The High Court has ruled that Blackrock Hospital and the parties to its shareholders’ agreement must execute a deed of adherence before the hospital can register a valid family transfer of shares.
Mr Justice Robert Haughton delivered the judgment on 14 June 2017 in the Commercial Court. The case concerned the interpretation of a 2006 agreement and two proposed transfers: shares held by James and Rosemary Sheehan to Dornway Limited, and shares held by Tullycorbett Limited to Xroon Limited.
The hospital argued that all parties had to sign the deed, while some respondents said only the incoming shareholder needed to sign. The court found that the agreement’s Schedule 6 form, read with the rest of the agreement, required the continuing parties as well as the transferee to execute it. The court also held that, for a valid family transfer, each party was contractually obliged to sign. It said the agreement did not give existing shareholders a veto over a transfer.
The first respondent, Joseph Sheehan, had objected that the hospital lacked standing to bring the proceedings because he opposed the decision to sue. The court rejected that preliminary objection. It held that the hospital, as a party to the agreement, had sufficient interest to seek its interpretation and that the agreement did not remove the Irish courts’ jurisdiction. The court said the application was a necessary action after the parties failed to resolve their disagreement.
The court did not determine whether the proposed transfer to Xroon qualified as a “Family Transfer”. It said that question was outside the issues supported by the pleadings and affidavit evidence. It also noted that the agreement provided a process for seeking information about a disputed family transfer.
The court’s final determination was that the hospital and each respondent had to execute a deed of adherence substantially in the Schedule 6 form before the hospital could register a family transfer in its register of members. That obligation applied in respect of a valid family transfer. The judgment did not itself order registration of either proposed transfer.