The High Court dismissed Vincent Kelly’s petition under section 205 of the Companies Act 1963, finding no sustainable evidence that the affairs of New Ad Advertising Company Limited had been conducted oppressively towards him as a member.
Mr Justice T.C. Smyth delivered judgment on 18 December 2007. At the close of Mr Kelly’s case, counsel for the notice party applied for a direction to dismiss it. The notice party elected not to call evidence, arguing that Mr Kelly had not proved his case and that the complaints made in court differed from those pleaded. The judge accepted that the complaints in court were not reflected in the pleadings, acceded to the application and dismissed the petition.
The judge found that Mr Kelly invested £3,000 in New Ad. He also found that a separate £15,000 investment was made in Pound Savers Security Ltd, though Mr Kelly honestly but mistakenly believed it had gone into New Ad. New Ad held patents and depended on royalties from related Newspaper Security Services companies. Those companies went into liquidation, and the court found that transferring funds to support the trading business was lawful and consistent with proper corporate governance. New Ad later waived royalties it had no prospect of recovering, and the sale of its patent produced little towards its obligations.
Mr Kelly complained about the company’s management, the information he received and share dealings. The judge found he received accounts as they became available under the law, and that the accounts showed adverse results. Although more timely information might have helped, the judge found the information provided was what Mr Kelly was legally entitled to receive. The court also found that Mr Kelly knew of and did not challenge a letter intended to give George McNulty a 51 per cent shareholding. Applying the decision in Greenore Trading, the judge held that Mr Kelly was estopped from claiming that transaction was irregular; in any event, it was not oppressive in itself.
The judge distinguished share dealings between individuals from the conduct of a company’s affairs for the purposes of section 205. He concluded that disagreement with business decisions, without evidence of unfairly oppressive conduct, did not establish a basis for relief. The judgment also records offers to buy out Mr Kelly, including an offer of £40,000 and a later £25,000 all-in figure, which he did not pursue. The court made no finding that either offer was accepted.