IEHC 423 — IEHC 423 — High Court

THE HIGH COURT

COMMERCIAL

[2026] IEHC 423

2024 No. 3071 P

BETWEEN

GERARD LANE and VICTORIA LANE

PLAINTIFFS

AND

DENIS CONNOLLY, MEZEN CONSULTANCY SERVICES LIMITED and

POINTSETTER LIMITED

DEFENDANTS

JUDGMENT of Ms. Justice Eileen Roberts delivered 30 June 2026

Table of Contents INTRODUCTION ................................................................................................................................................ 2 THE PARTIES TO THESE PROCEEDINGS AND OTHER RELEVANT ENTITIES ............................... 3 AN OVERVIEW OF THE CLAIMS ADVANCED IN THESE PROCEEDINGS ......................................... 7 THE EVIDENCE AND FINDINGS OF FACT ............................................................................................... 11 TIME PERIOD (A): 2013 - FEBRUARY 2017 ....................................................................................................... 11 A (1) Lead up to the chance meeting and the days that followed it ............................................................. 11 A (2) The MOU and progressing the purchase of Tinakilly ........................................................................ 19 A (3) The Shareholder Agreement ............................................................................................................... 23 A (4) Refurbishment of Tinakilly and Room 66 .......................................................................................... 29 2

A (5) Engagement on financial information ............................................................................................... 30 TIME PERIOD (B): MARCH 2017 - JULY 2022 ................................................................................................... 34 B (1) Monasterio – its acquisition and subsequent refurbishment .............................................................. 34 B (2) Discussions regarding the potential sale of Tinakilly ....................................................................... 41 TIME PERIOD (C): AUGUST 2022 TO DATE ....................................................................................................... 42 C (1) The Room 66 incident ........................................................................................................................ 42 C (2) Pre-litigation activity ......................................................................................................................... 43 C (3) The issuing of proceedings and the sale and liquidation of Monasterio .......................................... 46 THE EXPERT FINANCIAL EVIDENCE AND OTHER FINANCIAL EVIDENCE FROM NOONE CASEY............................ 54 The expert evidence ..................................................................................................................................... 54 Other financial evidence tendered by Noone Casey.................................................................................... 64 THE EVIDENCE OF ANNA WINDSOR .................................................................................................................. 67 LATE AMENDMENT OF PLEADINGS DURING THE TRIAL ................................................................. 71 INCREASED EQUITY SHARE CLAIM ......................................................................................................... 78 THE GARDEN .................................................................................................................................................... 79 LOANS .............................................................................................................................................................. 79 ALLEGED CAPITAL PAYMENTS ......................................................................................................................... 80 ANALYSIS .......................................................................................................................................................... 84 INTERPRETATION AND APPLICATION OF THE SHAREHOLDER AGREEMENT ....................................................... 84 THE LEGAL STATUS OF THE RELATIONSHIP BETWEEN THE PARTIES ................................................................... 87 (1) “A relation” .......................................................................................................................................... 89 (2) “which subsists between persons” ........................................................................................................ 89 (3) “carrying on” ........................................................................................................................................ 89 (4) “a business” .......................................................................................................................................... 90 (5) “in common” ......................................................................................................................................... 90 (6) “with a view of profit” .......................................................................................................................... 92 Partnership in the context of the Shareholder Agreement .......................................................................... 96 Applying partnership principles to the working relationship between the parties ...................................... 98 SHARE RIGHTS................................................................................................................................................ 106 INCREASED EQUITY SHARE CLAIM .................................................................................................................. 108 PROVISION OF FINANCIAL INFORMATION ........................................................................................................ 110 MONASTERIO .................................................................................................................................................. 111 EXTANT MOTIONS ........................................................................................................................................... 112 The Discovery Strike Out Motion .............................................................................................................. 113 The Alleged Breach of the Mareva Order ................................................................................................. 114 VALIDITY OF THE NOTICE OF TERMINATION.................................................................................................... 116 PAYMENT OF LEGAL FEES BY MEZEN.............................................................................................................. 118 THE TAKING OF AN ACCOUNT ......................................................................................................................... 119 CONCLUSIONS AND ORDERS TO BE MADE .......................................................................................... 124

Introduction

1. A chance meeting in a hotel bar in Tinakilly Country House Hotel (“Tinakilly”) in May

2013 resulted in the business relationship at the heart of these proceedings. This judgment,

whose length reflects the fifteen day hearing, addresses the legal status of that relationship 3

and how its accepted irretrievable breakdown should be managed in light of the

circumstances which arose in the years following that meeting.

2. The first named plaintiff (“Mr Lane”) claims that he and the first named defendant (“Mr

Connolly”) assumed fiduciary duties to each other as parties to a partnership concerning the

property and business of Tinakilly, which partnership it is claimed was later extended to

include, or was alternatively followed by a separate partnership on the same terms in relation

to, the property and business of a Spanish hotel, Finca Monasterio near Sotogrande, Marbella,

Spain (“Monasterio”). An alternative plea of a joint venture (giving rise to the same

fiduciary duties) was advanced by Mr Lane. These pleas are denied by Mr Connolly who

claims that the relationship between him and Mr Lane comprises no fiduciary duties owed by

one to the other. He says the relationship between them is solely one of common shareholders

in various corporate entities and that this status, rather than any partnership or joint venture,

should dictate how matters are brought to an end as between them.

3. For all the reasons set out in this judgment I have concluded that the relationship is

properly characterised as a partnership.

