Case No. IP-2014-000051

The setting up and trading of Oranmore 22.Except to the extent stated, these facts are not in dispute. As I say, Oran had been in the business of manufacture and sale of precast concrete products in Oranmore since 1996. In fact the family had been in that business for longer, since the mid 1970s, albeit through a different company. 23.Richard Burke became the General Manager of Oran in June 2002. Oran began trading in the UK under the mark ORAN PRE-CAST and the OP Device in the course of 2008. Ross Melville was appointed a director of Oran in September 2010. Following his appointment, the directors of Oran comprised Donall Dooley and his son John Dooley; Michael Melville and his son Ross Melville; and Peter Melville and his son Alan Melville. Richard Burke continued as General Manager.24.In mid 2011, Richard Burke and Ross Melville became aware that the lease of a pre-cast concrete manufacturing facility in Weeting, Norfolk, UK (the “Weeting facility”) was back on the market. Oran had previously looked at leasing the Weeting facility in 2008, but Tarmac took a three year lease instead. That lease was coming to an end and not being renewed. In late summer of 2011 they proposed to Oran’s board that Oran acquire the lease to facilitate the expansion of Oran’s trade in the UK. Oran rejected the proposal. There is a dispute about whether this happened in late September or mid-October 2011, and how exactly it happened. Nothing turns on this for the purposes of construing the Compromise Agreement, as it is accepted by the Defendants that, at the latest, by the time of an Oran board meeting held on 18 October 2011 Richard Burke and Ross Melville knew that Oran had ceased considering acquiring the lease of the Weeting facility. 25.Despite that, Richard Burke and Ross Melville continued their due diligence into the Weeting facility and entered into negotiations for the acquisition of the lease on their own account. On 21 October 2011 they incorporated Oranmore in the UK and became directors of it. They accept they could have informed, but did not inform, the other Oran directors of their intentions to take over the Weeting facility through the vehicle of a proposed new company at the 18 October 2011 board meeting.26.Richard Burke and Ross Melville say that they reached their decisions in the context of a decision made by Oran in April 2011 to cease selling Hollowcore into the UK market. Oran dispute that any such decision was made. Its position is that it had made a temporary decision to move its focus away from the UK Hollowcore market in light of unusually high transport costs between Ireland and the UK at that time, which reduced the profit margins that could be made from Hollowcore to uneconomic levels. Whether Oran had made a decision to pull out of the UK market or not is a dispute I will need to resolve. 27.In the first week of December 2011, John Dooley undertook a UK company search and discovered that Richard Burke and Ross Melville were directors of the newly incorporated Oranmore. At a meeting between those three parties in the first week of December, John Dooley told them that he was aware of the existence of such a company and what it was called, so they should tell him its name. They confirmed that it was called Oranmore. There is a dispute between the parties about whether there was any discussion of what the trading name of the new company would be. John Dooley’s evidence is that he asked if it would trade under that name and Ross Melville told him “it could be anything, it’s a work in progress.” Ross Melville disputes that, and both he and Richard Burke say that John Dooley did not make any comment or complaint about the name of Oranmore. That is a matter I will have to determine. I note as an aside that all parties accept that by the time of entry into the Compromise Agreement in May 2013, Oran was aware that Oranmore was trading under that name.28.On 7 December 2011 John Dooley sent Ross Melville the 7.12.11 Email from his personal email address, which stated: “I just wanted to send this email with regard to the new venture. I really don’t have a problem with the overall situation now that it’s out in the open. I personally don’t have a problem with Vinny’s redundancy situation, I would like to get some clarity on Richards [sic] situation and maybe firm up on the timescale and we can all then get our focus back. The 3 of us need to sit down and make some decisions on OPC when you get back. I’m sure there will be opportunities for both companies to help each other out going forward. I had a couple of good conversations with Richard on Monday and Tuesday about it and I believe if we all pull together and be straight up about things we shouldn’t have any problem. Again, I do wish ye luck with it.” The Defendants rely on this as an unlimited, irrevocable consent provided by a director of Oran to use the ORANMORE Signs in renunciation