Gonzalez v Mayer

• Jurisdiction: Ireland
• Judge: Mr Justice Kelly
• Judgment Date: 25 July 2003
• Neutral Citation: [2003] IEHC 43
• Date: 25 July 2003
• Court: High Court
• Docket Number: [2001 No. 90 Cos.]

[2003] IEHC 43

THE HIGH COURT

No 90 Cos/2001

GONZALEZ v. MAYER & ORS

IN THE MATTER OF INTERCARE LIMITED, ALLIED SALES CORPORATION LIMITED, WINDVALE ENTERPRISES LIMITED, TITAN TRADING LIMITED, ARMALO TRADING LIMITED, SOLENT TRADING OVERSEAS LIMITED and CARROWPARK LIMITED AND IN THE MATTER OF THE COMPANIES ACT, 1963 to 1999

BETWEEN

CARLOS HIDALGO GONZALEZ

Applicant

and

KURT KONRAD MAYER, MAJESTIC SALES CORPORATION, WINSTON SERVICES LIMITED, INTERCARE LIMITED, ALLIED SALES CORPORATION LIMITED, WINDVALE ENTERPRISES LIMITED, TITAN TRADING LIMITED, ARMALO TRADING LIMITED, SOLENT TRADING OVERSEAS LIMITED and CARROWPARK LIMITED

Respondents

Citations:

COMPANIES ACT 1963 S205

JURISDICTION OF COURT & ENFORCEMENT OF JUDGMENTS ACT 1998

BRUSSELS CONVENTION 1968 ART 16

BRUSSELS CONVENTION 1968 ART 21

BRUSSELS CONVENTION 1968 ART 22

TATRY V MACIEJ RATAJ 1994 ECR I-5439

SARRIO SA V KUWAIT INVESTMETN AUTHORITY 1999 1 AC 32

C (D) V C (W) 2001 2 IR 1

HARRODS (BUENOS AIRES) LTD, IN RE 1991 4 AER 334

INTERMETAL GROUP LTD V WORSLADE TRADING LTD 1998 2 IR 1

COMPANIES ACT 1963 S213

Synopsis:

PRACTICE AND PROCEDURE

Jurisdiction

Shareholder oppression - Forum non conveniens - Lis pendens - Brussels Convention - Jurisdiction of Courts and Enforcement of Judgments Act 1988 (2001/90COS - Kelly J - 25/7/2003)

Gonzalez v Mayer - [2004] 1 ILRM 351; [2004] 3 IR 326

The applicant presented a petition seeking relief under s. 205 of the Companies Act 1963. The first three respondents had foreign address and the High Court permitted service to be effected on these respondents. The petition stated that the court was empowered under the Jurisdiction of Courts and Enforcement of Judgments Act 1998 to hear and determine the claims. There were already proceedings in existence between the applicant and the first respondent in Spain. The first respondent applied to court to set aside the High Court order and service of the proceedings on him pursuant to the order or alternatively to stay or strike them out on the basis of forum non conveniens and/or lis pendens. Alternatively, an order was sought pursuant to Article 21 or 22 of the Brussels Convention.

Held by Kelly J. in staying the petition that the petition should be stayed until such time as the dispute between the applicant and the first respondent had been determined by the competent courts in Spain. The Spanish proceedings came into being long before the petition and the outcome of the Spanish litigation had a significant bearing on the petition. Moreover, Spain was quite clearly the appropriate jurisdiction to determine the dispute between the applicant and the first respondent.

In relation to the second motion before the court seeking directions, Kelly J. adjourned the petition generally pending the result of the litigation in Spain.

1 JUDGMENT of Mr Justice Kelly delivered the 25th day of July, 2003.

Introduction

2 This judgment concerns a spat in an international war of litigation which has been conducted for years between the petitioner (Mr Gonzalez) and the first named respondent (Mr Mayer).

3 On the 8 ^th March 2001 Mr Gonzalez presented a petition to this court seeking relief under s.205 of the Companies Act, 1963in respect of the fourth to tenth named respondents. Alternatively a winding up order is sought in respect of those companies on the basis that it would be just and equitable that such an order be made. All of these companies are incorporated in the State.

4 The first three respondents to the petition have external addresses, at Chile in the case of the first respondent and Mauritius in the case of the second and third.

5 Having presented the petition Mr Gonzalez applied to Butler J. on the 16 ^th July, 2001 and obtained an order permitting service to be effected upon Mr Mayer by ordinary prepaid post to his address in Chile. The order indicated that such would be good and sufficient service and furthermore permitted service on the first, second and third respondents by serving a copy of the petition on the registered address of the fourth to tenth named respondents.

