High Court dismisses application to join separate liquidations as companies are not related under Companies Act 2014.

THE HIGH COURT

COMMERCIAL

[2026] IEHC 6

[Record No. 2020/174 COS]

[Record No. 2020/78 COM]

IN THE MATTER OF TUSKAR PROPERTY HOLDINGS LIMITED (IN

LIQUIDATION)

AND

IN THE MATTER OF HYNES JEWELLERS (WEXFORD) LIMITED (IN

LIQUIDATION)

AND

IN THE MATTER OF JW FASHIONS LIMITED (IN LIQUIDATION)

AND

IN THE MATTER OF THE COMPANIES ACT 2014

AND

IN THE MATTER OF AN APPLICATION PURSUANT TO SECTIONS 599, 600, 608, 609, 610 AND 612 OF THE COMPANIES ACT 2014 BETWEEN MYLES KIRBY APPLICANT AND ALAN HYNES, FRANK HYNES, ADRIAN O'REILLY, TUSKAR INVESTMENT GROUP LIMITED AND MARTINA HYNES RESPONDENTS JUDGMENT of Mr Justice Michael Quinn delivered the 9th day of January 2026 Table of Contents PART ONE: INTRODUCTION ................................................................................................ 5 The winding up orders ................................................................................................... 8 The Applicant’s findings................................................................................................ 8 PART TWO:

These proceedings ............................................................................................... 9 Progress and conduct of the case ................................................................................. 11 Order 22 July 2020....................................................................................................... 12 Further Orders .............................................................................................................. 14 The Points of Claim ..................................................................................................... 15 Amended Points of Defence and Legal Submissions – 15 November 2021. .............. 16 The hearing of these proceedings ................................................................................ 25 PART THREE:

The Companies and other entities.................................................................. 30 Hynes Jewellers (Wexford) Limited (“HJW”) ............................................................ 30 JW Fashions Limited (“JWF”)..................................................................................... 31 Tuskar Property Holdings Limited (“TPH”)................................................................ 32 The Fourth Respondent: Tuskar Investment Group Limited (“TIG”) ......................... 33 The Tuskar Partnership ................................................................................................ 34 LAC Trading Partnership ............................................................................................. 34 PART FOUR:

The Respondents and other persons ................................................................. 35 The First Respondent Alan Hynes ............................................................................... 35 The Second Respondent Frank Hynes ......................................................................... 35 The Third Respondent Adrian O'Reilly ....................................................................... 37 The Fifth Respondent Martina Hynes .......................................................................... 37 Fiona Hynes ................................................................................................................. 38 James Wallace .............................................................................................................. 38 PART FIVE:

HJW ................................................................................................................... 38

(a) Cash withdrawals and credit defaults ..................................................................... 39 Thomas Sabo GmbH & Company Schmukhandel KG................................................ 39 BJ Fitzpatrick Limited ................................................................................................. 40 Other creditors ............................................................................................................. 40

19 North Main Street ................................................................................................... 41 The Joint Account of Frank and Martina Hynes .......................................................... 42 Evidence of the Fifth Respondent ................................................................................ 43 Evidence of the Second Respondent ............................................................................ 46 Cross-examination of the Second Respondent ............................................................ 46

(b) Purported transfer of shares in HJW ...................................................................... 50 Minutes of meetings of HJW ....................................................................................... 51 The “Options Document" 27 April 2020 ..................................................................... 54

(c) Statement of affairs and books and records ............................................................ 61 Financial statements for years ended 31 October 2017 and 31 October 2018............. 66 Sections 281-285 .......................................................................................................... 68 Section 609................................................................................................................... 71

(d) Vehicle hire purchase agreements .......................................................................... 73 The Volkswagen Touareg – First Citizen Finance ...................................................... 73 BMW vehicle – RCI Banque ....................................................................................... 75

(e) Creditors of HJW .................................................................................................... 76

(f) The First Respondent as a shadow or de facto director of HJW ............................. 77 Affidavit of the First Respondent 16 September 2016 ................................................ 81 The John Power proceedings ....................................................................................... 82 BJ Fitzpatrick Limited ................................................................................................. 85 Shadow or de facto director ......................................................................................... 87 “Statement of Claim” 1 February 2020 ....................................................................... 93 Summary for HJW ..................................................................................................... 100 PART SIX:

Tuskar Property Holdings Limited (TPH) ......................................................... 101 Annual returns and financial statements for the years 2008 to 2014 ......................... 102 Correspondence from Third Respondent ................................................................... 105 The Employment Contract ......................................................................................... 106 The Model 3 Tesla and other requests by the First Respondent ................................ 110 Director Service Agreement with the Third Respondent ........................................... 112 Role of James Wallace ............................................................................................... 114 TPH: statement of affairs and books and records. ..................................................... 115 TPH – payments through Bank of Ireland account .................................................... 119 Kenny Stephenson Chapman ..................................................................................... 124 McKeever Rowan ...................................................................................................... 125 Signatures of Colm Sugrue ........................................................................................ 126 €1 million received from client of Partners at Law ................................................... 128 The Third Respondent................................................................................................ 132 Summary for TPH ...................................................................................................... 134 PART SEVEN:

JW Fashions Limited (“JWF”) .................................................................... 135 Bank account of JWF ................................................................................................. 138 Statement of Affairs 4 October 2020: JW Fashions Limited ..................................... 139 Summary for JWF ...................................................................................................... 139 Interactions between JWF, HJW and TPH ................................................................ 140 PART EIGHT:

The Fourth Respondent Tuskar Investment Group Limited (“TIG”) and the “Deed of Retirement” ............................................................................................................ 141 PART NINE: Further evidence and cross-examination of the Applicant.............................. 152 PART TEN: Trial Evidence and Submissions of First Named Respondent .......................... 156 The Employment Contract ......................................................................................... 159 Personal monies ......................................................................................................... 161

19 North Main Street, Wexford ................................................................................. 164 The move to 113 North Main Street .......................................................................... 164 Post liquidation engagement ...................................................................................... 165 Payments from bank account of TPH ........................................................................ 166 Role of the Second Respondent Frank Hynes and the Fifth Respondent Martina Hynes .................................................................................................................................... 168 €1m from client of Partners at Law ........................................................................... 171 Other evidence ........................................................................................................... 172 Further cross examination of First Respondent ......................................................... 176 Cross examination of First Respondent regarding statement of affairs ..................... 177 Closing submissions of the First Respondent ............................................................ 180 Conduct of the defence .............................................................................................. 181 PART ELEVEN:

The First Respondent: Alan Hynes ........................................................... 183 Was the First Named Respondent a shadow director or a de facto director of the companies? ................................................................................................................. 185 Section 610 – fraudulent and reckless trading ........................................................... 190 Quantum ..................................................................................................................... 196 First Named Respondent – Section 609: contravention of obligation to keep adequate accounting records ..................................................................................................... 201 First Respondent - Section 608: assets improperly transferred ................................. 211 First Respondent - Section 612: misfeasance ............................................................ 211 Section 608................................................................................................................. 214 Section 612................................................................................................................. 214 First Named Respondent – Section 842: disqualification .......................................... 215 Length of disqualification .......................................................................................... 219 This case..................................................................................................................... 222 Section 846: costs and expenses ................................................................................ 224 PART TWELVE:

The Second Respondent ........................................................................... 226 Second Respondent – Section 610: fraudulent trading .............................................. 227 Second Respondent – Section 609: failure to keep proper books of account ............ 233 Second Named Respondent – Section 608: fraudulent disposition ........................... 234 Second Named Respondent – Section 612: misfeasance ........................................... 234 Second Named Respondent – Section 160: disqualification ..................................... 235 Period of disqualification. .......................................................................................... 238 PART THIRTEEN:

The Third Respondent Adrian O'Reilly ................................................ 239 Orders of the court ..................................................................................................... 243 The provisional liquidation ........................................................................................ 244 Third Respondent – Section 610: reckless trading .................................................... 247 Third Respondent – Section 609: failure to keep adequate accounting records ........ 254 Third Respondent – Section 608: assets improperly transferred ............................... 255 Third Respondent – Section 612: misfeasance .......................................................... 255 Third Respondent – Section 842: disqualification ..................................................... 255 PART FOURTEEN:

Fourth Respondent – Tuskar Investment Group Limited .................... 257 PART FIFTEEN: Fifth Respondent – Martina Hynes ........................................................... 257 PART SIXTEEN: Section 600: pooling of assets.................................................................. 258 PART SEVENTEEN: Conclusion ......................................................................................... 263 PART ONE: INTRODUCTION

1. Hynes Jewellers was a family business which started at 17 North Main Street in Wexford town in 1956, and later moved to 19 North Main Street. The business was founded by the parents of the Second Named Respondent, Frank Hynes. It was later taken over by the Second Respondent and his two sisters, Fiona Hynes and Catherine Cowman.

2. On 22 April 1999, Hynes Jewellers (Wexford) Limited (“HJW”) was incorporated. Its shareholders were the Second Respondent as to 55%, Fiona Hynes as to 35% and Catherine Cowman as to 10%. The Second Respondent and Fiona Hynes were the directors. The Second Respondent was the managing director and made most of the operating and financial decisions. He was a jeweller by trade and worked in the shop. He also conducted the Company’s dealing with suppliers, banks, accountants, lawyers and others and dealt with accounts, tax returns and contracts. His sisters worked in the shop and supported him. The Company traded profitably and although, like many other businesses, it had its “ups and downs”, the business was on a stable footing until the events giving rise to these proceedings.

3. In 2014, the Second Respondent decided to introduce their cousin, the First Named Respondent, Alan Hynes, as a financial consultant to HJW. The First Respondent was an accountant, and a member of the Institute of Chartered Accountants in Ireland (now Chartered Accountants Ireland) until he was expelled from it in 2015. A company originally owned by the First Respondent and his wife Noreen Hynes, Tuskar Property Holdings (“TPH”), was appointed secretary of HJW. From that time onwards, the Second Respondent consulted more with the First Respondent than with his sisters. HJW terminated the retainer of its local accountants and tax agents, Messrs Asple and Company.

4. One of the issues confronting HJW in 2014 was the level of rent it was paying for the shop premises at 19 North Main Street, Wexford. The lease provided for upward only rent reviews, and this contributed to business pressures in light of market conditions and relative to the trade of the Company.

5. When HJW ceased paying all or part of its rent the landlords Val Stone and Catherine Stack issued proceedings in the Circuit Court. On 11 December 2015 a decree was issued in favour of the landlords for possession of the premises, and for the payment of arrears of rent rates and damages, totalling €49,872.

6. On 6 January 2016, the County Registrar for Wexford issued an execution order. On

19 April 2016, the sheriff executed the order and the premises at 19 North Main Street were repossessed. HJW ceased trading.

7. About six months later, the jewellery business was restarted at new premises at 113 North Main Street, this time in the name of JW Fashions Limited (“JWF”). That trade continued for a period, again known as Hynes Jewellers. In February 2019 the sheriff, this time acting on foot of unpaid taxes, entered the premises and seized most of the stock. JWF continued to trade for a short period thereafter, but it ceased trading in April 2019.

8. Fiona Hynes gave evidence that from the start of the First Named Respondent’s involvement in HJW the Second Respondent became increasingly dependent on confiding in him to the exclusion of his sisters. Whenever she enquired how matters were going, he said that he and the First Respondent were handling matters.

9. Gradually, the affairs of HJW, a single outlet family jewellery business which over time had generated substantial cash revenues, became entangled with companies introduced by the First Respondent, including TPH, culminating in the insolvent liquidation of HJW and other companies, and losses to their creditors, including the Revenue Commissioners.

10. Prior to his involvement in HJW and JWF, the First Respondent was the subject of an order made on 9 October 2013 pursuant to section 160 of the Companies Act 1990 disqualifying him for a period of three years from being appointed or acting as a director or secretary or from being in any way, directly or indirectly concerned or taking part in the promotion, formation or management of a company. He was also the subject of a declaration made on 9 October 2013 pursuant to section 150 of the Act of 1990 that he not for a period of five years be appointed or act in any way, whether directly of indirectly, as a director or secretary of or be concerned or take part in the promotion or formation of any company unless it meets the requirements as to paid up capital stipulated in subsection (3) of section 150 (see Tuskar Asset Management plc, Dunne J., 24 September 2013). No evidence was adduced as to how much, if any, the Second Respondent and his sisters knew of this history when the First Respondent first became involved in HJW.

The winding up orders

11. On 28 November 2019, the Collector General presented a petition for the winding up of HJW, and by order of this Court (O’Regan J) made on 13 January 2020, HJW was ordered to be wound up by the court and the Applicant Myles Kirby was appointed liquidator.

12. On 20 January 2020, a petition was presented by the Collector General for the winding up of JWF. By order of the court made on 17 February 2020 (O’Moore J), it was ordered that JWF be wound up by the court and the Applicant was appointed liquidator.

13. On 3 March 2020, a petition was presented by the Collector General for the winding up of TPH.

14. On 9 March 2020, two orders of the court were made in respect of TPH. Firstly, an order restoring the Company to the Register and, secondly, an order appointing Mr Kirby provisional liquidator.

15. On 30 March 2020, an order was made by the court (O’Moore J) that TPH be wound up by the court and appointing Mr Kirby liquidator.

16. In this judgment I refer to HJW, JWF and TPH collectively as “the Companies”.

The Applicant’s findings

17. The Applicant says that his investigation of the affairs of the Companies has revealed the following.

18. Firstly, that the First Named Respondent was a shadow and/or de facto director of the Companies.

19. Secondly, numerous transactions and payments between the Companies themselves and as between the Companies and the Respondents and other parties which were fraudulent.

20. Thirdly, that the First and Second Respondents were knowingly party to fraudulent trading in the Companies.

21. Fourthly, that the Third Named Respondent was knowingly a party to reckless trading.

22. Fifthly, that the Companies failed to keep proper books and records of account, in breach of the requirements of Sections 281-285 of the Companies Act 2014 and that the First, Second and Third Named Respondents were responsible for this contravention.

23. The Applicant says that the First to Third Named Respondents, being directors or former directors, and in the case of the First Named Respondent a shadow or de facto director, failed to cooperate with him in his investigations and in the performance of his functions as liquidator and have failed to comply with orders of the court for the delivery of statements of affairs in relation to the Companies and to produce to him documents and information relating to the Companies in accordance with the terms of an order made by this court to that effect on

22 July 2020.

24. I have concluded that these findings are substantiated by the evidence. The First, Second and Third Respondents were party to numerous serious contraventions of the Companies Act 2014 and breaches of the duties of directors.

PART TWO: These proceedings

25. By the Originating Notice of Motion in these proceedings, as amended, the Applicant seeks the following orders and declarations:

(1) An order pursuant to section 600 of the Companies Act 2014 directing that the three companies TPH, HJW and JWF be wound up together as if they were one company.

(2) A declaration that the First Named Respondent has acted as a shadow director and/or a de facto director of the Companies within the meaning of Section 221 and/ or Section 222 of the Act.

(3) A declaration pursuant to section 610 of the Act that the First, Second and Third Named Respondents be personally liable for the debts of the Companies by reason of their knowingly being party to the carrying on of the business of the Companies in a reckless manner and/or with intent to defraud creditors of the Companies and/or creditors of other persons and/or other fraudulent purposes, together with further directions pursuant to Section 611 of the Act.

(4) A declaration pursuant to Section 609 of the Act that the First, Second and Third Named Respondents be held personally liable for the debts of the Companies by reason of the Companies being in contravention of sections 281 to 285 of the Act by failing to keep adequate accounting records in relation to the Companies in circumstances where those respondents are in default in respect of the said contravention.

(5) A declaration pursuant to section 612 of the Act that the First, Second and Third Named Respondents have misapplied or retained or become liable or accountable for money and/or property of the Companies and/or have been guilty of misfeasance and other breaches of duty or trust in relation to the Companies.

(6) An order pursuant to section 612 (2) of the Act compelling the First, Second and Third Named Respondents to restore to the Applicant such monies or property of the Companies as the court shall direct and/or to contribute such sum as the court thinks just to the assets of the Companies by way of compensation in respect of those respondents’ misapplication, retainer, misfeasance or other breach of duty.

(7) A declaration pursuant to Section 608 that property of the Companies was disposed of to the Respondents and that the effect of such disposal was to perpetrate a fraud on the Companies their creditors or members.

(8) An order pursuant to section 608(2) of the Act directing the Respondents, as persons appearing to have use control and/or possession of property of the Companies to deliver such property to the Applicant or to pay a sum in respect thereof to the Applicant.

(9) A contribution order pursuant to Section 599 of the Act requiring the Fourth Named Respondent, being a company related to the Companies in liquidation, to pay to the Applicant an amount equivalent to the whole or any part of the debts provable in the winding up of the Companies.

(10) Pursuant to section 842 of the Act an order as against the First, Second and Third Named Respondents disqualifying them from being appointed or acting as a director or other officer, auditor, receiver, liquidator or examiner or being in any way, whether directly or indirectly, concerned or taking part in the promotion formation or management of a company within the meaning of Section 819(6) of the Act for such period as the court may direct.

(11) In the alternative to (10) above a declaration pursuant to section 819 of the Act that the First, Second and Third Named Respondents shall not for a period of five years be appointed or act in any way directly or indirectly as a director or secretary of a company or be concerned in or take part in the formation or promotion of a company, unless the company meets the requirements (as to paid up capital) set out in subsection 3 of section 819.

(12) An order providing for the costs of these proceedings including orders pursuant to section 846 and/or section 820 of the Act directing that any of the First, Second or Third Named Respondents against whom a disqualification or restriction order is made, pay the costs incurred by the Applicant in investigating the matters the subject of these proceedings and in collecting evidence in respect of those matters, including so much of the remuneration and expenses of the Applicant as are attributable to his investigation and collection of evidence.

Progress and conduct of the case

26. Before I turn to the detail of the evidence it is appropriate to outline the manner in which the case has progressed and to describe the manner in which the Respondents have met the case, both in the immediate aftermath of the appointment of the Applicant, the exchange of pleadings and preparations for the trial of the case and the conduct of the action at hearing.

27. None of the Respondents were legally represented.

28. Having performed his initial investigation into the affairs of the Companies the Applicant issued the originating Notice of Motion on 15 June 2020. On the same day he applied for and obtained from this Court (Hyland J) an order pursuant to s.798 of the Act that the First and Second Named Respondents be restrained from reducing or removing their assets within or outside the State below the amount of €2,460,000 each pending the hearing of these proceedings.

29. The order also restrained the First and Fourth Named Respondents from dissipating or transferring or encumbering any assets or funds or property transferred to them by or on behalf of the Companies or in which the Companies formerly held any interest pending the hearing of the Applicant's application for interlocutory relief.

30. On 22 June 2020 an application was made, on notice to the Respondents but none of them appearing, for entry of the proceedings in the Commercial List. The court entered the proceedings in the Commercial List and directed that the application for interlocutory relief be heard on 22 July 2020.

Order 22 July 2020

31. On 22 July 2020 the only respondent who appeared was the First Respondent. He appeared in person, and he consented to orders against him in the following terms: -

(1) an order pursuant to s.798 of the Companies Act 2014 and the inherent jurisdiction of the court restraining him from removing his assets from the State or reducing his assets below an amount of 2.46 million until 2 November 2020 or further order;

(2) that he be restrained from dissipating transferring encumbering or otherwise dealing with any assets, funds or property transferred to him by or on behalf of any of the Companies until

2 November 2020 or further order;

(3) that he be summoned to attend before the court, on a date to be fixed, for examination in relation to the promotion formation trade dealings affairs or property of the Companies. (Ultimately no such examination hearing was held, and the Applicant instead sought and obtained a date for the full hearing of the action).

(4) an order pursuant to s.671(4) of the Companies Act 2014 directing the First Respondent to produce within four weeks of the date of that order any accounting records, deed instrument, or other document or other paper relating to the Companies within his custody or power.

(5) an order pursuant to s.671(4) of the Act and/or the inherent jurisdiction of the court directing the First Respondent to place before the court within a period of four weeks a statement in writing of any transactions between the Respondents and the Companies including: -

(i) any payments or transfers of money of any kind made by the Companies to the Respondents (or to any third party owned or controlled by any of the Respondents or in which they have an interest of any kind) from 1 January 2015 to date

(ii) any transfers of any property or other assets of any kind made by the Companies to the Respondents (or to any third party owned or controlled by any of the Respondents or in which they have an interest of any kind) from 1 January 2015 to date;

(iii) in relation to any payments or transfers disclosed as part of the statements described at (i) and (ii) above, a statement of the use to which the monies and/or property so transferred were put by the Respondents, including details of any accounts to which monies were lodged, any liabilities discharged, assets purchased, or investments made with transferred funds; and

(iv) any transfers of any interest in the shares in any of the Companies which have taken place from 1 January 2015 to date.

(6) pursuant to s.594(4) of the Act that the First Respondent provide the Applicant within a period of four weeks from the date of the order statements as to the affairs of each of the Companies. That this order was never complied with.

32. On 4 October 2020 the First Respondent furnished to the Applicant a document which he described as a “Combined Statement of Affairs – 30 March 2020”. The Applicant says that the document did not comply with the order and was defective in numerous fundamental respects.

33. An order for the costs of the motion was made against the First Respondent. The order for costs was subject to a stay pending the final determination of these proceedings. The stay was lifted pursuant to an application made on 4 December 2020 in light of the failure of the Respondents to comply with the orders already made.

34. The court was satisfied as to service of the motion on the other respondents. Similar orders for the production of documents and information were made against the Second Respondent Frank Hynes and the Third Respondent Adrian O'Reilly. They also failed to comply with this order.

Further Orders

35. By order made on 4 December 2020, the court vacated the stay on the costs order of 22 July 2020 by reason of the failure of the Respondents to comply with the provisions of that order.

36. The First, Second and Third Respondents were ordered to pay on a joint and several basis to the Applicant the sum of €40,000 in respect of the costs of the prior applications.

37. By the same order directions were made for the exchange of Points of Claim and Points of Defence, and that any request for voluntary discovery be made by no later than 12 February 2021.

38. Points of Claim were delivered by the Applicant and defences were delivered by the First, Second, Third and Fifth Named Respondents. No defence was ever delivered on behalf of the Fourth Named Respondent. On 8 March 2021 the court (Barniville J.) granted judgment in default of defence against the Fourth Named Respondent.

39. By the same order directions were made as to the deadline by which any motions for discovery would be issued by either party. No such motions were ever issued by either party. The Applicant swore an affidavit of discovery in response to a letter from the First Respondent requesting discovery. None of the Respondents inspected the documents so discovered. As to production of documents by the Respondents, the Applicant relies on the order made on 22 July 2020 directing the Respondents to deliver statements of affairs and to provide documents relating to all transactions as between the Companies and the Respondents and other parties which he says were not complied with.

The Points of Claim

40. The original Points of Claim were delivered by the Applicant on 21 December 2020. It later transpired that the Points of Claim included references to a transaction which was the subject of a criminal prosecution, no details of which were put before this court. On 22 October 2021 the court granted to the Applicant liberty to amend the Points of Claim by deleting the references to the transaction the subject of a criminal prosecution. The amended Points of Claim were delivered on 9 November 2021.

41. In the Amended Points of Claim the Applicant identifies the grounds for his claims for declarations of

(a) fraudulent trading;

(b) reckless trading;

(c) failure to keep books and records of account;

(d) claims for the return of property of the Companies pursuant to s.612 and s.608;

(e) a pooling order pursuant to s.600 of the Act;

(f) a declaration that the First Respondent Alan Hynes acted as a shadow and/or de facto director of the Companies;

(g) declarations of disqualification and/or restriction.

42. This document contained extensive particulars of the following allegations: -

(a) that the First and Second Named Respondents were knowingly party to fraudulent trading;

(b) that the First, Second and Third Named Respondents were knowingly party to reckless trading;

(c) failures of the First, Second and Third Respondents to keep proper books and records of account of the Companies;

(d) particulars of misapplication, retention and disposal of assets of the Companies to the Respondents;

(e) the grounds for the application for a pooling order

(f) grounds for the application for declarations that the First Respondent was a shadow director of the companies, and

(g) the grounds for orders of disqualification and/or restriction against the First, Second and Third Respondents.

43. I shall describe later the particulars and supporting evidence for each of the Companies in sequence (Parts Five, Six and Seven). Amended Points of Defence and Legal Submissions – 15 November 2021.

44. On 15 November 2021 the Applicant received from the First Named Respondent a document, said to supersede the previously delivered defences, described as “Amended Points of Defence and Legal Submissions – 15 November 2021”.

45. The document was said to have been delivered on behalf of all five respondents. It was clear from the order of Barniville J. made on 8 March 2021 that the Fourth Named Respondent was precluded from delivering a defence and no application for leave to deliver a defence late was ever made by the Fourth Respondent.

46. The First Named Respondent is not a solicitor and therefore had no standing to represent any person other than himself, either by the delivery of a “Defence” or at the trial.

47. The document is difficult to interpret and contains many statements and complaints which are not relevant to these proceedings. It contains a blend of terms which would be appropriate variously to affidavits, notices for particulars, counterclaims, submissions, and a series of complaints as to the manner in which the Applicant and other parties who are not party to these proceedings have conducted themselves. It would not qualify as a ‘Defence’ in any form of proceedings in this or any other court. It is nonetheless informative to quote extensively from this document. It reveals a failure or refusal on the part of the Respondents, led by the First Respondent, to engage with the specifics of the allegations made by the Applicant or the evidence portended in his comprehensive witness statement, and adopted by him at the hearing.

48. The document is replete with references to other parties who are not a party to these proceedings and to other legal proceedings in many of which the First Respondent is a party, the details of which were not placed before this court and the relevance of which to these proceedings was never explained by any of the Respondents. For example, numerous references are made to the Director of Public Prosecutions. In para. 26 where the document states “we submit that the Respondents will have no difficulty whatsoever in defending these proceedings after the book of evidence is served by the DPP and giving evidence at the ultimate trial of same in due course”.

49. The document was of almost no assistance to the court in understanding the true nature of any defence being put forward. Some of the references can only be understood after reading the description of evidence which follows later in this judgment, and even then, they do not disclose the legal basis of a defence. I shall, however, refer to it as the “Points of Defence”, since it is the only document put before the court purporting to be a “defence”.

50. The document runs to 4 pages and is divided into 28 paragraphs. Some of these paragraphs are self-evidently of no application.

51. In para.1 it is stated that: -

"The Respondents are representing themselves as 'lay-litigants' as is, the Fifth Named Respondent joined by the Applicant hereto".

52. In para. 2 it states: -

"The amended points of defence and legal submissions are made from facts within the Respondents' knowledge save where otherwise appearing and where so appearing the Respondents believe same to be true". The document is not attested, sworn or exhibited to any verifying affidavit.

53. Para.3: -

“The Respondents beg to refer to the pleadings and to the Affidavits already had herein when produced".

54. Paragraph 4: -

"The Second and Fifth Named Respondents are involved in numerous Court cases both with the Applicant herein and with the Revenue. The Second Named Respondent and the Fifth Named Respondent have traditionally represented themselves in this historic litigation". The Applicant is not a party to other proceedings with any of the Respondents.

55. Paragraph 5: -

"The Respondents make these legal submissions as directed by the Honourable Court on 2 November 2021 and for the purposes of seeking relief in the within proceedings pending the determination of an application for Judicial Review which they intend to make before this Honourable Court seeking various reliefs against the Director of Public Prosecutions('DPP')”.

56. There then follows a series of paragraphs relating to proceedings involving the DPP, with no information as to the content or relevance of those proceedings: “6. The impugned decision was made by the DPP in or around August 8th 2021 and free legal aid will be applied for by the Second Named Respondent on 13th December 2021 to retain Solicitors and Counsel”.

The court was never informed what the “impugned” decision of the DPP was. “7. The Second and Fifth Named Respondents are also involved in a settlement process with the First Named Respondent, which also depends on the DPP book of evidence being served by 13th December 2021. No explanation was ever proffered as to the relevance to this case, scheduled for hearing on 30 November 2021, of a book of evidence being served by 13 December 2021.

8. It is remarkable that the DPP has not yet made discovery of documents to the Second Named Respondent’s solicitor. The amended points of claim delivered by the Applicant on 9th November 2021 are deemed to be so inadequate as to constitute non-compliance with the Directions made by this Honourable Court on 2nd November 2021 for the following reasons: –

(i) The Applicant's legal representative has failed to specify the client to whose account the monies paid to Hayes solicitors were held. It is wholly inappropriate to seek to particularise the amended points of claim made on 9th November 2021 by reference to matters expected to be reflected in books of evidence that are due to be delivered by DPP on 13th December 2021.1

(ii) The Applicant has failed to address the particulars sought by the Respondents and the manner in which payments were made by his legal representatives to their respective clients.

(iii) The Applicant has failed to furnish full and detailed particulars of the location and/or to whom the monies were transferred from the client account of Hayes solicitors on behalf of Tuskar Property Holdings Limited and the dates of same.

(iv) It seems from the process of discovery that the Applicant's legal representatives in the within proceedings made some of these transactions that are set out in their The Points of Claim do not refer to ‘monies paid to Hayes Solicitors’.

‘solicitors certificate’. Such transactions will also have to feature in the “leave application” for a Judicial Review.

(v) In preparing the ‘leave application’ to the High Court (ex party) (sic) such transactions that resulted in the within proceedings and such transactions carried by the Applicants’ legal representatives will feature as evidence in the Judicial Review proceedings.

(v) (sic) It appears to be from the process of discovery that when the Applicant's legal representatives acted for Tuskar Property Holdings Limited such transactions that underpin and form the basis of the mareva order in the within proceedings were carried out in the exact same manner by the Applicant’s legal representative pursuant to instructions from clients.2

(vi) Such transactions that were made by the Applicant's legal representatives are therefore matters that are within the direct knowledge of the Applicant and not within the specific knowledge of the Respondents.”

57. Occasional further references are made to the DPP. Nowhere in this document, in evidence and submissions at the hearing of these proceedings or elsewhere did any of the Respondents provide to the court any description or detail of proceedings issued or being pursued by the DPP or how they might be relevant to these proceedings.

58. The document continues: “8. The Respondents fail to understand the reference made by the Applicant's legal representatives to transfers made on instructions of their clients to Alan Hynes and Noreen Hynes (BOI) and to the bank account of Tuskar Property Holdings Limited and to the bank account of Tuskar Asset Management Plc.

The Applicant’s solicitors Hayes had acted at some time in the past for TPH. No information was put before the Court as to any transactions “carried out” by Messrs. Hayes. The Applicant stated that he was satisfied that no conflict of interest arose for Hayes in acting for him in these proceedings. The Respondents did not contradict that statement or offer any particulars of such conflict.

9. Insofar as the Applicant has made amended claims against the Respondents, including the Fourth Named Respondent (which is a company that is not legally represented in the within proceedings) the Respondents are entitled to understand exactly what payments were allegedly made by any other party that resulted in accusations of impropriety and money laundering. No allegation of money laundering is made in these proceedings.

10. In those circumstances it is for the Applicant to particularise each and every irregular payment claim to be made in the within proceedings.

11. It is for the Applicant to particularise each and every irregular payment claimed to be made to the Respondents from the Companies (that he has been nominated as liquidator) and not already having been declared as income by the Respondents.

12. It is not satisfactory for the Applicant to merely claim that such matters are within the specific knowledge of the Respondents and seek to attempt to assert that such payments are irregular and contrary to the way payments were made by the Applicants’ legal representatives previously.

13. The Respondents submit that whilst they have no means of knowledge as to what legal principles were applied by the Applicants legal when making such transfers, those transactions carried out by Tuskar Property Holdings Limited were carried out in a legal manner.

14. It is for the Applicant to adequately particularise his amended claims that the Second Named Respondent and the Fifth Named Respondent failed to pay suppliers of their Jewellery business from their personal bank account held with PTSB. It is believed that those supplier payments are now the subject of the DPP.”

59. Insofar as a number of these paragraphs have the appearance of requests for particulars or complaints as to the adequacy of information provided, no Notice for Particulars was ever delivered by or on behalf of any of the Respondents. The evidence of the Applicant during the trial was that on a number of occasions the Applicant invited the Respondents to attend at his office to inspect any books or records or information of the Companies which were in his possession. These complaints are therefore made for the first time in this “Amended Points of Defence and Legal Submissions” delivered two weeks before the commencement of the trial.

60. The Applicant had delivered a comprehensive Witness Statement originally on 19 April 2021, and an amended version, with leave of the court, on 9 November 2021 outlining the evidence to be given of all of the transactions giving rise to his claims. His witness statement ran to 62 pages and was accompanied by 125 tabs of documents describing and evidencing all the payments, transactions and other events giving rise to these proceedings, all of which were put into evidence by the Applicant at the trial.

61. In the following paragraphs references are made to potential settlements, mediations and other extraneous matters. Again, it is informative to quote the relevant paragraphs: “15. Having regard to the ‘invite’ made by the Applicant's legal representatives on 18 November 2021 to negotiate a settlement of the Second and Fifth Named Respondent's purported liabilities in the within proceedings this ‘option’ will be considered after the books of evidence are served by the DPP on 13 December 2021.

16. It is regrettable that Fiona Hynes and Frank Hynes are experiencing relationship

(sic) as a number of files and papers all of which are required by the Fifth Named Respondent and Second Named Respondent to successfully defend and mount a counterclaim to the within proceedings have gone missing.

17. The Respondents had hoped that the mediation referred to in the previous paragraph herein would represent some light at the end of what has been a very long tunnel and in bringing to an end all of the various strands of litigation in which they are involved.

18. The Respondents main energy and focus has been on that mediation process which they have been involved in which they still hope will yet prove successful.

19. The Respondents have, however been left completely ‘shell shocked’ by the decision of the DPP and there is sadly, only so much the Respondents can deal with at any one time.

20. The judicial review proceedings are critical to the constitutional entitlement of the First and Second Respondents to continue to earn a living and to provide for their families. If the decision of DPP is allowed to go unchallenged then they will no longer be as employable in their respective careers.

21. The proposed mediation will also, as averred to above hopefully see the various, and protracted sets of litigation in which the Fifth Named Respondent and Second Named Respondent are involved with Revenue to an end.

22. The Applicant is currently not party to that mediation. The Second and Fifth Named Respondents were invited by the Applicant’s legal representative to discuss a settlement of their alleged liabilities in the within proceedings prior to the trial date. As such the Applicant would not be prejudiced by an adjournment of the within proceedings pending the outcome of the Judicial Review proceedings”. No application was made to this court for an adjournment of the trial. “23. The apparent breakdown of the relationship between Fiona Hynes and Frank Hynes and the issue of the missing files has seriously prejudiced the ability of the Respondents to deliver a defence and mount a counter claim in the within proceedings.

24. The assets of the First and Second Named Respondent are currently restricted in the within proceedings. Should this Honourable Court allow the mareva order to be varied and/or then cancelled then they would be in a better position to sell an asset, to obtain legal, avoid the threat of bankruptcy and to mount a counterclaim in the within proceedings.3

25. In circumstances where the trial is scheduled to proceed on 30 November 2021 for two weeks, the Applicant's legal representatives wrote to the Second and Fifth Named Respondent on 5th November 2021 advising the Respondents will have until 23rd November 2021 to deliver legal submissions.

25. On 18th October 2021 the Applicant's legal representatives wrote a without prejudice letter to the Second Named and Fifth Named Respondents offering a meeting that might negate any requirement for Martina Hynes and Frank Hynes to participate in a full trial.

26. We submit that the Respondents will have no difficulty whatsoever in defending these proceedings after the book of evidence is served by the DPP and giving evidence at the ultimate trial of same in due course.

27. The Respondents will happily submit a ‘leave application’ and a counterclaim in the within proceedings after the book of evidence is delivered by 13th December 2021.

28. Again however the Respondents would stress that these proceedings may not actually prove necessary if the mediation referred to above bears fruit.”

62. During the hearing of the case the First Respondent stated that he had not read all of the documents served on him. That statement goes some way to explaining why he stated in the ‘Points of Defence’ that the claims had not been fully particularised.

63. The trial date of 30 November 2021 had been fixed on 4 June 2021 and no application for an adjournment was made. Therefore, the suggestion in this ‘Points of Defence’ delivered on 15 November 2021 that the action should be adjourned, or that the Respondents would be No application was made to by the Respondents vary the mareva order to provide for legal costs or otherwise.

in a better position to respond to these proceedings after a “book of evidence was delivered by the DPP” on 13 December 2021 made no sense.

64. As regards references to “without prejudice” correspondence and potential mediation, the un-contradicted evidence of the Applicant at the trial was that he had indicated that if the Second or Fifth Named Respondent wished to meet with him to engage in relation to the liabilities of the Companies he would do so. There was never any mediation agreed upon or scheduled.

65. The relevance of this document is that it illustrates on the part of the Respondents the following:

(1) An unwillingness to engage with the specifics of the allegations made in the originating Notice of Motion and amended Points of Claim;

(2) A determination to complain about the conduct of the Applicant and other parties, including the DPP, all by way of distraction from the substantive issues in the case

66. Many of the extraneous matters such as DPP proceedings were not referred to by any of the Respondents during the hearing itself.

The hearing of these proceedings

67. The matter was listed for two weeks as a hybrid hearing, not for the convenience of parties generally, but to accommodate the particular circumstance that the Third Named Respondent is a medical doctor resident and practising in England. The Third Respondent never attended the hearing in person or remotely. None of the other respondents ever attended in person during the two-week hearing. The First, Second and Fifth Respondent joined the hearing remotely and intermittently.

68. On Day One when the matter was called, none of the Respondents appeared in court. The only respondent to join the hearing was the First Named Respondent who joined remotely. He did so by telephone and was not visible to the court, stating that he did not have a “video link from this phone” and only had “audio”.

69. It was explained to the First Respondent that remote participation in the hearing had been made available to facilitate the Third Named Respondent and not for the convenience of other parties. Nonetheless, I permitted the Respondents to participate remotely, which they did intermittently during the trial. They never displayed any desire or willingness to attend otherwise than at times which suited them, frequently being absent when the Applicant and others were giving their evidence.

70. Having invited appearances and being satisfied that all respondents had due notice of the commencement of the hearing, the court rose until 2 o'clock on Day One to enable the First Respondent to arrange a video link, which he appeared to be unable to do. Ultimately the court adjourned to Day Two on the basis that the First Respondent could by then either arrange a functional video link or attend in court in person.

71. On Day Two the First Respondent joined, again only by audio. The Second Respondent Frank Hynes joined remotely and was visible. Two witnesses called by the Applicant, Fiona Hynes and Colm Sugrue attended in person and gave their evidence and the Applicant commenced his evidence.

72. On Day Three the Applicant resumed his evidence. At the commencement none of the Respondents participated. The Fifth Respondent Martina Hynes joined for sporadic parts of the hearing.

73. On Day Four again no respondent joined at the outset of the hearing. The court was informed that the First Respondent had overnight written to the Applicant proposing a timetable spanning the course of the following week identifying specific times when he and other respondents would give their evidence, being a selection of times accommodating only them. The court directed that the Applicant reply immediately reminding the Respondents that the matter had been listed for hearing and was continuing at hearing as scheduled, and this was done.

74. The Second Respondent joined the hearing remotely.

75. On Day Five remote appearances were made by each of the First, Second and Fifth Respondents and the First Respondent gave evidence.

76. On Day Six the First and Second Respondents joined the hearing remotely. The First Respondent gave evidence and made submissions. He was scheduled to be cross-examined at

2 o'clock in the afternoon. When that time came the hearing resumed and the First Respondent was absent without explanation. The court deferred his cross-examination to the following day.

77. The Third Respondent Mr. O'Reilly never joined the hearing either in person or remotely.

78. The Fifth Respondent participated for a limited portion of the trial. This was understandable and she participated to the extent which was required having regard to her limited involvement in the case.

79. The First and Second Named Respondents chose to attend only intermittently. The First Respondent did not attend to hear the evidence given by the Applicant. He confirmed during the course of his cross examination that he had not read all of the documents which had been served on him in these proceedings, including most importantly the Points of Claim or the Witness Statement which the Applicant adopted in his evidence.

80. The court makes allowances for unrepresented parties. In this case, the court indulged the Respondents with a series of interruptions and deferrals to allow them every opportunity to participate in a meaningful fashion in the hearing of the action. Their response was to fail to participate meaningfully in the hearing. Although they made a variety of submissions, they did not engage in any detail with the evidence. They made a number of submissions regarding adequacy of evidence and complained about the quantum of the claims made against them, claiming to be surprised at the amount of the debts for which the Applicant sought declarations of personal liability. In doing so they did not adduce direct evidence to contradict the evidence given by the Applicant.

81. In ACC Bank Plc v. Kelly [2011] IEHC 7, Clarke J. considered the approach of the court to self-represented litigants. He recognised that it is the practice of the court to make allowances and accommodate self-represented litigants. He cautioned that there are limits to the amount of indulgence which a court can give. He quoted with approval an article by Evan Bell, (a Master of the Queen's Bench and Matrimonial Divisions of the Court of Judicature for Northern Ireland) in 2010 Judicial Studies Institute Journal No. 1 where he stated the following:

“The primary principle applied by judges in cases involving self represented litigants is the principle of fairness. Fairness is the touchstone which enables justice to be done to all parties. A judge in proceedings involving a self represented litigant must balance the duty of fairness to that litigant with the rights of the other party and with the need for a speedy and efficient judicial determination as is feasible. Achieving this balance is one of the most difficult challenges a judge can face. While a trial judge’s over arching responsibility is to ensure that the hearing is fair, it is not unfair to hold a self represented litigant to his choice to represent himself.

A litigant who undertakes to do so in matters of complexity must assume the responsibility of being ready to proceed when his case is listed. If he embarks upon the hearing of his case, he is representing to the court that he understands the subject matter sufficiently to be able to proceed. Although it may later become patently obvious that he is not, litigants who choose to represent themselves must accept the consequences of their choice. While the court will take into account the litigant's lack of experience and training, implicit in the decision to represent himself is the willingness to accept the consequences that may flow from that lack.

Indeed to hold to the contrary would mean that any party could derail proceedings by dismissing his representatives. It is the court's duty to minimise the self represented litigant’s disadvantage as far as possible, so as to fulfil its task to do justice between the parties. However the court should not confer on a person or litigant a positive advantage over his represented opponent nor is it the position that the party with the greater expertise must be disadvantaged to the point at which they have the same expertise effectively as the other party.

That would be a perversion of what is required, which is a fair and equal opportunity to each party to present its case.”

82. Clarke J made an interesting observation arising from the fact that Master Bell had referred in this passage to the position of a party who “chooses” to be self represented. He stated:- “It may well be that in many cases the party concerned has no real choice in the matter for they may not be able to afford legal representation. That may well be a factor to take into account in deciding precisely how to deal with difficult situations which may arise in the course of a trial. However whether a person represents themselves of choice or of necessity does not alter the overriding requirement that the conduct of the trial must be fair to both sides, and that the fact that a person is, for whatever reason, unrepresented cannot be allowed to operate as an unfairness to the represented party.”

83. None of the Respondents said that they could not afford representation or that the absence of legal representation was not of their choosing.

84. No application was made by any of the Respondents to vary the mareva injunction to permit them to fund legal representation in these proceedings.

85. I have described the conduct of the Respondents, dominated by their decision to attend only parts of the hearing and to be absent for some of the most important parts, notably the Applicant’s evidence. Most egregiously, the First Named Respondent failed to attend at the time when his cross-examination was scheduled to commence, causing the hearing to be interrupted for another half day. This behaviour was not only disruptive to the orderly conduct of court business, it was unfair to the Applicant, who had to be recalled in the second week of the hearing to give and to repeat evidence to which the Respondents had not paid attention.

86. In consequence of the manner in which the Respondents obstructed the Applicant in the conduct of his investigation and the performance of his statutory duties, and the manner in which they have met these proceedings, both in the preparation for the hearing and in the hearing itself, the Respondents have never presented, either to the Applicant or to the court, their own comprehensive description of their roles in relation to the Companies. They instead left it to the Applicant, hindered by their obstruction, to piece together the events giving rise to these proceedings, which he has done by reference to such documents as he has found, including the selective information and materials given to him by some of the Respondents and the assistance of external counterparties and others affected by the actions of the Respondents. If there were justifications for the many transactions, payments and other conduct which the Applicant discovered, the Respondents did not take the opportunities available to them before and during the hearing, to adduce evidence to substantiate such justifications.

87. I now turn to the evidence adduced. Of necessity some of the descriptions are repetitive.

PART THREE: The Companies and other entities

Hynes Jewellers (Wexford) Limited (“HJW”)

88. HJW was incorporated on 22 April 1999 and continued the business of a family jewellers previously carried out by the Hynes family since 1956. It operated originally at number 17 North Main Street and then from a premises at 19 North Main Street, Wexford. It traded until 19 April 2016 when the sheriff enforced the execution order obtained by the landlords of the premises by repossessing the premises and stock. HJW ceased trading on that date, and the family jewellery business was later recommenced in JWF.

89. At the time of the Applicant's appointment on 13 January 2020 the registered directors were the Second Respondent Frank Hynes and his sister Fiona Hynes. It later transpired that Fiona Hynes had resigned on 25 February 2019, although the resignation had not been registered.

90. A Mr James Wallace was a director from 8 July 2016 (a date after the company had ceased trading) until his resignation on 17 December 2019, although he claims that he resigned in August 2018.

91. The Applicant says that the First Respondent was a shadow director or de facto director.

92. The registered shareholders of HJW are Frank Hynes as to 55%, Fiona Hynes as to 35% and Catherine Cowman as to 10%.

93. In the course of the proceedings it was asserted by the First Respondent that on 1 January 2016 ownership of the shares in HJW was transferred to TPH. That transfer was never registered. The authenticity of minutes of the board of HJW purporting to approve the transfer was undermined by evidence given by Fiona Hynes.

94. When the Applicant was appointed, TPH was the registered secretary of HJW.

95. The events relevant to HJW in these proceedings are described in Part Five. JW Fashions Limited (“JWF”)

96. This company was incorporated on 31 March 2014 with the stated objective of manufacturing textiles. The financial statements for the year ended 31 January 2016 record that the Company had not traded since its incorporation.

97. The registered shareholders of the Company are a James Wallace and David Smith.

98. Mr Wallace was a director since the incorporation of the Company and he claims to have resigned in August 2018, although his resignation is recorded as effective only on 16 December 2019.

99. The current directors are Frank Hynes and Fiona Hynes, each having been appointed on 2 June 2016, a date after HJW ceased trading and before JWF commenced trading. Ms Hynes gave evidence that she was never aware that she had been appointed director of JWF and that any form which she signed was signed by her without knowing its import.

100. The secretary of the Company is a “Frank Hynes Junior”. To add confusion, the “Frank Hynes” who appears as a registered director of JWF has a date of birth of 1998. It is therefore suggested that he is not the Second Named Respondent, but his son or a nephew. The Second Respondent does not deny that he was or at least acted as a director of JWF.

101. In or about October 2016 JWF commenced the operation of a jewellery shop at 113 North Main Street. Mr. Wallace had offered to the Second Respondent to make the Company available to the Second Respondent for this purpose.

102. In February 2019 the sheriff, acting to recover Revenue debt, took possession of the stock at 113 North Main Street. The Company ceased to trade shortly thereafter and ultimately the Applicant was appointed on the petition of the Revenue.

103. The events relevant to JWF in these proceedings are described in Part Seven. Tuskar Property Holdings Limited (“TPH”)

104. This company was incorporated on 30 March 2000. The first shareholders and directors were the First Respondent Alan Hynes and his wife Noreen Hynes.

105. In January 2009, Alan Hynes and Noreen Hynes transferred their shareholding to the Third Respondent, Adrian O'Reilly, a medical doctor resident and practising in England, who is a brother-in-law of the First Respondent.

106. On 1 October 2013 the First Respondent and Noreen Hynes resigned as directors, and two new directors were appointed, the Third Respondent Dr O'Reilly and a Mr Colm Sugrue. Mr. Sugrue is a dentist residing and practising in Dublin. This occurred one week after the delivery of the judgment of Dunne J. in Tuskar Asset Management plc (In Liquidation) on foot of which disqualification and restriction orders were made against the First Respondent.

