In Murray v Browne  IEHC 651, High Court, Barrett J, 22 October 2015 a liquidator brought an application seeking to restrict a director pursuant to Section 150 of the Companies Act 1990 together with an application for an extension of time to bring the application under Section 56 of the Company Law Enforcement Act 2001. Section 56(2) of that Act provides that such an application should be brought not earlier than three and not later than five months after the date on which 'a report' under Section 56(1) is provided to the Director of Corporate Enforcement.
The application was almost thirteen months out of time due to the fact that the liquidator misplaced the letter from the ODCE advising him that he was not relieved of his obligation to bring a Section 150 application.
Barrett J refused the application for an extension of time, pointing out that the legislature had clearly believed that such applications should be brought speedily. However, he went on to indicate that he would not have restricted the director even if the application had been brought in time.
The essence of the application made by the liquidator was that over the three-year period from 2009 to 2012, the director had allowed the Company to run up liabilities of about €185k to the Revenue Commissioners. While Barrett J noted that in the last years of the Company's operation some CRO filings were missed and director remuneration became the predominant outgoing he was of the view that this remuneration could not be considered to be excessive.
He held, that apart from the issue of non-payment of taxes, there did not seem to be a suggestion that the director was wanting in honesty or responsibility. This was particularly so in circumstances where the Company’s non-payment of tax liabilities arose in a context where the Company was in a state of flux from 2008, deeply unstable from 2010, and the director's attentions were focused on winning new business.
Barrett J considered that what was at issue in the present case here was a director trying unsuccessfully to save a sinking company that still had some prospect of being turned around and, as a result, not having the time to be sufficiently attentive to other aspects its' affairs. He commented favourably on the fact that the director had, since the company’s liquidation, paid significant sums to the Revenue Commissioners in respect of certain tax liabilities arising in relation to the Company.
In a number of cases last year Barrett J looked at the issue of timing in bringing Section 150 applications and indicated that if a liquidator was in difficulty in this context they should make a pre-emptive application to the Court seeking extra time to bring an application. In one such case he suggested that an egregious delay by a liquidator in bringing a Section 150 application might well provide a defence for an affected director which was the position here.