Rory Mason v ILTB Ltd T/A Gillen Markets and Dermot Browne

• Jurisdiction: Ireland
• Judge: Ms. Justice Butler
• Judgment Date: 08 July 2021
• Neutral Citation: [2021] IEHC 477
• Court: High Court
• Docket Number: [2021 No. 3515 P.]

Between

Rory Mason

Plaintiff

and

ILTB Limited T/A Gillen Markets and Dermot Browne

Defendants

[2021] IEHC 477

[2021 No. 3515 P.]

THE HIGH COURT

Interlocutory injunctions – Termination of employment – Balance of justice – Plaintiff seeking interlocutory injunctions restraining the first defendant from taking steps directed towards the termination of the plaintiff’s employment – Whether the least injustice would be caused by restraining the defendants from continuing with the disciplinary process

Facts: The plaintiff, Mr Mason, applied to the High Court for interlocutory injunctions to restrain his employer, the first defendant, ILTB Ltd, from taking steps directed towards the termination of the plaintiff’s employment. The second defendant, Mr Browne, was a director of the first defendant, chairman of its board and the person who had been most closely connected with the events giving rise to the proceedings. There was considerable dispute between the parties as regards what had occurred to date both as a matter of fact and as to its legal significance. A range of reliefs were sought by the plaintiff, much of it referable to particular steps already taken by the defendants which the plaintiff alleged to have been unlawful and which it was alleged tainted the process which the defendants wished to pursue. The defendants opposed the application, arguing that an employer must be entitled to conduct an investigation to examine serious concerns which it may have regarding the conduct of an employee and that the plaintiff could not realistically object to what was proposed, namely an independent investigation by an experienced barrister specialising in employment law/industrial relations.

Held by Butler J that central elements of the plaintiff’s case met the Maha Lingham test: Maha Lingham v HSE [2006] 17 ELR 13. Butler J held that the reputational damage to the plaintiff arising from the proposed investigation was both significant and, in the small and specialised sector in which he was employed, quite possibly irreparable. It seemed to Butler J that the least injustice would be caused by restraining the defendants from continuing with the disciplinary process pending the determination of the substantive proceedings.

Butler J held that, as an unsuspended employee the plaintiff was entitled to attend at his workplace and to carry out his duties. Butler J held that she would make an order requiring the first defendant to facilitate the plaintiff’s return to work.

Judgment approved.

JUDGMENT of Ms. Justice Butler delivered on the 8th day of July, 2021

Introduction

1 This is the plaintiff's application for interlocutory injunctions to restrain his employer, the first defendant (also “the employer” or “the company”), from taking steps directed towards the termination of the plaintiff's employment. The second defendant is a director of the first defendant, chairman of its board and the person who has been most closely connected with the events giving rise to these proceedings. There is considerable dispute between the parties as regards what has occurred to date both as a matter of fact and as to its legal significance. A range of reliefs are sought by the plaintiff, much of it referable to particular steps already taken by the defendants which the plaintiff alleges to have been unlawful and which it is alleged taint the process which the defendants now wish to pursue.

2 The defendants oppose the application, arguing that an employer must be entitled to conduct an investigation to examine serious concerns which it may have regarding the conduct of an employee and that the plaintiff cannot realistically object to what is currently proposed, namely an independent investigation by an experienced barrister specialising in employment law/industrial relations.

3 Thus, the court is caught Janus-like between two parties, one of whom contends the court should look only at the legality of what has already occurred and should disregard proposals by the other side which might be construed as an attempt to cure defects in the process to date and the other of whom contends that what has occurred to date is largely irrelevant and the court should make its decision whether the justice of the situation requires interlocutory relief to be granted solely by reference to what is now proposed by it. In order to identify the legal issues arising and the legal standards by reference to which they should be determined, it is necessary to look in more detail at the factual background to the dispute and the relationship between the parties.

