Bula Ltd v Tara Mines Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Lynch
• Judgment Date: 06 February 1997
• Neutral Citation: [1997] IEHC 202
• Docket Number: Record Number l0898P/1986
• Court: High Court
• Date: 06 February 1997

[1997] IEHC 202

THE HIGH COURT

Record Number l0898P/1986

BULA LTD v. TARA MINES LTD

Between:

BULA LIMITED (In Receivership), BULA HOLDINGS, THOMAS C. ROCHE, THOMAS J. ROCHE, RICHARD WOOD and MICHAEL WYMES

plaintiffs

-and-

TARA MINES LIMITED, OUTOKUMPU OY, THOMAS FARRELL, BRENDAN HYNES, MICHAEL McCARTHY, SEAN MURRAY, DAVID LIBBY, MURROUGH O'BRIEN, YVONNE SCANNELL, HEIKKI SOLIN, JUHANI TANILA, JOHN TULLY, RISTO VIRRANKOSKI, PERTTI VOUTILAINEN and THE MINISTER FOR ENERGY and MICHAEL O'CONNELL

Defendants

Citations:

MINERALS DEVELOPMENT ACT 1940

ROCHE V MIN FOR INDUSTRY & COMMERCE 1978 IR 149

ARBITRATION ACT 1954

WHITE ON DAMAGES V2 461 (1989)

CADBURY (IRL) LTD V KERRY CO-OP CREAMERIES LTD & DAIRY DISPOSAL CO LTD 1982 ILRM 77

BULA LTD V TARA MINES LTD (NO 2) 1987 IR 102

Synopsis:

Contract

Mining lease - whether conspiracy by defendants against plain tiffs - whether Minister for Energy obliged to have supported mine project by plaintiffs - whether Minister wrongfully induced not to support project but instead to support take-over of first-named plaintiff by first-named defendant - Held: Minister not obliged to support project - take-over proposals bona fide - no wrongful induction of Minister - action dismissed - (High Court: Lynch J. - 06/02/1997)

|Bula Ltd. (In Receivership) & Ors. v. Tara Mines Ltd. & Ors.|

1 Mr. Justice Lynch delivered the 6th day of February, 1997.

Introduction

2 This case arises out of circumstances which commenced more than a quarter of a century ago. It has its origin in business dealings undertaken in the hopes of arriving at a very large crock of gold, which in the end of the day turned into a bottomless pit of debt and misery for those who most avidly sought the crock of gold. It is from that bottomless pit that the remaining Plaintiffs in this action hope by this litigation to escape.

3 The statement of claim contains such a multiplicity of allegations and claims many of which have been abandoned and withdrawn at various stages in the course of the trial, that I think it is desirable that I should state at the outset in broad terms what is the essence of the Plaintiffs claim.

4 The Plaintiffs allege against the first fourteen Defendants that in spite of a provision in the first Defendants lease from the Minister that they should co-operate with the Plaintiffs as owners of the neighbouring mine those Defendants nevertheless wrongfully conspired together and sought to inflict and did in fact inflict economic loss and damage to the Plaintiffs to such an extent as to ruin the Plaintiffs in order to enable the first Defendant to acquire the Plaintiffs 1/6 share approximately of the Navan Zinc and Lead Ore Body at an undervalue with a view to working the same for their own benefit along with their own 5/6 share approximately of that ore body. The Plaintiffs allege against the fifteenth and sixteenth Defendants that by virtue of agreements made with the Plaintiffs and other agreements made with the first Defendant the fifteenth and sixteenth Defendants had power and were under an obligation to the Plaintiffs to prevent the first fourteen Defendants from acting in the manner aforesaid but that the fifteenth and sixteenth Defendants not only failed to prevent the first fourteen Defendants from so acting but on the contrary encouraged and assisted them in so acting.

5 All of these claims so made by the Plaintiffs against the Defendants are vehemently denied by all the Defendants who allege on the contrary that the failure of the Plaintiffs" enterprise was due to the Plaintiffs own incompetence and unreasonable conduct leading to commercial errors of an irrational and disastrous nature.

Preliminary Facts

6 The first Plaintiff is a company incorporated on the 19th March 1971 and is hereinafter referred to as Bula. The second Plaintiff is a company incorporated on the 29th May 1974 whose name was changed to its present and above name on the 18th August 1975 and is hereinafter referred to as Holdings. Prior to the agreements hereinafter mentioned, Holdings owned 80% of the issued shares in Bula and was itself owned by the third to the sixth named Plaintiffs through the medium of other private companies. The remaining 20% of the issued shares in Bula were owned by Patrick Wright of Nevinstown, Country Meath, who died in 1977. The third to the sixth Plaintiffs are in this Judgment referred to individually by their names or numerical position as Plaintiffs and collectively as the Holdings Personnel.

