Oppressive conduct by a director warrants a buyout of a minority shareholder's shares under the Companies Act.

Neutral Citation Number: [2011] IEHC 79

THE HIGH COURT

2007 475 COS

IN THE MATTER OF ROLLVILLE LIMITED AND

IN THE MATTER OF THE COMPANIES ACT 1963 – 2007 AND

IN THE MATTER OF S. 205 AND S. 213 OF THE COMPANIES ACT 1963

BETWEEN

MARTINA BELL

PETITIONER

AND

ROLLVILLE LIMITED AND DESMOND BELL

RESPONDENTS

JUDGMENT of Mr. Justice Herbert delivered the 26th day of January 2011

The petitioner is a director and the holder of one of the two issued ordinary shares in Rollville Limited a company incorporated on the

29th March, 1999. The second named respondent is the holder of the other issued ordinary share and, is the other director of the

company, of which he is also the secretary. The petitioner and the second named respondent were married on the 17th April, 1990. In

or about February 2006, unhappy differences arose between the petitioner and the second named respondent which are the subject

matter of legal proceedings in Northern Ireland. The petitioner claims, pursuant to the provisions of s. 205 of the Companies Act 1963,

and additionally or alternatively, pursuant to the provisions of s. 213(g) of the said Act of 1963, that the affairs of the company are

being conducted and, that the second named respondent has exercised his powers as a director and as a member of the company, in

a manner which is oppressive to and in disregard of her interests as a member of the company and, in disregard of the interests of the

company and, that the relationship of trust and confidence between them has irretrievably broken down.

In Amended Points of Claim, delivered on the 20th April, 2009, a number of grounds were put forward by the petitioner in support of

her claim:-

“In the financial year ending 31/10/2006, the second named respondent wrongfully and fraudulently procured the first

named respondent to make a loan €965,904 to Duval Estates Limited: €439,239 of this advance was taken from the Ulster

Bank account of the first named respondent and, the balance of €511,000 was raised by way of a loan from the Bank of

Scotland (Ireland) Plc, on which interest of €15,666 had to date accrued.

The second named respondent fraudulently forged her signature on the following documents in order to obtain the said

loan from the Bank of Scotland (Ireland) Plc:

An Acceptance dated 16th March 2006, of a loan facility letter from the Bank dated the 13th March, 2006.

A Board Resolution of the first named respondent dated the 16th March, 2006.

Insurance Instructions dated the 16th March, 2006.

The second named respondent caused and wrongfully procured the first named respondent to create a charge over three

apartments at Mountgorry Wood in favour of the Bank of Scotland (Ireland) Plc, as security for the said loan.

In the financial year ended the 31st October, 2006, the second named respondent wrongfully caused and procured the first named

respondent to make an unauthorised loan of €30,000 to Bell Contracts, the name under which the second named respondent and his

brother, Mr. Martin Bell carry on business as building contractors in Northern Ireland.

By a Combined Building Agreement and Contract for sale dated the 22nd May, 2006, the second named respondent wrongfully caused

and procured the first named respondent to sell an apartment in Block A, Mountgorry Wood, Malahide Road, Swords, Co. Dublin,

constructed by the first named respondent, to his brother, Mr. Martin Bell and his wife, for the sum of €246,696, when the average

sale price achieved by such apartments was €285,837.

In late 2005 and, throughout 2006, after development works had been substantially completed at Mountgorry Wood since April or May

2005, the second named respondent procured and authorised payments and purchases to be made by the first named respondent for

which no proper or sufficient vouched details or invoices were forthcoming.

Fox Engineering €36,248

J.C. Campbell Electrics €7,385

M.B. Protective Coatings €121,641

Junemar Limited €17,264

Bell Contracts (Plant Hire) €53,600

Bell Contracts (Administration) €90,000

Bell Contracts (Engineering and Quantity Survey) €64,686

Motor and Telephone Expenses 2006 €14,616

Tractor (September 2006) €29,000

Total €434,440

In addition to his salary as a Director of first named respondent, in 2004 the second named respondent exceeding his

authority and without the consent of the petitioner drew €550,570 from the first named respondent as “Directors

Drawings” and in 2005 drew €746,000 from the first named respondent as “Directors Drawings”

At the trial of the action the second named respondent represented himself, his former Solicitors prior to trial having been granted an

Order pursuant to the provisions of O. 7 r. 3 of the Rules of the Superior Courts, declaring that they had ceased to act for the second

named respondent.

