The Court of Appeal has dismissed John Kelly’s challenge to the High Court’s confirmation of a merger between Bank of Ireland Private Banking Limited and the Governor and Company of the Bank of Ireland.
In a judgment delivered on 5 December 2018, Ms Justice Irvine said the High Court was entitled to refuse Mr Kelly’s request to adjourn the merger application and had sufficient evidence to confirm it. The appeal concerned an order made by Mr Justice McGovern on 21 July 2017, which set the merger’s effective time as 00.01 on 1 September 2017.
The proposed transaction was a merger by absorption. Bank of Ireland Private Banking was to transfer all its assets and liabilities to its parent, the Governor and Company of the Bank of Ireland, which owned all its shares. The High Court was asked to confirm the merger under the Companies Act 2014.
Mr Kelly had separate proceedings against the private banking company, seeking damages for alleged negligence, fraudulent misrepresentation, breach of duty and breach of contract concerning a property in Stockholm, Sweden. He argued that the merger could put any eventual award of damages or costs at risk because the application materials did not adequately explain the acquiring bank’s liabilities. He also said he had not had enough time to review the material and sought an adjournment.
The respondents said the bank’s 2016 audited accounts showed a surplus of assets over liabilities of about €8.1 billion, and that the accounts included detailed notes on its assets and liabilities. They also relied on due diligence by the two companies and the European Central Bank Joint Supervisory Team’s confirmation that it had no objection to the proposed merger.
The Court of Appeal found that Mr Kelly had known of the proposed application from 24 June 2017 but did not request the supporting documents until 13 July. It said he had not obtained expert financial advice or identified specific missing information that could show the merger was likely to put his claim at risk. The court concluded that refusing an adjournment was a fair exercise of the High Court’s discretion.
Under the Act, a creditor seeking to object had to credibly demonstrate that the merger was likely to put satisfaction of a claim at risk and that adequate safeguards had not been obtained. The appeal court held that Mr Kelly had not met that threshold. It said the High Court therefore had no statutory obligation to consider whether “proper provision” had been made for him or to require further documents.
The court also rejected the claim that the High Court had failed to scrutinise the merger application. It held that the statutory requirements for a merger by absorption had been addressed in the evidence and supporting documents. The Court of Appeal dismissed all aspects of the appeal.