High Court of Ireland Decisions

1. On 9th October, 1997 the Petitioner filed the Petition in this matter claiming declarations that certain alleged acts of the Respondents, which are particularised in the Petition, are oppressive to and in disregard of the interests of the Petitioner as a shareholder in Siac Construction Limited (the Company) and in breach of the Respondents' fiduciary duties to him and claiming certain other relief to which I will refer later. By Notice of Motion dated 15th October, 1997 in these proceedings the Petitioner sought directions and also interlocutory injunctions restraining the Company and the Respondents from:-

2. The Company was incorporated under the Companies (Consolidation) Act, 1908 as a limited liability company on 13th June, 1913 and since 1983 it has been incorporated under the name Siac Construction Limited. Its business is building and construction. The authorised share capital of the Company is £2,751,100. The issued share capital is £2,501,000.

3. The grounding Affidavit of the Petitioner sworn on 15th October, 1997 discloses that the entire issued share capital is currently owned by the following parties in the shares following:-

4. Formerly, the share capital of the Company was owned by the Petitioner's father who managed and operated the Company until 1965. The current ownership of the share capital, as outlined above, arose in consequence of appointments out of a discretionary trust in 1993. I should perhaps point out that there is an inconsistency between the Petition and the Affidavit of the Petitioner, in that the Petition suggests that the shareholding of Margaret Feighery has been distributed amongst the other shareholders other than Denis Feighery. Nothing, however, turns on this inconsistency.

5. For present purposes, what is significant is that only two of the shareholders, the Petitioner and the Chairman, are directors of the Company and of the shareholders only the Petitioner and the fifth named Respondent are employed by the Company.

6. Article 3 of the Articles of Association of the Company provides as follows:-

7. Article 3 goes on to outline the procedure for the forced sale of the shares and the ascertainment of their fair value.

8. The sixth named Respondent, to whom I will hereafter refer as "the Managing Director", is the Managing Director of the Company, having being appointed to that position on 2nd June, 1994.

9. Currently, the majority of the directors of the Company are non family members of the Feighery family and two are well known businessmen who hold directorships in several other prominent Irish companies.

10. The Company is a trading company and it also operates through a number of subsidiaries. The estimated turnover of the group of companies of which it is the parent in 1997 was £60 million. In 1996, the Company enjoyed a profit of £1 million by contrast to a loss of £500,000 for the year 1993, the year before the Managing Director joined the Company.

11. I believe it is not an exaggeration to state that the foregoing facts are the only undisputed facts among a welter of fact and innuendo in the Affidavits filed in support of and in response to this application.

12. Before outlining what I consider to be the facts in controversy which are relevant to the issues which fall to be determined on this application, it is necessary to record that there was listed for hearing contemporaneously with this application an interlocutory application in a plenary action in which the Petitioner is plaintiff and the Company and the six Respondents in these proceedings are defendants (1997, Record No. 11839P), in which the Petitioner sought interlocutory injunctions against the Company and the Respondents restraining them from:-

13. The Petitioner, a qualified Accountant, has been employed by the Company since 1982 when, he asserts, he succumbed to family persuasion to abandon a career in an accountancy practice and take up employment within the Company. He asserts that it was always understood between himself, on the one hand, and the other family and board members, on the other hand, that he would continue for the remainder of his professional career to participate in the management of the Company's affairs, that he would not be wrongfully excluded therefrom, and that neither the Company nor its directors would seek to undermine his position within the Company, nor to hinder the discharge of his functions therein. Further, he asserts that at all times the Company was a quasi-partnership between himself and the other family members, operated on the basis of mutual trust and confidence between them. The Chairman, in an Affidavit sworn by him in response to this application, has averred that the Petitioner joined the Company of his own volition and not as a result of family persuasion, and that, had the Petitioner an expectation that he would continue to participate in the management of the Company's affairs for the rest of his life, it was an expectation which was wholly unfounded and not based on anything which any member of the family had said to him. Moreover, he denied that there is some quasi-partnership in existence which entitles family members to participate in the management of the Company. In the Company, as it has developed, he averred, there is a real distinction between ownership and management of the business.

