Lyons v Curran

• Jurisdiction: Ireland
• Judge: Mr. Justice Blayney
• Judgment Date: 01 January 1993
• Neutral Citation: 1992 WJSC-HC 2259
• Date: 01 January 1993
• Court: High Court
• Docket Number: No. 294 J.R./1991

1992 WJSC-HC 2259

THE HIGH COURT

No. 294 J.R./1991

LYONS v. CURRAN

BETWEEN

CHARLES M. LYONS, THOMAS G. KELEGHAN AND JOHN J. MURPHY

APPLICANTS

AND

MAURICE R. CURRAN

RESPONDENT

Citations:

COMPANIES ACT 1990 S22

COMPANIES ACT 1990 S14

COMPANIES ACT 1990 S9

COMPANIES ACT 1990 S14(5)

COMPANIES ACT 1990 S14(1)

COMPANIES ACT 1990 S14(2)

GLACKIN V TRUSTEE SAVINGS BANK UNREP COSTELLO 10.4.92

PROBETS V GLACKIN UNREP O'HANLON 26.2.92

Synopsis:

COMPANY

Inspector

Powers - Membership - Investigation - Scope - Corporate share holder - Corporation not specified in inspector's warrant of appointment - Foreign corporation not being a related company - Whether inspector authorised to investigate also membership of foreign corporation - Companies Act, 1990, ss. 9, 14 - (1991/294 JR - Blayney J. - 27/5/92) - [1993] ILRM 375

|Lyons v. Curran|

WORDS AND PHRASES

"True persons"

Company - Membership - Investigation - Scope - Corporate share holder - Corporation not specified in inspector's warrant of appointment - Foreign corporation not being a related company - Whether inspector authorised to investigate also membership of foreign corporation - Duty to determine the true persons interested in success of company being investigated - Companies Act, 1990, ss. 9, 14 - (1991/294 JR - Blayney J. - 27/5/92) 1993 ILRM 375

|Lyons v. Curran|

1 Judgment of Mr. Justice Blayney delivered the 27th day of May 1992 .

2 The Respondent is the Inspector appointed by the Minister for Industry and Commerce to inquire into what is known as the Greencore Affair. In his final report submitted to the Minister on the 4th December 1991 he expressed the opinion that it was probable that:-

"Mr. Comerford (i.e., Mr. Chris Comerford) is the beneficial owner of Talmino, the owner of the Talmino loan note, and Messrs. Keleghan, Lyons and Murphy (being the Applicants herein) have no beneficial interest in that Company or that loan note."

3 He expressed other opinions also in regard to Talmino.

4 The Applicants claim that they, and not Mr. Comerford, are the beneficial owners of Talmino, and that issue is the subject of proceedings which have been initiated by Mr. Comerford against the Applicants. By virtue of Section 22 of the Companies Act 1990(to which I shall refer as the 1990 Act) the Respondents" report will be admissible in evidence:-

5 a "(a) of the facts set out therein without further proof unless the contrary is shown, and

6 (b) of the opinion of the Inspector in relation to any matter contained in the Report."

7 This could clearly be prejudicial to the Applicants and accordingly they have instituted these proceedings to have the Report of the Respondent, or such parts of it as refer to Talmino, quashed.

8 The main ground on which the application is based is that the Respondent, under the warrant by which he was appointed by the Minister, had no power to investigate Talmino because it was not one of the Companies he was appointed to investigate, and also because it was a foreign Company.

9 The background facts are not in dispute and are briefly as follows. The case concerns the purchase in December 1988, through a Company called Gladebrook, of 49% of the shares in Sugar Distributor Holdings Limited and their resale to Siucre Eireann CPT in February 1990 at a very substantial profit. The resale price was £8,680,000 payable in loan notes. The parties entitled to Gladebrook and their percentage interests in the Company were as follows:-

10 Charles M. Lyons (the first named Applicant) 22%.

11 Thomas G. Keleghan (the second named Applicant) 22%.

12 Charles Caravan 22%.

13 Talmino 22%.

14 Michael Tully 12%.

15 On the resale to Siucre Eireann Talmino became entitled to a loan note for £2,104,900.

16 By Warrant of the Minister for Industry and Commerce dated the 12th September 1991 the Respondent was appointed to investigate and report on certain companies including Gladebrook. The form of the Warrant was as follows:-

"Warrant of Appointment of Inspector. I, Desmond O'Malley, Minister for Industry and Commerce, in exercise of my powers under Section 14 of the Companies Act, 1990, and being of the opinion that there are circumstances suggesting that it is necessary in the public interest, do hereby appoint Mr. Maurice Curran as Inspector under the said section to investigate and report on the membership of the Companies listed in the Schedule hereto, and otherwise with respect to these Companies for the purposes of determining the true persons who are or have been financially interested in the success or failure (real or apparent) of these Companies, or able to control or materially to influence the policy of these Companies. Without prejudice to the generality of the foregoing, the investigation shall extend in particular to any circumstances suggesting the existence of an arrangement or understanding which, though not legally binding, is or was observed or likely to be observed in practice and which is relevant to the purposes of the investigation.

Desmond O'Mailey

Minister for Industry and Commerce

12th September 1991."

17 It is not necessary to set out all the Companies listed in the Schedule as the only one of them which is relevant in the present case is Gladebrook.

18 By letter dated the 26th September 1991 the Minister, in accordance with Section 9 of the 1990 Act, as applied by Section 14 subsection (5), approved the Respondents investigating also Siucre Eireann CPT.

19 The Applicant seeks to have quashed all references to Talmino in the Respondent's Report. The principal reference objected to is the following:-

"Having considered all the evidence given and documents produced, in my opinion it is probable that:"

(1) It was agreed at the Arbutus meeting to allot 22% of the shares in Gladebrook to Mr. Comerford to be held through an off-share Company (Chapter 16);

(2) The Company through which the shares were to be held was Delante (Chapter 17);

(3) When Mr. Murphy assigned Delante to Mr. Comerford at their meeting at the International Airport Hotel, Dublin it was for the purpose of holding the shares in Gladebrook (Chapter 20.1);

(4) Shares were allotted to Delante at the board meeting of Gladebrook in the International Airport Hotel, Dublin as shown in Mr. Tully's notes of the meeting (Chapter 20.2);

(5) The confidentiality agreement was completed between the shareholders of Gladebrook and Delante was joined in this agreement as a shareholder representing Mr. Comerford's interest (Chapter 20.3);

(6) Mr. Murphy decided for his own reasons, probably in order not to mix payments from Gladebrook through Delante to Mr. Comerford with the ownership of shares in Gladebrook, to form a new Company Talmino to hold the off-shore shareholding in Gladebrook (Chapter 21);

(7) The meeting of 19th February 1990 at Jury's Hotel Dublin described in Chapter 22 of this Report was called at Mr. Comerford's request to adjust the apportionment of shares and purchase moneys so that Talmino would receive...