Irish Press Plc v Ingersoll Irish Publications Ltd (No. 1)
| Jurisdiction | Ireland |
| Judge | BLAYNEY J. |
| Judgment Date | 25 May 1995 |
| Neutral Citation | [1995] IESC 10 |
| Court | Supreme Court |
| Docket Number | [S.C. Nos. 117 and 223 of 1994],[S.C. No. 141 of 1993] |
| Date | 25 May 1995 |
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[1995] IESC 10
Hamilton C.J.
Egan J.
Blayney J.
THE SUPREME COURT
JUDGMENT delivered on the 25th day of May 1995 by BLAYNEY J. [NEM DISS]
For many years prior to 1988, Irish Press Plc (hereinafter referred to as PLC) had been the owner of the three well-known Irish newspapers, the Irish Press, the Evening Press and the Sunday Press. In 1988 it became clear to the directors of the company that substantial additional capital was required for the development of the newspapers and they set about seeking such capital. Their efforts were successful. Mr. Ralph Ingersoll, who had substantial interests in the newspaper business in the United States, and also in England, agreed to invest £5 million in the newspapers.
The manner in which it was agreed that the investment should be carried out was that two new companies would be created, Irish Press Newspapers Limited (hereinafter referred to as IPN) which would be concerned with the actual business of running the three newspapers, and Irish Press Publications Limited (hereinafter referred to as IPP) in which would be vested the right to the titles of the three newspapers. It was agreed that PLC and Ingersoll Irish Publications Limited (hereinafter referred to as IIP) should be equal shareholders in the two new companies and that each company should have a board of six directors, three A directors to be appointed by IIP, and three B directors to be appointed by PLC.
The arrangement was formalised on the 30th November 1989 when two main documents were executed between PLC and IIP. The first document was a subscription and shareholders agreement and the parties to it were PLC, IPN, IPP, IIP, Corduff Investments Limited and Eamon de Valera. Prior to this agreement being entered into, the business of the three newspapers had been assigned by PLC to IPN, and the right to the titles of the three newspapers had been assigned to IPP. Under the terms of the agreement IIP subscribed £1 million for shares in IPN, and £4 million for shares in IPP, and it was provided that in consideration of the subscription of those amounts IIP would become entitled to 50 per cent of the equity in each of the companies.
Having regard to the limited nature of the issues which arose on this appeal it is not necessary to set out in detail the other provisions of this agreement except to indicate that it also provided that IIP should have the right to appoint the chief executive of each of the companies while the editorial functions in respect of political or public policy of the newspapers should be the prerogative of the editor-in-chief of IPN and IPP who would be nominated by Dr. de Valera.
The second agreement, which was also executed on the 30th November 1989 was made between Ingersoll Publications Limited (hereinafter called IPL) of the first part, IPN of the second part, and IPP of the third part. Under this agreement IPN engaged IPL "to conduct, operate and manage" the business of IPN as subsisting from time to time, and the business of any subsidiary from time to time of IPN, in consideration of an annual management fee of £300,000, such fee being adjustable upwards depending on profits achieved.
The effect of the two agreements was that PLC and IIP became equal shareholders in IPN and IPP, and the management of the business of IPN was entrusted to IPL under the terms of the management agreement.
The relationship between PLC and IIP worked reasonably well for about eighteen months but a number of events occurred which created problems for it. In or about the month of July 1990 the Ingersoll operation in the United States collapsed. This left the Ingersoll organisation consisting solely of two papers which they were managing in New England and some papers in Birmingham and Coventry. In late 1990 more capital was required and £3 million was subscribed by Ingersoll and £2 million by PLC. It was decided to launch the Evening Press as a two part paper in April 1991 but unfortunately the launch was not a success. After a period of about four weeks it was necessary to revert to the original format. At about this time also most of the Ingersoll personnel working in IPN left Dublin so that at the end of June 1991 the only person remaining was Mr. Guastaferro who had been appointed commercial director of IPN in September 1990.
In November 1991 there was a management buy out of IPL with the result that Mr. Ingersoll no longer controlled that company or had anything to do with it. And it became necessary to assign the management agreement which IPL had with IPN. But there was already a problem in regard to that agreement. Dr. de Valera was maintaining that it was dead because of the failure of IPL to operate it for the previous six months.
As a result of no longer being in control of IPL, Mr. Ingersoll turned his attention to IPN and over the next twelve months he exercised the powers given to him under the subscription and shareholders agreement to appoint the chief executive of IPN and IPP. For a variety of reasons which it is not necessary to go into in detail, but which are fully set out in the judgment in the High Court, the good relationship which had originally existed between the partners broke down and on the 21st January 1993 PLC presented a petition against IIP under s. 205 of the Companies Act, 1963. The relief sought was an order providing for the termination of the management agreement and for an order restraining IIP from making any payment of fees or expenses under the management agreement. The petition also sought an order directing IIP to procure the repayment to IPN of monies paid under the management agreement.
Points of claim were then delivered by PLC and IIP delivered points of defence and a counterclaim. In the counterclaim it was alleged that PLC had been guilty of oppression and a number of different forms of relief were claimed including an order dismissing Dr. de Valera as editor-in-chief and chairman of IPN and IPP. Subsequently amended points of claim were delivered by PLC and seven additional forms of relief were claimed the main ones being for damages for breach of contract and/or breach of duty and/or breach of fiduciary duty, and an order removing all current A directors by reason of their gross breach of fiduciary duties.
The petition was heard over thirty-eight days starting in June 1993 and finishing on the 30th November 1993. In a lengthy reserved judgment delivered on the 15th December 1993 Barron J. held that IIP had been guilty of oppression in two respects: Firstly, by insisting on the management agreement still being operated when in fact it had come to an end and secondly, by the de facto take over of IPN and IPP by appointing nominees for the purposes of the interests of IIP and not in the interests of IPN.
The substance of the order made by Barron J. was as follows:-
2 "1. The Court doth declare that the affairs of Irish Press Newspapers Limited and Irish Press Publications Limited are and were being conducted by the respondent and that the powers of the "A" directors are and were being exercised in a manner oppressive to the petitioner and in disregard of its interest as a member.
2. It is Ordered that the respondent do sell its shareholding in Irish Press Newspapers Limited and Irish Press Publications Limited to the petitioner at a price to be determined by the Court comprising a judge sitting alone - such shares to be held upon trust for the petitioner and purchaser until completion of the transfer but until then the exercise of the beneficial rights attaching to such shares shall be subject to such directions as the Court may make from time to time.
3. It is Ordered that the respondent be perpetually restrained from exercising or purporting to exercise any rights as the holder of such shares whether such rights would have arisen under the subscription and shareholders agreement dated the 30th day of November 1989 or otherwise.
4. It is Ordered that Denis Guastaferro and Jacob Daiber be restrained from exercising their power as directors or from receiving notice of meetings of directors or from attending meetings of directors.
5. It is Ordered that the management agreement herein dated the 30th day of November 1989 be and the same is hereby set aside.
6. And the Court doth declare that said management agreement has had no force and effect since the 14th day of November 1991.
7. It is Ordered that the valuation of the said shares and the assessment of damages be adjourned to the 25th day of January 1994 particulars of claim to be delivered by the 12th day of January 1994 and the respondent's particulars of defence (if any) to be delivered by the 19th day of January 1994.
8. It is Ordered and Adjudged that the petitioner do recover...
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