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1. Mantruck Services Limited (herein called "the Company") was incorporated on 11th August, 1988: its registered office is at Farnbeg, Strokestown, County Roscommon. The registered shareholders of the Company are John Duignan (the Respondent) and one John Dooley. Its directors are the Respondent and his wife Mary Duignan. The main business of the Company was the supply of tail lift units and refrigeration units for commercial vehicles. It had distribution agreements with suppliers of refrigeration units and a supplier of tail lift units, Zepro Lyften Produkpion AB (herein called 'Zepro'). On the 2nd July, 1993 the Company's creditors resolved that the Company be wound up, and Michael Butler, an insolvency practitioner was appointed as its liquidator. Subsequently, on 29th July, 1993, on the petition of Zepro, the company was ordered to be wound up by the Court and the applicant (Mr. Mehigan) was appointed Official Liquidator. The Company was then insolvent and unable to pay all of its debts.

2. On 9th July, 1993, an employee of Mr. Butler, Paul O'Brien, visited the Company's premises at Roscommon and collected certain book and records of the Company which were in a room on the premises. He filled his car with these and intended, he says, to "return to collect other things he saw there". He confirmed that he had not been given, or shown, any books of the Company which throughout this hearing were referred to as "red Cathedral books". Mr. O'Brien prepared a list of the books and records he removed on the 9th July, 1993 and a list of the books and records ultimately delivered by him to the Applicant's Solicitors on 30th July, 1993. On 20th August, 1993, Murphy J. ordered the directors of the Company to hand up to the Official Liquidator "all books records and documents and all of the stock and assets of the Company" in their or their agents respective possession power or procurement. Following his appointment as liquidator, Mr. Mehigan examined the books and records as delivered to his Solicitors by Mr. O'Brien on 30th July, 1993 as a result he believed there were, as he said, "significant and extensive" omissions in the Company's records. He was of the view that these omissions resulted in substantial uncertainty as to the assets and liabilities of the Company and substantially impeded the orderly winding up of the Company. His belief that the records were incomplete led him to apply for the Order granted by Murphy J. on 20th August, 1993. On 18th November, 1994, two invoices of the Company were furnished by the voluntary Liquidator to the Applicant's Solicitors. Save for these two invoices no other documents books or records were received from the Respondent on foot of the Order of 20th August, 1993. From the commencement of the liquidation, the Official Liquidator had been in regular contact with the Respondent. He had met him on 29th July, 1993 at Strokestown where the Company's premises was: the Respondent told him he had no business being there and that the voluntary Liquidator had removed all the books and records of the Company. There then followed lengthy correspondence relating to what the Official Liquidator saw as gaps, inaccuracies or deficiencies in the records he had been given. By letter of 16th August, 1993 , he was assured by the Respondent that "with regard to the records again I have advised on a number of occasions that the previous Liquidator had collected all books and records of the Company". In an affidavit, filed on 17th November, 1994 (which Murphy J. ordered to be admitted in evidence on the hearing of this motion), the Respondent exhibited the list of the records taken by the Voluntary Liquidator (Mr. Butler) and asserted that:-

3. The correspondence between the Official Liquidator and the Respondent continued, somewhat inconclusively, during the years 1993 and 1994. In November 1994, the Applicant Liquidator brought a motion for certain declarations pursuant to Sections 150 and 204 of the Companies Act 1990 , and Murphy J., on 21st November, 1994, ordered that the motion be heard on Affidavits filed on the 4th July, 1994 (by the Applicant) and 17th November, 1994 (by the Respondent) and on oral evidence. By a further Order made on 20th November, 1995 by Murphy J. the Respondent was directed to be examined on oath before the Master in relation to the promotion, formation, trade dealings, affairs and property of the Company. That examination took place on 7th February, 1996. During the course of that examination, the Respondent told the Master that when recording purchases, sales and receipts of the Company they were written up into "a temporary record book" and, after being "input" into a computer, the books were "scrapped", "disposed of " or "thrown out". The Respondent also said that at the end of 1992, the Company was told by the VAT Inspector to keep manual records and that they then ceased to use the computer and reverted to a manual system at which time the "original temporary books" were thrown out. Although the Respondent signed this transcript of evidence taken before the Master he did so adding in writing on the transcript:-