On the second day of the trial of the action as Senior Counsel for the petitioner, was about to call in evidence a handwriting expert

and several bank officials, the second named respondent admitted that he had forged the petitioner’s signature on the three

documents as alleged. He offered by way of explanation the fact that his sole concern was to ensure that he could remain successful

in the development and construction business and the re-development project at Perry Street, Dungannon, appeared to him to be an

opportunity which he could not afford to miss. He accepted, as pleaded in the Amended Points of Claim, that the petitioner,

supported by members of her family who were successful in this field in Northern Ireland, was wholly opposed to this project.

At the hearing of this Petition it was admitted by the second named respondent that without informing the petitioner or, seeking her

approval as the sole other shareholder and additionally director of the first named respondent, he had given three apartments at

Mountgorry Wood, Malahide, to the Bank of Scotland (Ireland) Plc. as security for this facility. He admitted that this facility had been

obtained by him without the knowledge or approval of the petitioner and by forging her signature on the aforementioned documents.

During the hearing of this petition the second named respondent accepted that the petitioner was not informed and had not given her

consent to the drawing down on the 21st March, 2006, of this sum of €511,000 and to the transfer of that sum to Duval Estates

Limited as part of what the second named respondent claims was a “loan” by the first named respondent to Duval Estates Limited of

€965,904.

It was accepted at the hearing of this petition that this alleged “loan” was included as such in the draft accounts of the first named

respondent for the financial year ending the 31st October, 2006, but under the erroneous designation of Duval Properties Limited. The

second named respondent gave evidence and it was accepted on behalf of the petitioner that €150,000 of this money had been

repaid to the first named respondent during 2006. It was admitted and accepted at the hearing of this petition that Duval Estates

Limited was incorporated in Northern Ireland on the 30th January, 2002. The second named respondent and his brother, Mr. Martin

Bell, each held 6000 ordinary £1 shares in the company, while the first named respondent and the petitioner each held a single “A”

share in the company, which carried restricted rights. For the purpose of the instant case it is not necessary for the court to delve

further into the structure, ownership or objects of this company or into whether, as pleaded in the amended Points of Claim, it was

intended to constitute the first named respondent and Duval Estates Limited related companies in order to facilitate the purchase of

property by Duval Estates Limited at Fivemiletown, Co. Tyrone.

The second named respondent, while accepting that the petitioner was entirely unaware of and, did not authorise the payment of this

money by the first named respondent to Duval Estates Limited, claimed that the petitioner had at all times left every aspect of the

running of the first named respondent exclusively to him, as instance, the fact that there had never been any board meetings. He

claimed that this was a bona fide loan from the first named respondent to Duval Estates Limited, a related company, which was fully

recorded in the draft accounts of the first named respondent for the financial year ending the 31st October, 2006, as an asset of the

first named respondent. He stated that his sole object in arranging for this loan to be made to Duval Estates Limited was to ensure a

supply of work for himself in order to provide for the family, even after the breakdown of the marriage in February 2006. The second

named respondent claimed that a further sum of €289,000 would have been repaid by Duval Estates Limited to the first named

respondent in September 2007 but for the refusal by the petitioner as a holder of a single “A” share in Duval Estates Limited to agree

to the sale by it of two properties in Ballygawley, Co. Tyrone.

I am satisfied on the evidence that the sole reason why the petitioner refused to agree to these sales in September 2007, was that

she was concerned that the properties, - a detached residence and a semi-detached residence were being sold at an undervalue.

Having regard to the contemporary valuation reports put in evidence at this hearing, I am satisfied that the petitioner had substantial

grounds for her belief having regard to the material difference in the amount of the respective valuations and, to the mis-description

of the properties in the valuation report prepared for the second named respondent. I also find that having regard to the information

of which she was in receipt about the conduct of the affairs of the first named respondent by the second named respondent, from

Mr. Desmond Kelly, an accountant appointed by her for that purpose, from April 2007 onwards, the petitioner had a genuine concern

which was both reasonable and rational as to whether any of the proceeds of the proposed sales would in fact be paid to the first

named respondent by Duval Estates Limited.