107. Mr Sugrue resigned on 11 April 2017. When the Applicant was appointed the Third Respondent was the only director and the only shareholder.

108. From 22 July 2016 to 4 May 2019, Mr James Wallace was also a director.

109. The Applicant claims that after the First Respondent resigned as a director he continued to direct and control the affairs of TPH. The First Respondent initially claimed that he was only an employee of TPH. Under cross-examination on Day Seven of the hearing he accepted that he was “the person that operates” and had control of TPH.

110. TPH was in receivership from 4 August 2010 to 8 September 2014. When the receiver, Mr. Declan Taite, was discharged on 8 September 2014 he filed at the Companies Registration Office (“CRO”) a certificate in accordance with s. 52 of the Company Law Enforcement Act 2021 that the company was insolvent.

111. The Applicant says that TPH had no discernible trade at the time it was appointed Secretary of HJW. On 10 July 2019 it was struck off the Register of Companies for failure to file annual returns. It was reinstated on 9 March 2020 on the application of the Revenue Commissioners, and the Applicant was appointed provisional liquidator.

112. The events relevant to TPH in these proceedings are described in Part Six. The Fourth Respondent: Tuskar Investment Group Limited (“TIG”)

113. TIG was incorporated on 23 May 2018 with a registered address at 113 North Main Street Wexford. It has at all times been owned as to 100% by the Third Respondent Dr. O'Reilly.

114. James Wallace was a director but resigned on 4 May 2019. There are no current directors registered in this company.

115. The secretary of the Company was originally James Wallace. TPH was appointed secretary on 4 May 2019.

116. No evidence was adduced as to the core business activity of this entity, if it had any. It features in the evidence as an entity to which an attempt was made on 1 July 2018, or other dates unknown, to transfer assets of TPH.

117. I expand on the role of the Fourth Respondent in Part Eight.

The Tuskar Partnership

118. The Applicant received a number of communications from an entity having a letterhead “The Tuskar Partnership”. The communications came both from the First Respondent Alan Hynes and the Third Respondent Adrian O'Reilly. Notepaper of the Tuskar Partnership describes the First and Third Respondents as the partners and the First Respondent as the secretary of the partnership. The only thing known about the activities of this partnership is that its name was used for communications emanating from the First and Third Respondents.

LAC Trading Partnership

119. The Applicant received communications from time to time from the First and Third Respondents on behalf of this entity.

120. The Applicant says that he was shown a copy of a partnership agreement dated 1 April 2012 which identifies the partners as the Third Respondent Dr O'Reilly, his wife Mrs Lorna Josephine O'Reilly, and the First Respondent's wife Mrs Noreen Hynes. The Applicant says that he does not understand what legitimate purpose this entity served.

PART FOUR: The Respondents and other persons

The First Respondent Alan Hynes

121. The First Respondent Alan Hynes is a former chartered accountant. He is the cousin of the Second Respondent Frank Hynes. He and his wife Noreen Hynes were the founding shareholders and directors of TPH. In January 2009 they transferred the shareholding in TPH to the Third Respondent, Dr. Adrian O’Reilly. On 1 October 2013 they resigned as directors and Dr. O’Reilly and Mr. Sugrue were appointed directors. Mr. Sugrue claims that he was not appointed until May 2014.

122. Following delivery of judgment on 24 September 2013, an order was made on 9 October 2013 in this court (Dunne J.) restricting the First Respondent from acting as a company director for a period of five years and disqualifying him for three years. These orders were made on foot of an application by the liquidator of a company called Tuskar Asset Management plc, a company through which the First Respondent had conducted a property investment business and which was subject to a winding up order in 2008. In that judgment the court found that the First Respondent failed to deal appropriately with allegations of failure to account for €3.1m of shareholder funds. The Applicant says that the First Respondent continued to direct and control the affairs of TPH, and later HJW and JWF, when he was still the subject of the disqualification order up to 8 October 2016 and subject to the restriction order for a further two years up to 8 October 2018.

123. The First Respondent was never a registered director of HJW or JWF. The Applicant says that he was a shadow and/ or de facto director of those companies.

The Second Respondent Frank Hynes

124. Frank Hynes was a director of each of HJW and JWF and the owner of 55% of the shares in HJW. The particulars filed with the Companies Registration Office recorded two different dates of birth. In the case of JWF the date of birth given for ‘Frank Hynes’ is 2 June 1998. The Applicant believes that this may be the son or nephew of the Second Respondent but says that there is ample evidence that the Second Respondent acted as a director of JWF. The Second Respondent Frank Hynes did not deny that he was a director of JWF. He never held any shares in JWF.

125. Many of the communications issued by the Applicant to the Second Respondent were replied to by the First Respondent.

126. Between the hearing of these proceedings and the delivery of this judgment each of the Second and Fifth Respondents, Frank Hynes and Martina Hynes, entered into a Personal Insolvency Arrangement (“PIA”) pursuant to the Personal Insolvency Act 2012 and at the same time a settlement with the Applicant (“the Settlement”) of the quantum of their liabilities in these proceedings. The arrangements in each case were approved by order of the Circuit Court made on 27 January 2025.

127. By the Settlement the Second Respondent agreed to acknowledge liability to the Applicant for two separate amounts as follows:

(a) a total sum of €1,660,572 to rank as an unsecured liability. This was stated in the PIA to relate to “Liquidators remuneration and company liabilities”. The amount is written off by the PIA.

(b) an amount of €1,907.05 being the balance remaining in respect of the interim costs order made in these proceedings on 22 July 2020. This amount is to be paid during the term of the Second Respondent’s Personal Insolvency Arrangement.

128. This court was informed of the Settlement and the PIA in the context of an application to lift the mareva order against the Second Respondent to permit the implementation of the Settlement and PIA by the Second Respondent. In doing so the court was informed that a substantive judgment was still required in the context of applications for disqualification orders and other orders against the Second Respondent and others.

The Third Respondent Adrian O'Reilly

129. Dr O'Reilly is the owner of all the shares in each of TPH and TIG and the sole director of TPH, having been appointed when the First Respondent resigned on 1 October 2013. He is a medical doctor living and practising in Cambridge England and is the brother-in-law of the First Respondent. The Applicant says that communications which he issued from time to time to Dr O'Reilly were forwarded to and replied to by the First Respondent. The Third Respondent was not represented and did not attend the hearing of the case.

The Fifth Respondent Martina Hynes

130. Martina Hynes is married to the Second Respondent Frank Hynes and was never an officer of any of the Companies. She was employed as a bookkeeper by HJW and JWF. The Applicant says that she has been joined in these proceedings because she is the co-owner of certain assets with the Second Respondent, notably a Joint Bank account into which monies of HJW were paid from time to time and not fully accounted for. The only relief sought against the Fifth Respondent is the return of those monies, in an amount of €354,372.

131. The Fifth Respondent’s Personal Insolvency Arrangement provided for acknowledgement of a debt of €354,372, being the amount which the Applicant says represented the balance owing to HJW arising from the transactions between HJW and the Joint Bank account of Frank and Martina Hynes.

132. The Settlement and Personal Insolvency Arrangement provided that Martina Hynes would grant a charge to the Applicant in the sum of €75,000 over her equity in a property at Barnstown, Wexford, and that the balance of the debt be written off.

Fiona Hynes

133. Fiona Hynes is a sister of the First Respondent. She worked in the family jewellery business. She is registered as a director of HJW and JWF, although she says that in HJW she had resigned on 25 February 2019. She is the owner of 35% of the shares in HJW. She says that she was not aware of her appointment as a director of JWF and she was never a shareholder in JWF. The Applicant makes no allegations of any wrongdoing against Fiona Hynes and does not seek any relief in these proceedings against her.

James Wallace

134. Mr Wallace is a former director of each of HJW, TPH, JWF and TIG. He features in this case in that capacity only. His principal role in the affairs of the companies was that in October 2016 he made his company JWF, available to the Hynes family to resume the operations of the jewellery business at 113 North Main Street after the sheriff had enforced the possession order at 19 North Main Street. The Applicant says that Mr Wallace has cooperated with him in relation to his investigations and does not seek any relief against him.

135. The evidence in relation to each of the companies and each of the Respondents overlaps. I shall identify firstly the evidence by reference to each company (Parts Five, Six, Seven and Eight), other evidence (Parts Nine and Ten), and then consider the claims made against each of the Respondents (Parts Eleven to Fifteen).

PART FIVE: HJW

136. The Applicant described his findings in relation to the affairs of HJW under six separate headings as follows:-

(a) cash withdrawals made at a time when the Company was defaulting on its debts;

(b) a purported transfer of the shares in the Company to TPH in January 2016, which the Applicant says was fraudulent;

(c) failure to keep books and records or to provide a statement of affairs;

(d) actions of the directors entering into credit transactions in the name of the Company after it had ceased trading;

(e) permitting the accumulation of significant liabilities to creditors; and

(f) operating under the control and/or direction of the First Named Respondent at a time when he was the subject of a restriction and a disqualification order.

(a) Cash withdrawals and credit defaults

137. The Applicant identified instances where HJW defaulted on debts due to creditors at a time when it held substantial credit balances in its bank account and large cash withdrawals were made from that account and paid to related parties. He says that at the time when the Company had cash with which to discharge debts as they fell due the Respondents were party to the default on those debts and instead withdrew or transferred monies out of the Company. The Applicant instanced four such cases. Thomas Sabo GmbH & Company Schmukhandel KG.

138. On 15 April 2016 Thomas Sabo GmbH was granted an order of a German court against HJW for payment in respect of invoices totalling €5,710, together with interest and court fees. The judgment creditor obtained an enforcement order on foot of a European Order for Payment directed to the County Registrar of Wexford directing that goods and chattels of the Company be seized to satisfy the debt.

139. The invoices giving rise to this debt dated from as early as 13 March 2015.

140. The Applicant found a bank draft drawn on 11 February 2015 under the authorisation of the Second Named Respondent for a total sum of €215,000 payable to himself. The Applicant states that no commercial explanation was offered to him for this payment. No evidence or even theory was advanced by any of the Respondents to substantiate the payment of €215,000 to the Second Respondent at this time.

141. During his cross-examination the Second Respondent referred to a historic disagreement between HJW and Thomas Sabo. He said that they had insisted that HJW invest in certain shop furniture which proved “useless” and incur other unjustified costs. He claimed that the reason for non-payment was an attempt to compensate or “offset against” amounts invested in this “useless” furniture. No attempt had been made to appeal or set aside the court judgment obtained by Thomas Sabo. Withholding payment was therefore a form of “self help” remedy, at a time when much greater cash amounts were being transferred out of the Company to the Second Respondent himself.

BJ Fitzpatrick Limited

142. This creditor was a stock supplier and presented a direct debit for €11,037.48 to HJW’s bank on 17 November 2015. It was refused on 18 November 2015. A second direct debit for €14,842.47 was presented on 30 November 2015 and refused on 1 December 2015. The Applicant states that the bank balance of the Company on each of those refusal dates stood in credit in amounts which were sufficient to meet these payments. He identifies this refusal as an instance of the Company simply countermanding direct debits at a time when it had sufficient funds in its bank to pay amounts due.

143. Ultimately, BJ Fitzpatrick secured judgment against the Company in the District Court for €14,842.47, and this amount remains unpaid.

Other creditors

144. Bank of Ireland provided a stocking loan facility to the Company over a period of several years. The amount due on that account at the date of liquidation was €328,809.91.

145. When the Collector General petitioned for the winding up of the Company the debt due to him, comprising arears of VAT, PAYE/PRSI/USC and Corporation Tax, together with interest, was €312,243.43. This was based on an assessment as of 15 July 2019.

146. Ultimately Revenue served an assessment for a total sum, including penalties, of €437,672. That assessment was never appealed and, when invited to do so, none of the Respondents provided to the Applicant any information to support an appeal. Accordingly the Applicant admitted the claim of Revenue in an amount of €437,672.12.

19 North Main Street

147. There is a history of dispute between HJW and its landlords, at least from the time when the First Respondent became involved in its affairs. The dispute related to the level of rent and a refusal by the landlords to agree a reduction or to consent to an assignment of the lease to TPH. The solution adopted by HJW was to unilaterally withhold rent. On 11 December 2015 the Circuit Court issued a decree for possession of the premises in favour of the landlords and for a monetary amount of €49,872, which was enforced by the sheriff on 19 April 2016.

148. The bank statements of HJW record that in the immediate aftermath of the Circuit Court decree of 11 December 2015 significant amounts were withdrawn from the Company's current account and lodged to a Joint Account in the names of Frank and Martina Hynes. The amounts were €50,000 on 15 December 2015, €50,000 on 22 December 2015 and €100,000 on 23 December 2015.

149. The same bank statements show that a sum of €200,000 was returned to the Company’s account on 7 January 2016 from the Joint Account of Frank and Martina Hynes. On 8 January 2016 a cheque was issued on the HJW account, signed by the Second Respondent, payable to TPH for a total sum of €164,000. This cheque cleared on the same day and the amount of €164,000 was lodged to the account of TPH. Immediately thereafter a sum of €150,000 was paid by TPH to the Joint Account of Frank and Martina Hynes.

150. When the Sheriff eventually realised the goods seized at 19 Upper Main Street, a surplus was refunded by the sheriff to HJW in an amount of €45,719.10 on 8 May 2017. On the same day a sum of €40,000 was transferred from the Company’s account to the account of TPH.

151. The bank statement for the Company shows that entering the month of December 2015, HJW held in its current account a strong balance of cash in the amount of €50,033.02. It was in credit in an amount of approximately €92,000 before the transfer of €50,000 to Frank and Martina Hynes on 15 December 2015. The significant amounts referred to above were lodged and later withdrawn or transferred out of the account. The account was overdrawn in May 2017 and the last statement available to the Applicant showed a credit balance on 9 May 2017 of €135.97.

152. The Applicant describes the movement of money in and out of this account as evidence of a deliberate scheme to ensure that available funds of HJW were not applied to pay the amount by the Circuit Court to be due and to ensure that no funds were in the account accessible by the landlord or the sheriff.

153. The contentious relationship between HJW and its landlords are another aspect of the case to which I shall return later.

The Joint Account of Frank and Martina Hynes

154. On 17 June 2020 the First Respondent sent an email to the Applicant’s solicitors Hayes with a spreadsheet file entitled “Frank Hynes and Martina Hynes”. The spreadsheet contained what the Applicant described as an analysis of all of the transactions on the Joint Account of Frank and Martina Hynes between 1 January 2015 and 3 January 2017. The first point which the Applicant identified as significant is that it was the First Respondent Alan Hynes, who had access to the personal bank statements of Frank Hynes and Martina Hynes and sought to explain the substantial movements of money between that Joint Account and accounts of HJW and TPH.

155. The spreadsheet ran to eight pages of densely printed details showing the running balance on the Joint Account and payments out under a variety of headings such as “Frank Hynes – HJW, Martina’s salary, Tuskar loan, Knockeen Nursing Home, Calcon Property Management, Sheridan Insurances, Green Star, property tax, Sunnyside Clinic, motor finance, Aviva Health, Irish Life, credit interest and bank charges”.

156. The Applicant conducted his own analysis of the transactions on this account. In the period between February 2015 and April 2016 payments totalling €704,375 were lodged to the Joint Account in a series of payments made by HJW and one payment (for €150,000) made by TPH. The Applicant says that both HJW and TPH were insolvent at the time when these payments were made to the Joint Account.

157. The Applicant says that when he ultimately gained access to certain records of HJW at another location, namely 3 Upper Rowe Street Wexford, they included the statements for the Joint Account of the Second and Fifth Named Respondents. The statements were put in evidence by the Applicant. They recorded the lodgements to the Joint Account during the period from 6 January 2015 to 14 April 2016 totalling €704,375. He traced also transfers from that account back to various accounts of the Companies totalling €350,002.40. The Applicant states that this left unaccounted for a total amount of €354,372.60.

158. The order made by this Court on 22 July 2020 directed that the First, Second and Third Named Respondents place before the court a statement in writing of any transactions between the Respondents and the Companies including any transfers of money or of other assets and a description of the use to which such monies or property were put. This order was never complied with.

Evidence of the Fifth Respondent

159. The Fifth Respondent, Martina Hynes, gave evidence in relation to accounts and bookkeeping. She was employed in HJW and JWF. She did the bookkeeping work and worked in the shop itself. She said that when the sheriff took possession of 19 North Main Street on behalf of the landlords on 19 April 2016 the landlord took everything from the shop including all of their personal data and personal items. She had the following to say in relation to the Joint Account with the Second Respondent:- “I will say that we at no time over the course of the years ever, ever took any money for our own personal benefit. There was money put into our personal account, but all of it is accounted for. We have statements for everything. We have numbers for every payment that was paid out of that account. We have nothing to hide. We would never do anything like that. It was just, you know, it was a time that was very difficult and we were trying to keep everything going, pay wages and keep the family together and everything. But at no time at all did we ever, ever take any personal money for ourselves personally judge. So we opened up another shop then with some help and we got a lot of help from people in business donating items to us actually for free to help us start again.”

160. The Fifth Respondent said that she could not understand how the Applicant had calculated his claims but she did not have the records available to explain all of the payments being referred to. She concluded by saying that as far as she was concerned everything was accounted for and that if she could get the rest of the books and records back from the previous landlord Messrs Stone and Stack and their solicitors William Fry “and those people who took everything from us, we would be in a better position to prove our case”.

161. The Fifth Respondent said that she simply did not believe that she could owe the kind of money that was referred to by the Applicant.

162. Under cross-examination, when questioned again as to why money had been lodged from HJW to the Joint Account of Martina Hynes and Frank Hynes, Mrs Hynes stated the following:- “I can't remember fully the reason behind it, but at the time we were looking – it was only to be short-term payment. We were looking to give ourselves, I don't know, maybe a short reprieve or something like that. We weren't trying to hide anything. You know Fiona Hynes knew about the money going into the account as well, you know it was never anything that was hidden. It wasn't put in there deliberately to spend on our own personal uses or anything like that. I can't actually remember the reasoning why we did that at the time, I can’t give you a straight answer to that to be honest. Frank Hynes would know better… In hindsight we shouldn't have put it into our personal account.”

163. Counsel for the Applicant put to the Fifth Respondent the details of payments made out of the Joint Account, many of which were sourced from the lodgements made to it from HJW. He put to Mrs Hynes that it was unusual for two employees of a company, one being a director, to operate a joint personal account which contained not only their personal monies but large sums of company money, exceeding €700,000 being lodged to the same account and being paid out in many instances for personal expenditure. Mrs Hynes acknowledged that the Joint Account was used for the payment of certain personal expenditure, but insisted that a number of the payments made and recorded in the statements were made for and on behalf of the relevant companies. Although repeating that a number of these payments were made on behalf of the Companies she acknowledged that it was inappropriate to mix company monies with the Respondents’ personal funds. She did not offer an explanation for why significant payments were drawn from the accounts of HJW and other companies, lodged to this Joint Account and only part of the money returned to the companies, leaving the shortfall of €354,372.60.

164. Mrs Hynes was also unable to explain why payments continued to be made out of this account after the company had ceased trading.

Evidence of the Second Respondent

165. The Second Respondent claimed that he had made out of the Joint Account payments to creditors of HJW totalling a sum of €801,290.91, which on his view of the matter would leave a balance overpaid out of the Joint Account in respect of creditors of €11,336.

166. He understood that the First Respondent, “being an accountant”, had furnished to the Applicant a spreadsheet describing all of the payments in and out of the Joint Account. The Applicant had received a schedule of payments from the First Respondent but his evidence was that the information contained in the spreadsheet submitted did not support or verify the Second Respondent's claim to have made payments to creditors totalling €801,290.91.

167. During the hearing the Second Respondent, at home while joining the hearing remotely, said that he had in his possession a copy of a schedule running to 33 pages explaining the payments. He sought to describe one by one the payments made, apparently reading from papers in front of him at home. No such schedule had been produced to the Applicant or was put in evidence.

168. The Second Respondent said that he had requested copies of relevant documents from Permanent TSB and would make those available.

169. The Second Respondent was unable to explain why the witness statement which he had delivered did not contain any information to respond to the allegation of mis-applying company funds.

Cross-examination of the Second Respondent

170. The Second Respondent agreed under cross-examination that a number of the payments made out of the account had been made not for Company business but for other family expenditure such as nursing home care for his mother.

171. He suggested also that the reason monies were transferred from the bank account of HJW to the Joint Account of Frank and Martina Hynes and then returned to HJW was to “ease bank charges”.

172. Counsel for the Applicant put it to the Second Respondent that he was a party to the carrying on of the business of the Companies in a manner which constituted fraudulent or at least reckless trading. The following exchange took place between counsel and Mr Hynes:

“Q. … Mr Hynes the liquidator’s case is and I put it to you, that you were a party to the carrying on of the business of the Companies with intent to defraud creditors of the Company, creditors of other persons or for fraudulent purposes; what you say to that?

A. I totally refute that out of hand.

Q. I have to put it to you Mr Hynes that you were party to carrying on of the business of the Companies in a manner which constituted reckless trading; what you say to that?

A. I think possibly I was reckless now in hindsight looking back.

Q. Okay Mr Hynes I've to put you that monies have been improperly retained in that joint account that should be paid back to Hynes Jewellers Wexford; what you say to that?

A. I totally refute that out of hand.

Q. And I put it to you Mr Hynes that you have acted in a manner which renders you unfit to be a company director again and that you should be disqualified or restricted from so acting in the future?

A. Yeah, I totally agree with you.”

173. The Second Respondent stated that when he was ordered to provide documents and information to the Applicant by the order made by this Court and 22 July 2020, he assembled statements of transactions and other material and gave them to the First Named Respondent who said that he would bring them to Dublin and give them to the Applicant.

174. The Second Respondent believed that this constituted compliance with the order of the court. He stated that he had received “limited advice”, to that effect. That advice had been given to him by the First Named Respondent.

175. It was put to the Second Respondent that he had not provided any invoices, vouchers, records, cheques or cheque stubs or any other information to vouch his claims that certain of the payments made out of the Joint Account of the second and Fifth Named Respondents were to creditors of HJW. He agreed that he had not “to date” given these and continued “but I hope to have them by Friday, because I have ordered the slips and the counter foils from the teller in the Permanent TSB bank that signed off on all those payments. So I've ordered copies of those and I'm told they’ll be with me by Friday so I will have them. Yes.”

176. The Second Respondent insisted that he had all the records necessary because they were kept meticulously by his wife the Fifth Named Respondent and stored on a computer.

177. It was put to the Second Respondent that it was too late to be seeking to source such documents, this being the Day Six of the trial, when an order had been made for delivery up of such material as far back as 22 July 2020. The Second Respondent’s only response to this was that he did not like the way the Applicant's counsel was “badgering” him.

178. When pressed in relation to the Applicant's case that while certain payments may have been made to valid creditors, there were still outstanding amounts owed to other creditors the Second Respondent stated “some of those creditors were creditors that we needed for the next shop, so therefore, they would continue to be paid as best – with what funds were available”.

179. The Second Respondent stated that it was his intention to ensure that those suppliers who would be needed in getting the business “off the ground” at the new location at 113 North Main Street, would be paid. Counsel for the Applicant put to the Second Respondent that where the Company had no premises or other assets and its stock had been seized, the directors had a duty to preserve any assets, including cash at bank, for the creditors of the Company, including the Revenue Commissioners. Instead, they had used company money, even on the Second Respondent’s account, to partly fund the new business which became that of JWF. It was put to him that this was careless and reckless trading. The Second Respondent accepted “that there was carelessness and recklessness on my behalf, yes, do I accept that.”

180. When pressed by counsel for the Applicant as to why, in the run-up to Christmas 2015, a time of the year when sales were strong, funds of HJW totalling €200,000 were transferred to the joint account of the Second and Fifth Respondents and to TPH, at a time when judgment had been granted in favour of the landlord for arrears of rent and other creditors were unpaid. The Second Named Respondent stated that this was done “to save on bank charges”. The Second Respondent denied that this was done in an attempt to circumvent the enforcement measures being taken by the landlord.

181. The Second Respondent confirmed that when rent was not paid to the landlords of 19 Upper Main Street in the context of a dispute over the level of rent, despite the fact that rent was contracted to be paid under the lease and despite legal proceedings for recovery of that rent, a deliberate decision was made to withhold rent because of that dispute. Similarly, the Second Respondent confirmed that he was withholding payments to Thomas Sabo and BJ Fitzpatrick, each of whom had obtained judgments, because of disagreements in relation to the trading relationships.

182. It is clear from all this evidence that at times when creditors, including judgment creditors, were pressing for payment, instead of utilising money which it had in its bank accounts to pay its debts, HJW monies were disbursed to the personal account of the Second Respondent and to the Joint Account of the Second and Fifth Respondents, for the benefit of those Respondents and others. It is also clear that, at times when HJW held monies sufficient to pay individual debts due by it, payments were withheld and countermanded, thereby depriving creditors of payments due to judgment creditors. These actions were perpetrated with intent to defraud those creditors.

(b) Purported transfer of shares in HJW

183. On 31 January 2016 TPH was appointed secretary of HJW.

184. The First and Second Respondents claim that on 1 January 2016 the shareholding in HJW (held by the Second Respondent, by Fiona Hynes and by Catherine Cowman) was transferred to TPH.

185. No record of this transfer was never registered in the Companies Registration Office, and the last registered return continues to show the shareholders as Frank Hynes, Fiona Hynes and Catherine Cowman.

186. In two separate affidavits the Second Respondent Frank Hynes referred to the role of TPH in HJW.

187. On 10 December 2019 the Second Respondent swore an affidavit in response to the Revenue petition for the winding up of HJW in which he stated that TPH “now manage and control the Company”.

188. He continued, in paragraph 25 to state the following:

“I say and believe and advised of the fact that the Company (being HJW) has not traded since

20 April 2016, having been taken over previously on 1 January 2016 by Tuskar Property Holdings Limited, for the purposes of acquiring the property rented by Bank of Ireland in Wexford, that there can be no liability for any amount claimed by the petitioner against your deponent director nor against the Company whatsoever”.

189. In separate proceedings: Joseph Howley (Collector General of Taxes) v Frank Hynes (2019/178R) the Second Respondent swore an affidavit on 27 January 2020. Although this affidavit was sworn in Revenue proceedings against himself and to which the Company was not a party, he stated that he was making the affidavit “for the purpose of grounding an application to set aside the order made the High Court (sic) on 13 January 2022 winding up Hynes Jewellers (Wexford) Limited and to recover the debts that are owed to me as the defendants in this case”.

190. He continued, in paragraph 5 as follows:

“I say that the Company agreed to sell 100% of it’s the (sic) shares to Tuskar Property Holdings Limited on 1 January 2016”.

191. The obvious and basic misstatement in this affidavit, apart from questions as to its veracity, is that it is not the company itself, but the owners of the shares who can agree to a transfer of shares. The role of the company is that its board of directors would, if appropriate, approve the transfer and the entry of the transferee’s name in the Register of Members.

192. Later in the same affidavit Mr Hynes again claims that HJW is owned 100% by TPH.

193. Two items of evidence were introduced purporting to verify the transfer of shares in HJW.

Minutes of meetings of HJW

194. The first is a minute of a meeting of the board of directors of HJW apparently held at

19 North Main Street, Wexford on 1 January 2016. The minutes, whose provenance was not verified by any of the parties at the hearing, purport to record the attendance at the meeting of James Wallace a director, Frank Hynes a director, Fiona Hynes, a director and “Tuskar Property Holdings Limited” as Secretary. The minutes record that there was produced three stock transfer forms evidencing the transfer of their shares by each of Catherine Cowman, Fiona Hynes and Frank Hynes to Tuskar Property Holdings Limited, and recording that “it was resolved by the directors – (1) that subject to due stamping, the aforementioned transfers of shares be and are hereby approved and the names of the shares transferred to them; (2) that relevant Share Certificates be cancelled and that a Director and the Secretary be instructed to initial such cancellations; and (3) that the Secretary be instructed to issue the relevant Share Certificates and that a Director and the Secretary be authorised to affix the common seal of the Company and/or execute such new share certificates on behalf of the Company”.

195. Fiona Hynes gave evidence, uncontradicted, that on 1 January 2016 she and her husband were on holidays and she attended no such meeting.

196. There were then produced copies of three stock transfer forms each purporting to be a transfer of shares to TPH from Fiona Hynes as to 35 shares, Frank Hynes as to 55 shares and Catherine Cowman as to 10 shares. The stock transfer forms bear the apparent signatures of Fiona Hynes, Frank Hynes and Catherine Cowman, although no evidence of any witnessing appears on the copies produced.

197. In her evidence, on which she was not cross-examined, Fiona Hynes said that although her signature was on the stock transfer form, she was “conned” into signing it and had never agreed to sell or transfer her shares in HJW.

198. In July 2018 Fiona Hynes engaged professional advice and assistance from a Mr. Kieran Burns, Chartered Accountant. On 17 July 2018 she and Mr. Burns attended a meeting at 113 North Main Street with the Second Named Respondent and Mr. Jim Wallace.

199. She was later that day presented with a Draft of Minutes of a Meeting of the Board of Directors of HJW purportedly held on that day. These minutes purported to be a minute of a meeting at which was attended by Frank Hynes, Fiona Hynes and Jim Wallace each as directors of HJW, and Kieran Burns, Chartered Accountant, being Ms Fiona Hynes’ accountant. In reply she immediately stated that this draft was a false record. The draft contains references in paragraphs 1-4 to discussions about tax returns and tax implications of “the stock transfers that have been signed by the Directors” and other tax matters. Point 5 of the draft included a resolution in the following terms (inter alia):

(iii) Not to amend or to collect from Fiona Hynes PAYE refund received directly from Revenue and to debit €10,292.98 and €1,718.67 to the directors net pay control account.

(iii) (sic) that subject to due stamping, the aforementioned transfer of shares be and are hereby approved and the names of the transferees be entered in the Register of Members as holders of the shares transferred to them.

(iv) that the relevant Share Certificates be cancelled; and that a Director and the Secretary be instructed to initial such cancellations;

(v) that the Secretary be instructed to issue the relevant Share Certificates; and the Secretary be authorised to affix the common seal of the company and/or execute such new Share Certificates on behalf of the Company.

(vi) To ratify the appointment of James Wallace to the Board of Directors and Tuskar Property Holdings Limited as company secretary.

(vii) That McKeever Solicitors 6 Harbourmaster Place, IFSC, Dublin be appointed to replace MJ O'Connor Solicitors, Drinagh, County Wexford.

(viii) that the shareholder(s) borrow an additional €1m from Bank of Ireland to repay the existing debt owed by the company and to fund the purchase of 17-19 North Main Street Wexford.

(ix) That the registered office be changed from 1 Lower Rowe Street, Wexford, County Wexford to 113 North Main Street, Wexford.”

200. The share transfers referred to in this minute are the purported transfer of shares in HJW by Frank Hynes, Fiona Hynes and Catherine Cowman to TPH.

201. James Wallace informed the Applicant that the email sending these minutes for approval which purports to be from him and sent on 17 July 2018 was not issued by him. Mr Wallace referred also to several other emails issued over his name emanating from the email address of secretarial.tuskarpartnership@gmail.com and jim.tuskarpartnership@gmail.com. His evidence was that he never issued those emails. He believed that emails from those addresses were issued by the First Named Respondent.

202. Fiona Hynes gave evidence, again not controverted by any other evidence, that although she attended a meeting on 17 July 2018 she and her adviser Mr Burns left the meeting before any resolution was passed, if indeed it was passed, purporting to approve the transfer of shares.

203. Ms Hynes evidence is that the minutes of the meetings purportedly held on 1 January 2016 and 17 July 2018, each purporting to record transfer of shares in HJW to TPH were fabricated.

204. In their submissions each of the First and Second Respondents denied the allegation by Fiona Hynes of fabrication of these minutes. They did not cross-examine Fiona Hynes on her evidence or put forward any other evidence to corroborate the share transfers or give their own evidence of these meetings.

The “Options Document" 27 April 2020

205. Relevant also to the purported transfer of shares in HJW and the role of TPH in relation to HJW is a document which was submitted by the First Respondent to the Applicant on 27 April 2020, dated that day and which is described as “Detailed Options for Approval and Satisfaction”. This document relates to many matters other than the transfer of the shareholding, but is so remarkable that it bears quoting extensively. It is questionable whether it is evidence of anything other than obfuscation by the First Respondent and his attempt to put before the Applicant his version of events. It is nonetheless informative in revealing the scale of unreality in the First Respondent’s approach to the affairs of all of the companies, which is reflected in his response to these proceedings.

206. The document, although described by the First Respondent as an “Options Document” is entitled “the High Court – record number 2014/5372P between Shane McCarthy, Plaintiff and Corrado Forte, Annino Forte, Roberto Forte and Tuskar Property Holdings Limited (In Liquidation) Defendants.” Neither Mr. McCarthy or any person named Forte is a party to these proceedings.

207. No information is contained in this document or elsewhere as to the substance or contents of proceedings bearing this title or why such a document was prepared by the First Respondent on 27 April 2020 for delivery to the Applicant. The document is stated to be addressed to “The Central Office of the High Court, to Eugene F Collins, “solicitors for the plaintiff”, to McKeever Rowan, solicitor for Tuskar Property Holdings Limited [and to] Hayes Solicitors, solicitor that act for Myles Kirby”.

208. The sub-heading before the recitals is: “Options delivered for approval and satisfaction this 27th day of April 2020 to Myles Kirby of Tuskar Property Holdings Limited (the "Company"), 3 Fitzwilliam Court (Upper), Pembroke Street, Dublin 1.”

209. The document opens with seven recitals:

(1) Mr Shane McCarthy is employed by KPMG 1 Stokes Place, Dublin 2.

(2) Mr Myles Kirby is a partner of Kirby Healy Chartered Accountants, 3 Fitzwilliam Court (Upper), Pembroke Street Dublin 1.

(3) Mr Alan Hynes is an employee of Tuskar Property Holdings Limited, Larkinstown, Coolree, Wexford, County Wexford.

(4) Since 2001, Tuskar Property Holdings Limited traded, managed and controlled other companies and by reason of the actions of the Plaintiff in this case [Mr. Shane McCarthy], was prevented from continuing to do so.

(5) Tuskar Property Holdings Limited acquired 100% of Hynes Jewellers (Wexford) Limited (the “Subsidiary”) effective from 1 January 2016 and took over the business of Hynes Jewellers (Wexford) effective from 1 January 2015 (sic) (emphasis added)

(6) It was an express or implied term of the Agreements made between Tuskar Property Holdings Limited and Hynes Jewellers (Wexford) Limited that the Company would take over all of the business and the assets of the subsidiary including any goodwill but not any of the liabilities of the subsidiary. (Emphasis added)

(7) Pursuant to the Orders made by the High Court prior to the announcement of the Irish Government in relation to Covid 19, the following options are hereby submitted to Mr Myles Kirby, 3 Fitzwilliam Court, Pembroke Place Dublin 1:

210. The document continues by describing 17 “options”. The first 12 are said to relate to “Tuskar Property Holdings Limited (Parent)” and options 13 to 17 are stated to relate to “Hynes Jewellers Wexford Limited (Subsidiary)”. HJW was never a subsidiary of TPH. “TUSKAR PROPERTY HOLDINGS LIMITED (Parent)

• Option 1 - the liability of Mr Shane McCarthy KPMG is reduced to 75% of the costs incurred in having to defend this matter in the High Court or alternatively €130,000.

• Option 2 - the liability of Mr Kieran Wallace (KPMG) is reduced to 75% of the plenary summons prepared or alternatively €220,000 of the expenditure incurred.

• Option 3 - the liability of Mr Declan Taite and Miss Joan Williams is reduced to 75% of the plenary summons prepared alternatively €315,500 of the expenditure incurred.

• Option 4 - the liability of the Institute of Chartered Accountants is reduced to 80% of the costs awarded by the High Court on a Party to Party (sic) or alternatively 70% of the statement of liabilities issued.

• Option 5 - the liability of the Collector General is reduced to 75% of the Value Added Tax (VAT) charged on the expenditure incurred or alternatively €410,000

• Option 6 - the liability of each of the vendors of Newtown House is reduced to 75% of the amount of the draft contract prepared or alternatively €200,000.

• Option 7 - the liability of Bank of Ireland is reduced to 75% of original value of the properties included as security or alternatively €6.8 million.

• Option 8 - the liability of the Solicitors Mutual Defence Fund (represented by JA Shaw solicitors) is reduced to 75% of the transfer value of the Moongate Property as per the Order made by the High Court or alternatively €3 million.

• Option 9 - the liability of each of the owners of the commercial properties rented and that deposits are withheld is reduced to 75% or alternatively €110,000.

• Option 10 - the liability of Mr Myles Kirby is reduced to 75% of the deposits collected belonging to Alan Hynes or alternatively €1,750 deposit held per property.

• Option 11 - the liability of Mr Michael McAteer, partner of Grant Thornton is already reduced to 65% of the Order made by the Wexford Circuit Court, said judgment having already been satisfied.4

• Option 12 - the liability of Mr David Phelan and Ms Sinead Phelan is reduced from €100,000 to €75,000 or alternatively the title deeds of their property is to be registered in the name of Tuskar Investment Group Limited. “HYNES JEWELLERS (WEXFORD) LIMITED (Subsidiary)”

Mesrs. McCarthy, Wallace, Taite, Williams and McAteer are all insolvency practitioners who from time to time had been appointed receivers over assets of the First Respondent or of companies owned or controlled by him.

• Option 13 - the liability of Mr Val Stone and Mrs Catherine Stack is reduced to 75% of the demand notice issued or alternatively €1.5 million is paid to the parent

• Option 14 - the liability of Bank of Irish life (sic) is reduced to 75% of the current value of the pension held in the name of Frank Hynes or alternatively €200,000 is reinvested in the property rented by Bank of Ireland, Customs House Quay, Wexford.

• Option 15 - the guarantee held as security by Bank of Ireland is reduced to “nil” or alternatively the lease held by Bank of Ireland in respect of Customs House Quay, Wexford is surrendered to Frank Hynes.

• Option 16 - the cost of the electric passenger motor vehicle ordered to replace commercial vehicle 161D30138 is paid to Frank Hynes or alternatively €60,000 is reimbursed to the parent

• Option 17 - the cost of the application made to the Cork District Court to reinstate the subsidiary to the CRO is reimbursed to the parent or alternatively €1,500 to Frank Hynes.

Due to the restrictions of Covid 19 it has not been possible to meet with any of the above individuals to discuss these options. Apparently, the original books and records maintained by the parent company are also withheld by certain of those same individuals. In principle certain of the conditions of my employment contract (s) can be discussed after the lockdown period expires on 5 May 2020 provided that agreement in principle is reached in respect of options 1 to 17. If you have any questions or wish to receive any more information then please email your enquiry to secretarial.tuskarpartnership@gmail.com Dated this 27th day of April 2020 Alan Hynes.”

211. This document was sent to the Applicant by the First Respondent in response to his initial contact seeking information in relation to the affairs of HJW. The First Respondent was not of course a registered director of HJW, JWF or TPH, but he took it upon himself to submit this and other materials in relation to the Companies to the Applicant.

212. The Applicant says that the document in itself is “mysterious”. It contains numerous references to insolvency practitioners including the Applicant himself, Mr McCarthy and Mr Wallace of KPMG, Mr Taite and Ms Williams of Farrell Grant Sparks, Mr McAteer of Grant Thornton, various banks and other bodies including the Institute of Chartered Accountants, Bank of Ireland, the Collector General, the Solicitors Mutual Defence Fund and others and purports to propose a write-down of amounts which the First Respondent says are due to him. No particulars of any such debts or claims were put before this court.

213. The Applicant points to the provisions of paragraph 5 and 6 which refer to TPH having “acquired 100% of HJW effective from 1 January 2016” and the statement in paragraph 6 that TPH would “take over all of the business and assets of the subsidiary (HJW) including any goodwill but not any of the liabilities of the subsidiary”. (Emphasis added)

214. Although no transfer of shares in HJW ever occurred, the Applicant says that this document, generally of limited credibility, contains within those paragraphs evidence of an intention to defraud creditors of HJW.

215. The Applicant queried this “Options Document” with the First Respondent who then issued a series of even more obtuse replies. In an email of 5 May 2020 from the First Respondent at an email address secretarial.tuskarpartnership@gmail.com he stated inter alia the following: “In regards to the online complaint made by Frank Hynes, it is important that copies of all correspondence addressed by your office to the directors of Hynes Jewellers (Wexford) Limited are made available to me. Because of the CVD – 19, I am prepared to accept this information from you via email. (Emphasis added). For your ease of reference, a copy of the document delivered to you on 27 April 2020 is attached to this email. It is extremely important that agreement in principle is reached between each of the parties in respect of each and every option before 31 May. Finally with respect to your own appointment as provisional liquidator, there is no point in you contacting Dr O’Reilly in regard to any other order made after 29 March 2020.”

216. In a further email dated 7 May 2020, the First Respondent had the following to say: “It is a matter of fact that I was a director of Tuskar Property Holdings Limited and that I have a directors account with the Company. I am employed by Tuskar Property Holdings Limited and my employment contract is legally binding on the Company. If you or your client is in any doubt about my role, David Phelan, managing partner of your firm will be in a position to confirm that I was a director of Tuskar Property Holdings Limited having acted for me previously.”

217. Under cross-examination the First Respondent said that the “Options Document” had been prepared by him in response to a request from the Applicant for such a document. The Applicant said he never requested such a document.

218. The shares in HJW remained in the ownership of the Second Respondent and his sisters Fiona Hynes and Catherine Cowman. If they had any value on1 January 2016, it was not the creditors of HJW but creditors of the shareholders whose interests would be impaired. But the evidence, including the numerous statements of the First Respondent, leads to the inexorable

conclusion that there existed a plan, to which at least the First Second and Third Named Respondents were party, to transfer control of HJW and its assets to TPH, a company over which the First Respondent retained control. The plan was not consummated but is clear evidence of a fraudulent purpose within the meaning of s.610(1)(b) of the Companies Act 2014. I return to this matter in the context of TPH (Part Six).

(c) Statement of affairs and books and records

219. The order for the winding up of HJW and appointment of the Applicant as liquidator directed that statements of affairs of the Company be made and filed by the Second Respondent Frank Hynes, and by Fiona Hynes and James Wallace, Mr. Wallace being a former director. Fiona Hynes and James Wallace each submitted an affidavit to the Applicant explaining that they did not have the information required to prepare a statement of affairs. The Applicant was satisfied that those two persons were not in possession of sufficient information to do so.

220. The Second Respondent failed to comply with the order or with the later order of 22 July 2020 directing him to provide statements and information relating to each of the Companies and transactions between the Companies inter-se and between the Companies and the Respondents. He informed the Applicant that he had authorised the First Respondent to deal with any matters concerning the affairs of HJW.

221. On 15 January 2020, two days after his appointment, the Applicant received from the First Respondent an email stating as follows: “as creditor of the Company we wish to recover the balance that is owed to Tuskar Investment Group Limited. Until such time as the outstanding balances is recovered in full a lien is being exercised over certain records of the Company”.

222. On 17 January 2020, the First Respondent wrote a further email to the Applicant. It follows the sequence of replying to a questionnaire from the liquidator, as follows:

• “No amount of monies due on the shares of Hynes Jewellers Wexford Limited.

• The Company seal is held by a third party.

• Names and addresses of keyholders – Val Stone and Catherine Stack, Stone Solicitors, the Bull Ring, Wexford

• The Company has invested in a lease at 19 North Main Street, Wexford.

• The assets of the Company are held by a third party.

• No assets of the Company held by directors.

• There has been no asset disposal during the preceding 12 months.

• No assets have been disposed to parties connected with the Company.

• The Company owns no immovable property.

• The Company has a mortgage with Bank of Ireland. Security documents have been requested from RDJ Solicitors.

• No insurance is currently held in place by the Company.

• The Company has invested in an executive pension plan with Bank of Ireland.

• The Company has a finance lease with First Citizen Finance DAC.

• No legal proceedings have been taken against the Company in the 12 months prior to the appointment of your client.

• The Company has not changed its name in the past 12 months.

• The current registered office of the Company is 19 North Main Street, Wexford.

• The Company ceased trading from 19 North Main Street, Wexford on 19 April 2016.

• The Company recorded nil turnover for each of the last three financial years preceding the appointment of your client.

• There has been no scheme of arrangement with any creditor in the past three financial years preceding the appointment of your client.

• There is no deficiency in any tax return or payment of taxes.

• The Company was managed and controlled by Tuskar Property Holdings Limited up to

30 June 2018. (emphasis added)

• Details of the directors and their addresses are as per the CRO.

• The last set of management accounts are held by Tuskar Property Holdings Limited.

• The minutes of the meeting held by the Company are held by Tuskar Property Holdings Limited.

• The shares in the Company are held by Tuskar Property Holdings Limited. (emphasis added)

• A committee of inspection has not been appointed.

• Frank Hynes has given a personal guarantee to Bank of Ireland."

223. The email concludes by stating “a list of creditors for the Company currently being prepared by Tuskar Investment Group Limited will be furnished to you subject to your client withdrawing his assertions immediately.”

224. No explanation was given as to why TIG would be preparing a list of creditors of HJW.

225. This communication appears to have been a response to the standard questionnaire issued by the Applicant, although it contains a number of assertions regarding management and control of the Company including a statement that up to 18 June 2018 the Company was “managed and controlled by TPH”. This statement is significant when taken with the First Respondent’s admission elsewhere that he was in control of TPH.

226. In an email of 13 February 2020 the First Respondent stated that if none of the books and records of the Company are available then he would be willing to finalise a statement of affairs for the Company on payment of “a reduced fee of €10k plus VAT”.

227. On 28 February 2020 the First Respondent emailed the Applicant’s solicitors stating “the unavoidable cost of having to reproducing the accounts of the Company prior to 19 April 2016 and thereafter currently amounts to €20,168.17. If your client wishes to agree a fee with TPH in respect of this matter then please email a proposal for consideration. VAT does not apply to the pension advice that I provided the Company and is owed to me.”

228. The Applicant points to a number of further inconsistencies relevant to the unavailability of financial statements. The Applicant says that the last annual return and accounts filed by HJW were for the year ended 31 January 2015 and he has not been provided with any more recent accounts or returns.

229. On 15 July 2019 there was filed in the District Court Office for the District Court area of Cork City an affidavit sworn on 5 July 2019 by the Second Respondent purporting to explain the delay in the filing of annual accounts and supporting an application for an extension of time. In this affidavit Mr Frank Hynes stated that the reason for the failure to file annual returns was due to the directors of the Company being unable to access financial records. He referred to the fact that “since 20 April 2016 the financial records of the Applicant company which are stored on a computer have been withheld by the Applicant company’s landlords due to a separate ongoing legal matter. As a result the Applicant company has been unable to file its annual return in respect of the annual return periods the subject matter of this application”. The affidavit referred to efforts to retrieve records from the landlords to no avail and concluded by stating “I say that qualified annual returns are prepared and ready for filing should the court grant an order in the terms of the notice of application and accordingly I request an order in the terms set out in the notice of application”.

230. On 11 September 2019 the Registrar of Companies objected to the granting of an extension of time to file annual returns. Firstly, the Registrar stated that Cork was not the appropriate jurisdiction for this application since the Company's registered office was located in Main Street, Wexford. Secondly, the Registrar referred to his own proceedings to strike the Company off the Register which had been commenced due to the Company’s failure to file outstanding annual returns. Thirdly, he had received no correspondence from the Company prior to the application for an extension of time, and the application had been made two years and nine months after the last outstanding annual return was due to be filed.

231. Each of the First and Second Named Respondents maintained their assertion that their inability to provide a statement of affairs and to provide books, records and other information relating to the affairs of the Company was due to the fact that when the sheriff took possession of 19 Upper Main Street, Wexford on 19 April 2016 he removed all contents, including stock which was ultimately sold by the sheriff, books and records and a computer.

232. The landlords were not called to give evidence. The Applicant's description of the position is based on his own communications with the landlords and correspondence he had with the landlords, including a letter of 12 March 2020 from Messrs Stone Solicitors, which was annexed to the Applicant's witness statement and therefore among the documents served on the Respondents. The Respondents did not address the contents of that letter in evidence or submissions.

