W.L Construction Limited -v- Charles Chawke and Edward Joseph Bohan  IEHC 92
The protection given to directors through the corporate structure, otherwise known as the “corporate veil” can be lifted as seen in the matter of Mr William Loughnane of W.L Construction Limited (“Company”).
Mr Loughnane brought a case against Mr Charlie Chawke for renovation works done to Mr Chawke’s pub. The case which was subsequently dismissed as it was held that the evidence brought forward by Mr Loughnane was “tainted by lies and dishonest”. There was also further doubt on the evidence of the company’s expert quantity surveyor.
The Company had claimed that Mr Chawke had owed €370,000 for the work that it had carried out, however it was later discovered that the actual value had not exceeded €28,691.
The defendant’s application to have the matter struck out was granted as Mr Justice Noonan found there to be an abuse of the courts process and the Company had failed to establish that it had a case against the defendant.
Mr Loughnane joined Mr Chawke as a co-defendant the purposes of costs of the dismissed case. Mr Justice Noonan ruled that only Mr Loughnane was responsible for bringing forward the claim and for the result and accordingly should be held liable for the costs incurred in the matter.
A 21 day stay currently applies and the written judgement is yet to be made.
The decision clearly shows that the corporate veil will be lifted, taking the directors protection from liability along with it, – should, of course the circumstances require. The court will not tolerate any misconduct in litigation and company directors should take this as a stark warning.
The above does not constitute legal advice and is intended for general guidance. Please contact us for further information.