The High Court has directed that Leech Papers Limited be wound up after finding that its failure to account to a minority shareholder for proceeds from the sale of its main premises amounted to oppression. The court said it would hear counsel on the precise order to be made.
In a judgment delivered on 22 July 2022, Ms Justice Stack found that the company received €889,862.95 from the 2016 sale of its premises at Shamrock Place, North Strand, Dublin. The premises had been its principal asset. The company later occupied them under a sale and leaseback arrangement.
The applicant, Christine Coates, held about 8% of the shares and had been a company director. The judge found that €400,000 of the sale proceeds was paid into a pension fund for the sole benefit of the first respondent, Joseph Leech. The company had not properly accounted for the remaining proceeds. Documents offered to explain the spending contained discrepancies, including over loan repayments and tax, and did not establish where the balance went.
The judge said the company neither consulted Ms Coates about the sale nor provided her with a proper account. Although she had voluntarily absented herself from an active role as director after leaving her employment, that did not remove her entitlement as a shareholder to an account of the proceeds from the sale of the company’s main asset. The failure to account prejudiced her ability to realise value from her shares, which appeared significantly reduced in value or potentially worthless.
The court also found that a 2019 Companies Registration Office filing stating that Ms Coates had resigned as a director was inaccurate and had been filed when she had not resigned or otherwise been deemed to have resigned. The judge treated that filing as an act of oppression. Other complaints—including that she had been excluded from company governance and failures to maintain records and comply with company law—were not, on the evidence, found to amount to oppression. The judge did not find that the company was deadlocked or that its business had been transferred to another company.
The applicant had sought relief under section 212 of the Companies Act 2014 and a winding-up order. The judge said the usual remedy of having the other shareholders buy her shares was inadequate because the company’s records made it impossible to value them. With no adequate alternative remedy, the court directed a winding up on just and equitable grounds or as relief for oppression under section 569(1)(e) or (f). A separate motion to attach and commit the respondents over access to company records was not proceeded with.