High Court dismisses MD's interlocutory application for reporting line changes due to irreparable relationship breakdown.

THE HIGH COURT

[2025] IEHC 653

[Record No. 2025/3453P]

BETWEEN

JOHN PAUL KELLY

PLAINTIFF

AND

STORE ALL LOGISTICS LIMITED

DEFENDANT

JUDGMENT of Mr Justice Liam Kennedy delivered on 27 November 2025.

Introduction

1. The plaintiff seeks interlocutory orders in relation to his role as the defendant’s managing director (“MD”). He objects to changes to its internal reporting lines which, he says, strip him of his authority, penalising him for asserting perceived rights (in terms of share allocation and remuneration) and punishing him on foot of an issue raised by a departing employee, thereby breaching his contractual rights by denying him due process (including a right to respond). He is also concerned that he will be dismissed or at least supplanted or sidelined as MD. The defendant denies these claims.

Criticisms of the Affidavit Evidence

2. At the outset, I note that the plaintiff criticised the affidavits filed on the defendant’s behalf as "extremely repetitive, verbose, inaccurate, misleading and confusing". This was ironic as such adjectives could also be applied to his own averments. The five affidavits, running to some 144 pages plus 487 pages of exhibits between them, were lengthy and disproportionately focussed on remuneration, shareholding, “resignation” and other issues (“Other Grievances”), which appear tangential or purely contextual to the current application. The plaintiff bears more (but not all) responsibility. The emphasis on the Other Grievances obscured the justification for seeking interlocutory relief in these proceedings. Far too much of the evidence (on both sides) rehashed issues: (i) addressed in earlier affidavits; (ii) which cannot be resolved on this application; and (iii) of contextual relevance only. Such issues should have been dealt with succinctly if at all. The main relevance of the Other Grievances to this application is any light they may cast on the parties’ motivation. There was no need for them to be repeatedly rehashed at length. Nothing was gained by their repeated ventilation in long and argumentative affidavits (and such abuse of the Court’s procedures may go to costs). In addition, despite the length of the affidavits and the repetition of certain exhibits, the affidavits often exhibited emails and documents without exhibiting associated correspondence or contextual documents, so it was often unclear whether any such documents reflected an agreed position at a particular point. This reduced the value of such evidence.

Background

3. The Waterford based defendant operates a successful logistics business employing 170 people. It has employed the plaintiff in various roles since 1999, continuing a family tradition

– it also employed his father, its MD by the time of his retirement in 2005. As a result of a management buyout (“MBO”), the plaintiff is a beneficial shareholder (with an indirect 17.5% stake) and a director, having become MD in 2022. He was previously Operations Manager. Members of the Dalton family (which also has a longstanding involvement in the business) beneficially own the rest of the company. Derek Dalton, his father Liam and his brother Eoin are directors along with the plaintiff. Derek owns 58.5% and Liam and Eoin each hold 12%. Since the principal protagonists are the plaintiff and Derek Dalton, for brevity, this judgment will refer to the latter as Mr Dalton whereas his father and siblings, who feature less frequently, will be identified by their full name.

4. As I have noted, the gist of the plaintiff’s claim is that the defendant is punishing him without due process or victimising him for asserting his entitlements and that, through Mr Dalton, it has attempted, or is attempting, to replace or sideline him. He says that recent changes in reporting lines are an unlawful sanction, demoting him and stripping him of powers and responsibilities without offering him the opportunity to respond to a complaint which, he says, prompted the changes, thus denying him natural justice, fair procedures, and his contractual entitlements, while subjecting him to an ongoing threat of dismissal.

Legal Principles

5. Employees’ rights to fair procedures are well settled. Three examples suffice: a. In Glover v BLN L td [1973] IR 388 (Glover) a company terminated its technical director’s employment without notifying him of complaints of misconduct and neglect which triggered his dismissal, affording him no right of reply. Walsh J deemed this a breach of an implied term that any procedure would be fair:

"failure to allow a person to meet the charges against him and to afford him an adequate opportunity of answering them is a violation of an obligation to proceed fairly. "

b. Likewise in Frizelle v New Ross Credit Union Ltd [1997] IEHC 137 (Frizelle), Flood J stated that ‘certain premises’ must be established to support dismissal for misconduct - ‘natural justice must be unequivocally applied’. There must be a bona fide complaint, unrelated to any other agenda, the complaint should be put to the individual who is the subject of the complaint; this should be done “factually, clearly and fairly without any innuendo or hidden inference or conclusion”. The respondent should also be interviewed and their version furnished to the deciding authority contemporaneously with the complaint without comment. The decisionmaker’s conclusion (on the balance of probabilities) should reflect the evidence and explanations. Sanctions should be proportionate. c. In QQ v Board of Management of School [2023] IEHC 302, Dignam J reviewed the principles governing interlocutory applications to restrain ongoing disciplinary processes. Dignam J cited paragraph 63 of Butler J’s judgment in Lally v Board of Management of Rosmini Community School [2021] IEHC 633 (which itself cited paragraph 11 of Clarke J's judgment in Rowland v An Post [2017] 1 IR 355), in which Butler J reaffirmed that on such an interlocutory injunction application the plaintiff:

“… must show that she has raised a fair question to be tried, taking into account the high standard by reference to which that question will be judged at the substantive hearing.” Dignam J added at paragraph 32:

“Thus, following the formulation set down by Butler J, the plaintiff must show that there is a fair issue be tried, taking into account the requirement to prove at trial that the process has gone irremediably wrong, i.e. that there have been flaws in the process and that those flaws mean that there is a serious risk that the process has gone irremediably wrong.”

6. In Earley v HSE [2017] IECA 158, and Earley v HSE (2) [2017] IECA 207 (together, Earley), the Court of Appeal confirmed that interlocutory relief may be granted to restrain an employer from fundamentally changing the role assigned to an employee. Hogan J cited the observation of Kelly J in Rafferty v Bus Éireann [1997] 2 IR 424 that "at common law an employee is not required to do a fundamentally different job from that contracted for." In Earley, there was an agreed job specification confirming the plaintiff’s role as Director of Nursing for Mental Health Services for the Galway and Roscommon area. A clause which required her "to work in any service area within the vicinity as the need arises" meant merely that she could be required to work in adjoining geographical areas in a similar capacity. The HSE could not reassign her from her existing post (with clinical and management responsibility in a designated service area) to a very different position even if that did not entail any loss of remuneration, status or prestige. Crucially she was changed from a clinical and operational role to a non-operational role, a material change. The first judgement held, inter alia, that in view of the contractual terms there was no lawful basis for the re-assignment. The second judgement confirmed that injunctive relief could be granted even though the employee’s remuneration, reputation and status were unaffected, the reassignment was not part of a disciplinary process and there had been no adverse findings against her. Such considerations were irrelevant to whether her contract was breached. Hogan J concluded that she was required to perform a fundamentally different job from that which for she contracted, and the courts should ensure, where possible, that an effective – and not simply a theoretical – remedy should be available in employment cases where such a clear breach has been established.

7. There was no real dispute as to the principles governing the award of injunctions: a. The fundamental principles were summarised by O'Donnell J (as he then was) in Merck Sharp & Dohme Corporation v Clonmel Healthcare Ltd [2019] IESC 65 (Merck). He noted, inter alia, that an interlocutory injunction may be appropriate even if damages would be an adequate remedy, although adequacy of damages is an important factor in the balance of justice assessment. b. The plaintiff accepted that Maha Lingham v Health Service Executive [2005] IESC

89 applies – he must establish a strong case that he is likely to succeed at the hearing of the action to be entitled to the relief sought at the interlocutory stage. c. Moreover, the Court will consider whether the balance of convenience favours the granting of injunctive relief. In Morgan v Trinity College Dublin [2003] IEHC 167 (Morgan), Kearns J noted that the plaintiff’s entitlements will be balanced against the defendant’s duty to maintain good order within its organisation and its need to protect all staff when determining whether an injunction is the appropriate remedy. d. Laffoy J similarly observed in Ryan v ESB International [2013] IEHC 126 (Ryan), that the potential impact on employer/employee relations, especially among key personnel, will be a “weighty factor” in the Court’s balance of convenience assessment. e. It is well settled that an irretrievable break down of relationships may render injunctive relief inappropriate (on an interlocutory basis or otherwise). In Bergin v Galway Clinic Doughiska [2007] IEHC 386 (Bergin), Clarke J concluded that the “potentially irreparable harm” that could be caused to the defendant by requiring it to retain the plaintiff in situ as CEO pending trial “would significantly outweigh any harm that would be done to the plaintiff in the event that he should not obtain an order allowing him to continue with his duties but should succeed at trial.” f. The Court also will consider whether the application is premature. As emphasised by Kearns J in Morgan, injunctive relief is not appropriate where matters could be dealt with fully and adequately by an internal grievance procedure.

g. Lastly, the Court will do "nothing in vain" - it will not make any order unless the need for it has been established (such as likely prejudice in the absence of such orders which could not be addressed by damages at trial).

