THE OFFICE of the Director of Corporate Enforcement has agreed, in an unusual move, to make a contribution to the costs of the legal action in which a well-known Dublin accountant successfully appealed his restriction as a company director.

Director of corporate enforcement Paul Appleby has also agreed that, in future liquidation cases where his office overrules liquidators and insists they take legal action to restrict directors, it will explain in writing why it is taking that course of action.

Previously Mr Appleby's staff would only speak to liquidators informally to explain why they were refusing to grant relief from their statutory duty to take restriction actions against directors.

Simon Coyle, a partner at accountancy firm Mazars and a non-executive director of Tralee Beef & Lamb, had sought legal costs from Tom Kavanagh, the liquidator of the Co Kerry meat processing firm, in a case before the Supreme Court.

Mr Kavanagh argued that he should not have to pay the costs because he had unsuccessfully sought relief from the director of corporate enforcement not to take a restriction case against Mr Coyle because he felt he had acted responsibly and honestly as a non-executive director of the company.

The costs issue was due for hearing in court yesterday, but the case was settled and no details of the settlement were provided.

However, Mr Appleby told The Irish Times that he had agreed to make a contribution to the legal costs in the case. "I don't want to get into specifics because it was not disclosed to the court," he said.

"This is quite an unusual case in the sense that it was one of a small minority of cases where we disagreed with the liquidator. Notwithstanding the liquidator's request that the person be relieved, we decided that it should go to court."

The total costs of the case are in excess of €40,000, the amount that Mr Kavanagh said in an earlier court hearing was remaining in the company. He had previously asked the court to limit costs to this amount.

Mr Appleby said the decision to settle the case was "mutually beneficial" to all the parties. The settlement means there is no judgment setting a legal precedent in which the director of corporate enforcement has to pay a liquidator's costs in a restriction case that the liquidator did not want to pursue.

Mr Appleby said his counsel told the court his office acted as "a filter" for cases that did not need to be heard in court. Three out of every four directors of liquidated companies did not face restriction actions. Of the remaining directors, 80 per cent were restricted, he added.