The parties to these proceedings and other relevant entities

4. Mr Lane is a successful entrepreneur and businessman, now aged 80. He was born and

raised in Ireland but left Ireland in his early twenties. For much of his life he has lived

between Manila in the Philippines and Sydney, Australia. He continued however to maintain

strong links with Ireland and has family living near Tinakilly. The evidence was that he

visited Ireland two or three times every year and, on those visits since about 2005, he stayed

with his wife at Tinakilly – a place that both of them have a deep affection for. Mr Lane is

not tax resident in Ireland.1

1 Day 3 page 139 line 16 4

5. The second named plaintiff (“Mrs Lane”) has been married to Mr Lane for fifty years. She

is a successful businesswoman in her own right and is also involved in Mr Lane’s extensive

business operations in the Philippines.

6. Mr Connolly is a 64 year old experienced businessman with expertise in the hospitality

sector. Since 2013 he has resided in a residential property (“Cúl an Tí) on the grounds of

Tinakilly. Mr Connolly has been responsible for the day to day operation of the business in

Tinakilly since 2013. It was clear from the evidence that he, too, has a deep affection for

Tinakilly.

7. The second named defendant, Mezen Consultancy Services Limited (“Mezen”), is an Irish

registered limited liability company (incorporated on 16 May 2013) and is the entity through

which the management and operation of the Tinakilly business is undertaken. Mr Connolly is

a director of Mezen and Mr Hatt is the company secretary.2 Mr Connolly is registered as

owning 99% of the shares in Mezen and his brother Mr Barry Connolly is registered as

owning the balance of 1% of the shareholding – which he holds on trust for Mr Connolly.

Therefore Mezen is wholly owned by Mr Connolly. Mr Lane is neither a director nor a

shareholder of Mezen although Mr Connolly confirms that he is holding 49% of the Mezen

shareholding on trust for Mr Lane. Mezen, through a Transfer of Trade Agreement,

purchased all the non-property assets of the Tinakilly business from receivers in 2013. No

dividend has ever been declared by Mezen.

8. The third named defendant, Pointsetter Limited (“Pointsetter”) is a company which was

incorporated in the British Virgin Islands (“BVI”) on 13 March 2013, by company service

providers instructed by Mr Lane. It is the company which acquired the freehold interest in

Tinakilly when it was sold by receivers in July 2013. Pointsetter was registered as owner of

Tinakillly on 6 February 2014. Mr Lane and Mrs Lane are the directors of Pointsetter, both

2 There was some evidence on day 10 that Mr Hatt may also have recently become a director of Mezen. 5

having been appointed on 1 July 2013. Mr Connolly became aware that Mrs Lane was a

director in 2015 but he agreed on cross-examination that he took no issue with that matter at

the time.3 The certificate of incumbency lists the entirety of the shareholding of 50,000 shares

in the name of “Gerard Lane and/or Virginia Lane in Joint Tenancy with Rights of

Survivorship”. At the time of the purchase of Tinakilly the agreed shareholding of Pointsetter

was to be 51% Mr Connolly and 49% Mr Lane, with Mr Lane to hold Mr Connolly’s shares

on trust. Mr Lane accepts that he holds a percentage of Pointsetter shares on trust for Mr

Lane, but seeks an increased equity share beyond his original 49% in the circumstances set

out in this judgment.

9. In addition to the named parties to these proceedings there are a number of other entities

relevant to this dispute although not parties to the proceedings. These entities include the

following:

(1) NOL 2 SL (“NOL”) is a Spanish registered company which purchased the Monasterio

property in or around 2018. It is owned 100% by Mr Connolly – although he says he

holds 51% of the shares on trust for Mr Lane.

(2) Monasterio Exclusive SL (“MESL”) is a Spanish company which operated the

business of Monasterio. It is owned 100% by Mr Connolly – although he says he

holds 51% of the shares on trust for Mr Lane. No dividend has ever been declared by

MESL.4

(3) Barry Connolly is Mr Connolly’s brother. He holds 1% of the shares in Mezen on

trust for Mr Connolly. He was not joined as a party to these proceedings in

circumstances where he agreed to be bound by the orders of this court.

3 Day 8 page 8 line 17 4 NOL and MESL are not part of the same group as Mezen. 6

(4) DB Hollowstone Limited (“Hollowstone”) is a UK registered company with a

registered office at Newstead House, Pelham Road, Nottingham. It is the company

which was the contractual counterparty to the contract for the sale of Tinakilly (as

purchaser). Ultimately, and in accordance with the terms of that contract, Tinakilly

was conveyed by its vendors to Pointsetter on completion of the sale. The directors of

Hollowstone were Ms Paddy Lavelle, Mr Connolly’s then sister-in-law, and Colin

Hatt (an associate of Mr Connolly who later became General Manager of Tinakilly).

Mr Connolly confirmed in evidence that 100% of the shares in Hollowstone are held

on trust for him by Ms Lavelle. Hollowstone is therefore a Connolly entity, although

Mr Connolly is not (and never was) registered as either a director or shareholder.

Hollowstone was the entity which Mr Connolly confirmed was used by him to

conduct some property transactions in the UK. Hollowstone is not a trading company.

It held a profit which was utilised in relation to the purchase of Tinakilly. Mr

Connolly confirmed in evidence that in 2012 those retained profits were entirely

under his control.5 Remarkably however neither Mr Connolly nor Mr Hatt could give

any indication to the court as to the level of those retained profits.

(5) Cassidys Spirits Distillery Limited (“Cassidys”) is an Irish registered company. Mr

Connolly says he is the 100% beneficial owner of Cassidys6 although the shares are

held in the name of Colin Hatt, who is also a director. Mr Connolly is secretary to

Cassidys.

(6) Provenance Spirits Company (“Provenance”) is an Irish registered company. Mr

Connolly is a director and the sole shareholder.

5 Day 7 page 25 line 26 6 Day 6 page 154 line 3 7

(7) Caspian Consulting Limited (“Caspian”) is also an Irish registered company and a

Connolly related entity. Mr Connolly is the director and Mr Hatt is secretary. A Mr

Michael Connolly is the sole shareholder.