Reliefs sought on this application

8. The primary interlocutory reliefs sought include orders: a. restraining the defendant from; (i) treating the plaintiff as other than its MD pursuant to the terms and conditions of his role and the reporting structure as matters stood prior to the 7 April 2025 Board Meeting (“the Board Meeting”); (ii) removing him as MD or appointing anyone else to that role; or (iii) imposing any disciplinary sanction on him other than in strict compliance with his contract of employment, fair procedures and natural justice, and company procedures. b. Reinstating the plaintiff to his role as MD as it was prior to the Board Meeting and directing the defendant to return to the pr e vi ou s reporting structure. c. Directing the defendant to inform staff that the previous reporting structure was to be restored and restraining the defendant from further altering its reporting structure insofar as it concerned the plaintiff, other than in strict compliance with statute, contract, and fair procedures and natural justice. d. Restraining the defendant f r o m imposing any disciplinary sanction on the plaintiff other than in strict compliance with his contract of employment, natural justice, fair procedures, statute and company procedures.

The facts

9. As I have noted, the facts are contested. Aspects of each side's positions and conduct will merit scrutiny at trial. This judgment does not resolve such controversies. It takes the plaintiff’s evidence at its height, along with uncontested or documentary evidence (but without. uncritically accepting assertions or subjective interpretations). All “findings” are provisional - there will be more extensive evidence at trial, including oral testimony tested on cross examination. Subject to such caveats, key points emerging from the current evidence are summarised in the following paragraphs.

10. The plaintiff has been seeking to negotiate an increase with Mr Dalton in his remuneration and to resolve shareholder issues. The issues remain unresolved, straining relationships. The plaintiff became MD in May 2022 with no change to his previous salary as Operations Manager. He expected a salary (or shareholding) increase, but his remuneration has not changed in five years. For two years, he sought to resolve those issues, but he says that the defendant failed to negotiate reasonably or in good faith and ultimately sought to penalise him. He takes issue with conditions associated with increases offered by the defendant.

11. In July 2024 the plaintiff’s frustration led him to resign (or to threaten to do so). The defendant says that he did resign; it duly notified staff, to the plaintiff’s chagrin. He says that he never “formally” resigned (and six months’ notice would have been required to do so). In any event, the parties agreed that he should remain, treating the interregnum as leave with the defendant’s accountants helping the parties agree a new package. He says that he accepted a proposal from which the defendant has resiled, wrongfully linking his remuneration to an unacceptable shareholder agreement. Again, these are issues for another day.

12. Although the relationships between the principals were strained by the shareholding and remuneration issues, this litigation was triggered by the departure of the defendant’s Food and Warehouse Manager ("FWM"). The FWM emailed Mr Dalton on 28 March 2025 informing him of his resignation, blaming the plaintiff. On 31 March 2025, Mr Dalton emailed his fellow directors, summoning a proposed directors’ meeting for 7 April 2025, stating that:

“A couple of years ago, under Project Acorn, the company set a goal of building a team which could maintain the company's standards for at least 6-months in the absence of the Directors. I feel today that we have built a competent team, but I don't believe we will achieve our goal with our current ways of work. The excessive day to day involvement by the Directors is hampering and curtailing the SLT’s decision making capabilities. Often they feel micro-managed in their roles which is in turn preventing them growing into their roles. I feel the SLT team needs to be allowed to lead. I am proposing we empower them to do so. To achieve this. I am proposing that the Directors take a step back from day to day operations, and refocus on tasks which drive the company’s success. I don’t believe the Directors contribution should be in any way diminished, but rather from an operations perspective, it should evolve to support the SLT team. To oversee this change I am proposing I am nominated as the Manging Director. I also propose a change to the org structure so that the SLT team report to the MD. I look forward to discussing on Monday”. This was not the first occasion on which Mr Dalton had expressed frustration with the reporting lines within the company or proposed his own appointment as MD.

13. The plaintiff objected to the Board Meeting and the proposed changes, noting that the defendant already had a MD. His 1 April 2025 email acknowledged that Mr Dalton had indeed set the objective "of building a team which could maintain the company’s standards for at least 6-months in the absence of the directors”. The plaintiff stated that he supported that objective, and they empowered such a team only to find that service levels dropped, they lost business, and it impacted financial performance. He argued that Mr Dalton "wanted the directors to make a rash decision based on scant information that has been gathered from a select few with very limited and biased views." He said that the proposal was unlawful, breached employment legislation and suggested that instead non-executive directors should be added to the board "to help us structure the company properly and set it up for success".

14. Mr Dalton replied on 4 April stating that he was simply asking the board to consider matters and continue discussions about issues that had been on the agenda for some time "and involve little more than explaining then exploring how roles can be evolved". He rejected the plaintiff's comments, reiterating the need for the directors to give management space to learn and evolve in certain areas but for the directors to stay involved in others and that "an appropriate level of trust and oversight can play an important role in mitigating any concerns [the plaintiff] had about service levels”. He reiterated that the directors should focus on the aspects of the business that because they were best placed to deal with, as opposed to those which unnecessarily sapped their energy which others could deal with. He concluded that that the company structure was not the underlying question and that the more relevant issue was how the directors’ roles should evolve to maximise their contribution to the business, maximise the benefit to the company and set up the SLT for success. He said he was not looking to attribute blame but to address challenges in the best interests of the company, which he regarded as everybody's responsibility. He acknowledged the plaintiff's incredible service, his work solving difficult problems in delivering complex solutions and expressed a desire to work with him to put the focus back on that.

15. The plaintiff emphasises that Mr Dalton did not provide him with a copy of the FWM’s resignation email before the Board Meeting, although, in submissions, it was accepted that he was informed of the gist of the communication on 31 March 2025 (when Mr Dalton told the plaintiff in advance of the meeting that the FWM had said he was resigning because of the plaintiff’s conduct). The plaintiff also demanded detailed written proposals as to what changes would be discussed at the Board Meeting, but Mr Dalton considered that the meeting had been duly convened and that the plaintiff had been sufficiently informed.

16. Following Mr Dalton’s refusal to accede to his requests for more information, the plaintiff did not attend the 7 April 2025 Board Meeting. The board did not appoint Mr Dalton as MD but did change the reporting structure. On 9 April 2025 the plaintiff received the minutes (set out below) and two days later Mr Dalton sent him an organogram showing new structures (“the Second Organogram”). An earlier organogram, the genesis of which is disputed, (“the First Organogram”) had provided for most of the SLT to report to both Mr Dalton and the plaintiff. However, the second largely envisaged the SLT reporting to Mr Dalton alone, with further reporting lines between Mr Dalton and the plaintiff. This is considered further below.

17. The plaintiff says that the new structure (which was subsequently circulated to staff) negatively and seriously impacted on him, undermining and diluting his role and rendering him MD in name only. His operational oversight was removed. SLT members who previously reported to him no longer provided information requested by him, changing how colleagues perceived and treated him. His solicitors wrote to the defendant, seeking undertakings. Its solicitors replied, denying that the plaintiff had been removed as MD, that steps had been taken to do so or that he had been stripped of his role or responsibilities. When the plaintiff subsequently made enquiries of colleagues, the Operations Manager rebuffed his requests, stating that operational matters were her responsibility, asking him to respect the new structure. He says that the defendant continues to undermine him and that he is exposed to the threat of disciplinary action, demotion or dismissal.

The plaintiff’s contract, job description and associated reporting lines

18. The plaintiff’s employment contract contained the following relevant provisions:

a. the opening clause stated

"You will be employed primarily as a Managing Director, reporting to the Board of Directors. You will be required to be flexible in this position and must be prepared to undertake any such work as may be assigned to you by the company from time to time. Such work can be outside the area of your normal duties”. b. It confirmed that his employment as a MD started 1 May 2022 and that the Unfair Dismissals Act, 1977 – 2001 would apply as it was a permanent contract. c. Paragraph 15 provided that, after probation, either side could terminate the employment in accordance with the appropriate notice period under the Minimum Notice and Terms of Employment Act 1973. The defendant could pay in lieu of notice. d. A termination of employment policy was incorporated, requiring the plaintiff to give at least six months’ notice should he wish to resign. The company handbook provided that, after probation, the company could terminate employment by giving notice - eight weeks in the plaintiff's case. The handbook reiterated the defendant’s right to pay in lieu of notice. e. Clause 21 incorporated disciplinary and grievance procedures. The latter was intended to deal amicably “with all problems, disagreements and disputes that may arise from time to time between management and employees or indeed between employees themselves". It provided a procedure for the escalation of disputes. f. The handbook also outlined the company's disciplinary procedure. One sanction in the disciplinary procedure was demotion (and the plaintiff submitted that the change in reporting structures was an effective demotion).