The second named respondent accepted in cross examination that at the date of the petition in the instant case there was no money

in the account of the first named respondent. The second named respondent claimed that the reason why he had not admitted to the

forgery of the petitioner’s signature on the Bank of Scotland (Ireland) Plc, documents, between the 20th April, 2009, when this was

first expressly pleaded in the amended Points of Claim and, the second day of the hearing of the petition by this Court was that he

wanted his day in court.

I find that this transfer of €965,904 from the first named respondent to Duval Estates Limited was a fraud on the petitioner as

member of the first named respondent and was not for her benefit or that of the first named respondent. It was for the sole benefit

of the second named respondent at the expense of the petitioner. This was an exercise of directors’ powers by the second named

respondent in a manner oppressive of the petitioner as being in total disregard of her interest as a member of the first named

respondent.

In the period from May 2003 until February 2006, when three Family Law orders were made in Northern Ireland in favour of the

petitioner against the second named respondent, the petitioner was paid a salary of £2,000 per month as a director of the first named

respondent. The second named respondent was paid a salary of €56,000 for the financial year ending the 31st October, 2004,

€64,000 for the financial year ending the 31st October, 2005 and €73,720 for the financial year ending the 31st October 2006, as a

director of the first named respondent. I am satisfied on the evidence that in all cases P.A.Y.E. Income Tax was deducted at source

by the first named respondent. The petitioner’s sole complaint with respect to these salary payments related to the unilateral total

cessation of salary payments to her after February 2006.

In addition to these salary payments, I am satisfied on the evidence, that the second named respondent in the financial year ending

the 31st October 2004, made drawings of €55,570 from the first named respondent and for the financial year ending the 31st

October, 2005, drawings of €746,000. All of which were reflected in the accounts of the company. In the Amended Points of Claim it

was alleged by the petitioner that she did not consent to these payments which were therefore ultra vires. During the hearing of this

petition a dispute arose between Mr. Desmond Kelly, Accountant, called in evidence by the petitioner, and the second named

respondent, as to whether or not tax had been paid on these drawings, - the second named respondent insisting that it had. After an

overnight adjournment during which further inquiries were made from the Revenue Authorities, it was conceded by Mr. Kelly that tax

of €258,570 had been paid to and accepted by the Revenue Commissioners in respect of the drawings of €550,570 and, €350,836 in

respect of the drawings of €746,000. The second named respondent gave evidence that he had spent 99.9% of the sum remaining

after payment of tax on the family. This was denied by the petitioner. However, it was accepted on behalf of the petitioner that to

the extent that this court was satisfied that some or all of these drawing were applied by the second named respondent for the

benefit of the family, she had no genuine ground for a complaint of oppression. Mr. Desmond Kelly gave evidence that there were no

minutes of any board meetings approving of these drawings and that the former Auditors of the first named respondent had no

information as to the circumstances in which these drawings were made. Mr. Kelly pointed out they designated as “expenses” and not

as “loans”, by these former auditors. Mr. Kelly gave evidence that in the financial year ending 31st October, 2002, the second named

respondent had drawings of €105,000 and in the financial year ending 31st October, 2003, his drawings were €160,000.

Despite the paucity of physical evidence in this case, ie. bank records, payment instruments, invoices and others documents, I am

satisfied on the general evidence before the court and I so find, that in the period 31st October, 2003, to February 2006, the second

named respondent, the petitioner and their children lived an extraordinarily lavish lifestyle. This was typified by expenditure on

constructing and furnishing a particularly fine dwelling house, purchase of expensive motor cars, jewellery and holidays and the

purchase of a string of very expensive ponies to enable the children to compete in equestrian events at a national and international

level. Until the unhappy differences arose between them in February 2006, the second named respondent and the petitioner operated

a joint bank account at the Northern Bank Plc. There was also a Home Loan account with the Ulster Bank Plc. to which repayments of

€2,000 per month was consistently made by the second named respondent.

Having considered the oral evidence given to the court by Mr. Desmond Kelly and the second named respondent relative to this issue

and, the documents and records proved or admitted into evidence and referred to by them, in particular, the accounts and draft

accounts of the first named respondent; the Northern Bank Plc. joint account statements, the Ulster Bank account statements; the

Northern Bank joint account cheque book stubs from the 6th September, 2005 to 6th October, 2006 (book of 100); the bank drafts

and cheques relating to the purchase of ponies; and photographs; I am not satisfied that the second named respondent has

discharged the evidential burden of establishing that 99.9% of these drawings, after the payment of tax, was spent on the family.