14. The Petitioner asserts that since he assumed that position, the Managing Director, with the assistance and support of the other Respondents, has embarked upon a course of conduct designed and intended to undermine the Petitioner's position as employee, director and shareholder in a manner which is oppressive to him. The Managing Director denies this allegation and contends that he has been extremely patient and has sought to accommodate what he alleges has been incompetence on the part of the Petitioner. He had discussed the Petitioner's role in the Company with a number of shareholders and directors prior to taking up the office of Managing Director and their unanimous view was that, if the Petitioner was incapable of performing the role of Financial Director and Company Secretary, which offices he then held, it was entirely within the Managing Director's area of discretion to remove him from those functions. It is the contention of the Managing Director that during his period with the Company the Petitioner has contributed very little to the management of the Company and board meetings.

15. What is represented by the Petitioner as a watershed in his relationship with the Managing Director was the Petitioner's removal from the position of Financial Director of the Company, which took effect from October 1995. The Petitioner's contention is that his removal was instigated by the Managing Director acting in bad faith and with a view to penalising the Petitioner for highlighting matters which the Petitioner alleges constituted mismanagement on the part of a Managing Director. These allegations are particularised in the Petition and are pleaded as rendering the Managing Director unfit to be the Managing Director of the Company. In fact, if they are true, they go beyond mere mismanagement. However, the Managing Director categorically denies any impropriety in relation to these matters. Moreover, the Managing Director contends that there is no link between the Petitioner's "whistle blowing" and his demotion and that the demotion was necessitated by the inadequacy of the Petitioner's performance as Financial Director and his inability to inspire the confidence of the board of the Company and the Company's bankers in his performance of that function. While the Petitioner acknowledges that he reluctantly accepted removal from the office of Financial Director as and from October, 1995, he contends that his demotion was wrongful. He further contends that, in consequence, he incurred a substantial reduction in salary, but this is disputed.

16. The Petitioner asserts that, despite assurances given to him before he acquiesced in his demotion that he would have a role in the financial management of the Company, after a transition period he came to be "sidelined". The Managing Director's response is that he endeavoured to continue to involve the Petitioner in aspects of the finance role but that he was generally incompetent and negative. Examples of the alleged incompetence were set out in the Managing Director's replying Affidavit sworn on 31st October, 1997 but were refuted by the Petitioner in a subsequent Affidavit.

17. The Petitioner further asserts that at the time of his demotion he was assured, in particular by the Chairman, that he would remain for life a director and an employee of the Company and would continue to have an involvement in the management of its affairs, and that this promise has been repeated to him on many occasions subsequently by various members of the family. However, the Respondents, and in particular the Chairman and the Managing Director, have attempted to marginalise him and have refused to clarify his functions in the Company following demotion, despite many requests for such clarification. It is categorically denied by the Respondents that the Petitioner was given an assurance that he would remain for life a director and an employee of the Company.

18. In his grounding Affidavit, the Petitioner averred that the hostility of the Managing Director towards him increased as a result of advice which he, the Petitioner, gave to other shareholders in or about April 1996 to the effect that it would be a mistake to continue his contract as Managing Director. For his part, the Managing Director, while acknowledging that he does not consider the Petitioner to be an effective and capable member of the management team, denies that he has been hostile towards the Petitioner. In any event, he only became aware of the Petitioner's advice following the institution of these proceedings and he contends that, had he been aware of it, he might have been justifiably hostile because, he contends, it embodies criticisms which are unfounded and unwarranted.

19. One of the Petitioner's complaints is that in April, 1996, at the instigation of the Managing Director, he was "passed over" for appointment as Company Secretary of a new subsidiary acquired by the Company, which was most unusual given that he was the Secretary of all of the Company's subsidiaries. The Managing Director's response is that the Petitioner was "passed over" because he would not be competent in the task.