19. The plaintiff says that as MD he had full operational responsibility for the defendant. However, both parties seem to have recognised the need for changes to reporting structures. Although the plaintiff became MD on 1 May 2022, there were ongoing communications about structures, responsibilities and reporting lines, such as his email exchange with Mr Dalton between 31 October 2023 and 6 November 2023, which is referred to in paragraph 27 of the plaintiff’s grounding affidavit. For example, Mr Dalton's 6 November 2023 email was prompted by the plaintiff raising the issue. The email: a. acknowledged the ongoing discussion and that the MDs role was "a General Manager role but with Directorship responsibilities". b. Commented that "Generally, everyone in an entire company would report to (the MD). However, this is somewhat complicated by the fact that there are two of us leading the business" . c. Emphasised that he would not agree with a structure which did not place operational responsibility on the MD. d. Expressed support for the plaintiff to transition "from being the captain on the pitch (operationally speaking) to the manager on the sideline. But I do not foresee a scenario where the manager is not responsive for the team performance and results". e. Stressed the need for a SLT able to operate independently and observed that:

"The MD role is a General Manager but with Directorship responsibilities. repetition from (a). Generally, everyone in an entire company would report to that individual ... Personally I would not be in agreement with a structure which doesn't place operational responsibility on the MD ... By operational responsibly, I mean you are directly responsible for the operational performance of the company ... "

20. Mr Dalton’s email noted that

"we spent an intensive 6-weeks considering and debating the company priorities with Joe Delaney prior to the publication of the Nov 22 organisational structure. I don't have any issue changing the structure or keeping the structure fluid, provided it is in the interests of the company and considers the objectives discussed.

Objectives

The overarching objective was to add management capacity and drive professionalism within the company. In addition to this, I suggested the following be considered;

1. If [Mr Dalton] and JPK [plaintiff] were to walk away from Store- All for 6-months we would require a management team that would ensure the company would not regress. This objective was tempered with the statement company stability (not growth) was what was aspired to.

2. The longer-term objective, to consider working towards succession plans. I don't think any of these are unreasonable. We cannot expand Store-All dynamically if as soon as we take off our we take our eye off the company, it starts to regress. Equally, we cannot consider pursuing new business streams for the same reason."

21. The email stated that Mr Dalton's primary concern with regard to the hierarchy was the plaintiff's perceived change in his responsibilities, saying that "The first draft of the company hierarchy put our roles and responsibilities as follows:

JPK – MD & Director of Operations

- Operations

- Quality

- IT

- HR

- Transport

Mr Dalton - Commercial and Finance Director

- Finance

- Projects

- Sales & Marketing”

22. The email stated that that was largely reflective of the agreed roles and responsibilities. An indication of the extent of the ongoing debate was Mr Dalton's comment in the email that "Joe sent me a load of differing structures and I’ve have no idea what the last one was. One structure does have the SLT team reporting to myself and yourself, with our titles removed and lines of responsibility removed (i.e. the SLT team reports to the Board of Directors). Although never even discussed or communicated with anyone, it is very clear from our conversations that this is the current structure in your head."

23. Mr Dalton expressed reservations with the structure proposed by the plaintiff – he disagreed with any structure which did not place operational responsibility on the MD or which placed responsibility for financial projects on him, stating that neither of those structures would be in the defendant’s interest. He explained what he meant by operational responsibility:

"…you are directly responsible for the operational performance of the company. The optimal solution is that you hire and train managers to act on your behalf. But you are ultimately still responsible for operational performance, through recruitment, management and the actions of these people. I would welcome you transitioning from being the captain on the pitch (operationally speaking) to the manager on the sideline overseeing the team. But I do not foresee a scenario where the manager is not responsible for the team performance and results. Unfortunately, while I can support you with this, I don’t believe I can actually help you. I have a similar challenge on the finance and projects side of things, in some regards it is a more difficult problem… I'm not suggesting the structure of November 22 is as ideal, but it considers our responsibilities, the fact that there are two of us running the business and the 6-weeks of prior discussion. I'm open to all changes from the initial structure which considered these.

Let me know if you want to sit down and discuss”.

The April 2025 Board Meeting

24. The Minutes record the outcome of the meeting as follows:

“6. SLT - Project Acorn II

Derek proposed that it was time to progress this project as the SLT needed to be given space to fulfil their potential, while the Directors needed to focus their attention and energy on larger issues. The concept for the original Project Acorn was to build a management team capable of running the day-to-day operations with minimum input from the Directors which, Derek summarised as being confident that the business could function even if the Directors all took 6 months’ holidays. The lessons of the previous project were discussed and it was agreed that some level of director oversight of the management team is required and that the directors retain control of some issues including client management. Liam Dalton agreed that the SLT is a competent team and they should not be micromanaged and that they needed greater autonomy if they were to grow as a team. Among the issues discussed were that the SLT should manage its own clock-in system, the Transport Manager, Quality Manager and IT Manager should report to the Operations Manager, and that the SLT would have greater autonomy over staff recruitment. It was also discussed that everyone should do their best to respect the new organisational structure to avoid undermining the SLT in any way. It was also agreed that the directors’ oversight should be centralised and streamlined and it was proposed that Derek Dalton take responsibility for liaising with the SLT. Derek was agreeable to taking on responsibility for the SLT but also outlined other issues that he believed required his attention including reviewing finances and funding issues, project management tasks and strategic development. Other items that required his attention included client management. business development and exploring opportunities on the IT front. Derek hopes that John Paul Kelly would take the lead on at least some of these issues. Eoin Dalton noted that the SLT have their role across these issues but that he believed that it was important that the directors retain control of key aspects like those being discussed. It was agreed that Derek would liaise with John Paul to establish if he was amenable to taking responsibility for these issues.

7. Managing Director

The on-going ambiguity around this role since July 2024 was discussed. Derek noted that the company has already lost one key staff member who directly attributed his exit to the role of the MD. Other key staff members have made it clear that they are unhappy with the situation, and they have considering leaving the company due to the current structure. It was noted that the feedback from the SLT team was also that Derek needed to take on these functions as it would ensure stability. Liam Dalton reminded those present that this issue has been an on-going issue since John Paul indicated that he was walking away from the role last Summer and proposed that Derek be appointed as Managing Director. Derek indicated that he was willing to take on the role but would prefer (it if) all the Directors agreed to the change and noted John Paul Kelly's absence. It was agreed that this proposal would be tabled for the next meeting”.

Submissions

25. The plaintiff submitted that: a. The defendant tried to appoint Mr Dalton as MD in his place. There was no contractual basis for the defendant to appoint another MD nor for his removal. Mr Dalton's actions following the FWM's allegations and the Minutes show that the plaintiff was being punished without being affording an opportunity to respond – a disciplinary sanction without due process, natural justice, or contractual rights. The attempt to change MD and reporting lines constituted sanctions in breach of contract, fair procedures, and natural justice.

While he has not ( yet) been dismissed, the defendant’s clear intention is to dismiss or demote him and to substitute Mr Dalton. b. Moreover, the defendant altered its reporting lines to such an extent and so suddenly as to remove him as MD in all but name. The changes were an unlawful sanction - the defendant altered the plaintiff’s role without applying fair procedures, natural and constitutional justice. The plaintiff provided none of the protections due to an employee accused of misconduct; it did not even show him the complaint. There was clearly an agenda - the restructuring proposals followed his attempts to seek an increase in remuneration and to address the shareholder dispute.

The defendant cannot deny the attempt to remove the plaintiff as MD - it was recorded in Mr Dalton’s email. Its solicitor’s correspondence suggests that this intention remains. c. The plaintiff meets the strong case test in Okunade v The Minister for Justice [2012] IESC 49 and relies on paragraphs 64 (7) and (8) of Merck (which provide that, while the adequacy of damages is the most important component of any balance of justice assessment, other factors should be weighed when considering how matters can be held most fairly pending trial and that any application should be approached with a recognition of the essential flexibility of the remedy and the fundamental objective of minimising injustice while the parties’ legal rights have yet to be determined). d.

The balance of convenience favours relief. Damages would be inadequate. The plaintiff is suffering severe reputational and occupational damage from being sidelined, causing internal and external reputational harm. Without such relief, he faces unlawful removal and significant reputational damage, whereas the defendant would not suffer if relief were granted. The defendant has not advanced evidence to support its position that the balance of convenience weighs against relief. It has not claimed any potential detriment in returning to the pre-April 2025 reporting lines.

Rather it maintains that there has been no change, contradicting the Operations Manager’s email asking the plaintiff to respect the new structure. Similarly, it denies attempting to remove the plaintiff as MD while ignoring the attempt to substitute Mr Dalton as MD in April 2025. e. The plaintiff has offered an undertaking as to damages.

26. The defendants submitted that: a. there is no basis for the orders sought - the plaintiff had not been dismissed, there was no disciplinary action, nor had he engaged with the company's grievance procedure, and he continued to be paid. The height of the plaintiff's allegations was that his role had changed from how it had appeared in a previous organogram but his evidence in that regard was inconsistent and disputed. b. Citing Morgan, an employer owes duties to all staff, not just the plaintiff - it must maintain order and protect the interests of the staff and the company as a whole. Such considerations must be balanced with the plaintiff's claims when considering the balance of convenience. As in Bergin, forcing the company to operate in the terms sought by the plaintiff could expose the defendant to irreparable harm. In that case, although the Court granted limited interlocutory reliefs, it did not require the defendant to allow him to resume his role as CEO. Clarke J said that any harm caused to the defendant by “requiring that it cooperate with the plaintiff” would significantly outweigh any harm to the plaintiff. That was important because “having regard to the breakdown in relations between the parties as evidenced by the affidavits, it seems to me highly improbable that, irrespective of the outcome of the proceedings, a court would be persuaded to make an order which would have the effect of requiring that the plaintiff be allowed to continue with his duties."

c. The defendant also relied on Ryan, as confirming that the potential impact on employer/employee relations is a weighty factor for the balance of convenience, submitting that the plaintiff's evident difficulty with several staff members was a reason not to make the orders sought. There was a fundamental breakdown of relations between the plaintiff and senior staff. d. With regard to the balance of convenience, the company was run by the Board which needed to be able to operate the company in the interests of all stakeholders, including clients, employees, directors and shareholders. The plaintiff was not the only stakeholder, and his interests had to be balanced with others. Damages would be an adequate remedy for him.

