The High Court has ordered William Kelly to pay Edward Gerard Kelly’s costs in proceedings over alleged oppression in Charles Kelly Limited, except for the remuneration of the court-appointed accountant who valued William Kelly’s shareholding.
In a judgment delivered on 31 July 2012, Ms Justice Laffoy addressed costs and clarified the terms of the final order following earlier decisions in the case. She said the dispute was between the two respondents’ equal shareholders, Edward Gerard Kelly and William Kelly. The company took no active part in the proceedings and was not liable for costs, except as specifically provided in the orders.
The court awarded Edward Gerard Kelly the costs of all three modules. The first concerned whether he was a member of the company and entitled to bring the application. The second addressed the substantive oppression issues and remedy. The third dealt with valuing William Kelly’s shareholding after the parties did not agree. Costs are to be taxed if the parties cannot agree, and include any reserved costs.
The judge said the petitioner had won in substance: he had obtained a remedy to end oppression established in the proceedings and to safeguard the company and its stakeholders. She acknowledged that Edward Gerard Kelly had contributed to, and shared responsibility for, the breakdown in the relationship between the men as shareholders, directors and employees or executive managers. However, she concluded that his evidence on those matters had not materially increased the proceedings’ overall costs.
The court left in place its direction that Deloitte & Touche be paid by the company for valuing William Kelly’s shares. The first respondent would not be liable for that remuneration. The judgment also confirmed that William Kelly must remit €165,000 to the company, the amount taken from it to pay his former solicitors. The judge rejected a proposed deduction for stenography fees, treating those as legal costs to be borne by William Kelly.
The final order requires the company to transfer to William Kelly in specie its existing interests in four properties in Ramelton as consideration for his shares, with the €165,000 remittance also required. The properties are to be conveyed on the basis of the company’s title “as is”, with appurtenant rights and subject to existing rights other than Ulster Bank’s debenture. If the bank will not release the properties from that debenture, the appropriate remedy is to be reconsidered by the court. The remittance and transfer were ordered to take place by 24 August 2012, with either party able to apply to court on notice to the other.