20. The Petitioner further complains that in May 1996 the Managing Director made unfounded allegations as to his competence to the Chairman and that by August 1996 he was openly advocating his further demotion. The Petitioner ascribes what he characterises as a "campaign" against him to the determination on the part of the Managing Director to organise a management buy-out of the Company and to undermine the influence of the Feighery family in the Company. In an Affidavit sworn by him on 21st November, 1997 the Petitioner averred that he was not given the position of Company Secretary of the new subsidiary referred to in the next preceding paragraph to ensure that he would not come into contact with outside investors who had promised to back the Managing Director in his management buy-out. The Petitioner makes a more serious allegation against the Managing Director. Having commented in his Affidavit sworn on 15th October, 1997 that it suits the Managing Director that the Company's profits are very modest because of his plans for a management buy-out and that the dividends being declared by the Company are being kept deliberately low on the advice of the Managing Director for the same purpose, the Petitioner averred that he had serious concerns about the way in which "the profit and loss figures" are being manipulated by the current Financial Director and the Managing Director to produce to the board "a desired picture in keeping with their overall objectives including a management buy-out". The response of the Managing Director is that initiatives which have been taken by him have enhanced the value of the Company and would make any management buy-out more expensive and less rewarding for any participants. Moreover, the dividend policy was designed to provide a balance between providing a return to the shareholders on capital in the Company and allowing the Company to grow its activities for the long-term benefit of all the shareholders, a policy which was approved by all the directors with no dissension recorded, even from the Petitioner. The allegation in relation to the manipulation of the profit and loss figures, it is contended, is totally unsubstantiated. The Managing Director further counters that the Petitioner's real motive in making these allegations, which he contends are of no substance whatsoever, is that he proposes breaking up the Company and selling off its parts. In the Petition, the alleged management buy-out stratagem is pleaded as resulting in the Company being mismanaged to the detriment of the Petitioner.

21. It is quite clear on the evidence that there was tension between the Petitioner and the Managing Director in the Autumn and Winter of 1996 and through the early part of 1997. "Tension" is my word: the Petitioner's perception is that the Managing Director was seeking to undermine, criticise and to demean him within the Company and, in particular, to try to undermine diverse aspects of his function within the Company; the Managing Director's perception is that the Petitioner was openly bitter about his demotion and continued to be so. At any rate, it is common case that there was a suggestion from the Managing Director that an outsider be engaged to assist in "finding a role" for the Petitioner in the Company. The Petitioner contends that it was explicitly represented to him that the outsider was to engage in a "mediation exercise". Barry O'Connor of MERC Partners undertook the task. He issued a report in February 1997. The Petitioner has averred that he "was absolutely shocked" by the contents of the report. He levels many criticisms at the report and at the conclusions of Mr. O'Connor, which it is not necessary to outline here. The general thrust of the criticism of the Respondents is that the whole mediation process was "hijacked" by the Managing Director for his own nefarious purposes, that is to say, to undermine further the Petitioner's position within the Company. The Managing Director's position is that Mr. O'Connor was selected by the Petitioner and that the Petitioner had a lead role in defining his terms of reference and that the reaction of the Petitioner to Mr. O'Connor's conclusions was naive and an extraordinary attempt to distort the real situation.

22. The Petitioner further complains that in February and March 1997 the Managing Director issued a series of memoranda allegedly detailing failures on the Petitioner's part to discharge his duty and he points to the reaction of the other Respondents to the criticisms contained in the memoranda as evidence that they were by then wholly under the influence of the Managing Director and were not prepared to stand up to him. The position of the Managing Director is that his criticisms were entirely valid and that his experience has been that the Petitioner is incompetent across a wide range of issues.

23. The situation deteriorated in June 1997 when the Managing Director proposed that the Petitioner be demoted from his position as Company Secretary and that he assume instead the functions of Internal Auditor. The Petitioner construes this proposal as an attempt to completely undermine his position within the Company, including his security of tenure. The Managing Director's position is that the function of Internal Auditor was offered to the Petitioner in order to provide him with a productive role in the Company and because he was not performing adequately as Company Secretary. There is a dispute as to the proper interpretation of the specification for the job of Internal Auditor and, in particular, the significance of the condition that there was to be a review after two years.