233. Whilst the Respondents maintain that their difficulties in accessing books and records were due to the actions of the landlord, the starting point is that the repossession of the property and seizure of stock and papers of the Company all derived from the failure to pay rent, followed by the Circuit Court decree of 11 December 2015, never appealed, which led in turn to the execution of the possession order by the sheriff on 19 April 2016. There is no evidence to contradict that description.

234. The Applicant says that the landlords ultimately delivered to him any such records as related to the affairs of the Companies as came into their possession. He said that those records are wholly deficient and substantiate his concern that there was a failure to keep proper books and accounts. He had invited the First Respondent to inspect them, an invitation which was never accepted.

235. On 27 February 2020 the Applicant wrote to the Second Respondent referring again to the failure to prepare and file a statement of affairs of the Company and to make books and records of the Company available to him. In this correspondence he referred the Second Respondent to communications he had received from the First Respondent in which the First Respondent had put a series of requests for payment to prepare a statement of affairs and in which the First Respondent sought a payment of amounts of €3,000 per financial year to reconstruct accounts for the Company from bank statements. The Applicant stated his view that the First and Second Respondents were together obstructing his efforts to perform his statutory functions and called on the Second Respondent to retrieve all company records from third parties, including from the First Respondent and deliver them to him. The Applicant never received a response to this letter. Financial statements for years ended 31 October 2017 and 31 October 2018

236. After the sheriff took possession of 19 Upper Main Street on 19 April 2016 HJW ceased trading. It no longer had any premises from which to trade or any stock in its possession. The Applicant obtained from the Registrar of Companies returns submitted which purported to relate to the years ended 31 January 2018 and 31 January 2019, signed by the Second Named Respondent Frank Hynes as a director, and by the First Named Respondent, signing as “Alan Hynes on behalf of Tuskar Property Holdings Limited, Secretary of the Company”. The accompanying accounts for year ended 31 January 2018 are said to have been signed by two directors namely Frank Hynes and Martina Hynes. Martina Hynes was never a director of HJW. The CRO refused to accept these annual returns or register them on the basis that they were non-compliant.

237. Although the Company did not trade during these later periods the figures contained in these statements are remarkable. The “Unaudited Abridged Accounts” – for the year ended 31 January 2018 contain a balance sheet which shows that in respect of the year ended 31 January 2017 the Company had shareholder funds of €429,791, and for the year ended 31 January 2018 shareholder funds of €596,576.

238. The “Unaudited Abridged Accounts” for the year ended 31 January 2019 purport to have been approved by Martina Hynes and Adrian O’Reilly, neither of whom were ever directors of HJW. They include profit and loss accounts showing turnover and profit figures for each of the years ended 31 January 2018 and 31 January 2019. In respect to the year to 31 January 2018 the turnover is shown at €917,185, and a gross profit of €419,767. For the year ended 31 January 2019 the turnover from “continuing operations” is stated to be €1,001,555 and gross profit at €432,743.

239. The Applicant says that the Company had lost its audit exemption due to failure to file previous returns.

240. The Companies Registration Office later informed the Applicant that on 4 October 2019 the District Court in Cork had made an order extending the time for filing annual returns to 19 December 2019, but the relevant accounts and signature pages were not delivered within that time.

241. The Applicant says that as HJW had ceased to trade on 19 April 2016 the figures shown in these financial statements for later years are fabrications. As a non-trading company with no other activity it could not have enjoyed the turnover or profits stated in these returns.

242. No explanations were offered by the Respondents in relation to these matters, other than their repeated assertions of their inability to access books and records and other assets seized by the landlord seized by the landlord of 19 Upper Main Street. Nor was any evidence or even a theory put before the court as to the purpose of these later financial statements and the attempts to have them lodged at the Companies Registration Office. The Applicant refers to these principally in the context of the inconsistent position maintained by the Respondents as between their various assertions of inability to access records following the repossession by the sheriff on 20 April 2016 on the one hand and yet the attempt in late 2019 to file financial statements containing the figures referred to above.

Sections 281-285

243. Section 281 of the Act states: “A company shall keep or cause to be kept adequate accounting records”.

244. Section 282 states:

(1) For the purposes of this Part, adequate accounting records are those that are sufficient to—

(a) correctly record and explain the transactions of the company,

(b) enable, at any time, the assets, liabilities, financial position and profit or loss of the company to be determined with reasonable accuracy,

(c) enable the directors to ensure that any financial statements of the company, required to be prepared under section 290 or 293 , and any directors' report required to be prepared under section 325 , comply with the requirements of this Act and, where applicable, Article 4 of the IAS Regulation, and

(d) enable those financial statements of the company so prepared to be audited.

(2) The accounting records shall be kept on a continuous and consistent basis, which is to say, the entries in them shall be made in a timely manner and be consistent from one period to the next; if those records are not kept by making entries in a bound book but by some other means, adequate precautions shall be taken for guarding against falsification and facilitating discovery of such falsification, should it occur.

(3) Without prejudice to the generality of subsections (1) and (2), accounting records kept pursuant to section 281 shall contain—

(a) entries from day to day of all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place,

(b) a record of the assets and liabilities of the company,

(c) if the company's business involves dealing in goods—

(i) a record of all transactions whereby goods are purchased and

whereby goods are sold, showing the goods and the sellers and buyers (except buyers of goods in ordinary retail trade) in sufficient detail to enable the goods and the sellers and buyers to be identified and a record of all the invoices relating to such purchases and sales,

(ii) statements of stock held by the company at the end of each financial year and all records of stocktakings from which any such statement of stock has been, or is to be, prepared,

(4) For the purposes of subsections (1) to (3), adequate accounting records shall be deemed to have been maintained if they comply with those subsections and explain the company's transactions and facilitate the preparation of financial statements that give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and, if relevant, the group and include any information and returns referred to in section 283 (2).

245. Section 283 states:

(1) Subject to subsection (2), a company's accounting records shall be kept at its registered office or at such other place as the directors think fit.

(2) If accounting records are kept at a place outside the State, there shall be sent to and kept at a place in the State such information and returns relating to the business dealt with in the accounting records so kept as will—

(a) disclose with reasonable accuracy the assets, liabilities, financial position and profit or loss of that business at intervals not exceeding 6 months, and

(b) enable to be prepared in accordance with this Part (and, where applicable, Article 4 of the IAS Regulation) the company's statutory financial statements required by section 290 or 293 and the directors' report required by section 325.

246. In Rayhill Property Company Limited [2003] 3 IR 588 Smith J. cited with approval the judgment in Maloe Construction Limited v. Chadwick Lovegrove and Beo [1986] 3 NZCLC 99: “The records themselves do not have to show the financial position of the company. They must be such that they will at any time enable that position to be determined. This requirement is not complied with if the company keeps only basic accounting records such as cheque books, deposit books, bank statements, invoices and the like. It may be that using such basic records an accountant could construct further records that would enable the financial position of the company to be determined. But the section requires that this basic accounting information should be assembled and recorded in such a way that the record itself will not only enable the financial position to be determined, but will enable that to be done at any time”.

247. The Applicant’s evidence was that none of the basic accounting records which ss. 281 and 282 of the Act require a company to maintain were to be found on his appointment, and none of the directors or officers of the company delivered such record to him. He said that there was no evidence or trace of such record ever having been kept. None of the Respondents gave evidence that such records were maintained, and they merely denied generally that the requirements of the Act had been contravened.

248. The persistent references by the Respondents to the role of the landlords do not assist, in that they offered no evidence of having kept the required records “on a continuous basis”.

249. The assertions by the First Respondent that management accounts were held by TPH, again contradicts the assertions that the landlord was responsible for the unavailability of records. Elsewhere references were made to issues with records maintained at a different location, 3 Upper Rowe Street for which the landlords of 19 North Main Street had no responsibility.

250. The Applicant submitted, correctly, that the request by the First Respondent for payment of a fee to reconstruct the accounts of the companies was an acknowledgement that they had not been kept in the first place.

251. I accept the evidence of the Applicant that HJW contravened Sections 281 to 285 of the Act.

Section 609

252. Section 609 of the Act states:

(1) Subject to subsection (2), if—

(a) a company that is being wound up and that is unable to pay all of its debts has contravened any of sections 281 to 285 , and

(b) the court considers that such contravention has—

(i) contributed to the company's inability to pay all of its debts, or

(ii) resulted in substantial uncertainty as to the assets and liabilities of the company, or

(iii) substantially impeded the orderly winding up of the company, the court, on the application of the liquidator or any creditor or contributory of the company, has the following power.

(2) That power of the court is to declare, if it thinks it proper to do so, that any one or more of the officers and former officers of the company who, with respect to the contravention, is or are in default shall be personally liable, without any limitation of liability, for all, or such part as may be specified by the court, of the debts and other liabilities of the company.

(8) The court shall not make a declaration under this section in respect of a person if it considers that—

(a) the person took all reasonable steps to secure compliance by the company with sections 281 to 285 , or

(b) the person had reasonable grounds for believing and did believe that a competent and reliable person, acting under the supervision or control of a director of the company who has been formally allocated such responsibility, was—

(i) charged with the duty of ensuring that those sections were complied with, and

(ii) in a position to discharge that duty.

253. HJW ceased trading more than three years before the petition for winding up was presented and almost four years before the winding up order was made. There was not before the court sufficient evidence to demonstrate the extent, if any, to which the contravention of Sections 281-285 contributed to the company's inability to pay its debts. On the contrary, the evidence is that in the final year of its trading, the company had strong cash revenues, as one would expect in a main street jewellers, but these were diverted to the accounts of other parties leaving creditors, including judgment creditors, unpaid.

254. The evidence of the Applicant was that the absence of books and records of account resulted in substantial uncertainty as to the assets and liabilities of the company and substantially impeded the orderly winding up of the company. That is clearly established by the evidence of failure on the part of the Respondents to demonstrate that such records were ever maintained, let alone delivered to the Applicant in accordance with the Act, and orders of the court.

255. Loose suggestions were made by each of the First and Second Respondents that others were responsible for maintaining records of the company. But no evidence was advanced to support a belief on either of their parts “that a competent and reliable person acting under the supervision and control of a director of the company who has been, formally allocated such responsibility was (i) charged with the duty of ensuring that the Act complied with and (ii) was in a position to discharge that duty”. (See s. 609 (8) of the Act)

256. Later in this judgment I consider the status of the First Respondent in HJW and conclude that he was a de facto director. Taking into account all the information before the court, including the submissions made by the Respondents, I am satisfied that (1) the contravention of ss. 281 to 285 of the Act resulted in substantial uncertainty as to the assets and liabilities of the company and substantially impede the orderly winding up of the Company, and (2) the First and Second Respondents were in default with respect to these contraventions. The sanction for those contraventions is considered in Parts Eleven and Twelve.

(d) Vehicle hire purchase agreements

257. HJW purported to raise finance relating to two separate motor vehicles after it had ceased trading. Whilst the aggregate value relating to these vehicles is limited in the overall context of the case, the Applicant says that the manner in which the First and Second Respondent undertook efforts to raise finance after the Company had ceased trading was fraudulent and demonstrates an effort to introduce confusion in relation to the affairs of the three companies as appears from the evidence summarised below.

The Volkswagen Touareg – First Citizen Finance

258. On 28 July 2016, more than three months after HJW ceased trading, the Company entered into a hire purchase agreement with First Citizen Finance relating to a Volkswagen Touareg. The agreement was signed on behalf of HJW by Mr James Wallace and a direct debit mandate was signed by Mr Wallace. The IBAN reference for the account number from which payments would be made was not that of HJW but that of TPH. When arrangements were being made to have the vehicle registered it was registered not in the name of either HJW or TPH but in the name of JWF. So the names of all three companies are used in relation to this one vehicle.

259. In November 2019 an application was made to Auto Boland Cars in an attempt to separately raise credit relating to this same vehicle. The application was made in the name of HJW as borrower, and on the form the contact name provided was that of the First Respondent Alan Hynes, “director”.

260. Auto Boland confirmed to the Applicant that this application for credit was rejected by all lenders in the market.

261. The next piece of evidence relating to this vehicle was an application made by the First Respondent to Revenue for confirmation of the amount of a VAT refund which might be obtained in respect of the vehicle in the name of HJW. The application was accompanied by an invoice addressed to HJW showing the amount of VAT in a sum of €11,593.50. This application was made at a time when the petition for the winding up of the Company had been presented by Revenue.

262. In February 2020 the same vehicle was placed by the First Respondent with Merlin Car Auctions who were given instruction to sell the vehicle “on behalf of JW Fashions Limited”. While the vehicle was in the possession of Merlin, First Citizen Finance, the original hire purchase company, repossessed it.

263. On 12 February 2020 the Applicant wrote to the Second Respondent making it clear that although steps had been taken to register the vehicle in the name of JWF, the original purchase invoice and the hire purchase agreement with First Citizen Finance were all addressed to HJW and that no steps should be taken to divert ownership away from HJW. In response to this the First Respondent again stepped in. He took the extraordinary step of calling on First Citizen Finance to repay to TPH as a debt the amounts which he said it had paid pursuant to the direct debit originally established when the vehicle was acquired. At this point the First Respondent was insisting that it was only TPH which had an interest in these monies and in the vehicle.

264. Ultimately the vehicle was repossessed and sold by First Citizen Finance for an amount less than the balance owing to it under the hire purchase agreement.

265. The Applicant's evidence on this transaction was that the use of the names of all three of the Companies variously for the original hire purchase agreement, the registration, and then the direct debit arrangements was part of a pattern of conduct on behalf of the First and Second Named Respondents to use the Companies and their names interchangeably, thereby putting obstacles in the way of the hire purchase company, and in the way of his efforts as liquidator to establish the correct ownership position.

BMW vehicle – RCI Banque

266. A second instance relating to the hire purchase of a vehicle is simpler, but equally illustrative of false or fabricated transactions.

267. On 20 May 2016, more than a month after HJW had ceased trading a Business Hire Purchase Agreement was entered into between HJW and RCI Banque (Group Renault) for the hire purchase of a BMW 518D. The vehicle was registered not in the name of any of the Companies but in the name of the Second Respondent Frank Hynes. The monthly lease payments were discharged by TPH. Ultimately the lease agreement was terminated in March 2019 after the Revenue Commissioners seized the vehicle with a view to putting it in an auction. At this point the lessor, RCI Banque, intervened and repossessed the vehicle and sold it at auction at a loss of €3,871.16.

268. Once again, the name of HJW as the hiring party was used to secure finance for the car after that company had ceased trading.

269. The name of HJW was used for the hire purchase agreements for both of those vehicles after that company had ceased trading. The raising of finance in the name of a company which had ceased trading whilst insolvent, was clearly an act of fraud. The fraud was compounded by various acts of the Respondents in establishing direct debits in the names of TPH and registering the vehicles in the name of JWF in one case and the Second Named Respondent in the second case. It was not until the intervention of the hire purchase company in one case and the Revenue Commissioners in the other that the extent of this fraud came to light.

(e) Creditors of HJW

270. On 4 October 2020, the First Respondent submitted to the Applicant a spreadsheet which he described as a “statement of affairs – Form 13 074.R27”, dated “31 March 2020” (the date of the order for the winding up of TPH) in respect of all three companies and showing a combined position.

271. I refer to this document as the ‘Statement of Affairs’ although it was not in any prescribed form or verified by an affidavit. It came simply as a spreadsheet attached to an email.

272. The Statement of Affairs described two principal categories of assets in HJW. The first was “Leasehold Property” said to be valued at €350,000. The second was “Bills Receivable” stated at a value of €1.25 million, making a total value for gross assets of €1.6 million.

273. The statement referred to liabilities as follows:

Creditors Secured by assets specifically

charged 350,000

Extent to which Claims are estimated to be

covered by assets (sic) (350,000)

Preferential Creditors 503,750

Debenture Holders secured by floating

charge 370,000

Unsecured Creditors 320,000

1,193,750

274. On this version there would be a surplus of assets in HJW of €406,250, subject to the costs of a winding up. The Applicant’s evidence was that the true position was a deficit of €894,264.77.

275. The First Respondent was cross-examined in relation to this statement. He confirmed that the figure of €350,000 in respect of leasehold property was a reference to the premises at

19 North Main Street which had been repossessed for non-payment of rent in April 2016. Therefore the Company had no valuable ongoing leasehold interest and the figure of €350,000 was a fiction.

276. The First Respondent was unable to put forward any evidence of the composition of “Bills Receivable” at €1.25 million.

277. The First Respondent said that he had made his best effort at producing a statement of affairs, but he was unwilling to be “drawn into a debate about the quality of his work”.

278. The evidence of the Applicant was that in respect of the amount of €1.25 million stated to represent “Bills Receivable” these were amounts mysteriously calculated by the First Respondent as “debts” due from receivers appointed over various assets. He could not identify any basis upon which these could properly be described as debts due to HJW. The Applicant also noted that in the most recently filed financial statements for HJW for the year ended 31 January 2015 no such figure appeared.

279. When the First Respondent’s asset figures are adjusted, which must follow from the evidence, the deficit in HJW is €894,264.77.

(f) The First Respondent as a shadow or de facto director of HJW

280. The Applicant says that based on all the evidence which has come to his attention the First Respondent was a shadow or de facto director of HJW. His solicitors Hayes wrote to the First Respondent on 27 February 2020 stating that the Applicant had reached this conclusion and notifying the First Respondent that he intended to report to the Director of Corporate Enforcement in relation to the affairs of the Company on the basis that the First Respondent was a de facto or shadow director.

281. Messrs Hayes pointed out that there was no reason to believe that the First Respondent’s engagement in the affairs of HJW was in the nature of professional advisory. There was no evidence that the First Respondent had invoiced or sought to charge the Company for such services. The First Named Respondent had been excluded from his membership of the Institute of Chartered Accountants and no longer held a practising certificate.

282. In response the First Respondent said the following “in regards to my own professional qualification I wish to confirm that I am in contract nor am I (sic) a member of the Institute of Chartered Accountants in Ireland”. He repeated his proposal that if his assistance was required in the reconstruction of accounts of the Company he would do so in return for the payment of a fee to be agreed with TPH.

283. The Applicant refers also to the fact that in the application for the raising of credit associated with the Volkswagen Touareg, the First Named Respondent was described as a director of HJW.

284. The evidence of Fiona Hynes was that the First Respondent came to be involved with the affairs of HJW during the course of 2014 and that he became the dominant influence as far as the conduct of its affairs were concerned. Fiona Hynes evidence was that until 2014 the Second Respondent was the managing director and “driver” of the business and made most of the operating and financial decisions. Catherine Cowman and Fiona Hynes worked in the shop and supported the Second Respondent. They left to the Second Respondent all dealings with suppliers, banks, accountants, lawyers and other professionals. Once the First Respondent became involved in or around July or August 2014, the Second Respondent began to confide no longer in Fiona Hynes and Catherine Cowman but instead in the First Named Respondent. This was compounded by the termination of the retainer of Asple & Company, the Company’s accountants and tax agents.

285. Fiona Hynes said that, to the exclusion of herself who was at the time a director, the First and Second Named Respondent managed the situation with the landlord at 19 North Main Street, culminating in the unilateral withholding of rent. When the sheriff repossessed the property on 19 April 2016 this was an unexpected and unpredicted development as far as she was concerned and was a direct consequence of the intervention of the First Respondent.

286. In the course of the attempts to re-establish the business at 113 North Main Street, the First Respondent gave instructions to Fiona Hynes in relation to arrangements she should make for the transfer of her pension and other matters, advising her to transfer them to her husband’s company, which had no connection to HJW or JWF. She described these communications as a move to exclude her from the continued operation of the business.

287. In an email to Fiona Hynes on 12 September 2018 the First Respondent stated that “the rest of the employees are all being offered jobs by Hynes Family Jewellers Limited”. By that time HJW had ceased to trade following the repossession of its shop unit by the sheriff. In a further email of 14 September 2018 the First Respondent said to Ms Hynes’ husband that “the new owners want to change the name of Hynes Jewellers Wexford Limited and the keys must be returned today”. Ms Hynes husband explained to the First Respondent that she was at that time out sick, and taking the advice of her doctor. No meaningful explanation was provided as to the precise mechanism by which the First and Second Respondents purported to move the trade of HJW to JWF or elsewhere. It was, however, clear to Ms. Hynes that the First Respondent was managing the move to re-open the business previously conducted by HJW, and giving to her instructions about employment status and pension matters.

288. The First Respondent has repeatedly asserted that the affairs of HJW were being managed by TPH and that he was only an employee of TPH.

289. When the Applicant first wrote to the Second Named Respondent the Second Named Respondent informed him that “the Company is also under the management and control of Tuskar Property Holdings Limited since 1 January 2016 and was not traded since 19 April 2016.” He referred the Applicant to the First Respondent. The First Respondent then took over most of the communications on which the Applicant required responses.

290. On 26 January 2020 the First Respondent emailed the Second Respondent relating to the affairs of HJW and enclosing drafts of various documents. He stated that “once the necessary documents were received from Hayes Solicitors” he, the First Respondent “shall then prepare the following documents: (1) Statement of Affairs for the Company and (2) Statements of Claim made against the Company and the Collector General”.

291. The repeated assertions in correspondence and otherwise by the First Respondent that TPH was acting as manager of HJW and that he was acting in his capacity only as an employee of TPH is significant in circumstances where TPH had been struck off the Register of Companies for failure to file accounts on 10 July 2019. It was only restored to the register on

9 March 2020 on the petition of the Revenue, the same day on which the Applicant was appointed provisional liquidator. The assertions by the First Respondent that it was TPH and not him personally who was controlling or managing HJW lacked any credibility, particularly when taken against his later admission that he controlled TPH.

292. When the petition was presented by Revenue for the winding up of HJW, and served on that company, it was the First Named Respondent who made representations to Revenue in the first instance. These led to an adjournment of the petition to 13 January 2020. On that date the First Respondent informed Revenue that he was unable to appear in court on behalf of HJW due to storm conditions. The hearing proceeded and the court made the order for the winding up of the company.

Affidavit of the First Respondent 16 September 2016

293. On 16 September 2016 the First Named Respondent swore an affidavit, on behalf of the defendant in proceedings entitled: “The High Court 2014/5283P between Frank Hynes, Plaintiff, and Hynes Jewellers (Wexford) Limited, Defendant and Travelers Insurance Company Limited, Notice Party.”

294. The pleadings in this case were not placed before the court and no explanation was given as to the substance of these proceedings. However, in his affidavit the First Respondent stated the following:

(1) “I am the accountant for Tuskar Property Holdings Limited, company secretary to Hynes Jewellers (Wexford) Limited that is named as the defendant in the within proceedings.

(2) I make this affidavit from first hand knowledge for the purpose of grounding a full defence to these proceedings and to highlight to this Honourable Court the shambolic behaviour of the firms of solicitors involved in the ongoing dispute between the Governor and Company of the Bank of Ireland and the Defendant.”

295. In this affidavit the First Respondent referred to the Circuit Court proceedings issued by Messrs Stone and Stack. He claimed that in March 2014 HJW had agreed to sell its interest in the lease at 19 North Main Street to Tuskar Property Holdings Limited for Euro €750,000 “to raise capital for the expansion of the business and to repay any liability owed to the Governor and Company of the Bank of Ireland and to the directors”.

296. The First Respondent then stated that “for reasons unknown to the defendant and to this deponent, the landlords solicitors refused to allow the defendant to sell its investment made in the lease, and petitioned to wind up the defendant which was successfully defended in the High Court by the directors”.

297. This was a reference to a petition presented by Messrs Stone & Stack for the winding up of HJW grounded on unpaid arrears of rent. That petition was ultimately withdrawn following the making of certain payments. The First Respondent complained that thereafter, arising from further arrears and he says “unbeknownst to the directors” the landlord obtained their order in the Kilkenny (sic) Circuit Court for possession of the premises. He claimed that the Company secretary, apparently TPH, put the landlords solicitors on notice of appeals to the High Court to reverse the orders obtained in the Circuit Court. No information was placed before this court in relation to any such appeals, and the decree for possession was executed on

19 April 2016.

298. The significance of this affidavit is that the First Respondent Alan Hynes held himself out as making the affidavit on behalf of and for the purpose of defending the interests of HJW and said that he had first hand knowledge of its affairs. He once again laid blame on other parties such as Bank of Ireland, Kieran Wallace of KPMG and the landlord.

299. No information was placed before this court as to what relief was being sought by Mr Frank Hynes against HJW and Travellers Insurance Company.

The John Power proceedings

300. On 20 January 2020 the First Respondent swore an affidavit in support of an application which he filed in proceedings entitled “John Power and Others v. Alan Hynes, P/A Hynes & Co Chartered Accountants and Hynes & Company Financial Consultants Limited (In Voluntary Liquidation)”. His application sought various reliefs not related to the matters in dispute in this case but which are informative. He sought an order “reversing the voluntary liquidation of Hynes & Co. Financial Consultants Limited”. In the grounding affidavit he referred to a voluntary liquidation of Hynes Financial Consultants Limited in which he had nominated Kieran Wallace of KPMG to act as voluntary liquidator and where instead, Mr Kieran Kirk of KPMG accepted the role as liquidator. He then referred to the appointment of Mr Kirby as official liquidator of HJW, which he referred to as a “subsidiary co.”. He referred to ongoing disputes between himself and the Institute of Chartered Accountants claiming that he had “rescinded” his contract with the Institute with effect from 31 July 2009. He made numerous complaints about the conduct of the Institute and its officers.

301. Without explanation of any connection or relevance of the ‘John Power’ case to the proceedings for the winding up of HJW, the affidavit referred to a “Deed of Retirement” dated

1 July 2018 in which the First Respondent said that TPH “retired from the Tuskar Partnership and the assets of TPH and Hynes Jewellers (Wexford) Limited were transferred to Tuskar Investment Group Limited (“TIG”). TPH has since been dissolved in the CRO”. The First Respondent exhibited the “Deed of Retirement”. I return to that document in Part Eight.

302. The First Respondent continued, referring to other issues in dispute between him and third parties and made the following allegations:

(1) That he was owed significant costs arising from legal proceedings between him and the Institute of Chartered Accountants.

(2) That he is owed on a party and party basis legal costs by the Institute of Chartered Accountants and that he is due to be refunded a significant amount in excess of €200,000 by way of VAT in respect of those costs incurred.

(3) That HJW has not traded since 19 April 2016.

(4) That HJW is owned as to 100% by TPH and is the owner of furniture fittings equipment and stock and computers which were previously held at 19 North Main Street and had cost HJW €827,312.

(5) That all of these furniture fittings, equipment, computers and stock remained in the ownership of HJW and that the landlords Messrs Stone and Stack had taken control of 19 North Main Street and held such items on trust for HJW.

(6) That there is an amount of €2,103,107.17 due and owing to HJW by Messrs Stone and Stack being the total cost of the furniture, equipment, computers and fittings having regard to their resale value.

303. He referred to appointments of receivers over assets variously owned by TPH and HJW.

304. The First Respondent referred extensively to the affairs of TPH. He referred to an appointment on 4 August 2020 whereby Declan Taite and Joan Williams were appointed by Bank of Scotland (Ireland) Limited to act as receivers over property owned by TPH at Tuskar House, Johns Gate Street, Wexford, County Wexford.

305. The First Respondent referred to claims which he said TPH makes to ownership of furniture and fittings and in assets comprising apartments at Castle Park Court, Castle Park Road, Dalkey, apartments at the Laurels, Ballinteer Road, Dundrum, apartments at Meadow Court, Stillorgan, County Dublin, apartments at Wygram Place, Wexford, County Wexford and elsewhere. He said that in respect of the contents of a number of these apartments Messrs Taite and Williams, and Mr Wallace, acted outside the scope of the deeds of their appointments as receivers and that those parties ought to account to TPH for the value of those contents. Numerous further complaints were made in respect of the conduct of secured creditors and others.

306. The First Respondent claims that he is owed an amount of €3,551,781.50 by Chartered Accountants Ireland, again in relation to matters which have no bearing on the proceedings before this court. If they have any relevance this was never put before the court.

307. The significance of this affidavit and many of the other communications issued by the First Respondent is his claim to have knowledge of and entitlements across both HJW and TPH despite the fact that at the time of the appointment of the Applicant the First Respondent was neither a registered director or shareholder in any of those entities.

308. These affidavits sworn by the First Respondent in various proceedings concerning the affairs of HJW and THL evidence his direct involvement in and control of the affairs of these companies over a period of many years.

BJ Fitzpatrick Limited

309. On 10 November 2015 HJW, by a letter signed by the Second Respondent Frank Hynes as director, served on BJ Fitzpatrick Limited, a wholesaler of jewellery and watches, a statutory demand claiming a debt in the sum of €225,000 and warning BJ Fitzpatrick that in the event that this “debt” remained unsatisfied for a period of 21 days a petition would be “advertised as necessary for a liquidator to be appointed to your company by the High Court”. The letter of demand concluded by stating “please address your response to Tuskar Property Holdings Limited that acts as company secretary to Hynes Jewellers (Wexford) Limited”.

310. In response to this threat BJ Fitzpatrick Limited initiated proceedings to restrain the presentation of a petition and applied for an injunction. The application was grounded on an affidavit sworn by Mr Stephen Fitzpatrick of BJ Fitzpatrick Limited on 24 November 2015. Mr. Fitzpatrick said that no debt was due and that the alleged liability of €225,000 was said by HJW to arise from a breach by BJ Fitzpatrick of contract for the fulfilment of orders. It is evident from Mr. Fitzpatrick’s affidavit that there was a history of dispute and contention between BJ Fitzpatrick and HJW, notwithstanding a prior successful relationship with extensive sales. In 2014 alone HJW had purchased some €250,00 worth of jewellery from BJ Fitzpatrick. There was no undisputed debt due by BJ Fitzpatrick to HJW.

311. When an issue arose in relation to the fulfilment of certain orders, BJ Fitzpatrick sought a meeting with HJW. The meeting was arranged for 4 November 2015 at a hotel in Wexford. Representatives of BJ Fitzpatrick, Mr. Stephen Fitzpatrick, and the sales director Mr. Martin Kinirons attended at the hotel when they expected to meet the Second Respondent Mr Frank Hynes, who they knew, and was a director of HJW. On that occasion Mr Frank Hynes did not attend but instead they were met by the First Respondent Mr Alan Hynes. The First Respondent informed Mr Fitzpatrick and Mr. Kinirons that he was the accountant to HJW. When they expressed concern about discussing the affairs of HJW with the First Respondent, who was not known to them, the First Respondent insisted that they must deal with him. According to Mr Fitzpatrick the First Respondent stated “you will deal with me whether you like it or not. If not now, eventually. It is me now that is dealing with the Company”.

312. It appears from affidavits exchanged in those proceedings that the First Respondent denied Mr Fitzpatrick's account of the meeting. According to Mr Fitzpatrick HJW was indebted to BJ Fitzpatrick in an amount of €11,132.29 at that time and a direct debit for payment had been returned unpaid. The First Respondent subsequently prepared a file note providing an entirely different account of the meeting, in which he made allegations regarding the solvency of BJ Fitzpatrick & Co., allegations which were denied by Messrs Fitzpatrick.

313. The First Respondent gave no evidence on this subject. The significance of these events is that by November 2015 the First Respondent had interposed himself to represent HJW in its dealings with BJ Fitzpatrick, to the point of threatening a winding up petition, albeit in a letter signed by the Second Respondent Frank Hynes, grounded on a claimed debt which was not proved and arose instead from unspecified allegations of breach of contract notwithstanding that BJ Fitzpatrick at the time was a creditor of HJW. He also presented himself as the person BJ Fitzpatrick “must” deal with on behalf of HJW.

314. I accept the evidence of the Applicant that the First and Second Respondents together controlled and directed the affairs of HJW and were party to that company incurring liabilities which were not discharged at the same time as monies were being removed from the account of HJW to other accounts controlled by these two respondents, namely the Joint Account of the second and Fifth Named Respondent and the account of TPH. Similarly, the evidence shows that after the Company had ceased trading efforts were made to secure finance in the name of HJW in respect of assets, the two motor vehicles, which were not even registered in the name of HJW.

Shadow or de facto director

315. A shadow director is defined by s. 222(1) of the Act as follows: “A person in accordance with whose directions or instructions the directors of a company are accustomed to act (in this Act referred to as a “shadow director”) shall be treated for the purposes of this part as a director of the company unless the directors are accustomed so to act by reason only that they do so on advice given by him or her in a professional capacity”.

316. The term de facto director is defined in s. 221 as follows

“A person who occupies the position of director of a company but who has not been formally appointed as such director shall, subject to subsection 4, be treated for the purposes of this Part as a director of the Company”.

317. Section 222(4) provides: “a person shall not be a de facto director of a company by reason only of the fact that he or she gives advice in a professional capacity to the Company or any of the directors of it.”

318. In re Hocroft Developments (in liquidation): Dowdall v. Cullen and Others [2009] IEHC 580 McKechnie J considered the law relating to shadow directors and de facto directors and the difference between the two. He observed that a de facto director is “one who is held out as and who acts as a true director would, whereas a shadow director does not”. He quoted with approval the description by O'Neill J in Lynrowan Enterprises Limited [2002] IEHC 90 where he held that a person could be a de facto director in the following cases:

(1) “Where there is clear evidence that the person has been either the sole person directing the affairs of the Company;

(2) Is directing the affairs of the Company with others equally lacking valid appointment;

or

(3) Where there were other validly appointed directors that he was acting on an equal or more influential footing with the true directors in directing the affairs of the Company.” (emphasis added).

319. McKechnie J. quoted with approval the description of a de facto director by Courtney in the Law of Private Companies (second edition) where he put the test differently: “although the person was not in fact a formally appointed director he occupied the position of director and the Company held him out as a director and he acquiesced in this or in the alternative he held himself out as a director and the Company acquiesced in this.”

320. To establish that a person is a shadow director there must be evidence before the court that the directors have from time to time or on a regular basis become accustomed to acting in accordance with the directions of the alleged shadow director. This requires evidence of a pattern or course of conduct on the part of the directors in which they have become accustomed to following the instructions of the so-called shadow director.

321. McKechnie J cited also with approval another description of the test by Millett J. in Hydrodam (Corby) Limited [1994] BCC 161 where he set out the test as follows: “A shadow director does not claim or purport to act as a director. On the contrary he claims not to be a director. He lurks in the shadows, sheltering behind others who he claims are the only directors of the Company to the exclusion of himself he is not held out as a director by the Company.”

322. In Hocroft, having reviewed extensive case law McKechnie J. made the following conclusions in relation to shadow directorship:

(1) “The question of whether a person is a ‘shadow director’ is purely a question of statutory interpretation with the normal applicable rules of construction applying.

(2) The interpretation of the phrase will be influenced by

(i) The purpose of the relevant provisions of the Companies Act where that definition is to be found (s. 27(1), since replaced by s. 221)

(ii) The fact that a shadow director so found is identified with a duly appointed director for company purposes which include:

(a) transactions involving directors where conflicts of interest arise

(b) the restriction/ disqualification provisions of sections (then 150 and 160 of the Companies Act 1990 as amended).

(c) insider trading, formerly under Part 5 of the Act

(d) fraudulent and reckless trading.

(3) For a finding to be made there must be directors of a company either de jure or de facto and in addition two further requirements must be met. (i) Firstly that directions or instructions were given by the person in question and (ii) secondly that the two directors (or majority) were accustomed to act upon such instructions or directions.

(4) These conditions, in addition to being conjunctive are interlinked by cause-and-effect the implementation must be positively connected to the communication.

(5) The making of such communication and the reliance thereon must be by force of habit that is habitual; they must be repetitive customary and recurring, they must be part of the usual course of things or, as said, they must constitute “a well established practice or pattern” of behaviour. On the other hand if either the communication, reliance or both are infrequent, rare or occasional they will not come within the section.

(6) The nature or character of the communication, however so labelled, coached or phrased, must, by objective assessment, be such as to equate with the ordinary meaning of the words direction or instruction. It must have an obligatory or imposing force or command behind it. This may be self evident or may be deducible from the habitual response of the directors.

323. McKechnie J. quoted again from Millet J. in Hydradom as follows: "A de facto director is a person who assumes to act as a director. He is held out as a director by the company, and claims and purports to be a director, although never actually or validly appointed as such. To establish that a person was a de facto director of a company it is necessary to plead and prove that he undertook functions in relation to the company which could properly be discharged only by a director. It is not sufficient to show that he was concerned with the management of the company's affairs or undertook tasks in relation to its business which can properly be performed by a manager below board level."

324. McKechnie J. continued: “evidently a de facto director must be a person of considerable influence so as to exercise similar power and authority as a true director. It is more likely I think that no one test is decisive but that all relevant factors must be considered, as Jacob J. did in Secretary of State for Industry v. Tjolle [1998] BCC 282, later endorsed by Walker LJ in Re Kaytech International plc., Portier v. Secretary of State for Trade and Industry [1991] BCC 390. Undoubtedly one such factor, always of considerable weight, is whether the person in question, with the approval of the true directors or a majority of them, held himself out as a director or was allowed by the company to do so. But there are others. In the final analysis I would respectfully share the view of Finlay Geoghegan J., who in Gray v. McLoughlin, McLoughlin & Tuohy ( ex tempore delivered on 9 th July 2004) described as the critical issue whether the person has assumed the status and function of a director.”

325. In relation to the distinction between a shadow director and a de facto director McKechnie J. quoted the “strong words” of Millet J. in Hydradom:

"[A]n allegation that a defendant acted as a de facto or shadow director, without distinguishing between the two, is embarrassing. It suggests … that the liquidator takes the view that de facto or shadow directors are very similar, that their roles overlap, and that it may not be possible to determine in any given case whether a particular person was a de facto or a shadow director. I do not accept that at all. The terms do not overlap. They are alternatives, and in most and perhaps all cases are mutually exclusive."

326. McKechnie J. said that this firm view as to mutual exclusivity may be justified, “but in the context of a given case, it may have to soften, as a finding under both heads may potentially be justified. Laffoy J. in Fyffes [2005] IEHC 477 (at p. 85 of the unreported decision of 21 st December 2005) also doubted that both were mutually exclusive.” McKechnie J. did not have to decide the question because in Hocraft the liquidator’s allegation was that the Respondent concerned was a shadow director and not a de facto director.

327. There is a clear difference between the two and the Act of 2014 provides different definitions. The definition of shadow directors require that it be proved that there is a pattern of the true directors acting, and being accustomed to act, in accordance with the ‘directions or instructions’ of the person concerned. As the term ‘shadow’ implies, and as Millet J. said, this refers to a person who “lurks in the shadows, sheltering behind others”. By contrast, a de facto director acts overtly, and, as Finlay-Geoghegan J. put it “… has assumed the status and function of a director”.

328. In this case there was not adduced evidence of the directors of the companies adhering to a pattern of actions under the directions or instructions of the First Respondent. There was no evidence of meetings of the directors, and a feature of the case is that no evidence was adduced by any of the Respondents that they ever held or conducted meetings of the board of directors, apart from the two meetings purporting to approve transfers of the shares in HJW. When it came to the events described in the evidence of the Applicant, the consistent pattern is that the First Respondent took it upon himself to take actions on behalf of the Companies and held himself out as having authority at a level consistent only with that of a duly appointed director. From time to time he used emails to introduce confusion such as ‘info@tuskarpartnership’ and ‘secretary@tuskarpartnership’. He did not deny that he had used the email address of James Wallace on a number of occasions. But in general, there is not a pattern of concealment in relation to his involvement in the affairs of the Companies.

329. The high point of the First Respondent’s denial of involvement is to suggest that in relation to the affairs of HJW he was acting as an employee of TPH, which was the company secretary of HJW. In fact, no evidence was adduced of services being provided by TPH to HJW. The substantive connection between the two companies was the transmission of funds between them directly and indirectly.

330. On numerous occasions the First Respondent openly communicated with third parties holding himself out as having authority to act on behalf of HJW. When the Applicant was appointed liquidator the First Respondent assumed the function of responding to communications to the directors in relation to the affairs of the Company, even to the point of presenting his version of a statement of affairs of the Company.

331. I am satisfied that the First Respondent was a de facto director of HJW since the commencement of his involvement in the affairs of that company during the course of 2014, through to the appointment of the Applicant.

332. My reasons for this conclusion in HJW are as follows:

(1) When the Applicant first wrote to the directors requesting information and circulating a questionnaire in relation to the affairs of the Company the First Named Respondent took it upon himself to engage in correspondence with the Applicant about the Company without denying the assertion made by the Applicant that he was a director of the Company.

(2) The First Respondent was clearly the person driving the arrangements for the transfer of the business of HJW to JWF after the sheriff had executed the permission order for 19 North Main Street.

(3) Although the Second Respondent Frank Hynes corresponded from time to time with the Applicant, he frequently referred correspondence to the First Named Respondent who either replied directly to the Applicant or assisted in relation to such replies.

(4) The First Respondent took active steps in representation of HJW in different sets of legal proceedings which I have referred to earlier, and when Revenue presented its petition for the winding up of HJW.

(5) In the two cases relating to motor vehicles in respect of which finance was being raised the First Respondent was an active participant, in one case at least holding himself out directly to the finance company as a director of HJW.

(6) In the engagement with Messrs BJ Fitzpatrick, although not using the term director, and insisting in evidence that he had not held himself out as a CEO, the First Respondent informed the representatives of Messrs BJ Fitzpatrick that he was the person with whom they should deal in relation on HJW.

“Statement of Claim” 1 February 2020

333. On 1 February 2020 the First Respondent submitted to the Applicant, who as of this date had been appointed liquidator only of HJW, a document described as a ‘Statement of Claim’. The document is stated to be “In the matter of Hynes Jewellers (Wexford) Limited (In Liquidation) and In the matter of the Companies Act 2014”. It bears the record number of the petition for the winding up of HJW (2019/ 429 COS). It is described as a “Statement of Claim made by Alan Hynes (Creditor) to Myles Kirby (Official Liquidator)”. It is instructive to recite many of the terms of this document as they illustrate the determination on the part of the First Respondent to intermingle the affairs of HJW with other companies and with other parties with whom he has been in ongoing disputes including entities such as the Bank of Ireland, Revenue, the landlords Val Stone and Catherine Stack, the Institute of Chartered Accountants and various receivers appointed from time to time over assets of TPH and of other parties. The document reads as follows: “(1) I am the financial controller for Tuskar Partnership and employed by Tuskar Property Holdings Limited (“TPH”) which is the parent company and sole shareholder of the Defendant (sic). TPH managed and serviced the Defendant from 1 January 2015 up to 30 June 2018.

(2) The defendant is a dormant company, limited by shares, incorporated under the Companies Acts 1963 – 2003 having its registered office at 19 North Main Street, Wexford, County Wexford. It has at one of its objects, in its memorandum of association, the making of investments.”

334. The term “defendant” is not defined anywhere in this document. The First Respondent states that TPH is the parent company and sole shareholder of the “defendant”. Elsewhere he claims that TPH had become the sole shareholder of HJW. He is clearly therefore referring to HJW as the defendant.

335. The document continues by identifying Myles Kirby as liquidator of “the Defendant”, Joseph Howley as the petitioner, being the Collector General, and the landlords of 19 North Main Street Val Stone and Catherine Stack.

336. In paragraph 6 he makes the first of his claims of debt as follows: “(6) Val Stone and Catherine Stack, practising as Stone Solicitors are indebted to the Defendant and have their principal offices at the Bullring, Wexford County Wexford

(7) Bank of Ireland is the secured creditor of the Defendant trading at the Customs House, The Quay, Wexford County, Wexford.

(8) TPH is the Company secretary of the Defendant.

(9) Frank Hynes is a director of the Defendant.

(10) Fiona Hynes is a director of the Defendant.

(11) James Wallace is a former director of the Defendant.

(12) Alan Hynes is a creditor of the Defendant.”

337. The document continues with a heading: “The role of Myles Kirby (official liquidator)”.

(13) Myles Kirby is a chartered accountant appointed by the High Court charged with the obligation of liquidating the assets of the Defendant. While Myles Kirby has commenced his role as liquidator he refuses to communicate with Alan Hynes on the basis that he claims that Alan Hynes is not a worthy professional.

(14) Alan Hynes is an accountant employed by the Tuskar partnership and a creditor of the Defendant with an address of Tuskar House, Larkinstown, Coolree, Wexford.

(15) Myles Kirby is obliged to liquidate the assets of the Defendant and to determine the claims of the rights of creditors. These include the rights of the petitioner, the Defendant, its members and creditors.

(16) Tuskar Property Holdings Limited (dissolved) managed the Defendant from 1 January 2015 up to 30 June 2018 and was the legal entity charged with responsibility for the defendant (emphasis added).

(17) Alan Hynes provided pension advice to the defendant to invest in the purchase of a commercial property rented by Bank of Ireland on the basis of a legally binding loan contract signed by Alan Hynes and Noreen Hynes with Bank of Ireland.

(18) On a date or dates unknown to the Defendant Val Stone and Catherine Stack having their principal offices at the Bullring, Wexford, County Wexford wrongfully knowingly so came into and had and exercise control of data, under cover of law, relating to the Defendant, its members and its creditors.

(19) Myles Kirby and Joseph Howley are obliged to procure and have failed to procure adequately or at all the books and records of the Defendant from Val Stone and Catherine Stack.

(20) Myles Kirby has failed to respect the right of the Defendant, its members and creditors to consult with Alan Hynes in regards to the pension investment proposed with Bank of Ireland.

(21) Myles Kirby has failed to respect the right of the Defendant, its members and creditors to communicate with Alan Hynes in accordance with the amended statement issued by the Institute of Chartered Accountants in Ireland dated 29 November 2019 and the Constitution of Ireland.

(22) Furthermore unless restrained by this Honourable Court Myles Kirby and Joseph Howley will continue with their wrongful conduct and activity and there will be a continuance of the breach of rights and interests of the Defendant, its members and creditors.

Direct effect

(23) Joseph Howley Myles Kirby Val Stone and Catherine Stack and each of them are subject to Article 6 (1) and (2) of the EU Treaty, Articles 10 and 18 of the EC Treaty, Directives 95/46 EC, 97/66 EC and directives 2002/58/EC under the doctrine of direct effect.

Further particulars

(24) Alan Hynes reserves the right to deliver further particulars following the delivery up to and including the AGM held for the Defendant.

Consequences of defaults by Val Stone and Catherine Stack

(25) The Defendant, its members and creditors are entitled to compensation in accordance with section 7 of the Data Protection Acts 1988 and 2003 And Alan Hynes (creditor) claims

A. An amount of the sum of €9,975.15 due and owing to Alan Hynes by the Defendant in respect of pension advice given by Alan Hynes to the defendant in respect of the proposed purchase of the Customs House commercial property rented by Bank of Ireland in Wexford.

B. An amount in the sum of €81,000 due and owing to Alan Hynes by the Collector General in respect of an overpayment made of VAT in respect of the sale of the Thomas Moore commercial property in Wexford.5

C. A Declaration that the contract entered into between Alan Hynes and the Institute of Chartered Accountants in Ireland is null and void with effect from 31 July 2009 and has no force or effect insofar as said contract was rescinded by Alan Hynes on 31 July 2009. 6

D. A Declaration that Val Stone and Catherine Stack have acted in contravention of Section 2(1) of the Data Protection Act 1988 as submitted by the Data Protection (Amendment) Act 2003 by obtaining unfairly and processing unfairly data relating inter alia to the Defendant, its members and other creditors, and obtaining said data for illegitimate purposes.

E. An injunction restraining Myles Kirby from relying on or seeking to give effect to the letter of Ms Carine Pessers for the Institute of Chartered Accountants dated 8th May 2019.

F. A declaration that the notice served upon Ms Heather Briars for the Institute of Chartered Accountants on 31 July 2009 is valid and has the effect of rendering the contract between Alan Hynes and the Institute of Chartered Accountants null and void.

The relevance of a property known as “the Thomas Moore commercial property” was never explained to this court. The relevance to this case of the First Respondent’s relationship and disputes with the Institute of Chartered Accountants was never explained to this court.

G. A declaration that Myles Kirby and Joseph Howley have acted in contravention of the Data Protection Act 1988 as inserted by the Data Protection (Amendment) Act 2003 by processing data relating to, inter alia, the Defendant, its members and creditors, unfairly, without consent and without complying with the provisions of the Data Protection Acts 1988 and 2003.