Analysis

27. For completeness, it is appropriate to briefly addresses certain peripheral points. To expedite matters, at my suggestion the parties agreed a timetable for directions at my invitation with a view to completion of pleadings and the issuing of motions for discovery, if necessary, by early December. If the plaintiff had taken that initiative at the outset of the proceedings, trial could have commenced much sooner. However, I welcome the parties’ mutual commitments of cooperation and will ensure that the agreed directions are complied with, to ensure the early trial of these proceedings.

Non-Disclosure and the failure to invoke grievance procedure

28. The defendant argued that relief should be refused because the plaintiff failed to meet his duty of disclosure or to engage with the defendant’s grievance procedures. Such matters may be reasons to refuse interlocutory relief, but the defendant has not satisfied me that relief should be refused on either ground on this occasion. It has not established a fair question as to material nondisclosure or that the plaintiff breached an obligation to pursue contractual procedures. The plaintiff argued, plausibly, that the mediation agreement superseded such procedures (the procedure itself seemed to envisage that mediation might replace the second stage of the process at least). In principle, where parties have agreed a procedure to be followed prior to litigation, the courts will enforce such escalation requirements save where it would be inappropriate or unjust to do so. However, it is not obvious to me that the grievance procedure was intended to encompass the issues which arose on this occasion. More importantly, the correspondence in relation to the mediation process on which the parties (sensibly) engaged does not seem to envisage that the parties would then invoke the grievance procedures if the mediation was unsuccessful. The plaintiff would scarcely have agreed to such terms. The plaintiff has established a strong case for the proposition that the contractual procedures were superseded. Nor would it be reasonable (in Braganza v BP Shipping Limited [2015] UKSC 17 or Caroline Connolly v Western Health and Social Care Trust [2017] NICA 61 terms) for the employer to insist on following the grievance procedure given the nature of the issues and the degree to which they have already been ventilated. Furthermore, the defendant has not applied to stay the proceedings; any such application should have been issued at the outset.

The “resignation”

29. A further issue of limited relevance was whether the plaintiff resigned in 2024 or only threatened to do so. It is undisputed that he threatened to resign (more than once). He went further in 2024. His 28 June 2024 email proclaimed his determination to resign in terms which Mr Dalton fairly described as an ultimatum. When the defendant did not blink, the plaintiff doubled down, stating that the resignation would taking effect the following day and confirming the return of his company car. He then returned it and absented himself. The plaintiff says these were idle threats and that no resignation could be effective without contractual notice and until company filings had been updated to reflect his departure from the board. However, company filings would reflect changes to the board, rather than his employment. In any event there can be a time lag between a departure from the board and corresponding filings. More importantly, the plaintiff’s failure to give the required notice could render him in breach of contract but would not necessarily invalidate his resignation. The notice requirement was for the defendant’s benefit here - it was not obliged to hold the plaintiff to it. Nor can the plaintiff rely on his own breach of his contractual obligations.

30. Even if the plaintiff was dissatisfied with his remuneration, his threatened resignation was difficult to reconcile with his own responsibilities. An objective recipient of his emails would have taken them to be notification of an immediately effective resignation. The final email was not couched as a mere threat, particularly when coupled with the plaintiff’s actions. He conveyed the impression that he was summarily ending his employment. If that was not his intention, his emails were unwise. The defendant cannot be faulted for taking him at his word.

31. That said, the significance of the “resignation” reduced when, by agreement, the plaintiff returned to work. He was soon back in situ while desultory attempts to resolve the remuneration issue continued intermittently. The “resignation” was superseded and its significance for present purposes seems limited to being part of the context for the Board Meeting or any relevance to the balance of justice.

32. It should also be noted that the defendant's position on the resignation was incomprehensible. Mr Dalton’s affidavit said that after the plaintiff’s return to work following his “resignation”, there were ongoing negotiations for “a new contract with the title of managing director” but says that “its terms remained uncertain". However, there is no dispute as to the facts that: (i) the plaintiff had originally been appointed MD; (ii) the parties agreed that he should resume his duties and return to work, and a new package would be agreed. The plaintiff has established a strong case to the effect that he resumed his original position as MD (as opposed to a position with that title, as the defendant enigmatically characterises it), but on the basis that his remuneration was to be renegotiated. Evidently, those remuneration arrangements remain ongoing. In the circumstances, the failure to finalise the new package does not suggest that the original resignation stands or that the plaintiff is anything other than the MD. The original contract applies until a new package is agreed. Accordingly, the Court is proceeding on the basis that the original contract applies as if the “resignation” never happened.

The plaintiff’s conduct and relations within the company

33. As is not uncommon in such situations, relationships have been complicated by the blurring of management or employment issues concerning the operation of the business with shareholder issues between the principals. The plaintiff's remuneration was such an issue - in principal, an employment issue between the defendant and the plaintiff but in practice also an issue for negotiation between the principals which spilt over into the shareholding issue. However, the parties’ chosen structure was that of a company (not a partnership), obliging all directors to act as such in the defendant's best interests. Such obligations are distinct from the plaintiff's duties and rights as an employee, and his shareholder entitlements.

34. The plaintiff denies flouting the Board’s authority or decisions. However, contemporaneous emails support the Board’s position. Likewise, Board Meeting minutes raise concerns as to the extent and manner of his participation in board meetings, with the plaintiff displaying an apparent reluctance to accept adverse rulings. The Board was ultimately entitled to determine the defendant’s governance and to manage its operations. The plaintiff had no veto and was bound to accept (lawful) decisions. Furthermore, he should have attended and participated constructively in Board Meetings in the company’s best interests. The defendant has established a fair question as to whether he did so, either in relation to the Board Meeting which triggered this application or on other occasions.

35. Also, the tone and content of many emails exchanged during the 2023 to 2025 period were unhelpful, suggesting that the plaintiff’s relationships with colleagues (and not just the Board) was sometimes suboptimal. While both sides blame the other for such tensions, this Court needs not adjudicate on such recriminations. Suffice to say that the strained relationships were not confined to the Board - the SLT and the effective management of the business were impacted. The defendant has established a strong case to support its position that the Board needed to intervene to avoid further escalation and to protect the business and the workforce.

Why was the plaintiff excluded from dealing with key customers?

36. The plaintiff has not established a strong case that his exclusion from the team managing a key customer account was either a breach of his entitlements or improperly motivated. He asserts that the defendant undermined him by excluding him from contacts with customers generally and from particular customer relationships. The defendant denies this, noting (plausibly) that the plaintiff’s omission from the team dealing with a key customer was at the latter’s request - the defendant would otherwise have lost the work. Mr Dalton averred, at paragraph 129 of his first affidavit, that the client informed the defendant that the plaintiff’s contribution to previous negotiations had not been in the spirit of a 30-year customer relationship, leaving a “very bitter taste" and that the defendant’s work was unlikely to continue if the plaintiff remained part of the negotiating team. Mr Dalton described the decision to exclude the plaintiff from the team negotiating with the particular client as "an operational

decision to accommodate the specific requirements of a long-standing client of in excess of 33 years”. Although the plaintiff disagrees, he has adduced no concrete evidence to do so. He has not established a fair question, let alone a strong case, on that point. The evidence does not suggest that the decision was unreasonable or other than bona fide; such operational decisions would rarely be regarded as impacting on the contractual position and the Court would be slow to intervene with interlocutory orders in respect of such matters.

The Statement of Claim and the delay in serving it

37. When preparing for the hearing, the Court’s attempt to understand the claim grounding the application was complicated by the lack of a statement of claim. An application for interlocutory relief does not suspend obligations under the Rules of the Superior Courts (RSC). The defendant’s written submissions rightly criticised the failure to deliver a Statement of Claim. However, the day before the hearing of the application, the plaintiff belatedly served the Statement of Claim (furnishing it to the Court on the morning of the hearing). There was no explanation or apology to either the defendant or the Court.

38. In response to that criticism, the plaintiff’s closing submission observed that a mediation agreement had precluded steps in the litigation while that process was underway. That explanation is not entirely satisfactory. Of course, where negotiations or a mediation are underway, with a good prospect of an imminent resolution, it may make sense to briefly defer significant litigation effort or expense until it becomes clear whether the case will settle but the Court’s approval should be sought if such deferral would otherwise render parties in breach of Court orders or the RSC. However, it is difficult to justify the prolonged failure to deliver a Statement of Claim in the current circumstances. The pleading might actually have assisted the mediation by clarifying the nature of the claim. I doubt that the defendant would have objected if the plaintiff had indicated that it wished to do so while the mediation process was underway providing that it was not compelled to furnish its defence immediately.

39. In any event, the mediation can, at best, only partly explain the plaintiff’s delay in meeting his obligations. He could have delivered the Statement of Claim before or after the mediation process concluded. Even if the mediation briefly prevented service, it did not prevent the pleading being drafted so it was ready to go. The circumstances suggest that its ultimate delivery was prompted by the criticism in the defendant’s submissions rather than by a belated desire to progress the claim and to comply with the RSC.

