Former Dairygold chief looks for €8m in damages

The employment of former Dairygold chief executive Jerry Henchy was wrongfully terminated for "spurious" reasons unrelated to how he did his job after an orchestrated campaign involving the company's chairman Vincent Buckley and others, it has been claimed at the High Court.

The “last place on earth” Mr Henchy would get a fair hearing was from the board of Dairygold, many of whose members were objectively or, in the case of Mr Buckley and Bertie O’Leary, subjectively biased against him, his counsel Patrick Hanratty SC said.

Mr Henchy is claiming some €8 million in damages, including for alleged defamation, and contends what happened to him involved “a travesty of fair procedures” which “gratuitously destroyed” his reputation and left him unemployable.

The 48-year-old businessman, a father of three from Kilmallock, Co Limerick, has not worked since his €560,000-a-year job was terminated in early 2009.

Opening his action against Dairygold, Mr Hanratty said his client's employment was terminated for "spurious" reasons which purported to relate to monies owed on his personal farm account with Dairygold. Mr Henchy contended that was not the real reason, but was one "suddenly" seized upon by Mr Buckley in January 2009.

Overall relations

Counsel said the matter had to be addressed in the context of Mr Henchy's overall relations with various members of the board and various developments within the Dairygold group. It also had to be seen in the context of Mr Henchy's moves to address possible conflicts between some individuals being members of both the Dairygold Board and the board of its associated company, Reox Holdings plc.

Mr Henchy had clashed with “conflicted” board members who refused to sign a code of conduct intended to ensure proper corporate governance and stop confidential information “leaking like a sieve”, Mr Hanratty said. After Mr Henchy privately voiced cocerns to another board member about Mr Buckley not having signed the code when Mr Buckley was seeking to be elected chairman, those concerns were made known to Mr Buckley, who in a statement to the board described them as “outrageous”.

Other major “bones of contention” included the sale of spin-off company, Breeo, and farmers concerns about Dairygold’s internal milk testing system. Mr Henchy had opposed as unworkable proposals by Mr O’Leary to have the Irish Co-operative Organisation Society do the testing, and proposed the system be outsourced to an independent company.

Mr Henchy also had to deal with factional interests on the board and his plan to have Dairygold exit from pig production was vigorously opposed by Patrick O’Keeffe, a large pig farmer from Cork, whose father Ned O’Keeffe called for Mr Henchy’s resignation, counsel said.

When Mr Henchy was given four days in January 2009 to clear the €159,000 balance on his personal trading account with Dairygold, he had no idea his employment was on the line, counsel said. That account was never previously an issue, but Mr Henchy was suddenly told Mr Buckley was making “a big issue” of it. Mr Henchy would also argue a question raised at the Dairygold agm in May 2008 about a large balance on a farm account was by “a plant”.

Mr Henchy had said on January 16th, 2009, he would pay some €40,000 and was awaiting a tax rebate of some €150,000 from which he hoped to clear the account. He was told then the problem about the account was not with the co-op’s auditors but with Vincent Buckley, who “would not let go” of the issue and held on to it “like a dog with a bone”, counsel said.

While it may be legitimate to raise concerns about the account, that was not done before this, he argued.

Mr Buckley had said that, unless the €159,000 was paid on January 19th, he would go to the board about it, counsel said. Mr Henchy said this was inappropriate and disastrous given the existence of more pressing issues, including the sale of Breeo Foods to Kerrygold which was at a delicate stage and involved disagreements between the boards of Dairygold and Reox.

At the board meeting, Mr Henchy had affirmed his commitment to clear the account before leaving the board to discuss the matter and the account was later cleared after Mr Henchy negotiated a bank loan, counsel outlined. Mr Henchy was “mystified” to have learned Mr Buckley told the board the account had become an audit issue for 2008, as he had never been told that.

‘Penny dropped’

It was not until January 21st, 2009, when he was asked to meet Mr Buckley and Mr O’Leary in a Cork hotel, that “the penny dropped” with Mr Henchy that his employment was at risk, counsel said. He later realised the decision to terminate his employment was “all but made” on January 19th and the hotel meeting was to try and get him to resign voluntarily before they sacked him.

Mr O’Leary had told Mr Henchy he was a “big boy” who always said he would prefer to avoid “a slow death”, counsel said.

Dairygold contended Reox was Mr Henchy’s employer after 2006 but, “whatever way you look at it”, Dairygold controlled Mr Henchy’s s employment, counsel said.

In its defence, Dairygold denies Mr Henchy’s claims, including that he was subject to an orchestrated campaign to procure his dismissal. It has also advanced several pleas concerning his contracts of employments, including that his contract of employment was transferred in June 2006 to Reox which, it is claimed, from then on regulated his employment.

It is denied Mr Henchy was chief executive or an employee of Dairygold after June 1st, 2006, and it is pleaded he was employed by and acted as chief executive for Reox.

The case is listed to last four weeks before Mr Justice Daniel Herbert.