(8) Monasterevin Whiskey Company Limited (“Monasterevin”) is an Irish incorporated

company. Mr Connolly is the secretary and Mr Hatt is the director. Mr Hatt is also the

sole shareholder but the evidence confirmed that he holds those shares on trust for Mr

Connolly.

An overview of the claims advanced in these proceedings

10. Tinakilly has become one of the most successful hotels and wedding venues in the

country. There is no doubt that both Mr Lane and Mr Connolly regard Tinakilly with pride as

a special and beautiful place, which they developed into a successful business following its

purchase from receivers in 2013.

11. Despite the growth and success of the business however, it is accepted that the

relationship between Mr Lane and Mr Connolly has irretrievably broken down and that was

clearly evident to the court at the hearing of these proceedings. Indeed, if anything, the

evidence at the trial further fractured the relationship between the parties leading Mr Lane,

when being re-examined on day 14 to say: “…this relationship absolutely has to end one way

or another. I will not, for the rest of my life, ever be involved in a business with Mr.

Connolly”.7 The reliefs sought in the proceedings are therefore focussed on formally

bringing an end to the commercial relationship and determining how to regularise the

respective interests of Mr Lane and Mr Connolly in both Tinakilly and in the proceeds of the

sale of Monasterio. Mr Lane seeks an order dissolving the partnership. He also claims to have

7 Day 14 page 21 lines 4-6 8

already ended his partnership with Mr Connolly, having done so by correspondence from his

solicitors in June 2024.

12. Damages are sought by Mr Lane for what he alleges are breaches of the fiduciary duties

owed to him by Mr Connolly and also for conspiracy as between Mr Connolly and Mezen. It

is accepted that Mr Lane and Mr Connolly entered into a shareholder’s agreement (the

“Shareholder Agreement”) in or around the date of the completion of the sale of Tinakilly

(15 July 2013), although the exact date in July 2013 is not specified in the signed Shareholder

Agreement. Both parties allege the other has breached clause 6 of the Shareholder

Agreement. Mr Connolly asserts a breach by Mr Lane of clause 6 because of the holding of

the shares in Pointsetter with his wife with rights of survivorship. Mr Connolly's evidence

was that he did not become aware until 2019 that Mr Lane was holding the Pointsetter shares

as a joint tenant with Mrs Lane.8 Mr Lane asserts a breach of clause 6 because of the

shareholding of Barry Connolly in Mezen.

13. Mr Lane claims a breach of clause 3 due to Mr Connolly’s failure to register Mr Lane as

the 49% shareholder in Mezen or to register him as a 51% shareholder in NOL and MESL.

Mr Lane also claims that Mr Connolly acted in a breach of clause 8 and conspired with

Mezen to pay dividends or profit distributions otherwise than in accordance with the

applicable equity percentages.

14. Both Mr Lane and Mr Connolly claimed, relying on clause 5 of the Shareholder

Agreement, an entitlement to an increased share in Pointsetter and Mezen (and Mr Lane in

NOL and MESL) by reason of certain alleged unmatched capital contributions each alleges

they made to the business – although this claim was not pursued at trial by Mr Connolly. Mr

Lane claims he has not received equivalent payments to Mr Connolly according to his pro

rata share (in breach of clause 8) and he pleads that he has serious concerns about the

8 Day 6 page 125 line 4 9

financial records of Mezen claiming resultant breaches of clauses 9 and 13. Mr Lane

complains of a longstanding failure by Mr Connolly to provide him with access to financial

records, as agreed. Indeed there was, throughout the hearing, a persistent complaint in respect

of the lack of financial information made available to Mr Lane including by way of discovery

in these proceedings – resulting in a motion to strike out the defence and counterclaim

remaining extant at the conclusion of the hearing.

15. In relation to Monasterio, Mr Lane pleads that Mr Connolly acted in breach of the

implied term that he would not cause or procure NOL and MESL to sell the business and

property of Monasterio without the knowledge or consent of Mr Lane and that the sale of

Monasterio by Mr Connolly was a complete disregard of Mr Lane’s interest in Monasterio.

16. There are disputes as to the extent of loans made by Mr Lane to the business of both

Tinakilly and Monasterio. A considerable amount of evidence was given regarding the

manner in which Mr Connolly ran the businesses and in particular the extent to which it was

alleged that he had made improper payments to various third parties (including himself or

entities related to him) through Mezen.

17. To a large extent, the resolution of these issues depends on the proper characterisation of

the business relationship between Mr Lane and Mr Connolly. Mr Lane claims that

relationship is one of partnership(s), or alternatively joint venture(s), such that each of Mr

Lane and Mr Connolly owe fiduciary duties to the other. Mr Lane accepts that he and Mr

Connolly agreed to (and do in fact) hold Tinakilly and held Monasterio through various

corporate entities but he says that such arrangement is subject to the overarching fiduciary

relationship agreed between him and Mr Connolly. Mr Connolly denies this and contends

that the only relationship between him and Mr Lane is one of common shareholders, with Mr

Lane’s status being that of an investor providing what Mr Connolly described as “soft loans”

to the business. 10

18. I will now consider the evidence adduced at the trial. Although it was not given in this

sequence, I propose, for presentation purposes, to outline the evidence and my findings of

fact primarily by reference to three separate time periods – recognising of course that the

evidence on certain matters may span or evolve over several periods. The first period of time

runs from 2013 to February 2017. The evidence in respect of this period is essential to

understand the nature of the relationship entered into by the parties. Tinakilly was acquired in

that period and many of the now disputed payments were made during that time. Relations

were generally good between Mr Lane and Mr Connolly during that period. The second

period I have identified is the period from March 2017 until July 2022. This period is one

where certain strains in the relationship between the parties started to manifest. It is the

period when Monasterio was purchased and the period during which difficulties emerged

more clearly regarding the sharing of financial information and the preparation of accounts.

