The High Court has dismissed parts of a minority shareholder’s oppression claim against Martialone Limited and two of its directors, while leaving several allegations unresolved at this stage.
In a judgment delivered on 23 December 2009, Ms Justice Laffoy ruled on an application by Patrick Griffin and Patrick Keane to strike out proceedings brought by Mike Hennessy under section 205 of the Companies Act 1963. The judge held that allegations concerning a share agreement, a share issue that never took place, alleged wrongdoing in a later share allotment, a withdrawn request for an extraordinary general meeting, unanswered questions at an AGM, director appointments and resignations, and alleged information exclusion could not give rise to relief under section 205.
Hennessy, who held 20.12% of the company’s issued shares, alleged that the company’s affairs had been conducted oppressively and in disregard of his interests as a member. He sought, among other remedies, an order requiring the respondents to sell their shares to him at a fair price, or an order for sale of the company. He also sought a winding-up order if necessary.
The judgment concerned only the strike-out application, not a trial of the disputed allegations. Laffoy said the court had to consider whether Hennessy could obtain relief if his pleaded facts were established, and could not resolve material factual conflicts on this application. She left open claims relating to his allegation that he was pressured into transferring shares without payment in 2001, the information supplied in connection with a share issue that proceeded in 2006, and his claim that he was compelled to resign as a director in 2003.
The judge rejected Hennessy’s contention that the 2001 transfer breached a shareholders’ agreement, finding that the clause he relied on described the position at the time rather than imposing a future obligation. She said that did not settle whether the alleged pressure surrounding the transfer could amount to oppression. She also declined to decide whether a defence might arise from the time elapsed before Hennessy first complained about that transfer.
The court did not decide what remedy might be appropriate if any surviving allegation were later proved. The judgment noted that shareholders holding 31.17% of the company were not before the court and that the position of another respondent and the effect of a compromise with a third respondent remained uncertain. The court also gave no weight to offers by Griffin and Keane to buy Hennessy’s shares when deciding whether his claims should be struck out.
The order dismissed the claim to the extent of the specified allegations. The judgment’s concluding summary does not set out a final disposition of the strike-out application against Griffin and Keane as a whole.