A COURT HAS heard allegations that the owners of several restaurants in Waterford are operating a “phoenix-style” plan after closing one branch leaving their suppliers down thousands of euro, only to try to reopen the place months later.
Mr Justice Simon McAleese said he’d have had “serious concerns” if Countryglen Limited, the owners of a wine and tapas bar previously known as La Bonita, apply to reopen a restaurant in the Waterford city premises, following accusations of non-compliance with tax and breaches of company law.
However, the judge said that Countryglen had withdrawn their application to reopen the premises “in the teeth of very strong objections” from a wineseller and off-licence owner who alleged that he lost “serious money” due to business as a supplier for the restaurant.
A solicitor for the objecting businessman said the matter was especially serious as one of the co-owners of Countryglen is a practicing solicitor and “officer of this court”.
Solicitor Tom Murran claimed that he believed the restaurant owners came to court originally “hoping for an easy ride” and to receive approval from the judge “on the nod”, only to receive an unexpected objection from Declan Brady, owner of World Wide Wines in Waterford.
Phoenix companies often arise out of the ashes of a collapsed business, usually with the debts accumulated under the former owner unpaid.
The court heard that Countryglen is owned by Walter Walsh and Mark Walsh, who also run a number of other restaurants and a pub in Waterford and Tramore.
Their two-storey restaurant La Bonita, located at No 8, The Mall in Waterford, had opened in late 2021 but closed earlier this year.
The premises was due to reopen once granted a license by the court but Countryglen withdrew the application this week in Waterford Courthouse following an objection from Brady, whose solicitor Murran criticised the company.
The application was withdrawn ahead of Tuesday’s court sitting.
It had been before the Circuit Civil Court on three previous occasions since April.
Two further court hearings, both held in recent weeks, were adjourned following requests from Countryglen. On one occasion, the court heard Mark Walsh was unwell and on the other, Walter Walsh was away on holidays.
He said his client Brady’s allegations concern “very serious allegations of misconduct by the applicant company”, including claims that Countryglen had “breached” licensing law and company law, along with “non compliance” with its tax obligations.
Murran told the judge this was all the more serious as Mark Walsh was a practicing solicitor with Waterford city firm Kenny Stephenson Chapman, thereby making him “an officer of this court”.
He alleged that investigations by his office Peter O’Connor & Son Solicitors found that there was a “serious failure on many counts by the applicants to comply with the obligations” under various laws relating to their business.
Murran told the court that without the hearing on the license going ahead, Brady was seeking to have costs awarded to him arising from his objection and employment of Murran’s services.
This was ultimately ruled out by Mr Justice McAleese, who said that while he was “gravely tempted” to give Brady costs, he felt it could have “unintended consequences” and set a precedent allowing objectors to be pursued for costs by companies in future.
The judge said he had “serious concerns about circumstances in which this matter has been conducted” from a “commercial” point of view, adding that if he’d also have had “serious concerns of the application if it proceeded” as originally intended.
Summarising Brady’s objection to the license, Mr Justice McAleese said that “what’s being applied for is a phoenix-type of license” for Countryglen to reopen the restaurant.
He added that Brady’s evidence appeared to be “straightforward and well-supported” but added that he could not delve into the claims as Countryglen had withdrawn its application for the license.
“I’m not entitled to reach any sort of conclusion,” he said.
Referencing the delays to proceedings due to the adjournments, Murran said the court was “entitled to take that into count” by awarding costs incurred by Brady through his objections.
He added that he wanted to “express my displeasure at the way this case has been handled by the applicant and particularly bearing in mind that one of the directors of the applicant is an officer of this court, I think the court should take note of that by awarding cost to my client”.
Barrister for Countryglen, Neil Rafter of Kenny Stephenson Chapman, disputed the accusations and said that Mark Walsh had provided a medical certificate when notifying the court of his sickness.
Rafter added that there was no basis in law to make any award of costs in such a case.
The barrister said there had been no objection to the license application aside from Brady, with “no objection from either An Garda Síochána or the Chief Fire Officer ” to the application.
In response, Murran raised a letter sent on May 15 by Countryglen to Brady’s solicitors which Murran said involved a “threat” that if the off-license owner “persists with the objection”, then the Walshes would be “seeking our costs in meeting the objection from your clients”.
Summing up the awards decision, Mr Justice McAleese said to award costs to Brady would “open a Pandora’s Box” in terms of consequences and ruled it out.
His decision is open to be appealed, he added.
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