was appointed by court order in March 2020. He said the company had traded as a dispensing chemist, but the respondents had not delivered a required statement of affairs or company books and records despite earlier court orders and requests. After the respondents appeared at a hearing in November 2021, they were to deliver the documents by 13 December. The liquidator later said the material provided raised further questions.
The judgment records that the first respondent’s position, as summarised by the liquidator, was that the company had been a payroll processor, had no turnover, did not trade in the normal sense, and had no assets or liabilities. The judge noted that the company’s audited accounts had prompted concerns, but the judgment does not set out their contents.
One example concerned the respondents’ assertion that the company never had “turnover” as such. Asked whether it invoiced businesses for payroll services and whether legal advice had been obtained about charging for them, the response was: “There was no real necessity to create all this paperwork. No legal advise was taken.” The judge said the position required further explanation.
Neither respondent filed a replying affidavit. The first respondent addressed the court on behalf of both, saying the liquidator’s queries had been answered and describing them as “childish”. The judge rejected those submissions and found the outstanding inquiries legitimate and justified. He said examination in a structured setting, supervised by a judge, was in the respondents’ interests; the first respondent replied, “Fine, so”.
The judge said he would deal with the precise form of the examination order at the next listing. His initial view was to refuse the separate request for a statement of affairs because, in large measure, it repeated earlier orders or undertakings. He listed the motion for mention on 11 October at 10am to address outstanding matters, including the order’s form and costs. The judgment does not record a final order summoning the respondents or a decision on costs.