4. At the hearing of this motion the Respondent accepted the accuracy of the transcript of evidence but objected to its admissibility - an objection which I disallowed having regard to the provisions of Section 245(6) of the Companies Act 1963 and the decision of O'Hanlon J. in In re Aluminium Fabricators Limited, 1984 ILRM 399.

5. The hearing of this motion commenced on 18th day of June, 1996. The Official Liquidator, Mr. Mehigan, was the first witness. Thereafter, Christopher Chisholm, a partner in Grant Farrell Sparks, Auditors and accountants, and Paul O'Brien of Michael Butler & Co. were called as witnesses. On the morning of 20th June, 1996, it was indicated to the Court, on behalf of the Respondent, that there might be certain books, papers and records of the Company either at the Company's old premises, or at a farm owned by the Respondent at Kilgrass, Strokestown in County Roscommon. An Order was made on that date for the purpose of providing for the delivery up of such books and records to the Official Liquidator and the hearing of the motion was adjourned until the 16th day of July, 1996.

6. The Motion resumed on the 16th day of July, 1996: the Official Liquidator then resumed his evidence. He gave evidence of having visited the Roscommon premises on 20th June, 1996 and that he recovered 28 computer discs and five red Cathedral books. These books comprised a Sales Book, a Purchases Book and two Cash Books and a Wages Book. The Sales Book contained details of sales invoices for the period April 1991 to March 1993: in addition, at the back of the book, it had a record of credit notes issued by the Company for the same period. The Purchases Books had details of purchase invoices for the period June 1991 to March 1993. The Cash Books recorded cheque payments and cash receipts of the Company and were in two separate books - one covered a Bank of Ireland account for the period 17th January, 1992 to 15th August, 1992 and the other a National Irish Bank account for the period 15th October, 1991 to 26th June, 1993. There was also a Wages Book covering the period April 1991 to March 1993. The 28 computer discs, according to the Official Liquidator, were of no assistance to him in his examination of the books and records of the Company.

7. Following receipt of the red Cathedral books, the Official Liquidator outlined in evidence the position in relation to the books and records of the Company. The following basic information and records were missing, according to Mr. Mehigan:-

8. Mr. Mehigan said that, by reason of the absence of these records,

9. Mr. Mehigan expressed the view that the failure of the Company to keep books of account (so as to properly record the above matters, and enable the financial position of the Company be determined with reasonable accuracy and its accounts readily and properly audited) had resulted in substantial uncertainty as to the assets and liabilities of the Company and had substantially impeded its orderly winding up. The uncertainty as to assets arose because

10. The uncertainty as to liabilities arose because

11. These uncertainties as to assets and liabilities, according to Mr. Mehigan, could be traced back to gaps or deficiencies in the records of the Company. In his evidence he detailed a litany of error or failure to record: among these were the facts that 149 invoices were not recorded in the Sales Book; there were also 304 cases where sales invoice copies could not be located. There were unrecorded credit notes and sales invoices for refrigerated units were missing; the Purchase Book was unreliable in showing entries where goods with VAT paid at point of entry were analysed as net purchases. A gross profit analysis done by Mr. Mehigan disclosed a gross margin of 8.71% for the two years to 31st March 1993 compared with a gross margin for the year ending 31st March, 1991 of 34.65%.

12. Mr. Mehigan estimated that some 80% of the time spent by him and his staff (and the outlay expended) related to his efforts to overcome deficiencies in the books and records of the Company. The professional fees and outlay for all the Liquidators work on the Liquidation to date was £94,256 plus VAT at 21%. 80% of that sum is £91,239.80. Mr. Mehigan expressed the view that in his search for the books and records of the Company Mr. Duignan had not been in any way co-operative with him.

