The High Court has struck out a liquidator’s application seeking to recover money from two former directors of Terence McCarthy Building Limited, finding that the delay in bringing the case was both inordinate and inexcusable.
The company was placed in voluntary liquidation in January 2009, with James J. Grant appointed liquidator. In December 2017, he applied for orders requiring the directors to repay €1,091,288 or restore company property, or alternatively to contribute compensation for alleged misapplication of assets, misfeasance or breach of duty. Those were claims in the application, not findings made after a trial.
The dispute centred on work in progress, including construction work on four houses at Stradbally. The land was owned by the directors, while the company carried out building work. The liquidator relied on the company’s estimated statement of affairs, which recorded work in progress of €1,165,640. The directors disputed the valuation; one respondent put the relevant work in progress at a lower figure. The judgment noted that the directors had not provided a satisfactory explanation for the figure in the statement of affairs.
The court focused its decision on delay. A report to the Office of the Director of Corporate Enforcement in March 2010 had set out the liquidator’s concerns and stated that the directors might owe between €300,000 and €1,076,288. Proceedings were not issued until December 2017. The judge found that the relevant matters had been known much earlier and that the delay had not been adequately explained.
The respondents also raised the six-year limitation period for claims under the Companies Act. The judge noted that the application appeared to have been brought outside that period, but the order was based on delay and the balance of justice. The court considered the burden of litigation on the respondents, the fact that the four properties had since been sold, and that the respondents had completed a five-year restriction period imposed in separate 2013 proceedings.
The court concluded that the delay was inordinate and inexcusable and that the balance of justice required the application to be struck out. The judge did not determine the underlying recovery claims or make a final ruling on costs; the parties were to be heard on any further orders, including costs.