The Department also accepted a disqualification undertaking for four years from Marion McCauley (51) of the same address in respect of her conduct as a director of the same company.
Kerblite Limited was incorporated on 12 December 1984 and carried on the business of house building and contracting works from 81 Bellspark Road, Urney, Strabane. It went into liquidation on 21 April 2006 with assets of £157,129.17, liabilities of £555,329.03 to creditors and an estimated deficiency as regards creditors of £398,199.86. After taking into account the losses incurred by members (shareholders, including the directors) of the company, the estimated total deficiency was £408,199.86.
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 undertakings from Gerard McCauley and Marion McCauley on 8 June 2009 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:
- Causing and permitting Kerblite Limited to trade from 1 May 2005 to December 2005, at a time when they knew, or ought to have known it was insolvent and when such trading was to the detriment of creditors;
- Causing and permitting Kerblite Limited to underprice a contract to the benefit of a related company;
- Causing and permitting Kerblite Limited to be financed by non-payment of £125,136.16 of debts properly payable to the Crown; comprising outstanding PAYE and NIC for the periods 2004/05 and 2005/06 of £80,253.11 due to the Commissioners of Inland Revenue and monies due to HM Customs & Excise in respect of VAT for the period 2004/05 and 2005/06 of £44,883.05;
- Causing and permitting Kerblite Limited to misuse accounts with the Allied Irish and First Trust Banks in that direct debits were unpaid on seven occasions totalling €14,449.62 and 16 cheques totalling €155,670.66 were dishonoured on the Kerblite Limited account at Allied Irish Bank in the period 23 February 2002 to 30 November 2005 and direct debits were unpaid on 29 occasions totalling £10,672.27 and 39 cheques totalling £124,823.49 were dishonoured on the Kerblite Limited account at First Trust Bank in the period 16 April 2003 to 30 November 2005;
- Causing and permitting Kerblite Limited to fail to ensure that the annual returns in respect of the periods made up to 14 January 1996 and 14 January 2003 were filed on time and that annual returns in respect of the periods made up to 14 January 2004 and 14 January 2005 were filed with Companies Registry.
The following are additional matters of unfit conduct, alleged by the Department in relation to Gerard McCauley, which solely for the purposes of the disqualification procedure were not disputed:
- Causing Kerblite Limited to fail to maintain/preserve/deliver up accounting records;
- Causing Kerblite to fail to maintain/preserve/deliver up statutory records.
The Department has accepted nine Disqualification Undertakings and the Court has not yet made any Disqualification Orders in the financial year commencing 1 April 2009.
Notes to Editors:
1. Gerard McCauley and Marion McCauley are husband and wife.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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 028 9054 8516.
7. The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.
8. For media enquiries, please contact the DETI Press Office, tel 028 9052 9297. Outside office hours, please contact the Duty Press Officer via pager number 07699 715440 and your call will be returned.