40. This is not a mere technicality. The Statement of Claim is a foundational pleading in the substantive action. The lack of a Statement of Claim stymies progress in the proceedings, which any diligent plaintiff should be anxious to progress to trial. In a few cases there may be a legitimate reason for delaying the Statement of Claim (such as where expert evidence is awaited). No such circumstances existed here. Such delays typically raise doubts as to the plaintiff’s commitment to pursue the claim, adding force to any suggestion that an injunction application may be tactical. In the absence of a compelling explanation, the Court may conclude that a plaintiff is seeking interlocutory relief for negotiating purposes, that the absence of a Statement of Claim implies a disregard for the obligation to progress the claim and casts doubts on the plaintiff’s commitment. Such doubts go to questions raised in Merck as to whether an application is tactical. Either party’s delay or failure to progress a claim or comply with the RSC may also influence a balance of justice assessment or judicial discretion.

41. Furthermore, when the Statement of Claim did finally emerge, it largely rehashed the plaintiff’s affidavits, continuing the excessive focus on historic, extraneous or contextual controversies rather than on the cause of action in these proceedings which must be relied upon to justify the current application. Succinct references to the Other Grievances would have sufficed for contextual purposes and to explain the alleged motivation underpinning actions impugned in these proceedings. Apart from the fact that the rehashing made the delay in producing the pleading hard to understand, a more succinct pleading focussed on the facts giving rise to the claim in these proceedings would have been more compelling (and helpful).

42. Unfortunately, the pleading bears the hallmarks of a cut and paste from the affidavits, which ignores the distinction between evidence and material facts on which the plaintiff relies to ground a cause of action. Background matters would, at best, fall into the former category as would most of the detail of the Other Grievances. For example, I am not sure that the Statement of Claim needed to plead that the plaintiff spent his summer holidays from the age of fourteen working for the defendant – that is no more material in the context of the Statement of Claim than the fate of his communion money. The pleadings should have been a third of their length. Litigants should be aware that if they lodge unnecessarily long pleadings or affidavits, they face the hazard of such documents being struck out along with potential cost sanctions for parties (or their lawyers).

43. However, the Statement of Claim did clarify the causes of action asserted in these proceedings, identifying in paragraph 7 several express terms of the plaintiff’s Contract of Employment relied upon. Paragraph 8 alleged 34 further terms. However, while the latter were characterised as “express or implied” there is no evidence of such express terms. Some appear uncontroversial; others are more unusual and may require scrutiny. Those are issues for another day but as matters stand the plaintiff relies on 34 implied terms rather than a smaller number of express provisions.

44. The Statement of Claim also sets out 28 particulars of, inter alia, alleged breaches of contract, breach of duty, denial of fair procedures, including the alleged failure to exercise good faith in the operation the plaintiff’s employment contract, including by failing to increase his remuneration and exercising duress to force him to enter a shareholder agreement. However, the claim is primarily grounded on the allegation that the defendant breached the contract by changing the reporting lines and/or seeking to appoint a new MD, demoting, dismissing or punishing the plaintiff without due process or threatening to do so, coupled with a Braganza type claim that it acted unreasonably in failing to settle his remuneration. The reliefs sought in the Statement of Claim (as opposed to broader reliefs ventilated in the plenary summons) reinforce the conclusion that the essence of the claim concerns whether the plaintiff suffered or was threatened with an effective demotion, dismissal or other sanction in breach of fair procedures and his contractual entitlements.

The plaintiff’s failure to attend the Board Meeting

45. The plaintiff’s justification for not attending the Board Meeting is unconvincing. He saw the FWM’s exit email as tantamount to a complaint and the Board Meeting as a disciplinary proceeding. However, it is good practice for employers to reflect on feedback from departing employees. That should not be confused as a disciplinary process. It does not of itself imply wrongdoing. This was made clear prior to the meeting. Nor do I see any process as having been irredeemably tainted. The plaintiff’s boycott is also difficult to reconcile with his duty to act in the company’s best interests. The Board would have been remiss if it had failed to convene to discuss the FWM’s departure. As a director devoted to the company’s best interests (and, indeed, in his own interests) the plaintiff should have attended. He refused to do so without advance written proposals. However, he has not established a strong case that the defendant failed to comply with requirements for such a meeting or that it departed from its normal practice. He evidently saw the meeting as an ambush, but he has not established a strong case on that point. It offered him a chance to probe the proposals and state his objections, refuting the exit letter. His non-attendance detracts from the credibility of his complaints about fair procedures and being deprived of the chance to respond.

46. Nor has the plaintiff established a strong case that he was or could reasonably have been in any real doubt as to what was proposed, or why, or that he would have been prejudiced by attending the meeting without receiving further details or documentation in advance. Mr Dalton had told him that the FWM had criticised him in his exit email and that the issue would be discussed at the meeting. The plaintiff criticises Mr Dalton for not also furnishing a copy of the FWM’s email, but Mr Dalton’s approach could equally be viewed as an attempt to resolve the issue without unnecessarily escalating the matter by attributing blame or going down the disciplinary path. In any event, the plaintiff knew what was to be discussed. It was not unreasonable to expect him to attend. Indeed, the defendant could argue that by failing to engage, it was the plaintiff, rather than his fellow directors, who raised the temperature in advance of the meeting, damaging relationships and reducing the opportunity for a more consensual outcome which might have been in the best interests of all concerned. I need not determine that. Suffice it to note that there was no doubt as to what was to be discussed. If the plaintiff had concerns, then all the more reason for him to attend. His failure to do so may not be fatal but does go to the balance of justice.

Relations between the parties

47. Although the plaintiff claims to have been sidelined and marginalised, he contributed to the impasse. Unhelpful communications, including his “resignation” emails were scarcely conducive to constructive working relationships within the company. Unhelpful actions (on both sides) form part of the context to the Board’s decision to change reporting lines following the FWM’s resignation and are relevant to any balance of justice assessment. The plaintiff blames the defendant, or the Daltons, or individual members of the SLT team for discord, whereas they blame him. This Court need not adjudicate those issues. Suffice to say that the current evidence shows that the plaintiff was involved on several occasions in the exchange of emails which were not constructive. The defendant needed to end such discord (irrespective of responsibility), a need which would inevitably prompt legitimate questions as to possible adjustments to roles, responsibilities, reporting lines and management styles to secure a more harmonious environment and protect the business. Irrespective of the responsibility for particular differences, the fact that there had been such incidents, including the FWM’s resignation, illustrated the impact on the SLT, the Board and the defendant as a whole. Without assigning responsibility, the Court is satisfied that the tone and content of certain communications and actions left much to be desired. The plaintiff's 30 June 2025 email is an example of a fractious relationship (and not just at Board level). Both sides may have contributed but the plaintiff does not appear to be free from responsibility.

48. The plaintiff’s position on the underlying controversies may or may not ultimately be vindicated. However, as matters stand, it is difficult to avoid the conclusion that the Board needed to address relationship and reporting issues to ensure the effective operation of the company. The correspondence establishes a fair question to be tried on the defendant’s behalf that action was required in the company’s best interests, including that of its shareholders, directors, staff and customers. Ensuring an effective and functional working environment is an entirely separate issue to any question of disciplinary action. The change to reporting lines may well have been a prudent step which the board genuinely (and reasonably) regarded as necessary in the company’s best interests, irrespective of any decision as to responsibility for any issues which had arisen. The plaintiff has only advanced a fair question to be tried as to whether that was the true motivation, rather than a strong case.

Mr Dalton’s possible substitution as MD

49. It is extraordinary that Mr Dalton proposed his own appointment as “the” MD when the plaintiff occupied that role. In a less contentious environment and if there was no contractual constraint, a joint MD arrangement might have reflected the joint roles of the two individuals as envisaged at various points in their evolving dialogue (such as Mr Dalton’s 6 November 2023 email).

50. It would appear from the First Organogram that Mr Dalton and the plaintiff were similarly positioned in the corporate hierarchy, notwithstanding the latter’s title. In the circumstances, while the plaintiff might still have had contractual grounds to object, a joint appointment may have been less prejudicial, particularly in view of the ongoing re-evaluation of roles referenced below. Indeed, although the 17 June 2024 email had referred to the plaintiff’s appointment as“the MD” the contract had used the indefinite article, describing him as “a MD”. However, Mr Dalton’s 31 March 2025 email did not propose a joint appointment. It envisaged Mr Dalton supplanting the plaintiff, with no explanation as to where that would leave the latter. The plaintiff has a strong argument that the defendant would breach its contract with him if it were to unilaterally appoint anyone else as “the” MD. There is no obvious basis, contractual or otherwise for his substitution without due process in accordance with his entitlements.

51. That said, it does not appear that the plaintiff’s removal is currently likely or that interlocutory relief is required to provide against that eventuality. The Board stepped back from the abyss (on Mr Dalton’s advice). He accepted the need to secure the plaintiff’s cooperation. The board did not change the MD. Although the unilateral proposal was not formally consigned to the corporate dustbin, it does not appear likely to be resurrected in the foreseeable future. I see no need for an interlocutory order at this stage. If the proposal was to resurrect its ugly head, the plaintiff could seek interlocutory relief then.