24. In any event, the Petitioner rejected the offer and, as he put it in his grounding Affidavit, realising that his position was in jeopardy and being determined not to accept another demotion, he consulted Messrs. Noel Smyth & Partners, Solicitors, and KPMG, Accountants. He apprised the Managing Director that he had taken this course in an internal memorandum of 3rd July, 1997, before leaving for his annual vacation. This elicited a memorandum from the Managing Director stating that the Managing Director and the Deputy Chairman would meet the Petitioner on his return from vacation on Monday, 21st July, when a full explanation was expected from the Petitioner. The Plaintiff responded through his Solicitors, by letter dated 18th July, 1997, to the effect that he would be happy to meet with the Managing Director and other members of the board provided an agenda for the meeting was furnished in advance, so that he should have an opportunity to consider it and take the necessary advice. On 31st July, 1997 Messrs. BCM Hanby Wallace, Solicitors, entered into the fray on behalf of the Company and in a letter of that date stated that there would not be "a suspension, a dismissal or any attempt to exclude [the Petitioner]". This position was reiterated by the Managing Director in his replying Affidavit sworn on 31st October, 1997 in which he averred as follows:-

25. However, at the time the Petition was presented the situation between the Petitioner and the Company was not as unfraught as that averment would suggest.

26. The following is a brief chronology of the events leading to the presentation of the Petition:-

27. In the foregoing summary, I have been careful not to refer to matters which the Petitioner alleges amount to a disclosure of a privileged communication by the Respondents on the hearing of the application. I take the view that the question whether there has been a breach of privilege does not bear materially on any issue I have to decide and I express no view on this point.

28. The Petitioner acknowledges that there has been a very serious breakdown in the relationship between him and the other shareholders. He perceives the move to have him removed from his position as a director as a prelude to his dismissal as an employee of the Company and, ultimately, to the forced acquisition of his shareholding under Article 3 of the Articles of Association. He contends that his removal from his position as a director of the Company would have devastating consequences and would give rise to the belief that he has been guilty of serious incompetence or wrongdoing. In a supplemental Affidavit sworn on 21st November, 1997, he averred that the Respondents are persisting in their plan to remove him as a director in order to gain an unfair advantage in these proceedings.

29. In his replying Affidavit, the Managing Director averred that the Petitioner, through his own conduct, has created a situation where he has completely lost the confidence of every other member of the board of directors and where it is simply no longer possible for him, the Managing Director, or any of the other board members to continue to try to work with the Petitioner. His continued membership of the board, particularly in the context of litigation where his solicitor is also the chairman of a competitor company, is impeding the taking of important board decisions and, even by the stage that affidavit was sworn, 31st October, 1997, important decisions had had to be deferred for fear of breaches of confidentiality. The Managing Director in a supplemental Affidavit sworn by him on 2nd December, 1997, reiterated that, through his conduct and incompetence, the Petitioner has totally lost the trust and confidence of the other members of the board, both executive and non-executive, and that he has also lost the trust and confidence of the other shareholders and that the situation had arrived by then where the other directors simply could not continue to work with him at board level. It was averred that his removal was absolutely necessary for the welfare of the Company generally. However, it was stressed that it is only his removal as a director that was being proposed and "not his removal from his remunerated position qua employee".

30. In his Affidavit sworn on 31st October, 1997 the Chairman, in essence, sided with the Managing Director. He deprecated charges of mismanagement and fraud made by the Petitioner against the Respondents and asserted that he could not find any averment in the Petitioner's grounding Affidavit which was true and could justify an allegation of fraud. He called on the Petitioner to immediately withdraw such allegations. He further contended that in joining some only of his siblings who are shareholders in the Company in the proceedings, the Petitioner was deliberately sowing division within the family. He expressed the view that the Managing Director is a capable and talented Managing Director, through whose efforts the fortunes of the Company have considerably improved and who enjoys the support of the shareholders. As regards the allegations that the Managing Director is involved in some secret preparations for a management buy-out, the Chairman averred that the Managing Director has stated that this is not so and that neither he, the Chairman, nor any of the Respondents has any reason to disbelieve him. The Chairman shares the concerns expressed by the Managing Director as to -

31. The fact that the Petitioner is advocating the break-up of the Company, he averred, only helps to heighten fears and leads both the Chairman and the other members of the board to conclude that there is "a subtext not apparent from a superficial reading of the documentation" served by the Petitioner. The Petitioner's continued presence on the board is having a paralysing effect on the business of the Company and, given the identity of the firm of Solicitors on record for him, is preventing the board from discussing certain items of business at board level. In a supplemental Affidavit sworn by him on 15th January, 1998, the Chairman averred that, with the exception of the Petitioner and Michael Shaughnessy, all of the directors of the Company are fully in support of the Managing Director and himself, as Chairman, in the running of the Company and the defence of the proceedings.

