High Court grants winding-up order on just and equitable grounds due to irretrievable breakdown in founder relations.

THE HIGH COURT

[2025] IEHC 669

Record No. 2025 / 199 COS

IN THE MATTER OF A PETITION TO WIND UP SULU SOFTWARE

CONSULTANCY LIMITED PURSUANT TO SECTION 569(1)(e) OF THE

COMPANIES ACT, 2014

Between:-

SUSAN O’NEILL

Petitioner

-and-

LUKE HUDNER

Respondent

Judgment of Mr. Justice Oisín Quinn delivered on 27 November, 2025

I. INTRODUCTION

1. This case concerns a petition brought by Susan O’Neill (the “Petitioner”) who is a shareholder, director and the CEO of SULU Software Consultancy Limited (the “Company”) to have the Company wound up relying on the “just an equitable” ground in section 569(1)(e) of the Companies Act, 2014, on the grounds that the Company has, due to a breakdown in the relationship with one of the founders, essentially ceased to function and is on the cusp of insolvency. The Petitioner presented the petition as a contributory within the meaning of section 571(1)(c) of the Companies Act, 2014.

2. The petition is opposed by Luke Hudner (the “Respondent”) who is also a director of the Company and, at the time the petition was presented, a shareholder, holding just over 25% of the issued share capital of the Company.

3. The undisputed facts at the time the winding-up petition was both presented on 12 June 2025 and at the time it was heard before this Court (on the 17 and 20 November 2025) are to the effect that the Company is on the brink of insolvency in circumstances that will be described more fully later in this judgment.

4. In summary, it no longer has any employees, is carrying out minimal activity and will run out of cash in a matter of a few months. The limited funds it has are as a result of monies lodged by the Petitioner to the account of the Company that she has received pursuant to the Directors and Officers (D&O) insurance policy, which funds were provided in a context where the Respondent instituted proceedings in July 2024 pursuant to section 212 of the Companies Act 2014 (the “Oppression Proceedings”) against both the Company and the Petitioner.

5. This judgment considers how to exercise the discretion afforded to the Court in the context of an application to wind up the company on the “just and equitable” ground in the context of the particular circumstances here and the arguments raised by the Respondent. In that regard, the Respondent did not dispute that the Court had, in the circumstances of this case, a broad discretion to wind up the Company under the “just and equitable” ground, but rather contended that the Court should not exercise that discretion on equitable grounds for three reasons:-

(i) the Petitioner had organised the acquisition of the Respondents shares in the Company after the Respondent had resigned;

(ii) the Petitioner was part of a plan to remove the non-compete clauses from the contracts of employment of key staff, which was proposed and supported by all the shareholders, except for the Respondent; and

(iii) the Petitioner had started to work on a new startup company which did not include the Respondent.

6. In addition, the Respondent urged that the real purpose of the petition was to frustrate the Oppression Proceedings and the Court should exercise its discretion not to grant the winding-up petition in all the circumstances.

II. BACKGROUND

7. The Company was set up by the Petitioner and Respondent and a third individual on 13 July 2022 with the aim of developing software to help companies leverage the benefits of using crypto currency and associated technology such as the “Lightning network”. The details of this are set out in the grounding affidavit of the Respondent to the Oppression Proceedings, including the account of how the first name of the Company “Sulu” was conceived by using the first two letters of the Petitioner’s and Respondent’s first names. The Petitioner and the Respondent are directors of the Company, along with one other individual. At the time the petition was presented, the Petitioner held 41.33% of the shares in the Company, while the Respondent held 25.31%. Consequently, the Respondent was able to block a special resolution which was supported by all the other shareholders to voluntarily wind up the Company at an EGM on 19 May 2025.

8. The affidavits filed in the petition and in the Oppression Proceedings (the papers for which were before the Court and referred to in the context of this petition) outline a series of allegations and counter allegations that relate to the breakdown in the relationship between the Petitioner and the Respondent. These conflicts cannot be resolved in the context of this petition hearing and neither side sought to cross-examine the other side on their affidavits.

9. Notwithstanding the disagreement in relation to the causes of the breakdown, there is no dispute but that there has been an irretrievable breakdown in the relationship between the Respondent and the Company. This emerges very clearly from the affidavits of the Respondent. Not only does he assert an irretrievable breakdown, but he makes it clear that, from his perspective, he does not consider himself to be in a position to ever work for the Company or with the Petitioner again (he avers “I do not wish to have any further business dealings with [the Company]”. The Respondent explains that, as a result of the events which he describes, he went on sick leave in the summer of 2024 and he did not return to work thereafter. He then resigned his employment later in July 2025 (after the winding-up petition was presented), although he remains a director of the Company. The solution he seeks is for the Company to purchase his shares.

10. Equally, the Respondent does not dispute that the Company is now essentially moribund in that it has no substantial assets, is essentially not trading and has no employees. It was not disputed on behalf of the Respondent that the Company is essentially on the cusp of insolvency. The Company only ever generated €2,484 in profit. Accordingly at the time of the hearing of the petition the Company found itself in a position where it had very limited monies in its bank account (together with a fraction of a Bitcoin) and the two other founders were voluntarily doing limited “caretaker-type” work on an unpaid basis on the advice of the accountant who has been proposed as liquidator.

