O'Sullivan v Conry Gold and Resources Plc

• Jurisdiction: Ireland
• Judge: Mr Justice Max Barrett
• Judgment Date: 10 October 2017
• Neutral Citation: [2017] IEHC 571
• Docket Number: 2017 No. 281 COS
• Court: High Court
• Date: 10 October 2017

BETWEEN

PATRICK O'SULLIVAN

PLAINTIFF

– AND –

CONROY GOLD

AND

NATURAL RESOURCES PLC

DEFENDANT

[2017] IEHC 571

2017 No. 281 COS

THE HIGH COURT

Practice and Procedures – Award of costs – Costs follow the event – Departure from normal rule – Exceptional circumstances – Non-compliance with articles of association.

Facts: The plaintiff sought an order from the Court to allow the parties to bear their own costs and should not make any order as to costs. The plaintiff contended that the Court should depart from the normal rule of ‘costs should follow the events’ and award the costs of the unsuccessful application to the plaintiff. The plaintiff claimed thathe was not advised by the first defendant/company before making the said application that the plaintiff had not complied with one of the article of the articles of association of the first defendant/company.

Mr. Justice Max Barrett refused to grant the relief sought by the plaintiff. The Court held that there was no reason as to why it should depart from the usual rule that costs should follow the event. The Court observed that the plaintiff did not say in evidence that he would not have filed the application had he been advised by the company about his non-compliance with the relevant article of the articles of association.

JUDGMENT of Mr Justice Max Barrett delivered on 10th October, 2017.

1 The court gave its principal judgment in this matter on 26th September last. On 4th October, there was a hearing as to costs. Two reasons were offered by Mr O'Sullivan as to why, despite his having unequivocally lost the application which led to the judgment of 26th September, the court should make no order as to costs, so leaving each of the parties to bear his or its own costs. The usual rule as to costs is, of course, that costs follow the event. Two reasons were offered by Mr Sullivan as to why the court should depart from this usual rule. These are outlined and considered below.

1. The Subscription Announcement

2 Early on in the course of the within proceedings, Mr O'Sullivan expressed a concern that Conroy Gold might seek a subscription for shares, ostensibly to acquire an asset, but with the true intended objective being so to dilute Mr O'Sullivan's shareholding as to render futile his ongoing efforts to push through certain shareholder resolutions. n this regard, the solicitors for the company wrote to Mr O'Sullivan's solicitors on 9th August last, indicating (without giving an undertaking) that ‘[T] he company can confirm that no measure will be taken by it which the Board does not consider to be in the best interests of its shareholders taken as a whole.’ On 29th September, three days after this Court delivered its principal judgment in the within proceedings, Conroy Gold announced a subscription for 700,000 new ordinary shares at €0.30 (UK£0.26) per share, with a view to raising €210k for the company. It is not clear on the evidence before the court whether this subscription has anything to do with the acquisition of an asset or is simply the raising of funds for perceived cash-flow reasons. But either way it does not matter, because there is no authority, and no case put up for the proposition, that a completely...