H. A Declaration that Myles Kirby and Joseph Howley have acted in contravention of the EU Treaty, the EC Treaty [and various recited directives of the EU].

I. A declaration that Joseph Howley has failed in his obligation to give effect to the VAT amounts incurred by the Defendants its members and creditors and the fact that the Defendant stopped trading on 19 April 2016.

J. A declaration that Myles Kirby and Joseph Howley have failed in their obligation to give effect to the provisions of the European Union law, and specifically Article 6 (1) and (2) of the EU Treaty, Articles 10 and 18 of the EC Treaty, Directive 95/46 EC, Article 5 of the Directive 97/66/EC, Directive 2002/58/EC (Article 6 thereof) as read under the rubric of Article 6 (1) and (2) of the EU Treaty and Articles 7, 8, 11 and 41 of the Charter of Fundamental Rights.

K. If necessary a declaration that the Petition filed by Joseph Howley is repugnant to the Defendant, its members, creditors and to the Constitution.

L. An injunction restraining Myles Kirby and Joseph Howley from acting unfairly and for a legitimate purpose.

M. An injunction restraining Val Stone and Catherine Stack their servants or agents from processing data relating to inter alia, the Defendant, its members and creditors, unfairly and without their consent and without complying with the provisions of the Data Protection Acts 1988 to 2003.

N. If appropriate an injunction restraining Val Stone and Catherine Stack from disposing of 19 North Main Street, Wexford, County Wexford pending the outcome of these proceedings and the liquidation process.7

O. If appropriate, an injunction restraining Bank of Ireland and Kieran Wallace from disposing of 17 North Main Street, Wexford pending the outcome of these proceedings and the liquidation process.

P. An order pursuant to Article 234 of the EC Treaty that:

(a) the questions set forth in the Directors Questionnaire issued by Hayes Solicitors appointed by Myles Kirby under s. 629 of the Companies Act 2014 be referred to the European Court of Justice for a preliminary hearing ruling pursuant to Article 234 of the EC Treaty;

(b) these proceedings be stayed pending the ruling of the European Court of Justice on the questions referred;

(c) such further or other declaratory orders and interlocutory order as this Honourable Court deems meet and just;

(d) damages;

(e) further and other relief;

(f) costs.

ALAN HYNES,

BA (Hons) Business & Finance.”

338. This document relates to numerous issues unrelated to the liquidation of HJW. Insofar as it purported to seek interlocutory relief or stays, the order for the winding up of the HJW was made on 13 January 2020 and the Applicant had been appointed liquidator. The petition Messrs Stone and Stack had informed the Applicant that the premises at 19 North Main Street was sold by them during 2018.

for a winding up of JWF was pending. No appeal was ever lodged against the winding up orders and appointment of the Applicant.

339. On 7 February 2020 the Applicant replied to this document informing the First Respondent that most of the information contained in it was not relevant to the winding up of the Company to which he had been appointed and stating that he would not be engaging with him on matters other than the claim by Mr Hynes that he was a creditor of the Company. The claim as a creditor was for a sum of €9,975.15, which was stated to relate to pension advice provided to the Company, Mr Kirby gave evidence that no invoice or any information supporting such a claim was ever submitted.

Summary for HJW

340. The evidence relating to HJW establishes:

1. The First Respondent was a de facto director of the Company within the meaning of s.

222 of the Act from July or August 2014 onwards.

2. Funds were diverted from the Company’s bank accounts to the Second and Fifth Respondents and for payments not related to the business of the Company, and for the purpose of avoiding payment to judgment and other valid creditors.

3. Company monies were mixed with personal monies of the Second and Fifth Respondents and applied for the benefit of those parties and other purposes unrelated to the business of the company.

4. A scheme was prepared by the First Respondent by which it was intended to place HJW and its assets beyond the reach of its creditors, inter alia, by asserting that the shares in HJW had been transferred to TPH.

5. The Company contravened ss. 281-285 of the Act by failing to keep proper books and records of account. The contravention resulted in substantial uncertainty as to the assets and liabilities of the Company and substantially impeded the orderly winding up of the Company.

6. The Company was caused to incur credit by entering hire purchase agreements for motor vehicles after it had ceased trading. In the transactions the names of HJW, JWF, TPH and of the First and Second Respondents were used with the intent of generating confusion and misleading counterparties.

7. The First and Second Respondents failed to deliver a valid statement of affairs of the Company and failed to comply with orders of the court for the delivery of documents and information relating to the transactions, assets and affairs of the Company. PART SIX: Tuskar Property Holdings Limited (TPH)

341. From its incorporation on 30 March 2000 until 2014 TPH had nothing to do with the jewellery business of the Hynes family or with HJW.

342. Over its lifetime the Company acquired interests in properties and borrowed from financial institutions. It granted charges to Bank of Scotland (Ireland) Ltd over a property at St John's, Gate Street, Wexford, a property at Wygram Place, Wexford and other properties.

343. On 4 August 2010 Bank of Scotland (Ireland) Limited appointed Mr Declan Taite as receiver and manager of assets of TPH. Mr Taite was discharged as receiver on 8 September 2014. He realised assets as receiver to a value of €307,000, and after expenses and costs distributed a sum of €189,000 to the secured creditor, to whom a balance of €1,127,617.20 remained owing.

344. On his discharge Mr Taite made the required filing pursuant to s.52 of the Company Law Enforcement Act of 2001 of a certificate that in his opinion TPH was insolvent.

345. On 10 July 2019 TPH was struck off the Register of Companies for failure to file annual returns.

346. On 9 March 2020 on the application of the Revenue Commissioners, the Company was restored to the Register of Companies and the Applicant was appointed provisional liquidator.

347. By order of this Court made on 30 March 2020 the Company was ordered to be wound up by the court and the Applicant was appointed liquidator.

348. The first directors and shareholders were the First Respondent Alan Hynes and his wife Noreen Hynes. In January 2009 all of the shares were transferred to Dr Adrian O'Reilly the Third Named Respondent, who is the brother-in-law of the First Respondent.

349. On 1 October 2013, whilst the Company was in receivership, Alan Hynes and Noreen Hynes resigned as directors and the Third Respondent was appointed a director. The First Respondent claims that he continued thereafter only as an employee of TPH, an assertion contradicted by all the evidence which is recounted below, and his admission in crossexamination that he controlled TPH.

350. The Third Respondent was the sole director at the time of the winding up order.

351. A return was made to the Companies Registration Office recording the appointment on

1 October 2013 of Mr. Colm Sugrue, a dentist resident and practising in Stillorgan, County Dublin. Mr. Sugrue said in evidence that his appointment only took effect in May 2014. Dr Sugrue resigned on 11 April 2017.

352. Company registration returns record also that James Wallace was a director from April 2016 to August 2018.

Annual returns and financial statements for the years 2008 to 2014

353. On 30 September 2015, at a time when the First Respondent was still the subject of the disqualification and restriction orders, there was lodged at the Companies Registration Office annual returns and abridged accounts for each of the years ended 31 December 2008, 31 December 2009, 31 December 2010, 31 December 2011, 31 December 2012, 31 December 2013, and 31 December 2014.

354. In respect of the years ended 31 December 2008, through to the year ended 31 December 2013, the accounts were stated to have been approved by the directors on 27 May 2015, the directors being stated as the First Respondent Alan Hynes and Noreen Hynes and the secretary being the First Respondent. These two persons had resigned on 1 October 2013 and the First Respondent was still the subject of a disqualification order and restriction declaration.

355. The annual return and abridged accounts for the year ended 31 December 2014 record the directors to be the Third Respondent Dr. O'Reilly and Mr. Sugrue. Mr. Sugrue is referred to also as the secretary. Mr Sugrue gave evidence, uncontradicted, that at no time was he ever requested to approve accounts of TPH.

356. No explanation was offered by the Respondents as to why or how on 27 May 2015 the First Respondent Alan Hynes and Noreen Hynes were approving financial statements, even in respect of earlier years, in circumstances where they had resigned on 1 October 2013, and where the First Respondent was subject to a disqualification order.

357. The last of the abridged accounts filed at the Companies Registration Office to show positive net assets was the balance sheet as at 31 December 2008 which showed net assets at €32,277. For the year ended 31 December 2009 the balance sheet showed a deficiency as regards assets of €17,161. For the year ended 31 December 2010 the deficiency had risen to €1,070,324. The reported deficiency remained in excess of €1 million up to and including the last of those filed accounts to 31 December 2014 which shows a net deficiency of assets of €1,130,763. No returns or accounts were made for any later period.

358. The Applicant found that after the discharge of the receiver Mr Taite, TPH filed annual returns and abridged accounts including what were described as an audit report for all of the financial years from 2008 to 2014 at the Companies Registration Office in September 2015. The Applicant contacted the previous auditor for the Company who informed the Applicant that she had not retained any records in relation to the affairs of the Company.

359. The Applicant said that his examination of the filed abridged accounts, such as they were again brought to light the following unusual features: –

(1) although the Company had been in receivership between 2010 and 2014 that fact was not mentioned in the financial statements

(2) the Company was shown by the accounts to be insolvent and yet the audit report is not qualified

(3) the accounts for the years 2008 to 2013 were signed by the First Respondent and his wife Noreen Hynes in May 2015 in circumstances where they had both resigned as directors on 1 October 2013, and the First Respondent was at the time of signing the accounts the subject of a disqualification order.

(4) the accounts for 2008 and 2009 recorded property values at book value rather than market or current use value. The Applicant says that the values achieved for those properties by the receiver, which predated the date of the financial statements, were minimal by comparison to the book values. He observes that the correct auditing treatment or accounting treatment would have been to post an impairment or write down reflecting the reduction in asset values, but this was not done.

360. On a number of the forms B1 the signature of Mr Sugrue appears, and Mr Sugrue denies that he signed those forms before they were filed at the Companies Registration Office.

361. The Applicant said that he could not understand why TPH would incur the cost and trouble of preparing financial statements for filing at the Companies Registration Office having regard to the fact that when these statements were filed and prepared the Company had no assets or discernible trade and had been through a receivership. It seemed to him that the main purpose of doing so was to keep the Company on the register because it was being used by the First Named Respondent for the purpose of receiving and disbursing monies unrelated to any business activities of the Company.

Correspondence from Third Respondent

362. Following his appointment as provisional liquidator on 9 March 2020 the Applicant wrote to the only registered director of the Company, the Third Named Respondent. On 18 March 2020 the Third Respondent replied providing basic limited information in relation to the Company. He stated that it had no employees and had no turnover for the past three years. He enclosed a copy of a “Deed of Retirement” dated 1 July 2018 between TPH and Tuskar Investment Group Limited.

363. The letter from the Third Respondent was on a letterhead of “Tuskar Partnership”, which described as its partners the First and Third Respondent and as its “secretary”, the First Respondent.

364. On 24 March 2020 the Third Respondent wrote to the Applicant again on the letterhead of “Tuskar Partnership” contradicting his own letter of 18 March 2020 in which he stated that the Company had no employees. He referred to an employment contract apparently dated 1 January 2015 between Tuskar Property Holdings Ltd as “the Company” and Alan Hynes “as the employee”. He referred to the terms and conditions of that contract and asserted that under one of its conditions, referred to below, a sum of €1.5 million was payable to Alan Hynes “or any lower amount provided by section 790AA of the Taxes Consolidation Act 1997”. He referred the Applicant to the provisions for payment of tax free lump sums on termination of such a contract and called on the Applicant to confirm that he would reimburse all amounts collected by the Company from “various rental properties belonging to the directors (including previous)”, and enquired how he should proceed to make his own claim against the liquidator as a director.

365. He concluded by stating:-

“You are aware that the Company took over the business, goodwill and assets of Hynes Jewellers (Wexford) Ltd (now in liquidation) with effect from 1 January 2016 (with the exception of any lease). Therefore the Company is in a position to honour the conditions and the terms of the employment contract in full.”

366. Dr O’Reilly continued with the following requests:-

“(i) Please confirm as liquidator that you now control the bank accounts of Tuskar Property Holdings Ltd and that you will transfer the relevant amount as per the employment contract to Alan Hynes.

(ii) Please also confirm as liquidator that you will transfer 1.5 times the relevant amount to the pension of Alan Hynes by the normal age of his retirement.”

The Employment Contract

367. The enclosure to the letter was a document described as an "Employment Contract" apparently dated 1 January 2015 and purporting to be an employment contract between TPH and the First Respondent. In his evidence the First Respondent confirmed to the court that this document was created not on 1 January 2015 but after he had conversations with Mr Kirby in his capacity as liquidator of the Companies.

368. Since the First Respondent confirmed that this ‘Employment Contract’ had only been created after the appointment of the Applicant as liquidator, its contents warrant limited analysis. However some of its provisions are informative. They evidence intent of the First Respondent to assert claims against the Company for which no meaningful explanation was ever provided in the course of the evidence.

369. Section 2 is headed “Start and continuity”:-

“2.1 Your employment of the Company started on 1 January 2000.

2.2 Your previous employment with Marsh and McLennan from 1 January 1995 counts as part of your period of continuous employment with the Company.

3. Job Title and Job Description

3.1 your job title is accountant.

3.2 Your main task and responsibilities are set out in your written job description.”

370. No “written job description” or other details of the nature of the work to be done were provided.

371. Loosely drafted and unusual clauses are inserted in relation to place of work and hours of work. Clause 6 refers to salary “6.1 Your salary is € 100,000 per annum”. Provisions are made for payment of reasonable expenses and for annual leave, sick leave, sick pay and sickness during annual leave, provisions for other absences, work outside Ireland, the payment of health insurance, provision of a company car, references to a staff handbook on company policies. The next provisions relating to a pension and liquidator appointment are noteworthy.

Section 16.1 provides that:-

“16.1 The Company has enrolled you in a pension scheme.

16.2 The Company will contribute not more than 150% of your earnings to a pension scheme on top of your salary and provide you access to a standard personal retirement savings accounts scheme.

17 Liquidator appointment

17.1 You now acknowledge under the terms of this employment contract that should a liquidator be appointed the Company is obligated to contribute to a pension scheme at a future date after the employment has ceased (i.e. when you have reached the age of normal retirement)

17.2 You now acknowledge under the terms of this employment contract that should a liquidator be appointed the Company is obligated to pay you a lump sum of €1.5 million in lieu of your final salary.”

372. Standard clauses concern devotion of whole time and attention to the affairs of the Company, processing of personal data, disciplinary and grievance procedures and confidentiality provisions.

373. The contract provides for termination on the giving of one month’s notice by either party during the first year of employment and thereafter three months’ notice.

374. On 9 April 2020, the Applicant wrote to the Third Respondent raising questions in relation to the Alan Hynes contract of employment. He pointed out that the reference to the First Respondent being an employee was in contradiction to the initial response which the Applicant had received from Dr O'Reilly to the effect that the Company had no employees. The Applicant also pointed out that the Company had declared no PAYE or PRSI for any period since the date of the contract.

375. Finally, the Applicant pointed out to Dr O'Reilly that the Company appeared to have been insolvent for the entire period from the appointment of a receiver in 2010 up to the appointment of the Applicant as liquidator in March 2020. The Applicant stated that since his appointment he had not received any information of direct assistance, or explanation for a number of these queries from Dr O'Reilly who was at the date of the appointment of the Applicant the sole director of the TPH.

376. No reply to this correspondence was put in evidence.

Correspondence from the First Respondent

377. The Applicant received a number of emails from the First Named Respondent. In an email of 5 May 2020 headed “Tuskar Property Holdings Ltd (In Liquidation)”, the First Respondent stated that access to the Company’s offices was being denied by landlords and he requested an update in regard to his employment contract with the Company.

“It is important that copies of all correspondence addressed by your office to the directors of Hynes Jewellers (Wexford) limited are made available to me. Because of COVID-19 I am prepared to accept this information from you via email.”

378. Finally, the First Respondent stated “With respect to your own appointment as provisional liquidator, there is no point in you contacting Dr O'Reilly in regard to any other order made after 29 March 2020”.

379. By this time the Applicant had been appointed official liquidator of all three companies.

380. On 7 May 2020 the First Respondent emailed Mr Kelly of Hayes Solicitors, acting for the Applicant referring in the title to “Tuskar Property Holdings Ltd (In liquidation) and Hynes Jewellers Wexford Ltd (In Liquidation)”. He stated the following:- “It is a matter of fact that I was a director of Tuskar Property Holdings Ltd and that I have a directors account with the Company. I am employed by Tuskar Property Holdings Ltd and my employment contract is legally binding on the Company. If you or your client has any doubt about my role, David Phelan, managing director of your firm will be in a position to confirm that I was a director of Tuskar Property Holdings Ltd having acted for me previously.”

381. The First Respondent referred again to the Options Document which had been presented to the Applicant on 27 April 2020 in the context of HJW (see paragraphs 205 et seq) and requested “written confirmation that the conditions of my employment contract will be honoured by your client as soon as possible”. That was the document which recited an agreement which provided that TPH would “take over all the business and the assets of HJW including any goodwill but not any of the liabilities of HJW”.

382. On 11 May 2020 the First Respondent wrote another, this time long email to the Applicant entitled “In the Matter of Tuskar Property Holdings Ltd (In Liquidation)”. He described a number of matters which were still in dispute between him and Revenue and referred to correspondence ongoing between the Third Respondent and HMRC (Her Majesty's Revenue Commissioners).

383. In the conclusion to this email he again referred to the “Options Document” and requested an “agreement in principle” by 31 May 2020.

384. Those communications reached an even further level of absurdity with the next two.

The Model 3 Tesla and other requests by the First Respondent

385. On 11 May 2020 the First Respondent emailed the Applicant for a second time, now seeking to avail of monies which had been lodged to TPH and which he claimed related to his properties: "In regards to the monies collected by Tuskar Property Holdings limited from my properties please see the documents that are attached to this email. Model 3 Tesla has now been ordered online. I should be grateful if you would please agree to transfer the sum of €55,000 to my personal bank account under the conditions of my employment with Tuskar Property Holdings Limited. As you are aware I did not sign any direct debit mandate with Bank of Ireland in respect of any commercial vehicle purchased by Hynes Jewellers Wexford) Limited.”

386. The Applicant did not provide this requested funding. He cites this email as evidence of a view apparently held by the First Respondent that he retained, even after the winding up order, some type of entitlement to use TPH as a source of money. It is difficult to believe that the First Respondent, having been a chartered accountant, could truly have expected the company in liquidation to provide this money. The email is nonetheless evidence of the First Named Respondent’s approach to ownership and control of TPH and its bank accounts.

387. On 18 May 2020 the First Respondent emailed the Applicant referring to “Tuskar Property Holdings Ltd (“parent”) in liquidation and Hynes Jewellers (Wexford) Ltd (“subsidiary”) in liquidation. In this email he invoked the terms of his employment contract stating that he is not required to work for TPH “for free”. He continued:- “Please confirm that you will honour the conditions of my employment contract and provide me with the following information

• copies of the bank statements in your control as provisional liquidator of Tuskar Property Holdings Ltd

• mandate from TuskarProperty Holdings as requested by Revenue. Because of Covid-19 I am having to continue to work from home. I require a PC and communications equipment to be able to carry on with my work safely. Therefore I propose to order IT and communications equipment online and to submit a pro forma invoice to your office for payment on 20 May. Please confirm by return email that this proposal is accepted by you. In regard to advancing all of the claims necessary in the liquidation process I should be obliged if you would accede to the requests made to your solicitor in response to their correspondence dated 7 May 2020 acknowledged in your own correspondence dated 14 May 2020.”

388. The First Respondent sent a further email the following day 19 May to the Applicant in the following terms:- “In regards to my having to work from home please find enclosed a copy of the IT order as promised. Please confirm that this order is acceptable and please make the necessary payment as soon as possible. Please be advised that the monthly rent collected by Tuskar Property Holdings Ltd from my properties amounts to €4,500. The total amount, therefore, credited to my director's current account (independent of my salary) from 1 January 2015 to 31 December 2019 (60 months) amounts to circa €270,000. The closing credit balance on the director’s current account is quoted as per the factual statements that are attached.”

389. The attached “IT order” comprised items totalling a cost of €12,842.85 including such items as a mobile wireless charging pad, an iPad Pro WiFi, a thunderbolt cable and adapter, a “magic keyboard” for iPad Pro, an Apple pencil and other items of Apple equipment, all of which the First Respondent was asking the Applicant to pay for.

Director Service Agreement with the Third Respondent

390. Another document put in evidence was described as a Director Service Agreement dated 1 January 2009 between TPH and the Third Respondent. That was the date on which the First Respondent and his wife Noreen Hynes transferred all their shares in TPH to the Third Respondent. The Third Respondent was not appointed a director of TPH until 1 October 2013.

Clause 2 provides as follows:-

“2.1 By this agreement you are appointed as a non-executive director of Tuskar Property Holdings Ltd for a term of six years.

2.2 You are an independent self-employed contractor. You acknowledge that this contract does not create any relationship of employment with the Company.

2.3 The consideration for this agreement is your wish to help the Company and the acceptance of your help by the Company. You agree that the consideration is sufficient to create this binding contract.”

391. Clause 4(a) is described “your work for the Company". It states:

“Your contribution as a non-executive director will be to

4.1 attend meetings of the Board not more than 12 times in each calendar year

4.2 contribute independent opinions and judgment to the issues discussed

4.3 hold office as a member of any committee of the Board as might reasonably be requested

4.4 attend meetings of any committee of which you are a member and to contribute to the best of your knowledge and ability

4.5 do all in your power to promote to develop and extend the business of the Company and in all respects conform to and comply with the proper and reasonable directions and instructions of the Company.”

392. Section 5 describes Dr O'Reilly's “Responsibilities as Non-Executive Director”. It is a recital of a number but not all, of the general company law and fiduciary duties of directors. The contract contains a provision for the payment of expenses and numerous clauses which are appropriate not for a director, whether executive and non-executive, but for an employee, including a provision for the termination of the agreement upon giving four weeks’ notice in writing by either party. As the Third Named Respondent never attended court or offered any evidence, no explanation was given as to whether this contract was ever operated or relied on.

393. To add to the contradictions, the Third Respondent was only recorded as having been appointed a director on 1 October 2013, 4 years and 9 months after the date of this contract. For much of his tenure as a director, including the period leading up to the liquidation of TPH, he was the sole director of the company. How the role could truly be ‘non-executive’, when the Third Respondent had in later correspondence informed the Applicant that the Company had no employees, was not explained. Nor could the provision in clause 4.5 to the effect that the Third Respondent was required to “conform to and comply with the proper and reasonable directions and instructions of the Company” be compatible with the duties of directors.

394. Although the Third Respondent never replied to the Applicant’s letter of 9 April 2020, the First Respondent, in his email to Mr Kelly of Hayes on 7 May 2020, referred to the Applicant's letter to Dr O'Reilly in which the Applicant had stated that he regarded the employment contract as “not bona fide and a sham”. The First Respondent stated that this was “a serious matter” which ought to be brought to the attention of the court “when it opens”.

Role of James Wallace

395. The order for the winding up of TPH and appointing the Applicant directed that Adrian O'Reilly the Third Named Respondent and James Wallace, being directors of the Company make out and file statements of affairs of the Company.

396. On 30 April 2020 Mr Wallace swore an affidavit explaining why he was not in a position to file a statement of affairs. He stated that although he had become a director on 22 July 2018 he had tendered his resignation to the Company on 14 August 2018. On 4 May 2019 he wrote again to the Company confirming his resignation and requesting that the secretary submit notice of his resignation to the Companies Registration Office. When the Company failed to file his resignation with the Companies Registration Office he completed his own form B69 submission to the CRO notifying it that he had ceased to be a director, attaching a copy of his letter of 4 May 2019.

397. Mr Wallace also exhibited to the affidavit a "statement" in which he outlined the background of his involvement in the companies generally. He had originally been in business making and supplying uniforms at Upper Main Street Wexford. He had incorporated a company called JW Fashions Limited (“JWF”) which was duly registered with Revenue and opened a bank account at Bank of Ireland. He had never used that company in connection with his own business. In April 2016, the Second Respondent Frank Hynes informed him that “his” premises had been seized and the contents put up for auction. Mr Wallace knew Mr Hynes and his family and they had both been trading at Main Street for many years. The Second Respondent informed Mr Wallace that he wished to restart his business and arising from this Mr Wallace offered to allow him to use JWF, which was a dormant company. It was only later that Mr Wallace discovered that although Mr Hynes had used JWF eventually, it was the trade previously carried on by HJW which resumed at the new location in October 2016. The business of HJW were never formally transferred to JWF, but Mr Wallace said that the affairs of the two companies became inter-mingled.

398. Mr. Wallace said that he remained a director of TPH for only a short period of time because he never received with any information in relation to its affairs. He later discovered that neither the First or Second Respondent had taken measures to file appropriate returns, leading ultimately to TPH being compulsorily struck off the Register.

TPH: statement of affairs and books and records.

399. On his appointment, the Applicant wrote to the Third Respondent and requested that he comply with the requirement to file a statement of affairs and send financial statements of the Company to him. Dr O'Reilly never replied directly.

400. There followed a series of communications from the First Named Respondent in relation to the affairs of TPH.

401. When the Applicant wrote to the Third Respondent on 2 April 2020 requesting financial statements, books and records of the Company and other materials the Third Respondent forwarded this letter to the First Named Respondent who, in response to this correspondence on 3 April 2020, sent an email to the Third Respondent, to the Applicant, to the Applicant's solicitors, Hayes, to Mr Hughes the solicitor for the petitioning creditor, the Revenue Commissioners and others.

402. In this email the First Respondent reopened matters relating to VAT claims and reclaims made in the name of TPH noting that "no appeal was ever made by the Company in respect of the amended VAT claims made to the Collector General and that this is not necessary" and stating that "I am not able to assist you any further as I am out of contract with the Company and I am waiting to receive a severance package as set out in the correspondence that is attached to this email".

403. On 6 April 2020 The Third Respondent wrote to the Applicant, again on letterhead of "Tuskar Partnership" referring to a number of matters of which he had been informed by the First Respondent, including references to a property in Wexford being suitable as a nursing home in which he said "it is proposed to enter into a new contract by 30 April 2020". He also requested the Applicant to "confirm that where a body corporate goes into liquidation anything which the Company is liable to do shall now be done by the liquidator under the regulation of VAT".

404. The relevance of a property being suitable for a nursing home was not explained.

405. The Third Respondent continued "please be advised that rents collected by the Company are on behalf of LAC trading partnership (agreement enclosed). Apparently some of the tenants of the properties work in the front line battle by the Health Services Executive (HSE) against CVD – 19 and are affected".

406. On 7 April 2020, the Applicant wrote again to the Third Respondent pointing out that the First Respondent was purportedly responding to queries directed to Dr O'Reilly and recommended to him that he obtain proper legal advice in relation to his responsibilities so he could comply with his obligations as a director.

407. On 9 April 2020, the Applicant wrote to the Third Respondent referring to discrepancies and inconsistencies between the correspondence received by him from the Third Respondent and from the First Respondent and referring him to the prior receivership of TPH and the certificate of the receiver on his discharge confirming the insolvency of TPH.

408. The Applicant informed the Third Respondent that in his view he had provided no assistance to him or cooperation in his capacity as liquidator and drew his attention to the provisions of sections 819, 820, 846 and 609 of the Companies Act 2014 and informed him that he would be referring to all of these matters in a report to the Director of Corporate Enforcement.

409. Further letters from the Applicant to the Third Respondent requesting explanations of references to rent and deposit for properties which according to the Applicant were owned by the First Respondent personally, and further information, went unanswered.

410. The Applicant says that the First Respondent had suggested that books and records of the Company were to be found at an address at 3 Upper Rowe Street Wexford. The Applicant attended at that premises and found limited records there.

411. The premises at 3 Upper Rowe Street Wexford had been leased by the First Respondent personally and yet it was the location at which records relating to all three of the Companies were found, albeit not complete records.

412. On 8 May 2020, the Applicant’s solicitors Hayes wrote to the First Named Respondent, noting that he had claimed that he had a directors loan account with the Company. On 14 May 2020, the First Respondent replied to Mssrs Hayes and to the Applicant stating that he was “not in possession of the nominal ledgers of the Company and that I do not have access to the accounting system of the Company".

413. The Applicant states he has never received from the First Respondent any records or documents to support a claim of a directors loan account

414. The order of this court made on 22 July 2020 directed that the First, Second and Third Named Respondents all provide statements of affairs in relation to the Companies and to produce to the Applicant any accounting record deed instrument or other document or paper relating to the Companies in their custody or power. These orders have never been complied with.

415. On 30 March 2020, the Applicant received from the Revenue Commissioners a letter rejecting a claim for a VAT refund which had been submitted by the Company before his appointment. The periods relevant were January/April 2019 and May/August 2019, for amounts totalling €519,000. The Applicant wrote to the Third Respondent informing him that the Company had 30 days within which to submit any notice of appeal. He requested underlying records pertaining to the VAT claim so that he could consider the merits of appealing the decision of Revenue. The Applicant says that he never received any such documents from either the First or Third Named Respondent.

416. Ultimately the Applicant agreed settlement amounts with Revenue in respect of each of the three companies, being in the case of TPH €1,026,972.90, in the case of HJW €437,673.12 and in the case of JWF €640,093.17, in each case including interest and penalties.

417. The First Respondent submitted a ‘Statement of Affairs’ to the Applicant on 4 October 2020. For TPH, the Statement of Affairs listed assets totalling €1,457,900 made up as follows:

Balance at Bank 100,000

Bills receivable 570,000

Trade debtors (“court orders”) 133,000

Loans and advances 300,000

Security deposits 400

Leasehold property 13,500

Other plant and machinery 6,000

Investments other than marketable securities 335,000

Total 1,457,900

418. The Applicant's evidence was that the bank balance of TPH as of the date of his appointment was not €100,000 but €2,000. In respect of the Bills Receivable, stated at €570,000, the Applicant explained that these were references to debts due to TPH from various receivers appointed over its assets from time to time. He said that there was no legal basis for this figure whatsoever.

419. The figure for “trade debtors (court orders)” of €133,000 was said to arise from orders for costs against a receiver. No court order or other evidence of such an obligation by a receiver was presented.

420. The Applicant was unable to trace any of the further assets said to make up the total asset values of €1,457,900.

421. Liabilities were stated by the First Respondent to be preferential creditors (Revenue) at €237,000 and unsecured creditors of €894,380.

422. In the summary of assets and liabilities, instead of deducting the unsecured debt of €894,000 from the amount available for creditors, the First Respondent, inexplicably, added that amount, presenting an apparent surplus in TPH of €2,115,280.

423. The Applicant performed an analysis of this statement. He had verified that the valid claim of Revenue was €1,026,972 and that there was no basis to treat the figure for “unsecured creditors” as an asset. When unsecured creditors are added in an amount of €4,300, the deficiency, before secured creditors and “pre-receivership” investors, was €1,029,733.83.

TPH – payments through Bank of Ireland account

424. The Applicant obtained from the Bank of Ireland the statements for the bank account of TPH for the period from 30 December 2015 to 6 March 2020. On the Applicant's appointment the bank froze the account.

425. The Applicant analysed transactions on the account for the period 30 December 2015 to 12 July 2018. He says that during this period the Company had no discernible trade, turnover or declared tax. Yet there was constant activity of transactions through this account. The Applicant says that the majority of the payments out of the account were for the benefit of the First and Second Named Respondent.

426. The opening balance on the account at 31 December 2015 was a credit balance of €25,132.66 . The balance as at 4 April 2018 was €3.04.

427. During the period concerned lodgements were made to the account totalling €602,669.99, and debits were made totalling €627,799.61.

428. The lodgements comprised the following:

Miscellaneous income €45,875.58

Receipts from IMS UK Ltd €69,416.77

Rental income from properties registered to Alan Hynes €108,337.40 Transfers from HJW €204,000.00 Transfers from JWF ` €58,540.24 Transfers from LAC trading partnership/Adrian O'Reilly €116,500.00 Total ` €602,669.99

429. The Applicant conducted enquiries about the payments from “IMS UK” totalling €69,416.77 during the course of 2016. He ascertained that IMS, a company registered in the UK, owed certain monies to a Mr Vincent Maguire. Mr Maguire instructed IMS to remit the payments to the bank account of TPH. Payments out of the account include 11 cheques totalling €38,000 to Mr Maguire.

430. The Applicant enquired of Mr Maguire and of IMS as to the reason why these monies were being directed through the account of TPH but never received any explanation. No information was available as to the nature of the relationship between TPH and Mr Maguire or IMS.

431. €108,337.40 is the aggregate amount of payments into the account from tenants of properties owned by the First Named Respondent.

432. The amount of €204,000 received from HJW by way of bank transfers consists of a transfer on 8 January 2016 of €164,000 and on 8 May 2017 of €40,000. The Applicant says that these transfers were made at a time when HJW was defaulting on its creditors as appears from the information described earlier in this judgement. (see Part Five)

433. The amount of €58,540.24 received from JWF is the aggregate of 23 transfers from the account of JWF. These payments also related to rental payments on properties owned by the First Respondent and his wife Noreen Hynes. The Applicant could find no explanation for the lodgement of those amounts to JWF and their onward transfer to TPH other than a desire on the part of the First Respondent to conceal such income.

434. The miscellaneous income of €45,875.58 comprised lodgements to the account never explained to the Applicant.

435. The amount of €116,500 received from “LAC trading partnership/Adrian O'Reilly” has according to the Applicant never been explained by the First or Third Named Respondent.

436. The Applicant formed the view that the First Respondent used the account of TPH to evade the payment of tax on rental income or to conceal this income from personal creditors of himself and his wife. He identified a number of unsatisfied judgments registered against the First Respondent. A judgment search against the First Respondent performed on 5 June 2020 recorded judgments in favour of the following parties:

Bushell Construction Ltd (3 September 2009) €1,118,057.42

Wesley Curran and Graham O'Donnell (16 July 2012) €519,166.63

John and Brigid Atkinson (26 March 2013) €200,000.00

Irish Life and Permanent plc (20 October 2016) €1,196,533.00

KBC Bank Ireland Limited (20 February 2018) €164,025.98

Total €3,197,783.03

437. The Applicant says that it is against this background of amounts due to personal creditors that he formed the view that the First Respondent was using the account of TPH to receive and conceal income from rental properties.

438. Payments out of the account totalling €627,799.61 were categorised under the following headings:

Personal expenditure for Alan Hynes €135,491.23

Payment to Hynes family members/related companies €264,652.55

Acquisition of assets for Alan Hynes personally €2,895.00

Payments to vehicle lessors €39,400.00

Payments to professionals €40,470.00

Payment to other third parties €48,000.00

Payments related to TPH €10,826.42

Uncategorised transactions €86,063.92

439. The detail of payments within these categories is significant. They include cinema expenditure (30 transactions) totalling €767.87, clothing (55 transactions) totalling €4,248.85, flights (12 transactions) totalling €1433.97, fuel (80 transactions) totalling €2,728.10, groceries (120 transactions) totalling €5,726.06, hotels (14 transactions) totalling €2,905.38, insurance (which includes payments to insure vehicles used personally by Alan Hynes and Frank Hynes) totalling €2,775.11. The Applicant says that in total there were 205 payments for leisure and entertainment, holiday spending, electronic goods, lotteries and car parking, all made by a company with no discernible ongoing trade.

440. The list comprises also property maintenance/furnishings (65 transactions) totalling €23,090.56, restaurants and cafes (117 transactions) totalling €4,494.05, Thomas and Rita Byrne (in respect of the rent of an office at 3 Upper Rowe Street Wexford by the First Respondent personally) totalling €9,203.45, and utilities (206 transactions) totalling €33,120.36. Finally under this heading 18 payments totalling €532.90 were made to Wexford Golf Club for “membership and spending”. The golf club confirmed to the Applicant that this related to the First Respondent's membership fees.

441. Payments to family members included the payment on 15 January 2016 of a sum of €150,000 to Frank Hynes. The Applicant says that when the account of TPH is reconciled with accounts of HJW it emerges that this payment to Frank Hynes on 15 January 2016 was sourced by a transfer from the account of HJW.

442. One payment was made to JWF of €86,000 around the time when JWF commenced its operations.

443. In 2016 the Company made a payment of €2,895 to Holland Pianos.

444. The leasing payments to First Citizen Finance and RCI Bank totalling €39,400 represent monthly payments for the leasing of vehicles where the leases had been entered into by HJW after it had ceased trading. The vehicles were used by the First and Second Named Respondents.

445. In summary the Applicant says that out of the payments made by the Company from this account totalling €627,799.61 he can identify only three payments totalling €10,826.42 which can validly relate to the Company itself. These were a payment of company secretarial fees, company registration office fees and a payment to the Revenue Commissioners. The Company was not carrying on any trade or business during the relevant period. This led the Applicant to conclude that the only explanation for the payments in and out of this account was that the account was being used for the personal benefit of the First and Second Named Respondent and others. The benefits were the diversion of monies to the First and Second Respondents directly or indirectly from other companies and to conceal income which might otherwise have been pursued by creditors, including judgment creditors, of the First Named Respondent.

446. The Applicant gave evidence that the signatories on the bank account of TPH at Bank of Ireland varied from time to time. From July 2015 onwards the First Respondent was consistently a signatory on the account. The Applicant identified in excess of 200 cheques drawn on the bank account of TPH between January 2015 and February 2020. Every cheque which came into the Applicant's possession was signed solely by the First Respondent. He exhibited to the court by way of example a cheque dated 11 January 2016 signed by the First Respondent and paid to the Second Respondent in the amount of €150,000.

447. The Third Named Respondent, being the only registered director of TPH at the time of the Applicant's appointment, repeatedly informed the Applicant that TPH had no employees, turnover or other business activity during the three years prior to the Applicant's appointment. It is in these circumstances that the Applicant expresses the view that the purpose of the activity on the Company's bank account can only have been to divert assets or income and to facilitate payments to the First and Second Named Respondents and other members of their families at the expense of creditors of TPH and HJW.

448. Other examples of cheques signed on the account of TPH by the Second Respondent were a cheque for €20,000 payable to Kenny Stephenson Solicitors, a cheque for €10,000 payable to a David Noone, and €50,000 payable to JWF.

Kenny Stephenson Chapman

449. The account shows payments totalling €35,350 made to Kenny Stephenson Chapman Solicitors, Waterford. The Applicant says that Kenny Stephenson Chapman never provided services to the Company. He wrote to that firm regarding these payments without receiving any detailed response.

450. The three payments to Kenny Stephenson Chapman were a payment of €6,150 on 7 March 2016, €9,200 on 5 September 2016 and €20,000 on 12 May 2017. The Applicant received from Kenny Stephenson Chapman two invoices which it had issued to the Company. The first is dated 31 August 2016. It is for a total sum of €50,000 plus VAT making a total of €61,500. The matter described on this invoice is "Re - Chartered Accountants Regulatory Board Appeal". The Applicant says that this can only relate to representation of the First Named Respondent in judicial review proceedings which he brought against the Chartered Accountants Regulatory Board arising from disciplinary proceedings at the Institute of Chartered Accountants. Although reference had been made earlier to proceedings against the Institute of Chartered Accountants, this invoice refers to the "Chartered Accountants Regulatory Board" appeal. In any case, the Applicant says that in these proceedings the firm’s client was not TPH.

451. The second invoice dated 15 March 2017 was for €15,000 plus VAT and outlays, making a total of €18,877.25. This is described in its narrative as being re "Ulster Bank Ireland Limited v. Dr Colm Sugrue".

452. This relates to proceedings initiated by Ulster Bank originally against Alan Hynes and Noreen Hynes to recover possession of a property. Dr Sugrue was joined in those proceedings, having signed one of the agreements relating to a relevant property apparently "on behalf of TPH". When Kenny Stephenson Chapman initially submitted their invoice to Dr Sugrue they were informed that the fees would be discharged by TPH and they reissued their invoice to the Company.

453. Again the Applicant says that this relates to a personal property interest of the First Named Respondent and that there was no basis on which it should be discharged by TPH.

McKeever Rowan

454. The First Respondent and others retained the services of McKeever Rowan Solicitors, on matters which included the affairs of the parents of the First Respondent. On 15 October 2019 Mr Maurice Dockrell of that firm emailed the First Respondent referring to a prior conversation and stating that McKeever Rowan would be prepared to act in the First Respondent parents’ case but would need “to work out how Tuskar is to pay our original bill, including the VAT element for the original €70k". He referred also to outstanding fees due to counsel.

455. In a reply to Mr. Dockrell written on 21 March 2020, this time copied to the Applicant, the First Respondent referred to various matters not relating directly to the affairs of any of the companies. He then stated the following: "… As you are aware the business of Hynes Jewellers Wexford limited, including all of the stock, assets, goodwill etc was transferred to Tuskar Property Holdings Limited with effect from 1 January 2016. I understand that you acted on instructions from Frank Hynes and that you wrote subsequently to Messrs Val Stone and Catherine Stack to request the return of the stock, records etc."

456. Later the First Respondent stated the following

"if you are willing to agree to release the lien held over the files on the condition that Tuskar pays the VAT element of your fees then please can you contact Myles Kirby. Assuming Mr Kirby agrees to this, and you are willing to act for Thomas Hynes and Vera Hynes in the conveyance of the Slaney Manor property to replace the Moongate property please send an email section 68 letter to be signed by Thomas Hynes and Vera Hynes to sign by 30 March 2020."

457. A remarkable feature of this correspondence is the suggestion that TPH, to which the Applicant had by then been appointed provisional liquidator, would discharge even the VAT element of fees outstanding, in order to facilitate continuing work for Thomas and Vera Hynes.

Signatures of Colm Sugrue

458. The statutory records of the Company showed Mr Colm Sugrue to have been a director from 1 October 2013 to 11 April 2017. Mr Sugrue is a dentist practising in Dublin. He has identified a number of errors in the statutory records of TPH, most notably with reference to his appointment, signatures on annual returns and his resignation.

459. On the file at the Companies Registration Office is a Form B10 recording the termination of the directorships of Alan Hynes and Noreen Hynes on 1 October 2013, and that they were replaced on that day by Colm Sugrue and Adrian O'Reilly, and that on the same day Mr Sugrue became secretary of the Company.

460. Mr Sugrue states that he had never agreed to become a director in 2013, and that it was not until 20 May 2014 that he agreed to act as a director and secretary of TPH.

461. Mr Sugrue's evidence was that on 11 April 2017 he resigned as a director and secretary of TPH. Mr Sugrue requested that the Company file a Form B10 recording his resignation. No steps were taken by the Company to record the resignation. On 7 July 2017 he filed a Form B69 notifying the CRO that he had ceased to be a director and secretary as of 11 April 2017.

462. The Forms B1 (annual returns) filed at the CRO in respect of the years ended 31 December 2013 and 31 December 2014 each contain a signature of Mr Sugrue as secretary. Mr Sugrue gave evidence that he never signed those forms, because he had never been in possession of sufficient financial information or records of the Company to enable him to sign or authorise the signing of such returns.

463. Each of these annual return forms was filed at the CRO on 20 October 2015.

464. Mr Sugrue gave evidence in relation to a document described as a “Residential Tenancy Agreement” dated 23 June 2017 relating to a property at 5 Obelisk Grove, Blackrock County Dublin. On the agreement the landlord is described as Tuskar Property Holdings Limited and the tenants are described as Brigida Payyo and Angelito De Guzman. The landlord contact details referred to on the front page of the agreement are: Landlord Tuskar Property Holdings Limited “address c/o Colm Sugrue, 3 Upper Rowe Street, County Wexford”. The tenancy agreement was signed on behalf of Tuskar Property Holdings Limited by Alan Hynes and James Wallace on 15 July 2017, and on earlier dates by the tenants and the landlords agent.

465. Mr Sugrue's evidence was that he never saw this agreement until it was shown to him by the Applicant. He had no reason to know why his name address and telephone number appeared on the front page of the lease, and his understanding is that the property at 5 Obelisk Grove, Blackrock, County Dublin was owned personally by Alan and Noreen Hynes.

466. The agreement postdates by over two months the resignation of Mr Sugrue as a director of TPH.

467. The Applicant says that there is nothing in the records of TPH to show that it was the owner of this property or that it received any benefit from the rent received. Elsewhere the bank accounts of TPH record that the rent passed in and out of its account but TPH never declared or paid any tax in respect of that property.

468. Mr. Sugrue was not cross examined.

€1 million received from client of Partners at Law

469. On 29 August 2008 a lodgement was made to an account of TPH at National Irish Bank in an amount of €1 million. The entry in the bank statement of the account records this amount as having been received from “Partners at Law”, a firm of solicitors practising in Dun Laoghaire, County Dublin.

470. The Applicant contacted Partners at Law and enquired as to the source and nature of these funds. He received a reply from Mr Justin McKenna of Partners at Law confirming the following: “This firm acted for an investor in 2008. This person instructed us to mortgage properties to raise money for the purpose of an investment recommended by Alan Hynes. I have attempted to contact the client but so far to no avail. I can confirm that €1 million was transferred from our client account on 29 August 2008 and paid directly to the account of Alan Hynes, Tuskar Property Holdings Limited care of National Irish Bank account number 95150141329499.

I understand the client was unconnected to Hynes or TPH and lost everything.”

471. The Applicant exhibited the full bank statement for the account of the Company at National Irish Bank covering these dates. At the time when the €1 million was lodged the account was in credit in an amount of €735.38. A series of lodgements and withdrawals were made between 29 August 2008 and 12 September 2009, at the conclusion of which the balance in the account stood at €748.27. The Applicant identified payments out of the account as including the following:

3 September 2008 Zurich Bank €260,408.31

4 September 2008 Mr David Phelan €100,000.00

5 September 2008 Anglo Irish Bank €100,000.00

5 September 2008 AIB €100,000.00

9 September 2008 Alan Hynes personal account €300,000.00

12 September 2008 Noreen Dunphy (Mrs Alan Hynes) €6,712.00

Sundry others €124,866.80

Total €999,987.11

472. According to the Applicant these disbursements amount to a dissipation of the entire amount of the €1 million which had been received from the investor client of Partners at Law.

473. This occurred a time when Alan Hynes and Noreen Hynes were the only directors of TPH, and the most substantial amounts were transferred when they were also the only shareholders.

474. The ledger for this account which the Applicant obtained from the Company’s then auditor Messrs O'Loughlin & Co. Chartered Certified Accountants, Monasterevin, County Kildare records the amount of €1 million received on 29 August 2008 as a “transfer from Hynes”.

475. In the notes to the abridged financial statements for the year ended 31 December 2008 audited by Messrs O’Loughlin, there appears under “transactions with directors”, entries referable to a directors loan account of Noreen Hynes which as at the commencement of 2008 had an opening balance of €436,748. It records during the course of that year “advances from directors” a sum of €101,757, leaving a closing credit balance on the directors loan account of €538,505.

476. The Applicant says that in circumstances where the sum of €1 million was sourced not from Alan Hynes or Noreen Hynes, but from a third party property investor client of Partners at Law, who lost everything, the effect of the entry of €1 million in the ledger is to convert a debit balance on the directors loan account to a credit balance appearing in the abridged financial statements.

477. The Applicant says that the actions of the directors of TPH in assigning the €1 million investment from an external property investor to the credit of the directors loan account was a false accounting entry and fraudulent. It had the effect of showing the directors account to be in credit, at the end of 2008 in an amount of €538,505 when, if the entry of €1 million were removed, it would be in debit at €461,495. The Applicant says that the First Respondent has attempted to rely on this false entry as a justification for numerous cash withdrawals made from the account of TPH during the same period, leaving only €748.27 in the account.

478. The Applicant states that when the directors loan account is adjusted for this amount the scale of the debt then owed by Alan Hynes and Noreen Hynes to the Company contravened the provisions of Section 239 of the Act in circumstances where the loans exceeded 10% of the net assets of the Company.

479. The Applicant wrote to Noreen Hynes in relation to this matter and she referred the Applicant to the First Named Respondent in relation to this issue. In her reply she confirmed that she had met the person behind the lodgement of €1 million and commented on her “professionalism in her dealing with the Company while experiencing the gravity of her financial loss”.