13. George Chisholm was an audit manager with Farrell Grant and Sparks who audited the accounts of the Company for the 17 months ending 31st March, 1990. He last did work on the books of the Company in the month of July 1991. He gave evidence that there was a manual record of sales, purchases, cheque payments, cash receipts, wages and salaries when the accounts were audited for the period of 17 months to 31st March, 1990.

14. Declan Hogan, a fellow of the Institute of Chartered Accountants, gave evidence. He is a former member of the Council of the Institute and of the Auditing Practices Review Committee. In addition, he is a member of the Consultative Committee of Accountancy Bodies. He gave evidence of having received all the records that were before Mr. Mehigan (including the books obtained on 20th June, 1996). In his opinion these books and records did not contain a record of the assets and liabilities of the Company. He drew attention to the failure to record stocks for February 1992 and thereafter; the failure to list creditors after March 1992 and the failure to record fixed assets after March 1991. Because of such deficiencies, he was of the opinion that one could not properly prepare a balance sheet, or indeed, a set of accounts for the Company. He said that he would have expected to see copies of all credit notes and copies of any leases so as to properly explain the transactions of the Company. Eugene Finneran is a Higher Grade Tax Officer and an Inspector of Taxes who in the years 1990 to 1993 was involved in VAT inspections of the Company. In July or August 1990 he met the then Company book-keeper for the purpose of checking on a VAT reclaim the Company had made. He did not see at that time any red Cathedral books. On 1st March, 1991, his office wrote to the Company seeking

15. In reply, by letter of 21st March 1991 the Respondent stated

16. Mr. Finneran replied on 25th April, 1991 again asking for

17. Between July 1990 and October 1992, Mr. Finneran paid eight or nine visits to the Company premises to inspect the records of the Company. He never saw or was shown any red Cathedral books. During this period manual listing of sales, purchases and credit notes were prepared by the Company on sheets with a "Zepro" heading (herein called 'the Zepro listings'). These listings purported to show figures for sales, purchases, credit notes and related VAT figures. Revised VAT returns were prepared on foot of these Zepros Listings for the period July 1988 to August 1992 which did not coincide with the original returns. Throughout the period of his visits Mr. Finneran was never told there was a manual system (his last visit was in October 1992) of recording sales and purchases and credit notes. Indeed he had been told the contrary in March 1991. Further, the fresh preparation by the Company of the Zepro Listings for sales, purchases and credit notes ostensibly "downloaded" from the Company's computer served to underpin the representation that there was not in existence any similar or colourably similar manual record of purchases, sales or credit notes.

18. John Duignan is an engineer by profession and holds the degree of Bachelor of Engineering. In relation to the list of information and records which Mr. Mehigan said was missing. Mr. Duignan gave evidence that all of the following information could be obtained from the computer system used by the Company:-

19. He said there was an opening stock figure for 1st April, 1992 and that all sales and material purchases could be derived from the computer.

20. Again, Mr. Duignan said this information could be printed out from the computer.

21. This data could be derived also from the computers.

22. These, said Mr. Duignan, were listed at the back of the Sales Book. Mr. Finneran had copies of eight of the notes; he could not explain the absence of other copies for the particular quarter.

23. Again, all data in relation to the factoring of invoices was capable of being derived from the computer.

24. The Liquidator had suggested that carrier refrigerated units had been sold for which there was no sales invoice the Sales Value of which amounted to £87,914 or £106,375 inclusive of VAT. Mr. Duignan produced a series of 17 invoices which he alleged represented invoices for the units the Liquidator said had no invoices.

25. Mr. Duignan asserted that such ledgers could be derived from some of the 28 discs obtained by Mr. Mehigan on 20th June, 1996 and that it would only take a couple of days for this information to be "downloaded" from the computer discs. The basis for this assertion was the opinion of a software expert who had written to the Respondent's Solicitors but who was not called to give evidence.

