The High Court ruled that Freda Hayes’s ordinary shares and special share carry at least 51% of votes cast on resolutions at a general meeting of The Blarney Woollen Mills Group, and that she may use those voting rights to increase the board and appoint directors.
Mr Justice Max Barrett delivered the judgment on 31 July 2015 in proceedings brought by Hayes against Patrick Kelleher, Robert Reardon and Frank Kelleher. The dispute concerned the interpretation of the company’s articles of association and a shareholder agreement.
Hayes, the company’s chief executive and largest shareholder, had requisitioned an extraordinary general meeting to increase the board from nine members to 13 and appoint additional directors. She argued that her shares and special share gave her 51% of voting rights. The defendants disputed that interpretation and argued that only the board could appoint directors.
The court found that the articles allowed the company to change the nine-director limit by ordinary resolution. It rejected the argument that the shareholder agreement fixed the board’s composition permanently at nine, saying the agreement described the initial arrangement and did not prohibit a later increase.
The judgment also found that the general meeting retained power to appoint directors alongside the board. It said the articles did not use clear language excluding that power. The court relied on provisions allowing the company by ordinary resolution to remove directors and appoint replacements, as well as authorities concerning shareholders’ powers.
On voting rights, the court rejected the defendants’ calculation that the special share contributed only 1.6 percentage points, which would bring Hayes’s voting power to 51% when combined with other holdings. It held that the agreement’s wording gave Hayes’s ordinary shares and special share at least 51% of votes cast.
The court concluded that Hayes could proceed as proposed: use her voting rights at a general meeting to increase the board and appoint directors. The judgment determined how the governing documents should be interpreted and the powers available at a general meeting; it did not record that the proposed meeting had taken place or that any additional directors had been appointed.