The Court of Appeal (COA) has upheld a High Court ruling that a company which operated a Dublin-based English language school should not be dissolved.
The case was brought by Tiago Mascarenhas against Rezaul Karim and his wife Mahbuba Sultana against a company called SEDA (Skills & Enterprise Development Academy) Limited, which operated a college with 600 students located on Capel Street in Dublin city centre.
Mr. Mascarenhas is a shareholder and director of the company.
Ms Sultana was the majority shareholder in the business, which operated under the name “English Language College”.
The parties had argued over the management of the business, which resulted in cases in the High Court.
The case centered on allegations that the couple, based in the UK and Bangladesh, had acted oppressively towards Mr Mascarenhas, in running the business.
The appeal concerned the 2019 judgment of Judge John Jordan, who found that Mr Mascarenhas was entitled to relief under section 212 of the Companies Act 2014, that he was neither appropriate nor desirable that the company be liquidated.
The judge also gave Mr. Mascarenhas the freedom to acquire the respondents’ shares in the company.
Mr Karim and Ms Sultana lodged separate appeals against the judgment.
In its judgment, the COA, comprising Mrs Justice Caroline Costello, Mr Justice Robert Haughton and Mr Justice Maurice Collins, upheld the High Court’s decision.
However, the COA found that the High Court had wrongly concluded that Mr Karim was the beneficial owner of his wife’s shares in the company.
All other aspects of the appeals were dismissed.
Giving the COA’s unanimous decision, Madam Justice Costello said the couple conducted or claimed to conduct the affairs of the company in a manner oppressive to the plaintiff, notwithstanding that Mr. Karim was neither a director nor a shareholder.
Although Mr Mascarenhas was not without fault in severing relations between the parties, the High Court found that this was largely due to the behavior of the appellants, the judge said.
Madam Justice Costello said the High Court was correct in concluding that the claimant was entitled to relief under section 212 of the Act.
It was common between the parties that they could not work together in the future and that the company should not be dissolved, she said.
“To put an end to the case, it was either necessary for the applicant to acquire the shares of Ms Sultana in the company, or for Ms Sultana to acquire the shares of the applicant.
“As the applicant was successful in his case, he was the key man in the business of the company, had experience in running a language school unlike Ms Sultana, had the support and senior management loyalty and he lived and worked in Dublin,” the judge said.
Ms Sultana has lived and worked abroad, she added.
It was appropriate to order that the claimant could buy Ms Sultana’s shares, if he wished, rather than the other way around, the judge said.
The fact that she was the controlling shareholder did not prevent the court from ordering it, Judge Costello said.
The High Court had evidence to support its assessment of the company and Ms Sultana’s actions in the company, the judge added.
The High Court carefully assessed the evidence from experts on each side and explained its reasons for accepting or rejecting the relevant evidence and its findings, the judge said.
There was no reason for this court to interfere with the High Court’s assessment or findings.
The High Court also exercised its discretion as to the costs of the applications before it in accordance with established principles and its findings.
No reason has been advanced for this court to interfere with its exercise of its discretion in awarding costs, Judge Costello said.
The trial judge had no basis in concluding that Mr. Karim was the beneficial owner of the shares held by Ms. Sultana in the company, Ms. Costello added.
The COA allowed Ms. Sultana’s appeal on this point and ordered the claimant to pay Ms. Sultana for her purchase of her shares in the company.
The COA’s preliminary view was that Mr. Mascarenhas was entitled to his costs against both appellants, jointly and severally.
However, the judge said that Mr Mascarenhas was far from being candid with the High Court and the COA about the deterioration of his immigration status and therefore the crucial question of his right to reside and work in the country. State.
This is a matter which the court may take into account when determining costs.
The COA, the judge said, would therefore normally reduce the plaintiff’s costs by 10%, reflecting an appropriate sanction for that conduct.
However, the appellants have also conducted the litigation in a way that this court cannot tolerate, and they have twice refused the opportunity to resolve the dispute by mediation.
For this reason, the ACO made no deduction from the costs incurred by the plaintiff in conducting the two appeals.