van Dessel -v- Esmonde & Anor [2014] IEHC 278 (26 May 2014)

van Dessel -v- Esmonde & Anor [2014] IEHC 278 (26 May 2014)

The respondents, as directors, used VAT and PAYE collected for the Revenue to finance continued trading while insolvent, despite knowledge of prior misuse of Revenue funds in the same business. This conduct, even when viewed in the context of their entire tenure, does not meet the standard of responsible directorship required by s.150 of the Companies Act 1990. The Court is therefore obliged to make a declaration of restriction against both respondents.

Citation
[2014] IEHC 278
Parties
Applicant: David van Dessel; Respondent: James Edward Esmonde; Respondent: Patrick O'Toole
Jurisdiction
Ireland
Judgment Date
26 May 2014
Procedural Posture
Company Law Application (liquidation/restriction) / Judgment on Application for Restriction Order Under S.150 Companies Act 1990
Outcome
declaration of restriction made against both respondents under s.150 Companies Act 1990
Legal Topics
Director Restriction, Liquidation, Director Responsibilities, Use of Revenue Funds, Statutory Compliance
Company Law Insolvency Law Director Restriction Liquidation Director Responsibilities Use of Revenue Funds Statutory Compliance

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Parties

David van Dessel

Applicant

James Edward Esmonde

Respondent

Patrick O'Toole

Respondent

Procedural Posture

Company Law Application (liquidation/restriction) / Judgment on Application for Restriction Order Under S.150 Companies Act 1990

Legal Issues

  1. 1 Whether the respondents acted responsibly as directors of Noxtad Ltd. in the period leading up to and during insolvency
  2. 2 Whether the respondents should be subject to restriction under s.150 of the Companies Act 1990

Ratio Decidendi

The respondents, as directors, used VAT and PAYE collected for the Revenue to finance continued trading while insolvent, despite knowledge of prior misuse of Revenue funds in the same business. This conduct, even when viewed in the context of their entire tenure, does not meet the standard of responsible directorship required by s.150 of the Companies Act 1990. The Court is therefore obliged to make a declaration of restriction against both respondents.

Court Disposition

declaration of restriction made against both respondents under s.150 Companies Act 1990

Orders

  • Respondents are restricted from acting as directors or secretaries or being concerned in the promotion or formation of any company for five years unless the company meets the capital requirements set out in s.150(3)