Sale documents of can be inspected subject to conditions, High Court rules

Businessman Michael Feerick claims a shareholding in the website business
Sale documents of can be inspected subject to conditions, High Court rules

High Court reporters

Lawyers for a man who is claiming a shareholding in the website business can inspect confidential documents relating to the proposed sale of the business, subject to certain conditions, a High Court judge has ruled.

Mr Justice Denis McDonald made the ruling on Monday in an application by businessman Michael Feerick of Earlspark, Loughrea, Co Galway, for discovery of documents in preparation of his case against the founders of the business, Jay Coleman and his sister Dympna Coleman, and the firm which operates the website business Gradam Communications of Court Road, Newtownbalregan, Co Louth.

Mr Feerick, who is a director of online educational resources website, claims he is entitled to a 20 per cent shareholding in the business arising out of an agreement with the Colemans in 2007.

Among the reliefs Mr Feerick seeks are an order authorising the allotment of an additional 20 per cent of shares in Gradam to him and, in the alternative, that the Colemans be prevented from denying he is entitled to that 20 per cent.

The defendants deny his claims and say it is entirely speculative. They say he has brought the case at a remove of many years since his involvement in the business and his action has put at risk a planned sale of the business.

The defendants also say his claim relates to a December 2007 agreement which Mr Feerick had not performed and was terminated in November 2010. At all times, they have refuted his shareholding claim and Mr Feerick has been aware of that position for more than 10 years, it is also claimed.

Proposed sale

Mr Feerick claims he needs information in relation to the proposed sale to properly advance his case.  The defendants dispute this and argue the sale agreement is confidential and revealing it would be prejudicial to them.

Mr Justice McDonald said essentially the category of discovery sought by Mr Feerick relates to the sale price of the business which has yet to be transacted.

In ordering discovery of such documents, he had to bear in mind confidentiality as well as the balance of justice and had to take an "unusual approach" in this application for discovery.

It seemed the court should proceed cautiously in that respect. He therefore made an order that lawyers for Mr Feerick can inspect the sale documents subject to an undertaking from them they will not reveal the price to be paid, or any other aspect of the document, to any other party including their own client Mr Feerick. A supervising lawyer for the Colemans/Gradam should also be present.

He said he would place a stay on that inspection taking place until an express undertaking from the Feerick lawyers in relation to that confidentiality is given.

He also gave liberty to Mr Feerick's solicitor to apply to the court if the solicitor is of the view that the information will assist Mr Feerick in undermining the defence of prejudice which the defendants say they will suffer if the information is discovered.

It seemed to the judge this would ensure no injustice will be done and, if the sales figure is in line with or greater than the value disclosed in Gradam's annual accounts, the matter may not go any further.

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