480. The First Respondent stated that the €1 million lodged on 29 August 2008 had been “sourced in 2008 by the directors of Tuskar Property Holdings Limited and is properly accounted in the balance carried forward in the directors current account. 100% of the funds sourced by the directors lodged to the bank account of Tuskar Property Holdings Limited was either applied to the various projects of TAM Plc (Tuskar Asset Management Plc) or loaned to the various shareholders of TAM Plc”.

481. The First Respondent insisted in this correspondence that the funds concerned were “sourced by the directors themselves”. He denied any fraud.

482. The financial statements of the Company from 2008 to 2014, in each of which there is recorded a credit balance on the directors loan account, were audited by Messrs O’Loughlin on May 2015 and filed in September 2015. Ms O’Loughlin confirmed that she obtained all her instructions in relation to this matter from the First Respondent. At that time the First Respondent was subject to the order of both disqualification and restriction made by this court (Dunne J.) on 9 October 2013.

483. The Applicant wrote to Ms O’Loughlin. She stated that in the course of the audit she had queried the movements on the directors loan account during 2008 and she said that it been asserted to her that the amount of €1 million lodged was a director's loan and she says that she had no information to suggest that it was anything other than a directors loan.

484. Ms O'Loughlin stated also that all her dealings in relation to TPH were with the First Respondent and she had no direct dealings with any other officer of the Company.

485. The Applicant says that it is clear from the correspondence with Mr McKenna of Partners at Law that the payment of €1 million was sourced by funds from an unnamed client investor of that firm8 and that there is no evidence that they were sourced from funds or other investments of the First Respondent or Noreen Hynes.

486. The only independent corroborative evidence of the source of this money is the confirmation by Mr McKenna that the money belonged to a client who had believed she was making an investment in property for herself, as recommended by the First Respondent. This is consistent with the confirmation given to the Applicant by Noreen Hynes. No evidence was adduced by the First or any of the Respondents to demonstrate a source for the €1 million other than the funds remitted by Messrs Partners at Law on behalf of their client.

The Third Respondent

487. From the incorporation of TPH on 30 March 2000, Alan Hynes and Noreen Hynes were the shareholders and directors.

488. In January 2009 the entire shareholding was transferred to The Third Respondent.

489. On 1 October 2013 the First Respondent and Noreen Hynes resigned as directors of TPH. The Third Respondent was appointed a director on that date. He remained in office as a director and was the sole registered director when the Company was ordered to be wound up.

490. The Company’s statutory returns purported to record that Colm Sugrue was also appointed on 1 October 2013, but Mr Sugrue gave evidence that he only agreed in May 2014 to become a director of the Company.

491. James Wallace was appointed a director on 22 July 2018 and resigned on 4 May 2019.

492. The order of disqualification and restriction of the First Named Respondent made by Dunne J. in the matter of Tuskar Asset Management Plc was made on 9 October 2013 pursuant to a judgment delivered by the court on 24 September 2013.

493. The Third Respondent did not attend the hearing of this case. No evidence was adduced by him or any of the Respondents of any activity on his part other than permitting his signature In his evidence at the hearing the First Respondent named the investor.

or name on documents of TPH, including the abridged financial statements for the year to 31 December 2014 and his correspondence with the Applicant. The Applicant says that by agreeing to act as the First Named Respondent’s replacement in the face of the disqualification order made by Dunne J. and thereafter permitting the First Named Respondent to continue to exercise control, such as control over the bank accounts of TPH, the Third Named Respondent facilitated the utilisation of TPH by the First Respondent for his own benefit, at a time when the First Respondent was disqualified from acting as a company director or being concerned in the management of a company.

494. The Applicant says that the Third Respondent thereby facilitated the First Respondent in acting as a shadow and/or de facto director.

495. The Applicant points out also that the financial statements to 31 December 2014, stated to have been signed on 28 May 2015 by the Third Named Respondent and by Dr Colm Sugrue, show the Company to have been insolvent for many years and yet the Third Respondent took no steps to have the Company wound up.

496. The accounts for the year ended 31 December 2014 show a directors loan account in favour of the directors in an amount of €554,075, an amount carried over from the previous year, a balance which the Applicant says can only have been correct if the directors account has the benefit of the lodgement of €1 million made on 29 August 2008 from the client of Partners at Law.

497. The Applicant refers also to the letter of 24 March 2020 which he received when he was provisional liquidator of TPH from the Third Respondent purporting to assert a claim on behalf of the First Named Respondent for an amount of €1.5 million said in the “Employment Contract” to be payable to the First Named Respondent on the occurrence of a liquidation of the Company. In that letter the Third Respondent had made following assertion “you are aware that the Company took over the business, goodwill and assets of Hynes Jewellers (Wexford)

Limited (now in liquidation) with effect from 1 January 2016 (with the exception of any lease) therefore the Company is in a position to honour the conditions and the terms of employment contract in full.”

498. The credibility of the Third Respondent as a director was wholly undermined by this assertion, since he had elsewhere informed the Applicant that TPH had no employees. This clearly revealed that, even in the post liquidation correspondence, the Third Respondent continued to support and facilitate the interests of the First Respondent.

Summary for TPH

499. Having resigned as a director of TPH on 1 October 2013 the First Respondent continued to exercise control over its assets and affairs and was a de facto director.

500. The Third Respondent facilitated the First Respondent in the manner in which he retained control of TPH.

501. Payments totalling €616,973 were made out of the Company’s bank account between

30 December 2015 and 12 July 2018 for the benefit of the First and Second Respondents and family members and for other purposes not related to any business of the Company.

502. The First Respondent utilised the bank account of TPH to receive and conceal from his creditors rental income from personal assets.

503. The First Respondent fabricated an Employment Contract and made claims for payments pursuant to it, before admitting in his evidence that it was fabricated.

504. The First, Second and Third Respondents made claims that the shares in HJW had been transferred to TPH and were party to the preparation of falsified board minutes and share transfer forms.

505. The First and Third Respondents failed to make a valid statement of affairs of the Company and failed to comply with orders of the court for delivery of documents and information relating to the transactions, assets and affairs of the Company.

506. The name of Colm Sugrue was applied to Company Registration Office forms and to a Residential Tenancy Agreement relating to personal property of the First Respondent without his knowledge or consent.

507. A sum of €1m received from an investor and intended for an investment in property was lodged to the Company’s bank account and disbursed for the personal benefit of the First Respondent and his wife and for other payments not authorised by the investor and unrelated to the valid business of the Company.

508. The receipt of €1m from an investor was falsely treated in the financial statements as a lodgement to the creditor of a directors loan account. PART SEVEN: JW Fashions Limited (“JWF”)

509. JWF was originally acquired as a shelf company by Mr James Wallace, in May 2014. He intended to use it for his own textiles business but never did. It was dormant until 2016. The shareholders of JWF are James Wallace and a David Smith. After HJW ceased to trade at

19 North Main Street, Wexford, on 20 April 2016, the business name “Hynes Family Jewellers” was transferred to JWF. In October 2016 JWF commenced trading the jewellery business at

113 North Main Street.

510. Mr. Wallace was appointed as director, together with the Second Respondent and Fiona Hynes. The Second Respondent was appointed Secretary.

511. Following the making of the winding up order for HJW Mr Wallace swore an affidavit on 4 February 2020 in which he described his involvement in HJW and JWF. He had agreed to be a director of each of these companies. He became a director of both companies in July 2016 and resigned on 14 August 2018, although his resignation only appears to have been registered effective in December 2019.

512. Mr Wallace states that he resigned because he felt that the returns for JWF and HJW “were being blurred”. He was never given sight of the financial records or books of account of the Companies and he could not fulfil the duties of a director.

513. Mr Wallace only became aware of the winding up of the Company when notified by the Applicant of his appointment and when the Applicant requested that he complete a questionnaire. He then co-operated with the Applicant and the Applicant makes no complaints in that regard.

514. According to Mr Wallace, the Revenue Commissioners were informed by the First and Second Named Respondents that JWF had no employees and that the staff working in the shop at 113 North Main Street were employees of HJW. Elsewhere the First and Second Named Respondent have stated that HJW ceased trading on 19 April 2016 when the sheriff took possession of 19 North Main Street on behalf of the landlord.

515. The Applicant says that neither HJW or JWF declared or paid payroll taxes in relation to employees for the year 2016 or any subsequent years. The jewellery business continued at

113 North Main Street from October 2016 until February 2019 when the sheriff, in that instance acting on behalf of the Revenue Commissioners, entered the premises at 113 North Main Street and seized stock of JWF.

516. Mr Wallace stated that when he queried the position with the First and Second Named Respondent in relation to records of JWF he was assured by them that all returns had been filed.

517. The Applicant says that the irregularity of the operations of JWF are illustrated by the following “conundrum”, as he put it. Either JWF itself was employing staff at 113 North Main Street Wexford and not declaring or paying payroll taxes in respect of them, or it was using staff employed by HJW which was no longer trading, and was not accounting to HJW or anywhere else for those payroll costs and taxes.

518. Fiona Hynes, sister of the Second Respondent gave evidence that she was working in the shop at 19 North Main Street when it was “raided” and closed after the sheriff took possession on behalf of the landlord for non-payment of rent. This came as a complete shock to her and she had to deal with customers who had placed deposits on jewellery or who had left in items for repair. Ms Hynes had to explain the situation to customers at a time when the First and Second Named Respondents were concerned principally with reopening the business, which ultimately they did at 113 North Main Street.

519. Ms Hynes said that although she was listed as a director of HJW and JWF she was not aware that she had been registered as a director of JWF.

520. Ms Hynes stated that although the financial statements filed at the Companies Registration Office for the year ended 31 January 2016 in relation to JWF appear to have been signed by her, she never saw those accounts. She may have signed a form appointing her as a director, and that signature was then used in respect of the accounts for the year ended 31 January 2016. It is not clear why a set of accounts was ever prepared in respect of the year ended 31 January 2016, as it contains a reference to a nil turnover and nil amounts for payroll costs, directors remuneration, statutory and other expenses including auditors remuneration.

521. A further curiosity about the Companies Registration Office information relating to JWF is that the Form B10 notifying changes of directors and secretary records the appointment as a director on 2 June 2016 of Frank Hynes having a date of birth of 2 June 1998. That is not the date of birth of the Second Named Respondent and confusion, at best, arises from the reference to that date of birth. The Second Named Respondent confirmed that he was a director and secretary of JWF at all relevant times.

522. Fiona Hynes was not cross-examined.

523. The Applicant accepts the assertions of Fiona Hynes that she was not a director of JWF and had no knowledge of the Company's business and was never in a position to provide a statement of affairs.

524. The Company was fined €1,750 in the District Court for failing to keep proper books and records and it has not filed any annual return at the Companies Registration Office since the accounts for the year ended 31 January 2016, which predate any trade in the company.

525. The order of this Court made on 22 July 2020 obliged the First, Second and Third Named Respondents to produce statements books and records in respect of each of the Companies, including JWF. The Respondents failed to comply with that order.

526. The Applicant gave evidence that he has never been provided with any meaningful books or records of JWF or with a statement of affairs, apart from the version submitted by the First Respondent on 4 October 2020.

Bank account of JWF

527. The Applicant obtained and analysed the bank statements of JWF for the period from

6 March 2017 to 27 January 2020. The total receipts to that account were €67,138, of which €63,238 comprised 39 monthly payments in respect of number 6 Obelisk Grove, a property owned by the First Named Respondent. The payments out of the account in the same period comprised a variety of payments including payments in favour of Alan Hynes, Frank Hynes, “JWF current account”, Sky Digital, TPH, a payment for an All In One voucher for €1,304.13 and other payments totalling €10,325.87.

528. No explanation was offered by any of the Respondents as to why lodgements to a bank account of JWF, a company whose only activity was the trade of a family jewellers at 113 North Main Street, Wexford would comprise almost entirely of rental payments for the First Named Respondent's property at Obelisk Grove, Blackrock, County Dublin. Most of its disbursements were payments in favour of the First and Second Respondents and TPH.

529. The Applicants says that the only conclusion which can be drawn from this is that the bank account of the Company served as a conduit for personal income of the First Named Respondent with a view to concealment thereof from his personal creditors.

530. The total liabilities of JWF as of the date of its liquidation were €651,609.93, of which €640,093.17 represented debt due to Revenue Commissioners.

Statement of Affairs 4 October 2020: JW Fashions Limited

531. The Statement of Affairs for JWF submitted by the First Respondent on 4 October 2020 included under assets a figure for leasehold property at €30,000, for “security deposits” at €6,000, and a second leasehold property at €135,000, bringing the total assets figure to €171,000. The Applicant was unable to trace any “security deposits”. Any leasehold properties held by JWF had been repossessed or otherwise vacated long before the appointment of the liquidator.

532. The First Respondent estimated as the only outstanding liability an amount for Revenue at €500,000, thereby showing a deficit of €329,000. When the Applicant includes the admitted claim of Revenue at €640,093 and unsecured debts of €11,516.76, the deficit is €651,609.

Summary for JWF

533. JWF commenced the jewellery business at 117 North Main Street six months after HJW ceased trading. In particular it employed certain staff previously employed by HJW and failed to properly account to Revenue for payroll costs and taxes, informing Revenue that staff working in the shop were employees of HJW, which had ceased trading.

534. The First Respondent was a de facto director of JWF.

535. The bank account of JWF was utilised for the receipt and concealment of rental income for properties owned by the First Respondent. Extensive payments were made from it to and for the benefit of the First and Second Respondents and for other expenses unrelated to the valid business of the Company.

536. The First and Second Respondents failed to comply with the obligation to make a valid Statement of Affairs of the Company and failed to comply with the order of the court that they deliver documents and information relating to the transactions, assets and affairs of the Company.

537. The First and Second Respondents sought to claim that the Volkswagen Touareg hire purchased by HJW was an asset of the Company when attempting to dispose of it.

Interactions between JWF, HJW and TPH

538. The Applicant says that by reason of the conduct of the First Three Respondents the affairs of the three companies became intermingled. He says that proper books and accounting records which would distinguish the affairs of the companies were not prepared or kept by any of the Respondents.

539. When JWF commenced its jewellery business at 19 North Main Street October 2016 the Revenue Commissioners were informed that staff working for JWF were employees of HJW.

540. The bank statement for TPH revealed a payment of €90,500 being made by TPH to JWF at the time when it commenced its operations. Insofar as the bank account of TPH was being operated or controlled by the First Named Respondent the Applicant says that this transfer of funds evidences the controlling influence of the First Respondent at least in the commencement of the trade of JWF in October 2016.

541. The First and Second Named Respondent sought to maintain that the Volkswagen Touareg acquired with funding from Ford Finance belonged to JWF despite the fact that it was HJW which was named in the hire purchase agreement. The Applicant refers to this as evidence of conduct intended to foster confusion and at best, distraction, on the part of creditors.

542. The Applicant formed the view that JWF operated under the control and direction of the First and Second Named Respondents. He also formed the view that the First Respondent had become the controlling intelligence behind the operations of all three Companies.

543. The First Respondent’s “theory” that he was an employee of TPH, which was the secretary of HJW, was advanced as part of his denial of being a shadow or de facto director of the other companies. There was no evidence of his status as an employee of TPH, and he acknowledged in his evidence that the ‘Contract of Employment’ had only been drafted by him for presentation to the Applicant after the companies were ordered to be wound up.

544. The Applicant says that he retrieved certain records from an office previously occupied by the First Named Respondent at 3 Upper Rowe Street, Wexford. The lease of that premises was held by the First Named Respondent personally. The Applicant says that amongst the records stored of that office was a bankers box comprising records of JWF. He says that those records included used chequebooks, supplier statements and invoices and the Company register. They did not, according to the Applicant, comprise any records which would be meaningful in the context of ascertaining the Company’s assets and liabilities. PART EIGHT: The Fourth Respondent Tuskar Investment Group Limited (“TIG”) and the “Deed of Retirement”

545. TIG was incorporated on 23 May 2018 with a registered office at 113 North Main Street, Wexford.

546. The only shareholder was the Third Named Respondent Dr O'Reilly.

547. The first and only director was Mr James Wallace. He resigned on 4 May 2019 and was never replaced.

548. Mr Wallace was also the first secretary of the Company. He was replaced in that capacity on 4 May 2019 by TPH.

549. The First Respondent furnished to the Applicant a copy of a document described as having been dated 1 July 2018 and made between TIG and TPH, bearing the description “Deed of Retirement from the Partnership”. Under the name TIG it carries “Ref: AH/TIG/122”.

550. This document is another mystery as to its provenance, and effect. It is stated to be dated 1 July 2018 and made between TIG as the “Incoming Partner” and TPH as an “Outgoing Partner”. The background is described in the recitals as follows: “(A) Tuskar Investment Group Limited (Incoming Partner) carries on the Business under the terms of the Tuskar Partnership Agreement (as defined below) (B) Tuskar Property Holdings Limited (Outgoing Partner) is replaced by the Tuskar Investment Group Limited (Incoming Partner) with effect from 1 July 2019 and the continuing partners have been and are going to continue to run the business after the outgoing partner retired.”

551. No definition is provided of “the business”. Nor can any explanation be gleaned from the document as to what is the “business” apparently carried on by TIG, or the business of the so-called partnership.

552. Reference is made in the interpretation section to a “Partnership Agreement” being a Partnership Agreement of 1 January 2009 between the “partners”, defined to be “the continuing Partners and Tuskar Investment Group Limited, as amended by a supplemental deed dated 1 June 2012 and a Deed of Retirement from the partnership dated 2 October 2015”.

553. Reference is made to “Partnership Property” being “the list of properties and all other assets (or rights in them) which are used by the Partnership for the purpose of the Business”. No such list was attached or referenced.

554. The interpretation section provides that words and expressions used in the deed have the meaning given to them in the “Partnership Agreement”, which was not before the court.

555. Section 2 of the agreement provides for “Retirement” as follows:

“2.1 The Outgoing Partner (TPH) retired on the leaving date, having given six months written notice to the Partners of its intention to retire from the Partnership in accordance with clause 34.1 (voluntary retirement) of the Partnership Agreement.

2.2 The Partnership shall not be dissolved as a result of such retirement but has and shall continue as between the continuing partners, on the terms of the Partnership Agreement as amended by this deed”.

556. Section 3 is entitled “transfer of partnership property”: “3.1 With effect from the Leaving Date (the leaving date is defined to be 30 June 2018, whereas the recitals provide that TPH is replaced by TIGL with effect from 1 July 2019) the Continuing Partners shall succeed to all the interest of the Outgoing Partner in the Partnership Property in equal shares or such other shares as the Continuing Partners may agree and immediately on obtaining all releases referred to in clause 3.3, and all consents referred to in clause 3.4, the Outgoing Partner shall transfer the legal ownership of the assets and any other items of Partnership Property as set out in the Partnership Agreement, and shall execute and deliver such documents and perform such acts as may be required to vest legal ownership in such Partnership Property in the Continuing Partners”.

557. Clauses 3.3 and 3.4 refer to any required releases of any mortgage, charge, or any other third party right or interest or third party consent required. No details of any such burdens or required consents are stated.

558. Section 5 provides for “Payments to Outgoing Partner” as follows: “5.1 The Outgoing Partner is not entitled to any share or interest in the property of the Partnership or Net Profits and Losses arising after her (sic) Leaving Date.

5.2 After the Leaving Date, the Partners instructed the Accountants to prepare Succession Accounts as soon as practicable in accordance with the provisions of the Partnership Agreement. Following which, the Succession Accounts were agreed and payments were made accordance with the Partnership Agreement”.

559. Section 6 is headed “Further provisions relating to Outgoing Partners”. It states: “The Outgoing Partner shall, at the cost and expense of the Partnership, do or procure to be done all such further acts and things, and execute or procure the execution of all such other documents as the Continuing Partners may from time to time reasonably require for the purpose of enabling the Continuing Partners to recover the outstanding assets of the Partnership or for the purpose of transferring to the Continuing Partners any Partnership Property which, on the Leaving Date, was vested in the Outgoing Partner as one of the Partners or on trust for the Partners. The Outgoing Partner irrevocably and by way of security appoints each and any of the Continuing Partners as her (sic) attorney to sign, execute and deliver on its behalf all deeds and documents and to do all acts and things necessary to give effect to the terms of this deed and for investing in the Continuing Partners the full benefit of the assets, rights and benefits to be transferred to the Continuing Partners under this deed”.

560. Execution blocks are inserted for execution of the document as a deed by each of James Wallace and the Third Respondent. The document was not signed or executed by any party.

561. Before turning to the Respondents’ descriptions of this document, I observe that in its terms it is unintelligible. Numerous critical terms such as “business”, “continuing partners”, “partnership property” are not defined and cannot be determined by a reading of the document. Clause 5 records that after the leaving date, stated to be 30 June 2018, the partners “instructed” the accountants (not identified) to prepare “Succession Accounts” and purports to record that succession accounts were agreed and payments made in accordance with the Partnership Agreement. No detail of those accounts, who prepared them or what payments were made, were ever provided.

562. In an affidavit sworn on 27 January 2020 by the Second Respondent in proceedings between Joseph Howley (Collector General) and Frank Hynes (2019 /178R) the Second Respondent stated the following of this document “By Deed of Retirement dated 1 July 2018 Tuskar Property Holdings Limited retired from the Tuskar Partnership and the assets of TPH and Hynes Jewellers (Wexford) Limited were transferred to Tuskar Investment Group Limited (“TIG”)”. (Emphasis added).

563. No evidence was adduced of any resolution of the directors or the shareholders of either TPH or HJW to authorise divestment of their respective assets.

564. In the affidavit sworn by the First Respondent on 20 January 2020 in the proceedings entitled John Power and others v Alan Hynes and others (2019/7631P) the First Named Respondent had the following to say in relation to this deed: “(34) By Deed of Retirement dated 1 July 2018 TPH retired from the Tuskar Partnership and the assets of TPH and Hynes Jewellers (Wexford) Limited were transferred to Tuskar Investment Group Limited (“TIG”). TPH has since been dissolved in the CRO. I beg to refer to a copy of the Deed of Retirement dated 1 July 2018 upon which marked with the letters AH1 I have signed my name prior to the swearing hereof”.

565. In his evidence before this court the First Named Respondent stated that this sworn reference to the Deed of Retirement was incorrect and that he “got that wrong”. He then said that this Deed was not a fabrication and was not intended to mislead any parties, but it never came into effect. There was no transfer of assets to TIG.

566. The First Respondent continued: “There is a document that I would definitely concede would have gotten me into some difficulty when coming to these type of situations, in that I prepared an employment contract and I prepared a document seeking to transfer the business of Tuskar Property Holdings, not that I've influenced, just the business, the assets of the Company into the name of the Fourth Named Respondent Tuskar Investment Group Limited. Now I prepared that document and I would have signed it off in the name of the director, well, at that point in time it would have been my brother-in-law, Adrian O'Reilly. Now Adrian wouldn't have necessarily known that I had done that, so I admit that that’s a document that I created and I take responsibility for. But at the time of creating that document, it really was with a view to consolidating matters for the Companies. That's why the Company is called Tuskar Investment Group Limited, it's a grouping or company that will be the holding company for the other companies. Again, this is something that I did with the best intentions to try and bring the business forward, bearing in mind that Tuskar Property Holdings had been, some of its assets had gone into receivership and not the Company itself. The Company itself was not going into receivership. So, working my way through the years with Tuskar Property Holdings. We were approached by individuals along the way seeking help in relation to their companies, their issues, their creditors and I have done what I say to be the best that I know how to in terms of helping those companies while I'm being employed by Tuskar Property Holdings. I didn't sign up to be an employee or director of any other company.”.

567. Under cross-examination the First Respondent said that the intention was to consolidate all assets of the companies under a new entity Tuskar Investment Group Limited and he had obtained professional assistance in the preparation of this Deed of Retirement. However, he said that Tuskar Investment Group Limited did not “take up” the assets and holds no assets.

568. This contradicts statements made by the First Respondent to the Applicant in an email he wrote on 12 March 2020 referring to the Deed of Retirement and stating “as you are aware TPH took over the business and assets of HJW since 1 January 2016 (with the exception of the lease)”. He then referred to the Deed of Retirement “executed on 1 July 2018” and quoted extensively from that document. The First Named Respondent in this correspondence purported to assert that “a lien is also being exercised over the records created by Tuskar Investment Group Limited in accordance with the Deed of Retirement executed on 1 July 2018 pending the satisfactory outcome of an investigation into this matter by Bank of Ireland and the drawdown of the loan contract signed with Bank of Ireland. This is a very serious matter”. Having yet again recited the Deed of Retirement as an executed document and invoking its provisions to assert a lien on behalf of an unidentified party, this illustrates the extent of the confusion sought to be created by the First Respondent in his correspondence with the Applicant.

569. The Applicant expresses his opinion that the Deed of Retirement was intended to effect some character of transfer of assets from TPH to TIG and therefore that TIG must have in its possession assets or funds which properly belong to one or more of the Companies to which the Applicant has been appointed or that TIG may be holding documents or records in relation to the affairs of the Companies.

570. The significance of the Fourth Named Respondent is that its name was used numerously by the First and Third Respondents in their efforts, limited as they were, to explain the affairs of the Companies. In substance the Fourth Respondent did nothing. The Deed of Retirement was not implemented. If any sense at all can be made of it, its relevance is to reveal that the First Respondent had, at some time unknown, a plan to place assets of the Companies outside the reach of their creditors. The First Respondent in his evidence stated that, although the deed was prepared with the benefit of professional advice, it did not come into effect, in contradiction to various earlier references to it in correspondence.

571. The Fourth Named Respondent never delivered a Defence. On 8 March 2021 Barniville

J. (as he then was) granted judgment in default of defence against the Fourth Named Respondent by reason of its failure to deliver Points of Defence as ordered. The court directed that the orders, declarations and reliefs to which the Applicant would be entitled against the Fourth Named Respondent be assesed at the trial of the proceedings.

572. Although Barniville J. ordered that judgment in default of defence be granted against the Fourth Named Respondent, his direction that the trial court assess the relief to be granted requires that this court determine, by reference to the relief sought in the Points of Claim what form of declaration or order can be made against the Fourth Named Respondent. In the Points of Claim and the Originating Notice of Motion, the Applicant invokes as against the Fourth Named Respondent the provisions of ss. 608 and 599 of the Act.

573. Section 608 provides as follows: “608 (1) The court has the following power where, on the application of a liquidator, creditor or contributory of a company which is being wound up, it can be shown to the satisfaction of the court that –

(a) any property of the company of any kind whatsoever was disposed of either by way of conveyance, transfer, mortgage, security, loan or in any way whatsoever whether by act or omission, direct or indirect, and

(b) the effect of such disposal was to perpetrate a fraud on the company, its creditors or members.

(2) That power of the court is to order, if it deems it just and equitable to do so, any person who appears to have –

(a) the use control or possession of the property concerned or

(b) the proceeds of the sale or development of that property,

to deliver it or them, or pay a sum in respect thereof, to the liquidator on such terms and conditions as the court thinks fit.”

574. Section 599 provides as follows: “599 (1) On the application of the liquidator or any creditor or contributory of a company that is being wound up, the court, if it is satisfied that it is just and equitable to do so, may make the following order.

(2) That order is one that any company that is or has been related to the company being wound up shall pay to the liquidator of that company an amount equivalent to the whole or part of all or any of the debts provable in that winding up.

(3) The court may specify that the order shall be subject to such terms and conditions of the court thinks fit.

(4) In deciding whether it is just and equitable to make an order under this section the court shall have regard to the following matters:

(a) the extent to which the related company took part in the management of the company being wound up;

(b) the conduct of the related company towards the creditors of the company being wound up;

(c) the effect which such order would be likely to have on the creditors of the related company concerned.

(5) No order shall be made under this section unless the court is satisfied that the circumstances that gave rise to the winding up of the company are attributable to the acts or omissions of the related company.”

575. Section 608 applies where property of a company has been disposed of “in any way whatsoever whether by act or omission direct or indirect”, and “the effect of such disposal was to perpetrate a fraud on the company, its members or creditors”. In the Points of Claim the Applicant alleges that the First, Second and Third Respondent and/or the Fourth Respondent “attempted to transfer the assets of TPH to TIG by way of a “Deed of Retirement”” dated 1 July 2018, and this is repeated in his submissions. The overwhelming evidence is that no such disposal actually occurred. In the absence of any such evidence of a disposal it is not open to this court to make an order pursuant to s. 608 against the Fourth Named Respondent.

576. Section 599 provides for the court to order, where it is just and equitable to do so, that a related company pay to the liquidator an amount equivalent to the whole or part of the debts provable in the winding up.

577. The Fourth Named Respondent is related to TPH, because the sole shareholder in both is the Third Named Respondent. That commonality of ownership does not apply between the Fourth Named Respondent and HJW or JWF. They could only be treated as related to the Fourth Respondent if “the business of the companies have been so carried on that the separate business of each company, or a substantial part thereof, is not readily identifiable” (see s. 2 (10)(e) of the Act). I did not hear evidence that the business and affairs of HJW or JWF were intermingled with any business of the Fourth Named Respondent. Therefore s. 599 can only be relevant to a potential contribution by the Fourth Respondent to the debts of TPH, to which it is related.

578. Section 599 (4) identifies matters to which the court shall have regard in deciding whether it is just and equitable to make an order under the section. Before considering those, the precondition in Section 599(5) must be considered. It provides that no contribution order shall be made “unless the court is satisfied that the circumstances that gave rise to the winding up of the company are attributable to the acts or omissions of the related company”.

579. TPH was insolvent at the latest since the appointment of the receiver on 4 August 2010. Its outstanding debt includes not only the shortfall for the secured creditor which appointed that receiver, and now its assignee Ennis Property Finance DAC, but the debt arising from the investment by the client of Partners at Law on 29 August 2008 and claims by other such investors. The Fourth Respondent was incorporated on 23 May 2018, long after TPH had incurred and defaulted on the debts which rendered it insolvent. That is not to say that there were no events or circumstances after 23 May 2018 to which the winding up of TPH was also attributable. Obviously taxes continued to accrue, and it was the final failure on the part of TPH to return and discharge taxes which triggered the petition for the winding up. Whilst the existence of the Deed of Retirement is informative as to the conduct of the First and Third Named Respondents, in circumstances where there is no evidence that the deed was implemented I cannot find that the winding up of TPH was attributable to that deed or any such intended transaction. Nor is there before the court any other evidence of acts or omissions of the Fourth Respondent to which the winding up of TPH was attributable.

580. Elsewhere in this judgment I have found that after the First Respondent resigned as a director of TPH he continued to occupy the position of director and exercise control of TPH. There is no basis to find that in doing so he was somehow acting on behalf of the Fourth Respondent.

581. The court cannot make an order against the Fourth Respondent either under s. 608 or s.

599 on the ground that an attempt was made, as the Applicant puts it in the Points of Claim and in his evidence, to transfer assets to it. The high point of the evidence in relation to the Deed of Retirement is that it reveals an intention or plan to transfer assets from TPH to the Fourth Respondent. That is directly relevant to the claims made against the First and Third Respondent in these proceedings, but it is not sufficient to ground an order against the Fourth Respondent either under s. 608 or s. 599.

582. The next point in relation to the Fourth Respondent is the assertion in correspondence by the First Respondent that a lien was being exercised over records created by the Fourth Respondent “in accordance with the Deed of Retirement”. The First Respondent did not say who was exercising the lien and there is no evidence of what or whose records were held by the Fourth Respondent. If such records belong to any of the Companies, the Fourth Respondent is of course prohibited by s. 632 of the Act from withholding possession thereof or claiming a lien. Any contravention of that section is an offence (s. 632 (4)). No application was made under s. 632. Nothing in this judgment precludes the Applicant if he deemed such a course to be beneficial for the winding up of the Companies, from pursuing the Fourth Respondent under that section.

583. Finally, the order of Barniville J. made on 8 March 2001, and a previous order made on

22 February 2021, ordered that the Fourth Respondent pay the Applicant’s costs. Those orders remain in full force and effect as against the Fourth Respondent, such costs to be adjudicated in default of agreement. PART NINE: Further evidence and cross-examination of the Applicant

584. The Applicant gave evidence that he had on numerous occasions invited the Respondents to attend at his offices and review any such records as were in his possession, limited as they were. He had retrieved records of HJW from the landlord and these were available for inspection by any of the Respondents at any time and he had so informed them.

585. The Applicant referred to the evidence of the First Named Respondent given on Day Five that the €1 million received from Partners at Law was money intended for the benefit of Tuskar Asset Management, having been advanced by an investor in that company. He pointed out that the amount of €1 million was accounted for in the financial statements as a directors loan, in contradiction to the acknowledgement in evidence by the First Respondent that the source of the money was an investor in Tuskar Asset Management.

586. In relation to the payment of €1 million from the client of Partners at Law the First Respondent questioned the Applicant as to the basis upon which it was sought to hold him liable. He submitted, in the form of a question, that the client concerned had instructed Partners at Law to transfer the money to TPH. The First Respondent also suggested in his crossexamination that he had passed these monies onwards to Tuskar Asset Management Plc. The Applicant stated that the information he had in relation to the application of this money is that it was transferred from Partners at Law to TPH and that thereafter the funds were dispersed to numerous payees including the First Named Respondent himself. This was evidenced in the bank statements.

587. No evidence was put before the court by the First Respondent of application of these funds in accordance with the purpose instructed by the investor client of Partners at Law, namely for investment in property. (See also Part Six above).

588. In relation to the claim by the First Respondent for a sum of €1.5 million, pursuant to his ‘Employment Contract’, although the First Respondent had in his evidence suggested that he had not sought to rely on the provisions of the Employment Contract which would have conferred on him an entitlement to be paid €1.5 million, in fact the First Respondent initiated a claim before the Workplace Relations Commission against the Applicant, including a claim under the contract of employment. Therefore it was not correct to say that the Applicant had never relied on the contract of employment.

589. On Day Six of the hearing the First Named Respondent undertook his crossexamination of the Applicant. The First Respondent had not been in attendance, even remotely, for all of the evidence given by the Applicant on Days Two and Three. He informed the court that he had not read all of the papers which had been served on him in these proceedings in advance of the hearing, including the witness statement of the Applicant. Despite these admissions, the court indulged the First Respondent by permitting him to embark on wide ranging cross-examination, intertwined consistently with his own submissions on matters about which he led no evidence.

590. The First Respondent asked the Applicant for his opinions regarding such matters as litigation between himself and Grant Thornton, and between TPH and KPMG. The Applicant stated that he did not have information as to the relevance of those proceedings since the Respondent had never given to him copies of any of the papers or other pleadings in such cases.

591. The First Respondent questioned the Applicant about the absence of property assets in TPH following the discharge of the receiver Mr Taite, and his evidence that the receivers were debtors of TPH.

592. In response the Applicant explained that the fact that there were no assets remaining in TPH following the receivership was of itself evidence of the insolvency of TPH. By the time the Applicant was appointed liquidator of TPH, the company had no discernible trade and appeared to have been utilised only for the purpose of movements of money at the behest of the First Respondent.

593. The First Respondent repeatedly put to the Applicant that he had never borrowed any of the amounts for which the Applicant was seeking to hold him personally liable. This revealed that he had not read, as he confirmed, the pleadings in the case which identify the legal basis of the claim, not being repayment of debt borrowed by the Respondent, but Section

610 of the Act (fraudulent trading) and other statutory grounds for a declaration of personal liability. Repeatedly the First Respondent stated that he had not borrowed those monies, which in turn required the Applicant on each occasion to refer him to the pleaded case grounded on fraudulent and reckless trading.

594. On numerous occasions during the cross examination, it only remained in reply for the Applicant, and his counsel to refer the First Respondent to the exhibits to the Applicant's witness statement in which breakdowns of the amounts claimed were provided, and copies of bank statements, cheques and other evidence of payments made through TPH and other companies were furnished.

595. The cross-examination was further complicated when the First Respondent informed the court that he did not have in front of him while conducting the cross examination the pleadings or the Applicant’s witness statements all of which had been served on him, because he was not at his own house but in another place where he could get internet connection.

596. The First Respondent said that when signing cheques on the bank account of TPH, he did so “for others to fill in and carry out their business”. He stated that he therefore was not a party to any of the “fraudulent activity payments” of which he stands accused in these proceedings.

597. This amounted to a suggestion by the First Respondent that he was acting responsibly by signing blank cheques and handing them over to others, who he did not name who then inserted names of payees. He repeated that he had not committed fraud, that he had regularly signed cheques and left them with his “cousins” to complete the payees. This was his answer to the allegation that he had been a party to the numerous payments made out of bank accounts in favour of parties other than creditors, including judgment creditors, of the Companies.

598. On Day Six the First Respondent acknowledged that “blank cheque writing is a reckless activity”. However, he insisted that it he had not been involved in defrauding creditors.

599. The First Respondent put it to the Applicant that among the records received by him from the landlords of 19 North Main Street were a computer and that if he had accessed information on the computer, he would have been in a position to access books and records of HJW.

600. The Applicant confirmed that he did not have the password to the computer. He had invited the First Named Respondent to attend at his office to inspect such books and records as had been retrieved from the landlords, including the computer. He said that if this invitation had been taken up the records, such as they were, could then have been an accessed by the First Respondent or any of the directors of the Companies. The Applicant explained also that only records of HJW up to 19 April 2016 could have been among the records retrieved from the landlords.

601. The Applicant also explained that since the only records retrieved from the landlords were those in existence prior to 19 April 2016 no records were available which could have formed the basis for accounts which were later filed in respect of the years 2018 and 2019 showing a turnover in HJW in the order of €1 million. The Company had ceased trading on 20 April 2016 following the repossession of the premises by the sheriff.

602. The Applicant stated that there was no valid reason why the Joint Account of Frank Hynes and Martina Hynes had been used to receive monies from HJW even if some of those monies were applied to pay creditors of HJW, as claimed by the Respondents. The use of this Joint Account, acknowledged in evidence by Frank and Martina Hynes to have been in receipt of substantial funds from HJW, continued long after the cessation of trade of HJW. Significant portions of the funds in that joint account, were sourced by payments or transfers from HJW at a time when HJW was defaulting in its obligations to its landlords and other creditors. If the funds in that account were being paid to meet any liabilities of HJW there was no good reason why they were not applied to discharge the judgment debt owed to the landlords of 19 North Main Street and other valid debts of HJW, particularly where the debt due to the landlords was the subject of the order of the Circuit Court which ultimately led to the repossession of the premises and the cessation of the trade of HJW. On the day on which the repossession order was enforced, there was a sum of €134,000 standing to credit in the Joint Account, and yet the Second and Fifth Respondents Frank Hynes and Martina Hynes asserted that this account insofar as it had received monies from HJW was being used to discharge expenses of that company. PART TEN: Trial Evidence and Submissions of First Named Respondent

603. In the parts of this judgment relevant for each of the companies I have referred to evidence and submissions made by the Respondents during the hearing of the case. I refer next to some general aspects of the evidence given by the First Respondent.

604. I have also referred earlier to and quoted extensively from a document delivered on 15 November 2021 described as “Amended Points of Defence and Legal Submissions – 15 November 2021” (see Part Two). This was a further opportunity for the First Respondent to state in writing, in advance of the hearing, his defence to the claims made against him, with the benefit of all the documents, including exhibits to the Applicant’s witness statements, which had been served long before the trial. Instead of doing so, he repeated complaints about such matters as the adequacy of the Points of Claim and of the particulars provided. He introduced complaints related to numerous other legal proceedings and enquiries to which the First Named Respondent has been a party, and which are not the subject of these proceedings. He referred extensively to a “proposed mediation” and suggested that these proceedings ought to be adjourned pending a mediation. No application was ever made by any of the Respondents for an adjournment of the hearing. He refers also to interparty correspondence including correspondence written on a without prejudice basis.

605. Two witness statements were delivered by the First Respondent, on 19 and 21 April 2021. They were of no assistance in identifying evidence he would give at the hearing, and were interwoven with submissions which did not address the case made by the Applicant.

606. When the First Named Respondent attended by video link on the fifth day of the trial he was sworn in and there followed extensive submissions by him.

607. It was at times difficult to distinguish between evidence offered by the First Respondent from bare counter allegations and submissions. The court has made allowance for the fact that none of the Respondents engaged solicitors and counsel. However it was unhelpful that in his addresses to the court the First Respondent moved continuously between making statements relating to facts, which, as he was sworn in, must be treated as his evidence, and making submissions or complaints in relation to the manner in which he has been treated by the Applicant and by numerous other parties and authorities including the Revenue Commissioners, the Institute of Chartered Accountants, landlords, banks, and receivers appointed the over various assets of the First Respondent and of TPH.

608. Having been sworn in on Day Five the First Respondent introduced himself by saying “Judge I've run Tuskar Property Holdings Limited now for nearly two decades and we have done our very best to help a number of clients and companies along the years and I find that some of the allegations that have been made against me, I find them to be very unjust”.

609. A remarkable aspect of the First Respondent’s address to the court was the admission of flagrant breach of the orders of disqualification and restriction made by Dunne J. in the matter of Tuskar Asset Management Plc. That order was made on 9 October 2013 and provided for disqualification of the First Respondent for a period of three years, an order which expired on 8 October 2016, and an order of restriction, for a period of five years which expired on 8 October 2018.

610. The First Respondent said the following: “I did not seek to go behind that order in my day-to-day role as an employee or an accountant for Tuskar Property Holdings, but I did seek to have the order appealed. And that was done by my legal representatives, who helped defend, at that time, what was called the Section 160 application brought by the liquidator of Tuskar Asset Management vehicle.”

611. He referred to arguments and submissions which had been made to Dunne J. and to his belief that an appeal had been lodged but said that he did not know the result of that appeal. He continued by stating “I've continued to carry out my work for the Company, Tuskar Property Holdings, up to the time that a letter was received from Revenue saying that it wished to have Tuskar Property Holdings, which had been dissolved at this point, restored to the CRO. And that letter was sent to my brother-in-law, Adrian O'Reilly, and I responded to that letter on behalf of Adrian O'Reilly”.

612. In relation to the roles of Mr Sugrue and Dr. O'Reilly the First Respondent stated that Mr Sugrue was a friend of his and continued:

“He became a director at my request and Adrian O'Reilly became a director at my request because of the order made by Ms Elizabeth Dunne that I should be restricted and disqualified. Now I'm being accused of carrying on as a director making decisions and behaving like a director. I would submit that I was doing my job and that I've always had to answer to the directors. I didn't take the initiative and go around in front of them when legal matters arose that Tuskar Property Holdings had to deal with, when legal matters arose that Hynes Jewellers (Wexford) Limited had to deal with, when legal matters arose that JW Fashions had to deal with, they were all handled by solicitors because the Companies themselves could not be lay litigants. And that's why in these proceedings I understand the Tuskar Investment Group Limited has suffered a judgment in default, because it has no legal representation and no right of audience in these proceedings. So I won't speak for that company”.

613. The First Respondent referred repeatedly to claims for rebates of VAT and other expenses incurred by TPH. He said that these arose from the role of TPH “on behalf of the Companies and the property syndicate which Tuskar worked for. That company syndicate became a company called Tuskar Asset Management Plc...” He said that the VAT refund and other claims submitted to Revenue were ongoing, that TPH continued to trade and opened a bank account with Bank of Ireland and that he continued to work for TPH since Revenue were “sitting on those claims”.

614. It is clear from the manner in which the First Respondent referred to both Tuskar Asset Management Plc and TPH, that when Tuskar Asset Management failed, receivers and a liquidator having been appointed, the First Respondent maintained TPH as the vehicle through which he continued his activities, including the diversion of monies sourced from the Companies, from investors and from other third parties.

The Employment Contract

615. The First Respondent referred to his “Employment Contract” and said the following:

“I was asked by the Applicant did I have a copy of a contract and I admit that I drew one up, for that very purpose, to give to the liquidator. And it includes a clause that I be remunerated a sum of money. Now I haven't received that remuneration and I haven't claimed any remuneration, I have just put it into a document to record what I feel I'm entitled to in respect of my services and my employment with the Company that employed me, Tuskar Property Holdings Limited”.

616. This was a reference to the draft of an employment contract referred to frequently by both the First Respondent and the Third Named Respondent and which purported to provide for the payment to the First Respondent of a sum of €1.5 million on the occurrence of a liquidation of TPH.

617. The First Respondent said that he never held himself out to be a director or an employee of HJW or JWF. He confirmed that he had “signed paperwork and put together documents to help the Companies to continue in their business”.

618. Commenting further in relation to his “Employment Contract” the First Respondent said: “I haven't been paid a fraction of what I set out in my employment contract. I haven't claimed it either against Mr Kirby. Nor will I be doing that. There is a clause in the wording of the document where I will be paid over the sum of a €1 million in the event the Tuskar Property Holdings goes into liquidation. On reflection, that's a rather silly clause to have in anyone's employment contract. But I put it there because of the background to this case, Judge, and the fact that I didn't receive any payment or remuneration from Tuskar Asset Management Plc and the fact that all of my rental income from the properties that I own with my partner and have large mortgages in respect of buying those properties, which we are negotiating at the moment with the banks, they're all going to be the subject now of this freezing order and I thought it would be fair and justifiable that I would have the benefit in any settlement of the liabilities that I am of a view that I should volunteer to resolve the liquidator of the Companies, that I would get the benefit, a credit for the balance brought forward on the directors current account, which is in favour of myself and Noreen Hynes, that's a buildup of monies that have been advanced into Tuskar Property Holdings by us when we were directors at the time, those monies having been borrowed against our assets, our personal assets, not the assets of the Company, but a gearing up on assets held personally in names of directors as part of their other business outside the Company. And this is the business of the A&N Properties and LAC trading partnership. These are all unincorporated business interests that we've had from many many years.”

619. The First Respondent confirmed that he created he contract of employment, bearing a date of 1 January 2015 after speaking with the Applicant following his appointment. He had been asked by the Applicant for a copy of the contract of employment to which he had initially said “I think I can get one”. When he found that he couldn't “get one” he then drew up the document which he submitted to Mr Kirby. He confirmed that the only reason he prepared the document at that point was that he had been asked for a copy of the employment contract by the Applicant.

Personal monies

620. The First Respondent insisted that at no stage did he take any money out of TPH for his own benefit stating that “I am the person responsible for paying the bills that are presented to Tuskar Property Holdings”. Again, he did not in his evidence address the numerous instances identified by the Applicant of payments and disbursements out of the bank account of TPH which were for the benefit of the First Respondent and others and were unrelated to any discernible assets or business activity of TPH.

621. The First Respondent continued by referring to the treatment of his personal income and stated:

“There is income from my personal assets that was collected by Tuskar Property Holdings. Prior to Tuskar Property Holdings collecting the income this was collected by various letting agents. Tuskar was put into receivership – sorry it wasn't put in receivership itself the assets the Tuskar Property Holdings owned were put into receivership around the time of 2009 when Bank of Scotland had appointed Declan Taite from Farrell Grant Sparks at the time as a receiver over certain assets that Tuskar Property Holdings had built. That receivership was concluded. Mr Taite – he signed a discharge and that was the end of the receivership. I was disappointed to hear in these proceedings that Mr Declan Tait believes that Tuskar Property Holdings was insolvent at that time. We weren't aware of that. When we made the application to have Mr Taite removed as the receiver, that is not mentioned or brought to our attention”.

622. The First Respondent claimed that the receiver Mr Taite had failed to keep up to date the records of TPH. He said that after the discharge of Mr Taite as receiver when the Company “came back into the control of myself and Noreen”, because of the disqualification and restriction orders made by Dunne J. he approached Mr Sugrue and Mr O'Reilly to replace himself and Noreen as directors of TPH, although he claims that the restriction and disqualification orders were under appeal.

623. The Applicant says that he had been unable to trace any record of an appeal pending, let alone any determination of such an appeal.

624. A notable feature of this evidence is the confirmation by the First Respondent that he used the bank accounts of TPH to receive and retain rental and other income from property and assets owned by him personally, which led to the intermingling and disbursement of funds described in Part Six above.

625. The First Respondent complained about what he described as a refusal on the part of Revenue to engage in relation to the affairs of any of the Companies the subject of these proceedings.

626. The First Respondent referred to actions which he had taken in relation to the Companies after the expiry of the disqualification and restriction orders, including correspondence relating to VAT, rebate claims and such matters. He stated that TPH provided management services to the other companies “that are involved in the liquidation and dealing with other companies and clients over the years”.