26. Mr. Duignan said that the finance houses did not use lease agreements in duplicate and accordingly, the Company had no records of such agreements.

27. Mr. Duignan refused to classify the red Cathedral books as comprising "a manual system". Taking the Sales Book as an example, he said that it was not a manual book because there were computer references in it both identifying, by number code, VAT rates and equipment type. Accordingly, he says, he was correct in pointing out to Mr. Finneran by letter of 21st March, 1991 that there was no manual system operated by the Company. The Sales Book differed from the Zepro Listings (as to sales) in that there was a computer number in lieu of a VAT rate. The manual books that he referred to in evidence before the Master were 1st March, 1991 books and these were not in fact destroyed - they could still exist on the premises repossessed by the ICC Bank in Roscommon. Mr. Duignan said he had copied the Cathedral Books in June 1993. He said that Mr. Mehigan had never told him what records he had and he did not believe he had any records the Liquidator did not have. He believed that Mr. Mehigan had the Cathedral Books and he only became aware that he did not have them on 20th June, 1996. The five red Cathedral books were found along with the computer discs on 20th June, 1966 in a crate in Mr. Duignan's house in Roscommon.

28. In his evidence before the Master (Q.109) Mr. Duignan had noted that the Company had stopped using the computer in August 1992.

29. Michael Butler an insolvency Practitioner gave evidence of having been appointed on 2nd July, 1996, Voluntary Liquidator of the Company. He first got the papers on 9th July, 1993 and did not look at them until 12th July, 1993. Although he did not inspect the records until 12th July he felt able to write to Mr. Finneran on 9th July saying

30. He expressed the view that the books and records of the Company were more than adequate to facilitate the orderly winding up of the Company and that the absence of copy credit notes was not a bar where Third Party verification was possible.

31. Counsel for the Liquidator, Mr. Mehigan, submits that there is evidence before me which establishes:-

32. It is worth noting that before any liability can be imposed on any officer, or former officer, of a company, the Court must be satisfied that a contravention of the provisions of Section 202 of the 1990 Act has been committed by the Company.

33. In other words, the Court must be satisfied that a criminal offence has been committed by the Company. Section 202(10) make it an offence for a company to contravene the section. Section 202 details the nature and extent of the accounting records which a company is obliged to keep. It is clear from the words of the section that the obligation of a company to "keep" proper books of account is not an obligation to act as a mere passive custodian of books and papers but rather the positive obligation to create books and records in a particular form with specified contents. It is also clear from the wording of the section that the obligation to keep proper books of account is necessarily a continuing obligation: they should be kept on a "continuous and consistent basis" and must be such that they "will at any time enable the financial position of the Company to be determined with reasonable accuracy" (S. 202(1)(b)) and books of account shall contain entries "from day to day" of all sums of money received and expended by the Company (S. 202(3)(a)).

34. Before any liability can be declared under Section 204 the following matters must be established in evidence.

35. Where the foregoing matters are established in evidence, the Court may, if it thinks it proper to do so, declare that such officer or officers be personally liable without any limitation of liability for all or such part as may be specified by the Court of the debts and other liabilities of the company. As is clear from paragraph (d) above, "officer" of the company is not restricted solely to executives of the company but may, in certain circumstances, embrace the auditors of the company and any person convicted of providing false information in purported compliance with the Companies Acts. While therefore the scope of Section 204 is sufficiently wide to catch members of a company if they are "Officers in default", it also applies to person who are not members of the company. Any suggestion therefore that the section has as its object the removal of the benefit of limited liability and the placing of the person (on whom liability is to be imposed) in the same position as if he were a sole trader is erroneous. As Murphy J. noted in relation to Section 297 of the Companies Act 1963 in O'Keefe -v- Ferris , 1993 3I.R. 165 at pp 173-4.

36. The observations of Murphy J. are equally appropriate in relation to Section 204, which, as I have noted, may, depending on the circumstances, result in the imposition of liability on persons who are not shareholders in or proprietors of the company.

