Source: https://ie.vlex.com/vid/sullivan-v-conroy-gold-693789173
Timestamp: 2019-04-24 07:57:46
Document Index: 436934394

Matched Legal Cases: ['Art.85', 'Art.85', 'Art.85', 'Art.85', 'Art.85', 'Art. 85', 'Art.85']

O'Sullivan v Conroy Gold and Natural Resources Plc, [2017] IEHC 543 (2017) - Case Law - VLEX 693789173
O'Sullivan v Conroy Gold and Natural Resources Plc, [2017] IEHC 543 (2017)
Docket Number: 2017 281 COS
THE HIGH COURT2017 No. 281 COS
PATRICK O’SULLIVANPLAINTIFF– AND –
CONROY GOLD AND NATURAL RESOURCES PLCDEFENDANT
TABLE OF CONTENTS(Numbers in square brackets are paragraph numbers)
Summary Chronology of Events [20]
The Days Previous to the EGM [61]
The Day of the EGM [63]
The ‘Newstalk’ Interview [65]
Reliefs Now Sought [67]
Some Conclusions [68]
Failure to Comply with Article 85/Section 144 [82]
Waiver and Estoppel [87]
Application of Doran. [90]
Changing One’s Position to One’s Detriment. [94]
Director Duties [95]
The Evidence. [102]
Gwyer and Eclairs. [104]
Operation of Conroy Gold [110]
Conclusion [111]
(i) The Dispute Arising.1. Mr O’Sullivan is a circa. 28 per cent shareholder in Conroy Gold, a public limited company incorporated in Ireland, chaired by Prof. Richard Conroy and quoted on the London Stock Exchange’s AIM market (formerly the Alternative Investment Market) and the Irish Stock Exchange’s Enterprise Securities Market (‘ESM’). On 30th May, 2017, Mr O’Sullivan served notice, pursuant to s.146 of the Companies Act 2014, of his intention to propose nine ordinary resolutions at a general meeting of the company. Those resolutions related to the removal of six serving company directors and the appointment of three company directors, Messrs O’Sullivan, Heddle and Johnson. On 8th June, 2017, Mr O’Sullivan requisitioned the directors, pursuant to s.178 of the Companies Act 2014, to convene an extraordinary general meeting (‘EGM’) of Conroy Gold. That EGM convened at the Davenport Hotel in Dublin on 4th August, 2017. At the EGM, the chairman submitted the resolutions in their entirety to a vote of the assembled company members. The unanimous recommendation of the board of directors of the company was that each of the resolutions should be rejected by the members. After a show of hands, a formal poll was requested. It is now known that all of the resolutions were approved by a majority vote. There is no dispute arising concerning the validity of the six resolutions which effected the despatch of six of the then sitting directors. There is a dispute concerning the validity of the three resolutions whereby Mr O’Sullivan sought to have himself and Messrs Heddle and Johnson appointed to the Board. That dispute centres on Art.85 of the articles of association of Conroy Gold and certain related provision in s.144 of the Act of 2014.
(ii) Article 85.2. Article 85 sits within a part of the articles of association of Conroy Gold that is entitled “PART XIII – APPOINTMENT, RETIREMENT AND DISQUALIFICATION OF DIRECTORS” and which provides as follows:
Provisions akin to Art.85 are not uncommon in the articles of association of a public company in Ireland. Nowadays, the primary purpose of such an article is to enable a company to comply with the requirements of the Act of 2014 relevant to the appointment of directors, including ss. 144, 149, 151 and 223, and to ensure, for example, that none of the restrictions on who may be appointed a director are breached by would-be directors, e.g., the limitation on the number of directorships permissible under s.142 of the Act of 2014. Notable provisions in this context include:
Returning to the text of Art.85, as quoted above, item [A] is not relevant to the within application. Turning to item [B], its requirements are simply stated and clear: if it is proposed to appoint a director who is not recommended by the Board (a ‘Non-Recommended Person’; and each of Messrs O’Sullivan, Heddle and Johnson was a Non-Recommended Person), the following applies:
Although Art.85 can be read as contemplating that a single formal notice would be served, the court is satisfied that more than one formal notice could be served, including a complete and curative notice in the event of a previous notice being realised to have been somehow deficient, provided all is done within the requisite timeframe and with some degree of formality. This assumes some significance in the within case because Mr O’Sullivan points to (1) his s.146 notice to propose resolutions, and (2) his s.178 notice requisitioning an EGM, as serving also the purpose of being a notice to the company of a willingness on his part to serve as a director if appointed. That is not the express purpose of s.146 or s.178 notices which, in any event, were served outside the 42-day timeframe prescribed by Art.85. Moreover, the court does not accept that it would in any event be appropriate retrospectively to endow on those notices a purpose that they were not intended to serve when served. For the court to conclude otherwise would require Conroy Gold, and any company similarly placed, to consider every document it received before an EGM and ask itself would some future court in a fit of indulgence be prepared to view that particular document in such a way that it might retrospectively be deemed to satisfy the requirements of Art. 85/s.144, even though it had not been served with the intention of satisfying such requirements. That would place companies in a notably invidious position, defeating the very certainty that, e.g., Art.85 seeks to achieve.
The service of any of the above notices requires to be done with a degree of formality. Why so? It is easiest to explain by way of example. Thus if one looks to the notice referred to at point (4) above, s.144(1) of the Act of 2014 provides that “Any purported appointment of a director without that director’s consent shall be void.” Absent a degree of formality in the process, there is an increased risk that a director may later seek to avoid her or his obligations as director on the basis that no informed consent to act was ever given. So, for example, in the, admittedly somewhat extreme, circumstances of Re Cem Connections Ltd [2000] BCC 917 (see also Kavanagh v. Kelly [2005] IEHC 421), Mr Registrar Rawson, sitting in the Companies Court, declined to disqualify...