Ann Sweeney pleaded guilty to running a pub in the seaside town of Dunfanaghy without a license.
Judge Paul Kelly told the businesswoman “Other premises in this area were operating at a disadvantage. Everyone in this business has had to struggle due to the economic conditions, yet others managed to stay compliant.”
Letterkenny District Court heard Ms Sweeney had admitted to a Customs officer in September 2010 that she had not renewed a license which had expired almost a year earlier.
Her solicitor Frank Dorrian said the license was renewed last November for the premises but the business in question remained closed.
Another prosecution against Mrs Sweeney was struck out because of a mistake in a Garda summons.
That summons had accused her of aiding and abetting herself in the sale of alcohol on a different date, instead of aiding and abetting another person.
However Mr Dorrian argued that an application by prosecuting Gardai to have the wording of the summons amended was statute-barred.
Judge Kelly dismissed the case due to the error.
A third accusation was also contested by Mr Dorrian relating to an allegation of operating premises without a Dance License.
Mr Dorrian argued the alleged offence took place on premises rented by Mrs Sweeney and the 1935 legislation only allowed for the prosecution of either the owner of the premises or the organiser of the dance.
Garda Inspector David Murphy sought an adjournment to get further legal advice on the case which will now be heard in September.
Mrs Sweeney, a failed candidate in the 2010 Donegal South West by-election, was later referred to Gardai after failing to submit her election expenses during the contest.
However the case was dropped after she insisted she hadn’t incurred any expenses.