The Court of Appeal has replaced an order requiring Charles Kelly Limited to transfer four Ramelton properties to William Kelly with an order that the company pay him €339,000 for his former shareholding. After setting off €165,000 that Kelly was ordered to repay the company, the balance is €174,000. Payment is stayed while Gerard Kelly’s High Court costs are assessed, subject to an initial six-month period.
The supplemental judgment, delivered by Mr Justice Haughton on 17 November 2022, followed an earlier Court of Appeal judgment dismissing William Kelly’s appeals in long-running oppression proceedings. The court had left issues about implementing part of a 2012 High Court order and appeal costs for further consideration.
That High Court order, made by Ms Justice Laffoy, valued William Kelly’s beneficial shareholding at €339,000 as of 31 August 2011. It directed the company to transfer four properties in Ramelton to him in exchange for his shares and required him to remit €165,000 to the company. The sum related to legal costs which Laffoy J found had been improperly taken from company accounts. The earlier order to repay €180,000 had been reduced to €165,000. Neither order provided for interest.
The properties were not transferred, and William Kelly paid no part of the €165,000. Updated drive-by valuations obtained for the appeal put their combined value at between €700,000 and €820,000, but did not assess title and assumed vacant possession. The court said the properties remained subject to mortgage debentures, whose security had been assigned by Ulster Bank to Promontoria, and could not be transferred unencumbered. A cottage was also reported to have been let to one family since 1970.
William Kelly sought an adjournment to obtain advice and pursue a review of the earlier appeal judgment, arguing that information about the security and debt assignment had not been disclosed. The court refused the late application, finding that the threshold for reviewing a judgment had not been met. It said the possible difficulty with the debentures had been anticipated in the High Court and that Kelly knew of both the security and its later assignment.
The court decided that the updated property values could not be used to increase the share valuation. It also refused Gerard Kelly’s request for statutory interest on the €165,000, saying interest would not fit the exchange envisaged by the High Court and neither the company nor Gerard Kelly had sought it there.
The €174,000 balance is initially stayed for six months from perfection of the order. If the process to assess or adjudicate Gerard Kelly’s High Court costs begins within that period, the stay continues until that process, including any appeals, is finished or the costs are agreed, and for a further three months. Gerard Kelly was awarded his appeal costs against William Kelly; the company received no appeal costs. The €984 cost of the updated valuation report is to be credited against William Kelly’s liability for Gerard Kelly’s High Court costs. The appeal was dismissed and the High Court order affirmed in other respects.