The petitioner herself gave very little credible positive evidence in relation to this issue. While I accept her evidence that she was not

asked to and did not give prior approval to the majority of this expenditure, in particular in relation to the ponies, I am satisfied that

she was fully aware of and accepted and, did not seek either to question or oppose it. I accept the evidence of the second named

respondent that their son and daughter were at this time brilliant and dedicated riders who constantly competed in National and even

International Pony Events, with his enthusiastic support and approval. I also accept the evidence of the second named respondent

that this skill and interest was supported by an equestrian establishment run at a highly professional level with trainers, grooms,

transporter, extensive facilities and equipment. I find on the evidence that the petitioner, while not herself terribly interested in this

sport was very pleased with her childrens’ success and was happy at all times to support them, even if not at the same level of

interest as the second named respondent.

I am satisfied that sufficient evidence of expenditure on household, family and family interests has been demonstrated by the second

named respondent as to enable the court to be satisfied on the balance of probabilities that these drawings, however irregularly they

may have been made as a matter of proper corporate governance, were not made as part of a conscious or deliberate scheme to

misapply or reduce the assets of the first named respondent in disregard of the interests of the petitioner as a member of the first

named respondent and, so as to cause her loss and damage as such member.

At the hearing of this petition the second named respondent accepted that on the 22nd April, 2006, an apartment at Mountgorry

Wood, Malahide Road, Swords, was sold by the first named respondent to his brother Mr. Martin Bell and his brother’s wife for

€246,696. The second named respondent did not dispute the evidence of Mr. Desmond Kelly that the average selling price for such

apartments at the time was at the time €285,837. The breakdown of the petitioner’s marriage to the second named respondent in

February 2006 did not alter in any way her position as the sole other shareholder in and sole other director of the first named

respondent. Despite this she was not informed of the sale nor was she asked to consent to it.

At the hearing of this petition the second named respondent accepted that this sale to his brother and his brother’s wife was at an

undervalue and he stated that he was prepared to repay 50% of the €40,000 underpayment to the first named respondent. By way of

an explanation for this sale the second named respondent stated that, “he did not want to be too hard on his brother” as he had

been of enormous assistance to him in the building of the Mountgorry Wood Apartment Complex. He accepted in cross examination

that his brother had been fully paid for his work in this respect. In my judgment this disposal of an important asset of the first named

respondent at a serious undervalue, without giving the petitioner full prior information about the proposed sale and, without obtaining

her prior consent, was a misapplication of the assets of the first named respondent in the second named respondent’s own interests,

and was an exercise of the directors powers in a manner which was “burdensome, harsh and wrongful” and in total disregard of the

petitioner’s interests as a member.

I am satisfied on the evidence that building work on the Mountgorry Wood Apartment Complex was substantially completed in April or

early May 2005. Involved was a total of 48 apartments in 4 Blocks on which work commenced in September 2003 and was completed

in the order of Block “D”, Block “C”, Block “B” and Block “A”. The first named respondent was the site owner, the developer and, the

building contractor. However, the second named respondent told the court that almost all the work had been done by subcontractors.

He said that his brother Martin Bell and a team of men from Northern Ireland were responsible for the foundations, the substructure,

bricklaying, plastering, roofing, landscaping and some other work. Plumbing, electrical, joinery and painting subcontractors were

employed in addition. It was his recollection that the last sale of an apartment at Mountgorry Wood was in May 2006, just as the

property market was starting to fall.

The second named respondent told the court that between 1999 and 2003 the only building work carried out by him was through the

first named respondent. In 2003 he and his brother Mr. Martin Bell using the business name “Bell Contracts” started to get back into

the building business and the property market in Northern Ireland. They built some new houses, but most of their work consisted of

building and renovating hospitals, schools and public offices. He had handled most of this work until early 2007 when his brother

Martin returned from working in the Republic of Ireland. Bell contracts operated a joint account in the name of Desmond and Martin

Bell, trading as Bell Contracts at the branch of the Northern Bank at Cookstown, Co. Tyrone.