32. I should perhaps say that the allegations made by the Petitioner against the Managing Director and the other Respondents in the Affidavits filed in support of the application and the counter-allegations made by the Managing Director against the Petitioner in the replying Affidavits are made in the most trenchant and uncompromising terms. I have recorded them as faithfully as possibly above, and where, in the interest of brevity, I have departed from the actual words of the deponents, I have not intended to put any gloss on the content in doing so.

33. When the hearing commenced in this Court on 18th December, 1997, as I have already stated, the hearing of this application commenced in tandem with the hearing of the interlocutory application in the plenary proceedings. It was only on the third day of the hearing, after the Christmas Vacation, that it became clear, or any at rate that it became clear to me, who was representing whom on the Respondents' side in the two applications. The position as I understand it is that William Fry represents all of the Respondents in these proceedings and that BCM Hanby Wallace represents the Company and the Managing Director in the plenary action and that William Fry represents the remaining Respondents. On the third day of the hearing, having previously intimated that he was adopting this course, Mr. Gallagher indicated that he was not moving the application seeking interlocutory injunctions in relation to the Petitioner's position as employee, having regard to the statements in the Affidavits filed on behalf of the Respondents in these proceedings that they did not intend to interfere with his position as an employee. An application for his clients' costs was made by Mr. Stewart instructed by BCM Hanby Wallace. I adjourned the interlocutory applications in the plenary action to the trial of the action and I reserved each party's position in relation to costs.

34. In the Petition, in addition to the declaratory relief to which I have already referred, the Petitioner seeks, inter alia, the following reliefs:

35. The issues which fall for determination on this interlocutory application are, first, whether the Petitioner has established that there is a fair issue to be tried as to his entitlement to the relief he claims and, if he has, secondly, whether the balance of convenience favours the grant or the refusal of an injunction restraining his removal as a director of the Company pending the hearing of the Petition.

36. The statutory provisions which come into play on this application are Section 205 and Section 182 of the Companies Act, 1963. Subsection (1) of Section 205 provides as follows:-

37. Subsection (3) of Section 205 empowers the Court "with a view to bringing an end to the matters complained of" to -

38. Subsection (7) of Section 182 contains a saver for any claim for compensation or damages payable to a former director in respect of the determination of his appointment as director or any appointment terminating with that as director.

39. On behalf of the Petitioner, Mr. Gallagher submitted that, in determining whether to grant relief under Section 205, the Court does not merely have regard to the contractual rights of a member of a company under its constitutional documents, its memorandum and articles of association, and his statutory rights under the Companies Acts, but has regard to wider equitable considerations arising from rights, expectations and obligations of the members inter se which, in the words of Lord Wilberforce in Ebrahimi -v- Westbourne Galleries Limited (1973) A.C. 360, "are not necessarily submerged in the company structure". The Petitioner bases his claim to remain a director of the Company and to continue to participate in the management of its affairs on such wider equitable considerations and, in particular, he contends that equitable rights flow from the fact that, as he asserts, the company was a quasi-partnership between himself and the other family members, operated on the basis of mutual trust and confidence between them. He also founds his entitlement on the doctrine of legitimate expectation.

40. The removal of a person from his position as a director, it was submitted, has been widely recognised as a classic instance of oppression and disregard of interests within the meaning of Section 205 and of unfair prejudice and Mr. Gallagher instanced Re A Company (1986) B.C.L.C. 376 and Re Murph's Restaurants Limited (1979) 1 I.L.R.M. 141. In the instant case, it was submitted, the Petitioner has an arguable case that his removal from office as a director would constitute oppressive conduct, not only on the basis of his legitimate expectation to remain in that position, but also because the actions of the Respondents in seeking to remove him lack any plausible basis. In particular, it was submitted that there was no challenge to the Petitioner's status as a director until 18th September, 1997. Prior to that, he was assured there was no dispute in relation to his status as a shareholder or as a director. The issues which arose around that time, the board minutes issue, which was an issue which really concerned his function as Company Secretary, and his failure to attend a meeting, it was suggested, were mere contrivances.

