Three former directors of the collapsed Custom House Capital (CHC) investment firm are jointly and severally liable to pay €214,457 to a liquidator for the cost of his investigation, collection of evidence and for the legal fees involved, the High Court has ruled.
It means liquidator Kieran Wallace can pursue either Harry Cassidy, John Whyte or John Mulholland for the total amount and they would have to afterwards sort out between themselves what their "share" of those costs would be.
Last December, the trio received disqualifications from involvement in companies of 14, 10 and 12 years respectively - 14 years being the longest period ever handed down under company law - over the misappropriation of some €66.5m in client funds.
Mr Cassidy, the CEO, said he he could not afford legal representation and had written saying he was not contesting the liquidator’s evidence.
Mr Mulholland, a non-executive director, accepted he had failed in his corporate responsiblity but asked for a restriction on involvement in a company rather than a disqualification.
Mr Whyte, CHC investment director, opposed the application.
Mr Justice David Keane found the conduct of all three was "deeply dishonest" , done over a protracted period of time and had a "devastating" impact on innocent investors.
The liquidator asked the court to make all three personally liable for the costs of the investigation and said the 2,000 investors involved should not have to put their hands into their pockets for those costs.
Mr Cassidy was again not represented during the costs application and Mr Whyte was no longer represented.
Mr Mulholland’s counsel asked the court to take into account, in considering who should pay the costs, that his client had co-operated with the investigation. This was disputed by the liquidator.
In finding they should be jointly and severally liable for the costs and should be paid forthwith, Mr Justice Keane said Mr Cassidy could have represented himself but had not done so while Mr Whyte’s previous representatives said they had no instructions from him.
In relation to arguments made on behalf of Mr Mulholland, the judge said he (Mulholland) argued it would be unfair to fix him with joint and several liability.
Among the reasons he could not accept submissions, the judge said the first was that they "entirely overlook the grave findings of fraud that have been made against Mr Mulholland" and the specific finding that he personally benefitted from the payment to him of wrongful "commissions", in most cases directly from client accounts.
While Mr Mulholland expressed embarassment and distress at the position clients now found themselves, he had made no attempt to address the deficit in client funds, he said.
The judge said Mr Mulholland’s view that his co-operation with the investigation merited some credit to him was "entirely misconceived". The judge also found no merit in his claim it was unfair to fix him with joint and several liability.
Tony McGillicuddy BL, for Mr Mulholland, asked that the 12 year disqualification be backdated to February 2015 when his client had resigned from directorships. He also asked for a stay on the disqualification and costs order pending appeal.
Bernard Dunleavy SC, for the liquidator, said there was no provision in law for backdating disqualifications.
Mr Justice Keane agreed there was no power to backdate and also refused a stay.
Reporting- Ann O’Loughlin