The Department for the Economy (the Department) has accepted disqualification undertakings from the directors of a company involved in floor and wall coverings.
The undertakings were received for six years each from Martin McCann (64) and Bernadette McCann (62) of Gloverstown Road, Toomebridge, in respect of their conduct as directors of P & M McCann (Flooring Specialists) Ltd (“the Company”).
The Company was involved in floor and wall coverings with a registered office at 27 College Gardens, Belfast, BT9 6BS. The Company went into liquidation on 14 April 2021 with an estimated deficiency as regards creditors of £167,024.73. There was a total of £2 owing as Share Capital, resulting in an estimated deficiency as regards members of £167,026.73.
The Department accepted the disqualification undertakings from Martin and Bernadette McCann on 22 May 2024 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:
- Causing and permitting the Company to submit inaccurate Corporation Tax / s455 and VAT returns resulting in a loss of monies properly due to the crown;
- Causing and permitting the company to operate a policy of discrimination against the Crown by retaining monies totalling £146,998.12 in respect of PAYE / NIC / CIS, VAT and Corporation Tax / s455 (excluding penalties and interest). This equated to 88% of the Company’s overall estimated deficiency. Furthermore, operating a policy of discrimination in that significant payments were made to trade creditors at a time when the HMRC debt continued to increase;
- Failing to comply with Companies Act 2006 in that annual accounts for the years ended 31 July 2011, 31 July 2012, 31 July 2014, 31 July 2017 and 31 July 2018 were filed late; and
- Causing and permitting the Company to fail to comply with Companies Act 2006 in that the annual returns for the periods ending 24 March 2013, 24 March 2014, 24 March 2016 and 24 March 2017 were not filed within the prescribed periods and the confirmation statements for the periods ending 24 March 2018 and 24 March 2019 were never filed.
The Department has accepted three Disqualification Undertakings and the Court has made two Disqualification Orders in the financial year commencing 1 April 2024.
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 for the Economy.
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. In cases where a person is subject to either a Disqualification Order made by the Court or a Disqualification Undertaking accepted by the Department, that person shall not be a director of a company, act as a receiver of a company's property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless he has the leave of the High Court. A disqualified person cannot obtain permission to act as an Insolvency Practitioner.
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 the 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 90 548582.
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 contact the Department for the Economy Press Office at pressoffice@economy-ni.gov.uk
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