Cribbin v Plc Ingredients Ltd and Another

• Jurisdiction: Ireland
• Judge: Ms. Justice Laffoy
• Judgment Date: 03 October 2012
• Neutral Citation: [2012] IEHC 390
• Docket Number: [No. 6329P/2011]
• Court: High Court
• Date: 03 October 2012

[2012] IEHC 390

THE HIGH COURT

[No. 6329P/2011]

Cribbin v PLC Ingredients Ltd & O'Sullivan

BETWEEN

MARK CRIBBIN

PLAINTIFF

AND

PLC INGREDIENTS LIMITED AND VINCENT O'SULLIVAN

DEFENDANTS

CASSIDY v SHANNON CASTLE BANQUETS & HERITAGE LTD 2000 ELR 248 1999/4/802

MINNOCK v IRISH CASING CO LTD & STEWART 2007 18 ELR 229

MCLOUGHLIN v SETANTA INSURANCE SERVICES LTD 2012 23 ELR 57 2011/33/9112 2011 IEHC 410

CAMPUS OIL LTD & ORS v MIN FOR INDUSTRY & ORS (NO 2) 1983 IR 88

LINGHAM v HEALTH SERVICE EXECUTIVE (HSE) 2006 17 ELR 137 2005/36/7565 2005 IESC 89

Company - Shareholder - Shareholder also employee and director - Defendant director purporting to suspend the plaintiff from employment pending investigation

Facts: The plaintiff and second defendant were shareholders and directors of the first defendant company. In July 2011, following apparent concerns about use of confidential information, the plaintiff was notified by the defendants that he was suspended as an employee pending investigations into the matter.

The plaintiff promptly issued a plenary summons on the matter. In the course of these proceedings, and related proceedings, the defendants proposed that senior counsel undertake the investigation. The plaintiff suggested this was a departure from established company procedures, but co-operated with the investigation after junior counsel ("the investigator") was eventually appointed. Following concerns about the delay in the investigation, the defendants purported to terminate the investigator's engagement in the matter and sought to start a fresh investigation The plaintiff now applied for interlocutory relief seeking the re-instatement of the investigator

Held by Laffoy J, that the Court found it difficult in the instant case to determine the correction application of the rules applying to interlocutory relief. The investigation was an ancillary issue to the main issue of whether the plaintiff's suspension was proper. Even if the Court accepted the plaintiff's submissions on the matter, by granting relief the Court would be sanctioning an attempt at bringing finality to the matter. This was not a desirable outcome to an interlocutory application, particularly in the instant case where a number of other issues had been raised by the parties since proceedings began. Campus Oil v Minister for Industry (No. 2) [1983] IR 88 considered.

Whilst the Court considered the manner in which the investigation had been set in train and was to be conducted left much to desire, the manner in which relief was sought on this application was not appropriate.

Ms. Justice Laffoy

1 While this judgment relates to an application by the plaintiff for an interlocutory injunction on foot of a notice of motion dated 10^th July, 2012, which was returnable on 17^th July, 2012, in order to give a proper perspective on the plaintiff's application and the defendants' response to it, it is necessary to consider the background in some detail.

2 The context of these proceedings, which were initiated by a plenary summons which issued on 13^th July, 2011, is that the plaintiff is an employee of the first defendant (the Company). The second defendant is the managing director of the Company. The plaintiff and the second defendant are shareholders of the Company, the plaintiff being a twenty five per cent shareholder and the second defendant being a seventy five per cent shareholder. They are both directors of the Company. However, these proceedings are solely concerned with the contractual relationship arising from the status of the plaintiff as an employee and the status of the Company as his employer.

3 What triggered these proceedings was that by letter dated 6^th July, 2011 from the Company, and signed on its behalf by the second defendant, to the plaintiff, the plaintiff was "officially" notified that he was "suspended from all activities as an employee of [the Company] with immediate effect until further notice to allow for a full and impartial investigation into … serious matters" which had been outlined in earlier correspondence between the parties, and which in the first paragraph of the letter of 6^th July, 2011 were referred to as "the apparent taking of confidential information belonging to the Company by you concerning the product makeup under which customs classification and tariff rulings are obtained in respect of the Company's products". It was made clear that the suspension was paid suspension. The plenary summons in these proceedings, which issued less than a week later, sought declaratory and injunctive relief in relation to the "purported" suspension of the plaintiff and a disciplinary investigation which was threatened.

