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restriction and disqualification - Coggle Diagram

- - - - change in 2014 act - s. 683 - became mandatory to bring 819 application
      - previously not many restriction applications being brought as optional
      - unless relieved by director of corporate enforcement (now CEA)
  - - - ro lo line electric motor - primary purpose is not to punish individual but to protect the public
      - stop phoenix syndrom - directors being able to walk away and re-establsih same business elsewhere
      - colm o'neil engineering purpose is to protect public at large
    - - person subject to order can't be director, secretary, promoter for 5 years
    - - tralee beef and lamb hardiman obiter - requirement to prove doubt if in line with fairness and consitutional justice - draconian
      - tailored homes giving directors last chance in form of hearing to escape restriction
  - - - cooperated with liquadtor as far as reasonably expect
      - no other eason why just and and equitable
      - acted honestly and responsibly
    - - squash ireland more than misjudgments or commercial erros - objective
  - - - Lynorowan Enterprises person not validly appointed, can still be resricted, if sole person directing affairs or directing on equal footing to true directors
      - Gray v McLoughlin court take into account all factors - if used title director, if had info to make decision - in this case other directors considered him to be director, had accepted description, sat at board meeting, responsibily - but did act hoenstly and responsibly so not restricted
    - - worldport ltd company can be shadow director, but can't restrict a body corporate
      - toy traders once established to be shadow director
    - - Euroking Miracle Ltd can be applicable to non-resident directors - purpose is against those unsuited to being directors
    - - s150 - applies to executive and non-executive
      - passive and expereienced non-executive can be restricted
      - gilson motors restriced failure to maintain adequate supervision
  - - - exception if meet capital requirements
      - if restricted director can use summary approval procedure to provide financial assistance
    - - courtney - may be inappropriate as many restricted directors may look to form a business themselves
  - - - shifted
        
        Tralee Beef and Lamb wording of act reverses usual burden of proof - require court to make order unless fall into category
      - winning ways director failed to show acted honestly and responsibly, onus on director
    - - costello doors
        
        obiter - excused - as the person in charge of keping books had fallen ill
      - la moselle clothing
        
        extent director complied with obligatin imposed by companies act (baxter)
        
        extent which conduct regard as incompetent to amount to irresponsibility (gray v mcloughlin) needs to be extreme
        
        extent of responsibiity for insolvency re usit failure to cease trading when clearly insolvent
        
        lack of commercial probity
        
        whole tenure looked at
        
        net deficiencies - if honest
        
        facts - director borrowed large sums when company insolvent - traded when knew insolvent - used money owed to finance own personal and busienss expenses
      - mitek holdings director of 5 companies, in examinership, scheme of arrangement approved, became insolvent - liquidator brought restriction - court - facts not standardised consider rights and interests of subisdiary seperately
      - squash ireland - approved La Moselle and said objective standard - needs to go further then commercial errors or misjudgments
      - kavanagh v reidler non-executive director entitled to rely on info provided by fellow director
      - doherty v donohoe
      - tralee beef and lamb expansion on test from La Moselle - look at general duties including due skill and diligence
      - james murphy mandatory order of 5 years - failed in responsibilites lack of commercial probity - didn't act responsibily
      - re USIT link between conduct and collapse of company requires careful scruitny - irresponsibility matter of degree - La Moselle test not exhaustive - each case on own facts
      - baxter knowledge at time no witch hunt
    - - USIT [World] trrading out of difficulty not irresponsible but must take effective and realistic steps
      - pineroad distribution shutting eyes to long standing and greatly increasing debt - gross recklessenss
    - - dublin sports cafe - no major difference, each case own facts - SC might be a difference - not full defence
      - mitek holdings non-executive directors usually get info from executive - all restricted as can't take hands off approach = each case on own facts
      - tralee beef and lamb higher standard expected of executive, (SC ) - didn't rule out being restricted - not in this case as honesty and responsible defence
      - RFM no distinction in statute but should be recognised by court
      - dorchester v stebbing 2 non-executive liable if interevened could have avoid loss
    - - Gleneagle (no restriction as no real moral blame), JPM CAD Designs - ties of affection cases - no real moral blame - since overruled by wafab
      - McCoy v Courtney husband and wife directors of insovlent company, husband accepted restriction, wife argued passive director - court wife should be restricted - used company cards for own personal use
      - Cahill v O'Brien Director A claimed acted hoenstly and responsibly and didn't prejudice creditors, director B claimed didn't contribute to insolvency - liquidator though both co-operated and neither should be restricted - court knowingly trading when struck off was irresponsibility - trying to resign unsuccessfully not sufficient - undertake to do same things - 2nd escaped as deceived and sought independent advice when finding out (self-restrictin)
      - mint restaurant restricted for using company cares for personal reasons
    - - 822 - request court to disapply restriction order where just and equitable
      - CMC IReland; Fennell v Carolan conduct of director after winding up may be taken into account - had co-operated with liquidator
      - Robinson v Forrest company wound up, restriction orders made, 1 contest the other didnt - director contesting acted honestly but not responsibly - deterrent value achieved
    - - bod investments keane - conduct both prior and after liquidation- wife passive director sought independent advice when learning - not restricted
      - now express requirement
- - - - protect the public
      - more severe - no involvement
      - Seymour more then just protect public
      - raise standards re swift
    - - nation irish bank DCE v Darcy corporate law offers privileges and opportunities - if avail of it msut accept standards and ergulatory rules - intention to improve standards
    - - onus on applicant
      - Readymix Ltd
      - can be mandatory if indictable offence, if not mandatory substantial burden (Baxter)
      - unfit to be in management
      - kentford securities 2 stage inquiry
        
        is jurisdiction triggered
        
        consideration of courts discretion
    - - court order disqualification - 842
      - 839 - automatic indictable offence kentford securiites - mandatory
  - - - director corporate enforcement, DPP, registrar, member, officer, employee, liquidator
  - - - keypak homecare transfering assets of insovlent company to another company controlled by directors
      - cladrose power exercised displaying lack of commercial probity and leaving creditors to suffer - 1 director relied on other, good cause to rely - no disqualification
      - Director of corporate enforcement v D'Arcy persuaded customers to take out polices to hide undisclosed monies - aware and responsible for practice - lack of commercial probity - 12 years reduced to 10 for co-operation
      - trading recklessly, non-payment of tax
    - - bath glass sought to disqualify 2 directors, look if director unfit to be in management - incurring debts alone not indicative of unfitness - no dishoensty, perosnal financial commitments, regular budgets - conduct not sufficient serious
      - newcastle timber - incompoetent and irresponsible - traded for years while insovlent - restriction more appropriate
      - wood products trade while insolvent, failure to file annual returns, struck off, trade when dissolved - hheld he was a direcotr - purpose is that all directors comply (doesn't matter if passive)
    - - Director of corporate enforcement v byrne finding not easily made, look at behaviour and record as a whole - more then mere mismanagement - high degree of icnompetence