of Oran’s own rights. Oran says it is nothing of the sort, merely a friendly email sent in his personal capacity with no intention to bind Oran. This is a matter I need to determine.29.On 8 December 2011, Oranmore signed a 10 year lease for the Weeting facility.30.It is Oran’s case, strongly disputed by the Defendants, that Ross Melville was asked by Alan Melville, a director of Oran, in John Dooley’s presence and immediately before an Oran board meeting on 13 December 2011, to change the company name of Oranmore. Ross Melville says he did not attend the meeting as he was in the UK and has provided evidence that he booked and paid for a hotel in Norfolk on both 12 and 13 December 2011. This is a matter I will need to determine.31.Richard Burke ceased working for Oran on 30 December 2011 and began working full time for Oranmore, in the circumstances described in the next section below. Ross Melville continued as a director and shareholder of both Oran and Oranmore.32.In March 2012, Oranmore began trading in the UK under the sign ORANMORE PRECAST and the First Defendant’s Device. Oranmore says that it obtained an oral licence of the copyright in the First Defendant’s Device from Ross Melville’s father, Michael Melville, in ‘early 2012’. However that was reduced to writing by Michael Melville in the Copyright Licence, an undated document which Oranmore states was signed in ‘mid 2012’. In its entirety that states “I, Michael Melville, of [home address] hereby give consent to ORANMORE PRECAST LIMITED to use the logo created by me in 1980 in my personal capacity. The logo is as indicated below; [logo]. Signed, Michael Melville.”33.On 11 June 2012 John Dooley sent an email to Ross Melville, Richard Burke, Alan Melville and Derek Duffy signed by him as “John Dooley, Oranmore Precast Ltd” giving Oranmore’s business address, phone numbers and web address and attaching the Defendant’s OP logo. It does not appear to be disputed that this was a spoof or sarcastic email referring to his discovery that Sean Sharkey, a previous employee of Oran who had resigned in May 2012 telling John Dooley that he was going to be business developer for his brother’s poker business, was now working with Oranmore. 34.35.On 29 June 2012 John Dooley sent Ross Melville a text message saying “Hi Ross, would you be available to meet with me on Monday to discuss Oran and Oranmore relationship going forward? I would like to discuss it with you as a director of both companies and me as a director of Oran and see where it goes from there. I would prefer to keep Richard out of it at this point if you don’t mind.”36.Oranmore relies on, inter alia, these three communications as evidence that Oran knew that Oranmore was trading under the ORANMORE Signs and First Defendant’s Device at the latest by June 2012. Oran disputes that, but accepts that it knew that Oranmore was so trading by September 2012 at the latest. 37.Oran accepts that neither by the time of the Compromise Agreement nor at any time before the letter before action relating to the present claims of February 2014, had it produced any explicit written expression of opposition to the use by Oranmore of its company name, the ORANMORE Signs or the First Defendant’s Device. Richard Burke’s claims against Oran 38.Richard Burke’s position is that he had from 2002 - 2007 been drawing only part of his salary, and deferring the rest, under an arrangement agreed with Michael Melville. It is not now disputed that on 17 December 2007 Michael Melville, as a director of Oran, signed a document stating that “as at the 31st December 2007, Richard Burke, General Manager of Oran Pre-Cast Ltd is owed €400,000 (fore [sic] hundred Thousand Euro) Gross in outstanding back pay”. On 11 December 2009 Michael Melville and Donall Dooley, as directors of Oran, signed a document stating that “as at the 31st December 2009, Richard Burke, General Manager of Oran Pre-Cast Ltd is owed €600,000 (Six Hundred Thousand Euro) Gross in outstanding back pay”.39.On 24 May 2011 Richard Burke’s solicitors wrote to Oran asking for payment of the €600,000 (the “Back Pay Claim”).40.On 22 November 2011 Richard Burke had a meeting with John and Donall Dooley and told them (i) that he intended to leave Oran to work on a new project in the UK and (ii) that he was owed €600,000 of unpaid salary as per the Back Pay Claim. 