McCormick v Cameo Investments Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice McWilliam
• Judgment Date: 27 October 1978
• Neutral Citation: 1978 WJSC-HC 2891
• Docket Number: No. 43 S.P./1978
• Court: High Court
• Date: 27 October 1978

1978 WJSC-HC 2891

THE HIGH COURT

No. 43 S.P./1978

McCORMICK v. CAMEO INVESTMENTS LTD.

TIMOTHY BRIAN McCORMICK

-and-

DAVID PAUL SIMON McCORMICK

.v.

CAMEO INVESTMENTS LIMITED

1 Judgment of Mr. Justice McWilliam delivered the 27th of October 1978.

2 This matter comes before me on a special summons issued by the Applicants on 23rd January 1978, claiming that the Respondent is neither entitled nor bound to acquire the shares of the Applicants in Dublin & Central Properties Limited (hereinafter called the Transferor Company) upon the terms of a scheme or contract dated 18th November 1977, notwithstanding that it has been approved by 9/10ths of the shareholders of the Transferor Company.

3 The scheme or contract comes within the terms of section 204 of the Companies Act 1963. Subsection (1) of this section provides:-

"Subject to subsection (2), where a scheme, contract or offer involving the acquisition by one company, whether a company within the meaning of this Act or not (in this section referred to as "the transferee company") of the beneficial ownership of all the shares (other than the shares already in the beneficial ownership of the transferee company) in the capital of another company, being a company within the meaning of this Act (in this section referred to as "the transferor company") has become binding or been approved or accepted in respect of not less than four-fifths in value of the shares affected not later than the date four months after publication generally to the holders of the shares affected of the terms of such scheme, contract or offer, the transferee company may at any time before the expiration of the period of six months next following such publication give notice in the prescribed manner to any dissenting shareholder that it desires to acquire the beneficial ownership of his shares, and when such notice is given the transferee company shall, unless on an application made by the dissenting shareholder within one month from the date on which the notice was given, the court thinks fit to order otherwise, be entitled and bound to acquire the beneficial ownership of those shares on the terms on which under the scheme, contract or offer, the beneficial ownership of the shares in respect of which the scheme, contract or offer has become binding or been approved or accepted is to be acquired by the transferee company."

4 Subject to a question which has been raised about notice to the Applicants, a matter to which I will return later, it is accepted that the requirements of this section have been satisfied by the Respondent.

5 The Transferor Company was incorporated in 1901 as the Central Hotel Limited and was principally concerned with the operation of the Central Hotel in Exchequer Street, Dublin. What might be described as a complete reorganisation of the Transferor Company took place in 1972 and 1973. A new issue of shares was made in November 1972, which gave a company called Charterhouse (Ireland) Limited through its subsidiaries a controlling interest in the Transferor Company, the hotel was closed at the end of 1973, the name of the Transferor Company was changed to Dublin & Central Properties Limited, and it became part of a property investment and development group. No attempt has been made to explain what was the purpose or what is the result of the involved inter-company transactions. Sufficient to say that the Respondent, one of the subsidiaries of Charterhouse (Ireland) Limited, owned a substantial majority of the shares in the Transferor Company at the relevant date, and the Transferor Company had three wholly-owned subsidiaries one of which, Waterloo Holdings Limited, owned a valuable site for development in Baggot Street.

6 It appears from the accounts for 1973 that Charterhouse (Ireland) Limited made a loan of £473,849 to The Transferor Company. Presumably this was repaid as it does not appear in the subsequent accounts.

7 It also appears that, subsequently, a loan of £600,000 or thereabouts was made by the Transferor Company to the Respondent in a transaction which has variously been described as money with which...