Saggart Motors Ltd v NG Motors Ltd
| Jurisdiction | Ireland |
| Judge | Ms. Justice Pilkington |
| Judgment Date | 29 May 2019 |
| Neutral Citation | [2019] IEHC 390 |
| Court | High Court |
| Docket Number | [2018 No. 9980 P] |
| Date | 29 May 2019 |
[2019] IEHC 390
THE HIGH COURT
Pilkington J.
[2018 No. 9980 P]
AND
Disclosure – Locus standi – Interlocutory relief – Plaintiff seeking that the defendants deliver up certain motor vehicles – Whether disclosure was doubtful
Facts: Before the High Court, there were two notices of motion. The first in time was a notice of motion dated 16 November 2018 (the same date as the issue of the plenary summons) on behalf of the plaintiff, Saggart Motors Ltd, seeking that the defendants, NG Motors Ltd and Mr Fritsch, deliver up certain motor vehicles and in the alternative, prohibiting the defendants from taking any steps to sell or dissipate any of the vehicles. Thereafter, on 15 February 2019, the plaintiff’s second motion sought orders pursuant to RSC O. 15, r. 39 (14) and (15) seeking that Mr Gasperavicius be given conduct of the proceedings and essentially that the proceedings continue as a derivative action.
Held by Pilkington J that there was no evidence before the court in the application seeking ex parte interlocutory relief before MacGrath J of the status of Mr Gasperavicius, the status of the second defendant as a 51% shareholder in the company, that the plaintiff to the proceedings had not sanctioned this litigation and the possibility of an application for a derivative action was not opened comprehensively (or at all) before him. Pilkington J held that, in any ex parte application, the duty of full disclosure to the court is paramount. Pilkington J noted that the plaintiff company had obtained reliefs in a cause of action it did not sanction and was opposed by the majority shareholder. In circumstances where the disclosure of those matters to MacGrath J was doubtful, and was not clarified before the court, and because she could see no basis for Mr Gasperavicius to have locus standi in the proceedings brought for interim interlocutory relief with regard to the motion issued on 16 November 2018, returnable on 19 November 2018, the motion should stand struck out.
Pilkington J held that, with respect to the notice of motion issued on 11 February 2019, returnable on 15 February 2019, she would strike out that motion on the basis that it was improperly brought (there being no valid or other reason why it was not brought prior to the initiation or at the initiation of proceedings), and also, considering the motion simpliciter, in her view none of the exceptions to the rule in Foss v Harbottle [1843] 2 Hare 461 had been made out by Mr Gasperavicius and accordingly both reliefs sought within this motion should stand struck out.
Motions struck out.
There are two notices of motion before the court. The first in time is a notice of motion dated 16 November 2018 (the same date as the issue of the plenary summons) on behalf of the plaintiff seeking that the defendants deliver up certain motor vehicles and in the alternative, prohibiting the defendants from taking any steps to sell or dissipate any of the vehicles.
Thereafter, on 15 February 2019, the plaintiff's second motion seeks orders pursuant to RSC O. 15, r. 39 (14) and (15) seeking that Mr. Darius Gasperavicius be given conduct of the proceedings and essentially that the proceedings continue as a derivative action.
By order of MacGrath J. on 16 November 2018, in granting ex parte relief, the court made orders directing the defendant to deliver up certain vehicles being held by them and an order prohibiting sale or dissipation in terms sought within their notice of motion.
It is noteworthy that counsel on behalf of the plaintiff gave an undertaking as to damages on behalf of that entity (as opposed to Mr. Gasperavicius) before MacGrath J.
Within these proceedings, there is a grounding affidavit of Mr. Gasperavicius dated 15 November 2018, a reply of the second named defendant on 23 November 2018, an affidavit grounding the second motion on 11 February 2019, of Mr. Gasperavicius, sworn on 11 February 2018, which also appears to deal with the first notice of motion and a further replying affidavit of Mr. Gasperavicius filed on 14 March 2019.
There are a number of unusual features in respect of this application. I propose initially to deal with the notice of motion being first in time and the two affidavits of Mr. Gasperavicius that essentially deal with the salient points in these proceedings. Much of the material contained within his affidavits to the first motion would appear to me superfluous to the issues upon which I am required to decide.
In any event, the plaintiff was established in May of 2015 and is in the business of selling motor vehicles. It has two directors, Mr. Gasperavicius, who holds a 49% shareholding in the company, and the second named defendant who has a shareholding of 51% in the company.
It is noteworthy that within the affidavit of Mr. Gasperavicius grounding the application for ex parte relief, he does not make the usual averments within his means of knowledge clause as one would do when swearing an affidavit on behalf of a company, to the effect that he swears it with the consent and authority of that company and from an examination of the books and records of that company. He does not do so and I regard this as significant. He does aver that he is a director of the plaintiff and he makes the affidavit on behalf of that company. He is a 49% shareholder of that company – the remaining 51% shareholder of the company being the second named defendant who (as his affidavit will disclose) objects in the strongest terms to these proceedings being maintained.
Counsel for the plaintiff has asserted that this is in essence an inter-partnership dispute and should be considered in those terms. That is not what is sought on the face of any application before me. It may inform the background of this dispute but it is not amongst the reliefs sought. In any event how those acting for the plaintiff can appear on its behalf when they do not have the authorisation of that company (quite the reverse), whilst in reality acting for Mr Gasperavicius who holds a 49% shareholding, was in my view never satisfactorily explained.
In essence, the initial complaint is that certain cars acquired by the plaintiff were moved; essentially the first named defendant sold cars on behalf of the plaintiff for commission. The cars appear to have been moved, even on the affidavit of Mr. Gasperavicius, on the basis that the plaintiff's business lease was up and they were moving to alternative premises. Photographs were taken and the return of the vehicles is now sought.
Furthermore, on 29 October 2018, apparently it is alleged that the first named defendant was taking steps to sell some of the plaintiff's vehicles and solicitors letters were written to that effect. No undertaking being forthcoming, the interlocutory relief was obtained before MacGrath J. as set out above.
The replying affidavit is sworn by the second named defendant. He confirms he is a holder of a 51% shareholding in the plaintiff company with Mr. Gasperavicius the holder of a minority shareholding at 49%, there are only two directors of the company. The second named defendant immediately takes issue how, as a majority shareholder, a minority shareholder (Mr. Gasperavicius) is entitled to bring the proceedings in the name of the plaintiff company. He notes that interlocutory relief before MacGrath J. was sought. He avers that the proceedings had not been authorised by the board of directors of the plaintiff company, and are barred in law.
More pertinently, he asserts (and this is elaborated upon in correspondence) that Mr. Gasperavicius had, when proceedings issued and ex parte interlocutory relief obtained, not sought leave of the court to commence proceedings by way of a derivative action in accordance with RSC O. 15, r. 39 and accordingly that the proceedings are not maintainable in those circumstances.
He also details other complaints including the withdrawal of certain monies totalling some €14,762.40 which it was confirmed within an exchange of correspondence between the parties has been utilised for the discharge of legal fees owed to the solicitors whom Mr. Gasperavicius now instructs. That payment was not sanctioned by the plaintiff company.
I propose to now deal with the issues concerning the...
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