County Antrim director agrees to disqualification

The Department of Enterprise, Trade and Investment (the Department) has accepted a disqualification undertaking for seven years from Stephen Cairns (44) of Blackthorn Drive, Newtownabbey, in respect of his conduct as a director of Cairns Office Supplies Limited.

Cairns Office Supplies Limited carried on business as a wholesale stationer and supplier of office furniture from William Sinclair House, McKinney Industrial Estate, 54 Mallusk Road, Newtownabbey and went into liquidation on 4 February 2005, with assets of £38,700 and liabilities of £704,547 and an estimated deficiency as regards creditors of £665,847. After taking into account the losses incurred by members (shareholders, including the directors) of the company the estimated total deficiency was £755,847.

In cases where a director offers a disqualification undertaking acceptable to the Department, thus avoiding a full hearing of the matter before the court, a shorter period of disqualification than would otherwise be appropriate is normally imposed.

The Department accepted the disqualification undertaking from Stephen Cairns on 13 April 2007, based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

• Causing and permitting the Company to trade from 1 February 2004 to September 2004 at a time when he knew or ought to have known it was insolvent and when such trading was to the detriment of creditors;
• Causing and permitting the Company to be financed by non payment of £118,074.48 of monies properly payable to the Crown for PAYE, NIC and VAT;
• Causing and permitting the Company to misuse an account with the Ulster Bank in that during the period 20 February 2004 to 7 February 2005, 87 cheques, with a total value of £194,957.83, were tendered to creditors without due regard to them being honoured upon presentation;
• Failing to ensure the Company’s annual accounts for the years ending 31 March 2002 and 31 March 2003 were filed within the prescribed time period with the Registrar of Companies;
• Failing to ensure the Company’s Annual Returns made up to 7 February 2003 and 7 February 2004, were filed with the Registrar of Companies;
• Failing to ensure that accounts for the years ending 31 March 2001, 31 March 2002 and 31 March 2003 gave a true and fair view of the Company’s state of affairs.

The Department has accepted two Disqualification Undertakings and the Court has made one Disqualification Order in the financial year commencing 1 April 2007.

Notes to Editors:

1. Insolvency practitioners acting as voluntary liquidators, administrative receivers and administrators have a duty to report 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 Company Directors Disqualification (Northern Ireland) Order 2002 (the 2002 Order) is for the protection of the public and trading community but its operation should not inhibit genuine enterprise.
3. Article 9 of the 2002 Order provides that where a director is found to be unfit he must be disqualified for a minimum period of two years, up to a maximum of fifteen years. The Courts have decided that the level of seriousness of unfit conduct can fall into three brackets with the top bracket of periods over ten years reserved for particularly serious cases, six to ten years reserved for cases which do not merit the top bracket and two to five years for cases where, although disqualification is mandatory, the case is less serious.
4. The 2002 Order also allows directors, with agreement of the Department to avoid the need for a court hearing by offering an acceptable disqualification undertaking. This has exactly the same legal effect as a disqualification order made by the court, and will usually include a schedule identifying the director’s unfit conduct. The consequences of breaching a disqualification undertaking are the same as those for breaching a disqualification order.
5. If anybody contravenes a disqualification order or breaches their disqualification undertaking they may be committing a criminal offence and could go to prison for up to two years or face a fine or both. Any person with information to suggest that a disqualified person has acted in contravention of this provision should contact The Insolvency Service’s Directors Disqualification Unit on 02890 548516.
6. The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.
7. For media enquiries contact DETI Press Office on 028 90 529604.