The High Court has ordered that Barry Harte remain a director of Ashwood Investments Limited pending trial of a dispute over his shares in the company and control of its pharmacy business. The court also barred reliance on two disputed clauses in the company’s amended articles of association.
In a judgment delivered on 6 June 2013, Ms Justice Laffoy dealt with applications for interlocutory injunctions in two related sets of proceedings. The substantive actions were due to be heard on 15 July 2013. The judge stressed that the applications did not determine the parties’ rights or resolve contested evidence.
The dispute centres on 25 shares, representing a third of Ashwood’s issued share capital. Harte says he remains their owner. Collette Sweetnam says she acquired them under security documents connected to a €2 million loan made to Harte in 2009. The court found a fair issue to be tried over whether the loan demand and security enforcement were effective, whether Sweetnam could transfer the charged shares into her own name, and whether she could use a power of attorney to act for Harte as a director.
Sweetnam’s solicitor sent a repayment demand by prepaid ordinary post on 15 November 2012. A stock transfer form was later dated 16 November and registered in Sweetnam’s name. Harte said he did not receive the demand. The judge said it was not possible at this stage to determine when, if ever, Sweetnam’s enforcement powers became exercisable. She also found a fair issue to be tried over whether the transfer gave Sweetnam legal and beneficial ownership of the shares.
That ownership dispute affects the board. Sweetnam was appointed a director at one extraordinary general meeting on 3 December 2012; a separate meeting that day resolved to appoint Damien Ryan. Ryan did not participate in the court proceedings. An earlier notice to remove Harte as director was not acted on, and the Horgan parties had undertaken not to remove him while the application was pending.
The court granted injunctions restraining the Horgan parties from removing Harte as a director, impeding his duties, or giving effect to the November 2012 resolution approving the share transfer. It also restrained the Harte parties from invoking clauses 28(e) and 28(h) of the amended articles, which concern director resignation and the effect of ending a director’s full-time employment. Both sets of orders continue until trial or further order and are supported by undertakings as to damages.
The orders preserve the disputed positions while the cases proceed. The court did not decide who owns the shares or conclusively determine who are the company’s directors. The orders also proceeded on the assumption that the Harte parties would accept that Ryan would not act as a director pending trial or further order.