37. Where the foregoing is established (along with the other four matters listed above) the Court may if it thinks proper declare an officer in default liable for all the debts of the company. The section, on its face, does not require that there be any causal relationship between the Section 202 contravention and the liability declared under Section 204. Nor does the section, on its face, make any allowance for different degrees of blameworthiness which might attend contraventions of Section 202. As to the absence of a causal connection between a contravention of S. 202 and the liability imposed under Section 204, there may well be a significant number of situations where the contravention bears little or no relationship to the amount of the debts of the insolvent company. For example, where the insolvency is the direct result of unwise foreign exchange transactions and it is discovered that the auditors and directors have knowingly and consistently undervalued the assets of the company (thereby resulting in a contravention of Section 202) such that, while insolvent, the company's indebtedness is less than it would have been had the assets been properly valued. Where such an undervaluation results in substantial uncertainty as to the assets of the company or substantially impedes the orderly winding up of the company liability under S. 204 is established, yet it would be clearly unjustifiable in principle to impose liability for all the debts of the company (caused by injudicious forex dealings) on the auditors and directors responsible for the company's contravention of Section 202. On the other hand, where a particular contravention of section 202 can be seen to have a particular financial consequence resulting in a particular debt of the insolvent company, it is difficult to see how it could be argued that imposing liability for such a debt works any injustice.

38. It is quite clear that contraventions of Section 202 may take many forms: the contravention may for example comprise a failure to properly records goods sold, or it may comprise the maintenance of false records for the purposes of tax evasion. Where Section 204 is involved in relation to such contraventions it is clear that the Court should not view both contraventions in the same light but rather be disposed to regard the false accounting example as a basis for the imposition of greater personal liability. However, on its face, Section 204 appears to allow that a Court, in the exercise of its discretion, can impose unlimited liability on an officer of a company in respect of all the debts of a company where the S. 202 contravention has not in itself resulted in any loss to the company, but has substantially impeded the orderly winding up of the company, or resulted in substantial uncertainty as to its assets and liabilities. There may be circumstances where, if the Courts discretion is exercised in this way, the result achieved would be so harsh, unfair and disproportionate, having regard to the wrong committed, as to constitute an unjust attack on the personal rights of the affected officers.

39. The Companies Act, 1990 is a post 1937 Statute and as such enjoys a presumption of constitutionality. Thus, where the Act makes provision for the exercise by a Court of a discretionary power, that power must be exercised in such a way as to respect the provisions of the Constitution. As Murphy J. said in O'Keefe -v- Ferris , supra, at page 174 (in relation to Section 297(1) of the 1963 Act)

40. The discretion, given by section 204 to the Court, must be exercised, as Murphy J. notes (in relation to S. 297), in a "responsible but also in a constitutional fashion". In my view, the Court in the exercise of this discretion must have regard to (but not necessarily exclusively) the extent to which the contravention of S. 202 resulted in financial loss and, if it did, whether or not such losses were reasonably foreseeable by the officer as a consequence of the contravention.

41. In New Zealand, their Companies Act 1955 contains almost identical provision to Sections 202 and 204 of the Irish Companies Act, 1990, and Counsel for the Liquidator sought to rely on the New Zealand case of Maloc Construction Limited (In Liquidation) -v- Chadwick & Others, 1986 3NZ CLC 99, 794 in which Tompkins J. in the High Court, suggested that three factors were relevant to the exercise of the discretion given by the Act to the Court, namely, causation, culpability and duration. As to causation, he suggested that there must be a causal relationship between the contravention of Section 202, the officers contribution to that contravention, and the losses of the company resulting therefrom. As to culpability, Tompkins J. said that the less blame attaching to an officer for a Section 202 contravention the less liability should be imposed. As to duration, Tompkins J. believed that it was relevant to consider whether debts were being incurred when the contravention was taking place. It seems to me that the three elements identified by Tompkins J. are relevant to the principles which should guide the exercise of discretion under Section 204 and that in assessing liability under Section 204, the Court should have regard to the extent to which the officer's involvement in the S. 202 contravention resulted in financial loss and, if it did, whether such loss was reasonable foreseeable by the officer as a consequence of the contravention and that, save in exceptional circumstances, liability should not be imposed for contraventions not resulting in loss, or for losses not reasonably foreseeable as a consequence of the contravention.

