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1. While it is not integral to what I have to determine, it does appear that the failure of the legislature to provide a procedure whereby a named category of persons was empowered to maintain a Section 150 application (in marked contrast to the procedure allowed in relation to Section 160) is probably explained by the original view that the restriction was to be an automatic consequence for a director of an insolvent company. Whatever the reason, the fact is that the 1990 Act does not expressly empower any party to bring on a Section 150 application.

2. All enactments should be given a purposive construction: that is, a construction which promotes the remedy the Oireachtas has provided to cure a particular mischief. Armed with such a canon of construction, this Court approaches Part VII of the 1990 Act noting that the legislature has expressly provided a particular restriction for particular types of conduct; it is a restriction to be imposed by the Court, but which cannot realistically be imposed in the absence of a procedure whereby applications for such a restriction are made to the Court by parties with an interest in making such an application. I believe that the Court ought to construe Section 150(1) in such a way as to promote, rather than restrict, the remedy provided for in that subsection: while the grounds for the disqualification of a director and other officers of a company differ from the grounds warranting restriction of a director, nonetheless, it does appear to me that the persons authorised by Section 160(4)(b) to bring an application for a disqualification order are, broadly, the same category of persons who would have an interest in seeking an order for the restriction of a director. In promoting, rather than restricting, the remedy provided for in Section 150(1), this Court ought, in my view, construe the mandatory power provided therein as exercisable on the application of any one of the class of persons identified in Section 160(4)(b) of the 1990 Act being persons identified by the legislature as having an interest in moving an application for a disqualification order and whom the legislature would have intended to have a like interest in relation to applications to restrict directors. Accordingly, in my view, Musgrave Limited, as a creditor of Steamline Limited are entitled to maintain this application.

3. Steamline Limited was incorporated on the 1st May, 1992; it was wound up by a creditors voluntary winding up on the 19th July, 1996. At that date, Michael Coughlan, Brendan Flannery and Kieran Walshe were directors of the company. The company was incorporated with a view to sourcing and purchasing goods for a number of supermarkets in Moscow. These supermarkets were initially operated by a partnership (comprised of C.F.P International Limited, Irlasto Plc and two Russian nationals). After tax advice, a company called Cystan Holdings Limited was incorporated (and registered in Cyprus) which held the shares in Garden Ring Supermarkets Limited which in turn owned the supermarkets in Moscow. The shares in Cystan were held by the original partners i.e. Irlasto C.F.P. International Limited and the two Russian nationals. Messrs. Coughlan, Walshe and Flannery were directors of Irlasto and Messrs. Coughlan, Flannery and Pratt were directors of C.F.P. International Limited. The corporate and tax driven scheme was put into effect on the 1st January, 1994. Steamline had supplied the supermarkets in Moscow with goods since September 1992. Up until the 31st December, 1993 it was paid directly by Garden Ring Supermarkets, but as soon as the new corporate structure had been put in place it was paid by Cystan, who in turn, was paid by Garden Ring Supermarkets; it is clear from the Affidavits before me that between August 1992 and April 1996 the Applicant Musgrave Limited supplied the company with groceries, aware that the company was, in turn, supplying these groceries to Garden Ring Supermarkets.

4. The terms of trading between Steamline Limited and Musgrave Limited were initially those of 28 days credit being allowed in respect of goods supplied together with a letter of credit in a fixed sum. The amount of this letter of credit increased as time went by and the last letter of credit (which expired on the 10th September, 1994) was for £70,000. The other terms of trading are in some dispute: Musgrave say that they agreed with the company for the payment of a ' surcharge' on goods, whereas the company says that the only terms are those contained in a letter of the 21st September, 1992 from Musgrave to Steamline Limited. The company in the three years to September 1995 purchased £2.4 million worth of goods from Musgrave. In turn, these goods were sold on, eventually to Garden Ring Supermarkets. As stated, Garden Ring Supermarkets was to pay Cystan, and Cystan to pay the company. Arrangements were such that the company's mark up was slight - the intention being that it would make a nominal profit only, it had no staff and paid a management fee to C.F.P. International Limited. The state of health of Garden Ring Supermarkets in mid-1995 was encouraging: in the year ending the 31st December, 1994 its trading profits were $3.4 million. Merchant Bankers, Barings, were interested in procuring a situation where Irlasto purchased a controlling interest in Garden Ring Supermarkets. It was decided to do a due diligence exercise in relation to Garden Ring Supermarkets Limited. This commenced in early August 1995 and finished at the end of August 1995. The report was available, according to Mr. Coughlan, only in mid-October of 1995. Early in this process it became clear that there was theft on a huge scale within the supermarkets in Moscow. According to Mr. Coughlan the extent of the theft was only clear when the results of the due diligence became available in mid-October 1995. This disclosed a sorry picture of pilferage of goods to a value of some $2 million. What was uncovered in Garden ring Supermarkets Limited produced cash flow problems for Steamline. According to Mr. Coughlan the directors decided that they should inform Musgrave Limited of what had happened. This they did but not until the 21st November, 1995 when representatives of Musgrave attended a meeting with representatives of Steamline Limited. On that date Mr. Coughlan offered to pay the outstanding liability of Steamline to Musgrave by way of instalments. The sum which he offered to pay was a sum of around £130,000 which was Steamline's estimate of what was owed to Musgrave but was not a sum which Musgrave agreed was owed to them. Musgrave, in any event, refused to accept this proposed payment by instalments in the absence of some form of security being also offered by Steamline. Michael Smith, a sales director for Musgrave, says that Coughlan at that meeting said that the company had " gone by August 1995 " and that $2m worth of retail stock had gone missing in the Moscow premises. Mr. Coughlan denies having said either of these things at that meeting. It is not practicable to give details of the balances due by the company to Musgrave between 1992 and 1996, not least because they are not agreed and I cannot resolve on Affidavit the disagreement between the parties. However, it can be said, that on the 2nd October, 1995 the company paid Musgrave the sum of £69,956.46 and that between November 1995 and April 1996, Steamline paid to Musgrave further sums totalling £84,905. Musgrave contend that the balance due to them as at the 16th November, 1995 was the sum of £199,097.90 and that £113,915.14 was due to them as at the date of the winding up (being the 19th July, 1996). Musgrave contend that two orders were placed by Steamline (on the 4th and 13th October, 1995) for goods to the value of £39,405.73 and £40,366.35. They say that such orders were placed by Steamline at a time when that company was insolvent. Steamline for its part say that these orders were placed directly from Moscow and were prior in time to the invoice dates and were not placed at a time when the directors of Steamline knew that the company was insolvent. Indeed, they say that at that time the company was not insolvent.