11. From the Petitioner’s perspective, the complaints of the Respondent in the Oppression Proceedings are disputed and the breakdown in their working relationship is considered by her to be a matter of regret. The Petitioner explains that the Company was essentially in start-up mode having raised funds from a number of investors but those funds have now run out. She explains that the commencement of the Oppression Proceedings by the Respondent, who was a director of the Company and one of its founders and a significant shareholder, has essentially precluded any further investment (it is not disputed that the Company has been unable to raise any funds since 6 August 2024) and ultimately has condemned the Company to the cusp of an imminent insolvency. In March 2025 the Company passed a resolution supported by all of the shareholders except the Respondent, releasing all of the founders, including the Respondent, from their non-compete clauses. The Board minutes in respect of that decision indicate that it arose in “consideration of the financial position and poor future prospects of the Company”.

12. It was not disputed that as of 22 October 2025 the Company had monthly revenue of €700 and had just under €65,000.00 in cash on account and 0.039 of a Bitcoin worth less than €4,000.00. The Company had five creditors (three for nominal amounts) and monthly costs of €12,000.00, excluding legal and accounting fees. In addition, there was no dispute that the Company systems were vulnerable to cyberattack due to the absence of any fulltime employees.

13. In summary, while the causes of the background circumstances may be in dispute, the winding-up petition proceeded on the basis that it was not in dispute that the Company was on the cusp of insolvency, that it was carrying on no real business, no longer had any employees and that the relationship between the parties had irretrievably broken down.

14. The Oppression Proceedings commenced on 25 November 2024 and came into the Chancery 2 list in the High Court on a ‘for mention’ basis with certain affidavits having been exchanged. The winding-up petition was issued on 12 June 2025 and came into the Chancery 2 list on 14 July 2025. At that point, it was indicated on behalf of the Respondent that he was not opposing the petition. The matter was adjourned briefly to facilitate the necessary details of the insurance of the proposed liquidator being put before the Court. In that regard, there is no dispute about the suitability or appropriateness of the proposed liquidator proposed by the petitioner and no objection is taken to him by the Respondent.

15. There is no formal or technical objection made to the form of the petition, or its advertisement, service or other formal statutory requirements and I am satisfied that all of the other statutory requirements and proofs are in place in relation to the presentation of the petition, its filing, service and advertisement.

16. In addition, on the initial return date for the hearing of the petition, Counsel for the Petitioner expressed the view that if the winding-up petition were granted that this would inevitably bring an end to the Oppression Proceedings. Subsequently at the hearing of the petition itself, Senior Counsel for the Petitioner stated that, as a matter of law, this may well not be the case and that it was difficult to see how the Respondent’s proceedings, in some shape or form, could not at least continue against the Petitioner who was named in her personal capacity as a respondent to the Oppression Proceedings.

17. Around the time that the winding-up petition was initially in the list, the Respondent resigned his employment, and this led to a situation which, from the point of view of the Company and the Petitioner, triggered certain provisions in the Company Constitution (clauses 15.2 and 15.3) and the Shareholders Agreement (clauses 1.1.3, 1.1.23, 6.1.2 and 6.1.3), whereby the Respondent’s shares were acquired. From the point of view of the Company the position adopted was that the Respondent by virtue of his resignation was technically a “Bad Leaver” and accordingly, his shares were acquired for a nominal value by the Petitioner. It should be said that the Respondent in addition to resigning claimed that his resignation was caused by the conduct about which he complains in the Oppression Proceedings, and that therefore, he asserts essentially that his resignation constitutes a constructive dismissal and he has initiated a claim against the Company for unfair dismissal with the Workplace Relations Commission. Pursuant to the terms of the Company Constitution, if he succeeded, he would then be deemed to be a “Good Leaver”. In either eventuality, his shares are offered to the other shareholders of the Company and in the event that he is a “Good Leaver” then any “vested shares” can be purchased for fair value, and any “unvested shares” can be purchased for nominal value. In the event that he remains a “Bad Leaver”, for example if he were to be unsuccessful in his unfair dismissal case, then all of his shares could be acquired for nominal value.

18. The issue therefore would not be whether or not the Respondent would remain a shareholder, but rather the price he would receive for the shares. As things stand, as of the hearing of the winding-up petition, the Petitioner had purported to acquire the Respondent’s shares following his resignation for nominal value. Notwithstanding this, the Petitioner maintains that in any event the Fair Value of the shares is also nominal due to the financial position of the Company and the fact that it has no patents, no registered IP rights and no technical assets.

19. In this context, by way of the further background, Counsel for the Petitioner accepted that in the event that the winding-up petition is granted then, by virtue of section 602 of the Companies Act 2014, the acquisition of the Respondent’s shares will be deemed to be void (having occurred after the presentation of the winding-up petition) and the shares will accordingly be deemed to be still in the ownership of the Respondent.