41. Aside from the Petitioner's remedy under Section 205, it was submitted that in the special circumstances which prevail in the instant case his fellow directors and shareholders owe him fiduciary duties and, as authority for this proposition, Mr. Gallagher cited the decision of the New Zealand Court of Appeal in Coleman -v- Myers (1977)

42. On behalf of the Respondents, Mr. Collins strongly urged that the plaintiff

43. Even if the Company is a quasi-partnership, Mr. Collins submitted that the Petitioner has a second hurdle to surmount - that he has an arguable case that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to him or in disregard of his interests as a member. Even accepting that the decision of Gannon J. in Re Murph's Restaurants Limited is authority for the proposition that in this jurisdiction oppression within the meaning of Section 205 can be suffered by a member in his capacity as a director as well as in his capacity as a shareholder, as Mr. Collins did for the purpose of his argument, he submitted that, as regards the matters alleged by the Petitioner to constitute oppression and disregard of his interests, they do not make up an arguable case of oppression within the meaning of Section 205 - conduct which is burdensome, harsh and wrongful - or of disregard of the Petitioner's interest in his capacity as a member. In particular, it was submitted, the fact that the Petitioner and the Managing Director, who is not a shareholder, are mutually critical of each other cannot constitute oppression within the meaning of Section 205.

44. Mr. Collins rejected the argument that the attempt to remove the Petitioner as a director is in itself a breach of Section 205. The shareholders have a statutory right under Section 182 to remove a director. If they were to decide to remove the Petitioner as a director because they were not satisfied that his presence on the board was helpful or conducive to the good management of the Company how could this ever in itself be treated as burdensome, harsh and wrongful, Mr. Collins asked rhetorically. It could not, he answered: it would be an intolerable position if shareholders could not have on their board those people whom they bona fide believe are the best people to run the affairs of the Company. As to the argument that the proposal to remove the Petitioner as a director is tainted with the evil oppression of previous events, that it is the culmination of a chain of oppressive conduct, Mr. Collins submitted that the Petitioner would have to establish an arguable case that the previous events should be fairly regarded as constituting oppression prior to and independent of the proposal to remove him as a director, which, it was urged, he has not shown.

45. Mr. Collins analysed the nature of the statutory right of removal of a director under Section 182. The corresponding English provision has been described in Palmer on Company Law (24th Edition, 1987) as "one of the most important principles of modern Company Law". Mr. Collins pointed to a number of significant features of the provision. First, the shareholders have the statutory power notwithstanding an agreement or a provision in the Articles of Association to the contrary. Secondly, having regard to subsection (7), which I have quoted above, the section clearly contemplates that the removal of the director may be wrongful in the sense of infringing some right, contract, expectation or some other matter which could give rise to a cause of action against the Company, but in such instance the right of removal is not precluded and the former director is left with his remedy for compensation or damages. Thirdly, there is a significant distinction between the action of the directors acting so as to exclude one of their number from acting as a director and the shareholders dismissing a director. On this point, Mr. Collins relied on the following passage from Palmer at page 901:-

46. Mr. Collins also referred to the decision of the Chancery Division of the English High Court in Bentley-Stevens -v- Jones (1974) 1 W.L.R. 638 as illustrating this point. In that case, the company had three shareholders and ran a nursing home. The three shareholders were directors and the fourth director was the matron of the nursing home. A dispute arose between one of the shareholders and the other two and the majority shareholders convened an extraordinary general meeting to remove and did remove the other director (the plaintiff) as a director. The plaintiff sought various declarations to the effect that his removal was void, that the meeting had been invalidly held by reason of certain procedural irregularities and sought an injunction restraining the defendants from acting on the resolution. In the course of his judgment, Plowman J. stated as follows:-

47. Mr. Gallagher sought to distinguish this decision on two grounds. First, the application had been brought in plenary proceedings, not in an application under the English equivalent of Section 205, which he submitted was a critical distinction. Secondly, while the regard was had to the Ebrahimi case and the notion of quasi-partnership, the decision predated the decision of the House of Lords in American Cyanamid Company -v- Ethicon Limited (1975) AC 396.

