Directors withdrew €400k, court hears

The High Court has heard allegations that a company, part owned by brothers Edward and Oliver Garry, the latter a Fine Gael member of Clare County Council, had lost money through unauthorised withdrawals by directors of €400,000.

Edward Garry failed in a bid to obtain an injunction directing his brother, Oliver, and Oliver’s two sons, Colin and John, to pay back €33,000 he claimed had recently been misappropriated from the finances of Abbey Contractors Limited.

He also failed in an attempt to get a court order directing the release to him of work diaries, time sheets, chequebook stubs, and accounts relating to the running of the firm that has its registered office at Fort Hill, Kildysart, Co Clare, the address of Oliver Garry.

Counsel for Edward Garry said it was his client’s case that Oliver Garry’s sons, Colin and John, had effectively become directors of the company in 2004 and, with their father, had, over a period of time, conducted a concerted operation of using resources of the company for their own benefit.

Edward Garry told the court he had lived in Dublin for the past 40 years and he and his brother, Oliver, were 50% shareholders in the company, which owned lands and carried out works, mainly for Irish Rail.

He had recently discovered through the AIB in Clonskeagh, Dublin, that €33,000 had been withdrawn from the company’s bank account, bringing to about €400,000 the amount that had been withdrawn by the Kildysart directors “for their own use over six or seven years”.

He claimed a large house had been built by the company for one of the directors that had never been paid for. When his solicitor questioned the €33,000 withdrawal, he had been told by solicitors for the Kildysart directors it was in regard to a redundancy payment. He believed this to be a fictional redundancy payment for the benefit of those people who were in control of the firm.

Mr Garry said he was seeking an order directing return of the €33,000 to the company bank account, or payment of it into court until the determination of a derivative action by him against the firm, his brother and nephews. This action was due for mention before another judge next Monday.

The court heard that if the other directors continued to extract money from Abbey Contractors, the company would not have funds to pursue his and its action against them. He wished to be put in the shoes of the firm to pursue his claim.

Mr Justice Patrick McCarthy refused both applications but granted Mr Garry leave to issue a motion to be dealt with next Monday.