The High Court has joined the official liquidator of CTO Greenclean Environmental Solutions Limited to existing proceedings over payments of more than €2.6 million allegedly made to two former directors. It refused the liquidator’s request for an interim order restricting the men from using or disposing of the money while the case continues.
The judgment, delivered by Mr Justice Robert Haughton on 26 April 2017, concerned a motion by official liquidator Myles Kirby. Louis J. O’Regan Limited, a creditor, had brought the underlying proceedings. The claims allege that €2,064,333 was paid to Stephen Griffin between February and May 2008 and €600,000 to David Ronan in January 2009, described in the company’s books as pension payments.
The applicants allege the payments were improper and breached section 139 of the Companies Act 1990. Alternative claims allege fraudulent preferences or misfeasance and breach of duty. Griffin and Ronan deny wrongdoing and maintain the payments were bona fide and made while the company was solvent. Those claims have not been determined in this judgment.
Mr Kirby argued that joining him would allow the claims to be pursued for the benefit of all creditors and would give the court direct access to the company’s books and records. The respondents opposed joinder, including on the basis that claims by the liquidator could be time-barred. Mr Justice Haughton found the limitation issues were not clear enough to decide on this procedural motion. He said they would require fuller pleadings, evidence and argument. The court’s decision to join the liquidator was not a finding that the underlying claims were proven or that they were within time.
The court separately considered the requested interim restraint under the test for Mareva-type injunctions. It accepted that the liquidator had an arguable case, but found insufficient evidence that either respondent intended to dispose of assets to evade a potential obligation or frustrate a future court order. Refusal to give an undertaking, by itself, was not enough. The judge also cited the significant delay in pursuing injunctive relief.
The court therefore granted the request to add Mr Kirby as a co-applicant and refused the interim injunction. A further request that was not pursued at the hearing was declined. The judge said the proceedings should be case-managed and would hear the parties on directions for exchanging pleadings.