Various orders against the siblings were sought by Gary Lennon, liquidator of Gilson Motor Company Ltd, which traded in high-value vehicles and operated a car parking and valeting service at Sir John Rogerson’s Quay, Dublin.
Mr Lennon had sought orders under section 160 of the 1990 Companies Act to have Mr Gilson disqualified from acting as a company director for five years. He did not contest that application.
Mr Lennon also sought an order under section 150 of the same act, seeking certain restrictions to be imposed on Ms Gilson preventing her from acting as a company director for five years unless certain capital requirements were met.
Ms Gilson opposed the liquidator’s application on grounds including she had “no hand, act, or part” in running the business from which, it was accepted, she gained no personal benefit.
Mr Justice Paul Gilligan made an order disqualifying Mr Gilson from acting as a company director. In relation to Ms Gilson, the judge said it was accepted she “played no active role”, “did not act dishonestly”, and was “deceived by her brother in the improper way he ran the affairs of the business”.
Ms Gilson “probably never saw the writing on the wall for the company for the simple reason she did not involve herself in any way in the affairs of the company”, Mr Justice Gilligan said.
It was difficult to attach any real moral blame to Ms Gilson, he added.
Her brother had accepted full responsibility and she had acted honestly. However, the judge said, she had displayed “a want of proper standards” in effectively not taking any interest in the affairs of the company of which she was a director.
She had not kept herself informed of the company’s affairs and, under the relevant company laws, “must suffer the consequences as provided for in section 150 of the Companies Act”.
There was no other reason why it would be just and equitable for her to be subject to restrictions applied for by the liquidator, he said.
The court must reject any suggestion that a family member, who can be one of two directors of a company that is insolvent and who does not keep themselves informed of the affairs of that company, cannot suffer any restriction despite losses caused to creditors.
The judge adjourned the matter to October when final orders are to be made.
Gilson Motor Company Ltd, Annaly Drive, Onger Wood, Dublin 15, was wound up by the High Court in 2011 after it failed to pay €141,937 in taxes to the Revenue. Mr Lennon was appointed liquidator.
Mr Lennon, represented by Brian McGuckian, argued that Mr Gilson was “unfit to be concerned in the management of a company” and had not acted honestly or responsibly in relation to the company. He had ran the business, managed all the sales, and his signature was on all the cheques, Mr McGuckian said.
No proper books and records were kept by the company; company funds were diverted into accounts for the purpose of defrauding Revenue, the main creditor of the company, for the purposes of deliberate avoidance of paying the company’s taxes, counsel said.
Between June 2010 and July 2011, some €375,000 was lodged to accounts in the name of Damien Gilson Parking Solutions, monies which were in fact proceeds of company sales, he said.
The liquidator sought orders against Ms Gilson because she failed to take a proactive role in relation to the company, he said.He claimed she had not acted responsibly in relation to the affairs of the company. In particular, she had a responsibility to take notice of the firm’s affairs when the company was struck off the register of companies in 2008 for a failure to file returns and subsequently restored.