III. RELEVANT LEGAL PRINICPLES

20. Various sections of the Companies Act 2014 are relevant to this application together with some helpful dicta from various cases and some very helpful academic commentary. These are set out hereunder and then touched upon again in the description of the submissions made by the parties and the decision of the Court.

(i) Relevant Statutory Provisions

The relevant provisions of the Companies Act 2014 are as follows:

21. Section 224A of the Companies Act 2014

Section 224A was inserted (27.07.2022) by European Union (Preventive Restructuring) Regulations 2022 (S.I. No. 380 of 2022) and provides as follows:-

(1) A director of a company who believes, or who has reasonable cause to believe, that the company is, or is likely to be, unable to pay its debts (within the meaning of section 509(3)), shall have regard to –

(a) the interests of the creditors,

(b) the need to take steps to avoid insolvency, and

(c) the need to avoid deliberate or grossly negligent conduct that threatens the viability of the business of the company.

(2) The duty imposed by this section on a director shall be owed by them to the company (and the company alone) and shall be enforceable in the same way as any other fiduciary duty owed to a company by its directors.

22. Section 569(1) of the Companies Act 2014

Section 569(1) is entitled “Circumstances in which company may be wound up by the court” and provides as follows:-

(1) A company may be wound up by the court—

(a) if the company has by special resolution resolved that the company be wound up by the court,

(b) if the company does not commence its business within a year after the date of its incorporation or suspends its business for a continuous period of 12 months,

(c) if the members of the company are all deceased or no longer exist,

(d) if the company is unable to pay its debts,

(e) if the court is of the opinion that it is just and equitable that the company should be wound up,

(f) if the court is satisfied that the company’s affairs are being conducted, or the powers of the directors are being exercised, in a manner oppressive to any member or in disregard of his or her interests as a member and that, despite the existence of an alternative remedy, winding up would be justified in the general circumstances of the case but this paragraph is subject to subsection (2),

(g) if the court is satisfied, on a petition of the F453[Authority], that it is in the public interest that the company should be wound up, or

(h) in the circumstances referred to in section 535(2) or 542(5).

(2) The court may dismiss a petition to wind up a company under subsection (1)(f) if it is of the opinion that proceedings under section 212 would, in all the circumstances, be more appropriate.

(3) Subsection (1) is in addition to the special cases (namely those provided under sections 455(2)(d), 760 and 761) in which a company may be wound up by the court.

23. Section 602 of the Companies Act 2014

Section 602 is entitled “Voidance of dispositions of property, etc. after commencement of winding up” and provides as follows:-

(1) This section applies to each of the following acts in any winding up of a company:

(a) any disposition of the property of the company;

(b) any transfer of shares in the company; or

(c) any alteration in the status of the members of the company,

made after the commencement of the winding up.

(2) Without prejudice to subsection (3), an act to which this section applies that is done without the sanction of—

(a) the liquidator of the company, or

(b) a director of the company who has, by virtue of section 677(3) retained the power to do such act, shall, unless the court otherwise orders, be void.

(3) Nothing in this section makes a person who does an act rendered void by this section liable for doing such act, being an act that was done by the person at the request of the company, unless it is proved that, prior to the person’s doing the act, the person had actual notice that the company was being wound up.

(4) If a company that is being wound up makes a request of a person to do an act referred to in subsection (3) and does not, at or before the time of making the request, inform the person that it is being wound up, the company and any officer of it who is in default shall be guilty of a category 2 offence.

(5) Nothing in subsection (4) shall be read as limiting any liability, civil or criminal, that, apart from this section, may attach to a company, or any officer of it, for making a request of the kind referred to in that subsection, irrespective of the consideration that the relevant facts have been communicated to the person concerned or that those facts are otherwise in the knowledge of that person.

(ii) Relevant Case law

24. Re Lanskey Ltd. [2022] IECA 34

In Re Lanskey Ltd. was a case in which the application was made on the “just and equitable” ground and was one in which the undisputed factual position was that the relationship between two shareholders (who held the company on a 60:40 basis) had irretrievably broken down and the management was deadlocked and the company had effectively ceased to function. Collins J at para 26-27 states as follows:-

26. Section 569(1)(e) is cast in broad terms and it has been said that the court should not trammel the jurisdiction thus conferred by reference to authorities that merely exemplify it. In any event, and subject to that caveat, Courtney, The Law of Companies (4th ed; 2016) (“ Courtney”) identifies a number of circumstances in which such orders have been made, including (i) quasipartnership cases and (ii) cases where there is deadlock in corporate management (at para [24.120]). Given the undisputed background to the incorporation of the Company here, it certainly appears to be a quasipartnership in the sense used in the authorities in this context. Re Murph's Restaurant Ltd [1979] ILRM 141 establishes that where there is a fundamental breakdown in relations between quasi-partners, the power of the High Court to wind-up the company on just and equitable grounds may be engaged. The deadlock in corporate management ground also clearly applies on the evidence here. The leading Irish case is Re Vehicle Buildings and Insulations Ltd [1986] ILRM 239 which is discussed in detail in Courtney. While Re Vehicle Buildings and Insulations Ltd involved two 50% shareholders — whereas the split here is 40:60 — it has not been suggested that that of itself takes the case outside the scope of section 569(1)(e) and it would be most surprising if that were to be the case, having regard to the terms of that sub-section. A notable feature of Re Vehicle Buildings and Insulations Ltd is that – as here – the order was made on foot of a hearing on affidavit only. Both Re Murph's Restaurant Ltd [1979] ILRM 141 and Re Vehicle Buildings and Insulations Ltd were opened to the High Court.