This period of time also coincides with the Covid pandemic which caused particular strain for

hospitality businesses such as Tinakilly and Monasterio. The final period I consider is from

August 2022 to date. This is the period in which the relations between Mr Lane and Mr

Connolly broke down entirely. It is also the period in which Monasterio was sold by Mr

Connolly and the present proceedings were issued and advanced to trial.

19. In addition to those time periods I consider some evidence entirely separately, given the

amount of such evidence and/or its relevance to all periods. Specifically I deal separately

with the evidence and arguments made in relation to the claim by Mr Lane for an increased

equity contribution in both Tinakilly and in Monasterio. I also deal separately with the expert

evidence adduced in this case and some factual evidence. 11

The evidence and findings of fact

Time Period (A): 2013 - February 2017

A (1) Lead up to the chance meeting and the days that followed it

20. Tinakilly had for many years operated successfully as a country house hotel. It was sold

by its previous owners, the Power family, to a property development company in 2007. That

company, together with related companies, went into receivership in December 2011. The

receivers decided to put Tinakilly up for sale in 2012 – by which time Tinakilly and its

gardens had deteriorated significantly due to a lack of maintenance and investment since its

sale in 2007.

21. Mr Lane learned that Tinakilly was for sale and initially made inquiries with the selling

agent CBRE in November 2012. Mr Lane met with Mr Hughes of CBRE at Tinakilly on 8

February 2013 to discuss the sale. Later that month Mr Lane made an offer to purchase

Tinakilly (specifically Lot 2 which comprised the hotel, the adjoining house (Cúl an Tí) and

5.86 hectares of land) for €1,000,000, increasing that offer to €1,100,000 in March 2013.

This higher offer was accepted subject to contract and Mr Lane paid a refundable booking

deposit of €50,000.00 to CBRE on 3 April 2013.

22. Having discussed matters with friends in Manila, who cautioned against the wisdom of

trying to run a hotel from the opposite side of the world, Mr Lane (who had no prior

hospitality experience himself) decided not to proceed with the purchase. His evidence was

that he made this decision very reluctantly. He requested the return of his deposit on 5 May

2013 and this was returned to him shortly thereafter.

23. Mr Connolly was also interested in purchasing Tinakilly and was in fact the underbidder

to Mr Lane. His lower bid of €1,050,000 was accepted subject to contract following the

withdrawal of Mr Lane’s offer. 12

24. Mr and Mrs Lane stayed as guests in Tinakilly for 6 nights between the 16 and 22 May

2013. It was during that time that the chance meeting took place in Tinakilly between Mr

Lane and Mr Connolly leading to their joint involvement in the purchase of Tinakilly.

25. Differing versions of the chance meeting were proffered in evidence by the four parties

who were involved in that meeting. That fact alone is not surprising given that the meeting

happened almost 13 years ago. Some of the differences are immaterial to the issues the court

has to decide. Others however are relevant and will need to be considered in more detail.

26. What is agreed is that the meeting took place in the bar/restaurant in Tinakilly sometime

between 16 and 22 May 2013 and more likely in the earlier part of that time period. Mr and

Mrs Lane were having lunch and noticed a lifelong friend of Mr Lane, Mr Brendan Murphy,

sitting at an adjoining table with Mr Connolly (who Mr Lane says he may have met

previously but did not know). Mr Muphy was also a close friend of Mr Connolly and the two

had had some business dealings together previously. Mr Connolly had earlier collected Mr

Murphy from Donnybrook Hospital (where Mr Murphy’s wife was then a patient) and had

driven Mr Murphy to Tinakilly as he wanted to show him the hotel he was going to buy.

27. On seeing Mr Murphy, Mr and Mrs Lane joined his table and the four got chatting. What

is agreed is that both Mr Lane and Mr Connolly informed the other of their interest in buying

Tinakilly. Mr Lane advised that he had just received back his deposit and Mr Connolly

advised that he had just paid his deposit. Both deduced that Mr Lane was the “overseas

investor” who had originally outbid Mr Connolly. From this point on however there were

different versions of events described in evidence.

28. Mr Lane’s evidence was that “Mr Connolly suggested that we join together as partners to

purchase Tinakilly. I ultimately agreed and we shook hands on the new partnership”.9 He

said he believed this was the perfect arrangement as Mr Connolly was in Ireland and he had

9 Gerard Lane witness statement para 28 13

some experience in the hospitality business running bars and restaurants while Mr Lane had

available funds and a real love for Tinakilly. Mr Lane said in evidence that “I was ready from

the beginning to spend money to restore the hotel to its former glory”.10 Both men gave

evidence of their view that there was a lot of potential in Tinakilly with the right management

and investment. On Mr Lane’s version of events the partnership deal was done in the bar that

day and sealed with a handshake. His oral evidence was that: “what I'm saying is that we

shook hands on, not the possibility of the partnership, as you say, but on the fact that we've

just agreed to the partnership".11

29. Mr Lane accepted that there were further discussions in the days that followed to “iron

out the details”.12

30. Mr Lane says that Mr Connolly originally proposed a 50:50 partnership but that he (Mr

Lane) suggested a 51% interest for Mr Connolly and a 49% interest for Mr Lane to reflect the

fact that Mr Connolly would be on the ground running the hotel and should be able to have

the casting vote in making day to day decisions. Mr Lane said in evidence that this “was a

massive declaration of trust”.13

31. The two men continued to have discussions in the days following the chance meeting and

they decided on the structure involving separate corporate entities being used to own and to

operate Tinakilly. Both men signed a Memorandum of Understanding (“MOU”) before Mr

Lane departed Tinakilly on 22 May 2013 (most likely the MOU was signed on 21 May). Mr

Lane says the MOU was drafted by Mr Connolly while Mr Connolly says it was jointly

drafted. In any event both men signed it and it is accepted that the MOU was overtaken by a

later shareholders’ agreement they both signed in July 2013 (the “Shareholder

Agreement”).

