The High Court recently made an order to wind up a company, Ely Property Group Ltd, on the basis that it was deemed unable to pay its debts by reason of non-compliance with the demand of a petitioner (In re Ely Property Group  IEHC 81).
The petition was brought by a firm of chartered accountants, Copsey Murray, who claimed they were due €53,746.91 in respect of accountancy services provided to the company and other companies in the Ely Property Group. The managing director of the company argued that the monies claimed were not due by the company, but by other companies within the group, and that the company was not responsible for the fees incurred by these subsidiary and associated companies.
Laffoy J had regard to documentary evidence produced by the accountancy firm, which showed that the company was the client of the firm and that it had assumed responsibility for the fees incurred in respect of work done by the firm for it and its subsidiary and associated companies.
In her judgment Laffoy J noted that the company had been unable to produce one shred of evidence to support its claim. She further noted that in the first year of the arrangement, the company discharged invoices submitted by the accountancy firm which clearly covered fees incurred not only by the company, but also by its subsidiary and associated companies.
Also, during the second and third years of the arrangement, the company continued to pay fees to the firm, albeit not in the full amounts invoiced. In such circumstances, Laffoy J found that it was impossible to conclude that the company was bona fide disputing the firm’s debt.
Laffoy J was satisfied that the company was deemed to be insolvent pursuant to section 214(a) of the Companies Act 1963 by reason of its failure to comply with the demand issued by Copsey Murray and was also satisfied that the presentation of the petition did not constitute an abuse of process.