627. The First Respondent then referred to other assets which he said had been acquired by TPH including three commercial units in Wexford town. He made no reference to the residential properties in Dublin, the rent for which was received in the bank accounts of TPH and JWF.

628. The First Respondent said that he was disappointed to read the witness statements of Colm Sugrue and Fiona Hynes and stated that he had been reluctant to embark on cross examination of friends and former directors of the Company. He denied being a party to any forgery of signatures on share transfer forms or minutes of meetings relating to the transfer of shareholding in HJW.

629. In relation to the practice of moving monies in and out of the bank account of TPH and as between it and HJW and other companies the First Respondent said that this was done with a view to minimising bank charges, although he offered no explanation as to how this was achieved or as to how this would justify the payments made to himself or other third parties.

630. The First Respondent said that he thought that the court could now assist and there would be a fair and just result if “I could be allowed to get into a discussion with Mr Kirby or into dialogue about the composition and the origin of the monies that appear on the certificate of the partner in Hayes that made the application to bring these matters forward into the commercial court”. He submitted that he could offer explanations in relation to individual payments if given the opportunity to do so.

631. The details of the payments out of TPH and identified by the Applicant were set out extensively in the Points of Claim and in the witness statement of the Applicant served in advance of the hearing of these proceedings. The Applicant's evidence, uncontradicted, is that no effort was made by the First Respondent to address the payments described in that witness statement.

19 North Main Street, Wexford

632. Referring to the repossession of 19 North Main Street, Wexford by the landlords Messrs Stone and Stack, a repossession in fact effected by the sheriff, the First Respondent claimed that items which were the property of HJW were retained comprising computers, fixtures and fittings and stock. He alleged that a further “ransom” amount was sought by the landlords as justification for retaining those items, said to be an amount owed to the landlords solicitors William Fry. The First Respondent submitted that if HJW had received back the items which were surplus to the amount owing in respect of rent HJW would have been in a very financially healthy state.

The move to 113 North Main Street

633. The First Respondent referred to the “move” to 113 North Main Street, Wexford, stating that “now that Hynes Jewellers had no home, it was seeking to have another premises, commercial premises and it availed of a company that Mr James Wallace kindly offered to Frank and Fiona in order for them to take out a new lease with a new landlord and continued trading from the premises at 113 North Main Street, Wexford”.

634. The First Respondent then complained about the role of Fiona Hynes. He contradicted the allegations which she had made regarding her absence of knowledge of the business affairs of JWF, at the same time stating that he had not been party to or privy to any board meetings of JWF involving Frank Hynes and Fiona Hynes.

635. The First Respondent addressed the allegation by Fiona Hynes that she did not know or understand that she was ever signing documents which would have the effect of selling her shares in HJW to TPH. He said that he was in attendance at meetings at the offices of TPH where all members of the Hynes family were present.

636. Although these very general assertions were made by the First Named Respondent he did not cross-examine Fiona Hynes when she gave her evidence that she had never agreed to any sale or transfer of her shares in HJW to TPH. Nor did he claim to have himself attended the meeting of directors of HJW which purportedly approved the transfer of the shares, leaving uncontradicted the evidence of Fiona Hynes that she had not participated in any valid meeting giving such approval. That being the case, I accept the evidence of Ms Hynes regarding those meetings and the purported share transfers.

Post liquidation engagement

637. The First Respondent complained that the liquidator had never written to him to seek clarification of matters such as the Revenue liabilities and other matters and continued “and I'm the person who is the most knowledgeable about these matters, being a former chartered accountant”. He then said that all of the registered directors and officers who received correspondence from the Applicant passed the paperwork to him asking him to answer the questions, which he did as best he could. He did not demur from the proposition that he regarded himself as the appropriate person to reply to all such correspondence.

638. The First Respondent disputed the Applicant's claims that no proper books and records of the companies were maintained. He said that a number of the records of HJW are not with the liquidator because they were on computers that were seized when the possession order of the Circuit Court was enforced against HJW.

639. According to the Applicant this statement in the course of the trial was the first occasion on which it had been suggested that such records were available on computers. The Applicant said that if any of the Respondents had accepted his invitation to attend at his office to inspect such records as he held, the question of access to computers, and use of an appropriate password, could have been raised.

640. Having asserted that books and records of all the Companies are generally “with the liquidator”, the First Respondent was unable to describe those records, a significant omission for a person who had been a chartered accountant.

Payments from bank account of TPH

641. The First Respondent said that payments made out of the bank accounts of TPH were made “at the behest of clients” and that they went “towards the payments made on behalf of Tuskar Asset Management Plc”. How this assists in justifying such payments was not explained.

642. The First Respondent continued: “Now those payments and those transactions were dealt with and gone through in great detail by the liquidator of Tuskar Asset Management Plc, who subsequently, in the tribunal convened by the Institute of Chartered Accountants and we would be here for a very long time if I was able to give the 13 books of evidence produced in the tribunal to demonstrate to this Court the manner in which those funds that appear on Mr Jeremy Erwin’s certificate (i.e. the solicitor’s certificate for entry of these proceedings in the Commercial List) to demonstrate how they were applied and where they came from and what we've done with the fund. There is a suggestion that I have received out of that a payment of Tuskar Property Holdings a figure of €200,000 to a bank account in my own name. I'm not disputing that, judge. I haven't disputed that. But afterwards, the €200,000 that came into my personal bank account was applied and spent on Tuskar Asset Management Plc. And that is verified, incontrovertibly, in the evidence in the tribunal and not so much in the defending of the action brought about by the Section 160 proceedings”.

643. Again, no basis was put forward to justify TPH money being “applied and spent on Tuskar Asset Management plc”.

644. The First Respondent said that extensive evidence had been given at the “tribunal” that TPH had received payments from Tuskar Asset Management Plc and that “the same principles apply in these proceedings that Tuskar Property Holdings has received payment from Hynes Jewellers (Wexford) Limited and JW Fashions for managing those companies”.

645. There are a number of difficulties with this evidence. Firstly, the reference to a “tribunal” is a reference to proceedings at the Institute of Chartered Accountants which led ultimately to the termination of the First Named Respondent's membership of that institute.

646. Secondly the First Respondent made no effort to bring before this Court either in advance of the hearing or at the hearing itself the evidence which he said would demonstrate the basis upon which payments were made out of TPH.

647. The First Respondent made the general assertion repeatedly that payments made out of TPH were made “for the benefit of investors of companies that Tuskar Property Holdings was providing service to”. This is contradicted by the direct evidence given by the Applicant of the identity of payees, and of the absence of any vouching documentation to verify the payments.

648. The First Named Respondent made a series of submissions going to the certificate of Mr Erwin. That certificate related to the application for entry of the proceedings in the Commercial List and not an application for judgment.

649. The certificate of Mr Erwin was relevant only to the application for entry of these proceedings in the Commercial List. When this Court (Barniville J. as he then was) made the order entering these proceedings in the Commercial List on 22 June 2020, none of the Respondents were represented, and the court was satisfied as to service of the application for entry of the proceedings. Accordingly, the opportunity to take issue with the certificate of Mr Erwin had long since passed before the trial of the case. The substantive remedies now sought against the Respondents are not grounded on that certificate but on the evidence adduced by the Applicant at the hearing of these proceedings. The First Respondent’s fixation with challenging the certificate of Mr. Erwin illustrated his persistent failure to address the substance of the claims made against him and the evidence adduced by the Applicant. Role of the Second Respondent Frank Hynes and the Fifth Respondent Martina Hynes

650. The First Respondent stated the following: “… Martina and Frank, they are jewellers and gifted jewellers – and Frank is qualified – though not at the level of professional accountants or solicitors. They have sought my help and I've given them every effort, every help I could offer and I fully recognise that I've gone too far on occasion. But it's with the best intent in the world. There has been a long-standing dispute between the directors of Hynes Jewellers (Wexford) Limited and the landlord. It's not something that I was aware of prior to the time Frank came to call upon me to ask me for help. When he explained his dilemma, he had issues with – on a few fronts and there is no – I have not been successful in bridging the gap between the landlords and Hynes Jewellers (Wexford) Limited, I have not been successful in recovering the assets that are itemised by William Fry. I did my best to do that for Frank, I felt that, I don't know, I felt that if those assets could be returned to the Company, Hynes Jewellers (Wexford) Limited could carry on. It no longer had the overhead of a lease, which it could no longer afford with the landlord, it had a banking arrangement with Bank of Ireland and inside Hynes Jewellers (Wexford) Limited there were plenty of assets and some of those assets are in the form of a pension, which you will find in an amount in favour of Frank and there was one there in favour of Fiona as well – I'm not very well formed (sic) about Fiona's.”

“They traded, as best they can on the Main Street Wexford for many many years and they've had the good times and the bad times, but in the recession time I think the skill set of Frank Hynes as opposed to selling the jewellery – people could not really afford luxury items at that time – it was more his skill sit in repairing and fixing watches that brought the income into the Company. … the employment contracts at that time judge were all resting in the name of Hynes Jewellers (Wexford) Limited. None of the staff under those employment contracts moved over to the new company”.

651. In relation to the transfer of the jewellery business the First Respondent had the following to say: “I was up to the point where I was talking about the health and state of the Hynes Jewellers (Wexford) Limited company and the payroll costs of that company. And I felt that they needed to be reviewed. And we had a meeting with all the staff to review the payroll costs of that company Again, that's done with a view not to injuring any party or – everyone had their say, like we’re being given an opportunity to have our say here. But there were agreements made, decisions made at that meeting with the directors present and the staff present and it was decided to seek out another premises and to move the business of Hynes Jewellers to the new premises. But until such time as the matters between the landlords and Hynes Jewellers (Wexford) Limited had been resolved and given the exposure that the directors – and I say directors, I think Frank Hynes had the main exposure to guaranteeing the conditions of this and guaranteeing the conditions of the borrowings of the Company, I'm not so sure, or I can't recall at this stage of those guaranteed obligations were low-key. But all who came to the meeting were of the view that this was the way forward. One employee was not interested in the route forward in that way and became emotional and left the meeting, the owner went after her and comforted her.”

652. The First Respondent continued: “I wish things had been done differently in the past, I think that would be an honest statement to make. By that I mean I wish I hadn’t asked Colm to be a director and I wish I hadn't asked Adrian to be a director. But they did so to help me. And for that matter James Wallace. These are all good people. And they've done the best that they can to help, I guess, me. And that's because I took a blow when I was accused of being and adjudicated to be a shadow director of Tuskar Asset Management and Justice Dunne made her ruling on that occasion. I'm gathering that I wasn't going to court and I didn't give a good enough explanation of certain transactions that took place in Tuskar Asset Management Plc. So, if this is typical and when I'm involved in a liquidation of Tuskar Property Holdings Limited, I really do not want to find myself back there in that situation again. So, the transactions this time that I am being challenged on, if that's the right word to use, I say they’re the transactions listed on the certificate of Mr Jeremy Erwin. And I'm guessing after that what the transactions are, I really am trying to find out more about those transactions”.

653. He continued: “So if I could have an opportunity to get answers from Mr Kirby, I'm sure he would be – it would be in his interest to explain, I'm sure to me and to the Respondents that you know, item number, transaction number one this is a problem, we say this is a problem for the following reason, we have picked this transaction up from this bank statement or this transaction, we would like you to let us have your say about the transaction.”

654. The First Respondent continued with further complaints saying that he had not been afforded an opportunity to address the detail of the transactions. He ignored the fact that details of the transactions complained of in these proceedings were contained in comprehensively particularised Points of Claim and the extensive witness statement delivered by the Applicant in advance of the hearing of these proceedings. At one point he confirmed that he had not read those documents.

655. In relation to the allegation of fraudulent trading the First Respondent said the following “the whole term ‘fraudulent trading’ you'll appreciate that’s worrying sound for anyone. To be running a company without having adequate resources, that’s a problem. But anyone involved in this case on the Respondent’s side done their very best to help these companies”.

€1m from client of Partners at Law

656. In reference to the lodgement of €1 million to the account of TPH from the client account of Partners at Law the First Respondent said the following: “The monies to fund that payment came from a lady called Mary Rood, a €1 million was put into the account of Tuskar Property Holdings and I don't know was it spent as set out in the accounts of Tuskar Property Holdings”. Again, the evidence and particulars delivered by the Applicant demonstrated the manner in which that money had been dispersed out of the account of TPH, clearly not returned to the investor or applied for her benefit.

657. The First Respondent continued: “At the time I was a director. I brought the money in from Ms Rood into the Company. The lodgements were reflected as capital coming into the Company, not from Ms Rood, but from me, because I brought it in. And then its paid out to the various investment that Tuskar was managing and different projects that Tuskar was managing, none of them being personal projects of mine. Ms Rood had a shareholding in TAM, so that she ultimately benefited from those payments.”

658. The First Respondent sought to explain this by stating that there was an opening balance in the TPH accounts for a directors loan account and that all transactions relating to “this type of transaction were posted” to that account. He continued “so all of the monies that were paid into Tuskar Property Holdings bank account were recorded as if they had been put there by the directors, the directors having arranged that. But it's not false accounting. And that auditor Mary O’Loughlin, explained that to me and I went through that with a fine-tooth comb. There was a reconciliation of the bank opening balance moving towards the closing balance. Every single transaction has to be posted”. He continued by asserting that this amount still “sits” in the directors current account.

659. This was a clear admission that money sourced by him from elsewhere, notably the €1 million from a client of Partners at Law, was not his or his wife’s money, and yet was being treated as though they had been lodged by the directors. The evidence shows that this amount was disbursed to the First Respondent and other family members, and never applied for the benefit of the investor or of TPH itself.

Other evidence

660. The First Respondent denied having forged any signatories on accounts. In relation to signatures on financial statements of TPH he said that he signed whatever he was asked to sign by the auditor.

661. In relation to the approval and signing of accounts and returns after his resignation the First Respondent apologised, acknowledging that this was not something that he should have done after his resignation as a director, but he “did not think this would be a problem”.

662. In relation to the “Options Document” the First Respondent acknowledged that much of its content related to issues unrelated to these proceedings, notably ongoing disputes between him and Bank of Ireland and issues between him and the Institute of Chartered Accountants.

663. The First Respondent agreed that there are many transactions which overlap between the accounts of the Companies. He said that the assets of HJW “appear on a schedule produced by William Fry (solicitors to the landlord) but they are being held back, they are not being released and returned to Hynes Jewellers (Wexford) Limited because a further payment is required or demanded by a landlord and the directors of Hynes Jewellers (Wexford) Limited are not happy with that. That's where the assets lie in relation to that company. I have outlined them and particularised them to the best of my ability in my affidavit, which is a lengthy affidavit, but it is in my opinion it's factual it's to be best of my belief”. Apart from these bald statements, no explanation was offered during the course of the First Respondent's evidence as to what assets of HJW remained in the possession of the landlord of 19 North Main Street.

664. Illustrative of the “non sequitur” which characterised the evidence of the First Respondent is his claim that assets of TPH had been taken by a receiver: “So having taken legal advice when I worked for Tuskar Property Holdings, we engaged the services of a legal firm in Waterford to seek out and recover some of the items, assets in particular belonging to Tuskar Property Holdings that had been sold by Grant Thornton, acting as receiver of certain assets that were belonging to A&N Properties outside of Tuskar Property Holdings”.

665. The First Respondent suggested that certain of these assets, apparently owned or held by A&N Properties had been paid for by TPH and that he had obtained legal advice to the effect that there were grounds to seek to recover their value from a partner at Grant Thornton who had acted as receiver of assets of A&N Properties, although he did not say who would be the beneficiary of any such recovery action.

666. The First Respondent stated that rental income from his properties is covered under his own personal tax returns, hence the complications which would flow if he were to be held personally liable for the tax liabilities of the Companies in liquidation. He continued: “This will overlap into my income and my expenses. The income from my property is paid into the bank account of Tuskar Property Holdings. It is not the income of Tuskar Property Holdings Limited, it's not an asset of Tuskar Property Holdings Limited, but has been spent by Tuskar Property Holdings on the Companies that are in liquidation. Those monies were used to fund the restoration of Hynes Jewellers (Wexford) Limited. Those monies were used to fund the repayments on the commercial lease for the car. There was two commercial vehicles were financed, one with Simpson Finance and one with a French company”

667. Later he continued: “The allegation, I think, in these proceedings is that the directors and that Alan Hynes is accused of being a shadow or de facto director committed the Companies to these contracts after a point in time when the landlords order had been carried out in respect of taking back the property for Hynes Jewellers (Wexford) Limited and taking certain assets to the value of €54,000 to discharge the rent arrears. But there were plenty of assets left behind after that order has been executed. They were itemised by William Fry. They're just not being released because William Fry believe that their client is entitled to a firm payment of €30,000 for storing those items. There is also the reference in a letter from William Fry that if Hynes Jewellers (Wexford) Limited, or Tuskar Property Holdings or any of the directors didn't pay that €30,000 to William Fry's client account in Dublin by a certain date that their client would proceed to sell all the assets. Now, the assets are copied and itemised on the audited accounts, on the balance sheet of Hynes Jewellers (Wexford) Limited to the tune of €60,000 odd Judge. So my question would be, if we are facing accusations that improper books and records were kept and that this has probably given the liquidator the grounds for raising these transactions as concerns, they having seen them in the audited accounts, I'm making the, I believe, the assumption that he would not have saw fit to actually raise those issues, because he would have satisfied himself that they are properly accounted for in the books and records of the Company. But after Tuskar Property Holdings was dissolved by the CRO, there was no further need for the Company, at that stage because TIG had been formed”.

668. With reference to TIG the First Respondent stated the following:

“Now, to make it very clear, and I haven't said this so far, there was no physical transaction, no physical transfer of any asset to TIG. TIG had no bank – sorry, TIG being Tuskar Investment Group Limited, named from the outset as the Fourth Named Respondent. It doesn't have legal representation, so I haven't spoke out for it. But in my evidence about books and records and in defending my role as an employee of the Company, I'm personally a director and I’m being accused of a shadow director when I ought not to have been a shadow director. There is no transfer of assets, even though I drew up a document setting out the process. The result of that document, Judge, is that it didn't happen. And therefore there is nothing that TIG owns or can claim can give back to any of the Companies, because it didn't take anything from them”.

669. Once again within this passage there is a series of fundamental contradictions. When TPH was dissolved compulsorily for failure to file returns, it was restored on the application of the Revenue Commissioners as creditor and the Applicant appointed liquidator. The First Respondent then goes on to make the contradictory statements that “I'm personally a director and I'm being accused of a shadow director when I ought not to have been a shadow director”.

670. The First Respondent repeated his blame of the auditors and protested that the Applicant had not brought the auditor before the court in support of the allegations as to the inadequacy of books and accountancy records kept by the Companies.

671. The First Respondent said that he could contribute to the costs awarded against him or that he would offer to the liquidator the proceeds of costs awarded in his favour: “One of the headings that I was offering to the liquidator was that I would use the costs that had been awarded to me on a party and party basis against the Institute of Chartered Accountants as part of my means of discharging the tax liabilities that are featuring in these proceedings on behalf of all the Respondents. That is a limited order. It would not cover the tune of 2.46 million. So under another category of my proposal, I sought to call upon the Bank of Ireland to honour a loan contract which we had signed with them – we being myself and Noreen Hynes – which is for a considerable amount of money 6.4 million. And that was – in that facility there is an equity clause of €1 million whereby I could deploy that asset with the permission of Bank of Ireland to facilitate this settlement of the mareva order. That will be the second category where I would call upon funds to satisfy the mareva order.”

672. The reference to a mareva order made repeatedly by the First Respondent and on which he was much focused during the hearing was the order made against the First and Second Respondents at the commencement of these proceedings. No evidence was adduced before the court of any amount owed, much less adjudicated or taxed, by the Institute of Chartered Accountants or any obligation on the part of Bank of Ireland to provide funds to settle liabilities of the Companies.

673. In relation to the absence of evidence to vouch the payments made out of the Companies bank accounts, the First Respondent said that “the transactions going through the accounts of Frank and Martina Hynes are not, in my opinion to be left out of the evidence that I give. I would have thought that evidence would come solely from Frank and Martina. Because of this mareva order, which we won't go on about, but the overlap appears now based on the evidence that was provided to the court on Friday. I wasn’t there on that occasion.”9 Further cross examination of First Respondent

674. On Day Seven the First Respondent was cross-examined by counsel for the Applicant. At the outset he was reminded that earlier in the hearing he had indicated that he would “take as Frank puts it, on the chin the penalties that the court can impose for the behaviour that has been highlighted in the 21 points”. He insisted under cross-examination This was a reference to the First Respondent’s failure to attend the first several days of the hearing when much of the Applicant’s evidence was given.

that he was opposing the claims of fraudulent trading, reckless trading, failure to maintain proper books of account and the claim that he was a shadow and/or de facto director.

675. The First Respondent stated that he also wished to contest the Applicant's application for a disqualification order, contrary to what he had stated at the outset of the hearing. His only explanation for this change of position was that he was under “some pressure” when the court first sat in the matter.

676. The First Respondent stated in relation to the so-called “Deed of Retirement” relating to Tuskar Investment Group Limited that this document had been prepared in the context of an intention of consolidating matters for the Companies under one company namely Tuskar Investment Group Limited which would be a group or holding company for all the other companies. He then confirmed that no transfer of assets or companies ever actually occurred pursuant to that document and said “TIG did not take up any of the assets from any company. TIG is empty, it has nothing”. Cross examination of First Respondent regarding statement of affairs

677. The First Respondent was questioned in relation to the “Combined Statement of Affairs

30 March 2020” which he had furnished to the Applicant on 4 October 2020.

678. The statement included under HJW a leasehold property stated to be worth €350,000. The First Respondent confirmed that this was a reference to the leasehold property at 19 North Main Street, Wexford which had been repossessed by the landlords pursuant to an order of the Circuit Court. Therefore HJW had no interest in that leasehold property and he agreed that there was no basis for inserting a value of €350,000 for it.

679. The First Respondent then sought to suggest that this figure instead represented the cost of leasehold improvements on the premises, for which the Company had borrowed €350,000 from Bank of Ireland. It was put to the First Respondent this was contradicted by the fact that in the financial statements of HJW for 31 January 2015 there was an entry for the leasehold interest of €160,000. If that had been correct, the statement of affairs figure of €350,000 would mean that the Company had spent an additional €200,000 or €190,000 on the premises in the same year in which it had lost possession of the property following the proceedings in the Circuit Court, and after the Circuit Court decree for possession had issued.

680. The First Respondent said that he had simply drawn up the document based on conversations with Fiona Hynes and Frank Hynes and it was his best effort to produce a statement of affairs. He did not propose to be “drawn into” questions as to the standard of his work in preparing such a document.

681. The First Respondent said that he would have to go back to notes and other information in relation to this in order to answer questions in relation to the statement of affairs. Under further questioning he confirmed that all of the figures appearing in the estimated statement of affairs were estimates and they had been inserted without examining any records or statements or other documents.

682. In relation to the €1 million received from Partners at Law the First Respondent sought to explain this by stating that there was an opening balance in the TPH accounts for a directors loan account and that all transactions relating to “this type of transaction were posted” to that account. He continued “so all of the monies that were paid into Tuskar Property Holdings bank account were recorded as if they had been put there by the directors, the directors having arranged that. But it's not false accounting. And that auditor Mary O’Loughlin, explained that to me and I went through that with a fine-tooth comb. There was a reconciliation of the bank opening balance moving towards the closing balance. Every single transaction has to be posted”. He continued by asserting that this amount still “sits” in the directors current account

683. This was a clear admission that money sourced by him from elsewhere, notably the €1 million from a client of Partners at Law, was not his or his wife’s money, and yet was being treated as though they had been lodged by the directors.

684. When questioned in relation to the claims that he acted as a shadow director or de facto director the First Respondent acknowledged (Day Seven) that he was the person in control of TPH. He stated “I would accept that I am the person that operates that company. Not the others.”

685. The First Respondent persisted in his denial that he was a shadow or de facto director of HJW or JFW. He stated that he was not in a position to give sufficient detail in relation to the affairs of those companies, although he was attentive to and helped the first and Fifth Named Respondents and Fiona Hynes in relation to those companies. He insisted that the dayto-day running of those companies including the buying of stock, paying creditors, landlords and such matters was “not anything that he got involved in”.

686. The First Respondent persisted with the proposition that HJW was managed by TPH, having admitted to controlling and operating TPH. It was put to him that the effect was that he was the person managing the affairs of HJW. When questioned further in relation to evidence given by Fiona Hynes, James Wallace and others that he was a shadow director he stated “so any documents that have been created by others to make out that I am a shadow director, I just run for cover. I run a mile from it. I don't want to be there”. He did not say what documents he was referring to.

687. The First Respondent stated that he did not get involved with Frank and Martina Hynes until “I think around 2015”. The First Respondent was still the subject of a disqualification order, which expired in 2016, and a restriction order, which expired in 2018. He insisted that he did not have any role or connection with his cousins until “around 2015” which was a period of only two years into the disqualification and restriction orders.

Closing submissions of the First Respondent

688. The First Respondent made a closing submission. It did not address in sequence the claims of the Applicant and can best be described as a selection of themes to which he returned during the hearing.

689. Firstly, that in his calculation of the liabilities of TPH, the Applicant has conflated the liabilities with liabilities of Tuskar Asset Management. He said that the claims which are listed by the Applicant in the statement of assets and liabilities under the heading of “investments” were all made in the liquidation of Tuskar Asset Management. This a reference to a figure of €3.651 million included in the Applicant’s summary of the liabilities of the Companies in respect of “investors” which include the €1m paid to TPL by Partners at Law. He says that this same figure appears in relation to the liquidation of Tuskar Asset Management and is therefore a duplication.

690. Secondly, the First Respondent states that the Applicant has not reviewed or accessed the computerised books and records held by the Companies which came under his control. He refers to the offer which he had made to assist in the liquidation process in connection with statements of assets and liabilities for a reasonable fee had been declined by the liquidator.

691. Thirdly, the First Respondent stated that clean audit opinions had been given in respect of the accounts of HJW and JW Fashions and he had therefore made all disclosures which he had been asked to make and had offered to assist in the liquidation process “for a fee”.

692. Fourthly, the tax liabilities in respect of TPH overlap with the tax liabilities of HJW and JWF.

693. Fifthly, the Applicant should not have entered into an agreement with Revenue settling the tax liabilities of the Companies, particularly where he had not reviewed the computerised books and records of the Companies.

694. Sixthly, the First Respondent stated that he made numerous offers to the Applicant to discharge the “preferred creditors”.

Conduct of the defence

695. A number of features of the manner in which the Respondents addressed the trial of this action merit comment at this point.

696. Firstly, various of the Respondents were selective as to which parts of the trial they attended. On Day One the First Named Respondent joined by audio connection only stating that he was not in a position to use a video link.

697. Secondly, the First Respondent participated only occasionally and ultimately only attended for the purpose of giving evidence and being cross-examined many days after the commencement of the trial. He confirmed in his evidence that he had not listened to the evidence given by the Applicant in court or even read the documents which had been served on him in advance of the hearing and in some cases many months earlier in the form of Points of Claim and exhibits to the Witness Statements. The trial date had been fixed six months in advance.

698. Thirdly, inconsistent positions were adopted by various respondents during the course of the hearing. They indicated at the outset that they did not intend to object to certain of the relief sought or certain of the evidence being advanced. In the second week of the hearing, after the Applicant had given his evidence, both the First and Second Named Respondents sought to object to evidence given and pursued cross-examination, having initially indicated that they did not intend to do so. Since they were unrepresented, the Court indulged the Respondents, but the effect was disruptive to the orderly conduct of the hearing.

699. The Third Named Respondent did not participate in the hearing at all.

700. Extensive evidence was sought to be given by the First and Second Named Respondents which had never been referenced in any witness statements. In the course of seeking to give that evidence they appeared, attending remotely, to be referring to documents and details which had never been delivered or served on the Applicant and were not presented to the court.

701. I referred earlier to the judgment of Clarke J in ACC Bank Plc v Kelly [2011] IEHC where he described the manner in which the court should seek to achieve fairness as between parties, particularly where a party is unrepresented. The Respondents were of course entitled to participate in the trial without legal representation, but they exhibited total disregard for the importance of the hearing. Their intermittent attendance was disruptive to the presentation of the Applicant's case and the conduct of the trial itself. The three most egregious examples of this were as follows. Firstly, the unexplained absence of the First Named Respondent from the court room, even on a remote basis, at the very time when he was due to be cross-examined, causing a delay to the following day in the commencement of his cross-examination. Secondly, the statement by the First Respondent that he had not read many of the papers which had been served on him including the Applicant’s Witness Statement and its exhibits. Thirdly, the statement by the First Respondent that he had not been present for and listened to all of the Applicant’s evidence. Having said this, he made occasional selective references to parts of that evidence.

702. Too much of the trial time was taken up with the distractions caused by the disruptive conduct of the First Respondent. The case must be decided by reference to the evidence relating to the transactions and other events giving rise to the proceedings, and not by reference to the conduct and comportment of the First Respondent at the hearing. Nonetheless, when it comes to the discretionary aspect of the reliefs sought by the Applicant, the court has regard to the First Respondent’s blatant disregard for company, tax and other laws as revealed by his approach to these proceedings.

703. The Applicant assisted the court by presenting the evidence in relation to each company separately, albeit that the evidence overlaps extensively both as between the Companies themselves and the separate allegations against the individual respondents. I next turn to consider the position of the individual respondents sequentially.

PART ELEVEN: The First Respondent: Alan Hynes

704. The reliefs sought against the First Named Respondent are as follows. In referencing these I refer to the paragraphs in the Amended Originating Notice of Motion.

(2) A declaration that the First Respondent has acted as a shadow director and/or a de facto director of the Companies (Sections 221 and 222 of the Act)

(3) A declaration pursuant to Section 610 of the Act that the First Named Respondent be personally liable for the debts of the Companies by reason of being knowingly party to the carrying on of the business of the Companies in a reckless manner and/or with intent to defraud creditors of the Companies and/or creditors of other persons or further fraudulent purposes.

(4) A declaration pursuant to Section 609 of the Act that the First Respondent be personally liable for the debts of the Companies by reason of the Companies being in contravention of Sections 281 to 285 of the Act by failing to keep adequate accounting records, in circumstances where the First Respondent is in default in respect of that contravention.

(5) A declaration pursuant to Section 612 of the Act that the First Respondent has misapplied or retained or become liable or accountable for money and/or property of the Companies and/or has been guilty of misfeasance and other breaches of duty or trust in relation to the Companies.

(6) An order pursuant to Section 612(2) of the Act compelling the First Named Respondent to restore to the Applicant such monies or property of the Companies as the court shall direct and/or to contribute such sum of the court thinks just to the assets of the Companies by way of compensation in respect of the Respondent’s misapplication, retainer, misfeasance or other breach of duty.

(7) A declaration pursuant to Section 608 of the Act that property of the Companies was disposed of to the Respondent and that the effect of such disposal was to perpetrate a fraud on the Companies their creditors or members.

(8) An order pursuant to Section 608(2) of the Act directing the First Respondent, as the person appearing to have use control and or possession of property of the Companies and/or the proceeds of sale or development of that property, to deliver such property to the Applicant and/or to pay a sum in respect thereof to the Applicant on such terms and conditions as the court thinks fit.

(9) Pursuant to Section 842 of the Act an order disqualifying the First Respondent from being appointed or acting as a director or other officer, statutory auditor, receiver, liquidator or examiner or being in any way, whether directly or indirectly concerned or taking part in the promotion, formation or management of a company within the meaning of Section 819(6), or any registered society within the meaning of Friendly Societies Act 1896 to 2014 or any society registered under the Industrial and Provident Societies Act 1893 to 2014, for such period as the court may direct

(10) In the alternative a declaration pursuant to Section 819 of the Act that the First Named Respondent shall not for a period of five years be appointed or act in any way directly or indirectly as a director or secretary of a company, or be concerned in or take part in the formation or promotion of a company, unless the Company meets the requirements (as to paid up capital) set out in subsection 3 of Section 819 of the Act.

(11) An order providing for the costs of the proceedings including orders pursuant to Section

846 and/or 820 of the Act directing that the First Named Respondent pay the costs incurred by the Applicant in investigating the matters the subject of these proceedings and in collecting evidence in respect of those matters, including so much of the remuneration and expenses of the Applicant as are attributable to such investigation and collection.

Was the First Named Respondent a shadow director or a de facto director of the companies?

705. The First Respondent was a director of TPH from the date of its incorporation on 30 March 2000 to the date of his resignation on 1 October 2013. I have concluded that thereafter he continued to occupy the position of director of TPH. He was therefore a de facto director within the meaning of section 222 of the Act.

706. The First Named Respondent was never formally appointed a director of HJW or JWF. I have concluded that at all material times in relation to the events the subject of these proceedings he occupied the position of director of HJW and JWF and was therefore a de facto director of those companies within the meaning of section 222.

707. My reasons for these conclusions are as follows.

708. I accept the evidence of Fiona Hynes, who was a director of each of HJW and JWF, to the effect that from the time when the First Named Respondent was introduced to the affairs of HJW in 2014 decisions in relation to the affairs of HJW, and later of JWF were taken by the First and Second Named Respondents together, with the First Respondent taking a lead on financial and legal matters.

709. The First Respondent took it upon himself to represent HJW in litigation matters. When the Collector General presented the petition for winding up of the company the First Named Respondent made a request for an adjournment. He made representations that the petition should not proceed pending the outcome of separate proceedings between the Second Respondent and the landlords. The petition was adjourned to 13 January 2020 and the First Named Respondent informed Revenue that he was unable to be in court on behalf of HJW on that occasion due to a storm.

710. The First Named Respondent swore affidavits on behalf of HJW in proceedings entitled Frank Hynes v. HJW and Others in an affidavit sworn on 16 September 2016. In this affidavit he described himself as “the accountant for TPH company secretary to HJW that is named as the Defendant in the within proceedings”. He continued: “I make this affidavit from first-hand knowledge for the purpose of grounding a full defence to these proceedings and to highlight to this Honourable Court the shambolic behaviour of the firms of solicitors involved in the ongoing dispute between the Governor and Company of the Bank of Ireland and the Defendant”.

711. The First Respondent referred to the Circuit Court proceedings issued by the landlords of 19 North Main Street and provided his history “from first hand knowledge” of that property, the dispute with the landlords and of other properties in which TPH had an interest.

712. In numerous dealings with creditors and other counterparties the First Named Respondent held himself out as representing HJW. When the Company was in contention with the supplier BJ Fitzpatrick and scheduled to attend a meeting with the Second Named Respondent the First Named Respondent attended that meeting and informed the representatives of BJ Fitzpatrick that he was the person they must now deal with in relation to the affairs of HJW.

713. Records of HJW were found by the Applicant at the premises at 3 Rowe Street, Wexford, a premises previously occupied by the First Named Respondent, but in respect of which the lease was held by TPH.

714. The First Respondent has repeatedly asserted that TPH was the secretary of HJW and that he was an employee only of TPH. Yet the Fourth Respondent, being a director and the sole shareholder of TPH has confirmed TPH had no employees. There was therefore no other explanation proffered as to why records of the Companies were found by the Applicant at a property leased to the First Respondent.

715. On the appointment of the Applicant he wrote to the registered directors of each of the companies. He received only limited replies from them. Instead, he received numerous letters and emails from the First Named Respondent in relation to all of the Companies. Many of these were in direct response to the letters which the Applicant had written to the registered directors. Thereafter the First Respondent continued to correspond with the Applicant in relation to the affairs of all three companies.

716. The First Named Respondent asserted to the Applicant that he was exercising a lien over books and records of account of HJW. Later he requested the payment of a fee by the Applicant for the preparation of accounts. In earlier proceedings, before the District Court, he had sworn an affidavit on 5 July 2019 stating that the returns for HJW for the years 2016, 2017 and 2018 had been prepared and were ready to file, if an extension of time for doing so were granted.

717. On the application for finance in respect of the Volkswagen Touareg in November 2019 the First Named Respondent was named as a director of HJW.

718. In the Options Document of 27 April 2020 the First Respondent first referenced the purported “take over” of HJW by TPH and then proposed “Options” to resolve disputes relating to 17 separate issues, ranging across the affairs of HJW, TPH and other disputes between himself and the Institute of Chartered Accountants, various banks and various receivers. In doing so he held himself out as the person with most knowledge of and authority to negotiate in relation to the affairs of the Companies.

719. In the case of TPH, on the date of the First Respondent’s resignation as a director his brother-in-law the Third Named Respondent was appointed a director. The First Respondent and his wife Noreen Hynes had earlier, in 2009, transferred their shares in TPH to the Third Respondent. The change in directors followed the delivery of the judgment of Dunne J. in Tuskar Asset Management plc (In Liquidation).

720. Following the appointment of the Applicant the Third Respondent entered into limited correspondence with the Applicant but it was clear from this correspondence and that the Third Named Respondent sourced any information relation to the affairs of TPH from the First Named Respondent. There was no evidence before the court that the Third Named Respondent as a director acted independently of the First Respondent.

721. Even taking the evidence of the First Respondent himself, and his correspondence with the Applicant, it is clear that after the liquidation of Tuskar Asset Management Plc the First Named Respondent treated TPH as the vehicle through which to continue to conduct his own property and other businesses and intermingled its monies with those of the other companies.

722. The First Respondent appears, at least in part, to have corresponded with and given instructions to McKeever Rowan Solicitors in relation to TPH.

723. From January 2015 onwards all cheques issued by TPH were signed by the First Named Respondent. This of itself would not necessarily be conclusive evidence of directorship, but is an important feature and there was no evidence of any other parties assuming responsibility for payments made by TPH.

724. The First Named Respondent has repeatedly referred to the existence of his “directors current account” in TPH, which he claimed ultimately to be in credit in an amount of €270,000.

725. The First Named Respondent confirmed that much of the income received in TPH was rental income relating to assets owned by him personally. He never provided any satisfactory explanation as to why bank accounts of TPH were used for this purpose.

726. No evidence was adduced of any invoice or statement or payment in respect of a professional services provided by TPH or the First Named Respondent to HJW or to JWF.

727. The evidence in relation to JWF is more limited. But there is no doubt that the First Respondent was directing arrangements for the resumption of the jewellery business by its ‘transfer’ to JWF. When Fiona Hynes sought clarity in relation to her employment status following the commencement of the jewellery trade by JWF at 113 North Main Street, the First Named Respondent intervened. He informed her that she should return any keys to the premises which she held and make arrangements to have her pension transferred to her husband's company. She was informed by the First Named Respondent that “the rest of the employees will be offered jobs by Hynes Family Jewellers Wexford Limited”, an entity which did not exist.

728. Some of the matters referred to above are not in and of themselves conclusive evidence of a person being de facto director. For example the mere fact of the First Named Respondent being the only signatory on the bank account of TPH would not in and of itself be such evidence. Yet when it emerges that for many years at least he was the only person to sign cheques the inference is compelling. When this is taken in the context of all other aspects of his involvement the combined effect is that the First Named Respondent overtly participated in, if not dominated, the affairs of each of the three Companies.

729. A significant feature of this case is the common thread of the First Respondent in all the Companies. His first involvement was in HJW, when asked to support the directors in relation to its financial and legal affairs. He introduced TPH and it was appointed secretary of HJW. When the retainer of the company's auditors and tax advisers Messrs. Asple & Co. was terminated, the First Respondent did not simply replace them in an advisory capacity, and there is no evidence of any fees being charged by him or through TPH for professional advices. The extent of his activity from that time onwards is detailed at length in Parts Five, Six and Seven above.

730. HJW was a family owned company which operated for the second generation of the family the single outlet jewellery business at 19 North Main Street, Wexford. TPH was a company through which the First Respondent had continued to conduct his property investment activities. There was no valid reason why the finances of these two entities should become interwoven by the movement of monies between them, save for the role of the First Respondent in both.

731. JWF was a smaller part of the story. Again, the First Respondent was active in arranging that it commence a jewellery business and its bank accounts were also used to receive, and conceal from his creditors, the rental income flowing from properties owned by the First Respondent.

732. Once introduced to HJW and later JWF, the First Respondent took the opportunity to avail of his influence in those companies to take advantage firstly of cash resources in HJW to the detriment of its creditors and secondly to use the privileges otherwise attaching to limited liability for his own benefit.

733. The First Respondent did not “lurk in the shadows”, to borrow the phrase used by Millet

J. in Re Hydrodan (Corby) Limited (op cit.). His actions were overt and known to creditors and external counterparties of the companies and to Revenue and other authorities. He was therefore a de facto director of all three companies within the meaning of Section 222 of the Act.

Section 610 – fraudulent and reckless trading

734. Section 610 of the Act provides as follows: “610. (1) If in the course of the winding up of a company or in the course of proceedings under part 10 in relation to a company, it appears that –

(a) any person was, while an officer of the company, knowingly a party to the carrying on of any business of the company in a reckless manner, or

(b) any person was knowingly a party to the carrying on of any business of the company with intent to defraud creditors of the company, or creditors of any other person or for any fraudulent purpose. The court, on the application of the liquidator or examiner of the company, a receiver of property of the company or any creditor or contributory of it, has the following power.

(2) That power of the court is to declare, if it thinks it proper to do so, that the person first mentioned in paragraph (a) or (b) of subsection (1) shall be personally responsible, without any limitation of liability, for all or any part of the debts or other liabilities of the company as the court may direct.

(3) Without prejudice to the generality of subsection 1 (a) an officer of the company shall be deemed to have been knowingly a party to the carrying on of any business of the company in a reckless manner if –

(a) the person was a party to the carrying on of such business and, having regard to the general knowledge, skill and experience that may reasonably be expected of a person in his or her position, the person ought to have known that his or her actions or those of the company would cause loss to the creditors of the company, or any of them, or

(b) the person was a party to the contracting of a debt by the company and did not honestly believe on reasonable grounds that the company would be able to pay the debt when it fell due for payment as well as it’s other debts (taking into account the contingent and prospective liabilities).

(8) Where it appears to the court that any person in respect of whom a declaration has been sought on the grounds set out in subsection 1 (a) has acted honestly and responsibly in relation to the conduct of the affairs of the company or any matter or matters on the ground of which such declaration is sought to be made, the court may, having regard to all the circumstances of the case, relieve him or her either wholly or in part, from personal liability on such terms as it may think fit.”

735. Section 610(1)(b) which relates to fraudulent trading, applies to any person who was knowingly a party to the fraudulent trading, whether or not that person was an offier of the Company. Section 610(1)(a), which relates to reckless trading, applies only to a person who was an officer of the company. Since I have concluded that the First Named Respondent was a de facto director of the Companies this distinction is not relevant to him. As far as Section 610(1)(b) is concerned, the first question to be determined is whether any business of the companies has been carried on with intent to defraud creditors of the company or creditors of any person, or for any fraudulent purpose. If I so find, the next question will be whether the First Respondent has been knowingly a party to the carrying on of such business in that manner.

736. The leading Irish cases on this subject include re Kelly's Carpetdrome Limited (1 July 1983), re Hunting Lodges Limited [1985] 1 ILRM 75, PSK Construction Limited (Kavanagh) v. Killeen and Higgins [2009] IEHC 538 and re Kelly Trucks [2019] IEHC 6. These concern the application of s. 297 of the Companies Act 1963 (the predecessor of s. 610).

737. In re Hunting Lodges Limited (In Liquidation), Carroll J. held that a single transaction can be described as the “carrying on of business” within the meaning of s. 297. She concluded that even one single act committed with fraudulent intent can, and in that case did, suffice to ground a declaration of personal liability under the section.

738. Carroll J. also made it clear that “every person is deemed to intend the natural and probable consequences of his acts”. On the facts of that case she found that the avoidance of stamp duty was not the primary concern of the Respondents, but was a necessary consequence of secret payments which were made. That was therefore a “natural and probable consequence” and evidence of fraudulent intent.

739. In PSK Construction Limited, the court was again concerned with taxes. The court found that under declarations of amounts due in respect of PAYE, PRSI and RCT was for a fraudulent purpose namely to induce Revenue Commissioners to believe that the amount due by the company to Revenue in respect of particular months was the lesser amount declared and not the true amount. The court found that the related purpose in that case was to avoid Revenue Commissioners moving against the company if it had known the true amount due for those taxes and that the company was failing to remit the taxes. The court found this to be a fraudulent purpose.

740. A survey of the case law relating to s. 610, and its predecessor s. 297 of the Act of 1963 shows that the following have been found to amount to fraudulent trading for the purpose of the section. Insofar as they are relevant to the findings I have made in this case they include such matters as the following:

(a) Assets or monies being transferred to other companies when the company is under pressure for payment, whether by judgment or otherwise by other creditors (Kelly’s Carpetdrome).

(b) Disbursement of company funds into bank accounts the existence of which are excluded from the company's books and records, thereby concealing income from creditors (Re Contract Packaging Limited, 1992).

(c) Withdrawal of company monies by a director for their own personal use (re Contract Packaging).

(d) Attempts to divert business, property or assets to other companies under the control of the same directors or shareholders or elsewhere (Re Contract Packaging and Re Kelly Trucks Limited (In Voluntary Liquidation) [2019] IEHC 6.

(e) Knowingly under declaring amounts due to Revenue Commissioners (PSK Construction Limited).

741. The term “knowingly” means that it must be proved that the person concerned had knowledge and fraudulent intent must be established. (See Re Patrick and Lyon Limited [1933] CH 786). In considering this proof, the court will apply the principle that every person is deemed to ‘intend’ the natural and probable consequences of his acts. (See Re Hunting Lodges).

742. I have described in detail earlier in this judgment numerous transactions and events which evidence intent to defraud creditors of the Companies or other fraudulent intent. Those relevant to the First Respondent are the following:

(1) Attempting to defraud First Citizen Finance in connection with the hire purchase agreement relating to the Volkswagen Touareg 161D30138 by entering into the agreement in the name of HJW at a time when HJW was insolvent, had ceased trading and had no realistic prospect of honouring the terms of the hire purchase agreement, by seeking to sell the vehicle by auction and later to seek to recover payments made to First Citizen Finance on the basis that the monies had been debited from an account in the name of TPH without authority.

(2) Facilitating fraudulent disposition of monies from HJW to the Second Named Respondent. When the Second Named Respondent transferred a sum of €164,000 from the bank account of HJW to the bank account of TPH on 8 January 2016, at a time when HJW was defaulting on its creditors, the First Respondent immediately thereafter issued a cheque in the sum of €150,000 to the First Named Respondent drawn on the account of TPH.

(3) Lodging to the bank account of TPH on 29 August 2008 a payment of €1 million from an investor, being a client of Partners at Law Solicitors, in an amount of €1 million which was received from that investor on the basis that the money would be invested in a property scheme recommended by the First Respondent.

(4) Falsely recording the payment of €1 million made to TPH on 29 August 2008 as a “transfer from Hynes” and assigning it to the credit of a directors loan account.

(5) Dissipating the amount of €1 million by making payments out of the account of TPH to himself directly and to other institutions namely Zurich Bank, Anglo Irish Bank and AIB.

(6) Dissipating from the account of TPH payments totalling €616,973.19 between 1 January 2016 and 12 July 2018 for the benefit of himself and family members and the payment of charges unrelated to the business of TPH.

(7) Using the accounts of TPH and JWF to receive and hold monies in respect of which the First Respondent had a personal interest, notably rental income from properties owned by himself and properties owned jointly with his wife, for the purpose of concealing those funds from his creditors.

(8) The First Respondent was a party to the making or attempting to make false and misleading filings with the Companies Registration Office including annual returns and financial statements for HJW for the years ended 31 October 2017 and 31 October 2018.

(9) Making false returns to the Revenue Commissioners including purported VAT reclaim submitted by TPH on 18 July 2019 in the amount of €488,086 for the period January to April 2019 and €31,006 for the period May to August 2019.

743. In addition to the above instances of direct fraudulent activity, the First Respondent has in his communications with the Applicant and in the course of these proceedings made false claims in relation to his status in the Companies and in relation to the status of TPH.

744. Firstly, he asserted that he was in TPH no more than an employee, later admitting that he controlled TPH, which he had asserted managed the affairs of HJW.