The plaintiff’s existing role and associated reporting arrangements

52. Since the defendant did not actually change the MD, the most tangible impugned action was the change to reporting lines and the restriction of information to the plaintiff. Since the reliefs sought would preclude any material change from the plaintiff’s existing role and associated contractual commitments it is necessary to identify his role and the extent to which reporting arrangements formed part of his contract.

53. The contemporaneous documents suggest that his role, and those of senior colleagues including directors, were under ongoing review, which is unsurprising in the wake of an MBO. Accordingly, while the plaintiff’s appointment as MD is undisputed, it is unclear what that meant in practice - the extent of his role and the associated reporting arrangements were uncertain, ill-defined and in flux. His job description was never settled. It could be argued that the rights and responsibilities normally associated with the position of MD were impliedly incorporated, but that begs the question as to what that would mean in practice in the context of this company.

54. Even disregarding the controversy as to the job description, it appears that it was only a draft, produced in March 2025 and never finalised due to Mr Dalton's (plausible) objection that it needed to be considered in the context of the wider review of roles and responsibilities. Mr Dalton considered that it was "premature given the ongoing work in relation to the organisational structure" noting, correctly, that it was the board which should approve the MD’s job description, which never happened. All parties should have cooperated to finalise the job description and ensure its approval by the Board. The plaintiff had an interest and a responsibility, both personally and as MD, and was entitled to input and negotiate, but the process needed to be independent of him. However, he has not established a strong case that his job description was ever settled or that responsibility for that lacuna rested solely with the defendant. Accordingly, while he was MD (with whatever that that implied), the extent and definition of his responsibilities was uncertain; all parties appear to have recognised that these were open questions, but that reasonable flexibility was expected of the plaintiff.

55. It should also be noted that the draft (which the plaintiff at least seems to have approved) does not refer to reporting lines, although it did refer to leadership, development and management skills and responsibilities.

56. The significance of the job description must also be seen in the context of the plaintiff’s explanation at paragraph 88 of his second affidavit that it was generated for the purposes of an Irish Aviation Authority approval process. In the circumstances, it is of limited assistance.

57. The job description confusion is related to the controversy as to reporting lines. The plaintiff highlighted differences between organograms which preceded and followed the Board Meeting. He said that the First Organogram was prepared in March 2024 and reflected his contractual entitlements, which were then undermined in the second. However, the defendant maintains that the First Organogram was only prepared later, in 2025, in the course of ongoing discussions, was never adopted by the board and was not part of the plaintiff’s contract. The plaintiff has not established a strong case on that point.

58. Significantly, paragraph 85 of the plaintiff’s second affidavit confirmed that his 2022 contract was "the only contract in being or contemplated” for his role as MD. He added that the only aspect of the contract subject to negotiation was his remuneration. However, that contract does not expressly incorporate the First Organogram or the job description.

59. It is also apparent that reporting lines were malleable. All parties seem to have accepted that they were not cast in stone but there was a lack of clarity as to the arrangements. Contemporaneous documents suggest that reporting lines were not fixed. For example: a. It is not clear what chart is referred to in Mr Dalton's 6 November 2023 email and nor is the Court satisfied that the date, genesis or status (in terms of approval) of the First Organogram (on which the plaintiff relies) has been established. The plaintiff has not demonstrated any basis to conclude that it was approved by the board, or that it forms part of the plaintiff’s contract of employment. b. The plaintiff’s 5 July 2023 email insisted that the full SLT should report to the Board of Directors not just to him as MD. c. The plaintiff was himself involved in the long running Project Acorn which was, according to the defendant, directed, inter alia, to improving structures and reporting lines, which had been identified as a strategic imperative, although the plaintiff contends that its scope was more limited.

d. For several years, the Board was discussing, at Mr Dalton’s behest, the need to vest operational matters in the SLT and to focus the leadership (himself and the plaintiff in particular) on more strategic goals. His repeated objective was that the directors should step back, leaving day-to-day operations in the SLT’s hands, allowing the Board to focus on strategy and longer-term issues. That could not be described as an idiosyncratic goal; it would chime with a corporate philosophy which suggests, rightly or wrongly that enterprises need to evolve as they expand, ensuring that leaders move from the hands on role appropriate in a small undertaking so as to focus on longer term strategic goals while empowering management to manage the day to day operation of the business.

Accordingly, the FWM’s resignation letter came in the context of the increased awareness of the need to address the defendant’s reporting and structure to empower the SLT and maximise the effectiveness and development of the business. e. While Mr Dalton’s 6 November 2023 email had suggested that, as MD, the plaintiff had operational responsibility and was “directly responsible for the operational performance of the defendant...”, that position had evolved even before the Board Meeting. For example, the Operations Manager’s 5 December 2023 employment contract provided that she would report to the Board of Directors.

This was also confirmed in her job description which was signed by the plaintiff himself. By virtue of his role as MD and his division of responsibilities with Mr Dalton, the plaintiff might have appeared the obvious person for her to report to but that was not the approach adopted. Her reporting line was reaffirmed by a subsequent directors meeting on 10 December at which the board reaffirmed that she should continue to report to Mr Dalton, apparently to resolve discord between her and the plaintiff. This was reflected in an email from Mr Dalton dated 16 December 2024.

Although the plaintiff denies the defendant's account of disputes between him and the Operations Manager, contemporaneous documents suggest that recriminations led the Board to reiterate that she should report to Mr Dalton. f. As long ago as 29 July 2024, when, in the wake of his “resignation” the plaintiff compared himself to Sir Alex Ferguson, demanding an increased remuneration package, he was also identifying the need for "clear roles, responsibilities and remuneration [to be] agreed for each director".

60. It would be unusual for detailed reporting lines, structures and organograms to be cast in stone in terms of a single individual’s employment contract, even an MD’s. Rigid commitments to one employee would limit the entity’s scope for dealing fairly and effectively with other officers and employees. They would hamstring its ability to adapt in a competitive environment. Accordingly, if any such restriction had been intended, the Court would have expected it to have been clearly articulated. The plaintiff has not established a fair question, let alone a strong case, as to; (i) when the First Organogram was produced; (ii) whether it was adopted by the Board (as opposed to having been proposed or under discussion); (iii) whether it formed part of his contractual terms. The evidence does suggest that at all material times there was a mutual awareness of the need for reporting responsibilities and structures to evolve and a need for flexibility on the plaintiff’s part. Arrangements hastily put in place after the MBO were not seen as meeting the business’s long-term needs.

61. The plaintiff saw the Board Meeting as a punitive measure, but undisputed evidence confirms the awareness of the need to address structures and reporting lines for legitimate business reasons to ensure that the business operated and developed successfully. The plaintiff has not established a fair question to the effect that contract incorporated detailed reporting lines or that they were set in stone. Although the plaintiff’s grounding affidavit asserted that the company’s reporting structure "at that time" was set out in the First Organogram, Exhibit JP5, it was not clear what time he was referring to. If he meant November 2023 (which would tie in with related averments in his affidavit) then it is not clear how the organogram could be said to form part of the plaintiff’s May 2022 contract. Nor does he say when and how the board adopted the First Organogram.

62. Even if reporting lines and arrangements were as claimed by the plaintiff, that would not necessarily mean that such matters were contractual commitments. Contemporaneous documents acknowledge the need for flexibility. This issue would require oral evidence as to what was said and done and what might be implied in the normal course of employment. It would also require detailed legal submissions. As matters stand, the plaintiff has only established a fair question as to whether the original reporting arrangements (whatever they were) were a material element of the plaintiff’s contract of employment which could not be unilaterally changed.

Were the 7 April 2025 changes to reporting lines intended to punish the plaintiff?

63. As Glover, Frizelle and other authorities confirm, if the Board Meeting or its outcome constituted a disciplinary process or sanction, then it would have been conducted unlawfully, in breach of contract and contrary to principles of natural and justice and fair procedures. The plaintiff has only established a fair question as to whether the meeting constituted such a process or sanction - he has not yet established a strong case that that was the motivation. The defendant downplays the changes in reporting lines as consistent with the ongoing process (in which the plaintiff was involved) of updating its organisational structures and reporting lines and reviewing the roles, responsibilities and relationships of the directors and the SLT. It argued that the SLT needed autonomy to deal with operational matters on a day-to-day basis under the board’s oversight, freeing directors for strategic issues. Mr Dalton’s affidavits, his

31 March 2025 email and the Minutes offer plausible explanations for the change to reporting lines. There was a view that micromanagement and the lack of a clear division of responsibility between the SLT and the MD or the Board was obstructing the SLT’s effective operation. Contemporaneous documents lend credence to that view. Such concerns seem to have shared by the outgoing FWM, the Operations Manager and the Board generally.

64. Where disagreements, personality clashes or other conflicts have led or threatened to lead to the loss of key staff or customers, any prudent employer would take steps to avoid such issues in future. This need not involve determining rights and wrongs, ascribing blame or imposing sanctions but may, for example, lead to conclusions as to who would work best with each other (or with certain customers) and that adjustments to reporting lines were in the company’s best interests. A Board must act in the company’s best interests and may conclude that a reallocation of responsibilities is required to maximise employees’ effectiveness (and retention) and to ensure the defendant’s continued success. Accordingly, it should not be assumed that a change of reporting lines was a disciplinary sanction.

