A RETIRED livestock exporter who became involved in a property company with an auctioneer and accountant has claimed before the High Court they defrauded him of substantial sums invested by him in the business.
There were “all sorts of curiosities” in the accounts of Bonane Ltd when they were provided to Jim Horgan in 2008, it was claimed.
The action before Mr Justice Roderick Murphy was adjourned on consent yesterday to December following settlement talks between the sides.
Jim Horgan, formerly of Horgan Meats, brought proceedings against certified accountant Ian O’Leary and auctioneer Thomas J O’Driscoll over the manner in which his alleged €623,000 investment in Bonane Ltd, a property company set up in 1999, was handled over the years to 2008. He also claimed the affairs of the company were being carried on oppressively.
The defendants denied the claims and contend Mr Horgan misunderstood the basis upon which shareholders’ funds were contributed to the company. Mr Horgan had chosen to take no active involvement in the company, they also claimed.
All three are well-known Cork businessmen who knew each other prior to getting involved in Bonane, the court heard. Mr Horgan, after retiring from Horgan Meats, invested in Bonane with funds obtained from selling a property in Douglas, Cork.
Various inconsistent accounts of the agreement between the three men had been advanced by the defendants, Dermot Gleeson, SC for Mr Horgan, said.
These included claims it was agreed from the start Mr Horgan would pay more than the others – an “unspecified more” – and there was also an “invented share premium” of which Mr Horgan had never heard.
There was also reference to a “directors’ equalisation account”, a “device” which attempted some form of redistribution of contributions and seemed “exclusive to Mr O’Leary” but was “never heard of” by the technical committee of the Institute of Chartered Accountants in Ireland.
At the heart of the case was a disagreement about the terms in which the three came together in Bonane, counsel said. Mr Horgan contended they were effectively the “three musketeers”, all equal, while the defendants offered different versions of their arrangement. By the time the legal proceedings issued in 2009, Mr Horgan had put in €623,000, Mr O’Leary had put in €144,000 and Mr O’Driscoll had put in €284,000, counsel said. A sum of €250,000 had since been repaid to Mr Horgan.
Mr Horgan disputed the defendants’ claim that €114,000 of that was an “entry fee” to reflect their expertise and work on Bonane.
In opening the case, Mr Gleeson said the three came together in 1999 in an arrangement that started out as a “friendly quasi-partnership”. Bonane was set up, it was agreed they would make contributions via directors’ loans to it, put in the same amount of money, have equal shareholdings and participate equally in the fruit of their investments, he said. Bonane invested in a couple of properties a year for 10 years with the objective of capital appreciation, he said.
Between 2007 and 2008, James Horgan jnr, son of Mr Horgan, was getting a bit more interested in the Bonane business and would occasionally ask Mr O’Leary for accounts but met with a “reticence”, counsel said. His father had signed accounts often as a director but had “not attended to them” in the early years and there was “a great informality” about the way things were done.
When Mr Horgan jnr sought the accounts, the typical response was Mr O’Driscoll was a private man who didn’t want someone like Mr Horgan jnr looking into his affairs, Mr Gleeson said.
In summer 2008, “dramatic events” arose after Mr O’Driscoll suggested Jim Horgan might consider buying out Mr O’Driscoll’s interest in Bonane, he said. Mr Horgan was not interested but his son was and sought accounts.