5. After the due diligence exercise had been completed, the Merchant Bankers Framlington and Barings, were still interested in the Moscow venture; between December 1995 and February 1996 those Merchants Bankers advanced some $800,000 to Irlasto who in turn loaned the monies to Cystan. A root and branch reform of the related companies was proposed:-

6. The directors of Steamline believe that with these reforms the business could survive and prosper: not only did they so believe but both Mr. Walsh and Mr. Coughlan agreed to give ' warranties' and ' indemnities' up to $100,000 to secure the cash advances from the two Merchant Bankers. After the receipt of the results of the due diligence, Steamline contend that they did not thereafter consciously seek credit. In April 1996 Steamline ceased to trade. However, as already noted, it repaid to Musgrave during this period the sum of £84,905. On a more general level, it reduced the level of all of its creditors from the sum of £552,000 (at the 31st October, 1995) to £277,000 by the 19th July, 1996. During the period from October 1995 to April 1996 according to Mr. Coughlan the directors honestly believed that the business of the company could be saved. However, Cystan owed the company large sums of money and was not repaying these sums, and by June 1996 (accordingly to Mr. Coughlan) it became clear that the supermarket business in Moscow could not survive. Events crystallised. The Russians ensured that Cystan was not repaid any sum from February 1996 onwards. Funds were misappropriated by the Russian side according to Mr. Coughlan. Intimidation of the Irish directors took place: the Irish were effectively locked out of the Moscow stores.

7. The Applicants say that the directors did not behave honestly or responsibly. In particular it is said that it was irresponsible:-

8. The Respondents say that:-

9. I have to decide whether this Court should restrict these three directors from acting as such for a period of five years. Section 150(1) and (2) (which I need not set out in detail here) effectively puts the burden on the three directors to satisfy this Court that they have acted honestly and responsibly in relation to the conduct of the affairs of the company and that there is no other reason why it would be just and equitable that they should be subject to the restrictions of Section 150(1).

10. Consideration has been given to the meaning of the words " acted honestly and responsibly in relation to the conduct of the affairs of the company " in a number of cases: Business Communications Limited -v- Baxter and Anor . unreported, 21st July, 1995, Murphy J.; Outdoor Advertising Services Limited , Costello P., unreported, 28th January, 1997; and La Moselle Clothing Limited, unreported, 11th May, 1998. There was no real dispute between the parties as to how the phrase should be construed and the judgments to which I have referred are ad idem as to the type of conduct which will merit the description " irresponsible". I should first say that I am satisfied in this case that the directors have not been guilty of dishonesty of any kind - and that I am concerned only with whether their conduct can be described as 'irresponsible' . As to this aspect of matters, I can summarise my views as follows:-

11. Steamline continued to pay to Musgrave its debts by instalment between October 1995 and April 1996 amounting £84,000. Steamline continued to pay its other creditors (including Musgrave) thus reducing its liability to those creditors from £552,000 to £277,000 by July 1996. The two Merchant Bankers, Framlingtons and Barings, continued to invest in Irlasto between October 1995 and December 1995. Mr. Coughlan and Mr. Flannery, as directors of Irlasto, gave ' warranties' and ' indemnities' in respect of such advances from the Merchant Bankers. The offer from the directors of Steamline to pay Musgrave by instalments made on the 21st November, 1995 is, in my view, wholly inconsistent with the conduct of directors who believed that the company was ' finished' and was not capable of trading profitably. Between November 1995 and April 1996, Steamline Limited traded on a cash on delivery basis which, in my view, represents an attitude evidencing responsibility on the part of the directors. The detailed restructuring proposals which were made in October 1995 (and notified to Musgraves at the meeting on the 21st November, 1995) does not in any way represent the actions or plans of persons who believed that their business was then insolvent.

12. Looking at the actions of the directors in the period after the receipt by them of the due diligence exercise, I cannot find any conduct on their part which I could say constituted a want of commercial probity or in any way contributed to the insolvency of the company or to the net deficiency in the company's assets. Nor do I view the figures inserted in the Statement of Affairs for realisation of assets, or for the Musgrave debt, as necessarily being characterisable as a breach by the directors (although I think it fair to say that they deserved a better explanation then was tendered by the Respondents) of their obligations under the Companies Acts. The figure due to Musgraves (£39,000) is undoubtedly in dispute - a bona fide dispute - between the parties; and the Cystan debt and its realisable value is a matter on which no certain view can be expressed, although, as I have said, I would have liked some better explanation then was given for the reason of the insertion of the figure in the Statement of Affairs.

13. In all of the circumstances, the directors have discharged the onus which was upon them of satisfying this Court as a matter of probability that they behaved honestly and responsibly in relation to the conduct of the affairs of the company and that there was no other reason why it was just and equitable that they should be restricted.