The High Court has refused an application to remove a liquidator appointed to an Irish company whose main asset is 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.
The shareholders, each holding 50 per cent, are businessman Michael Curneen and Irish firm Print & Display Ltd (P&D), a company of businessman Jim Conway.
On Friday, Mr Justice Mark Sanfey refused P&D’s application to remove Mr Dowdall as liquidator and replace him.
While Mr Dowdall’s conduct had on occasion fallen short of ideal, he had been “generally effective and honest”, the judge said.
Outlining the background, he said Dominar was a holding company for a Polish subsidiary, P&D Polska, which is involved in printing in Polish and European markets and managed by Mr Curneen.
Proceedings
In 2007 Mr Conway’s P&D firm brought High Court shareholder oppression proceedings alleging the valuable development site in Warsaw, owned by the group’s P&D Polska subsidiary, 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, a claim ddenied by the liquidator.
Efforts to sell the Warsaw site were dogged by difficulties in subsequent years, the court heard. These included what are known as “restitution claims” by people who owned, or whose families owned, private property which was 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.
Investments
On the appointment of the 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 were exchanges of correspondence and angry company annual meetings.
P&D brought proceedings in 2018 seeking Mr Dowdall’s removal. Its claims centred on his conduct of the liquidation in relation to preservation and sale of 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.
Mr Justice Sanfey held that “good cause” had not been shown for his removal.
Orderly fashion
He was satisfied Mr Dowdall will conduct the remainder of matters in the liquidation – primarily the removal of material from the site and the distribution of net sale proceeds to shareholders – in a prompt and orderly fashion.
To remove him would be to permit a replacement liquidator to investigate Mr Dowdall’s conduct, at very considerable cost and prolonging the liquidation.
He also must have regard to the impact removal would have on the reputation of Mr Dowdall in circumstances where the P&D side properly confirmed there had been no dishonesty on Mr Dowdall’s part.
Mr Dowdall gave his evidence honestly although his recall over the decision not to appeal an adverse Polish court finding in relation to the restitution claims was “somewhat confused and unsatisfactory,” he said.
Whether there was a separate cause of action in relation to Mr Dowdall’s conduct was entirely a matter for P&D, he said.