7 On Tuesday, 4th October 1994, the third and fourth Plaintiffs, Mr. Roche Senior and Mr. Roche Junior withdrew their claims and I accordingly dismissed their action as against all Defendants reserving the question of costs until the end of the case.

8 The first Defendant is a mining company, incorporated on the 31st day of December 1970 and is hereinafter referred to as Tara. The first fourteen Defendants are collectively referred to as the Tara Defendants. The second Defendant is a Finnish mining company, and is referred to as Outokumpu. The third to the fourteenth Defendants were at various times Directors of Tara and/or Outokumpu and are referred to individually by their names. The fifteenth Defendant is the Minister for Energy, sued in his corporate capacity as such including but not in their personal capacity the various holders of that office in the relevant period and is referred to in this Judgment as the Minister. The sixteenth Defendant was at all material times as Civil Servant in the Department of Energy who was on the nomination of the Minister a Director of Bula from June 1977 to June 1982 and was reappointed such Director in April 1983 retrospectively from June 1982 and remained such Director until October 1986.

9 During the period when the events giving rise to this litigation occurred, Messrs. Gerrard Scallon & O'Brien were Solicitors to the Plaintiffs and Messrs. Arthur Andersen were their Auditors and Accountants. Messrs. McCann Fitzgerald were Solicitors to Tara and the Tara Defendants and Messrs. Ernst and Whinney were their Auditors and Accountants. Messrs. Arthur Cox & Co. were engaged specially as Legal Advisors to the Minister and Messrs. Coopers & Lybrand as his special advisors on the accountancy and economic aspects of the Bula mine project assisted by Mergers Ltd. subsequently called I.C.C. Corporate Finance Ltd. and referred to in this Judgment as Mergers/I.C.C.

10 The Navan Zinc and Lead Ore Body lies underneath the lands of Nevinstown and adjacent townlands to the North of the river Blackwater in the country of Meath, and extends under the river Blackwater and under the lands of Whistlemount and adjoining townlands to the south of the river. The late Patrick Wright owned in or about 120 acres of the lands of Nevinstown and also owned the minerals beneath those lands. The minerals beneath Whistlemount and the adjoining townlands to the south of the river were owned by the State.

11 A Company which is not a party to this action but which is an associate or parent company of Tara namely Tara Exploration and Development Company Limited incorporated in 1953 (in this Judgment referred to as Exploration) carried out on its own behalf and on behalf of Tara extensive drilling for minerals in the Nevinstown area of Country Meath in the late 1960's and the year 1970. Exploration and Tara discovered rich deposits of lead and zinc beneath the lands of Nevinstown, the property of Patrick Wright. These findings were published in official journals as required by Law and by Stock Exchange Regulations and therefore were available to interested members of the public. Tara sought to obtain a lease of these minerals from the Minister with a view to developing a zinc and lead mine. It was then discovered that the minerals under Patrick Wright's land were not State owned minerals but were owned by the said Patrick Wright. Tara and Exploration then sought to purchase from Patrick Wright his land and/or the minerals thereunder in the beginning of 1971. In March 1971 the two Messrs. Roche offered Mr. Wright a higher price than that which had been offered up to then by Tara and/or Exploration and Mr. Wright sold his lands to Messrs. Roche the conveyance being to Bula on their direction. Mr. Wood joined in the venture later.

12 Tara and the Minister were at this time in negotiation whereby the Minister would grant to Tara a lease of that part of the Navan Zinc and Lead Ore Body in Whistlemount and certain adjoining townlands to the south of the river Blackwater in Country Meath. The Minister would have wished to include in this lease the minerals under Nevinstown to the north of the river, so that the Navan Ore Body which forms one single but extensive ore body might be worked as one. Accordingly the Minister sought to acquire compulsorily the minerals under the lands of Nevinstown by a Minerals Acquisition Order dated the 15th March 1971 pursuant to the powers in that behalf contained in the Minerals Development Act 1940. The compulsory acquisition of these minerals by the Minister was challenged by Mr. Thomas C. Roche and Bula as Plaintiffs against the Minister, the Attorney General and Patrick Wright as Defendants and that challenge was upheld and the compulsory purchase order was quashed in the High Court on 13th April 1973 and affirmed by the Supreme Court on 4th March 1974. See the case of Roche and Another -v- The Minister for Industry and Commerce and Others, reported in (1978) IR 149.

13 The Minister remained anxious to have some measure of control or interest in the Nevinstown minerals. The Minister might have recommenced compulsory acquisition proceedings observing the matters which the courts had identified as necessary to be observed for a valid compulsory purchase order. On the other hand the Holdings Personnel were anxious to have the good will of the Minister towards Holdings and...