Factual Background

4 The plaintiff has been employed as the managing director and company secretary of the first defendant since January, 2016, having previously worked in a range of roles in the financial services sector principally in wealth management. The plaintiff's academic background and his experience are entirely focused on this area of the financial services sector. The plaintiff's contract of employment, dated December, 2015, contains a grievance and disciplinary procedure at clause 12. In particular, 12.3 provides:-

“Where there is an allegation of misconduct, or the Company perceives that there has been misconduct on your part, the company will investigate the matter with a view to determining whether the disciplinary policy will be invoked. The Company may suspend you, on full pay, for the purposes of conducting a proper investigation. Suspension is not a sanction and should not be perceived as such. It is, rather, a holding measure to protect the integrity of the investigation process.”

5 In addition to being employed as managing director, the plaintiff is also a director of the defendant company. This arises because on entering into his new employment, the plaintiff purchased a 15% shareholding in the first defendant and all shareholders with a shareholding of greater than 10% are entitled to nominate a director. This shareholding was not simply an indent of the plaintiff's employment. He paid some €235,000 to purchase it in the name of a nominee company, Rorel Ltd, and, consequently, it represents a significant investment by him in the first defendant. The plaintiff states that he accepted the position of managing director at a salary less than that which he would normally have expected because it was envisaged that his principal reward would lie in the value of his shareholding which would deliver substantial value to him if he were successful as managing director.

6 A shareholders' agreement was entered into between the parties on 19th December, 2017. That agreement made provision for circumstances in which the plaintiff might cease to be employed by the first defendant. The agreement defines a “ bad leaver” as an employee who ceases to be employed by the company “ for any other reason than as a good leaver”. “Good leaver” is defined as someone who leaves with the consent of the company or due to death, disability/ill health or redundancy or in cases of dismissal other than dismissal for reasons relating to fraud or gross misconduct, where the dismissal is subsequently held by a court or tribunal to be unfair within the meaning of the Unfair Dismissals Acts. The significance of these definitions is to be found in clause 9.4 dealing with the transfer of shares by key employees. Effectively, if the plaintiff ceases to be an employee of the first defendant, then Rorel Ltd must offer its shares for sale to such persons as directed by the board. However, under clause 10 the sale price for the shares will vary depending on whether the plaintiff is classified as a good leaver or as a bad leaver. Needless to say, the basis for the valuation of shares if the plaintiff is classified as a bad leaver is significantly less advantageous to him than if he is a good leaver. Thus, if dismissed by the company, the plaintiff loses not only his employment, but also a significant proportion of the investment he has made in the first defendant or in the anticipated increase in the value of that investment.

7 The first defendant is a private company and a regulated entity under the Central Bank Act, 2010. It is involved in the provision of wealth management and investment advisory services to its clients as well as operating a subscription-based investment newsletter service. It was founded in 2005 by Mr. Rory Gillen, the majority shareholder, who was joined by Mr. Brian Delaney, also a shareholder. Both Mr. Gillen and Mr. Delaney are directors. The second defendant, Mr. Dermot Browne, who the plaintiff describes as a close friend of Mr. Gillen, joined the company as a director and chairman of the board in the Summer of 2020. He is not a shareholder. The plaintiff makes certain allegations about the interpersonal relations between members of the board describing those relations as “ dysfunctional”. Mr. Browne, who has sworn the replying affidavits on behalf of the defendants, disputes this. Whilst accepting that there were disagreements between board members from time to time, he characterises the relationships, and particularly that between the plaintiff and Mr. Gillen, as being professional.

8 The plaintiff's perception that relations between members of the board were not good is relevant to the circumstances of his employment immediately before the events which give rise to these proceedings. The plaintiff perceives there to have been a difference in focus between Mr. Gillen and Mr. Delaney on the one hand, both of whose experience and skillset lies in stockbroking and himself on the other with a background in wealth management and investment advice. He feels that as stockbroking is more focused on individual performance, he has not been given sufficient credit for the performance of the team which he has built for the purposes of providing wealth management services. The plaintiff is of the view that his management of the first...