745. Secondly he asserted that the shareholding in HJW previously held by the Second Respondent and his sisters Fiona Hynes and Catherine Cowman had been transferred to TPH.

746. Thirdly, he asserted that by the Deed of Retirement any such interest as TPH had in HJW and other companies had been transferred to the Fourth Named Respondent. These transactions were not implemented, but these claims, and documents presented in support of them revealed an intended scheme to conceal and divert assets of the Companies from creditors and other counterparties.

747. I am satisfied and shall declare that the First Named Respondent was knowingly a party to the carrying on of the business of the Companies with intent to defraud creditors and for other fraudulent purposes, and that he be personally liable, without limitation of liability, for all of the debts of the Companies. I turn next to the quantum of that liability.

Quantum

748. Section 610 (2) empowers the court to declare a person responsible “without limitation of liability, for all or any part of the debts or other liabilities of the company.” The words “all or any part” require the court to consider whether the personal liability should extend to the entire debt of the company or to some lesser part of the debt. This in turn requires the court to apply the principle of proportionality by reference to the circumstances of each case.

749. In many cases of reckless trading, and in some cases of fraudulent trading, the principle of proportionality requires the court to assess the extent to which the deficit and losses suffered by creditors were caused by identified actions of the Respondents. Typically this analysis focuses on a claim that the Respondents have knowingly caused a company to incur debts without having reasonable grounds to believe that the company would be in a position to repay the debts in full. This in turn engages a requirement to determine a date at which the company became insolvent, and analysis of the knowledge or imputed knowledge of respondents that their actions or those of the company would cause loss to the creditors of the company or any of them. This is the analysis which is applied to invoke the “deemed reckless trading” provision in s. 610(3). Instead, the Applicant’s case is grounded, and I have found it to be proved, on the numerous instances of fraud summarised in paragraph 740 above, and of fictitious claims summarised in paragraphs 741-744 above.

750. In re Hunting Lodges Carroll J. considered two leading English cases applying the statutory provisions corresponding to s. 610 and stated: “The last remaining question is the extent to which each of them shall be liable. In this regard it is important to look to the entire circumstances. In re Cyona Distributors Limited (1967 CH 889) Denning MR says at page 902 ‘in my judgment that section (referring to the corresponding section in the English Act) is deliberately framed in wide terms so as to enable the court to bring fraudulent persons ‘to book’. If a man has carried on the business of the company fraudulently the court can make an order against him for the payment of a fixed sum… the sum may be compensatory. Or it may be punitive’. In re William C Leitch Bros Limited (1932 2 CH 71 at page 79) Maugham J., says – ‘I am inclined to the view that section 275 is in the nature of a punitive provision and that where the court make such a declaration in relation to all or any of the debts or other liabilities it is in the discretion of the court to make an order without limiting the order to the amount of the debts of those creditors proved to have been defrauded by the acts of the director in question, though no doubt the order would in general be so limited’ ”.

751. Carroll J. found that the managing director in re Hunting Lodges Mr. Porrit had directed all of his efforts to “getting as much out of the company as he could before the Revenue moved against it”. Having summarised his actions she concluded “in my opinion it is entirely proper that Mr. Porrit should be personally responsible without any limitation of liability for all the debts of the company. The benefit of limited liability should, in my opinion, be totally withdrawn and he should be put in the same position as if he were a trader carrying on business personally”.

752. A similar order was made by Murphy J. in Re Kelly Trucks Limited (In Voluntary Liquidation) [2019] IEHC 6).

753. My conclusion in this case is that the wholesale abuse of the privilege of limited liability revealed in the evidence was of such a scale that, as Carroll J. did in Hunting Lodges, the benefit of limited liability should be totally withdrawn from the First Respondent. I have detailed and summarised already the numerous actions on the part of the First Respondent which have grounded my conclusion that he was knowingly a party to fraudulent trading. I am not persuaded that his conduct was limited to fraud on any limited number or category of creditors. The appropriate remedy is a declaration that he shall be responsible for all the debts of the companies.

754. The debts of the Companies in this case have not been formally adjudicated. A formal adjudication in exercise of the powers of the Applicant pursuant to Section 627 will typically only occur when there have been realised assets which, after discharging costs, charges and expenses incurred in the winding up within the meaning of Section 617, will be sufficient to pay dividends to creditors. I shall hear the parties before the final order is made and whether an order pursuant to s. 611 is required. It is my intention nonetheless to make the orders by reference to the quantum of liabilities disclosed in the evidence and summarised below, as was done by Finlay Geoghegan J. in PSK Construction Limited (op cit).

755. I have already considered the evidence relating to the claims of creditors and the evidence of the Applicant relating to the form of a “statement of company affairs” which was submitted by the First Named Respondent on 4 October 2020, and the Applicant’s reasoned analysis of the claims.

756. In HJW the debts of the company which have been ascertained are as follows:

Bank of Ireland €328,809

Revenue Commissioners €437,672.12

BJ Fitzpatrick €14,842.12

RCI Banque Branch Ireland €3,871.16

Thomas Sabo Gmbh €5,710

Wexford County Council €3,984.11

Total €794,888.51

757. In the Applicant's analysis of liabilities an estimate was included for the landlords of

19 Upper Main Street Mr. Stone and Ms. Stack in an amount of €100,000. This was an estimate of a balance still owing to those parties and it included provision for untaxed legal and other costs. It does not seem to me that for the purpose of a declaration pursuant to s. 610 it is appropriate to include that estimate the total of ascertained claims referred to above. This does not preclude those parties from proving their claim in the winding up.

758. Accordingly there will be a declaration that the First Named Respondent is personally responsible for the debts of HJW in an amount of €794,888.51.

759. In JWF the debts ascertained are as follows:

Revenue Commissioners €640,093.17

Obaku Limited €8,067.74

Wexford County Council €3,449.02

Total €651,609.93.

760. There will be a declaration that the First Named Respondent is personally liable for this total amount of €651,609.93.

761. In TPH the Applicant has analysed separately the debts incurred before and after the appointment of the receiver on 4 August 2010. The debts incurred after the receivership are the following:

Revenue Commissioners €1,026,972.90

Hobo Retail Limited €4,300

Total €1,031,272.90

762. Debts incurred prior to the receivership fall into two categories. The first are the ‘non investor’ liabilities, comprising the following debts:

Ennis Property Finance DAC €1,127,607.20

CB Richard Ellis €3,630

Des O'Sullivan loan €100,000

Total €1,231,247.20

763. The second category relates to monies lodged to the bank account of TPH on a series of dates between 26 September 2006 and 29 August 2008. These amounts totalled €3,551,185. These represented amounts advanced by investors originally secured through Tuskar Asset Management plc, but whose monies were in fact lodged to TPH. The client of Partners and Law which lodged €1m on 19 August 2008 was one such investor.

764. The First Respondent submitted that the Applicant was conflating liabilities of TPH with liabilities of Tuskar Asset Management plc.

765. The evidence of the Applicant was that the persons concerned had invested in property schemes being promoted by the First Named Respondent, in some cases through Tuskar Asset Management plc (“TAM”), and that their funds were, on the instructions of the First Respondent transferred to TPH. The Applicant is of the view that each of these investors has a valid claim against TPH for the amounts advanced and received by it.

766. It is only in respect of the investment by the client of Partners at Law, in an amount of €1 million, lodged to the account of TPH on 29 August 2008, that the Applicant now seeks a declaration of personal liability against the First Respondent. That is the only one of the investor payments in respect of which evidence was adduced at the hearing as to the lodgement to both the account of TPH and the disbursement of that amount to the benefit of the First Respondent and others thereby causing total loss to that investor. I shall therefore include that amount in the declaration. Again, this does not preclude other investors from proving their claims in the winding up.

767. In summary, the debts of TPH for which the declaration of personal liability will be made against the First Respondent are the following:

Post receivership 1,031,272.90

Pre receivership non-investors 1,231,247.20

Pre receivership investor 1,000,000.00

Total 3,262,510.10

First Named Respondent – Section 609: contravention of obligation to keep adequate accounting records

768. Sections 281 to 285 stipulate the basic obligations of every company of keeping of accounting records, including the obligation to keep them at the registered office of the company and to preserve such records for a period of at least six years after the end of the financial year containing the latest date to which the record relates.

769. Section 609 applies where a company which is being wound up and is unable to pay all of its debts has contravened the provisions of s. 281 to 285 of the Act and where the court considers that such contravention has:

(i) contributed to the company’s inability to pay its debts,

(ii) resulted in substantial uncertainty as to the assets and liabilities of the company, or,

(iii) substantially impeded the orderly winding up of the company.

770. Section 609(2) provides that where any one or more of the officers and former officers of the company are found to be in default with respect to a contravention of ss. 281-285 the court may declare such person to be personally liable, without limitation of liability, for all, or such part as may be specified by the court, of the debts and other liabilities of the company.

771. Earlier in this judgment I have described the failures and contraventions in each of the three Companies to keep proper accounting records. They may be summarised as follows:

(1) Failure to keep records which were sufficient to explain and evidence all transactions of the Companies.

(2) Failure to keep records which were sufficient to enable at any time the assets, liabilities financial position and profit or loss of the companies to be determined.

(3) Failure to keep records which were sufficient to ensure that financial statements of the Companies compliant with the Act were prepared and audited.

(4) Failing to keep records on a continuous and consistent basis or to take precautions against falsification and to facilitate the discovery of falsification.

(5) Causing the Companies to submit documents and filings to the Companies Registration Office which had been falsified including the following:

(a) Annual Return Forms for TPH in 2013 and 2014 purporting to bear the signature of Colm Sugrue, a former director of TPH but which was not signed by him.

(b) Accounts of JWF for the year ended 31 January 2016 and 17 June 2016 purporting to bear the signature of Fiona Hynes, which were not signed by Fiona Hynes.

(6) Failing to keep accounting records for a period of at least six years after the end of each financial year to which they related.

(7) Causing TPH to be fined €5000 in the District Court for failing to keep proper books and records.

(8) Causing JWF to be fined €1750 in the District Court in 2019 for failing to keep proper books and records.

(9) Failing to prepare or file annual returns on a current basis for each of the Companies with the Companies Registration Office.

772. In defending this case much of the focus of the Respondents has been on their repeated assertions that books and records of the company were retained by the landlord of 19 Upper Main Street and that the Applicant was somehow at fault. The evidence of the Applicant is that such records as were retained by the landlords were given to him and demonstrably did not comply with the Act. Furthermore, there was no evidence advanced by any of the Respondents as to precisely what they believed those records comprised.

773. The Applicant has been confronted with the task of reconstructing the affairs of the Companies without the benefit of any meaningful records. Such information as he has gleaned in relation to the treatment of monies in and out of bank accounts has been facilitated in some measure by obtaining statements from the relevant banks, and piecemeal information submitted by the First Respondent in the form of a spreadsheet purporting to justify expenditure made out of the Joint Account of the First and Fifth Respondents.

774. Section 609(8) of the Act states: “The court shall not make a declaration under this section in respect of a person if it considers that—

(a) the person took all reasonable steps to secure compliance by the company with sections 281 to 285 , or

(b) the person had reasonable grounds for believing and did believe that a competent and reliable person, acting under the supervision or control of a director of the company who has been formally allocated such responsibility, was—

(i) charged with the duty of ensuring that those sections were complied with, and

(ii) in a position to discharge that duty”.

775. It was only during the course of the trial and her own evidence that it emerged that the Fifth Respondent held a position in HJW and JWF as a bookkeeper. No case was made by reference to s. 609 (8) to the effect that she, or any other named person, had been charged with the duty of ensuring compliance with sections 281-285 and was in a position to discharge that duty or that the Respondents had any grounds for believing or did believe that she was a “competent and reliable person acting under the supervision or control of a director who has been formally allocated such responsibility”. Nor was this defence invoked in relation to any other person.

776. In as much as the First Respondent attempted at one point to lay blame on the external auditor, again no case was made by reference to subsection (8) and the evidence of the Applicant was that the auditor had confirmed that only very limited data and information was provided to her when doing her work. Although the First Respondent did not frame his blame of the auditor by reference to subsection (8), any submission to that effect is to fundamentally misunderstand the function of an external auditor by contrast to the functions of a person holding office or employed within the company and charged with a function of compliance with sections 281-285.

777. Another remarkable feature of the case is that not only did the Respondents fail to produce compliant books and records of account to the Applicant or to show that such records were ever kept, they also presented to the Applicant selective and misleading documents designed to cause confusion and impede the orderly winding up of the Companies. I refer in particular to the production of such documents as the so-called “Employment Contract” for the First Named Respondent, the Directors Services Contract with the Third Respondent, and the Deed of Retirement apparently made between TPH and the Fourth Named Respondent.

778. I have also found that false entries were made in the Directors Loan Account ledger in TPH consequential on the treatment of the lodgement of €1 million received from Partners at Law as a loan from directors.

779. The leading Irish judgment on this subject is that of Shanley J. in Mehigan v Duignan [1997] 1 IR 340. I shall return that judgment in more detail. It is frequently cited as authority for a proposition that a declaration pursuant to s. 609 must be limited to a declaration of personal liability for so much of the debts of the company the inability of which to repay has been caused by the contravention itself.

780. In Conroy v Corneill re Rayhill Property Company Limited (in liquidation) [2003] 3 IR 588, Smyth J. examined sections 202 and 204 (the predecessor of s. 609). In that case Smyth

J. had the following to say: “Such ‘keeping’ of the books of account or records, even on the Second Named Respondents own evidence, was spasmodic and so infrequent and muddled with the affairs of other companies or enterprises. In in my judgment this led to a failure to meet the objectives intended to be achieved by the observance of the statutory requirements. Equally, I am satisfied that there is a causative connection between the failure to keep the proper books and records which could and should have permitted the company to make informed decisions as the occasion arose (because of the muddled state of affairs there were no records extant to which reference could be made) and the inability of the company to pay debts — as was immediately clear when the Applicant was appointed. No meaningful proper records were available as such. The ‘bits and scraps’ of information, as he was able to work up into a set of records, clearly indicated that the company could not pay its debts because not only was it carrying on business while insolvent, but this was either being done knowingly and with deliberation or because it had no records on a receipts and payment basis or income and expenditure basis or any other basis such as could enable it to know or to pay its debts.”

781. In re PSK Construction Limited (In Voluntary Liquidation) [2009] IEHC 538 Finlay Geoghegan J. found that there were contraventions of s. 202 of the Act(sorresponding to ss. 281-285 of the Act of 2014). The court considered Mehigan v. Duignan and was not satisfied on the facts of that case that the Applicant had established what she described as “the necessary causal link between his inability to recover certain debts of the company and the failure of the company to maintain its books in accordance with the requirements of s. 202 of the Companies Act 1990.” She confined the declaration of personal liability pursuant to s. 204 to an amount which represented the additional expenses incurred in the liquidation in relation to the reconstruction of books, in an amount of €21,447. The court made it clear in that case that this sum was separate and distinct to the amount of a declaration of personal liability pursuant to s.

297 (A) of the Act for reckless trading.

782. In re Mantruck Services Limited (Mehigan v Duignan) the court found extensive contraventions of s. 202 of the Act and that the Respondent was a person who had knowingly and wilfully authorised and permitted those contraventions.

783. The court was satisfied that the company having contravened s. 202 was unable to pay its debts of the time of the winding up and that the contraventions were such as to result in substantial uncertainty as to the assets and liabilities of the company and had substantially impeded the orderly winding up of the company. The court found also that the Respondent was an officer of the company who had knowingly and wilfully authorised and permitted the contraventions.

784. The court held that while the company was unable to pay all its debts it was not possible to separate liabilities of the company which had resulted directly from any contravention of s.

202. The court accepted evidence from the Applicant that some 80% of his time was occupied in seeking to overcome deficiencies in the books and records of the company. He declared the Respondent to be personally liable to the company in an amount of £91,239.80 being the losses which flowed from the expenditure by the Applicant as a consequence of the contraventions of s. 202.

785. The origins of this causative limitation were examined by Shanley J. earlier in his judgment. Shanley J. had the following to say: “Section 204 requires as one of the conditions precedent to liability a contravention of section 202 which either:

(a) contributes to the company's inability to pay all its debts

or

(b) results in substantial uncertainty as to its assets and liabilities or

(c) has substantially impeded the orderly winding up of the company.

Where the foregoing is established (along with the other four matters listed above) the Court may if it thinks proper declare an officer in default liable for all the debts of the company. The section, on its face, does not require that there be any causal relationship between the Section 202 contravention and the liability declared under Section 204. Nor does the section, on its face, make any allowance for different degrees of blameworthiness which might attend contraventions of Section 202. As to the absence of a causal connection between a contravention of S. 202 and the liability imposed under Section 204, there may well be a significant number of situations where the contravention bears little or no relationship to the amount of the debts of the insolvent company.”

786. Shanley J. then cited examples of cases where auditors or directors have been knowingly and consistently undervaluing assets of the company and where such an undervaluation results in substantial uncertainty as to the assets of the company or substantially impeded the orderly winding up.

787. Shanley J. continued: “It is quite clear that contraventions of Section 202 may take many forms: the contravention may for example comprise a failure to properly record goods sold, or it may comprise the maintenance of false records for the purposes of tax evasion. Where Section 204 is involved in relation to such contraventions, it is clear that the court should not view both contraventions in the same light but rather be disposed to regard the false accounting example as a basis for the imposition of greater personal liability. However on its face, Section 204 appears to allow that a court, in the exercise of its discretion can impose unlimited liability on an officer of the company in respect of all the debts of the company where the S. 202 contravention has not in itself resulted in any loss to the company, but has substantially impeded the orderly winding up of the company, or resulted in substantial uncertainty as to its assets and liabilities. There may be circumstances where, if the court's discretion is exercised in this way, the result achieved would be so harsh, unfair and disproportionate, having regard to the wrong committed, as to constitute an unjust attack on the personal rights of the affected officers”. (Emphasis added).

788. Citing a discussion in O'Keeffe v. Ferris [1993] IR 165 regarding the application of the principle of proportionality, Shanley J. continued:

“The discretion, given by section 204 to the court, must be exercised, as Murphy J notes (in relation to S. 297) in a ‘responsible but also in a constitutional fashion’. In my view the court in the exercise of this discretion must have regard to (but not necessarily exclusively) the extent to which the contraventions of S. 202 resulted in financial loss and, if it did whether or not such losses were reasonably foreseeable by the officer as a consequence of the contravention”.

789. Shanley J. then referred also to the New Zealand case of Maloc Construction Limited (in liquidation) v. Chadwick [1986] 3 NZCLC 99, where the court had identified three factors relevant to the exercise of the discretion namely causation culpability and duration. Shanley J. continued: “As to causation, he suggested that there must be a causal relationship between the contravention of Section 202, the officers contribution to that contravention, and the losses of the company resulting therefrom. As to culpability, Tompkins J. said that the less blame attaching to an officer for a Section 202 contravention the less liability should be imposed. As to duration, Tompkins J. believed that it was relevant to consider whether debts were being incurred when the contravention was taking place. It seems to me that the three elements identified by Tompkins J. are relevant to the principle which should guide the exercise of discretion under Section 204 and that in assessing liability under Section 204, the Court should have regard to the extent to which the officer' involvement in the S. 202 contravention resulted in financial loss and, if it did, whether such loss was reasonably foreseeable by the officer as a consequence of the contravention and that, save in exceptional circumstances, liability should not be imposed for contraventions not resulting in loss, or losses not reasonably foreseeable as a consequence of the contravention.”

790. It is clear from this analysis that the court must, in determining the quantum of any order respect the personal rights of affected officers and exercise its discretion carefully, and not, save in the most egregious cases, simply make a general declaration in respect of all debts. However these are only descriptions of certain aspects of the consideration designed to protect against a result “so harsh, unfair and disproportionate, having regard to the wrong committed, as to constitute an unjust attack on the personal rights of the affected officers”.

791. The Applicant does not identify what proportion of the losses suffered by creditors is attributable to the contraventions of sections 281 to 285. Therefore, if one applies the causation requirement described by Shanley J. in Mehigan v Duignan, a declaration pursuant to s. 609 would be limited to the amount of the professional costs and charges incurred in the reconstruction of books and records for which the Applicant has provided a breakdown. But when regard is had to the particularly egregious conduct of the First Respondent, including the fabrication of documents presented to the Applicant and the failure to maintain any meaningful books and records of account, the principle of fairness and proportionality which underpinned the application of the causation requirement in Mehigan v Duignan and other cases which applied it is not offended by imposing liability pursuant to s. 610 for all the debts of the companies.

792. I shall therefore declare that the First Respondent is a person in default as regards the contravention by the Companies of sections 281 to 285 of the Act and that he be personally liable without any limitation of liability for all of the debts and liabilities of the Companies, in the amounts totalling €3,262,520.10, and for the costs of reconstructing records in the further total amount of €47,851.12 (see paragraph 794).

793. This declaration is not cumulative with the declaration I intend to make pursuant to s.

610 of the Act. It is an additional ground, pursuant to s. 609, for a declaration of personal liability in respect of the same debts.

794. The Applicant gave evidence as to the precise amount of the professional time costs incurred by him and members of his firm in connection with the exercise of reconstructing the books and records of account of each of the companies. He provided a detailed breakdown of the amount of this time and I accept this evidence. The amounts concerned were in HJW €20,122.19 in JWF €6,295 and in TPH €21,433.93. I shall declare the First Named Respondent liable to contribute each of those amounts to the relevant company.

795. The liability of the First Named Respondent will be joint and several with that of the first and Third Named Respondents for as it concerns each of the three companies.

First Respondent - Section 608: assets improperly transferred

First Respondent - Section 612: misfeasance

796. Section 608 and 612 are grouped together by the Applicant. There are a number of material differences between the provisions of these sections as they apply to the facts of this case.

797. Section 608 provides as follows: “608 (1) The court has the following power, where on the application of a liquidator, creditor or contributory of a company which is being wound up, it can be shown to the satisfaction the court that –

(a) any property of the company of any kind whatsoever was disposed of either by way of conveyance, transfer, mortgage, security, loan or in any way whatsoever whether by act or omission, direct or indirect, and

(b) the effect of such disposal was to perpetrate a fraud on the company, its creditors or members. (Emphasis added).

(2) That power the court is to order, if it deems it just and equitable to do so, any person who appears to have –

(a) the use, control or possession of the property concerned, or

(b) the proceeds of the sale or development of that property,

to deliver it or them, or pay a sum in respect thereof, to the liquidator on such terms or conditions as the court thinks fit.”

798. Section 612 provides as follows: “612 (1) Subsection 2 applies if in the course of winding up the company it appears that –

(a) any person who has taken part in the formation of promotion of the company, or

(b) any past or present officer, liquidator, provisional liquidator or examiner of the company, or receiver of the property of the company, has misapplied or retained or become liable or accountable for any money or property of the company, or has been guilty of any misfeasance or other breach of duty or trust in relation to the company.

(2) The court may, on the application of the director or the liquidator or any creditor or contributory of the company, examine into the conduct of the promoter, officer, liquidator, examiner or receiver, and compel him or her –

(a) to repay or restore the money property or any part of it respectively with interest at such rate as the court thinks just, or

(b) to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or other breach of duty or trust as the court thinks just.”

799. Section 608 applies to a disposal or a transaction where the “effect of such disposal was to perpetrate a fraud on the company its creditors or members”. It is not necessary to show that there has been a fraudulent intent. It is only necessary to show that the effect has been to deprive the company, its members or creditors or the relevant asset. This has been interpreted to mean that the focus of the section is on the effect of the transfer rather the intention of the party effecting the transfer.

800. In Le Chatelaine Thudichum (in liquidation) Limited v. Conway [2008] IEHC 349 Murphy J. put it thus “the section merely requires that the company, its creditors or members be deprived of something to which it is or to which they are lawfully entitled”. He was not persuaded that evidence of fraudulent intent was required and the focus is entirely on effect. This approach was followed by Finlay Geoghegan J. in re CityWest Hire Limited (in liquidation) [2014] IEHC 279 and Barrett J. re MPS Global Limited (in liquidation) [2014] IEHC 318.

801. The second feature of s. 608 which distinguishes it from s. 612 is that orders can be made against any person who has received the asset or money concerned. By contrast with s. 612, there is no requirement that the recipient is director or officer past or present or has been a person who took part in the promotion or formation of the company.

802. The only constraint which would apply to the scope of an order, if the court was satisfied that the company or its creditors have been deprived of the asset, is that an order can only be made where the court deems it “just and equitable to do so”.

803. Subsection 4 provides that “in deciding whether it is just and equitable to make an order under this section the court shall have regard to the rights of persons who have bona fide and for value acquired an interest in the property the subject of the application”. No submissions were made by any of the Respondents in this case to the effect that they or any other parties had received an interest in assets of the company bona fide and for value.

804. Section 612 applies where there is evidence that a person who has taken part in the promotion or formation of the company, or any past or present officer has “misapplied or retained or become liable or accountable for any money or property of the company or has been guilty of any misfeasance or other breach of duty or trust in relation to the company”. The remedy under s. 612 against any such person is either that they pay or restore the relevant money or asset to the company or contribute to the assets of the company by way of compensation an amount in respect of the “misapplication, retainer misfeasance or other breach of duty or trust as the court thinks just”.

Section 608

805. I have referred in Part 6 to the disbursement from the account of TPH of the entire of the sum of €1 million received in that account from an investor client of Partners at Law. One of the payments made out of that account was on 9 September 2008 for €300,000 to the personal account of the First Respondent. This was clearly a payment which perpetrated a fraud on TPH and its creditors within the meaning of s. 608. There will therefore be an order pursuant to s.

608 that the First Respondent, being a person having the use, control or possession of that money, pay that amount to the Applicant.

806. Between 1 June 2018 and 27 January 2020, a series of payments totalling €22,913.15 were made out of a savings account of JWF in favour of the First Respondent. These correspond almost exactly to receipts preceding them referenced “5 Obelisk Grove” or “6 Obelisk Grove”, being retail properties owned by the First Respondent. They are part of the evidence that the First Respondent used JWF as a channel to conceal rental income. Therefore, they do not constitute disposals of property of JWF for the purpose of s. 608.

Section 612

807. I have already concluded that the numerous instances of transfers of money out of the bank accounts of HJW and TPH evidence trading with intent to defraud creditors of those companies and for other fraudulent purposes. I have no hesitation in determining that such payments and transfers are also evidence of misfeasance and that the First Respondent has been party to such misfeasance for the purpose of s. 612. There will therefore be an order pursuant to s. 612 that the First Respondent contribute to the assets of the companies by way of compensation for an amount equivalent to the following.

808. To HJW:

(a) €354,372.60, being the balance unaccounted for in payments to the Joint Account of the Second and Fifth Respondents between 1 January 2015 and January 2016,

(b) €215,000 paid to the Second Respondent by bank draft dated 11 February 2015.

809. To TPH:

(a) €616,973.58, being the total amount of disbursements from the account of TPH between 1 January 2016 and 12 July 2018 made to or for the benefit of the First Named Respondent and his wife and daughter, to the Second Respondent and to third parties to meet personal expenditure of the First Respondent and to other payees for unvouched and unexplained expenses,

(b) €699,987.11, being the balance of the funds of the investor client of Partners at Law dissipated between 3 September 2008 and 12 September 2008. (An additional €300,000 dissipated in this way was paid to the First Respondent directly and accordingly will be the subject of the order pursuant to s. 608) (see paragraph 805).

810. The Applicant in closing submissions suggested that if the First Respondent makes payments as directed pursuant to s. 608 or s. 612 the amounts so paid may be credited against the total amount of his liability declared pursuant to s. 610. The applicant did not expand on the precise basis for such an allocation or accreditation, and this aspect can be addressed before the final order is made.

First Named Respondent – Section 842: disqualification

811. Section 838 of the Act defines the term “disqualified” as meaning in relation to a person “the persons being disqualified from being appointed or acting as a director or other officer, statutory auditor, receiver, liquidator or examiner or being in any way, whether directly or indirectly concerned or taking part in the promotion formation or management of each of the following: –

(a) a company within the meaning of s. 819 (6),

(b) any friendly society within the meaning of the Friendly Societies Acts 1896 to 2014,

(c) any society registered under the Industrial and Provident Societies Acts 1893 to 2014.

812. Section 842 of the Act provides as follows: “On the application of a person specified in section 844 (which includes liquidator) or of its own motion, the court may make a disqualification order in respect of a person for such period as it sees fit if satisfied –

(a) that the person has been guilty, while a promoter, officer, statutory auditor, receiver, liquidator or examiner of the company, of any fraud in relation to the company its members or creditors.

(b) that the person has been guilty, while a promoter, officer, statutory auditor, receiver liquidator or examiner of the company, of any breach of his or her duty as such promoter, officer, auditor, receiver, liquidator or examiner.

(c) that a declaration has been granted under section 610 in respect of the person.

(d) that the conduct of the person as promoter, officer, statutory auditor, receiver, liquidator or examiner of the company makes him or her unfit to be concerned in the management of a company.

(h) that the person was a director of a company when a notice was sent to the company under section 727 and the company, following the taking of other steps under Chapter 1 of Part 12 consequent on the sending of the notice, was struck off the register under section 733.”

[(e), (f), (g) and (i) are not relevant].

813. In Kentford Securities Limited: Director of Corporate Enforcement v. McCann [2011] IR 585 O'Donnell J. (as he then was) described the two-stage enquiry which the court must undertake by reference to s. 842 (then s. 160). The first stage is for the court to determine on the facts whether any of the subsections apply and whether one or more of the criteria in 842

(a) to (j) have been established. These are, as O'Donnell J described them, “gateways” to the second stage, which is the exercise of the court’s discretion.

814. I have determined that the First Respondent was a party to fraudulent trading in the Companies and that a declaration will be made pursuant to section 610 of the Act. Therefore section 842 (c) applies to him.

815. That in itself would be sufficient to establish the jurisdiction to consider as a matter of discretion whether to make a disqualification order. It is none the less of assistance, and relevant also in the context of the length of the period of disqualification, to consider whether any of the other criteria have been met. The aspects of the conduct of the First Respondent which are invoked by the Applicant in relation to this aspect of the case are as follows:

(1) The fact that the First Respondent has engaged in reckless and/or fraudulent trading within the meaning of s. 610.

(2) Failure to keep proper books of account and records in relation to the affairs of the companies as required by sections 281 to 285 of the Act.

(3) Misapplication and retainer of property of the companies and misfeasance, within the meaning of s. 612 of the Act.

(4) The fact that the First Named Respondent acted as a de facto director of the Companies at a time when he was the subject of a disqualification order up to 8 October 2016 and a declaration of restriction up to 8 October 2018.

(5) That the First Respondent was a de facto director of TPH when it was struck off the register on 10 July 2019 for failure to file annual returns at the Companies Registration Office.

816. Clearly the last of the above constitutes a ground for a disqualification pursuant to section 842 (h).

817. I have also concluded earlier in this judgment that the First Respondent took advantage of the position of influence which he secured following his introduction firstly to the affairs of HJW during 2014, and having continued as a de facto director of TPH following his resignation on 1 October 2013, resulting in multiple abuses of the privilege of limited liability. In these circumstances I conclude that the conduct of the First Respondent makes him unfit to be concerned in the management of a company, a ground for disqualification pursuant to section 842(d).

818. Section 819 of the Act, which governs restriction orders only, invokes as one of the relevant criteria the question of whether a director has, when requested, co-operated with the liquidator in relation to the conduct of the winding up. There is no direct equivalent of that provision within s. 842. Nonetheless it is appropriate to have regard to the manner in which respondents have conducted themselves following the appointment of a liquidator.

819. Since the day of his appointment the Applicant has encountered on the part of the First Respondent continuous non-cooperation, obfuscation and failure to comply with the basic obligations of directors to provide information and documents to a liquidator. He has failed to deliver a statement of affairs compliant with the orders made and has not complied with the order made by this Court on 22 July 2020 which directed that he provide to the Applicant accounting records, deeds, instruments or other documents of papers in his custody or power and that he provide to the Applicant a statement in writing of transactions between the Respondents and the Companies including information relating to payments and transfers of money, transfers of properties and details of the use to which any such money or property was put.

820. When all these matters are taken into account I am satisfied that the First Respondent has been guilty of breach of duty and conduct which makes him unfit to be concerned in the management of a company.

821. No discretionary factors have been drawn to my attention which suggest that an order should not be made. In fact, when he first joined the hearing on Day Two the First Respondent indicated that he would “take on the chin the penalties that the court can impose for the behaviour that has been highlighted in the 21 points”. He said also that he was “not so concerned about restriction or disqualification, I’m not currently acting as a director, nor do I need to”, and later he said, “I don’t wish to drag this out, Judge”. He also stated that he was more concerned about the quantum of the claims against him. Over the course of the hearing, he resiled from that opening position, and the court proceeded to hear all the evidence and submissions on the basis that the case against the First Respondent was contested.

822. When the multiple breaches of provisions of the Companies Acts, breaches of duty, and the conduct of the First Named Respondent in all his dealings with the Applicant are taken into account I am satisfied that it is appropriate in this case to exercise the discretion conferred by s. 842 to make a disqualification order.

823. The First Named Respondent is a person to whom the provisions of s. 842 (b), (c), (d) and (h) apply and I shall make an order of disqualification.

Length of disqualification

824. In Bovale Developments Limited, Director of Corporate Enforcement v. Bailey and Another [2013] IEHC 561, Finlay Geoghegan J. considered the approach which the court should take to the exercise of its discretion and to the period of disqualification: – “(i) The primary but not the only purpose of an order of disqualification is to protect the public against future conduct of companies by persons whose past record has shown them to be a danger to creditors and others.

(ii) It is also a purpose of an order of disqualification to improve corporate governance (Re Kentford) and Re Wood Products Ltd.: Director of Corporate Enforcement v.

McGowan [2008] IESC 28

(iii) A further purpose of an order of disqualification is that it act as a deterrent, both in respect of the Respondent director and other directors of companies (Re Kentford, O'Donnell J. at para. 27, quoting with approval Lord Woolf M.R. in Re Westmid Packing Ltd. [1998] 2 All E.R. 124). Hence, the period of disqualification should contain deterrent elements.

(iv) The period of disqualification should reflect the gravity of the conduct or wrongdoing as found by the Court in relation to the relevant sub-paragraphs of s. 160(2) (now s. 840(2)) in respect of which the order of disqualification is being made;

(v) a period of disqualification in excess of ten years should be reserved for particularly serious cases;

(vi) the Court should firstly assess the correct period in accordance with the foregoing and then take into account mitigating factors prior to fixing the actual period of disqualification.”

825. The question of duration or period of disqualification and any reductions for mitigating circumstances was considered in Kirby v. Rabbitte: Re Wasteman Plant and Civils Limited, [2020] IEHC 703 and in Kirby v. Conlon: Re Pembroke Dynamic Investment Services, [2021] IEHC 475.

826. In both of these cases the Respondent had consented to disqualification orders and the court was concerned only with the period of the disqualification.

827. In Westman Plant the Respondent had consented to a declaration pursuant to s. 610 of the Act that he was knowingly a party to the carrying on of the business of the company with intent to defraud creditors and to a declaration making him personally liable for debts and liabilities of the company in the sum of €1.5 million. He had also consented to a disqualification order and the only matter for consideration before the court was the period for which he should be disqualified.

828. O’Moore J. found in Re Westman that the Respondent had presided over a company which had done nothing but defraud Revenue. He found that the Respondent had engaged in a continuous and calculating fraud, had failed to cooperate with the liquidator and had failed to comply with court orders. The court decided that the appropriate period of disqualification was a period of fifteen years.

829. The court was willing in that case to apply a discount in mitigation having regard to the fact that the Respondent had, but only on the eve of the hearing, settled his dispute with the liquidator and accepted that he had perpetrated a fraud and that a disqualification order should be made. By that time the liquidator had already been put to the significant cost of the proceedings, although the terms of settlement at least saved a three-day trial. The discount which the court applied in that case was 5%, thereby reducing the period of disqualification to a period of fourteen years and three months.

830. In Re Pembroke Dynamic the evidence was that the Respondent had diverted charitable donations fraudulently. The Respondent consented to a declaration pursuant to s. 610 of the Act that he be responsible for up to €2 million worth of the debts of the company and to an order of disqualification pursuant to s. 842. Again, the court was concerned principally with the period of disqualification.

831. At the time of the liquidation the company records showed that it owed in excess of €4 million to charities around the world. The court considered that this was a particularly serious case having regard not only to the losses to the charities concerned but the effect that this fraud would have on the ability of charities generally to gain the trust of donors. As Sanfey J. put it “there is a disquieting risk that a fraud of the magnitude perpetrated in the present case may have a ‘chilling’ effect on potential donors who may be concerned at even the possibility that their offerings may not reach the selected recipient”.

832. Sanfey J. concluded that an appropriate period of disqualification in that case would be eighteen years. When it came to mitigation the court had regard to the following particular circumstances. Firstly, the fact that terms of settlement had been agreed, thereby avoiding the costs of a six-day hearing in that case, albeit that the agreement was concluded only immediately prior to the hearing when the costs of preparation for the trial had already been incurred. Secondly the Respondent had already spent time in prison abroad awaiting trial on fraud charges, including a period of solitary confinement. Reference was made to medical complaints since the Respondents release in that case. Thirdly the liquidator accepted in that case that notwithstanding the Respondent’s knowing involvement in the carrying on of the business with intent to defraud creditors he had not made any personal gain or profit from his actions.

833. The court applied a discount of two years and disqualified the Respondent for a period of sixteen years.

This case

834. No submissions were made by the First Respondent as to the length of any disqualification order which would be made.

835. In determining the appropriate period for a disqualification order I have taken into account the following particular factors in the case of the First Respondent.

836. Firstly, the Respondent acted in flagrant breach of the order of Dunne J. made on 9 October 2013 in the matter of Tuskar Asset Management plc in liquidation. The declaration of restriction expired on 8 October 2018 and the disqualification order expired on 8 October 2016. When that order was made, the First Respondent and his wife resigned as directors of TPH and arranged for the appointment of the Fourth Respondent, who was the First Respondent’s brother in law and was a doctor residing and practicing in England. The First Respondent admitted in his evidence that he retained control and influence over the affairs of TPH.

837. TAM having failed, following receivership and ultimately liquidation, the First Respondent utilised TPH as the vehicle through which to continue his activity of property investment.

838. Secondly, in 2014 the First Respondent became directly concerned in the affairs of HJW and commenced trading as a de facto director of that company.

839. Thirdly, in 2016 the First Respondent became concerned in the affairs of JWF, again acting as a de facto director and in breach of the order of Dunne J.

840. All of these activities were in flagrant breach of the order of this Court.

841. Thirdly, having been a chartered accountant and having been through the process of an insolvent liquidation in the case of TAM and the proceedings leading to his restriction and disqualification, the First Respondent was acutely aware of the company law and other duties of directors and officers of companies from the moment of his involvement in the Companies the subject of these proceedings.

842. Fourthly, the First Respondent caused the finances of the Companies to become intermingled by the movement of monies between them and, on his own admission, by causing TPH, an insolvent company controlled by him, to act as secretary of HJW.

843. Fifthly, the First Respondent failed to cooperate with the Applicant in the performance of his functions as liquidator. Not only did he decline to provide documents and information in relation to the companies, in accordance with the requirements of the Act and as ordered by this Court on 27 July 2020, he persisted in submissions to the Applicant which were fictitious. Among these submissions were the assertion that the shareholding in HJW had been transferred to TPH, the assertion that the interests of TPH in HJW and other entities had been somehow transferred to the Fourth Respondent, the presentation of an Employment Contract and maintenance of claims for payment of a sum of €1.5 million pursuant to that contract and claims for the funding of other personal expenses, including by the acquisition of a Model 3 Tesla motor vehicle.

844. Sixthly, in and of itself, the manner in which the First Respondent met these proceedings would not necessarily warrant a disqualification order. The Respondents were entitled to respond to the proceedings without legal representation. However it is clear that the First Respondent sought to take advantage of the absence of representation and went to great lengths to disrupt the conduct of these proceedings, both in terms of the failure to deliver documents as ordered by this Court from time to time and failure to attend before the court at the hearing times and in particular by absenting himself at times when his attendance was required, notably when the time came for his cross-examination, thereby causing further delay in the conduct of the trial.

845. It seems to me that the scale and level of the misconduct of the First Respondent, from his first activities in TPH as early as 2008 if not earlier, through to his engagement with the Applicant, is such that this case falls into the most serious of categories. The appropriate period for an order of disqualification is eighteen years.

846. No mitigating circumstances were evident in this case. On the contrary, from the moment of the Applicant's appointment the First Respondent sought to obstruct the performance of his functions and aggravated the difficulties encountered by the Applicant, all contributing to additional cost in the winding up.

Section 846: costs and expenses

847. Section 846 provides as follows:

“The court, on hearing an application under section 842, may order that the person disqualified or against whom a declaration under section 819 is made as a result of the application (by virtue of section 845(3)) shall bear –

(a) the costs of the application, and

(b) in the case of an application by the Director (of Corporate Enforcement), the Director of Public Prosecutions, a liquidator a receiver or an examiner, the whole (or so much of them as the court specifies) of the costs and expenses that are incurred by the Applicant –

(i) in investigating the matters that are the subject of the application, and

(ii) in so far as they do not fall within paragraph (a), in collecting evidence in respect of those matters, including so much of the remuneration and expenses of the Applicant as are attributable to such investigation and collection.”

848. I shall hear the parties before making any order as regards the costs of these proceedings. However, I am satisfied that this is an appropriate case to make an order pursuant to s. 846(b) relating to the costs and expenses, meaning professional time, incurred by the Applicant in investigating the matters subject to the applications under s. 842 and in collecting evidence in respect of those matters. I have heard evidence, which was not challenged by any of the Respondents, as to the amount of time so incurred, and a breakdown of that time.

849. The evidence of the Applicant was that in conducting his investigation into the matters which are the subject of these proceedings the additional time costs incurred by the Applicant were as follows:

HJW €22,444.75

JWF €5,977.50

TPH €19,240.37

Subtotal €47,670.62.

850. The Applicant also gave evidence of the additional time costs and professional costs incurred by him in gathering evidence for these proceedings in the following amounts:

HJW €48,975.75

JWF €10,883.5

TPH €48,975.75

Subtotal €108,835.

851. Section 846 provides that the court may order that the person disqualified bear these costs and expenses. I shall therefore make an order that the First Named Respondent pay to the Applicant the total of the above amounts, namely €156,505.62.

852. The obligation of the First Respondent will be joint and several with that of the Second and Third Respondents, to the extent that similar orders are made against them in the next sections.

PART TWELVE: The Second Respondent

853. The reliefs sought by the Applicant against the Second Respondent are as follows (numbered as per the amended originating notice of motion)

(2) A declaration pursuant to section 610 of the Act that the Second Named Respondent be held personally liable for the debts of the companies by reason of knowingly being a party to the carrying on of the business of the companies in a reckless manner and/or with intent to defraud creditors of the company are other creditors of for other fraudulent purposes.

(4) A declaration pursuant to section 609 that the Second Respondent be held personally liable for the debts of the companies by reason of the companies being in contravention of sections 281 to 285 of the Act by failing to keep adequate accounting records in relation to the Companies, in circumstances where the Second Respondent is in default in respect of the said contravention.

(5) A declaration pursuant to section 612 of the Act that the Second Named Respondent has misapplied or retained or become liable or accountable for money and/or property of the Companies and has been guilty of misfeasance or other breaches of trust, and an order pursuant to section 612(2) of the Act compelling the Second Respondent to restore such money or property of the Companies or to contribute by way of compensation for such conduct.

(7) A declaration pursuant to section 608 that property of the Companies was disposed of to the Second Named Respondent and that the effect was to perpetrate a fraud on the companies or creditors or members and an order directing the Second Respondent to return or restore such monies to the Companies.

(10) An order of disqualification pursuant to section 842 of the Act, or in the alternative a declaration of restriction pursuant to section 819.

(13) An order for the payment of costs incurred by the Applicant in investigating the matter the subject of these proceedings and of collecting evidence, including so much of the remuneration and expenses of the Applicant are as attributable to such investigation and collection.

854. The Settlement and Personal Insolvency Arrangement of the Second Respondent in effect apply a limit of €1,622,479.05 to the amount of any monetary declaration or order I can make against the Second Respondent.

Second Respondent – Section 610: fraudulent trading

855. It is not necessary in this section of the judgment to repeat my recital of all of the evidence which led me to the conclusion that the business and affairs of the Companies were conducted in a fraudulent manner and for fraudulent purposes. I am now required to consider the extent to which it can be said that the Second Respondent was knowingly a party to the carrying on of the business of the Companies in such a manner. I have concluded that the Second Respondent was knowingly a party to the conduct of the business of HJW and JWF in a fraudulent manner.

856. The Second Respondent was a director of HJW and JWF. He was never a director, shadow director or de facto director of TPH. He facilitated certain transactions in TPH, not least by permitting his Joint Account with his wife the Fifth Respondent to be used as a conduit for the transmission of monies from HJW to TPH. Nonetheless the evidence in relation to his direct involvement in the affairs of TPH is limited. My reasons for concluding that he was knowingly a party to fraudulent trading in HJW and JWF are as follows:

(1) Making cash payments to himself and to his joint account with the Fifth Respondent from HJW at a time when HJW was defaulting on its debts. Those payments included the following:

• 11 February 2015: the payment of €215,000 by bank draft to himself,

• 15 December 2015: €50,000 transferred to Joint Account,

• 22 December 2015: €50,000 transferred to Joint Account,

• 23 December 2015: €100,000 transferred to Joint Account.

(2) Although the aggregate amount of the three payments made in December 2015 was returned to the account of HJW on 7 January 2016, on the next day a payment of €164,000, signed and authorised by the Second Respondent, was paid from the account of HJW to TPH, of which €150,000 was paid out to the Second Respondent on 15 January 2016.

(3) The Second Respondent was party to the transfer of sums totalling €704,375 from HJW and TPH to the Joint Account of the Second and Fifth Respondent between January 2015 and April 2016, of which a sum of €350,002.40 was returned to HJW, leaving unaccounted for a balance of €354,372.60.

(4) When a sum of €40,000 was returned by the sheriff following the sale by him of stock at 19 Upper Main Street, the Second Respondent was party to the transfer of this amount on 5 May 2017 to TPH.

(5) The Second Respondent was a party to the making and filing of false annual returns at the Companies Registration Office for HJW for the years ended 31 October 2017 and 31 October 2018.

(6) The Second Respondent was a party to the transactions for the hire purchase of vehicles with First Citizen Finance and RCI Banque respectively which amounted to attempts to defraud those creditors and were an instance of the intermingling of the affairs and names of the Companies.

(7) The Second Respondent has been a party to and supported the assertions made by the First Respondent to the effect that the shares in HJW were transferred to TPH on 1 January 2016.

(8) The Second Respondent directly participated in the manner in which the jewellery business formally carried on by HJW was resumed by JFW and the attendant irregularities. No payroll taxes were returned in respect of employees of either of those companies for 2016 or subsequent years. The Revenue Commissioners were informed that JWF had no employees or staff and that the persons working in the shop at 113 North Main Street continued to be employed by HJW. The irregularities associated with the transfer of employees and treatment of payroll and payrollrelated taxes only became evident after Revenue selected JWF for audit in 2017.

857. In his evidence the Second Respondent purported to give, without providing any documents to support the claim, details of payments which he said had been made out of the Joint Account to creditors of HJW. He named a number of suppliers and others, including the Revenue Commissioners, IBB, BJ Fitzpatrick, JJ Byrne Car Sales (although this was in respect of a car for the Second Respondent's daughter) and a number of payments made directly back to HJW itself.

858. The Applicant gave evidence that payments back to or for the benefit of HJW had already been accounted for in his calculations. However, in the course of closing submissions and supplemental evidence the Applicant acknowledged that although these payments had not been vouched or verified by the Respondents, it appeared that the Second Respondent was now making a claim that a sum in the order of €170,000 had been made out of the Joint Bank Account to creditors of HJW. The Applicant said that even if these payments were taken at face value, notwithstanding that they had not been verified, this would still leave a shortfall in the order of circa €180,000 unaccounted for as between the Joint Account and HJW.