27. What is said by the Appellants is that winding up should be the “option of last resort”, relying on the observations of the High Court (Charleton J) in In re Fuerta Limited [2014] IEHC. 12. The circumstances in In re Fuerta were rather different to the circumstances here, involving allegations of noncompliance with the Companies Acts. However, accepting for the purpose of this appeal that there is such a general principle, it appears to me that the High Court was entitled to take the view that there was no adequate or satisfactory alternative remedy here and that, therefore, it was appropriate to reach for the “ option of last resort”. What is suggested is that the Court should have directed the Appellants to buy out the Petitioner's shareholding. However, the process of valuing that shareholding would be fraught with difficulty and delay given the nature and range of conflict between the parties. Furthermore, the Court had no evidence of the Appellants' willingness and/or financial capacity to buy out the Petitioner (and no such evidence was contained in the draft affidavits sought to be relied on in the High Court either). A buy-out of the Petitioner was not, on the evidence, a realistic or effective alternative. The High Court was, in my view, entitled to take the view that the appropriate remedy was to wind up the Company, thus enabling the sale of the Company's assets on the open market by an independent liquidator who would be answerable to the court.

25. Re Leech Papers Ltd [2022] IEHC 475

In Re Leech Papers Ltd Stack J. also considers this statutory jurisdiction at para. 59-60 Stack J. states as follows:-

59. A common order where oppression of a minority shareholder is found to exist is to direct the purchase of his or her shares. The difficulty with this in this instance, in circumstances where the Company's books and records are obviously inadequate, is that, as the applicant complains, it is going to be impossible to value her shareholding. She says the usual remedy pursuant to s. 212, whereby the other parties would be directed to purchase her shareholding, so that they can all go their separate ways, is of no use to her here, as she will never be able to get proper valuation of it. She says that it is necessary to appoint a liquidator in order to investigate these matters and that this is available as a remedy for oppression or disregard of her interests, or on just and equitable grounds.

60. It is clear from the authorities that liquidation is very much a last resort and only where no other alternative remedy would be available. This was stated by the Court of Appeal in Re Lanskey Ltd. [2022] IECA 34, and by Charleton J. in Re. Fuerta Ltd [2014] IEHC 12, at para. 7 where he stated that winding up on just and equitable grounds was a last resort not lightly to be taken and should only be engaged in the most intractable situations. Where other avenues were available, winding up on this ground should not be invoked. He stated (at p. 3) that there must be “a most serious lack of compliance coupled with an absence of reasonably available alternative steps and in the context of existing or impending prejudice”.

26. Re Kilcurrane Business Centre Limited [2021] IEHC 701

In Re Kilcurrane Business Centre Limited Butler J. considers the ”just and equitable” grounds in section 569(1) and states as follows at para.s 49-50 and 53-54:-

49. On the basis of the preceding analysis, I have found that the petitioner has established that there is a debt owing to him by the company which, despite a formal statutory demand, the company has not repaid. Under s. 570, the company is deemed to be insolvent in these circumstances. I acknowledge that the company is in possession of an asset which exceeds the value of the debt owed to the petitioner and, in other circumstances, that might be sufficient to refuse the petition on the grounds that the petitioner should simply seek to recover the debt in normal course. However, in the circumstances of this case, I do not think that such an approach is warranted, partly because the company is not a trading company and its total indebtedness significantly exceeds the value of its only asset and partly because I have found the defence put forward by the company has not been advanced on a bona fide basis. Therefore, it follows that the petitioner has established a basis for the grant of an order winding up the company under s. 569(1)(d) and I will make such an order.

50. Lest I am incorrect in any of the findings that have led me to this conclusion, I have also considered whether the company should be wound up on the alternate basis advanced, namely that it is just and equitable to do so under s. 569(1)(e). The jurisdiction exercisable under s. 569(1) is always discretionary but this is particularly so in the case of s. 569(1)(e) where the phrase “ just and equitable” necessarily connotes that equitable principle should be applied. In addition, the standard is a subjective one in that the court must be of the opinion that it is just and equitable that the company be wound up. Needless to say, this opinion must be one which is reasonably based on the evidence before the court.

…

53. … As pointed out at the beginning of this judgment, the background to the petition concerns three companies, a partnership, a lease and a veterinary practice which serve as the legal superstructure to what was in effect a quasipartnership between the petitioner and the Klaassens. Indeed Ms. Klaassen- Don on behalf of the company asserts that the commercial loan to the company arose in the context of the same “nexus, joint venture and/ or partnership”. That quasi-partnership and any relationship of trust and confidence between the parties has clearly broken down. The authorities suggest that it may be just and equitable to wind up a company in this type of circumstance.

