The Court of Appeal has upheld a High Court refusal to remove a liquidator to an Irish company whose main asset was a valuable development property in Warsaw, Poland.
The Dominar Group was voluntarily wound up in 2008, and liquidator Liam Dowdall was appointed following what the court heard was a "catastrophic deterioration in the relationship" between shareholders.
In May last year, the High Court refused an application to remove Mr Dowdall as liquidator and replace him. On Wednesday, Mr Justice Robert Haughton, on behalf of the three-judge court of appeal, upheld that decision
The shareholders in Dominar, each holding 50 per cent, were businessman Michael Curneen and Irish firm, Print & Display Ltd (P&D), a company of businessman Jim Conway.
Dominar was a holding company for a Polish subsidiary, P&D Polska, which is involved in printing in Polish and European markets and was managed by Mr Curneen.
Valuable site
In 2007, Mr Conway's P&D firm brought High Court shareholder oppression proceedings alleging the valuable development site in Warsaw, owned by P&D Polska, had been transferred without the Irish P&D's knowledge to another Polish firm, Grosbeak, controlled by Mr Curneen.
Those proceedings were settled in 2008 with an agreement that a liquidator would be appointed to Dominar to realise its assets including the sale of P&D Polska and the Warsaw property.
P&D Polska was eventually sold to Mr Curneen at what Mr Conway claimed was an undervalue, which was denied by the liquidator.
Efforts to sell the Warsaw site were dogged by difficulties in subsequent years, the court heard. These included “restitution claims” by people who owned, or whose families owned, private property nationalised by Communist governments following the Soviet takeover of Eastern Europe in 1945 at the end of the second World War.
A further problem was that a Polish firm which leased the site allegedly left “a mountain” of rubble and soil on it which was costly to clear.
On the appointment of Mr Dowdall as liquidator, a declaration of solvency showed the company had investments of €3,820,988, including the Warsaw site. After deduction of liabilities and other matters, the estimated surplus was €631,316, making it solvent.
Mr Conway’s P&D was not happy with the way the liquidator was realising the assets and, from 2013, there followed a number of exchanges of correspondence and angry company annual meetings.
P&D brought proceedings in 2018 seeking Mr Dowdall’s removal.
Asset sales
It centred on his conduct of the liquidation in relation to the preservation and sale of the assets. The complaint also centred on attempts to resolve a compensation claim brought in Poland against the Warsaw public authority in relation to the existence of the restitution claims before the Warsaw development property was purchased.
Mr Dowdall, supported by Mr Curneen, a notice party, denied the claims and argued, among other things, his removal and replacement would lead to a further prolonging of the liquidation.
The High Court held that “good cause” had not been shown for his removal.
In its 23 grounds of appeal, P&D argued, among other things, the High Court judge misdirected himself as to the correct test of law and of failing to take into account a number of issues in the case.
Mr Dowdall’s lawyers argued the trial judge correctly found no cause was shown to remove him and had correctly exercised the discretion vested in him under company law to decline to remove him.
Mr Justice Haughton, in the court’s decision, said the trial judge was correct in finding, among other things, that the interests of Dominar and the Grosbeak company in procuring the efficient administration of the Warsaw site, and the most advantageous sale possible, did not diverge.
The trial judge was entitled to conclude the costs incurred in clearing the site did not arise from any neglect or oversight on the part of the liquidator, he said.
Mr Justice Haughton was satisfied the trial judge was entitled to come to the conclusions he did.
He was also satisfied fresh evidence introduced on behalf of P&D for the appeal did not warrant removing the liquidator.
