Oseph Byrne v Catríona Byrne and Sean Byrne
| Jurisdiction | Ireland |
| Judge | Mr Justice Maurice Collins,Noonan,Faherty JJ |
| Judgment Date | 08 February 2022 |
| Neutral Citation | [2022] IECA 34 |
| Year | 2022 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Record No 2020/316 COS |
In the Matter of the Companies Act 2014
And in the Matter of Lanskey Limited
[2022] IECA 34
Noonan J.
Faherty J.
Collins J.
Record No 2020/316 COS
Appeal No 2021/159
THE COURT OF APPEAL
CIVIL
Judgment of Mr Justice Maurice Collins delivered on 8 February 2022
The Appellants appeal from an Order of the High Court (Allen J) made on 17 December 2020 directing the winding-up of Lanskey Limited (hereafter “ the Company”) and appointing John Healy of Kirby Healy as liquidator of the Company.
The winding-up order was made on the petition of Joseph Byrne, a 40% shareholder in the Company. The Appellants are, respectively, the wife and son of the Petitioner, who between them hold the remaining 60% shareholding in the Company. Sean Byrne was a director of the Company prior to the making of the winding-up order. The Petitioner, who is in his 70s, had also been a director though as of the hearing of the winding-up petition before the High Court, there was some dispute as to whether he remained as a director or whether he had resigned. Catríona Byrne had been secretary of the Company as well as a director but had resigned as a director in August 2020.
The Company was incorporated in 2012 for the purpose of acquiring a flower-growing business which, it seems, had initially been established by Catríona Byrne and which the Petitioner later became involved in. The business was based on lands in Ballyboughal, North County Dublin. The business operated as “ Blooming Baskets” and, in addition to growing flowers and plants, it involved the sale of flower baskets both at wholesale and retail level. It seems that it developed a very successful watering system for its baskets and was generally a very successful and profitable business. When the Company was incorporated, it incurred significant debt (€950,000) in order to acquire the business (including some 19 acres of land using for growing) from the Petitioner and Catríona Byrne and the evidence suggests that this debt was paid off within 6/7 years.
Unfortunately, significant conflict appears to have arisen as between the Petitioner and the Appellants as to the management of affairs of the Company. In June 2019, the Petitioner issued proceedings pursuant to section 212 of the Companies Act 2014 ( “the 2014 Act”) asserting that the Company's affairs were being conducted and/or the powers of the directors were being exercised in a manner oppressive to him and in disregard of his interests as a member and seeking a declaration to that effect. Various other reliefs were sought in those proceedings, including “ if necessary” directions with regard to the presentation of a petition for the winding up of the Company under section 212 or section 569 of the 2014 Act, an order providing access to the books and records of the Company and orders directed to the possible mediation of the issues in dispute. I shall refer to these proceedings as “the section 212 proceedings”.
In the affidavit grounding those proceedings, the Petitioner alleged that corporate governance within the Company was “ virtually non-existent”, that there were no regular directors' meetings and that he had been excluded from management and from access to the Company's bank accounts. He also expressed concern about certain transactions involving the Company, including the approval by it of a share transfer from Catríona Byrne to her son (the effect of which was to increase his shareholding to 51%) and the withdrawal of €30,000 by Catríona Byrne from the Company, apparently for the purpose of discharging a tax liability arising on that transfer. While expressing a willingness and a desire to resolve the issues by mediation, Mr Byrne also expressed the view that, in the absence of any such resolution, it would be necessary to wind-up the Company so that an independent liquidator could investigate its affairs and realise its value by selling it as a going concern under the supervision of the High Court.
The Appellants both swore affidavits in the section 212 proceedings which took issue with the Petitioner's characterisation of their conduct within the Company and suggested that any difficulties were the responsibility of the Petitioner himself. In her affidavit, Catherine Byrne accused the Petitioner of being aggressive and abusive and said that it was virtually impossible to deal with him. In her view, the winding up of the Company was to be avoided at all costs but any resolution of the position would require the resignation of the Petitioner as director and the acquisition of his shares over a period of time. She also explained that the parties had had numerous mediation sessions with different mediators without reaching any resolution. In his affidavit, Sean Byrne also took issue with what his father had stated. He accused the Petitioner of being largely responsible for the breakdown in trust and confidence between him and his fellow directors. The Petitioner responded in kind repeating his assertions of being excluded from the Company's management and making it clear that he was not prepared to resign as a director or to allow his shares to be acquired in the manner suggested by his wife.
On 13 (or 14) October 2020, while the section 212 proceedings were pending in the High Court, the Petitioner issued a winding-up petition. It sought the winding up of the Company on the basis of its failure to pay a sum in excess of €300,000 which was the subject of a statutory demand issued on 7 October 2020. The sum demanded comprised some €275,000 said to be due to the Petitioner by way of loans advanced by him to the Company, as well as an amount of €11,000 in respect of outstanding salary and expenses and a sum of €30,000 in respect of monies said to have been taken from the Company by Mrs Byrne. However, the Petitioner also sought the winding-up of the Company on the grounds that it was just and equitable.
The Petition was grounded on a short confirmatory affidavit of the Petitioner and he also swore a more detailed affidavit on 17 November 2020 referring to what he characterised as the illegal delivery of a false return to the CRO on 4 November 2020 purporting to record his resignation as a director with effect from 14 October 2020. He suggested that this had been prompted by the presentation of the winding-up petition. He explained that in February 2020 he had tendered his resignation but that his solicitor had shortly afterwards communicated his withdrawal of that resignation. The Petitioner also referred to the incorporation of a new company, Baskets in Bloom Ltd by the Appellants which, he suggested, was waiting in the wings to carry on business in competition with the Company.
One final point to mention in this context is that a mediation between the parties took place on 1 March 2020, without success.
The Petition was returnable to 16 November 2020. On that date both it and the section 212 proceedings were transferred – apparently by consent – to the list to fix dates on 19 November 2020. On that date, a hearing date of 3 December 2020 was assigned. There appears to have been no objection to a hearing date being fixed.
On 2 December 2020 counsel for the Appellants sought leave from the Judge in charge of the Chancery list to deliver affidavits but the Judge declined to give such leave, indicating that the application should be made to the Judge...
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Leech Papers Ltd v Companies Act 2014
...a last resort and only where no other alternative remedy would be available. This was stated by the Court of Appeal in Re Lanskey Ltd. [2022] IECA 34, and by Charleton J. in Re. Fuerta Ltd [2014] IEHC 12, at para. 7 where he stated that winding up on just and equitable grounds was a last re......