42. No argument was addressed to me to the effect that Section 204 created a criminal offence or was other than a civil wrong. Accordingly, in considering the issue of the standard of proof, I am considering it in the context of the proof a civil wrong.

43. The approach adopted by Denning LJ. and approved of by Tompkins J. in the Maloc case has not been followed in our Courts. In Banco Ambrosiano -v- Ansbacher & Co., 1987 ILRM 669 Henchy J. said at page 701

44. Accordingly, in considering whether to impose liability under Section 204 no higher degree of probability of a contravention of Section 202 is required then in any other civil matter.

45. The issues I have to decide are

46. I am satisfied that the books of account of the Company made available to the Official Liquidator both before and on 20th June, 1996 did not contain:-

47. While Mr. Duignan contended that the computer of the Company could using the discs discovered on 20th June, 1996 produce a debtors and creditors ledger (and a nominal ledger), such records were not produced and the basis on which Mr. Duignan expressed this contention appears to have been his reliance on the views of a software expert (Mr. Desmond McLaughlin) who had expressed such an opinion to the Respondent's Solicitors but who was not called to give evidence. I therefore do not attach any weight to the contention that a debtors and creditors ledger could be "downloaded" or retrieved from the discs. In particular, little weight can be attached to this contention where Mr. Duignan himself swore to the Master that the Company stopped using the computer in July or August of 1992 (see pages 10 and 11 of Transcript of evidence before the Master). Even if the discs retrieved on 20th June, 1996 could achieve the results Mr. Duignan stated in his evidence, the fact is that in the period from the commencement of the Court winding up (on 30th July, 1993) to 20th June, 1996 the absence of a debtors and creditors ledger rendered it impossible for the Liquidator to determine with any accuracy (let alone reasonable accuracy) the financial position of the Company or to ascertain from the records, the assets and liabilities of the Company. Thus, even if one were to accept Mr. Duignan's evidence that the computer discs and the red Cathedral books between them (together with the earlier records provided to the Liquidator) provided records sufficient for the purposes of Section 202 of the 1990 Act there was, nonetheless, clearly a period of time when the absence of the discs and the books - and the consequent deficiencies in the Company's records - meant that the Company was during that period in contravention of Section 202 of the 1990 Act.

48. I should say that I have some concern as to whether or not Mr. Duignan is accurate in stating that he believed the Liquidator at all material times had the "red books" and that it was only when he realised, in Court, that the Liquidator had not those books that he disclosed where they might be. It is worth recalling that in his Affidavit filed on 11th November, 1994 Mr. Duignan states that

49. Exhibit B is a copy of the list of records taken by Mr. Butler. The red Cathedral books are not on the list. What is on the list is what Mr. Duignan was aware was given to Mr. Mehigan by the Voluntary Liquidator's staff. It is difficult therefore to understand how he believed the Liquidator had the red Cathedral books. It is also difficult to understand why the red Cathedral books were never produced to Mr. Finneran whom he knew was anxious to see purchase and sales day books and who paid the Company some 8 or 9 visits between July 1990 and October 1992. The sales books recorded sales for the period from 1st April, 1991 onwards and the purchases book recorded purchases from June 1991 onwards.

