Conroy Gold has been awarded all costs after winning its court battle against a dissident shareholder last month.
Patrick O'Sullivan, a minority shareholder in Conroy Gold and Natural Resources, failed in his bid for a High Court declaration that he and two of his nominees had wrongly been blocked by the company's chairman, Prof Richard Conroy, from being elected directors of the gold mining company's board.
Tuesday’s cost award comes with a stay on the order pending any appeal by Mr O’Sullivan. Reacting to the judgment, Prof Conroy said: “Having won the High Court Case which Mr Patrick O’Sullivan brought against it, and won the EGM last week by a margin of nearly a million votes, I am very pleased that today the High Court has awarded costs to the company.”
Speaking to The Irish Times, Mr O'Sullivan indicated that he has informed Conroy Gold that he intends to appeal the decision of Mr Justice Max Barrett in the High Court.
Outlining his reasoning for not awarding costs, Mr Justice Barrett said: “Mr O’Sullivan has, unfortunately for him, been entirely unsuccessful in the within proceedings...the court sees no reason why it ought now to depart from the usual rule that ‘costs follow the event’. The court will therefore make an order for costs against Mr O’Sullivan”.
Mr O’Sullivan’s court action followed from an extraordinary general meeting (egm) held in August called at the behest of the minority shareholder who, at that time, held 28 per cent of the company. On that occasion Mr O’Sullivan was successful in removing six people from the company’s board of nine but another resolution seeking to install three new directors was blocked.
After a vote at the egm, Prof Conroy prevented the appointment of Mr O'Sullivan, Gervaise Heddle and Paul Johnson to the board, citing one of the company's articles of association which required prior notification.
At the recent court case Mr Justice Barrett said Mr O’Sullivan, having failed to comply with the rules of prior notification, had asked the court to accept there had been “practical and substantive” compliance but there was no such thing.
“The notification requirements are simple and clearly worded and there is good reason why they exist and fall to be satisfied and they were not satisfied,” the judge said.
Shareholder oppression
Prior to the August egm, Mr O’Sullivan was successful in another court action in which he claimed shareholder oppression. He raised concerns at that time that the board of Conroy was contemplating measures to dilute the current members’ shareholdings before the meeting with a view to defeating his resolutions.
A further egm was held last week at which Mr O'Sullivan again sought to remove company board members. This time his fire was focused on Prof Conroy and Maureen Jones, the company director. He also called another vote to add the new directors that had previously been blocked.
All of the resolutions were defeated at the egm by between 945,428 and 989,208 votes. The total number of ordinary shares in issue is 12,213,537 and 9.19 million were cast at Friday’s meeting.
Prior to last week’s egm, Prof Conroy and Ms Jones exercised warrants for 400,000 shares between them – an action that was criticised by Mr O’Sullivan’s solicitor, Bernard McEvoy. The company also released 800,000 shares in return for funding for its Clontibret, Co Monaghan project.
In a separate announcement issued to the stock exchange on Tuesday, Conroy Gold said the stock will stop trading on Ireland’s Enterprise Securities Market (ESM) on November 6th. The company will continue to trade on London’s AIM.