54. Finally, and crucially in the context of my conclusion that it is also appropriate to make an order winding up the company under section 569(1)(e), the breakdown in relations between the parties was accompanied by the illegal transfer of the company's debt to the petitioner out of the jurisdiction to its parent company without notice to or the consent of the petitioner. This, in my view, definitively tips the balance such that I am of the opinion that it would be just and equitable to wind up the company. I will therefor allow the petition and make an order winding up the company on both grounds advanced by the petitioner.

27. Ebrahimi v Westbourne Galleries Ltd. & Ors [1973] AC 360, House of Lords In Ebrahimi, Lord Wilberforce considers the equivalent legislative provision in England. Lord Wilberforce reviews the authorities and states as follows:- “My Lords, in my opinion these authorities represent a sound and rational development of the law which should be endorsed. The foundation of it all lies in the words 'just and equitable' and, if there is any respect in which some of the cases may be open to criticism, it is that the courts may sometimes have been too timorous in giving them full force. The words are a recognition of the fact that a limited company is more than a mere legal entity, with a personality in law of its own: that there is room in company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights, expectations and obligations inter se which are not necessarily submerged in the company structure. That structure is defined by the Companies Act and by the articles of association by which shareholders agree to be bound. In most companies and in most contexts, this definition is sufficient and exhaustive, equally so whether the company is large or small. The 'just and equitable' provision does not, as the respondents suggest, entitle one party to disregard the obligation he assumes by entering a company, nor the court to dispense him from it. It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is, of a personal character arising between one individual and another, which may make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way. It would be impossible, and wholly undesirable, to define the circumstances in which these considerations may arise. Certainly the fact that a company is a small one, or a private company, is not enough. There are very many of these where the association is a purely commercial one, of which it can safely be said that the basis of association is adequately and exhaustively laid down in the articles. The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements: (i) an association formed or continued on the basis of a personal relationship, involving mutual confidence - this element will often be found where a pre-existing partnership has been converted into a limited company;

(ii) an agreement, or understanding, that all, or some (for there may be 'sleeping' members), of the shareholders shall participate in the conduct of the business; (iii) restriction upon the transfer of the members' interest in the company - so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.”

28. Wilberforce LJ states [1973] A.C. 360 at 374-375 : “My Lords, the petition was brought under section 222 (f) of the Companies Act 1948, which enables a winding up order to be made if "the court is of the opinion that it is just and equitable that the company should be wound up." This power has existed in our company law in unaltered form since the first major Act, the Companies Act 1862. Indeed, it antedates that statute since it existed in the Joint Stock Companies Winding up Act 1848. For some 50 years, following a pronouncement by Lord Cottenham L.C. [Ex parte Spackman (1849) 1 Mac. &

G. 170, 174] in 1849, the words "just and equitable" were interpreted so as only to include matters ejusdem generis as the preceding clauses of the section, but there is now ample authority for discarding this limitation. There are two other restrictive interpretations which I mention to reject. First, there has been a tendency to create categories or headings under which cases must be brought if the clause is to apply. This is wrong. Illustrations may be used, but general words should remain general and not be reduced to the sum of particular instances. Secondly, it has been suggested, and urged upon us, that (assuming the petitioner is a shareholder and not a creditor) the words must be confined to such circumstances as affect him in his capacity as shareholder. I see no warrant for this either. No doubt, in order to present a petition, he must qualify as a shareholder, but I see no reason for preventing him from relying upon any circumstances of justice or equity which affect him in his relations with the company, or, in a case such as the present, with the other shareholders.”

29. Lord Cross of Chelsea, who also delivered a judgment and agreed with the decision of Lord Wilberforce stated as follows:- “To give the court jurisdiction under this section the petitioner must show both that the conduct of the majority is 'oppressive' and also that it affects him in his capacity as a shareholder.

…

A petitioner who relies on the 'just and equitable' clause must come to court with clean hands, and if the breakdown in confidence between him and the other parties to the dispute appears to have been due to his misconduct he cannot insist on the company being wound up if they wish it to continue.”

(iii) Relevant Academic Commentary

30. Finally, the issue is very helpfully analysed by Courtney on the Law of Companies, 4th Ed. from para.s 24.119-24.136. In para. 24.120 Courtney identifies six categories into which the decided cases can be grouped. Those typical categories where the just and equitable ground is invoked are described as follows:-

(i) The ‘quasi-partnership’ cases.

(ii) Deadlock in corporate management.

(iii) Failure of substratum.

(iv) Illegal objects.

(v) Corporate instruments of fraud.

(vi) Public interest.