50. I have already indicated that I was satisfied that the books of account given to the Liquidator both before and on 20th June, 1996 were deficient in six material respects. These deficiencies were such that the financial position of the Company could not at any time be determined with reasonable, or indeed any, accuracy or enable the Company to be readily and properly audited. I am satisfied further that the deficiencies were such that the assets and liabilities of the Company could not be recorded and that there was not a sufficient recording or proper record of goods purchased and sold or of the purchasers and sellers of those goods or of invoices relating to all purchases and sales. Equally, the records of the Company do not contain statements of stock held by the Company for the years ending March 1992 and 1993. Finally, I am satisfied that the books of account were not kept in a continuous and consistent basis and are deficient in failing to enter daily all sums of money received and expended by the Company and the matters in respect of which such took place. Because I am satisfied as to the foregoing, I conclude that there have been contraventions by the Company of Section 202 1(a), (b), (d), 202 (2), 202 (3) (a), (b) and (c) of the Companies Act, 1990.

51. I am also satisfied that the Company, having contravened Section 202, was unable to pay its debts at the date of its winding up; equally, the contraventions of Section 202 were such as to result in substantial uncertainty as to the assets and liabilities of the Company and also substantially impeded the orderly winding up of the Company. Mr. Duignan was an officer of the Company who I find knowingly and wilfully authorised and permitted the Section 202 contraventions and cannot avail of any defence under Section 204.

52. I am also satisfied that, while the Company is unable to pay all its debts, it is not possible to separate out liabilities of the Company prior to its winding up which result from any contravention of Section 202. However, there is evidence from the Liquidator that some 80% of his time was occupied in seeking to overcome deficiencies in the books and records of the Company. The losses which flowed from this expenditure of time (£91,239.80) were reasonably foreseeable by Mr. Duignan as a consequence of the contraventions of Section 202. Accordingly, pursuant to Section 204 I declare John Duignan to be personally liable to the Company in the sum of £91, 239.80.

53. Finally, having regard to the mandatory words of Section 150 of the 1990 Act (in relation to which See In Re Business Communications Limited Murphy J. 21st July, 1995 ) I am satisfied that I have no discretion but to impose the 5 year restriction, contained in the section, on Mr. Duignan: he does not bring himself within any of the three exceptions of subsection 2 (of Section 150).

54. Where a company is being wound up, is unable to pay all its debts and has contravened Section 202 of the 1990 Act - Section 204 provides that the Court may if it thinks it proper to do so declare that an officer of the company who is in default

55. The first point to note in relation to Section 204 is that the Court is given a discretion as to whether or not is makes the declaration in question and if it does whether it should related to all or only some of the Company's debts. The second point to note is that, on its face, Section 204 appear to allow the Court declare a person liable for losses that person did not necessary cause. As to the exercise by the Court of its discretion Tompkins J. in the Maloc Construction Limited case , supra, at p. 99, 809, suggested that three factors were relevant to the exercise of discretion, namely, causation, culpability and duration. As to causation, he suggested that there must be a casual relationship between the contravention of Section 202, the officer's contribution to the contravention and the losses of the Company resulting therefrom. As to culpability , Tompkins J. suggested that the loss blame that attached to an officer for contravention of Section 202, the loss liability should be imposed. As to duration, Tompkins J. suggests that it is relevant to consider whether debts were being incurred when the contravention was taking place. In my opinion, there three factors, enumerated by Tompkins J., may be said to be elements of a general principle which appears entirely sensible namely that a Court, in the exercise of its discretion under Section 204, will wish to be satisfied that there is a casual relationship between the officer's involvement in the contravention and the personal liability imposed on him. It seems to be that if the Court's discretion is exercised by an application of such a principle the section will not be open to attack. On the ground that it offends any principle of constitutional justice. In East Donegal Co-operative -v- Attorney General 1970 I.R. 317 Walsh J. said at page 341:

56. If a Court in its discretion was not to have regard to any casual relation ship before imposing personal liability under Section 204 then it seems to one that a constitutionally questionable consequence and an absence of proportionality might follow where for minor contraventions of Section 202 personal liability of millions of pounds could be imposed. Accordingly, it seems to me that I am bound to exercise the discretion given to me under Section 204 in such a way as to ensure that there is some casual nexus between the loss occasioned by the Section 202 contravention, the blameworthiness of the officer in question for such contravention and the liability declared under Section 204.