County Tyrone director agrees to disqualification

Date published: 24 September 2024

The Department for the Economy (the Department) has accepted a disqualification undertaking from the director of a company involved in other building completion and finishing.

Director Disqualification undertaking.
Director Disqualification undertaking.

The undertaking was received for six years from Patrick McHugh (35) of Ashleigh Court, Castlederg, Co. Tyrone, in respect of his conduct as director of Erganagh Construction Services Ltd (“the Company”).

The Company was involved in building completion and finishing with a registered office at 25 Listymore Park, Castlederg, Co. Tyrone, BT81 7LN. The Company went into liquidation on 24 February 2022 with an estimated deficiency as regards creditors of £155,084.07.  There was a total of £1 owing as Share Capital, resulting in an estimated deficiency as regards members of £155,085.07.

The Department accepted the disqualification undertaking from Patrick McHugh on 2  September 2024 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

  1. Causing and / or permitting the Company to submit inaccurate VAT returns resulting in an Officer’s Assessment totalling £132,614 and an additional £12,399 of centralised assessments being raised by HMRC, resulting in a loss of monies properly due to the Crown from 2018/19. This represented 100% of the Company’s overall adjusted deficiency in respect of taxes properly payable to the Crown. Furthermore, as he submitted inaccurate VAT returns, he failed to comply with his duties in terms of filing accurate VAT returns, which resulted in the large debt falling due to HMRC. He continued to run the Company without any regard to his obligations as a director in terms of compliance with the VAT regime. This resulted in the Company having more money than it ought to have had available to fund its continued trading; and
  1. Causing and permitting Erganagh Construction Services Ltd to fail to comply with the relevant legislation in that financial accounts for the period ending 31 March 2017 were not filed within the prescribed time and annual accounts for the year ending 31 March 2018 were never filed; and
  1. Causing and permitting Erganagh Construction Services Ltd to fail to comply with the relevant legislation in that the Annual Return for the periods ended 17 September 2014 and 17 September 2015, and the Confirmation Statement for the periods ended 17 September 2016, 17 September 2017 and 17 September 2018 were not filed within the prescribed time.

The Department has accepted nine 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. To keep up to date with news from the Department for the Economy you can follow us on the following social media channels:

9. For media enquiries contact the Department for the Economy Press Office at pressoffice@economy-ni.gov.uk  

10. The Executive Information Service operates an out of hours service for media enquiries only between 1800hrs and 0800hrs Monday to Friday and at weekends and public holidays. The duty press officer can be contacted on 028 9037 8110.

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