Application to jail three company directors rejected by High Court

A HIGH Court judge has refused an application to jail three directors of a company which operated the Brook Lodge Hotel in Aughrim, Co Wicklow.

A businessman sought their attachment and committal to prison alleging they were in contempt of court because their company failed to obey an order to pay him a €1.2 million debt.

Mr Justice Peter Kelly yesterday ruled the hotel operating company, Durgman Entertainment Ltd, to which provisional liquidators have been appointed, had not been properly notified of the application by the creditor to seek their imprisonment.

Earlier this week, the court was told Eamonn Galavan, Clonroche, Enniscorthy, Co Wexford, the creditor owed the €1.2m, wanted to bring contempt proceedings against Bernard Doyle, Waterside, Darglevale, Bray; Evan Doyle, Macreddin Village, Aughrim; and Eoin Doyle, Levmoss Hall, The Gallops, Leopardstown, Dublin.

The hotel continues to be operated by the directors in their personal capacities.

The contempt application arose from their alleged failure to abide by a court order of March 3, 2010, requiring Durgman and two related companies — Brooklodge Estate Ltd and Firefly Properties Ltd — to purchase €1.2m worth of shares from a company owned by Mr Galavan. An appeal was lodged against that order on March 16, 2010.

Yesterday, Mr Justice Kelly ruled Mr Galavan’s application to have the directors arrested and committed to prison required they should have been served with proper notice in accordance with the rules of the superior courts.

In order for the court to find there was willful disobedience of the court order (in relation to the €1.2m), it must be satisfied the company and directors have been properly served with a notice in which they are made aware of the consequences of failing to obey it, he said.

There was “nothing technical” about compliance with the rules in a situation where a person is being deprived of their liberty.

The fact that an appeal had been lodged against the March 2010 order, and it appeared nothing had been done to prosecute it, added an element of confusion to the matter, he said.

The judge granted an application to allow the directors to be examined by lawyers for Mr Galavan next October.

This is only in relation to their directorships of the two associated Durgman companies, Brooklodge and Firefly, which the court heard had not traded for the last two years.

In relation to Durgman, the judge did not see much point in allowing examination of the directors because a provisional liquidator had been appointed and there was no doubt it would go into official or voluntary liquidation.

It would be up to the liquidator to ensure all creditors are treated on a equal basis, the judge said.