The High Court has ordered a preliminary hearing on three disputed issues in a long-running business dispute over outdoor rock and pop concerts promoted in Ireland.
The case concerns Eamonn McCann and Denis Desmond, who worked together in a venture that the judgment says apparently operated profitably from the late 1970s until 2006. The parties agree that they arranged to end their business relationship in 2006, but dispute the terms of that agreement and how the venture’s profits should be calculated.
Mr Justice Charleton’s ruling, delivered on 11 May 2010, grants a motion to hear the issues on oral evidence before the remaining matters are determined. The issues are who the proper parties to the agreements were; whether profits were to be shared before or after overheads and costs were deducted; and what buy-out terms were agreed for the interest claimed by Mr McCann. Mr Desmond contends that the interest was held by Wonderland Limited.
The judgment records competing positions on the proposed buy-out calculation. Mr McCann’s position was that he should receive the full business valuation, calculated at 4.66 times average net profits. Mr Desmond argued that the payment should be 45% of a valuation based on 4.66 times 45% of average net profits. The judgment said the parties’ differing calculations produced estimates ranging from about €4 million to €16 million.
Mr McCann opposed splitting the case into modules. He argued that document discovery could show how the parties had run the business and illuminate both the original arrangement and its termination. He also said evidence about overheads and the multiplier would overlap with later questions about damages. Mr Desmond argued the issues could be decided separately through oral evidence and that doing so would substantially reduce costs.
The judge accepted the application, finding that the three questions were central, capable of being dealt with separately and likely to save time and costs without appreciable prejudice. He said relevant evidence could include the parties’ dealings, accounts, division of responsibilities and communications. He made no finding on the identity of the contracting parties or on the disputed profit-sharing and buy-out terms.
The ruling followed unsuccessful mediation. The judge said he would discuss further orders with the parties; further directions to advance the case were to be made by Kelly J. in the Commercial List the following day.