The Court of Appeal has dismissed an appeal against the winding-up of Lanskey Limited, leaving in place the High Court’s order appointing a liquidator to the flower-growing business.
In a judgment delivered on 8 February 2022, Mr Justice Maurice Collins said the High Court was entitled to find that the relationship between Joseph Byrne, a 40% shareholder, and the other shareholders, Catríona Byrne and Sean Byrne, had irretrievably broken down. The court found that the company’s management was deadlocked and it had effectively ceased to function.
The company, incorporated in 2012, operated the Blooming Baskets business from lands in Ballyboughal, North County Dublin. The business grew and sold flowers and plants and also sold flower baskets wholesale and retail. The judgment said the company had borrowed €950,000 to acquire the business and about 19 acres of land, and that the debt appeared to have been repaid within six or seven years.
The dispute had included allegations by Joseph Byrne that he was excluded from management and access to company accounts, and concerns about a share transfer and a €30,000 withdrawal. The other shareholders disputed his account and blamed him for the breakdown in trust. Those were competing positions in earlier proceedings; the Court of Appeal’s decision turned on the just-and-equitable basis for winding up, not a finding that oppression had been established.
The High Court made the winding-up order on 17 December 2020, following a hearing in which it excluded affidavits the appellants had sought to file late. On appeal, the court said it was surprised by the refusal to allow the affidavits and considered that an adjournment might have been possible without significant prejudice. But the appellants also had to show that the decision caused or may have caused real prejudice.
Having reviewed the draft affidavits, the Court of Appeal concluded they could not have affected the outcome. They addressed insolvency and oppression, while the order rested on the just-and-equitable ground. The petitioner had not pursued insolvency at the High Court hearing, and his counsel accepted on appeal that insolvency could not properly support the order. The appellate court also found no evidential conflict requiring cross-examination or an oral hearing.
The court said a buyout was not a realistic alternative on the evidence, given the difficulty of valuing the shares and the absence of evidence about the appellants’ willingness or ability to fund a purchase. It upheld the winding-up order, which allows the independent liquidator to sell the company’s assets under court supervision. The appellants may seek to purchase the business or assets from the liquidator in the ordinary way.