Legal row over shares at Munster Joinery
LEGAL ROW OVER SHARES AT ONE OF EUROPE’S LARGEST MANUFACTURERS OF WINDOWS AND DOORS
A DUHALLOW man has won his High Court bid to take a case against one of the country’s most private companies, Munster Joinery in Ballydesmond.
A legal row erupted beween Millstreet native and former sales executive Dermot Corkery and his previous employers Munster Joinery who are one of Europe’s largest window and door manufacturers.
Mr Corkery stated in oral and written submission that the main dispute is the payment of money he is ‘rightfully due as a shareholder’. Mr Corkery had taken his case against Jurras Ltd, a Munster Joinery subsidiary and its directors, Donal and Noreen Ring, alleging oppression of his interests as a shareholder. They rejected his claims.
However, in an eight page judgement, Judge Carmel Stewart said the question of whether Mr Corkery was a shareholder was ‘a live issue’ in the case. She also stated that there wasn’t any evidence of the company redeeming him his shares or calling on him to convert or transfer them. She said Mr Corkery had raised ‘serious issues’ in his points of claim and his solicitors sent two letters to the company before starting litigation but had not received a reply.
The judge also stated that Mr Corkery had raised ‘a host of issues’ in relation to the factual background to the case, which included the manner in which he was paid by Munster Joinery and in the way in which dividends were paid, and whether they amounted to commissions and potential ‘future tax implications’ for both Mr Corkery and the company.
While Mr Corkery has so far succeeded in taking his case against Munster Joinery at the High Court, there is, however, the option for Munster Joinery to lodge an appeal to the Court of Appeal.
THE doors may be blown wide open on one of the country’s most private companies, Munster Joinery in Ballydesmond, as a former sales executive has succeeded in his bid to take a case against one of Europe’s largest window and door manufacturers.
A legal row erupted between Millstreet native Dermot Corkery, a former sales executive who has a degree in accountancy and finance, and his former employers, Munster Joinery.
Mr Corkery, who is now living in Wexford, stated in oral and written submissions that the main dispute is the payment of money that he is “rightfully due as a shareholder.”
However, the company is claiming that Mr Corkery, who left in 2014, ceased to be a shareholder once he was no longer employed by them. Munster Joinery challenged Mr Corkery’s right to take a case but, at the High Court, Judge Carmel Stewart, in her eight page published judgment, said the question of whether Mr Corkery was a shareholder was “a live issue” in the case.
She also stated that there wasn’t any evidence of the company redeeming his shares or calling on him to convert or transfer them. The judge said Mr Corkery had raised “serious issues” in his points of claim and his solicitors sent two letters to the company before starting the litigation but had not received any reply.
She wrote: ‘ The explanation given for this failure to respond to the pre-litigation correspondence was that the petitioner (Dermot Corkery) was not a member of the company and therefore not entitled to such information. That being the case, they would have been immediately aware that there was a locus standi point to be made. I do not accept that it was more appropriate to await the closure of pleadings, given that there was a costly and extensive discovery process undertaken in the interim.’
The judge also stated that Mr Corkery had raised a “host of issues” in relation to the factual background to the case, which included the manner in which he was paid by Munster Joinery and the way in which dividends were paid, and whether the dividends actually amounted to commissions and potential “future tax implications” for both Mr Corkery and the company.
She also stated with regard to the question of the saving of time and cost, that it seemed to her that “a large amount of time and costs had already been expended since the petition first commenced. An extensive discovery process has taken place and all that remains is for the matter to proceed to a hearing” at what she said should be “the earliest opportunity.”
Mr Corkery has taken his case against Jurras Ltd, a Munster Joinery subsidiary, and its directors, Donal and Noreen Ring, alleging oppression of his interests as a shareholder. The company denies his claims.
In the judgment, it was stated that in 2004, Mr Corkery was allocated shares in Jurras Ltd – a subsidiary of Gairdini, the Munster Joinery parent.
Regarding the proceedings over Mr Corkery’s locus standi to take the shareholder oppression case, Judge Stewart stated that there ‘seems to be a dispute as to whether the initial holding comprised of 80 ordinary shares or 53 E- Ordinary shares.’
Munster Joinery maintained that, at the time of Mr Corkery’s employment, he held 35 E- Ordinary shares in the company. Munster Joinery relied on Clause 2A of the company’s amended Articles of Association, which provide that an E- Ordinary shareholder does not have the right to receive notice, attend, speak, or vote at any general meetings of the company. Munster Joinery also maintained that a person who is not a member of a company or who is not currently a member of a company cannot petition for relief pursuant to section 212 of the Companies Act, 2014.
Mr Corkery’s employment with the company “terminated on September 25, 2014.” It was outlined by Judge Stewart that there was a mutual agreement between Mr Corkery and his employers which is “confidential and which has not been disclosed to the court.”
The judge stated that ‘ the parties appear to agree that the confidential agreement was silent as to the question of the petitioner’s extant shareholding in the company at the time his employment was terminated.’
The respondents relied on the case Re Via Net Works (Ireland) Limited, in which the Supreme Court held that persons who had agreed to transfer their shareholding pursuant to a shareholder’s agreement did not have locus standi in their action against the company, notwithstanding that their names were still present on the Register as shareholders.
Furthermore, Mr Corkery argued that the “triggering event” envisaged by the Articles of Association never occurred, while Munster Joinery argued that a triggering event did occur.
Judge Stewart wrote that there is “no evidence before the Court of a resolution of the company referring to the transfer/conversion of the shares, nor is there any document calling upon the petitioner to transfer or convert the shares. The petitioner is entitled to put the respondent on full proof of matters which are at issue in the proceedings.”
Companies Office filings also show that more than 40 individuals hold E shares in Jurras Ltd. According to the latest company accounts, the company had accumulated profits of €12.8 million at the end of 2014. Munster Joinery (UK) had a turnover of £73.6 million and made £3 million pre-tax profit that year.
Munster Joinery, based at Lacka Cross in Ballydesmond, is regarded as one of the largest manufacturers of window and doors not only in Ireland but in Europe. It is understood that up to 1,400 staff are employed at their large manufacturing plants in Ireland and in the UK. Mr Ring is also the owner of luxurious hotels in the tourist hotspot of Killarney.
While Mr Corkery has so far succeeded in taking his case against Munster Joinery at the High Court, there is, however, the option for Munster Joinery to file an appeal to the Court of Appeal.