10 Day 2 page 15 lines 3-4 11 Day 2 page 50/51 12 Gerard Lane witness statement para 31 13 Day 2 page 11 lines 15-16 14

32. Mrs Lane’s witness statement recounts that after the initial lunchtime conversation Mr

Lane went to meet Mr Connolly that evening. When Mr Lane returned he told Mrs Lane that

he and Mr Connolly had decided to go into partnership together to buy and run Tinakilly on

the basis of a 49:51 split which Mrs Lane said she understood was intended to give Mr

Connolly operational control. Mrs Lane was not in favour of a proposal her husband told her

was made by Mr Connolly that he (Mr Connolly) would purchase the residential house on the

grounds with a loan from Mr Lane and this aspect did not proceed. Mrs Lane stated in

evidence that she understood Mr Lane had entered into a partnership with Mr Connolly which

was based on trust originating from the close and long-term relationship between Mr Lane

and Mr Murphy. She proffered the view that that trust was the reason why much of the

business arrangements between her husband and Mr Connolly had not been “properly

formalised”.14 A lot of Mrs Lane’s evidence was however hearsay in nature and the court

treats it as such.

33. In her oral testimony Mrs Lane could not provide any details of the lunchtime discussion

or any other meeting. Although she said that she was at the table she could not recall any of

the discussions that took place between her husband and Mr Connolly, saying that she

“wasn’t privy to their conversation”.15 She conceded that she did not recall seeing the two

men shaking hands and that she might be confused about the reference in her witness

statement to a meeting having taken place in the gardens in Tinakilly that same evening. She

was not otherwise involved in the discussions and could report only what her husband told

her had happened.

34. Mr Brendan Murphy knew both Mr Lane and Mr Connolly. He expressed his sadness at

the breakdown of their relationship. His version of events confirms that at the lunch table the

14 Virginia Lane witness statement para 19 15 Day 4 page 53 lines 16-17 and page 67 line 25 15

sale of Tinakilly came up and the parties came to realise their respective interests in

purchasing it. His evidence was that “[t]he conversation evolved and quickly led to the

suggestion that Gerry and Denis should partner up and buy it between themselves. I do not

recall who made that suggestion but it came up naturally as the conversation evolved as both

Gerry and Denis were interested in purchasing Tinakilly… That conversation continued for a

few hours, maybe more, I recall that, at the end of the evening, Gerry and Denis shook hands,

agreeing the plans they had spoken about to jointly purchase and develop Tinakilly.”16 He

later said in his oral testimony that “[t]here was a lot of handshaking”17 but conceded that the

“handshaking wasn’t necessarily the partnership being formed”.18

35. Mr Murphy gave evidence that he had spoken to Mr Lane and Mr Connolly separately in

the days and weeks leading up to the purchase of Tinakilly. His evidence was that he had

“absolutely no doubt that what they were discussing and agreeing to do was to enter a

partnership to purchase Tinakilly”.19 He also said that“[i]n all my conversations with both

Gerry and Denis I never had any indication that they were engaged in some form of

shareholder relationship and that Tinakilly was really the business of Denis while Gerry was

just a shareholder. They were partners”.20 He conceded in cross-examination however that he

had no information about the actual legal relationship between the two men as he didn’t know

the full extent of their dealings or the paperwork they had signed. He said that “partnership”

was the most common word used in the early stages of the parties coming together, especially

by Mr Lane.

36. It seems from his witness statement that Mr Murphy learned of the 49%/51% split at a

later date than the initial meeting, although he did not specify precisely when. He accepted in

16 Witness statement of Brendan Murphy para 17 17 Day 4 page 29 line 21 18 Day 4 page 30 lines 15-16 19 Witness statement of Brendan Murphy para 18 20 Witness statement of Brendan Murphy para 19 16

his oral evidence that this part of the agreement was likely reached after the chance meeting

sometime in May 2013. Mr Murphy did not see any documentation the parties entered into at

the time.21

37. In his oral testimony Mr Murphy confirmed that he had travelled to Tinakilly earlier that

day with Mr Connolly. He confirmed that Mr Connolly had driven him back to Donnybrook

later that day. When it was put to him by counsel that it was Mr Murphy himself who had

first suggested on the journey back to Donnybrook that Mr and Mrs Lane might be interested

in investing with Mr Connolly given their love of Tinakilly, Mr Murphy rejected that

suggestion saying: “I didn't have that conversation. The only conversation would have been,

'This could be a great partnership.' So that's what the conversation was about”.22

38. Mr Murphy did not agree with Mr Lane’s evidence that the partnership was formed at the

meeting in the hotel bar. He said this was not accurate and that “[i]t took some time and days

before they agreed anything… But they were excited about the idea”.23 Mr Murphy’s

evidence was that he did not see any documents signed by the parties at that time but that it

was possible that there were a few phone calls between the three men in the days following

the chance meeting. He accepted that Mr Connolly discussed matters with his own family.