The first named respondent paid Bell contractors €28,800 on foot of an invoice dated the 5th April, 2005, for the hire of scaffolding

for sixteen weeks, order dated the 30th April, 2005. (sic) Bell Contractors were paid €24,800 on foot of an invoice dated the 5th April,

2005, for the hire of portacabins and a digger for sixteen weeks, order dated the 31st May, 2005. (sic) The first named respondent

paid Bell Contactors €64,685.95 on foot of an invoice dated the 2nd December, 2005, for “the provision of procurement, engineering

and quantity surveying services” and, €90,000 on foot of an invoice dated the 2nd December, 2005, for “the provision of

administration expenses to Rollville”. The first named respondent paid the second named respondent €14,616 for diesel fuel consumed

(Diesel Card Ireland) and telephone calls made (Vodafone) in 2004 and 2005. The second named respondent claimed that he ran the

project at Mountgorry Wood, Swords, from his office at 20 Union Street, Cookestown, Co. Tyrone and, that theses costs were

incurred in travelling between this office and Swords and, telephone calls made for the purpose of the building work at Mountgorry

Wood. In October 2006, a loan of €30,000 was made by the first named respondent to Bell Contracts. This sum was included in the

accounts of the first named respondent for the financial year ending the 31st October, 2006, as a “loan”. The second named

respondent claimed that this was a genuine loan and stated that he was willing to repay to the first named respondent 50% of

whatever remained outstanding on foot of this loan. The petitioner claimed that each of these payments was unauthorised by her and

was made in total disregard of her interests as a member of the first named respondent and, was an exercise by the second named

respondent of his power as a director of the first named respondent in a manner which was oppressive to her as a member and as a

director of the first named respondent.

On the evidence I am not satisfied that these payments, amounting in total to €249,968 represented bona fide transaction for the

benefit of or from which the first named respondent had derived a benefit. If these had been payments from which the first named

respondent received a benefit, the failure of the second named respondent, even after February 2006, when matrimonial problems had

arisen between him and the petitioner, to inform the petitioner of and, to seek her approval for the making of these payments though

irregular, would not amount to oppression of the petitioner. However, for a number of reasons I am not satisfied that these were bona

fide payments from which the first named respondent derived the benefit: the invoices and payments relate to a period after May

2005, when on the evidence the building work at Mountgorry Wood had been substantially completed; the sequence, dates and

appearance generally of the invoices in unconvincing; the invoices lack any proper details of the work alleged to have been done or

the services alleged to have been rendered; no documents, records or details of any sort were furnished in evidence to support these

claims for work done, goods supplied and services rendered by Bell Contracts to the first named respondent; the evidence established

that the work at Mountgorry Wood started in September 2003 and was substantially completed in early May 2005, yet the particular

sixteen weeks invoiced was not identified, or why it was isolated in this fashion or what particular aspect or aspects of the work at

Mountgorry Wood was involved; there was a close interest between the second named respondent who authorised these payments

on behalf of the first named respondent and Bell Contracts.

In the circumstances I am satisfied that theses payments amounted to a continuous misapplication of the funds of the first named

respondent for the purpose of enabling the second named respondent to re-establish himself in the building and property development

sector in Northern Ireland. In this respect the second named respondent acted in total disregard of the interests of the petitioner as

a member of the first named respondent. In authorising these payments the second named respondent acted recklessly,

unscrupulously and unfairly and, in a manner which was wrongful and, oppressive of the petitioner as a member of the first named

respondent.

Having heard the evidence of the second named respondent, despite the wholly unsatisfactory lack of particularity in the invoice

legends, “work done to the above”, I am prepared to accept that the total sum of €121,641 paid by the first named respondent to

M.B. Protective Coatings Limited (a company controlled by Mr. Martin Bell brother of the second named respondent) in 2006 was a

bona fide payment for “snagging”, public services and, other external works at Mountgorry Wood. I am also prepared to accept on the

balance of probabilities that the sum of €19,595 paid to Junemar Limited (a company controlled by Mr. Martin Bell and his wife) despite

the unsatisfactory nature of the legend on the invoice dated the 10th October, 2006, “work on Mountgorry Wood” was a bona fide

payment for work done in remedying an ingress of water into the underground car park at Block A, Mountgorry Wood.