31. Courtney then states at para 24.120: “A jurisdiction that is driven by what is ‘just and equitable’ is the very essence of what is dynamic. The practice of law has an uncanny tendency to present factual situations which differ from established authorities, and so other situations which do not fit neatly into the foregoing categories may still merit the winding up of a company on just and equitable grounds. A recent example of this is Re Fuerta Ltd [2014] IEHC 12 where Charleton J ordered the winding up of a company on the just and equitable ground on account of serious irregularities in the company’s compliance with company law (in particular the failure to file annual returns). It is thought that such a petition will, since the commencement of the Act, be more properly brought now by the Director of Corporate Enforcement under s 569(1)(g) rather than by a private party under the just and equitable ground under s 569(1)(e)”.

IV. SUBMISSIONS

32. Both sides filed very helpful written submissions and referred to helpful case law and made helpful submissions to the Court based on the papers before the Court.

Petitioner’s Submissions

33. For the Petitioner, Mr. Bernard Dunleavey SC (with Mr. Anthony Thuillier, BL) submitted to the Court that this case touched on three categories of case in which the “just and equitable” jurisdiction is typically exercised.

34. He submitted that while it did not fit fully into any one, it had elements of at least three, namely: the quasi partnership cases, the deadlock cases, and the failure of substratum cases, as follows:- “A. The company is not, in a classic sense, a quasi-partnership, because the shareholding of the founders is not equal. But the Company is a start-up, and the founders did enter it on a basis of mutual trust and confidence. As Laffoy J stated in Connemara Mining “breakdown of mutual trust and confidence is recognised as a factor which may satisfy the court that it is just and equitable to wind up a particular type of company, that is to say, a company which is in essence a quasipartnership.” Ms O’Neill has averred to the breakdown of trust between Mr Hudner and herself and Mr Alarco (the other founder, who is not however, a director).

B. It is not the case that the management of the company is deadlocked in the traditional sense. The traditional sense being that there are two diametrically opposed camps, and therefore no action is possible. The Board of the Company can still make a number of decisions – but crucially, the decision it most wants to make in the circumstances, i.e. to wind the company up voluntarily, is a path which is blocked by the intractable dispute between Mr Hudner and the other shareholders, and this, itself, has caused the company to become “effectively paralysed”, to use the term of Lavan J in Bluzwed Metals Ltd v Transworld Metals SA. The dispute between the parties has deprived the Company of the ability to raise funds. All the directors can do is shepherd the Company towards its inevitable end. It would be surprising if the Court were to take the view that the Company’s current activities – which amount to merely administering a diminishing concern – were enough for the Court to refuse to wind the Company up.

C. Lastly, there has not been a failure of substratum in the traditional sense, i.e. that the company is now pursuing a different venture to that originally envisaged, but it is true that owing to the paralysis the Company is suffering from, the purpose for which the Company was formed is no longer pursued. This category has a somewhat outdated flavour to it. Traditionally the Court would inquire into the intentions of the parties who came together to form the company in question, and this main object or objects would constitute the ‘substratum’. In Re Leech Papers, the High Court (Stack J.) described failure of substratum as occurring “where the purpose for which a company was formed is no longer pursued, or where the Company pursues a different venture to that originally envisaged.”

35. He submitted that while it was useful to view the authorities and the academic commentary set out in Courtney (described above) as identifying typical categories of situations where the “just and equitable” ground had been exercised, that this categorisation should not be applied in a rigid manner or take away from the broad discretion created by section 569(1)(e).

36. In addition, he pointed to the fact that it was not disputed that the Company was on the brink of insolvency and a special resolution to wind up the Company had been supported by all the shareholders except the Respondent. This distinguished the case from others where, for example, an otherwise healthy company was in deadlock as a result of a breakdown between two founders.

37. Counsel for the Petitioner submitted in a general way that the granting of the windingup petition would not necessarily bring an end to the Oppression Proceedings. and that this ultimately was a matter to be teased out on another day.

38. In addition, he accepted that pursuant to section 602 of the Companies Act, 2014 that the Respondent’s shares would be restored to him if the winding-up petition was granted.

39. Counsel for the Petitioner submitted that there was nothing to disentitle the Petitioner to relief in the arguments advanced on behalf of the Respondent in relation to the acquisition of the shares, the release of the non-compete clauses, or the setting up of the new start-up. He explained that the acquisition of the shares occurred pursuant to the clauses in the Company Constitution, the non-compete clauses were released following a transparent process supported by all the shareholders bar the Respondent and the Petitioner’s role in the new start-up had not involved any breach of IP or the removal of any asset of the Company by the Petitioner and was in any event an obvious follow on from the release of the non-compete clauses that had occurred transparently back in March 2025.

40. Finally, Counsel also drew attention to the fact that from the Petitioner's point of view, the Respondent was still a director of the Company and yet he had no proposals as to how the Company could continue if the winding-up petition was refused. It was submitted that he had no plan for the continuation of the Company and seemed to accept that his opposition to the petition would mean that the Company would drift until its undoubted insolvency in a matter of months. As a director, this was an unsatisfactory position for him to be adopting, it was contended.

Respondent’s submissions

41. On behalf of the respondent Mr. Andrew Whelan, SC (with Mr. Brian Murray, BL) submitted that applying equitable principles that the Company should not be wound up.

