About this case:

• Citation:
  [2025] IEHC 11
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Rory Mulcahy

Delivering judgment for the High Court, Mr Justice Rory Mulcahy stated that “although I think it would be an exaggeration to assert that separation of the issue of standing would ‘tear the fabric of what the parties need to litigate’, it means that the issue of standing can not, or at least might not, be readily capable of being determined in isolation from the other matters in dispute”.

Background

The applicant claimed that the affairs of two companies, Maxela Limited and EastDeli Limited, were conducted in a manner oppressive to him and in disregard of his interests as a member of those companies, leading him to issue proceedings seeking relief pursuant to s.212 of the Companies Act 2014.

The respondent denied this claim and contended that the applicant was no longer a member of either company, having allegedly sold his interests to a third company, Corex Emerald Limited, and so did not have standing to maintain the proceedings.

The applicant denied that he had sold his interests, alleging that the share transfer to Corex was “never consummated” and suggesting that if he did sign the acceptance form for the transfer, the contents of the document must have been misrepresented to him. 

Having issued and struck out a motion seeking to strike out the proceedings as bound to fail on the basis of the applicant’s alleged lack of standing, the respondent issued a fresh motion seeking inter alia an order pursuant to Order 36, rule 9 of the Rules of the Superior Courts or pursuant to the court’s inherent jurisdiction directing a modular trial on the issue of the applicant’s standing.

The respondent’s motion came before Mr Justice Mulcahy in the High Court.

Submissions

The respondent relied on Re Via Net Works (Ireland) Ltd [2002] 2 IR 47, in which an oppression claim was dismissed as bound to fail in circumstances where, at the time of the petition, the applicant was contractually obliged to transfer his shares to the respondent in that case.

The respondent maintained that having regard to Re Via, a module confined to the single question of fact could resolve the proceedings without the necessity for a full trial on all the issues of oppression alleged.

The applicant submitted that the proposed issue was unsuitable for modular trial as the evidence relevant to the balance of the case was relevant to the question of standing, and that Re Via was subject to a caveat that where the oppression alleged is the expropriation of the petitioner’s shares, the decision in Re Via ought to be distinguished and should not preclude the petition being heard under s.212 of the 2014 Act.

The applicant also contended that the motion constituted an abuse of process where the respondent elected not to pursue the central issue in his earlier motion.

The High Court

Mr Justice Mulcahy considered the legal principles relating to applications for modular trials, noting that while the court enjoys an express jurisdiction to try certain questions or issues of fact other than in the course of a unitary hearing, and an inherent jurisdiction to order a modular trial if appropriate, “the default position is that there should be a single trial of all issues at the same time”.

Having regard to the criteria in McCann v Desmond [2010] 4 IR 554, the court recognised that if the matter was to proceed by way of modular trial, the respondent would be at an “obvious litigation advantage” in that if the issue of standing was decided in his favour, he would succeed in the proceedings overall, and if decided against him, he could still fully contest the proceedings in the remaining module.

Considering the applicant’s position, Mr Justice Mulcahy observed that the applicant, unlike the respondent, could not win the case by succeeding in the proposed module.

The court also pointed out that it was “far from clear” that the question of standing could be fairly determined in isolation from all other issues raised in the proceedings, as the evidence given in relation to the allegations of oppression could be relevant to the questions of standing and the evidence given of the interactions between the parties more generally, after the purported transfer of the shares in the companies, would be relevant to any alleged estoppel.

Furthermore, the judge proposed that if the issue of standing was “decoupled” from the rest of the case, it could prejudice the applicant if, for example, the credibility of the respondent’s evidence regarding the transfer of shares was determined in isolation from an assessment of the credibility of his evidence and conduct in the management of the companies generally.

The court also considered the applicant’s contention that the respondent’s motion was an abuse of process contrary to Henderson v Henderson and was calculated to cause delay, where it allegedly re-visited issues which the respondent elected not to pursue in his original motion.

In this regard, Mr Justice Mulcahy pointed out: “The respondent is not pursuing an argument which he could have but did not pursue in earlier proceedings… Rather, he has decided not to pursue the argument by way of a motion to strike out while at the same time making clear that he would pursue the argument in the substantive proceedings and, indeed, would seek a modular trial on the issue.”

Notwithstanding “obvious potential advantages in terms of savings in time and costs”, the judge determined that the first and third criteria in McCann v Desmond had not been met. In refusing to order a modular trial, the court encouraged the parties to reconsider mediation as an alternative to litigation in circumstances where the ongoing relationship between the parties would have to be addressed regardless of the outcome of the proceedings.

Conclusion

Accordingly, the High Court refused the orders sought.

Alexandr Vakiy v Max Bulgakov [2025] IEHC 11