Connemara Mining Company Plc

• Jurisdiction: Ireland
• Judge: Ms. Justice Laffoy
• Judgment Date: 25 February 2013
• Neutral Citation: [2013] IEHC 123
• Court: High Court
• Date: 25 February 2013

[2013] IEHC 123

THE HIGH COURT

[No. 30 COS/2013]

Connemara Mining Co PLC, In re

IN THE MATTER OF CONNEMARA MINING COMPANY PLC

AND

IN THE MATTER OF THE COMPANIES ACTS 1963 - 2012

RSC O.74 r10

COMPANIES ACT 1963 S215(A)(ii)

COMPANIES ACT 1963 S214(C)

COMPANIES ACT 1963 S213

COMPANIES ACT 1963 S213(E)

COMPANIES ACT 1963 S213(F)

COMPANIES ACT 1963 S214

COMPANIES ACT 1963 S215

COMPANIES ACT 1963 S208

COMPANIES ACT 1963 S213(G)

MCCANN & ORS COMPANIES ACTS 1963-2012 2012

IRISH TOURIST PROMOTIONS LTD, IN RE UNREP KENNY 22.4.1974 1966-75/I-J/2347

LA PLAGNE LTD, IN RE 2012 1 ILRM 203 2011/31/8503 2011 IEHC 91

COMPANIES ACT 1963 S214(A)

FORREST LENNON BUSINESS SUPPORT SERVICES LTD, IN RE UNREP LAFFOY 24.8.2011 2011/22/5675 2011 IEHC 523

Company law - Winding up - Petitioner - Contributory - Shareholder - Locus standi - Just and equitable- Companies Act 1963

Facts: The Petitioner sought an order that the Company in question be wound up. The Petitioner was the largest single shareholder in the Company and beneficially owned a 6.32% interest in the Company. It was submitted by the Company that the petition be dismissed on the basis that the Petitioner lacked locus standi. The Petitioner had advanced two grounds for the Company to be would up, namely the inability of the Company to pay its debts and that it was just and equitable that it be wound up.

Held by Laffoy J. that the proper course was to fix a new return date for the hearing of the petition. It was premature to make a determination on whether the Petitioner had standing. The Court would direct that the Petitioner and the Company file outline legal submissions.

1 Judgment of Ms. Justice Laffoy delivered on 25th day of February, 2013.

The proceedings thus far

2 1. On 23 ^rd January, 2013 Trampus Limited (the Petitioner) presented a petition in the High Court, which was returnable on 18 ^th February, 2013, seeking an order that Connemara Mining Company Plc (the Company) be wound up under the provisions of the Companies Acts 1963 - 2012. When the matter first came before the Court on 18 ^th February, 2013, the petition had not been advertised as required by Order 74, rule 10 of the Rules of the Superior Courts 1986 (the Rules), as amended. However, on that day there was also before the Court a motion on behalf of the Petitioner for the directions of the Court as to the advertisement of the petition, to include an order that the petition be advertised in one London daily morning newspaper.

3 2. Apart from an affidavit of Barry O'Donoghue, a solicitor in the firm Ferrys Solicitors, which is on record for the Petitioner, to ground the motion for directions, the following evidence was before the Court on the 18 ^th February, 2013;

4 (a) an affidavit of Mark Gregory Hardy (Mr. Hardy), who is described as a director of the Petitioner, which was sworn on 23 ^rd January, 2013 and which verified the petition;

5 (b) an affidavit of James Finn (Mr. Finn), the Company secretary and director of the Company, which was sworn on 14 ^th February, 2013, in which, at the outset, it was asserted that the Petitioner does not have locus standi to present the petition and that it should be dismissed, and in which Mr. Finn also strenuously contested the factual basis on which the Petitioner seeks to wind up the Company and asserted ulterior motive, although characterised as purpose, on the part of the Petitioner in bringing the petition; and

6 (c) a second affidavit of Mr. Hardy sworn on 18 ^th February, 2013.

7 Predictably, the affidavits are replete with evidential conflicts.

8 3. When the petition was called on for hearing on 18 ^th February, 2013, counsel for the Company submitted that at that stage the petition should be dismissed on the grounds that the Petitioner does not have locus standi. That issue was argued by both sides, counsel for the Petitioner submitting that the Petitioner does have locus standi and urging the Court to deal with the motion for directions.

The petition

9 4. It is recorded in the petition that the Company was incorporated in the State on 28 ^th March, 2006. Its primary object is stated to be to -

"… engage in all aspects of exploration and mining, research and development, information and technology exchange, to promote exploration and mining in Ireland and Worldwide, to acquire and hold shares, interests and investments of all descriptions and to engage in all related activities …"

10 It is also recorded that the Company is listed on the AIM sub-market of the London Stock Exchange and, at the date of the petition, it had approximately five hundred registered shareholders.

11 5. The capacity in which the Petitioner brings the petition is stated as follows therein:

"[The] Petitioner is the largest single shareholder in the Company and, at the date of this Petition, beneficially owns 1,625,000 fully paid-up shares representing a 6.32% interest in the Company. As some of the shares in respect of which your Petitioner is a contributory have been held by it, and registered in its name, for at least 6 months during the 18 months before the commencement of the winding up, [the] Petitioner is entitled to present this Petition … in accordance with s. 215(a)(ii) of the Companies Act 1963 (as amended)"

12 6. In the petition, the Petitioner has advanced two grounds on which the Company should be wound up, namely:

13 (a) the inability of the Company to pay its debts; and

14 (b) that it is just and equitable that it should be wound up.

15 7. The particularisation of the assertion as to the inability of the Company to pay its debts, as set out in the petition, is based on the Petitioner's interpretation of:

16 (a) the Annual Report and Accounts for the year ended December, 2011 of the Company, which, in accordance with the listing rules of the London Stock Exchange have been in the public domain since 26 ^th June, 2012;

17 (b) the Company's Interim Report for the six months ended 30 ^th June, 2012, which was released on 24 ^th September, 2012;

18 (c) the filing by the directors of the Company of a document entitled "Exploration Update" on 20 ^th November, 2012; and

19 (d) what transpired at an investors' presentation meeting held by the Company in the City of London on 20 ^th November, 2012.

20 On the basis of what has been extrapolated from the foregoing and set out in the petition, it is asserted in the petition that the Company is unable to pay its debts within the meaning of s. 214(c) of the Companies Act 1963 (the Act of 1963).

21 8. The basis on which it is contended that it would be just and equitable that the Company be wound up, as set out in the petition, is that there are proceedings pending in a court in Dallas, Texas against Mr. Finn and another director of the Company "in respect of [their] conduct in their roles as directors of Endeavour Oil & Gas, Inc …". Having asserted that it is alleged in the proceedings that "they have been in breach of their fiduciary duties", it is stated as follows in the petition:

"In the event that the allegations...