42. In particular he relied on the dicta of Lord Cross of Chelsea in Ebrahimi (cited above) who stated: “A petitioner who relies on the 'just and equitable' clause must come to court with clean hands, and if the breakdown in confidence between him and the other parties to the dispute appears to have been due to his misconduct he cannot insist on the company being wound up if they wish it to continue”.

43. Mr. Whelan, SC set out the background in some detail and contended that from the Respondent’s perspective he found himself now outside a Company that he had helped found. He had brought the Oppression Proceedings seeking to protect his position and had now resigned his employment and lost his shares. The non-compete restrictions had been dropped by the Company and the others had gone on to set up a new start up and he “felt very aggrieved”. Overall, he wished to continue with his Oppression Proceedings.

44. Mr. Whelan, SC helpfully agreed broadly with the legal analysis around the discretion afforded by section 569(1)(e). He accepted that the Court had a broad discretion and he did not take particular issue with the analysis that there was a breakdown and that the Company was now on the cusp of insolvency.

45. However, he contended that while the Court did have a broad discretion to make an order for the winding up of the Company in these circumstances pursuant to the “just and equitable” jurisdiction, that the Court should not do so in this case on equitable grounds.

46. These equitable grounds, described as “conduct issues”, related to:-

(i) the purchase of the shares,

(ii) the removal of the non-compete clauses; and

(iii) the setting up of the new business at some point in 2025.

47. Mr. Whelan, SC particularly stressed that the Petitioner had not been forthcoming at the earlier stages about the work undertaken by her to set up the new business. In addition reference was made to the overarching context in which it was contended that the Petitioner was motivated by trying to shut down the Oppression Proceedings.

48. While it was accepted on behalf of the Respondent that the Company was virtually insolvent, it was submitted that these “conduct issues” were sufficient to disentitle the Petitioner to relief.

V. DECISION

49. Overall I am satisfied that the appropriate exercise of the Court's discretion is to accede to the petition and to make an order for the winding up of the Company and the appointment of Mr. Gaynor as the liquidator. Having considered the factual context and having taken account of the submissions made, I am of the opinion that it is just and equitable that the Company be wound up.

50. The principal reason for this is the undisputed fact that the Company is on the cusp of insolvency and has literally only months to go before it runs out of funds and there is no plausible prospect of this not occurring. No solution has been identified that will enable the Company to avoid an imminent insolvency. As Collins J. says in Re Lanskey Ltd. “there was no adequate or satisfactory alternative remedy here”.

51. To refuse the petition would be to create an unsatisfactory situation. The Company has currently no employees and is carrying on minimal activity. In a few months the Company will be insolvent with no cash or other assets and it will be difficult, from a practical point of view, for any liquidator to carry out the functions necessary to wind up the Company properly.

52. In addition to that, the factual backdrop involves many of the typical scenarios that engage the court’s “just and equitable” jurisdiction under section 569(1)(e). While the facts do not completely align with any one of the specific categories identified by Courtney in para. 24.120, I accept that the jurisdiction is not confined to the six categories identified in Courtney, and that these are simply very helpful and useful examples of the type of cases that might typically engage the court’s jurisdiction. That

conclusion emerges from what is said in Courtney itself, from the wording of the provision (which is broad) and what is said by Collins J. in Re Lanskey Ltd. described above and Lord Wilberforce in Ebrahimi.

53. Here, there are significant features that chime with at least three of those categories. There is clearly an undisputed irretrievable and complete breakdown in the relationship between two of the three principal founders. The Respondent is refusing to become involved again in the Company and he accepts and insists that the breakdown is irretrievable.

54. All of the other shareholders voted for the voluntary winding up of the Company but this was blocked by the Respondent. There is accordingly a high degree of deadlock in relation to this aspect of the business and there appears no realistic prospect of any further investment in the Company.

55. In addition, without investment, a start-up of this nature is unable to perform the purpose for which it was founded.

56. When considered together in context, these features come within the types of cases identified by Courtney as being reflected in the authorities as engaging the jurisdiction of section 569(1)(e). When combined with the undisputed fact that the Company is on the cusp of insolvency and will run out of funds in a few months and when all of the other shareholders (including all of the investors) support the winding up of the Company the evidence is strongly supportive of the Court exercising its discretion to wind up the Company under section 569(1)(e). In addition to that, no alternative course has been identified.

57. I have given careful consideration to each of the grounds identified by Mr. Whelan, SC on behalf of the Respondent for contending that there is conduct here on the part of the Petitioner to disentitle her to succeed in the petition. However, I am not satisfied that these are sufficient when looked at in their undisputed factual context to justify refusing the relief. In addition the matter has to be assessed in the context of the Company as a whole.

58. Firstly, there appears to be no dispute that the Company was rapidly running out of cash when the decision was made to release the employees (including both the Petitioner and the Respondent) from their non-compete clauses. In those circumstances, the decision, which was supported by all of the other shareholders and investors to release the directors and founders from their non-compete clauses had an appropriate rationale and is not tainted by unconscionability. Nor was it targeted at the Respondent. He was treated in the same way as the other founders. In addition it was done transparently and at a meeting about which proper notice was provided.

