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1. On the 30th of November, 1999 the Revenue Commissioners presented a petition for the winding up of Milhouse Taverns Limited. The Petitioner relied upon a demand dated 29th July, 1999 made pursuant to the Companies Act, 1963 Section 214 for the sum of £146,768.04 in respect of V.A.T, P.A.Y.E. and P.R.S.I. together with interest. The company neglected to pay the said sum or to secure or compound for it to the reasonable satisfaction of the Petitioner. Accordingly the company is deemed to be unable to pay it's debts and may be wound up by the Court pursuant to the Companies Act, 1963 Section 213 (E).

2. On behalf of the company Patrick Harrisson an accountant swore an Affidavit on the 9th March, 2000 in which he sets out the assets and liabilities of the company. Upon the basis of an offer of £405,000 being accepted for the company's premises it appears that a sum of £154,525 would be available to satisfy the Petitioner's demand. The company's indebtedness in the amount of the demand is not denied in the Affidavit.

3. In response to this an Affidavit was sworn on behalf of the Petitioner by Gerard Scanoll on the 10th March, 2000. Mr. Scanoll deposes to his belief that the company is insolvent and unable to meet it's debts. Having commenced trading in December, 1996 the company ceased trading in December, 1999. The only payment made to the Revenue Commissioners during the period of trading is a sum of £4,280 in respect of P.A.Y.E and P.R.S.I for the years 1996/1997 and 1997/1998. No payment was made in respect of V.A.T and no returns were filed in respect of corporation tax. As a result of an audit carried out by the Revenue Commissioners the company was assessed for V.A.T for the period November/December, 1996 to May/June, 1998 together with interest and penalties in the amount of £199,366. No assessment for Value Added Tax for the period from July, 1998 to December, 1999 has been made and no returns have been submitted by the company but the Revenue Commissioners estimate the company's liability for Value Added Tax for this period at £69,363. In addition for P.A.Y.E and P.R.S.I estimated assessments for the years 1996/1997 and 1997/1998 were raised and the outstanding liability on foot of these is £60,666. While no assessments have been raised in respect of P.A.Y.E and P.R.S.I for the years 1998/1999 and 1999/2000 and no returns have been submitted the Revenue Commissioners estimate the company's liability for these years at £56,345. The total liability of the company in respect of Value Added Tax, P.A.Y.E and P.R.S.I together with interest and penalties is estimated at £381,522. The Affidavit exhibits a letter dated 13th January, 2000 from Patrick Harrison which upon the basis of what he describes as very scanty information he suggests a liability for V.A.T, P.A.Y.E and P.R.S.I of £156,301 this sum being exclusive of interest and penalties. The letter records an offer of £405,000 for the company's premises and upon the basis of this offer the sum of £156,301 would be available to satisfy the Revenues claim. No account has been taken by Mr. Harrison of liability for capital gains tax in estimating the amount which he calculates would be available. On the basis of this Affidavit I am satisfied that a sale of the company's present premises at £405,000 would not enable it to meet its liabilities.

4. It is material to note that an offer of £460,000 in respect of the company's premises was made on 2nd March, 2000.

5. Finally a further Affidavit was sworn by Patrick Harrison on behalf of the company on the 24th March, 2000 in which he calculates the capital gains tax payable upon a sale of the premises for £405,000 at £12,880 and upon a sale at that price estimates the amount which would be available to the Petitioner after satisfaction of the claim for capital gains tax at £141,645.29. An increased offer from the purchaser has been obtained in the amount of £426,200 and upon my calculation on the basis of this offer the amount available to the Revenue Commissioners to satisfy it's claim for all taxes other than capital gains tax would be £158,605.29. The company's accountant in his letter of the 13th January, 2000 estimates the company's liability for all taxes excluding capital gains tax for the period December, 1996 to December, 1999 at £156,301; however this sum does not take into account interest and penalties. In these circumstances it is quite clear that a sale even at the enhanced price of £405,200 would not result in the company being in a position to discharge it's liability to the Petitioner upon the basis of it's own accountants computation.

6. It is well settled that a petition should not be brought were the person claiming as petitioning creditor is well aware that the company has a substantial and reasonable defence to the claim which it wishes to plead and on which it proposes to rely to defeat the entire claim brought against it; Stonegate Securities Limited v. Gregory (1980 1 I.R 241) and In The Matter of Page Boy Couriers Limited 1983 ILRM 510. The Affidavits filed on behalf of the company in this matter fall far short of showing that the company has a substantial and reasonable defence to the Petitioners claim which would enable it to defeat the entire of the claim brought against it. Further on the basis of the Affidavits filed in the matter I am satisfied that the company is deemed to be insolvent and unable to pay it's debts pursuant to the Companies Act, 1963 Section 214(c).

7. Accordingly I propose making an Order that the company be wound up pursuant to the provision of the Companies Act, 1963/1990.