[2018] IELCA 4 THE HIGH COURT COMMERCIAL 2015 NO. 114 SP (2015 NO. 54 COM) IN THE MATTER OF THE BLARNEY WOOLLEN MILLS GROUP BETWEEN FREDA HAYES PLAINTIFF AND PATRICK KELLEHER, ROBERT REARDON AND FRANK KELLEHER DEFENDANTS RULING ON PLAINTIFF’S COSTS TAXED PURSUANT TO ORDER OF THE COMMERCIAL COURT DATED 8 OCTOBER 2015 This action was pursued by Special Summons in the Commercial Court, by the Plaintiff Ms Freda Hayes, the CEO and largest shareholder in the Blarney Woollen Mills Group (“the Company”), against the Defendants, all being shareholders in the company. The Action was concerned with the construction of certain provisions of a Shareholders’ Agreement dated 3 March 2000 in conjunction with the Company’s Articles of Association. In essence, the Plaintiff’s claim was for a determination by the Court regarding the correct construction of the contractual provisions governing the extent of her voting rights as a shareholder of the company. By order dated 18 May 2015 the proceedings were admitted to the Commercial list of the High Court. The background underlying the Action is comprehensively set forth in the Plaintiff’s Affidavit which both grounded the Special Summons and an application for admission of the Action into the Commercial Court list. The Judgment delivered by Barrett J on 31 July 2015 also provides detailed historical information. In her grounding Affidavit sworn on 11 May 2015, the Plaintiff set out that she had left the company in 1992 and had set up and run the very successful “Meadows and Byrne” company. The Plaintiff rejoined the Blarney Woollen Mills company in the year 2000, and which arrangement involved a merger of the two entities. The rationale behind this arrangement is set out at paragraph 6 of the Plaintiff’s grounding Affidavit as follows-: “6. In 2000 my brother Patrick Kelleher asked for my help in reorganising the “Blarney Woollen Mills” business which was continuing to suffer as a result of ongoing discord between family members. In essence the plan which was ultimately agreed upon involved merging the “Blarney Woollen Mills” and “ Meadows and Byrne” businesses. While I readily accepted that dividends
The Court found in favour of the Plaintiff in all issues, holding that: the Plaintiff’s ordinary shares and special share carry not less than 51% of the votes cast on any resolution put before a general meeting of the company; the limit of nine directors on the company’s Board may be increased by ordinary resolution of the company; the shareholders have an inherent power to appoint directors which had not been displaced by either the articles of association or shareholder agreement; the Plaintiff was entitled to exercise the minimum 51% voting rights at a general meeting of the company for the purpose of increasing the number of directors on the Board and to appoint directors to it. Each of the issues was not only thoroughly analysed by the solicitors, as evidenced by the solicitors’ attendance notes and correspondence with Client and Counsel, but regard must also be had to the Plaintiff’s view that it was of great importance from the perspective of the prosperity of the company that issues concerning its future governance be resolved as a matter of some urgency. This was considered to be particularly so given the company’s very large annual turnover and large number of employees. It is quite clear that the matter was properly pursued at all times with a degree of urgency. While, at an early stage, prior to the initiation of the proceedings, Counsel had expressed the view that the procedure to be adopted was straightforward, this cannot reasonably be conflated with the Defendants’ inferred proposition that the work undertaken was straightforward. Indeed, I note that, on behalf of the Defendants it has been acknowledged that issues of some complexity did arise for determination in this case. While the Plaintiff’s solicitors properly relied on both Senior and Junior Counsel in terms of advocacy and, in particular in the drafting of two sets of legal submissions, this cannot be reasonably considered to have been in any way unusual. It is the norm. What is clear from my consideration of the papers is that the two solicitors concerned carefully took the fullest instructions possible from the Client, considered all relevant documentation and in the course of instructing Counsel and at all times thereafter researched and outlined their own views in relation to the issues. There was no overreliance on Counsel as is implied, rather there was a mutually beneficial exchange of thoughts between solicitors and barristers. The solicitors bore the responsibility of briefing Counsel to the fullest possible extent and to engage with them in that regard. The work required painstaking attention to detail and again this is evident in the correspondence and attendance notes on file.