The High Court has upheld Denis O’Reilly’s claim that he and Francis Goff entered a binding oral agreement to become equal shareholders in a Wexford property development company.
Barnaculla Developments Ltd had six shareholders and was involved in developments including Silverdale at Kilmuckridge and Silversands at Rosslare. O’Reilly held 15% of the company and Goff 25%.
O’Reilly claimed that in 2003 they agreed that Goff would acquire the shares of the other shareholders and that the pair would ultimately hold the company equally. Goff denied any concluded agreement and maintained that the shares he bought were acquired solely for himself.
The dispute centred heavily on what had been agreed orally and on conflicting accounts of a November 13, 2003 company meeting. O’Reilly disputed minutes stating that all shareholders would sell to Goff and that all directors would resign.
A recorded telephone conversation from April 28, 2005 proved significant. During that call, after O’Reilly referred to their original agreement for a 50-50 shareholding, Goff said he would not go back on any agreement he had made. The discussion also addressed how the arrangement would be implemented through the company's accountant and legal advisers.
Mr Justice Roderick Murphy found that the parties had reached an oral agreement in October 2003. The later referral to accountants and solicitors concerned the tax and legal mechanics, not whether a deal existed.
The court also found that the absence of an agreed payment date did not invalidate the arrangement. Payment was implicit once the share price and proportions were settled.
Specific performance was ordered, requiring the agreement to be carried out. O’Reilly was also entitled to related declarations concerning the shares. Separately, the court was not satisfied that a resignation letter from O’Reilly had been placed before the November 2003 meeting and granted a declaration relating to his disputed removal as a director.