859. Section 610(8) of the Act provides “where it has been shown that a person in respect of whom a declaration has been sought on the grounds set out in subsection (1)(a) (reckless trading) has acted honestly and responsibly in relation to the conduct of the affairs of the company or in relation to any of the matters on the ground of which such declaration is sought the court may, having regard to all the circumstances of the case, relieve him either wholly or in part from personal liability on such terms as it may think fit”. Although this ‘saving’ or ‘relieving’ provision applies only to reckless trading cases, I have carefully considered whether it can be said that the Second Named Respondent has acted honestly and responsibly relation to the affairs of the company.

860. The Second Respondent was by training a jeweller and the evidence is that prior to the events described in this judgment he was a skilled jeweller and diligent shopkeeper. There is no suggestion that prior to 2014 he acted otherwise than responsibly and diligently in the conduct of the business of HJW. This all changed when he introduced the First Respondent to the affairs of the Companies, shortly followed by a total breakdown of relations between HJW and its landlords which led to the order of the Circuit Court for possession of the trading unit and the execution of the repossession order by the sheriff which proved fatal to the business of HJW.

861. I accept that in some measure the Second Respondent was influenced by the First Respondent. Very limited evidence was adduced as to the communications between the Respondents. In his evidence he indicated that from time to time he had taken advice from the First Respondent. That much is clear, and it has emerged in the evidence that the hand of the First Respondent is over almost all of the transactions and events described in this judgment.

862. The Second Respondent explained that he had no training in financial and legal matters, which explains in part why he turned to the First Respondent for advice and assistance. However he permitted matters to deteriorate, in collaboration with the First Respondent, and the numerous defaults in terms of the payments of creditors, intermingling of assets as between companies and diversion of monies when creditors were unpaid all occurred at a time when the Second Respondent was a director of HJW and owed to that company and its creditors the duty not only to ensure compliance with company law, but also to ensure that assets and revenues of the Companies were validly and properly accounted for and applied in the ordinary course of business, including the payment of creditors as they fell due.

863. The duties of directors include of course the fiduciary duties described in section 228 of the Act notably to (a) act in good faith in what the director considers to be the interests of the company, (b) to act honestly and responsibly in relation to the conduct affairs of the company, (c) not use the company’s property, information or opportunities for his or her own or anyone else's benefit unless so authorised or approved.

864. The fiduciary duties include a duty to exercise the care skill and diligence which would be exercised in the same circumstances by a reasonable person having both (i) the knowledge and experience that may reasonably be expected of a person in the same position as the director and (ii) the knowledge and experience which the director has. In this regard I have taken account of the fact that the Second Named Respondent had no legal or financial training. Nonetheless he had been a director of HJW since its incorporation on 22 April 1999, and was its largest shareholder. As the principal director responsible for business decisions, he had historically taken the care to appoint and avail of the services of external accountants and auditors Messrs Asple & Co. The decision in 2014 to dispense with their services and rely instead on the First Respondent was clearly a dominant factor leading to the events which followed.

865. The evidence of the Second Respondent that he availed of a Joint Account of himself and the Fifth Respondent as a channel through which to make payments to certain selected creditors of HJW is in itself revealing. Even on his own description of the matter a significant shortfall arose. The proposition that an account outside the Company’s regular bank accounts would be utilised in order to save bank charges was simply not borne out in evidence. In his evidence the Second Respondent acknowledged that it was a “silly mistake by putting company monies into a personal bank account”.

866. When all these matters are taken into account, I cannot conclude that the Second Named Respondent acted honestly and responsibly in relation to the affairs of the company.

867. I shall make a declaration that the Second Respondent was knowingly a party to the carrying on of the business fraudulently.

868. As regards the quantum of liabilities which will be the subject of a declaration, I have earlier identified the liabilities of the companies as described in the evidence of the Applicant. In the case of HJW the total amount as €894,264.77. In the case of JWF it is €651,609.93. These debts amount in total to €1,545,874.70.

869. I have referred earlier to the settlement entered into between the Applicant and the Second Respondent. The court was informed that the settlement was entered into consistent with the Personal Insolvency Arrangement in respect of each of the Second and Fifth Respondents. In the case of the Second Respondent the Personal Insolvency Arrangement contains an acknowledgement of a debt to the Applicant for “liquidators’ remuneration and company liabilities” in a total amount of €1,660,572.

870. Accordingly, the declaration pursuant to section 610(2) will be a declaration that the Second Respondent is personally responsible for the debts of HJW and JWF in an amount not exceeding €1,660,572. This amount will include amounts referred to in the next sections. Such debt will be treated in accordance with the terms of the Personal Insolvency Arrangement. Second Respondent – Section 609: failure to keep proper books of account

871. I have earlier in this judgment described the deficiencies in relation to the books and records of account in relation to the Companies. It is clear from the Second Respondent’s own evidence that he, being a director, and being the person most directly involved in the day-today activities of HJW and JWF is a person who was in default in relation to the contraventions of sections 281 to 285 of the Act as regards the keeping of adequate accounting records. Nowhere in his evidence or submissions did he claim to have any knowledge of the obligations imposed by the Act or that he had taken any actions to ensure that any of the companies complied with their obligations.

872. In his evidence and submissions at the hearing the Second Respondent made a number of very general assertions in relation to accounting records. He repeated many of the assertions which had been made by the First Respondent regarding the responsibility of the landlord of

19 North Main Street, all of which was disposed of by the evidence of the Applicant, which I accept, that he had obtained from those landlords such books and records as they had ever obtained and that they failed to comply with the provisions of the Act.

873. When ordered to furnish books records of account and explanations for transactions, the Second Respondent failed to comply with the directions of the court. At no point did he offer evidence to the effect that proper books of account were actually maintained and if so what they were and where they ought to have been found, other than the references to landlords.

874. The contravention of sections 281 and 285 of the Act and the role of the Second Respondent as a person in default are grounds as envisaged by section 609(2) of the Act for a declaration that the Second Respondent be personally liable without limitation of liability for the debts and liabilities of HJW and JWF. Having regard to the declaration that I have made pursuant to section 610 and having regard to the terms of the Personal Insolvency Arrangement and the Settlement with the Second Respondent I do not consider it necessary or appropriate to make provision for any additional liability under section 609. For the avoidance of doubt however I am satisfied that the Second Named Respondent is a person in default and that this default is a ground for a declaration of personal liability by reference to section 609.

875. The Applicant gave evidence as to the amount of professional time and costs associated with the reconstruction of the books and records of the companies. This amount in the case of HJW was €20,122.19 and in the case of JWF €6,295. These two figures amount to a total of €26,417.19. Again, having regard to the terms of the Settlement and the Personal Insolvency Arrangement I do not consider it appropriate to make any additional order in respect of these amounts in the case of the Second Respondent.

Second Named Respondent – Section 608: fraudulent disposition

Second Named Respondent – Section 612: misfeasance

876. The Applicant invokes section 608 and 612 together in relation to a number of payments made to the Second Respondent as to which he was a party.

877. I have examined the law relating to those sections in Part Eleven. The essence of section

608 is the requirement to prove that disposal or transfer of assets or money has had the effect of depriving the company or its creditors of those assets. By reference to section 608 the Applicant has identified the following payments made to the Second Respondent:

• On 11 February 2015: €215,000 was paid by HJW to the Second Respondent

• Monies transferred from HJW and TPH to the Joint Account of the Second and Fifth Respondent and unaccounted for amount to €354,372.60.

• On 15 January 2016 the Second Respondent received from TPH a payment of €150,000.

878. These payments were not vouched or verified.

879. No satisfactory explanation was proffered for these payments. They clearly constituted diversion of monies of HJW and TPH and the effect was to perpetrate a fraud on those companies and their creditors, in the sense identified in the judgment in the Le Chatelaine Thudichum, namely that the effect was to deprive the company or its creditors of the benefit of those assets. I am satisfied therefore that it is appropriate to make an order pursuant to section 608(2) that the Second Respondent return such monies to HJW and TPH respectively, subject to the limitation of the Personal Insolvency Arragnement.

880. In the context of “misapplication or retainer” for the purpose of section 612 the applicant refers to the payments totalling €627,799.61 out of the account of TPH between 1 January 2016 and 12 July 2018. Save for the amounts directly received by the Second Respondent, namely an amount of €152,700 in total, there is no direct evidence of the Second Respondent being a party to the misapplication or retainer of assets or misfeasance in TPH, a company of which he was not a director and no order will be made pursuant to s. 612.

Second Named Respondent – Section 160: disqualification

881. When it comes to a consideration of the application of section 842, I am concerned principally with the role of the Second Named Respondent in relation to the affairs of HJW and JWF. The relevant features of his conduct in relation to those companies may be summarised as follows:

(1) I have found that the business of the companies was carried out in a fraudulent manner and that the Second Respondent was knowingly a party to the carrying on of the businesses in such a manner. I have made a declaration pursuant to section 610(1)(b) of the Act.

(2) As a director of HJW and JWF the Second Respondent is a person who has been in default in relation to the contraventions of sections 281 to 285 of the Act regarding the maintenance of books and records of account.

(3) The Second Respondent facilitated the First Respondent in the manner in which the First Respondent influenced, if not controlled, the affairs of HJW and JWF and the activity on their respective bank accounts, all of which has caused loss to the creditors of those companies.

(4) Each of HJW and JWF continued trading for extended periods when they were insolvent, and only entered liquidation following the petition presented by the Revenue Commissioners.

(5) The Second Respondent failed to comply with the orders of this Court for delivery to the Applicant of a statement of affairs and of documents and information in relation to the transactions, assets and affairs of the Companies. I have already determined on 4 December 2020 that the Second Respondent has breached the order made by this Court on 22 July 2020.

(6) The Second Respondent failed to cooperate with the Applicant in the performance of his duties as liquidator. He has from time to time made assertions that he was relying on the First Respondent or that he has agreed that the First Respondent would provide documents and information to the Applicant. Clearly this did not constitute compliance with the obligations of directors to deliver information to the liquidator or with the orders made by this Court.

(7) The Second Respondent was also party to the various claims being made to the effect that the shareholding in HJW had been transferred to TPH. He denied that any of the minutes of meetings of HJW approving such a transfer had been fabricated, a denial undermined by the evidence of Fiona Hynes on which she was not cross examined.

882. The Second Respondent will be the subject of a declaration of personal liability pursuant to section 610 of the Act and his conduct as a director of HJW and JWF has rendered him unfit to be concerned in the management of a company. Therefore the grounds for a disqualification order in s. 842(c) and (d) apply.

883. No submission was made as to how the court should exercise its discretion in applying s. 842 to the Second Respondent. The matters which I have taken into account are as follows.

884. Firstly, there was no evidence as to how much if any the Second Respondent knew about the disqualification order and restriction declaration which applied to the First Respondent when the Second Respondent introduced him to HJW in 2014.

885. Secondly, the Second Respondent had no formal training or experience in legal or financial matters.

886. Thirdly, the Second Respondent clearly came under the influence of the First Respondent, at least in the early stages after his introduction. However, it is not clear that the First Respondent was so dominant that this would justify the failure and breaches of duty on the part of the Second Respondent. On the contrary the only inference which the court can draw from all of the evidence is that the Second Respondent facilitated the First Respondent by permitting him to exercise influence and control in HJW, even if he later came to regret doing so.

887. The Second Respondent became a director of HJW in 1999. He was not therefore new to the role and responsibilities and obligations of a director of a limited company. He cannot therefore abdicate those responsibilities by reference to the actions of the First Respondent who he introduced to the affairs of the Companies.

888. I have considered whether the more limited sanction of a restriction declaration pursuant to s. 819 of the Act would be appropriate in the case of the Second Respondent. It seems to me that the dual purposes of s. 842, which are to act as a deterrent both in the case of a named respondent and in the case of others, and to protect members of the public from any repetition of these events, can only be served if an order of disqualification is made in respect of the Second Respondent and I shall make such a declaration. Period of disqualification.

889. I accept that the Second Named Respondent was not the driving force in relation to all of the events which have given rise to the winding up of the companies and the losses incurred by their creditors. Nonetheless he was a party to numerous transactions and payments the effect of which was to divert monies and other assets out of the companies notably HJW, to the detriment of creditors.

890. The Second Respondent had been a director of the company and responsible for the conduct of its business, including financial and legal matters since the incorporation of the company in 1999. After he introduced the First Respondent he continued to serve as a director of HJW and JWF. He permitted and facilitated the transactions and events which have given rise to the losses suffered by creditors.

891. The appropriate period for the disqualification order in respect of the Second Respondent is a period of seven years.

892. During the course of the hearing the Second Respondent acknowledged, interspersed with certain protestations that others were responsible, that he had acted recklessly in relation to the affairs of the company. However his failure to cooperate with the liquidator and continued reliance on the First Respondent to have produced information and documents to the liquidator, which clearly did not happen, was misplaced. I see no reason to discount the term of the disqualification order and there will therefore be an order of disqualification pursuant to section 842 (c) and (d) for a period of seven years.

893. The Applicant has provided details of the costs incurred by him in terms of time and professional expenses associated with the investigation of matters the subject of the application and gathering evidence for these proceedings. Section 846 provides that the court may order a respondent who is the subject of a disqualification order to discharge those amounts. The amounts for HJW are €71,420.50 and for JWF are €16,861. There will be a declaration pursuant to s. 846 that the Second Respondent bear those costs.

894. The Personal Insolvency Arrangement provides that the Settlement Amount of €1,660,572 includes the liquidator’s remuneration. Accordingly, the order pursuant to section

846 in respect of the Second Named Respondent will be subject to that limitation. It will also be joint and several with the liabilities of the First Respondent for such amounts in the relevant two companies HJW and JWF.

PART THIRTEEN: The Third Respondent Adrian O'Reilly

895. In the originating notice of motion the reliefs sought against the Third Respondent are as follows (quoting numbers contained in the originating notice of motion): –

(3) A declaration pursuant to section 610 of the Act that the Third Respondent be held personally liable for the debts of the Companies by reason of his knowingly being party to the carrying on of the business of the Companies in a reckless manner and/or with intent to defraud creditors of the Companies and/or creditors of other persons and/or for other fraudulent purposes. The particulars Points of Claim focus on reckless trading and not fraudulent trading. Similarly in the submissions at the hearing the Applicant focused on reckless and not fraudulent trading as far as concerns the Third Respondent.

(4) A declaration pursuant to section 609 of the Act that the Third Respondent be held personally liable for the debts of the Companies by reason of the Companies being in contravention of sections 281 to 285 of the Act by failing to keep adequate accounting records in relation to the Companies, in circumstances where the Third Respondent is in default in respect of the said contravention.

(5) A declaration pursuant to section 612 of the Act that the Third Respondent has misapplied or retained or become liable for money and/or property of the Companies and/or has been guilty of misfeasance and/or other breaches of duty or trust in relation to the Companies, and an order compelling the Third Respondent to restore to the Applicant such monies or property of the Companies as the court may direct and/or to contribute such sum as the court thinks just to the assets of the Companies by way of compensation.

(7) A declaration pursuant to section 608 of the Act that property of the Companies was disposed of to the Respondents and that the effect of such disposal was to perpetrate a fraud on the Companies, and an order directing the Respondents to deliver such property to the Applicant or pay a sum in respect thereof to the Applicant.

(10) Pursuant to section 842 of the Act a disqualification order, and/or in the alternative pursuant to order section 819 of the Act a declaration of restriction.

896. The Third Respondent was never a director or officer of HJW or JWF, and there is no evidence of any direct involvement on his part in the day to day affairs of those companies. His activities principally related to TPH, and to a limited extent the Fourth Respondent TIG.

897. The Third Respondent did not attend the hearing. He therefore offered no evidence to contradict the Applicant's description of his role and his actions and omissions.

898. The Third Respondent became the owner of all of the shares in TPH in 2009, having taken a transfer of the shares from the First Respondent and his wife Noreen O'Reilly. He remained the sole shareholder up to the time of the winding up order and appointment of the Applicant.

899. On 1 October 2013 the First Respondent and his wife resigned as directors of TPH, following the delivery of the judgment of Dunne J. in Re Tuskar Asset Management plc. On the same day the Third Respondent was appointed a director. He remained a director up to the appointment of the Applicant.

900. It is has been claimed that on the same day Mr. Colm Sugrue was appointed a director. Mr. Sugrue's evidence was that it was not until May 2014 that he agreed to act as a director of TPH. He resigned on 11 April 2017.

901. Mr. James Wallace was a director of TPH from 22 July 2018 to 4 May 2019, although he tendered his resignation in August 2018.

902. At the time when the Third Respondent was appointed a director of TPH Mr. Taite stood appointed as a receiver of the company. The receiver was discharged on 8 September 2014, almost one year after the appointment of the Third Respondent.

903. After the receivership the Third Respondent continued to serve as a director and was the only shareholder up to the time of the appointment of the Applicant. The Applicant says that by acting as the sole shareholder and the only director to serve continuously from 1/10/2013 through to the time of the liquidation he facilitated the First Respondent in retaining control over the affairs of TPH. Elsewhere in this judgment I have found that the First Respondent was a de facto director of TPH from the date of his resignation as a director onwards, and that he continued to exercise control over the affairs of TPH and in particular its bank accounts.

904. The Third Respondent is the owner of all of the shares in the Fourth Respondent Tuskar Investment Group Limited. He was not a director of it.

905. James Wallace was a director and secretary of the Fourth Respondent for a short period of time but resigned on 4 May 2019. He was never replaced and thereafter the Fourth Respondent had no registered directors.

906. On his resignation TPH was appointed secretary.

907. It is not necessary to repeat in detail all of the evidence described in earlier parts of this judgment. As far as they concern the Third Respondent, the uncontroverted evidence is that as a sole shareholder of TPH and the only person registered as a director continuously from 1 October 2013 to the time of the liquidation, for much of that time being the sole director. The Third Respondent permitted and facilitated the First Respondent to exercise control over TPH and its bank accounts and other assets after the First Respondent and his wife had resigned as directors following the making of disqualification and restriction orders against him.

908. The Third Respondent approved abridged financial statements for TPH for the year ended 31 December 2014 which recorded as of that date assets valued at a total of €82,438 and liabilities of €1,144,985, resulting in a deficiency of assets of €1,130,763. Despite this evidence of insolvency and despite the existence of the certificate of insolvency signed by the receiver on his discharge on 8 September 2014, no steps were taken by the Third Respondent to regularise the affairs of TPH or have it wound up.

909. The Third Respondent was the sole director and shareholder of TPH when it was struck off the Register of Companies on 10 July 2019 for failure to submit returns to the Companies Registration Office. No evidence was advanced of any steps taken by him to remedy that failure. In March 2020 the Collector General moved to have the company restored to the Register and petitioned for the winding up order.

910. Having regard to the insolvency of TPH, the Third Respondent was under a duty to ensure not only that the company complied with the Act, but also to ensure that the interests of its creditors were not compromised. By facilitating the retention of control by the First Respondent and by his failure to act in the interests of the Company and its creditors, the Third Respondent facilitated the numerous transactions and payments described in this judgment. In particular as regards TPH he facilitated the payments out of the bank account of TPH between

30 December 2015 and 12 July 2018 totalling €627,799.61 of which only a sum of €10,826.42 was referable to the business of TPH, thereby leaving unaccounted for a balance of €616,973.58. These payments include payments to and personal expenditure of the First Respondent, payments to Hynes family members and related entities, the acquisition of assets for the First Respondent, and payments to professionals unrelated to any valid business or affairs of TPH.

911. He also facilitated the continuous use of the bank accounts of TPH to receive monies representing rental income on properties owned by the First Respondent.

912. One of the most serious matters found in the affairs of TPH was the receipt and dissipation of the sum of €1 million on 29 August 2008 from Partners at Law in respect of a property investment by a client of theirs, which payment was then treated by the First Respondent as a credit against a directors’ loan. This occurred more than five years before the appointment of the Third Respondent and a year before he became the sole shareholder. Therefore, he had no direct hand in this event. Nonetheless he approved, without questioning this, later financial statements in which the directors’ loan account of the First Respondent appears in credit, a credit derived only from the false designation of the lodgement of that investor’s money as being sourced by the directors.

Orders of the court

913. By the order made on 30 March 2020, being the order for the winding up of TPH it was ordered that the Third Respondent make out and file a statement of affairs pursuant to section 593(1) of the Act within 21 days from date of perfection of that order. This was never complied with.

914. By the order of this Court made on 22 July 2020 the Third Respondent was ordered to place before the court within a period of four weeks from that date a statement of writing in any transactions between the Respondents and the Companies including payments, transfers of money, transfers of property or other assets, and details of any accounts or other place to which any monies were lodged, liabilities discharged, and any transfers of any interests in the shares of the Companies from 1 January 2015 onwards.

915. By the same order the Third Respondent was directed to produce, again within four weeks, any accounting records, deed, instrument or other document relating to the Companies in his custody power or procurement.

916. By the same order the court directed, for the second time, delivery of a statement of the affairs of TPH in accordance with section 594 of the Act.

917. The Third Respondent failed to comply with these orders.

The provisional liquidation

918. On 18 March 2020, during the period when the Applicant was provisional liquidator of TPH, the Third Respondent wrote to him noting “that you are now responsible for all the affairs of Tuskar Property Holdings Limited and that you have had a conversation with Alan Hynes in regards to the above case”. He provided answers to a number of points in a questionnaire. In response to the question requesting details of investments, he stated: “as per Deed of Retirement”. He described the business of the company as “property and company management services”. He stated that the company had no employees and a nil turnover for the past three years.

919. The Third Respondent then referred to a case involving a Mr. Forte, being “a motion before the High Court on 14 January 2019 brought by Mr. C. Forte”. He stated that he had not yet seen Mr. Forte’s notice of motion and grounding affidavit but continued “this case stopped Tuskar Property Holdings Limited from carrying on in its own business and our position is that we don't have any objection to the restoration of Tuskar Property Holdings Limited to the register in Dublin provided that the associated legal costs are offset against the overpayment made by the company of VAT”.

920. The Third Respondent then enclosed a “copy of Deed of Retirement executed by Tuskar Property Holdings Limited and Tuskar Investment Group Limited”. I have described this in Part Eight.

921. On 24 March 2020 the Third Respondent wrote again to the Applicant. He referred to the “Employment Contract” between the First Respondent and TPH dated 1 January 2015 and invoked the provisions of clause 17 (ii) stating “under the above employment clause it is a condition that €1.5 million is payable to Alan Hynes or any lower amount provided by s. 790 AA of the Taxes Consolidation Act 1997 (TCA) (whichever is the relevant figure)”.

922. He continued “under the terms of the employment contract a lump sum payment is also payable at a future date after the employment has ceased (i.e. when Alan Hynes reaches normal retirement age), so it is necessary for the company to provide for payments ‘receivable’ as well as those actually received”. He then referred to the statutory exemptions from tax on portion of any such severance payment.

923. The Third Respondent continued: “You are aware that the company took over the business, goodwill and the assets of Hynes Jewellers (Wexford) Limited (now in liquidation) with effect from 1 January 2016 (with the exception of any lease). Therefore the company is in a position to honour the conditions and the terms of the employment contract in full.

(i) Please confirm as liquidator that you now control the bank accounts of Tuskar Property Holdings Limited and that you will transfer the relevant amount as per the employment contract to Alan Hynes.

(ii) Please also confirm as liquidator that you will transfer 1.5 times the relevant amount to the pension of Alan Hynes by the normal age of his retirement. Finally please confirm that you will reimburse all amounts that have been collected by the Company from the various rental properties belonging to the properties owned by the Directors (including previous) in relation to my own Directors current account you might please let me know how I am to proceed in making claim to you as liquidator”.

924. This letter is remarkable for a number of reasons. In particular, the reference to monies collected “from the various rental properties belonging to the properties (sic) owned by the Directors” reveals that the Third Respondent had direct knowledge that the Company’s bank accounts were being used to receive rental income of directors, or that he was simply writing this and other letters in pursuance of the First Respondent’s agenda.

925. The First Respondent himself acknowledged in his evidence that the Employment Contract was only created and written by him after the Applicant had asked for such information. No explanation was ever provided as to why the Third Respondent considered it appropriate to call on the Applicant to honour that contract.

926. The Third Respondent never provided a meaningful explanation of the so called Directors Service Agreement between him and TPH dated 1 January 2009.

927. The Applicant wrote again to the Third Respondent on 9 April 2020. He pointed out that the letter which he had written to the Third Respondent requesting copies of the Company’s unabridged financial statements for the year ended 31 December 2014 had been sent by the Third Respondent to the First Respondent for a reply, but when the First Respondent purported to reply he did not in fact provide those financial statements or any company records.

928. The Applicant informed the Third Respondent that he believed he was not cooperating with him in the performance of his duties and that he would include a description of all of these matters in his report to the Director of Corporate Enforcement.

929. The auditor Ms. O'Loughlin informed the Applicant that she had no direct dealings with the Third Respondent or any other officer of the company apart from the First Named Respondent with whom she had all her dealings.

930. The Applicant received no satisfactory reply to his letters to the Third Respondent. He received only limited and selective communications from the Third Respondent throughout these proceedings. Perhaps the most striking aspect of the communications was that at no time did the Third Respondent ever provide a description of the role he performed in TPH, or why he had agreed to act as a director and the sole shareholder and continued to do so after the receivership and up to the time of liquidation. He then made a decision to absent himself from the trial of these proceedings, which would have been his final opportunity to explain his actions and omissions.

Third Respondent – Section 610: reckless trading

“610. (1) If in the course of the winding up of a company or in the course of proceedings under Part 10 in relation to a company, it appears that—

(a) any person was, while an officer of the company, knowingly a party to the carrying on of any business of the company in a reckless manner, or

(b) any person was knowingly a party to the carrying on of any business of the company with intent to defraud creditors of the company, or creditors of any other person or for any fraudulent purpose, the court, on the application of the liquidator or examiner of the company, a receiver of property of the company or any creditor or contributory of it, has the following power.

(2) That power of the court is to declare, if it thinks it proper to do so, that the person first-mentioned in paragraph (a) or (b) of subsection (1) shall be personally responsible, without any limitation of liability, for all or any part of the debts or other liabilities of the company as the court may direct.

(3) Without prejudice to the generality of subsection (1)(a), an officer of a company shall be deemed to have been knowingly a party to the carrying on of any business of the company in a reckless manner if—

(a) the person was a party to the carrying on of such business and, having regard to the general knowledge, skill and experience that may reasonably be expected of a person in his or her position, the person ought to have known that his or her actions or those of the company would cause loss to the creditors of the company, or any of them, or

(b) the person was a party to the contracting of a debt by the company and did not honestly believe on reasonable grounds that the company would be able to pay the debt when it fell due for payment as well as all its other debts (taking into account the contingent and prospective liabilities).

(8) Where it appears to the court that any person in respect of whom a declaration has been sought on the grounds set out in subsection (1)(a) has acted honestly and responsibly in relation to the conduct of the affairs of the company or any matter or matters on the ground of which such declaration is sought to be made, the court may, having regard to all the circumstances of the case, relieve him or her either wholly or in part, from personal liability on such terms as it may think fit.”

931. The concept of reckless trading was first considered in Re Hefferon Kearns Limited (No. 2) [1993] 3 IR 191.

932. In Hefferon Kearns, Lynch J. quoted extensively from the analysis by Kingsmill Moore

J. of the meaning of the word “reckless” in Donovan v. Landis Limited [1963] IR 441 where he stated the following (quoting in turn a test as described by Megaw J. Shawinigan v. Vokins [1961] 1 WLR 1206); “In my view ‘reckless’ means grossly careless. Recklessness is gross carelessness – the doing of something which in fact involves a risk whether the doer realises it or not; and the risk being such, having regard to all the circumstances, that the taking of that risk would be described in ordinary parliaments as ‘reckless’. The likelihood or otherwise the damage will follow is one element to be considered, not whether the doer of the act actually realised the likelihood. The extent of the damage which is likely to follow is another element, not the extent to which the doer of the act in his wisdom or folly, happens to foresee. …each case has to be viewed on its own particular facts and not by reference to any formula. The only test, in my view, is an objective one. Would a reasonable man, knowing all the facts and circumstances which the doer of the act knew or ought to have known, described the act as ‘reckless’ in the ordinary meaning of that word in ordinary speech? As I have said, my understanding of the ordinary meaning of that word is a high degree of carelessness”.

933. Lynch J. continued: “The inclusion of the word ‘knowingly’ in section 33 subsection 1(a) (a predecessor of section 610 1(a)) must have been intended by the Oireachtas to have some effect on the nature of the reckless conduct required to come within the subsection. I think that its inclusion requires that the director is party to carrying on the business in a manner which the director knows very well involves an obvious and serious risk of loss or damage to others, and yet ignores that risk because he does not really care whether such others suffer loss or damage or because his selfish desire to keep his own company alive overrides any concern which he ought to have for others”.

934. Two decisions of the High Court of South Africa are informative in relation to the position of the Third Named Respondent. In Engelbrecht N.O. and Others v. Zuma and Others [2015] 3 All SA 590 (GP), the court was required to consider the provisions of s. 424 of the Old Companies Act 61 of 1973, which related to “liability of directors and others for fraudulent conduct of business”. Subsection 1 of s. 44 provided as follows: “when it appears, whether it be in a winding up, judicial management or otherwise, that any business of the company was or is being carried on recklessly or with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the court may, on the application of the Master, the liquidator, the judicial manager, any creditor or member of contributory of the company, declare that any person who was knowingly a party to the carrying on of the business in the manner aforesaid, shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the court may direct”.

935. In that case the court was concerned with a number of directors who had varying degrees of involvement in the company, some being described as inactive. The court had the following to say “recklessness may consist of blameworthy conduct characterised by a failure to take any due care in the management of the company that results in detriment to the company and others and exhibits a high degree of disregard for the standards observed by honest and diligent men of affairs. It may, however, also be demonstrated by a similarly uncaring and careless failure to attend to the company’s business or to prevent foreseeable harm from being caused by failing to take reasonable preventive measures against such eventualities: Cronje N.O. v. Stone [1985] 3 SA 597 (T).”

936. The case of Cronje v Stone was considered by Dr. Courtney in the Law of Companies (4th Edition) at paragraph 16 178 where he states “in the South African case of Cronje N.O. v. Stone a director who was also a large shareholder in the company never became actively involved in the business of the company. It was held that she had recklessly refrained from exercising proper control over the company and that her inertia had facilitated the mismanagement by her co-director”.

937. The only conclusion which I can draw from all of the facts is that the Third Named Respondent was desirous of facilitating or accommodating the First Named Respondent in his endeavours, that desire influencing his conduct to the exclusion of any responsible actions or activities on his part.

938. There was limited evidence before the court about the actions and day-to-day activities of the Third Respondent, apart from the fact that his day to day business was the practice of medicine in England. What is known is the following.

a) he had been the sole shareholder since January 2009

b) the company was in receivership

c) the company was insolvent

d) the First Respondent and his wife had resigned as directors following delivery of the judgment of Dunne J. in Tuskar Asset Management Plc

e) following resignation the First Respondent continued to exercise control over the business and affairs of TPH

f) the company had no discernible trade or other activity, or employees

g) between 1 January 2016 and 12 July 2018 funds totalling €616,973.58 were disbursed from the Company’s bank account and not accounted for

h) the Third Respondent approved financial statements for the year ended 31 December 2014 which recorded a deficiency of €1.13m, and failed to take action to regularise its status, whether by resolving to liquidate the company or any other measure.

939. When the Applicant wrote to the Third Respondent following his appointment, he received limited replies and some of his letters were replied to by the First Respondent. Insofar as the Third Respondent replied directly to the Applicant everything he said was in “support” of the First Respondent, most notoriously the assertion that the First Respondent was entitled to the payment of a lump-sum of €1.5 million on the winding up of TPH, pursuant to an employment contract which the First Respondent himself acknowledged had only been created by him after the Applicant's appointment.

940. It is understandable that in his capacity as a medical doctor living and practising in England the Third Respondent would not have acquired direct knowledge of the everyday transactions of TPH. But when he was appointed the Company was in receivership, and when the receiver was discharged the Company did not resume normal legitimate trade. Instead, it served as a vehicle for the First Respondent to continue his property investment activities in succession to the failed TAM.

941. The Third Respondent offered no evidence to contradict the Applicant's evidence and analysis. I am persuaded that he facilitated a scheme whereby the First Respondent retained control over the assets and affairs of TPH, resulting in the losses to creditors in the case of TPH in a total amount of €1,029,733.83.

942. Not only was the Third Respondent the only person who was a director continuously for the entire of the period from 1 October 2013 through to the appointment of the Applicant he was also the sole shareholder, and therefore a person with power to appoint and remove directors. Whilst a shareholder does not by virtue only of his shareholding owe the same duties to creditors and others as a director, the Third Respondent was in the unique position of being both a director and the sole shareholder who by his inaction facilitated the activities of the First Respondent which gave rise to the losses above.

943. The financial statements to 31 December 2014 approved by the Third Respondent recorded a deficiency in excess of €1.13 million. The Third Respondent was an educated professional person and, although it was not pleaded or argued, ignorance of company law is no defence. It does not take a chartered accountant or financial expert to know that the company was seriously indebted to creditors. I approve of the views expressed by the High Court of South Africa in Engelbrecht (op cit.). The manner in which the Third Respondent facilitated the actions of the First Respondent, resulting in the losses incurred by creditors, is exactly the “uncaring and careless failure to attend to the company’s business” which that court considered to be reckless conduct.

944. I have found as a matter of fact that the Third Respondent was knowingly a party to the carrying on of the business of TPH in a reckless manner for the purpose s. 610 (1)(a). It seems to me that the deeming provision of s. 610 (3)(a) is relevant also. Being the only shareholder and the only registered director to serve continuously from 1 October 2013 to March 2020 the Third Named Respondent was clearly a party to the carrying on of the business of the company. Whilst he had no legal or financial training or expertise, or at least no evidence of any such expertise was adduced, he was an educated professional person who cannot say and has not pleaded that he was ignorant of any of the company law and fiduciary duties of directors. Knowing that the company was insolvent before and after the receivership and therefore from the day of his appointment he ought to have known that his failures to take steps to address or remedy the insolvency or alternatively to initiate a liquidation, a power which he held as the sole shareholder, would cause loss to creditors of the company. Although not a person with legal or financial training, he chose in his later correspondence with the Applicant to cite company law, employment law, tax law and even quote obligations of a liquidator to the Applicant. Whether he himself drafted the letters is unclear, but he cannot claim ignorance of such matters when he entered into such correspondence.

945. I shall therefore make a declaration that the Third Named Respondent was knowingly a party to the carrying on of the business of the company in a reckless manner, and that he be personally responsible for the debts of the company in the amount referred to below.

946. It does not seem to me that it would be appropriate in this case to impose on the Third Respondent personal liability for debts which had accrued prior to the appointment of the receiver, which occurred some three years prior to his appointment. Therefore the declaration will be limited in his case to those debts which were accrued thereafter, which amount in total to €1,029,733.83. Third Respondent – Section 609: failure to keep adequate accounting records

947. I have already concluded that TPH contravened the provisions of section 281 to 285 of the Act concerning its obligations to maintain books and records of account. I have also concluded that this contravention resulted in substantial uncertainty as to the assets and liabilities of the company and substantially impeded the orderly winding up of the company.

948. The next question is whether, as the Applicant submits, the Third Respondent is a person in default with respect to this contravention.

949. Each of Mr. Sugrue and that Mr. Wallace was a director of TPH for a limited period of time. The Third Respondent is the only person who was a registered director of the company from 1 October 2013 onwards. One of the basic duties of a director is to ensure that the company complies with the provisions of the Companies Act itself including of course sections 281-285. This duty applied no less to the Third Respondent than to any other person, and I can only conclude that as the one director continuously registered as such he was a person in default as regards this contravention and I shall so declare pursuant to s. 609.

950. Having regard to the particular status of the Third Respondent, I shall limit the quantum of this declaration to the amount of the additional cost incurred in the liquidation for the reconstruction of the books and records of account. I have accepted the evidence of the Applicant that this amount is €21,433.93. I shall declare the Third Respondent liable to contribute this amount to the Applicant. This obligation will be joint and several with that of the First Respondent.

Third Respondent – Section 608: assets improperly transferred

Third Respondent – Section 612: misfeasance

951. There is no evidence of any disposal or transfer of assets of any of the companies to the Third Respondent and no for an order against him pursuant to section 608.

952. I have already detailed the disbursement of sums totalling €619,973.58 out of the bank account of TPH and which have not been accounted for. These payments and transfers amounted to misapplication of company funds within the meaning of section 612. I have taken this into account as part of the events facilitated by the Third Respondent and which ground the declaration against the Third Respondent pursuant to s. 610. Clearly the Third Respondent did not himself misapply or retain those monies. Since any payment of compensation in respect of this set of transactions would, as the Applicant suggested in the hearing, be credited against the liability declared pursuant to section 610, it is not necessary to determine whether the Third Respondent is independently “guilty” of misfeasance in respect of this money within the meaning of section 612.

Third Respondent – Section 842: disqualification

953. I have determined that this is an appropriate case in which to make a declaration pursuant to section 610(1)(a) that the Third Respondent has been a party to reckless trading and that he be liable to pay the debts of TPH. Therefore section 842(c) applies to him.

954. The Third Respondent was a director of TPH when it was involuntarily struck off the register on 10 July 2019 for failure to file annual returns. Therefore section 842 (h) applies to him.

955. It can be said that in the period between the Third Respondent's first appointment as a director of TPH on 1 October 2013 and the discharge of the receiver on 8 September 2014, there were limits to what he could have done in relation to assets, such as they were, of that company. However, when the receiver was discharged, having certified the company to be insolvent, direct responsibility reverted to the directors for the management of the Company's assets and affairs. The Third Respondent had been the sole shareholder since 2009 and a director for almost a year. He took no steps to regularise the affairs of the Company and facilitated the misuse of the Company in the manner described in Part Six of this judgment, leaving it to the Collector General to intervene by moving to have the Company restored to the Register and the Applicant appointed to conduct an orderly winding up. In his engagement with the Applicant he failed to cooperate or comply with orders of the court.

956. The Third Respondent also sought to mislead the Applicant in relation to a range of matters. These included the claim for payment of a lump sum to the First Respondent pursuant to an “Employment Contract” and the effect of the so-called Deed of Retirement between TPH and the Fourth Respondent.

957. The conduct of the Third Respondent was serious, and is in the category which would warrant a term of disqualification exceeding ten years. I shall make the order for a period of twelve years.

958. No mitigating circumstances have been advanced by or on behalf of the Third Respondent which would warrant any reduction in that period.

959. Section 846 provides that the court may order a disqualified person to bear the costs of the application and the costs and expenses incurred by the Applicant in investigating the matters the subject of the application and in collecting evidence. In the case of TPH the professional time cost incurred by the Applicant were €19,248.37 and the costs of gathering evidence were €48,975.75. There will therefore be an order that the Third Respondent contribute to the costs so incurred in an amount totalling €60,224.12. This liability is joint and several with that of the First Respondent.

960. I shall separately hear the parties as to the legal costs.

PART FOURTEEN: Fourth Respondent – Tuskar Investment Group Limited

961. In Part Eight I have examined the facts relating to the Fourth Respondent and concluded that no further orders can at this time be made against it, whether pursuant to s. 608, s. 599 or otherwise. It remains liable for costs pursuant to orders made on 22 February 2021 and 8 March 2021.

PART FIFTEEN: Fifth Respondent – Martina Hynes

962. The only relief sought by the Applicant against the Fifth Respondent is a declaration pursuant to section 608 of the Act that the transfer of monies to the Joint Account of the Second and Fifth Named Respondents had the effect of perpetrating a fraud on HJW and its creditors or members and an order for the return of those monies.

963. Monies totalling €704,375 were transferred to the Joint Account from HJW accounts. Of this amount a sum of €350,002.40 was over time transferred back. This left unaccounted for a balance of €354,372.60.

964. The Personal Insolvency Arrangement of the Fifth Respondent, approved by the Circuit Court on 27 February 2025, includes an admission of a debt to the Applicant in the amount of €354,372.60. This provision corresponds with a settlement between the Applicant and the Fifth Respondent. As part of the Personal Insolvency Arrangement and the Settlement, the Fifth Named Respondent has agreed to grant security to the Applicant in respect of her interest in a specified property, and the balance of the debt will be written off.

965. In these circumstances I shall confine the relief to a declaration pursuant to section 608 that the transfer of monies totalling €354,372.60 was a disposal the effect of which was to perpetrate a fraud on HJW and its creditors. Before the order is perfected I shall hear any submissions as to any further or other order required concerning the Fifth Respondent.

PART SIXTEEN: Section 600: pooling of assets

966. The Applicant seeks an order pursuant to section 600 directing that the Companies be wound up together as if they were one company.

967. Section 600 provides:

(1) Where 2 or more related companies are being wound up and the court, on the application of the liquidator, or any creditor or contributor, of any of the companies, is satisfied that it is just and equitable to do so, it may make the following order.

(2) That order is one that, to the extent specified in the order, the companies shall be wound up together as if they were one company, and if such an order is made, it shall, subject to the provisions of this section, have effect and all the relevant provisions of this Part shall apply accordingly.

(3) The court may specify that that order shall be subject to such terms and conditions as the court thinks fit.

(4) In determining those terms and conditions, the court shall have particular regard to the interests of those persons who are members of some, but not all, of the companies.

(5) Where the court makes an order under this section—

(a) the court may remove any liquidator of any of the companies, and appoint any person to act as liquidator of any one or more of the companies,

(b) the court may give such directions as it thinks fit for the purpose of giving effect to the order,

(c) nothing in this section or the order shall affect the rights of any secured creditor of any of the companies,

(d) debts of a company that are to be paid in priority to all other debts of the company pursuant to sections 621 and 622 shall, to the extent that they are not paid out of the assets of that company, be subject to the claims of holders of debentures under any floating charge created by any of the other companies,

(e) unless the court otherwise orders, the claims of all unsecured creditors of the companies shall rank equally among themselves.

(6) In deciding whether it is just and equitable to make an order under this section, the court shall have regard to the following matters:

(a) the extent to which any of the companies took part in the management of any of the other companies;

(b) the conduct of any of the companies towards the creditors of any of the other companies;

(c) the extent to which the circumstances that gave rise to the winding up of any of the companies is attributable to the acts or omissions of any of the other companies;

(d) the extent to which the businesses of the companies have been intermingled.

(7) Notwithstanding any other provision, it shall not be just and equitable to make an order under this section if the only ground for making the order is—

(a) the fact that a company is related to another company, or

(b) that creditors of a company being wound up have relied on the fact that another company is or has been related to the first-mentioned company.

968. The term ‘related company’ is defined in section 2(10). Subsections (a)-(d) and (f) are not relevant since the shareholding in the three companies is diverse. None of the shareholders in any of the Companies is a shareholder or holds voting control in the others.

969. The Applicant invokes subsection (e) which provides as follows: “the business of the companies have been so carried on that the separate business of each company, or a substantial part thereof, is not readily identifiable”.

970. This definition does not say to whom the business of the Companies must have been not readily identifiable.

971. The Applicant says that the making of a pooling order would result in a saving of time and costs and ultimately lead to a better outcome for the creditors of the Companies. He referred the court to section 600(6) which identifies matters to which the court shall have regard in deciding whether it is just and equitable to make such an order. These criteria have a certain relevance to the affairs of the Companies, although the court was not addressed on the evidence by reference to each of them. The most relevant is section 600(6)(d), which refers to the extent of intermingling of the businesses.

972. The section can only apply if the Companies are related within the meaning of section 2(10)(e). I am not persuaded that this definition applies to the Companies.

973. The business of HJW was that of a retail jeweller. That business ceased on 19 April 2016. By that time TPH had been appointed Secretary. The evidence is that the First Respondent became a de facto director and was exerting control of HJW and TPH. This was not voting control but control of the management of the Company’s finances and the Company’s engagement with certain creditors. The clearest example was in the engagement with BJ Fitzpatrick. It was never suggested that in that engagement he introduced the names of TPH or any other entities. On the contrary, he insisted that he was the person that suppliers must deal with in relation to HJW itself.

974. The First Respondent took advantage of his influence to transfer money between company bank accounts. The movement of moneys between HJW and TPH was intermingling of cash. That is not the same as intermingling the business such that they are not readily identifiable. A ‘business’ is more than cash at bank. In this case, bad as the records were, the Applicant was able to trace the amounts of money between the bank accounts of the different companies.

975. Before the receiver’s appointment in 2010 TPH was engaged in property investment and had extensive borrowings secured on properties. There is a dearth of evidence as to what, if any, business was being conducted by TPH when it was appointed Secretary of HJW. The Applicant says that for a number of years, and at least after the discharge of the receiver, TPH had no discernible trade or business, and that its only activity was that the First Respondent utilised it as a vehicle for the transmission and concealment of moneys, as between it and himself and other family members.

976. It seems to me that the examination of the relationship for the purpose of section 2(10)(e) should not be through the prism only of the instances, numerous as they were, of abuse of the corporate entities perpetrated by the First Respondent and others. This conduct involved intermingling and diversion of money between bank accounts. There is however no evidence that the HJW business of retail jewellery and the business carried out by TPH, at some time in the past having been property investment, had become so inseparable that they were not readily identifiable.

977. That same distinction applies between TPH and JWF.

978. It is said that the business carried on by JWF was the same ‘Hynes Family Jewellers’ which had been carried on by HJW. When 19 North Main Street was repossessed HJW ceased trading. The phrase ‘transfer’ was used from time to time in various parties descriptions of the events of 2016. The trade name “Hynes Jewellers” was used by JWF. But there was no evidence that between 19 April 2016 and October 2016 any part of the business of HJW had continued. Whether JWF was “restarting” the family business or commencing its own business, there was no point in time when the two companies were carrying on the same or an identical business such that the two were not readily identifiable. If customers or suppliers were confused about this, no evidence was led to that effect.

979. The Revenue Commissioners were informed that the employees in the shop at 113 North Main Street operated by JWF were employees of HJW. No detail of those communications was put in evidence. Revenue were in a position to identify the separate businesses when it came to raising the assessments which, when not appealed, grounded the debt on foot of which separate petitions were presented for the winding up of the Companies.

980. The names of all three companies were used in relation to the hire purchase and later attempted disposals of two motor vehicles. Undoubtedly that was intended to and caused a measure of confusion. It did not preclude the finance companies from exercising their rights to repossess the vehicles. I do not consider that the hire purchase of two vehicles, which in fact were for personal use by at least two of the Respondents, was such a central feature of the business of any of the Companies, that these two transactions can, of themselves, have had the effect of rendering the separate business of each of the Companies not readily identifiable.

981. The Applicant relies on what he describes as “the close links between the three companies and the operations carried out by each Company”. The common close link was the role of the First Respondent as de facto director of each of the Companies. He led a ‘programme’ of utilising the separate corporate identities of the Companies for his own benefit and the benefit of family members. Whatever about TPH, this activity was not the business of HJW or JWF. Apart from these abusive transactions, there is no evidence of close links between the operations of the Companies themselves.

982. It may well be that by the time of the events giving rise to these proceedings, the only ‘business’ of TPH was to serve as a tool for the First Respondent to divert and extract cash from it and the other two companies and to conceal his own personal income. But it cannot be said that this was the business of HJW or JWF or even a substantial part thereof. The Companies are therefore not related within the meaning of section 2(1) and the court has no jurisdiction to make an order pursuant to section 600.

983. I accept that there may be administrative efficiencies and a saving of costs if an order were made pursuant to section 600 and that discretionary factors may favour such an order. But the jurisdiction only arises if the Companies are related within the definition in section 2(10), which they are not.

PART SEVENTEEN: Conclusion

984. Throughout this judgment I have stated the amounts in respect of which I intend to declare the Respondents to be liable under different sections of the Act. Before the order is perfected, I shall hear the parties as to any necessary corrections or updates to those numbers which may be required. This is not an invitation to reopen the substantive decision in relation to the amounts being imposed or any other parts of this judgment, but an opportunity for the parties to identify any potential errors in calculation before the final order is perfected.

985. The matter will be listed before this court two weeks after the delivery of this judgment for any submissions as to the final form of the order and as to costs.