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Supreme Court upholds costs award against liquidator

Anthony J Fitzpatrick had appealed decision that he must pay half of Revenue’s costs

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Wed Jul 31 2019 - 17:04

The Supreme Court has upheld an award of costs made against a liquidator in favour of the Revenue Commissioners.

The issue in the appeal related to the circumstances in which a liquidator may incur personal liability for costs on being removed for cause.

Anthony J Fitzpatrick had appealed against a 2017 costs order which set down he must pay half the costs incurred by the Revenue Commissioners in relation to High Court proceedings taken against him around the liquidation of Ballyrider Ltd which began nine years ago.

The Supreme Court noted Ballyrider Ltd owned a hotel in Co Kildare which was the subject of a charge in favour of AIB, owed some €237,346.

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Mr Fitzpatrick was appointed voluntary liquidator in 2010 as the company was wound up.

The Revenue, owed €109,000, was a preferential creditor.

The hotel was later sold and in 2015 the High Court ordered Mr Fitzpatrick be removed as liquidator.

Mr Fitzpatrick unsuccessfully appealed that decision.

He also appealed over costs orders made in favour of the Revenue.

On Friday, a five-judge court dismissed his appeal over the Court of Appeal decision in the matter.

Satisfied

Mr Justice William McKechnie, giving the court’s judgment, said, even though there was no finding of negligence or misconduct against Mr Fitzpatrick, the High Court was satisfied, by reason of his failure to conduct litigation in an efficient and cost-effective manner, he should be removed as liquidator.

That High Court decision was affirmed on appeal, Mr Justice McKechnie said.

It was only fair to say, or to acknowledge, the trial judge had also said, if Mr Fitzpatrick had produced a detailed account and a credible plan at the High Court hearing to progress and complete liquidation, she may not necessarily have made the order which she did.

In the absence of such account or plan, his appointment was terminated, Mr Justice McKechnie said.

In this case, the position of liquidator was directly in issue and the court was therefore satisfied the normal rules on costs would apply and, if otherwise justified in so doing, an order for costs in favour of Revenue could be made.

The approach of the Court of Appeal in this matter was “unimpeachable”, the judge held.

He was entirely satisfied the outcome at an individual level was appropriately reached on the correct principles which were properly applied.

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