In September 2006, a year after all development work had been completed at Mountgorry Wood, a tractor was purchased by the first

named respondent for a sum of €29,000, I find on the evidence that this tractor was principally used in maintaining the sand arena

and for other purposes associated with the equestrian establishment maintained for the benefit of the petitioner’s and the second

named respondent’s children and therefore to be regarded as a “family” expenditure. On the 13th June, 2006, a steel-frame shed was

purchased by the first named respondent from Fox Engineering Limited for a sum of €36,248. I am satisfied on the evidence that this

must be regarded also as a “family” expenditure as it was mostly used by the children of the petitioner and the second named

respondent in connection with their equestrian activities. The court will therefore regard this total expenditure of €213,869 as genuine

and as not constituting oppression of the petitioner as a member of the first named respondent.

Section 205(1) of the Companies Act 1963, employs the phrase “are being conducted/exercised”. This envisages that the oppression

complained of, is operative at the date of the presentation of the Petition, (see Greenore Trading Company Limited and the Companies

Act 1963 [1980] I.L.R.M. 94 at 101 per Keane J. (as he then was)). I am satisfied on the evidence of the petitioner and of Mr.

Desmond Kelly, the accountant, that in April 2007, following an investigation of the accounts and draft accounts of the first named

respondent by Mr. Kelly, the petitioner learned of the borrowing by the first named respondent of the sum of €511,000 from the Bank

of Scotland (Ireland) Plc. and of the transfer of that sum together with a sum of €439,238 from the funds of the first named

respondent in Ulster Bank Plc, to Duval Estates Limited. Mr. Desmond Kelly also became aware of the drawings made by the second

named respondent from the first named respondent and of the various payments and loans made by the first named respondent

hereinbefore considered.

I accept the evidence of Mr. Kelly that in June 2007, he made inquiries from and entered into correspondence with the former auditors

of the first named respondent regarding these matters. He was not satisfied with the information which this firm was able to provide

to him and, he was ultimately referred by them to the second named respondent. He then contacted the second named respondent

but received no response whatever from him. In July and August 2007, the petitioner, through her solicitors, continued to protest to

the then solicitors for the second named respondent with respect to the manner in which the second named respondent was

conducting the affairs of the first named respondent and, she also continued unsuccessfully to seek information through them and

from the former auditors of the first named respondent regarding these loans, payments and drawings. By a letter dated the 25th

September, 2007, the petitioner proposed that the second named respondent purchase her shareholding in the first named

respondent, failing which proceedings pursuant to the provisions of s. 205(1) of the Companies Act 1963, would issue.

Correspondence in this regard was exchanged between the solicitors for the petitioner and the then solicitors for the second named

respondent throughout the months of October and November 2007. The petition was presented on the 12th December, 2007.

In the points of defence delivered on the 12th March, 2008, on behalf of the second named respondent by the solicitors then acting

on his behalf, it was pleaded, (at para. 6) that the petitioner had consented to and/or acquiesced in the first named respondent

making the alleged loan to Duval Estates Limited. The second named respondent maintained this position until the second day of the

hearing of this petition, despite the pleading in the Amended Points of Claim, delivered on the 20th April, 2009, that the second named

respondent had fraudulently forged and/or procured the forging of the documents attached to the Bank of Scotland (Ireland) loan

facility letter of the 13th March, 2006. Having regard to all of these circumstances, I am satisfied that the oppressive conduct by the

second named respondent may properly be regarded as having continued up to the 12th December, 2007, when the petition was

presented.

At paras. 36 and 37 of the Points of Defence, the second named respondent pleads that without prejudice to his claim that the

petitioner is not entitled to relief under s. 205(1) of the Act of 1963, or to any relief, by reason of the fact that the first named

respondent is deadlocked because of the breakdown of the matrimonial relationship between him and the petitioner, he is prepared to

purchase the petitioner’s shares for fair market value or to consent to an order that the first named respondent be wound up. The

petitioner prays that the second named respondent be ordered to purchase her shares in the company at their full market value; in

the alternative, she seeks an order winding up the first named respondent.