39. Mr Connolly’s evidence was that by the time of the chance meeting he had paid his

deposit because his bid of €1,050,000 had been accepted. He claims that he was in a position

to fully fund the purchase of Tinakilly and had no need to bring anyone else on board. On the

evidence I do not accept this to be the case. He said in evidence that: “I certainly was in a

position where I could have completed on the purchase of the property and subsequently I

had probably a smaller fund, if you like, to support the operating of the business, yeah”.24 It

was his evidence that the money would have come from Hollowstone and that he could have

21 Day 4 page 38 line 28 22 Day 4 page 7 lines 10-12 23 Day 4 page 29/30 24 Day 7 page 79 lines 22-25 17

disposed of assets and that he was well supported by colleagues so that he “wouldn't have had

a difficulty”.25 When pressed on this on cross examination and having been provided with

evidence of eight sets of proceedings against him around 2013 Mr Connolly agreed that he

was involved in a lot of litigation at the time of the purchase of Tinakilly and that those

proceedings resulted in judgments against him running into millions of euro.26 He also

confirmed that he did not disclose anything in those proceedings to the effect that there were

retained profits in Hollowstone that were to his order. In the circumstances, I do not accept

Mr Connolly's evidence that he had no need of further financial contribution to purchase and

develop Tinakilly. It is clear that he was heavily indebted personally and this likely

influenced his requirement that he not be listed as a shareholder in Pointsetter. I reject Mr

Connolly’s evidence on day 7 of the hearing to the contrary. The court is not aware of the

level of funds held by Hollowstone at the relevant time, but it is likely on the facts that the

involvement of Mr Lane and his resources would have been an attractive prospect for Mr

Connolly.

40. Mr Connolly’s evidence was that that there was absolutely no discussion at the chance

meeting about the possibility of himself and Mr Lane buying and operating the hotel

together.27 Mr Connolly says that the first suggestion of Mr Lane coming on board was made

by Mr Murphy in the car on the way back to Donnybrook. He said he discussed the

possibility with his wife that evening of "potentially bringing someone in as an investor".28 It

was only after that time, and using Mr Murphy as an intermediary of sorts, that he and Mr

Lane began to discuss getting into a business relationship. He says that happened over the

next few days, was focussed on establishing corporate entities to own and run Tinakilly and

25 Day 7 page 80 line 3 26 Day 7 page 85 line 23. In fact the evidence on Day 8 was that judgment of €7,116,318.45 was awarded against Mr Conolly on 23 April 2012. That figure was later reduced reflecting property sales by the creditors. 27 Day 7 page 68 line 18 28 Day 6 page 113 lines 3-6 18

that there was no mention of a partnership and no partnership agreement was ever entered

into. He says that Mr Lane was very enthusiastic about getting involved (which fact is

accepted by Mr Lane) and that Mr Lane’s commitment was to provide “soft loans” to the

corporate entities (a fact disputed by Mr Lane29). Mr Connolly explained in his evidence that

he understood soft loans to mean "a shareholder or an investor would make funds available

to a company that are not on demand loans and that they don't necessarily carry an interest

or penalty".30 When it was suggested that such an offer would make no commercial sense for

Mr Lane, Mr Connolly’s response was that "… the reality is that Mr Lane isn't looking at this

from a commercial point of view, it's his hobby, it's a passion, it's an interest".31

41. I believe Mr Murphy’s evidence of the chance meeting is the most accurate. I do not

accept there was a deal concluded that day, as Mr Lane suggests, nor that there was no

discussion between the two men on a joint approach, as Mr Connolly suggests.

42. I find, as a matter of probability, that there was some discussion at the chance meeting of

the possibility of Mr Lane and Mr Connolly forming a business relationship to purchase

Tinakilly. Mrs Lane may have left the table early as Mr Connolly suggests. I find as a matter

of probability that the lunchtime meeting did not continue late into the evening. It is likely

that Mr Connolly drove Mr Murphy back to Donnybrook later that afternoon. In the time

available however I accept that some discussions took place at the lunch – enough to secure

an understanding that Mr Lane and Mr Connolly would explore buying and operating

Tinakilly together, with Mr Connolly running the business on a day to day basis and Mr Lane

being willing to provide funding towards the purchase price and towards the immediate

investment both men understood was going to be needed to turn Tinakilly into a high class

29 Day 2 page 20 lines 16-23 – “I have never heard of that term being used in business. And so, no, I most definitely did not understand anything about soft loans. This only came up quite recently. It's only in the past few months that he introduced this term "soft loans", but it really does not apply to our understanding, either the MOU or later the Shareholder Agreement”. 30 Day 6 page 118 lines 1-3 31 Day 7 page 96 lines 25-27 19

and profitable venue. I accept that Mr Lane, at least, understood this arrangement would be a

partnership and that both men drew considerable comfort from the fact that the other was a

close friend of Mr Murphy who had a strong friendship and history with each of them. I

accept as a matter of probability that the word partnership or partner was used at least in

loose terms and that the parties shook hands at the end of the meeting as a gesture of trust and

an agreement to explore matters further. I do not believe however that a partnership was

formed that day. Rather the parties had something to consider with their respective families

and, with the assistance of Mr Murphy, they remained in contact and commenced discussions

on the specifics of how they might buy Tinakilly and how their relationship would be

structured. The terms agreed between them as at 21/22 May 2013 are reflected in the MOU

both men signed around that date. The question for the court is whether the MOU and/or the

subsequent Shareholder Agreement and its implementation comprised or evidenced a legal

partnership (as alleged by Mr Lane) or a purely corporate shareholder arrangement (as

alleged by Mr Connolly).

43. I turn now to consider the MOU that was signed by Mr Lane and Mr Connolly. While

there was some attempt by Mr Connolly to cast the MOU as a non-binding document, the

parties are otherwise agreed that the MOU reflected the terms agreed between them as at that

point in time.