65. The plaintiff saw both the Board Meeting and the change to reporting lines as punitive and disciplinary, reactions to the FWM’s complaint (without due process) or improper retribution for his position on the Other Grievances. He has established a fair question to be tried, not a strong case, in that regard. The directors - including the plaintiff - were obliged to protect the company’s interests. Explanations have been offered which could explain the change to reporting lines.

Did the change to reporting lines nevertheless breach the Plaintiff’s employment contract?

66. Mr Dalton’s 6 November 2023 statement (that he would not agree with a structure which did not place operational responsibility on the MD) appears difficult to square with the defendant’s current position that such changes were insignificant (although it could be argued that the new approach reflected the need to address the conflict within the company). However, while the plaintiff has not established an arguable case that the First Organogram was agreed and notwithstanding the opacity as to existing roles and structures, whatever arrangements were in place were abruptly and radically changed by the Board Meeting. The defendant’s attempt to play down those changes is unconvincing and ignores their pervasive nature. It may well have been open to the defendant to adjust arrangements and reporting lines (within reason). However, even allowing for the flexibility expected of him (and it should be noted that a similar clause did not avail the HSE in Earley), the plaintiff has made out a strong case that his role, responsibilities, powers and authority were so fundamentally altered as to exceed what could possibly have been permitted either by his contract (to the extent that his job description must be determined on the basis of custom and practice or reasonableness) or on the basis of a legitimate exercise of discretion (in Braganza or Ray O’Sullivan v Health Service Executive [2023] IESC 11 terms).

67. Notwithstanding the malleability of reporting lines and structures, the plaintiff was intended to be MD with extensive operational responsibilities and the Board Meeting radically changed those arrangements. The plaintiff has a strong case which is likely to succeed that the changes to reporting lines, particularly when coupled with the subsequent failure to ensure an effective information flow to the MD, were so pervasive as to breach his contractual entitlements on any plausible interpretation of his role and contract. Even if the reporting lines were changed for legitimate reasons in the company’s best interests, such fundamental changes could still breach the plaintiff’s contractual rights (as in Earley). The Second Organogram effectively sidelined him, eliminating his direct involvement in operational matters. Everything would be filtered through Mr Dalton. The defendant’s extraordinary failure to ensure basic communication with the plaintiff following the Board Meeting exacerbated matters. There is a strong case that the changes materially impacted the plaintiff’s role as MD, leaving him the title but not the powers and responsibilities associated with his role.

68. On the face of the Second Organogram, virtually all operational reports were to Mr Dalton alone - it provides for Mr Dalton and the MD to liaise with each other. Whatever its status, the First Organogram had envisaged that operational reports were to both Mr Dalton and the MD and some, but not all, earlier documents seem to convey a similar intention. Even if that document was never adopted by the defendant and the plaintiff’s role was never fully delineated, the plaintiff has established a strong case that the new regime was so restrictive in its treatment of the MD’s role (and particularly the restrictions on information imposed) as to effectively insulate him from any operational, information, power or authority. The Second Organogram essentially ended all direct reports to the MD save in respect of aviation operations. (Even that exception appears to have been a matter of necessity – the defendant could not readily reassign such responsibilities for regulatory reasons). Accordingly, notwithstanding the defendant’s protestations and those of its solicitors - protestations which did the defendant little credit - the second new organogram was undoubtedly a radical change. The MD’s direct access to the SLT virtually ended.

69. For completeness, section 173 of the Companies Act 2014 does not advance matters. It empowers the Board, as a matter of company law, to define the scope of the MD’s role. However, the issues here are whether the MD’s role has been contractually agreed and whether the defendant is materially changing those arrangements. Section 173 does not alter the contractual obligations of the parties. The plaintiff has established a strong case that the changes to reporting lines and associated restrictions were so all encompassing in their impact on his role and responsibilities as to constitute a breach of contract. Such a breach could, in principle, give rise to an entitlement to injunctive relief.

70. I am not attracted by the defendant’s submission that I should distinguish Earley on the basis of the ambiguity as to the plaintiff's role. The changes in this case went far beyond any flexibility reasonably required of the MD or required as a result of the lack of definition. While this will be an issue for trial, I find it difficult to understand how any individual could have been expected to accept appointment to an MD role if the appointment was on the basis of the arrangements recently implemented by the defendant, arrangements which seemed to leave the plaintiff with the responsibilities of the office of MD without the powers necessary to do the job. The defendant was entitled to change reporting responsibilities and structures, and any reasonable modification to the defendant's role would have been unexceptional. However, these changes were so extreme as to exceed the most generous bounds of what could have been envisaged. The changes exceeded the reasonable flexibility which senior management must accept in the interests of the business. They were more significant than the defendant maintained, and the plaintiff has established a strong case that they breached his contractual rights. The all-encompassing restrictions fell outside what could be regarded as reasonable (in O’Sullivan/Braganza terms).

71. The directors may have honestly and reasonably believed that its actions were in the defendant’s best interests. However, even so, the plaintiff has established a strong case that they were a fundamental change to his role and responsibilities, a breach of contract akin to constructive dismissal. In that respect he has established a strong case likely to succeed at trial which could in principle give rise to the award of injunctive relief. He has only established a fair question to be tried as to whether: (i) the true motivation for the changes was to sideline him and strip him of his authority as MD; (ii) the decision was intended to punish him in breach of contract and without due process; (iii) alternatively, the change in reporting lines was intended to penalise him for his position in the remuneration and shareholding disputes; (iv) the defendant will continue to seek to replace him as MD.

Provision of information to the MD since the Board Meeting

72. The unsatisfactory way information has been communicated, or not communicated, to the plaintiff since the Board Meeting raises similar concerns and the defendant’s solicitors’ recent explanations reinforce those concerns. The significance of the changed reporting lines was increased as a result of the severity with which the changes were implemented, depriving the plaintiff of information which an MD could expect to receive as a matter of routine, such as news of developments such as significant arrivals, departures, customer wins (or losses) or other developments that presented a significant threat, opportunity or challenge to the business. He has established a strong case for trial that, since the Board Meeting, he has not been supplied with all information which he was entitled to receive. The defendant’s approach adopted was unsatisfactory and disrespectful, but the Court would not go so far, on an interlocutory basis, as to recognise or enforce entitlements in the broad terms for which the plaintiff contends.

The reliefs sought

73. The plaintiff says that the reliefs sought would preserve the status quo pending trial, preventing changes in his employment conditions save in accordance with the contract, proper governance and fair procedures. However, the orders sought go beyond restoring the “status quo”. In fact, it is not even clear what the status quo was, given the malleability of structures and reporting lines. The plaintiff has not demonstrated a strong arguable case as to the precise status quo as to reporting lines. In the circumstances, the reliefs sought could be viewed as going beyond restoring the status quo. Furthermore, it is not obvious that the Board Meeting was unlawfully convened and conducted or that the change in reporting lines was anything other than a legitimate business decision. If reporting lines were in flux, intervening to prevent any change pending trial would be interfering with the status quo. While the plaintiff has demonstrated a fair issue on the question as to what were the pre-meeting reporting lines, that issue has not been determined, nor would it be appropriate for this Court to adjudicate at this point, for example, the date of the First Organogram or whether it was formally adopted by the Board or whether it formed part of the plaintiff’s employment contract. While such issues remain open, granting relief in the broad terms sought would sow further confusion. In any event, even if the first organogram represented the status quo, the desirability of maintaining the status quo must still be subject to the balance of justice assessment.

74. While the plaintiff is aggrieved about the remuneration and shareholding issues and considers that the defendant or the other shareholder directors behaved unreasonably in that regard, he has not advanced a fair question to be tried on those issues. He has made numerous assertions, some inconsistent, in his affidavits, but he has not satisfied me the existence of any binding legal agreement other than his May 2022 contract of employment. Indeed, his second contract emphasised that that was the only contract, which seems difficult to reconcile with the terms of some of the orders sought.

Balance of justice

75. Although the plaintiff has established a strong case that the changes to reporting lines and withholding of information breached his contractual and other entitlements, the balance of justice does not favour the relief sought. Arguments in favour of the relief would be the need to mitigate the undoubted stress, embarrassment and reputational damage to the plaintiff as a result of the defendant’s actions and to vindicate his contractual and other rights. While the ultimate determination of the rights and wrongs of the myriad disagreements between the parties (to the extent that they are justiciable) will determine the appropriate remedy, at this stage I am reluctant to make orders which appear designed to revive a contentious and dysfunctional situation. That could generate further disputes, legal expense, further damaging relationships and the business itself and potentially jeopardising the interests of the company, its shareholders and employees.

76. It is clear that from the plaintiff's perspective the current situation is difficult, stressful and damaging to his reputation both within the company and externally. However, he has been living with that situation since the changes were implemented in April. That harm can be addressed by damages if he wins at trial. Even more importantly, an attempt to reverse the outcome of the Board Meeting would be disruptive and damaging to the company, its business and the workforce. Furthermore, in determining the balance of convenience the plaintiff's own actions, including his communications not only with his fellow directors but also with the SLT, are relevant as are his actions in June and July 2024 when he evidenced clear intention to resign without regard to his contractual obligations. The plaintiff has not established that he comes to the court with clean hands (although neither has the defendant).

