The High Court has dismissed Athlone Town Stadium Limited’s applications to undo a settlement reached in May 2019, ruling that the company was bound by the agreement. The court also made costs orders against the company and two individual defendants.
The dispute arose after the settlement was recorded in court on 23 May 2019. It provided for the personal claim against the directors to be withdrawn, the company’s appeals to be discontinued without costs orders, and €50,000 lodged as security for costs to be paid to the plaintiff, alongside a further €50,000. It also set out arrangements for a new entity to hold Athlone Town Stadium on trust for the benefit of the club or a successor club, with the club using the lands for football and community purposes.
One director, Declan Molloy, opposed the settlement. The company later sought a declaration that it was not bound by the agreement, arguing, among other things, that the company had not authorised it and that required company procedures had not been followed. The court heard evidence from the company’s solicitor, Neil McNelis; Molloy; director Paddy McCaul; and solicitor Colm MacGeehin, who acted for the directors.
The judge found that McNelis’s email of 15 May 2019 authorised MacGeehin to take instructions from the directors on behalf of the company as well as the directors personally. The directors discussed the settlement, and a majority supported it. The judge found there was no formal board meeting or resolution on 23 May, but held that a majority decision following the directors’ discussions was sufficient in the circumstances. The court also found that McNelis was aware of, and had cooperated to some extent with, implementation of the settlement before objecting in September.
The judge rejected the company’s arguments that the agreement was invalid because it was not embodied in a court order, lacked a signature, or involved improper delegation of authority. The judgment distinguished the contractual agreement from the court order: although the agreement was generally contractual rather than an order, the company was bound by it. The judge also found the settlement to be in the company’s interests, given the risks and liabilities it faced if it continued its appeals.
The court dismissed the company’s applications, including its amended motion, and dismissed a separate motion seeking information about the release of funds. The judge clarified that the plaintiff’s solicitor could deal with the €50,000 already in his possession as he considered appropriate; the judgment recorded that no undertaking or injunction restricted its use.
The court ordered the first, second and third defendants to pay the plaintiff’s costs on a solicitor-and-client basis, jointly and severally. It also ordered costs for the fourth defendant against the company and, from the date its solicitors came off record, the second defendant. Those costs orders were stayed for 28 days, with a further stay to the first Court of Appeal mention date if an appeal was lodged in that period. The question of costs against McNelis personally was adjourned to 20 January 2020.