The High Court refused an application by three investors seeking documents or information from the liquidator of two forestry investment companies, but made no order requiring them to pay his costs.
In a ruling delivered on 16 August 2021, Mr Justice David Keane said the court had already refused the investors’ application in a judgment on 16 July. They had sought an order under the Companies Act 2014 requiring Alan Fitzpatrick, liquidator of Sixth Irish Forestry Fund plc and Third Forestry Growth Plan plc, to provide information or documents about the companies’ business. The earlier judgment was reported as [2021] IEHC 488.
The remaining issue was costs. Fitzpatrick argued that he had entirely succeeded in defending the application and should receive his costs from the applicants. The investors accepted that their application had failed, but argued that the court should use its discretion to depart from the usual rule that the unsuccessful party pays the successful party’s costs.
They said the case raised novel legal questions about the court’s powers to order disclosure to a company contributory, and that any successful future proceedings could benefit all 12,400 investors. The judge said the issues were novel and the investors’ case was not notably weak. He described the application as, in effect, a test case that clarified the scope of the relevant rights of contributories. He also said the asserted public interest was attenuated and the issues did not concern a sensitive personal right.
The judge said he expressed no view on the commercial wisdom of the directors’ 2019 decision to sell the companies’ forestry assets and put them into liquidation, or on whether the directors may have breached their statutory duties. He noted that shareholders were not given information about the reasons for the sale and liquidations until a memorandum dated 4 February 2020. The directors’ authority to manage the companies without consulting preference shareholders did not, he said, make it reasonable to keep them entirely uninformed about matters central to the companies’ purpose.
Keane said the circumstances, the test-case nature of the application and its efficient conduct justified departing from the usual costs rule. He therefore made no costs order against the applicants. He rejected their argument that the liquidator need not have opposed the application, saying his engagement had assisted the court in resolving the legal questions.
The court ordered that Fitzpatrick’s reasonable costs of the application, including reserved costs and the costs of submissions, be treated as costs in the liquidation of each company and rank accordingly. The ruling did not grant the investors’ request for documents or information.