Attempt to end contracts invalid - Payzone

Payzone plc has conceded before the High Court that the purported termination last month of the contracts of its chief executive…

Payzone plc has conceded before the High Court that the purported termination last month of the contracts of its chief executive officer John Nagle and chief financial officer John Williamson was invalid, null and void and of no effect.

However, the electronic payments company has rejected the men's claims that they are entitled to damages apart from their legal costs to date. The court also heard an extraordinary general meeting (egm) will go ahead on March 10th to discuss a resolution from five shareholders for the removal of both men.

Last week, Mr Nagle and Mr Williamson secured continuing High Court injunctions restraining the company from dismissing them pending the outcome of full legal proceedings. This came after Ms Justice Maureen Clark ruled that Payzone's defence to their claims of unlawful termination of contract was "devoid of merit" and that they were deprived of constitutional justice and fair procedures.

The judge noted the purported termination of both men's contracts did not prevent the company from embarking on a process which conforms with the executives' contractual rights and the company's own articles of association.

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When the matter came before the judge again yesterday, she was told by Paul Sreenan SC, for Payzone, that it was taking a "pragmatic view" and had decided to accept the court's preliminary views last week on the basis the court decision did not affect the company's ability to act in accordance with law and its articles of association.

Payzone would agree to the making of a declaration that the termination of the men's employments by letter on January 15th was null and void and of no effect, he said. The company had also offered to pay costs, on the usual basis, incurred by both men to date. It was for them to decide if they wished to take the risk of proceeding with their claim for damages, incurring further costs.

Mr Sreenan said, given the position adopted by his side, there was no longer any urgency in the case and his client was preoccupied with other matters. The case now boiled down to the question of money and it might be possible to progress matters in other ways, he said.

Paul Gardiner SC, for Mr Nagle, said the concessions made by Payzone in a letter received on Tuesday night from Payzone's solicitors did not resolve the issue of the claim for damages, including aggravated damages, for breach of contract and for malicious falsehood brought against the company and its non-executive directors.

His side should also secure costs on the highest solicitor-own-client level and not the normal level arising from Payzone's failure to concede from day one that there was no lawful basis for the terminations, he said.

Payzone was claiming his side had suffered no financial loss and in those circumstances the case was not concluded, counsel said. The company wished to put it back so Mr Nagle and Mr Williamson could be removed at the egm. The court should direct Payzone to file a defence and his side would then seek discovery of what legal advice it had been given concerning the matter.

Eoin McCullough SC, for Mr Williamson, said he agreed with Mr Gardiner.

Ms Justice Clark said she would grant the declaration in the form consented to by Payzone and would ask the sides to see if they could agree on the amount of costs to be awarded to the plaintiffs up to now.

She directed that Payzone deliver a defence to the damages claim by February 15th and listed the matter for mention on February 20th.

Given the consent by Payzone to the declaration, the judge also discharged the injunctions secured by Mr Nagle and Mr Williamson, who are continuing in their posts.

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times