A (2) The MOU and progressing the purchase of Tinakilly

44. The MOU is undated but was likely signed on 21/22 May 2013. It is common case that no

legal advice was obtained by either Mr Lane or Mr Connolly before signing the MOU. It is a

short document which provides in material part as follows:

“It is agreed between [Mr Lane and Mr Connolly] to enter into a partnership for the purpose

of acquiring and operating [Tinakilly].

The structure shall be a single purpose vehicle (SPV) holding [Tinakilly]. 20

Shares in the “SPV” shall be held 49% [Mr Lane] and 51% [Mr Connolly].

Under circumstances whereby all shares are held by [Mr Lane] it is agreed that 51% of such

shares shall be held on trust to the benefit and/or direction of [Mr Connolly] and at all

material times [Mr Lane] shall accept such directions.

It is agreed that both parties shall provide funding to the “SPV” pro rata to their

shareholding.

Both parties agree that no charge debenture shall be put against the “SPV” unless by written

mutual consent…

… The purchase price agreed with the vendors is 1,005,000 (sic) euros [amended by hand]…

… It is also agreed that a cash flow fund of 50,000 euros be provided and a refurbishment

fund of 100,000 euros be provided at the time of closing.

A deferred payment of 40,000 euro per annum be allowable to [Mr Connolly] for an initial 3

years.

That a floating loan fund of 200,000 be provided for trading and refurbishment purposes and

this will carry an interest rate of 6% and can be called upon in lots of 50,000 as and when

required and this shall be provided by [Mr Lane] and/or [Mr Connolly] [underlined wording

added by hand].

No outlay in excess of 5,000 on capital expenditure shall be undertaken without both parties

consent.

A roadmap of operations and development shall be agreed between the parties and the

management company.

The management company shall hold all licences and certificates for trading purposes and

the shareholding shall be 49% [Mr Lane] and 51% [Mr Connolly] unless otherwise agreed

between the parties.

[Mr Connolly] agrees 21

-to operate the property and work towards a breakeven in trade for year ending 2014,

-to promote best practice and maintain all licences and certificates up to date and in order,

-to provide the “SPV” monthly management reports,

-to ensure all revenue documents are returned on time,

-to act with the best interest of the business at all times.

Both parties agree that any gain made or purchase of adjoining lands made by either party

shall be subject to and governed by this agreement unless otherwise agreed in writing.

Should funds not be to hand to complete by [Mr Lane] at time of completion, [Mr Connolly]

is entitled to complete on the contract and shall assume 100% of the “SPV” by so doing and

this agreement shall be void”.

45. It is clear from the MOU that the basic Prop Co/Op Co structure was agreed at the outset

with the Prop Co owning the property of Tinakilly itself and the Op Co being the entity to run

or operate the business of Tinakilly. The need for both further capital and operating

expenditure is noted. There is no reference to “soft” or interest free loans. On the contrary, a

commercial interest rate of 6% is specified. The MOU also envisages a form of joint

decision-making on matters such as the incurring of capital expenditure over a certain limit.

46. Pointsetter became the “SPV” envisaged by the MOU to hold the title to Tinakilly. Mr

Lane confirmed in his evidence that the requirement for him to hold all the shares in his name

with 51% held on trust for Mr Connolly was “at Denis’s request. He didn’t want his name to

appear in a property company and so he asked me if I would hold 51%, his 51% in trust for

him, which I did”.32

47. While the contract for the sale of Tinakilly was signed by Mr Colin Hatt on behalf of

Hollowstone as purchaser, clause 17.5 of the contract provided for the assignment of the

property to Pointsetter and this is what occurred on closing. The “management company”

32 Day 2 page 13 lines 15-18 22

envisaged by the MOU became Mezen. On 14 June 2013 Mezen executed the transfer of

trade agreement with the vendors of Tinakilly and Mr Connolly signed this agreement on

behalf of Mezen.

48. Mr Connolly argues that, at its height, the MOU amounts to an intention to form a

partnership at some point in the future but that no partnership was actually formed at that

stage.

49. The evidence establishes that following the execution of the MOU, Mr Connolly and Mr

Lane were both involved in steps relating to the purchase of Tinakilly. For example, both

men met on 27 May 2013 with the solicitors instructed in the purchase and Mr Lane

continued to engage with those solicitors through to mid July 2013 when the purchase

transaction closed (the contract for sale having been signed on 14 June 2013). Both men met

with a surveyor at Tinakilly on 28 May 2013. The two men discussed their plans and Mr

Lane produced a business plan for Tinakilly which he shared with Mr Connolly on 31 May

2013. Mr Connolly provided comments that same day, noting that the document “sums up the

vision very well”.

50. The evidence also establishes that the purchase price paid for Tinakilly of €1,050,00033

was contributed to personally by Mr Lane in the sum of €543,212 with the balance of the

acquisition costs paid not by Mr Connolly personally but rather on his behalf by

Hollowstone. In fact 49% of the purchase price was €514,500 and 51% is €535,500. I am

satisfied on the evidence that Mr Lane and Mr Connolly each contributed their pro-rata share

to the purchase of Tinakilly. I do not accept the suggestion advanced in evidence by Mr

Connolly that Mr Lane agreed to contribute €580,000 in return for a 49% share.

Subsequently, Mezen entered into a lease with Pointsetter in respect of the Tinakilly premises

33 The recorded acquisition cost is in fact €1,097,000 23

(excluding Cul an Ti) although that lease was never implemented and no payments were

made on foot of the lease.34

51. While it accepted that the MOU was overtaken by the later execution of the Shareholder

Agreement by Mr Lane and Mr Connolly (likely in or around the 15 July 2013), the plaintiffs

have placed some emphasis on the terms of the MOU to support their argument that the

parties had from the very outset agreed a partnership arrangement for the purchase and

operation of Tinakilly. First they refer to the fact that the MOU on its face expressly states

that Mr Lane and Mr Connolly have agreed “to enter into a partnership” to acquire and

operate Tinakilly. They also say that consistent with a partnership arrangement, the MOU

provided that the parties’ funding obligations would be proportionate to their shareholdings.

