The Supreme Court has struck out a long-running claim by Anglo Irish Beef Processors Limited and DJS Meats Limited against four former shareholders after finding that years of unexplained delay caused serious prejudice to the defence.
The dispute arose from a June 1989 agreement under which Anglo Irish bought the defendants’ shares in DJS for £1. A clause in that agreement required the selling shareholders to make a payment if DJS’s net liabilities exceeded an agreed figure.
Anglo Irish maintained that the eventual balance sheet showed liabilities £1,584,857 above that threshold. The defendants disputed the meaning of the clause, saying the intended indemnity related only to certain trading losses.
Proceedings began in November 1989 and were later expanded to include warranty claims. However, after pleadings closed in April 1994, Anglo Irish repeatedly allowed the case to lie dormant. Notices of intention to proceed were served in 1996, 1998 and 2000, but substantive progress remained limited.
The High Court accepted that the delay was both inordinate and inexcusable but allowed the action to continue. The four defendants appealed.
Delivering the Supreme Court judgment, Chief Justice Keane said no explanation had been offered for what he described as the remarkable lethargy with which the proceedings were pursued. The decisive issue was the death in November 2000 of Brendan Devine, an accountant who had advised the defendants during negotiations before the 1989 agreement.
According to affidavit evidence which was not disputed on the facts, Devine had been present for discussions concerning the meaning and financial implications of the disputed clause. His evidence would also have been important to the defendants’ third-party claim against Stokes Kennedy Crowley and Company.
The Supreme Court found that his loss as a witness created a substantial risk that a fair trial was no longer possible and caused serious prejudice to the defendants.
The appeal was allowed and the plaintiffs’ claim against all four defendants was dismissed.