41.It is Richard Burke’s case that he was given a letter on 20 December 2011 stating that he was to be made compulsorily redundant, which had been backdated to 18 November 2011. Oran relies on the letter as dated. In my judgment, nothing turns on this as both parties accept that he was made redundant and his last day of employment by Oran was 30 December 2011.42.On 6 January 2012, Richard Burke’s solicitors sent a letter before action relating to the Back Pay Claim to Oran. It demanded payment of the full €600,000 within 14 days. Oran did not respond. Oran’s case is that the letter was intercepted internally and not put before the Directors.43.On 9 March 2012, Richard Burke’s solicitors notified Oran by letter that a summons been issued against it in the High Court of Ireland in the sum of €600,000. Oran did not respond. Again, Oran’s case is that the letter was intercepted internally and not put before the Directors for some weeks.44.The Oran directors must have become aware of those letters, because on 25 April 2012, Oran and Richard Burke executed two agreements relating to the cessation of Richard Burke’s employment by Oran: (i) a document signed by two directors of Oran settling his redundancy package by agreeing to pay him €9,615 holiday pay and €47,000 redundancy pay (the latter to be satisfied by payment of €16,692 in cash and the transfer of a Jeep motor car) (“2012 Redundancy Agreement”); and (ii) a document signed as a deed by an Oran director and also signed by Richard Burke, compromising his €600,000 Back Pay Claim by agreeing to pay him the sum of €125,000 net of taxes, in monthly instalments of €10,000, beginning on the date of signature (“2012 Back Pay Agreement”). Clause 3d of the latter agreement provided that in the event of Oran “failing, refusing and neglecting to any one of the instalments due and payable herein then in that event the total amount of the sums claimed in the aforesaid high Court proceedings shall become due and payable by the Company to the said Mr Burke.”. Clause 3e provided that on receipt of the final instalment Richard Burke “acknowledges and accepts that he has no claim against the Company whether it be under statute or common law.”45.Oran failed to make any instalment payments under the 2012 Back Pay Agreement and failed to make the cash payment element of the 2012 Redundancy Agreement, although the car was transferred. Accordingly, Richard Burke filed a claim for redundancy pay with the Irish Employment Appeals Tribunal on 22 November 2012 (“Redundancy Claim”). Oran disputed this claim, stating that all payments had been made, which it now accepts was not the case. Richard Burke also issued further proceedings at the High Court in Ireland for the Back Pay Claim in the full amount of €600,000, as he was entitled to do pursuant to clause 3d of the 2012 Back Pay Agreement. 46.On 5 February 2013 the High Court of Ireland granted summary judgment against Oran in the sum of €600,000 (the “Back Pay Judgment”). That was notified to Oran by a letter from Mr Burke’s solicitors of 26 February 2013 which demanded payment within 14 days. Oran made no payment.47.Richard Burke lodged an application in the Sheriff’s Office for immediate execution of the Back Pay Judgment. The Sheriff notified Oran on 17 April 2013 that it had 4 days from receipt of the notice to pay €600,000 plus enforcement costs, failing which the Sheriff would seek to levy that amount against it by seizure and sale of goods or otherwise. The Compromise Agreement 48.Oran and Richard Burke entered into negotiations. Richard Burke was represented by his solicitors. Oran was not, although it had taken some legal advice upon receipt of the Sheriff’s notice. John Dooley acknowledged in paragraph 15 of his first Witness Statement, and in oral evidence, that Richard Burke had informed Oran that he was not willing to waive his rights under the Back Pay Judgment unless he obtained a separate release of Oran’s claims against him. Oran agreed to provide such a release.49.Accordingly, on 17 May 2013 Oran and Richard Burke entered into the Compromise Agreement, comprising three documents:i)A letter from Richard Burke to Oran (the “Burke Release”) stating: “In consideration of the payment of the sum of €26,092, which payment I acknowledge in full and final settlement of all sums due and owing to me by Oran Pre-Cast Ltd whether arising by contract, common law and/or statute. Further and [sic] consideration of the aforesaid payment I confirm I will instruct my Solicitors Steen O’Reilly 31/34 Trimgate Street, Navan to discontinue enforcement proceedings against your company arising from the High Court Judgement in the case: Richard Burke v Oran Pre-Cast Limited Record Number 2012/636S. I further confirm I have instructed by [sic] solicitors to withdraw such claims and actions that have been filed before the Employment Appeals Tribunal.” ii)A letter from Oran to Richard Burke (the “Oran Release”) stating: “In consideration of you compromising the amount due and owing to you on foot of High Court Judgement in the case: Richard Burke v Oran Pre-Cast Ltd Record Number: 2012/636S I confirm, on behalf of and under the authority of Oran Pre-Cast Ltd that Oran Pre-Cast Limited have no claim against you, Richard Burke, whether it be in contract, common law and/or statute.” iii) A document headed ‘Discharge Form’ signed by Richard Burke (the “Discharge Form”) stating: “I Richard Burke… hereby accept from Oran Pre-Cast Ltd… the net sum of €26,092 comprising