Neither party at the hearing of this petition urged upon the court that an order be made winding up the first named respondent. I am

satisfied on the evidence that for the court to make an order winding up the first named respondent, would not be in the interests of

the members, even though the circumstances of the case would justify the making of such an order pursuant to the provisions of the

s. 213(f) and (g) of the Companies Act 1963. Therefore the alternative remedy pursuant to the provisions of s. 205(3) of the Act of

1963, that the second named respondent purchase the petitioner’s shares in the first named respondent at a proper price must be

provided. In, In Re. Clubman Shirts Limited [1991] I.L.R.M. 43 at 53, O’Hanlon J. approved and adopted the dictum of Oliver L.J. in In

Re. Bird precision Bellows Limited [1985] 3 A.E.R. 523 at 529 where he held that:-

“. . . the ‘proper’ price is the price which the court in its discretion determines to be proper having regard to all the

circumstances of the case.”

In arriving at this proper price the court is entitled to include an element of compensation for whatever injury may have been inflicted

on the petitioner by the party responsible for the oppression. (see Horgan v. Murphy [1997] 3 I.R. 23 per. Barron J. at pp. 28/29).

In my judgment the proper price to be paid by the second named respondent for the petitioner’s shareholding in the first named

respondent having regard to all the circumstances of this case is 50% of the value of the first named respondent as a whole, without

any premium or discount because of the nature of the shareholding and, making the following assumptions:-

(1) That the full sum of €965,904 has been repaid by Duval Estates Limited to the first named respondent.

(2) That so much of that sum as amounts to €439,238.62 now stands unencumbered in the bank account of the first

named respondent.

(3) That all sums of whatever nature and kind due on foot of the loan to the first named respondent from the Bank of

Scotland (Ireland) Plc. have been repaid in full and that the first named respondent has received a full and final discharge

from the bank.

(4) That all sums paid by the first named respondent to the Bank of Scotland (Ireland) Plc. by way of drawdown charges,

interest, penalties or otherwise on foot of the said loan have been repaid by the second named respondent to the first

named respondent and now stand unencumbered in the bank account of the first named respondent.

(5) That the sum of €30,000 has been fully repaid by Bell Contracts to the first named respondent and now stands

unencumbered in the bank account of the first named respondent.

(6) That the sum of €40,000, being the amount by which Mr. Martin Bell and his wife were undercharged by the first

named respondent in the purchase of an apartment at Mountgorry Wood, has been paid to the first named respondent

and now stands unencumbered in the bank account of the first named respondent.

(7) That the total of the several payments found by this judgment to have been wrongfully made by the first named

respondent to Bell Contracts and, to the second named respondent in respect of Diesel Card Ireland and Vodafone

charges has been repaid to the first named respondent and stands unencumbered in the bank account of the first named

respondent.

(8) That the three apartments at Mountgorry Wood, are no longer held as security by the Bank of Scotland (Ireland) Plc.

and have each a value of €285,837 less the ordinary average costs of sale. There was no evidence before the court of

any of the 48 apartments at Mountgorry Wood having been let by the first named respondent. I am satisfied on the

evidence that but for their having been given as security to the Bank of Scotland (Ireland) Plc. each of these apartments

would have been sold by mid 2006 for this average price. I am satisfied on the evidence that between mid 2006 and

January 2011, the open market price of these apartments has fallen considerably. I am satisfied therefore, that by

assuming that each of these apartments has a current market value of €285,837, less the ordinary costs of sale, the

petitioner is sufficiently compensated for the oppressive acts of the second named respondent in causing or permitting

the first named respondent to give these three apartments as security to the Bank of Scotland (Ireland) Plc. in March

2006.

(9) That the first named respondent has no liabilities.

As I do not regard this figure as, “erring on the side of generosity” and, because the conduct of the second named respondent, both

prior to, - since the 16th March, 2006, - and subsequently to the presenting of the petition in this case until the second day of the

hearing, has been exceptionally oppressive to the petitioner as a member and as a director of the first named respondent, the court

will award interest on the purchase price from the 31st October, 2006 to the date of this judgment. This interest is to be calculated

by reference to the rates paid from time to time by Ulster Bank Plc. for deposits of this amount withdrawable on 30 days notice. The

total purchase price payable to the petitioner by the second named respondent for her shareholding in the first named respondent is

to be regarded as a judgment debt and carry interest accordingly from this date to the date of final payment.

The court will award the petitioner her costs of the proceedings against the second named respondent to include any (if any)

reserved costs, the same to be taxed and ascertained in default of agreement.

.