Players in Blackrock Clinic case urged to consider mediation

A High Court judge has urged the parties involved in marathon, bitter and costly litigation over control of Dublin's Blackrock Clinic to give "most serious consideration" to mediation as an alternative means of resolving their differences.

For this dispute to be resolved, it would "require probably all of the principals to back down from their current positions," Mr Justice Michael Twomey said, urging the lawyers involved to bring his judgment to the attention of the principals.

He made the comments in proceedings by Dr Joseph Sheehan concerning shareholdings in Blackrock Hospital Ltd (BHL). The case is against parties including businessman John Flynn and his company Benray and Breccia, a company linked to businessman Larry Goodman and BHL.

BHL owns the share capital of Blackrock Clinic Ltd, co-founded in 1986 by Dr Sheehan with his fellow surgeons James Sheehan and Maurice Neligan, and Dr George Duffy.

Dr Sheehan and Mr Flynn/Benray have separate actions against Breccia over the price sought by it for redemption of loans made by Anglo Irish Bank from 2006 to buy shares in the clinic. The loans were sold by the National Asset Management Agency to Breccia, which also bought shares in 2006. Last November, Mr Justice Robert Haughton refused to lift injunctions granted in 2014 which prevent Breccia calling in Dr Sheehan's loans before a full hearing of his case.

The Court of Appeal previously ruled that a receiver appointed by Breccia in 2014 over Benray’s shares in BHL was entitled to sell those shares. It also overturned High Court findings that the 2006 BHL shareholders’ agreement included an implied term the shareholders owed each other “mutual general duties of good faith and fair dealing” and limited a shareholder’s right to recover money under another shareholder’s loan.

On Friday, Mr Justice Twomey said the “long-running and bitter private dispute”, dating to late 2014, had taken up much of the court’s scarce resources and was likely to have taken up a full half year of court time by the time it ended.

To date, it had resulted in seven judgments of the High Court and Court of Appeal, with two other judgments pending, “no doubt millions of euro spent on legal fees”, and another High Court judge deciding to cease hearing the case further, he said.

Recusal

Mr Justice Haughton’s recusal was sought by Breccia after the judge criticised Breccia in his judgment last November.

After Mr Justice Haughton recused himself, the litigation was allocated to Mr Justice Twomey who on Friday gave a judgment concerning whether the remaining issues should proceed via a single unitary hearing or via a number of modules.

He directed a modular hearing of three modules on grounds including it would be better from a court resources perspective.

The first module concerns whether dividends could be legally paid to Dr Sheehan. The second concerns Dr Sheehan’s claim of a change of control in the ownership of Breccia in 2009 allegedly triggering an obligation by Breccia to offer its shares to all the shareholders which it had not. The third involves a claim by Dr Sheehan of conspiracy to Breccia and other defendants to damage his interests.

The judge also urged the sides to again consider mediation of the dispute.

While there was an earlier unsuccessful mediation and the proceedings were in “full flow”, that should not prevent another attempt at settlement or mediation, he said. This was particularly so where the parties will have several judgments involving independent judicial assessments of aspects of the dispute which might facilitate a settlement now.

He was urging the parties, and particularly their lawyers who have an “overriding duty” to the court, under their code of conduct to “ensure in the public interest that the proper and efficient administration of justice is achieved” to give the “most serious consideration” to an attempt to resolve this dispute by mediation.