48. In my view, even assuming that the Petitioner has an arguable case for relief under Section 205 and an arguable case that the Respondents, as shareholders and directors, owe him fiduciary duties and are in breach of those duties, I must nonetheless be satisfied that I have jurisdiction to override the shareholders statutory power under Section 182 to remove the Petitioner from the board. I am not satisfied that I have such jurisdiction and none of the cases cited by Mr. Gallagher support a contrary conclusion. In particular, the relief granted by this Court (Gannon J.) in the Murph's Restaurants case, in which the principles laid down by the House of Lords in the Ebrahimi case were applied, and in which it was held that the purported exclusion of the Petitioner by his co-shareholders and directors in an irregular and arrogant manner was undoubtedly oppressive, was a winding-up order under Section 213 of the 1963 Act.

49. The current position is that the board resolved on 24th September, 1997 to convene an extraordinary general meeting to consider the Petitioner's removal as a director of the company. Extended notice, as required by Section 182(2), was given for an extraordinary general meeting to be held on 6th November, 1997. That meeting has been adjourned pending the outcome of this application. In the interim, the Petitioner has not been excluded from the board meetings. He has attended but has voluntarily withdrawn when issues concerning his litigation were being deliberated.

50. In substance, what the Petitioner seeks is an injunction to restrain the company in general meeting resolving to remove him as a director, that is to say, to restrain the exercise of its statutory right under Section 182. As I have indicated, I consider that the Court has no jurisdiction to grant such relief.

51. Mr. Gallagher stressed that the Petitioner's ultimate objective is to stay in the company and his preferred method of having the oppression and disregard of his interests which he alleges brought to an end is by means of an order that he acquire the Respondents' shares. Mr. Gallagher submitted that it is arguable that, if the Petitioner establishes at the hearing of the Petition that he is entitled to relief under Section 205, the appropriate form of relief is an order that he acquire the Respondents' shares, on the basis that, in the light of such a finding of oppression, the Court should not, as it were, leave the Respondents with the spoils. Be that as it may, in the eventuality of an order being made that the Petitioner acquire the Respondents' shares, the Petitioner's continuance on or return to the board would be attributable to his voting power as a shareholder and not by virtue of an order of the Court.

52. Accordingly, in my view, the Petitioner has not made out an arguable case for the specific form of relief he seeks in this application.

53. Moreover, in my view, the balance of convenience favours the refusal, rather than the grant, of the injunctive relief sought. The Chairman has averred that the Petitioner's continued presence on the board is having a paralysing effect on the business of the company. While the Chairman is open to the charge that he has not adopted an impartial stance in this matter, his view is shared by the majority of the board members. It is irrelevant, in my view, that there is no allegation of obstructive behaviour against the Petitioner. It is also irrelevant that the perception of the board members that the Petitioner's presence on the board, given the existence of the Petitioner's litigation and the solicitors he has chosen to process the litigation on his behalf, is inimical to the company's interest may be totally wrong. That the perception is there, in my view, is a sufficient reason to allow the shareholders the opportunity, through the medium of an extraordinary general meeting, to express and give effect to their views on the issue.

54. I do not consider that the plaintiff will be exposed to irreparable damage if the shareholders vote him off the board. In view of the position adopted by the Company and the Respondents in the plenary action, which in the circumstances is tantamount to an undertaking to the Court, the ploy which he suspects, to oust him as a director, employee and shareholder from the company, if it exists, cannot be implemented while these proceedings remain unresolved. As the Petitioner will remain in his position as an employee of the company, his fear that colleagues and acquaintances will think ill of him is misplaced. On the evidence, there is no reason to suppose that the absence of the Petitioner from the board will put the value of his shareholding in jeopardy. Finally, the Petitioner will retain such rights, if any, as are afforded to him by Section 182(7).

55. I refuse the Petitioner's application.