A HIGH Court judge has refused to jail three directors of a company that operated the Brook Lodge Hotel in Aughrim, Co Wicklow.
A businessman had sought the order, alleging the three were in contempt of court because their firm failed to obey an order to pay him a €1.2 million debt.
Mr Justice Peter Kelly yesterday ruled that the hotel operating company, Durgman Entertainment Ltd, to which provisional liquidators have been appointed, had not been properly notified of the application by that creditor – Eamon Galavan – to seek their imprisonment.
Earlier this week, the court was told Mr Galavan, Clonroche, Enniscorthy, Co Wexford, wanted to bring contempt proceedings against Bernard Doyle, Waterside, Darglevale, Bray, Evan Doyle, Macreddin Village, Aughrim, and Eoin Doyle, Levmoss Hall, The Gallops, Leopardstown, Dublin.
The hotel continues to be operated by the directors in their personal capacities.
The contempt application arose from their alleged failure to abide by a court order of March 3rd, 2010, requiring Durgman and two related companies – Brooklodge Estate Ltd and Firefly Properties Ltd – to buy €1.2 million worth of shares from a firm owned by Mr Galavan. An appeal was lodged against that order on March 16th, 2010.
Yesterday, Mr Justice Kelly ruled Mr Galavan’s application to have the directors arrested and jailed required they should have been served with proper notice in accordance with the rules of the superior courts.
While it was contended by counsel for Mr Galavan this was a “technical” matter that could be overlooked because the directors were aware of their obligations, this was not one of those rare cases justifying the court’s overlooking a failure to adhere to the rules, the judge said.
The plaintiff was seeking to enforce an order made well over a year ago, and a necessary condition of any application for contempt was that it accord with the rules, he said.
Before he could decide whether there was wilful disobedience of the court order, he must be satisfied the firm and directors had been properly served with notice making them aware of the consequences of failing to obey it, he said. There was “nothing technical” about compliance with the rules in a situation where a person was being deprived of their liberty, he added.
The fact an appeal had been lodged against the March 2010 order – and it appeared nothing had been done to prosecute it – added an element of confusion, the judge also said. He granted an application to allow the directors be examined by lawyers for Mr Galavan next October in relation only to their directorships of the two associated Durgman companies, Brooklodge and Firefly, which the court heard had not traded for the last two years.
He did not see much point in allowing examination of the directors of Durgman, as a provisional liquidator had been appointed and there was no doubt the firm would go into official or voluntary liquidation.