4 Contemporaneously with the plenary summons the plaintiff issued a notice of motion dated 13^th July, 2011 seeking interlocutory relief restraining the defendants from treating the plaintiff as being under suspension, directing the defendants to permit the plaintiff to continue to discharge his functions as a director and employee of the Company and restraining the second defendant from conducting or participating in any disciplinary investigation or disciplinary hearing in respect of any complaint against the plaintiff other than as a complainant or witness. That motion was grounded on the very comprehensive affidavit of the plaintiff sworn on 12^th July, 2011. It was responded to by an equally comprehensive affidavit of the second defendant sworn on 18^th July, 2011. It would appear that the motion was adjourned from time to time. Eventually, it was adjourned to enable a process which had been suggested in a letter of 27^th October, 2011 from the defendants' solicitors to the plaintiff's solicitors, to which I will refer in detail later, to take place.

5 It appears from the evidence put before the Court that separate proceedings in this Court (Record No. 2011/6119P), which obviously were initiated before these proceedings, between the Company, as plaintiff, and the plaintiff in these proceedings, as defendant, have been settled except in relation to costs and that issue stands adjourned. Although finalised pleadings in those proceedings have not been put before the Court, as I understand the position, their objective was to procure for the Company injunctive relief restraining the plaintiff in these proceedings from accessing, using or passing on to other or disclosing confidential information of the Company. Those proceedings do not have a bearing on the issue with which the Court is now concerned, and I mention them only to illustrate that an awful lot had happened before the proposal contained in the defendants' solicitors' letter of 27^th October, 2011 was made. As appears from a letter from the defendants' solicitors to the plaintiff's solicitors, which was also dated 27^th October, 2011, that proposal was made because, while the plaintiff's motion in these proceedings had been adjourned in July 2011 to allow outstanding issues between the parties to be mediated on, the mediation failed to resolve the outstanding issues. Before considering the proposal and what transpired subsequently, it is important to record that the plaintiff has remained on paid suspension, and that he denies any wrongdoing.

6 The proposal in the letter of 27^th October, 2011 was that a senior counsel be appointed to conduct "the full and impartial investigation" referred to in the letter of 6^th July, 2011 imposing the suspension. The role of the senior counsel was explained in the letter as follows:

"This investigation will be conducted pursuant to the Companies(sic) Disciplinary Procedure as set out in the Companies (sic) Hand Book and in particular Clause 2.1 thereof. The formal procedure provided for therein sets out the procedure for a disciplinary interview which refers to the "Manager/Supervisor" which role will be performed by Senior Counsel once appointed. However given the circumstances of the investigation being conducted outside the Company Senior Counsel has only been asked to determine whether or not the allegations that have been made against your client in [the second defendant's] correspondence as referred to above, are in fact well founded. If these allegations are found to be well founded, it will be a matter for the Company to determine the appropriate sanction to be imposed on [the plaintiff]. Again given the independent nature of this investigation, we do not consider it appropriate to have an Appeal from the decision of the investigator and in these circumstances, his decision will be final as will the decision of the Company in the event that the allegations or any aspect thereof are upheld by the Investigator."

The correspondence from the second defendant referred to was the letter of 6^th July, 2011 and an earlier letter of 30^th June, 2011. It was specifically stated that the plaintiff would be "assured of fair procedures and natural justice throughout the process" and that the plaintiff's legal and constitutional rights would be respected. It was then stated:

"[The second defendant] will prepare a written account of the issues as set out in the correspondence referred to above including any supporting documentation. This will be furnished to the Investigator and a copy will be furnished to your client via our offices."

7 While an extract from the Company's Handbook has been exhibited in the plaintiff's grounding affidavit on the first interlocutory motion in July 2011, the extract does not cover Clause 2.1. The only evidence the Court has as to the content of Clause 2.1 is such as is to be discerned in the response of the plaintiff's solicitors to the proposal of 27^th October, 2011, which was dated 2^nd November, 2011. Having said that, it was obviously prudent to propose the appointment of an independent person to investigate the complaints against the plaintiff, which...