The High Court has stayed John O’Driscoll’s oppression proceedings against SGC Global Advanced Technologies Ltd until separate plenary proceedings over his claimed shareholding are determined.
Mr Justice Brian O’Moore ruled on November 30, 2020, that a person must be registered as a company member to bring and maintain a claim under section 212 of the Companies Act 2014. Mr O’Driscoll was not registered as a member of SGC, a point the parties accepted at the time of the motion.
Mr O’Driscoll claims he is entitled to be registered as a shareholder. In the plenary proceedings, he has counterclaimed for an order under section 173 requiring SGC to correct its register. Those proceedings also include a claim by Kevin Devlin for specific performance of an alleged agreement under which Mr O’Driscoll sold his interest in SGC to him.
Mr Devlin and SGC sought a stay of the section 212 case until the plenary proceedings are decided. They argued that, while Mr O’Driscoll remained off the register, he could not maintain the oppression claim. They did not ask the court to strike it out, saying a stay would be less distressing and would avoid requiring him to start similar proceedings again if he were later registered.
Mr O’Driscoll initially opposed the stay, arguing that it could lead to duplicated evidence and added time and costs. During the hearing, both sides accepted that factual findings in the plenary proceedings would bind the parties in the oppression case. The judge said that this addressed the concern about duplication and found that the claimed prejudice from a stay had no real foundation.
The judge held that section 212 permits a member to apply for relief and that the Companies Act defines a member, in relevant circumstances, as a person whose name is entered in the company’s register. He rejected the argument that a person could start or continue an oppression case while off the register, provided entitlement to registration was established before final judgment. He said Mr O’Driscoll’s standing had to be established separately from the oppression proceedings.
The court found in favour of Mr Devlin and SGC and ordered a stay until the plenary proceedings are determined. It did not decide whether Mr O’Driscoll is entitled to be registered, whether the alleged sale agreement exists, or the merits of the oppression allegations.