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Judge orders the release of Clerys sale firm documents


The iconic Clerys department store building on Dublin’s O’Connell Street   Picture: Frank Mc Grath

The iconic Clerys department store building on Dublin’s O’Connell Street Picture: Frank Mc Grath

The iconic Clerys department store building on Dublin’s O’Connell Street Picture: Frank Mc Grath

A law firm has been ordered to discover a range of documents concerning the company that formerly operated Clerys department store, including those relating to the company's controversial sale in June 2015.

Yesterday, Mr Justice Robert Haughton directed solicitors William Fry to discover the material within 14 weeks but agreed to place a stay on his order in the event of an appeal.

The documents are wanted for forthcoming disqualification proceedings brought under the Companies Act by the joint liquidators of the Clerys operating company - OCS Operations Ltd (Operations) - against two former directors of that company.

The joint liquidators - Eamonn Richardson and Kieran Wallace of KPMG - sought documents including material concerning the conduct of Operations' affairs before Clerys was sold to Natrium just after 1am on June 12, 2015. It was wound up hours later.

Operations is part of the OCS group. The two former directors subject of the disqualification application - Rafael Klotz and Malcom MacLennan MacAulay - deny they acted in breach of their duties as directors and insist they acted honestly and responsibly in the conduct of the company's affairs.

Fry's, represented by Declan McGrath SC, had argued its client was not Operations and it was instead instructed by OCS Investment Holdings Ltd and US-based Gordon Brothers, the parent and ultimate parent of the OCS group. Because the two latter companies had refused to consent to discovery concerning Operations, the firm was not legally entitled to discover documents which might, in addition to referring to Operations, also touch on affairs of the OCS group, it argued. Imogen McGrath BL, for OIHL, also opposed the discovery sought.

James Doherty SC, for the liquidators, maintained Operations had been a client of Fry's and had paid the firm more than €735,000 for work done. The firm had advanced "technicality upon technicality" in opposing some of the discovery sought, he argued.

The judge was told by Mr Doherty no substantial monies are expected to be realised from the liquidation of Operations. There would be substantial legal costs and fees of the joint liquidators, the court heard.

In his ruling, Judge Haugthon said he was satisfied there was at the very least an "implicit acknowledgement" Operations was a client of Fry's and the firm acted not just as solicitors for the OCS group but all entities within that group during the relevant period from September 2012 to June 2015. Correspondence also seemed to acknowledge Fry's acted for Operations up to June 12, 2015 and only ceased to act after that date, he said.

Operations also paid €735,000 to Fry's between September 2012 and December 2014 and invoices and other material set out in some detail that much of the work done by Frys was on behalf of Operations rather than for the OCS group. The fact it was said the client was OIHL and it was on its instructions that fees were divided between the OCS firms doesn't alter his conclusion that Operations was a client and the bulk of work done was on behalf of Operations, he said.

He held the liquidators were prima facie entitled to discovery of documents under a number of categories, including all files and documents relating to the sale of the OCS group. The documents could only be used for the disqualification proceedings unless the court directed otherwise.

Irish Independent