12 January 2000

GUARANTEE BOILER SERVICES LIMITED

3 DIRECTORS DISQUALIFIED

On 16 December 1999 the High Court disqualified James Harvey from Donaghadee, Stephen Beattie and Joseph Hugh Giles Duncan from south Belfast from being company directors for periods of 5, 2 and 2 years respectively as a result of their conduct as directors of Guarantee Boiler Services Limited.

The case was brought by the Insolvency Service of the Department of Enterprise, Trade and Investment under the Companies (NI) Order 1989 which seeks to protect the public and trading community from the abuses of the privilege conferred by limited liability status.

Guarantee Boiler Services Limited traded in the installation and repair of heating systems from premises at Owen O’Cork Mills, Beersbridge Road, Belfast during the period October 1983to April 1997. It was wound up by the High Court on 15 April 1997 with an estimated deficiency to creditors of £38,965. This was later revised to an estimated deficiency of £91,631.

The matters of unfitness found by the Court and for which James Harvey was disqualified included:

• causing the company to trade from October 1995 to April 1997 in the knowledge that it was insolvent;
• causing the company to misuse two bank accounts by issuing 69 cheques totalling £40,455 which were dishonoured on presentation;
• presenting misleading financial information to a bank in the form of a statement of affairs which ignored the debts owed to the Crown creditors. This statement of affairs showed net assets of £106,742 at January 1997. The company was wound up in April 1997 with a deficiency to creditors of £91,631; and
• failure to file accounts in the Companies Registry.

In the case of Stephen Beattie and Joseph Hugh Giles Ducan the Court found that they had failed to address the affairs of the company as formally appointed officers and allowed themselves to be recorded as directors without undertaking the duties which such a position entails.

In accepting that he was likely to be disqualified Mr Harvey said that he relied upon others to perform all financial and administrative tasks. He also blamed former employees who had (he alleged) taken valuable contracts from the company and also removed many of its experienced and valuable personnel.

In his judgment Master Redpath referred to established case law which held that reliance on professional advice cannot be used as a defence to what a director should have known and the steps that should have been taken consequent upon this knowledge.

Master Redpath also noted that it appeared that Mr Harvey had made no financial gain from the company and that Messrs Beattie and Duncan had lost substantial sums of their own money.

 

 

NOTES FOR EDITORS

1. The Official Receiver when a company is wound up by the Court has a duty under the Insolvency (NI) Order 1989 to investigate the causes of failure and report any unfit conduct to the Insolvency Service within the Department of Enterprise, Trade and Investment.
2. The aim of the Department is to bring disqualification proceedings against those directors of failed companies who have abused the privilege of limited liability status through negligence, incompetence or lack of commercial probity. The legislation contained in the 1989 Order is for the protection of the public and trading community but its operation should not inhibit genuine enterprise.
3. Article 9 of the Companies (N.I.) Order 1989 allows the Court to make a disqualification order for a period of between 2 and 15 years for unfit conduct. This is the Article used by the Insolvency Service.
4. Requests for other information should be made in the first instance to DETI Press Office, tel: 028 90 529366, Fax: 028 90 529546 and not the Insolvency Service.