The High Court dismissed proceedings brought by Blackrock Medical Partners Limited (BMPL) and Dr Joseph Sheehan over Galway Clinic Doughiska Limited’s approval of a proposed medical facility, finding the claims moot and unable to confer any benefit on the plaintiffs.
The dispute concerned a February 2017 board decision to approve a two-storey facility estimated to cost about €17 million. BMPL held a 25% shareholding in Marpole Limited, the clinic operator’s parent company, while Parma Investments Limited held 75%. The plaintiffs argued that the project required BMPL’s consent under a 2004 shareholder agreement, which covered restricted transactions involving borrowing or expenditure above €250,000.
The defendants denied that the board decision breached the agreement. They argued that the directors had acted in the clinic operator’s interests and that Parma was not responsible for their votes. The plaintiffs also alleged that the defendants’ actions threatened their contractual protections and were intended to frustrate repayment of investor loans. Those were allegations, not findings made after a trial.
The defendants applied to dismiss the case, arguing that it was moot or bound to fail, and also sought security for costs. The court heard the dismissal application on 25 June 2020. The plaintiffs did not appear or submit evidence in response. The judge said the only evidence before the court was an uncontroverted affidavit from Parma secretary Declan Sheeran.
Sheeran’s evidence was that the proposed development had been deferred in December 2017 for commercial reasons and had not proceeded. He also said Parma acquired BMPL’s Marpole shares from a receiver, with the transfer completed on 27 May 2020. On that basis, the plaintiffs no longer had a shareholding interest in Marpole or its subsidiary.
The judge dismissed the claims for declarations, specific performance and an injunction, concluding that the project had not been implemented, there was no longer a live controversy, and the plaintiffs had no continuing material interest in the board’s decisions. He also dismissed the damages claims against Parma, citing the absence of meaningful particulars of financial loss and the lack of evidence supporting key allegations, including the alleged purpose to prevent repayment of investor loans.
The judgment did not determine whether the 2017 approval was a restricted transaction requiring BMPL’s prior written consent. The judge said that issue had received only limited submissions and did not need to be decided. Dr Sheehan also lacked standing to pursue claims under the agreement’s investor covenants in his personal capacity, the court held.
The court dismissed the proceedings as an abuse of process because the claims were moot and could confer no benefit. It did not decide the defendants’ separate application for security for costs, as dismissal made that unnecessary.