The High Court has ordered that undistributable client funds and assets held in the liquidation of Custom House Capital Limited be lodged in the account prescribed by section 623 of the Companies Act 2014. The order provides a route for dealing with the remaining balances as the liquidation moves towards conclusion.
In a judgment delivered on 20 February 2025, Mr Justice Brian O’Moore ruled on an application by Official Liquidator Kieran Wallace. The company was wound up in October 2011. The motion was dated 2 October 2024 and heard on 5 February 2025.
The liquidator had recovered and distributed substantial sums to clients, but said a remainder would be impossible to distribute. Some clients could not be contacted; others had not engaged sufficiently or supplied the information needed to receive funds. The court noted that earlier rulings had required the liquidator to arrange for the orderly distribution or transfer of client assets, but said keeping the liquidation open indefinitely solely to deal with balances that could not be distributed would be an untenable result.
The liquidator considered four options: keeping the liquidation open, setting up a trust, distributing the remainder among other clients, or using the statutory process for unclaimed and undistributable balances. The court rejected the first three as impractical or inappropriate. Continuing the liquidation for ten years was estimated to cost €825,400. A proposed trust was estimated to cost €235,000 over ten years, based on an assumed average €2 million held, before redemption and distribution charges. A €400 charge could be disproportionate where some clients were due less than €1,000. Distributing one client’s money to others, the judge said, risked defeating the claims of those actually entitled and lacked a legislative basis.
The judge held that the remaining monies and assets came within “unapplied or undistributable balances” in section 623(1). He said both the ordinary meaning of the provision and the purpose of the Companies Acts supported that reading: a liquidation should not have to persist indefinitely because assets cannot properly be distributed. He also considered the historical context of the provision, including recommendations in the 1958 Cox Report.
The Central Bank of Ireland did not oppose the orders sought, subject to assurances about client communications. The court did not need to decide the liquidator’s alternative argument under Order 74, rule 78 of the Rules of the Superior Courts.
The order covers monies on hand or under the liquidator’s control representing undistributable balances beneficially owned by, or payable for the benefit of, former clients. The court granted the liquidator and the Central Bank liberty to apply in relation to the order, and allowed the liquidator’s costs of the motion as part of the winding-up costs.