The High Court has ordered the winding up of Davis Joinery Limited and appointed Frank Wallace as official liquidator, after the company failed to pay a creditor’s €53,080 debt. The order was made on 19 July 2013 in a petition brought by Leon Cosgrave de Buitlear, who resides in Perth, Western Australia.
The debt comprised court orders and a decree arising from claims concerning minimum notice, unfair dismissal and personal injuries. The €35,910 unfair dismissal award was made by the Employment Appeals Tribunal in February 2011. A statutory demand for the total €53,080 went unpaid, making the company liable to be treated as unable to pay its debts for the purposes of a winding-up petition.
The company did not appear at any hearing. The judgment records that it and its directors had been notified. The company’s only substantive response to earlier correspondence was a 2011 letter from director John-Paul Davis stating that it had stopped trading and could not meet creditor arrears or collect money owed to it. No other creditors or contributories appeared.
The petition raised a potential obstacle to the petitioner seeking payment from the Employer’s Insolvency Fund, which had been merged with the Social Insurance Fund. Under the legislation described in the judgment, a company generally had to be formally wound up or meet another specified condition to be treated as insolvent for that purpose. The petitioner’s counsel argued that the relevant EU directive’s definition of insolvency applied directly and entitled the petitioner to the €35,910 award from the Fund. The judge made no ruling on that argument, the directive’s implementation in Irish law, or whether the petitioner could sue the State.
Timing was also an issue: the petitioner’s counsel submitted that a winding-up order had to be made by 14 August 2013 to preserve the opportunity to claim in respect of the award. The judge said appointing a provisional liquidator alone would not resolve the problem. She also considered that a winding-up order should not be made unless an official liquidator was in place.
After the proposed liquidator consented to serve in that role, the court ordered the company wound up and appointed him official liquidator. The winding up is to proceed under High Court supervision. The judgment noted that this use of ordinary winding-up powers did not resolve the broader concern it described about employees whose employers cease trading without formal insolvency proceedings.