59. In relation to the start of the new business, the Respondent must have known that the resolution to lift the non-compete clauses which occurred back in March 2025 meant that it was likely that the Petitioner, and indeed others, would start to work on new projects. It is not obviously unconscionable that they did not inform the Respondent of this or seek to include him. He had made it clear that he did not want to work with them again.

60. It is correct that to some degree a winding-up order will relieve the Petitioner of feeling duty bound to provide some time voluntarily to keep the Company “ticking over” and that this will suit her in the context of the other business. However, that is not a factor to which I have attached any weight in coming to the conclusion reached in this case, but equally nor does it weigh against exercising the discretion under section 569(1)(e).

61. The decision to release the Petitioner and the other founders from their non-compete obligations was backed by every other shareholder and the Respondent knew this when he decided not to oppose the petition in July when it was first listed before the Court. In addition, the Respondent has not been able to point to any actual evidence of wrongdoing. He does not say that any IP or patent or other property of the Company has been taken. Even so, this is a matter that the liquidator would be entitled to enquire into if he felt same was appropriate. Accordingly I am not satisfied that this ground raised by the Respondent is sufficient to disentitle the Petitioner to the relief sought.

62. Next, the decision to acquire the shares was essentially one triggered by the terms of the Company Constitution (which reflect the terms of the Shareholders Agreement entered into by the Respondent) when combined with the decision of the Respondent to resign.

63. The Respondent ought to have known that by resigning he would automatically trigger the clauses that could lead to the loss of his shares - unless of course the petition was granted, but he opposes that relief.

64. The only issue in this context is the amount that the Respondent would be paid. In circumstances where at that time, the Company essentially had no value, which was accepted by Counsel for the Respondent, the difference, if any, in the payments due to the Respondent would be marginal.

65. In addition, in the Oppression Proceedings, the Respondent does not seek an Order that he can purchase the shares of the Petitioner, rather he seeks to have his shares bought. Accordingly it is clear that the outcome he desires is for the Company or the Petitioner to acquire his shares. That occurred as a result of his resignation – it was not a scenario manufactured or orchestrated in some way by the Petitioner.

66. Furthermore, the granting of the winding-up petition will reverse that decision and restore the Respondent’s shares to him by virtue of the provisions of section 602.

67. Turning then to the contention of the Respondent that the petition is an abuse of process by the Petitioner on the grounds that she is seeking, it is submitted, to thereby avoid the Oppression Proceedings, it is not clear that the presentation of the winding-up petition is designed to frustrate the Oppression Proceedings. The Petitioner has lodged the monies that she has received pursuant to the D&O insurance policy to the account of the Company. If there is any wrongful removal of a Company asset this can be considered by the liquidator. That would in any event be a loss of the Company and not of the Respondent. In any event, the Petitioner accepts that whatever about the precise effect of the winding-up on the Oppression Proceedings that it seems likely that the Respondent’s claims can proceed, against the Petitioner at least, in some form.

68. In the context of the equities, the Respondent puts no plan forward as to how the Company should continue to operate if the winding-up petition is refused. As a director who does not dispute that the Company is on the verge of insolvency his approach is to allow this to happen in circumstances where there would then be no resources to fund a liquidator. The Companies Act provisions (see section 224A above) require directors to think of creditors as the Company moves into the zone of insolvency. The Respondent, who is still a director of the Company has no proposals for how the Company (which he now wants nothing to do with) should keep trading responsibly as it inevitably runs out of money.

69. Ultimately this matter proceeded without either side seeking to cross-examine the other side on their affidavits. The Court cannot resolve the issues of fact in dispute between the parties in relation to many of the underlying issues in the section 212 proceedings.

70. Nonetheless, there are sufficient undisputed facts to enable the Court to reach a decision to wind up the Company and to weigh appropriately the contentions of the Respondent as to why on equitable grounds the discretion to wind up the Company should not be exercised in favour of the Petitioner.

71. As described above, the undisputed facts indicate an irretrievable breakdown in relations between two founders, a degree of deadlock in terms of decision making, a failure of the Company to be able to pursue its purpose, and an inability to raise any funds which is fatal to a start-up business of the nature being pursued by the Company. The undisputed facts demonstrate that the Company is on the cusp of insolvency and will run out of money in a few months. The issues complained of by the Respondent when examined in context are not sufficient, for the reasons set out above, to disentitle the Petitioner to the relief sought. Finally, there is no alternative resolution reasonably available.

72. Accordingly, I am of the opinion that it is just and equitable to wind the Company up.

VI. CONCLUSION & FORM OF ORDERS

73. Accordingly, for the foregoing reasons I am satisfied to make an Order for the winding up of the Company pursuant to section 569(1)(e) of the Companies Act, 2014.

74. The Court will appoint Mr. Colin Gaynor as the Liquidator.

75. I will hear from the parties as to the direction of the preparation and filing of a Statement of Affairs by the Directors and as to costs.