77. The fact that the plaintiff is still employed as MD, receiving his full salary, is relevant. He is understandably concerned that he has been wrongfully sidelined. He may succeed at trial on those points. Although he will have not lost wages, there is no doubt that the current arrangements would have had a reputational impact and have been distressing, indeed stressful for him. He may seek damages as compensation even if there was no pecuniary loss. The defendant did not dispute the fact that such an entitlement could arise if the plaintiff was successful at trial; to the contrary it submitted and averred that damages would be an adequate remedy in that scenario. However, given the fraught relationships, the confusion as to roles and responsibilities and the difficulties which have already arisen, it would not be appropriate to turn the clock back to the uncertain position that prevailed before the Board Meeting. That would not be in the best interests of the company or its 170 employees.

78. The way the plaintiff has conducted himself, including the tenor and content of some of his communications, his threatened “resignation” and his own failure to attend the Board Meeting of which he complains, also make the Court less inclined to make broad interlocutory orders. To some extent, the defendant has established a fair question as to whether the plaintiff was the author of his own misfortune, leaving the Board little option but to intervene. Most importantly, given the tension in the relationships, it would be wrong to make an order requiring the parties to work together under the uncertain arrangements which prevailed before the Board Meeting since the relationship between them has broken down.

79. The Court would also be concerned, particularly given the issues as to the content and timing of the Statement of Claim, that the broad reliefs sought would not be fair to all parties and would instead simply give the plaintiff a commercial advantage in any negotiations, an eventuality that was also noted by Clarke J in Bergin. Although arrangements are unsatisfactory from the plaintiff’s perspective, and will remain so until the issue is resolved, the impact on the plaintiff, including his stress, frustration and reputational concerns, is outweighed by the disruption that the orders sought would represent for the company and its 170 employees. He can be compensated by an appropriately inflated damages award if he succeeds at trial.

80. Arguments against the reliefs sought include: (i) the fact that damages would be an adequate remedy, which would be the case in my view; (ii) the plaintiff’s own conduct as noted above including the manner and tone of his communications and participation or nonparticipation in board meetings and his resignation or threatened resignation in disregard of his contractual obligations and duty to the company; (iii) the concern that the reliefs sought would be a recipe for future litigation because of the doubts as to what were the pre-existing arrangements and the extent to which they represented contractual entitlements; (iv) the plaintiff’s failure to progress this claim as expeditiously as he should have.

81. In considering the balance of justice it is important to consider the contractual framework. In that context, it is significant, although not determinative, that the contract provides reserves the right for the defendant to pay the plaintiff's salary in lieu of notice. It seems to me, on the basis of the 6 November 2023 email (which does not appear to have been rejected by the plaintiff at the time) that responsibilities for the supervision of the day-to-day management of the company were in fact shared by and between the plaintiff and Mr Dalton.

82. Above all these considerations, the Court is concerned that the reliefs sought would disrupt the effective operation of the business, contrary to the interests of all stakeholders. This outweighs the impact on the plaintiff who will continue on full remuneration until the litigation is resolved. Hogan J in Earley noted the need to ensure, where possible, that an effective – and not simply a theoretical – remedy should be available in employment cases where a clear breach of contract has been established. In this case, damages would be an effective remedy. Interlocutory relief is not appropriate because of the impact it would have not only on the business but also on the rest of the workforce, and because of the plaintiff’s own contribution to the situation which has arisen. Furthermore, the impact on the plaintiff will be reduced due to the parties’ commitment, at my urging, to an expedited timetable to complete the pleading and discovery process to secure an early trial.

83. Although it would not be appropriate to grant interlocutory relief in the broad terms sought, some reliefs could protect the plaintiff without unduly impacting on the defendant or other parties. In particular, concerns arise as a result of the defendant’s extraordinary and repeated failure to provide the plaintiff with basic information, as exemplified by its failure to inform him of the departure of long serving or high-ranking employees. Such omissions were disrespectful of both the plaintiff and the departing employees. I invited the parties to reflect on whether they could agree more appropriate arrangements to avoid any such to prevent such issues arising future.

Both parties adopted unrealistic positions in response. The plaintiff took the opportunity to advance a shopping list of demands for information and documents canvassing a wide range of issues in general terms which appeared inappropriate at an interlocutory stage. The defendant’s solicitors’ response was even more disappointing. A more conciliatory approach on its part might have been appropriate but their solicitors proffered an entirely unsatisfactory explanation for the defendant’s brazen delay even in providing basic information to the plaintiff about the departure of his colleagues.

They proposed arrangements which did not engage constructively. For example, the Court would expect details of important developments, including the departure of senior or long serving staff, to be forwarded to the MD immediately, or certainly within days. The defendant says that the plaintiff has not been suspended and remains MD and that no change in that regard is imminent. However, its treatment of him appears inconsistent with that stated position. While the plaintiff is MD, he should receive relevant and timely information about important aspects of the defendant’s affairs.

I am not satisfied with the defendant’s current proposals. I will, if necessary, impose prescriptive interlocutory orders with regard to the regularity and content of SLT, board and strategic meetings, to be attended by both the plaintiff and Mr Dalton and by other colleagues as appropriate and to require the defendant (presumably via Mr Dalton) to ensure that all material and information which is material to the plaintiff’s role is expeditiously forwarded to him. Reasonable and appropriate requests for information from the plaintiff should be dealt with by Mr Dalton and the SLT reasonably comprehensively and swiftly as possible.

Since the effect of the Board's restructuring of reporting lines is, in effect, to make Mr Dalton the conduit between the MD and most other company employees, Mr Dalton should take responsibility for ensuring that any reasonable and legitimate questions constructively raised by the plaintiff are readily addressed. He and the plaintiff should liaise with each other and should speak at least regularly, in person where possible. In any event, Mr Dalton must take responsibility for ensuring that the plaintiff receives appropriate information on a timely basis.

The plaintiff must not abuse such access and should likewise engage constructively. The Court will not be impressed if either party (continues to) fail to engage appropriately in that regard. Hopefully the parties can adopt a more mature approach, agreeing appropriate arrangements in this regard. If not, I will give directions.

Conclusion

84. While recognising Merck’s exhortation to avoid an overly structured approach, recognise the flexibility of interlocutory remedies, and guard the objective of minimising injustice until the parties’ legal rights are determined, its principles lead to clear conclusions: a. a permanent injunction could in principle be granted if the plaintiff succeeds at trial. This would be on the basis that the drastic change to reporting lines sidelined the MD, sidelining him from the role to which he was appointed, in breach of contract. The plaintiff has established a strong case on that point. The Court could in principle issue a permanent injunction. Alternatively, it could award damages. Sometimes it is impossible to unscramble the omelette and damages are the appropriate remedy. See, for example, the decision of Sanfey J in Dromada Windfarm (ROI) Limited v Cremins [2023] IEHC 417. The difficulties posed by permanent injunctions in employment contexts is recognised by many authorities, including Bergin. The courts are wary of orders requiring people to work together where there has been an irretrievable breakdown of relationships. It is not necessary for me to determine which remedy would be appropriate. It suffices for present purposes to note that, in principle, if the plaintiff succeeds at trial, a permanent injunction could be awarded. b. The plaintiff has also established a fair question (but not a strong case) as to whether the change in reporting lines constituted an unlawful disciplinary procedure. c. The delay in serving the Statement of Claim raises doubts as to whether the plaintiff intends to go to trial or whether the application is brought for strategic reasons.

Notwithstanding my concerns and in view of the mediation explanation, I will assume that the plaintiff genuinely intends to go to trial. d. It is evident that the current circumstances are damaging to the plaintiff and his reputation. Nevertheless, damages would be an adequate remedy if he wins at trial. There was no suggestion of any inherent difficulty in assessing damages. e. Furthermore, even if the plaintiff won at trial, a Court would be unlikely to order his reinstatement given the degree to which relationships have broken down (irrespective of the responsibility for that state of affairs). f. As outlined above, I have considered other factors which are relevant to the balance of justice. In particular, I noted that problems had arisen and the difficulties which the previous arrangements were causing (irrespective of who was responsible). It is clear that the plaintiff’s role and the associated reporting arrangements were uncertain, ill-defined and in a state of flux. It follows that any order seeking to preserve those arrangements would be ambiguous and resting in shifting sands, a recipe for further friction within the company and litigation in these proceedings. The balance of justice does not favour granting the relief in the terms sought. g. However, if necessary, I will make limited directions, preferably in terms agreed by the parties, as to the provision of information to the plaintiff in a more satisfactory, professional and timely manner.

85. I will dismiss the application and (unless the parties can agree those arrangements) will make limited orders to ensure appropriate information is made available to the plaintiff on a timely basis. The matter will then be listed for final orders on 10 December at 10:30am.

Representation

Ms Cathy Smith SC and Mr Barry O’Mahony BL, instructed by Richard Black Solicitors, for the Plaintiff. Mr Benedict Ó Floinn SC and Mr Tom Power BL, instructed by Ormonde Solicitors, for the Defendant.