6 The petition recited that the court was empowered under the Jurisdiction of Courts and Enforcement of Judgments Act, 1998to hear and determine the claims made in it. It further recited "The court shall assume jurisdiction under Article 16 of the Brussels Convention of 1968. No proceedings between the parties concerning the same cause of action are pending in another contracting State".

7 Mr Mayer now applies to court to set aside the order made by Butler J., to set aside the service of the proceedings on him or alternatively to stay or strike them out on the basis of forum non conveniens and/or lis alibi pendens. Alternatively an order is sought pursuant to Article 21 or Article 22 of the Brussels Convention.

The Petition

8 Mr Gonzales is a businessman who resides in Tenerife. Mr Mayer is a dual Spanish and Chilean national. He is domiciled in Chile.

9 The first eight paragraphs of the petition identify the parties to it. It alleges that the shares in the fourth to tenth named companies (the Irish companies) are owned by the two Mauritian companies which are the second and third respondents. Mr Mayer is alleged to be the ultimate beneficial owner of the shares owned in the Irish companies by the Mauritian companies.

10 The petition goes on to set forth the business relationship which has existed between Mr Gonzalez and Mr Mayer for the last thirty years. It alleges that on the 23 ^rd June, 1973 a company called Kurt Konrad y Cia S.A. was incorporated under the laws of Spain. Its shareholding was controlled as to 50% by Mr Gonzalez and his family with the other 50% being controlled by Mr Mayer. It is said that it was intended that the business of that company would be jointly managed by Mr Gonzalez and Mr Mayer and would be treated as a form of partnership.

11 The petition alleges that in the years following 1973 an alteration in the shareholding of that company occurred. As of the date of presentation of the petition it contends that Mr Gonzalez controls 44.46% of the shares whilst Mr Mayer controls the remainder. Since 1973 it is alleged that a number of companies related to the original have been incorporated under the laws of Spain. The shares in some of these are controlled directly by Mr Gonzalez whilst others are controlled by Mr Mayer. Others of these companies are subsidiaries or are partly controlled by the original. All of these companies including the original company are referred throughout the petition as "the Spanish companies". That is the nomenclature I adopt for the purposes of this judgment.

12 The Spanish companies have engaged in the business of land ownership and development in Spain. They run hotels, own real estate and engage in development activities.

13 The petition alleges that in 1992 the Irish companies, were acquired by agreement between Messrs Gonzalez and Mayer. The shareholdings in the Irish companies roughly reflect the shareholding controlled by Mr Gonzalez and Mr Mayer in the original Spanish company. The business of the Irish companies has been similar to the Spanish companies and it is said that these Irish companies either own directly or, alternatively, have a significant shareholding in companies that own valuable real estate in Spain.

14 The petition contends that all of these companies both Irish and Spanish were to operate as a form of partnership between Mr Gonzalez and Mr Mayer.

15 Paragraph 15 of the petition recites that prior to the 23 ^rdJune, 1997 disagreements arose between the Gonzalez and Mayer families as to the way in which the business of the companies ought to be managed. On that date an agreement was entered into between the disputing parties which has been called the "unionisation agreement". On the same day amendments to the statutes of Kurt Konrad y Cia S.A. were made by means of a deed of conversion. The terms of that unionisation agreement which Mr Gonzales contends for are set out in the petition. There then follows a series of complaints concerning non-compliance with the terms of the agreement. They include an alleged wrongful refusal to vote in favour of an alteration of the articles of the Irish companies so as to achieve the purpose described in the unionisation agreement; a failure to vote in favour of the appointment of joint attorneys in respect of the companies and the wrongful defeat of resolutions proposed at an extraordinary general meeting of the Irish companies held on the 21 ^st March, 2000.

16 The petition then continues

17 2 "24. The respondents have accordingly specifically refused to accept that the affairs of each of the Irish companies should be conducted and the powers of the directors exercised in the future in accordance with the provisions of the unionisation agreement, and have specifically refused to amend the articles of association of the said companies so as to bring the same in compliance with the unionisation agreement and the deed of conversion. They have specifically refused to allow the nominee of the applicant to be appointed as joint attorney of each of the said companies, and have thereby indicated clearly that they do not intend to allow the applicant any role in the management of the said companies. They have insured (sic) that Ms Revilla continue to act as attorney of each of the said companies, notwithstanding the specific reservations expressed at the meeting and otherwise both as to the actions of Ms Revilla and as to the terms of the power of attorney granted in her favour.

18 25. In the premises, the applicant charges that the affairs of the Irish companies are being conducted and that the powers of the directors of the said companies are being exercised in a manner oppressive to him and in disregard of his interests as a member.

19 26. Further in...