notice, statutory redundancy, outstanding annual leave, ex-gratia payment and any monies owed by or to the company for termination of employment in full and final settlement of all statute and common law claims of every nature, type and kind whatsoever arising from my said former employment with the Company and the termination thereof by reason of my redundancy. I hereby acknowledge and agree that this payment of €26,092 constitutes a full and final settlement of all claims (if any) which I may have against the Company, its parent, subsidiaries and associated companies and/or each and all of their respective officers, directors, employees and agents, whether such claims arise under contract, at common law, in tort, in equity and/or pursuant to statute (including but not limited to the Redundancy Payments Acts 1967 to 2001, the Minimum Notice and Terms of Employments Acts, 1973 to 2001, Protection of Employment Act, 1977 (as amended) Organisation of Working Time Act 1997, Payment of Wages Act 1991, Parental leave Act 1988, Maternity Protection Act 1994, Unfair Dismissals Acts 1977 to 2001, Employment Equality Act 1988 and National Minimum Wage Act 2000).” 50.Richard Burke’s evidence was that he signed the Compromise Agreement “on the basis that I was finished working with [Oran] and, free of any claims against me, I would now be able to get on with my life working for [Oranmore]”. He said “I was only willing to compromise my claims worth over €600,000 on the basis that [Oran] had no further claims against me. I wanted to move on with my life.”51.John Dooley’s evidence is that Richard Burke wanted the separate release from Oran “to prevent us from pursuing him”, “to make sure we could not come after him for anything he had taken after the company once he had left” and “so we would not pursue him in case anything came out after he left”. At paragraph 15 of his witness statement, John Dooley stated that Oran could have pursued Richard Burke for sums of money arising from “a lot of malpractices on his part”, and this was the reason why Richard Burke sought the Oran Release. He refers to conversations between Richard Burke and Donall Dooley at the end of 2011 to support his allegations. This is hearsay evidence. The court has not heard from Donall Dooley. Richard Burke strongly denies any such malpractices. There is no documentary evidence put before the court to corroborate these allegations and for the purposes of these proceedings, in my judgment, they are unfounded. For those reasons, I give John Dooley’s evidence on this point no weight. 52.The effect of the Compromise Agreement was that Richard Burke compromised his rights under the Redundancy Claim and the Back Pay Judgment for a total payment of €26,092. This is the same cash sum for which he had previously compromised his rights under the Redundancy Claim (but not the Back Pay Claim) in the 2012 Redundancy Agreement and effectively amounts to a waiver of the €600,000 awarded to him under the Back Pay Judgment.53.Oran provided Richard Burke with a cheque for €26,092 (plus another in payment of his agreed solicitor’s costs) upon signature of the Compromise Agreement. Oran’s Financial Position at the time of the Compromise Agreement 54.It is common ground that Oran was not in a financial position to easily meet the €600,000 Back Pay Judgment at the time of the Compromise Agreement. Oran’s witness Derek Duffy stated in his witness statement that in 2012: “The dispute with Richard over his redundancy from [Oran] and the claim that he was asserting against [Oran] for €600,000 he claimed was owed to him, which is referred to in paragraphs 11 and 12 of John’s witness statement with which I agree, threatened the solvency of [Oran]. [Oran] was therefore paralysed from taking any action in respect of the First Defendant’s name throughout 2012 because if it did so, Richard could have pursued the winding up of [Oran] on the basis of his claim for €600,000”. He confirmed in cross-examination that Oran’s ‘primary concern’ throughout 2012 and into 2013 was its solvency. 55.John Dooley stated in his 1st Witness statement that at the time of the negotiations and signature of the Compromise Agreement: “I was also aware of the risk to the company of having a judgment registered against it and so was focused on getting a settlement to draw a line under the court action in Ireland. The company would be in a dire position when trying to obtain credit if we had a judgment against it and so I wanted to settle this.”56.Richard Burke, too, was aware of the potential implications to Oran of him enforcing his judgment, stating in paragraph 83 of his witness statement that he settled his claims for “a significantly reduced sum as [Oran] told me that they did not have sufficient funds and if I were to proceed for the full amount that it would result in redundancies within the company.”57.None of this evidence was challenged in cross-examination.