The High Court has refused a motion by John Harrington to require an independent expert to value his brother Flor Harrington’s shares in Kush Seafarms Limited, with the applicant to receive the costs of the motion. Execution of the costs order is stayed until the proceedings are finally determined.
The judgment, delivered by Mr Justice Allen on 20 December 2018, concerns a section 212 Companies Act 2014 application by Flor Harrington. He alleges that he has been excluded from the company’s business and that its affairs have been conducted oppressively and in disregard of his interests. John Harrington contests those allegations. The court made no finding on whether oppression occurred.
The brothers are the company’s directors and hold its 71,690 issued ordinary shares equally. Bord Iascaigh Mhara holds 15,872 preference shares. The company, incorporated in 1987, carries on aquaculture, primarily mussel farming, at Ardgroom Harbour, County Cork.
Flor Harrington seeks a court-supervised purchase of his shares at a fair price. He put the company’s value at significantly more than €2 million; John Harrington disputed that figure and suggested a value of about €1.4 million. John Harrington had proposed that an independent expert value the shares, with both brothers bound by the result. Flor Harrington said he first needed access to company records and professional advice to form his own view of value.
John Harrington’s motion sought appointment of an independent professional valuer and access to company documents for that expert. The judge said its substance was a request to direct a sale and purchase at a price set by an expert. The court concluded it did not have jurisdiction to entertain that motion. It also said it would not be just or fair to bind Flor Harrington to an expert valuation in which he had no input.
The judge rejected a revised suggestion that a valuer be appointed to assist the court. A sale and purchase order under section 212 would require a finding of oppression or an admission of “technical oppression”, neither of which had been established in this case. A third valuer could also add costs, and the court would first need to assess any disagreement between valuers appointed by the parties.
The court refused John Harrington’s motion and awarded its costs to Flor Harrington, staying execution until final determination of the proceedings. The underlying oppression application remains unresolved. The judge urged the parties to consider mediation, noting the litigation could become increasingly expensive.