The MOU contains provisions to protect the interests of both parties such as, for example,

limiting the amount that could be spent by one party without the agreement of the other. Mr.

Connolly explained in his evidence that the use of the word “partnership” in the MOU was

"in respect of co-shareholding".35 He said "it was not the intention of the parties to operate

the relationship through an actual partnership…".36

A (3) The Shareholder Agreement

52. The Shareholder Agreement is the only subsisting agreement signed by the parties (it

having expressly superseded and replaced the MOU) and it is therefore a document of some

importance to the issues before the court. For that reason I set it out below in full:

“The following is to outline the basic agreement reached between Denis Connolly(DC) and

Gerry Lane(GL) for the purpose of a partnership to acquire and operate Tinakllly House and

Hotel, Rathnew, Co Wicklow.

34 Day 3 page 17 line 14 35 Day 6 page 119 line 23 36 Day 6 page 119 lines 25-27 24

1). Acquisition: the agreed purchase price of the property is Euros 1,050,000. In addition,

there will be other costs incurred to cover 2% stamp duty, legal and accounting expenses,

operating funds, stock, redundancles, ongoing losses, refurbishment, landscaping etc, which

are estimated to amount to approximately Euros 250,000.

2) Ownership: the acquisition will be made by 2 companies. Pointsetter Ltd, a special

purpose vehicle(SPV) registered in the British Virgin Islands and owned 100% by GL, will

own the 2 shares in Hollowstone Ltd, which wlll own the property. Mezen Ltd, which ls

owned 99% by GL and 1% by DC, will be the operating company to run the business of the

hotel.

3). Shareholding: It is understood that the beneficial ownership of the shares of all of the

above 3 companies is 51% DC and 49% GL. Trust agreements will be executed to cover the

shares held in trust by GL on behalf of DC.

4). Voting rights: It is hoped that with proper communication and consultation, decisions on

all important issues will be unanimous. However, should there remain a difference of

opinion, that of DC will prevail.

5). Capital Contributions: DC and GL will provide 51% and GL 49%, respectively. Further

contributions for renovation, operating funds, expansion etc will be funded in like manner.

Should further funding become necessary in the future, each party has the right to participate

or allow the other to increase his equity percentage.

6). Sale of shares: should either party wish to sell or transfer part or all of their shares, It is

agreed that the other party will have the right of first refusal. The party purchasing will have

a period of 90 days to complete the purchase. Thereafter, either party is free to sell shares to

third parties. Any issuance of new shares to third parties must be agreed in writing by both

DC and GL. 25

7). Directors: both DC and GL act as directors of all 3 companies above. Any change and/or

addition must be approved in writing by both parties. Board meetings will be held 3 times per

year, time and place to be mutually agreed.

8). Dividends: dividends/profit distributions will be mutually agreed and determined by the

cash flow needs of the business and available funds. Distribution shall be in accordance with

equity percentages.

9). Information: both parties will have complete access to all financial, commercial and other

material information generated by and/or affecting the business. Each will respect the

confidentiality needs of the business with respect to disclosures to third parties. Any such

disclosures must be agreed in writing.

10). Compliance: Mezen Ltd will hold all licenses and certificates required for trading

purposes, making sure that they are up to date and in order at all times. DC will ensure that

the company complies with all existing Government regulations, including the Labour Code.

11) Conflict of Interest: any action by one party which may affect the interests of the other

party must have prior agreement in writing. In particular, any purchase of the adjoining

lands would be subject to this provision. Both parties agree that no charge/ debenture shall

be put against the business unless by mutual consent.

12) Management: DC wlll mange the company on a day-to-day basis and will work towards

break even in trade for the year ending 2014. He will ensure that the business adheres to the

highest professional standards, places a strong emphasis on quality and strives for

exceptional customer satisfaction at all times.

13) Financial: a Business Plan will be prepared and calenderised in advance for each 12

month period. Timely and accurate financial reports will be prepared each month to include

a Balance Sheet, Income Statement, Accounts Receivable and Payable schedules and such

other reports as required to illustrate the financial condition of the business. All Capex items 26

over Euros 5,000 require mutual agreement and DC will provide monthly management

reports.

14) Remuneration: In consideration for managing the business, DC will receive a deferred

payment of Euros 40,000 per annum for the first 3 years. Thereafter, an agreement will be

reached on how the company should be managed going forward. DC will have the use of the

4-bedroom house behind the hotel.

15) Death or disability;

16) Freebies: a special room rate of 50% off the published rate for the day will be extended

to family and friends of DC and GL, subject to availability, F&B will be charged at the full

rate by either the guest or their host. At their discretion, DC & GL may entertain guests who

are potentially beneficial to the hotel at the hotel's expense. Reconciliation and settlement of

accounts shall be completed monthly.

16) Validity: this agreement supersedes and replaces the agreement signed by DC and GL in

June 2013, which is no longer valid

Agreed this _____ Day of July 2013

[signed by Denis Connolly and Gerard Lane]”

53. Mr Lane stresses that the Shareholder Agreement, executed some two months following

the MOU, continues to expressly refer in the opening recital to the agreement being “for the

purpose of a partnership to acquire and operate Tinakllly”. Mr Lane’s evidence was that:

“We never discussed anything other than a partnership”.37

54. Mr Connolly's evidence was that the Shareholder Agreement was a jointly prepared

document and was prepared without any legal advice. He described the Shareholder

Agreement as a document "obviously setting out the intentions of the parties and it was also,

if you like, as an outline, basic agreement so suggesting a further and more substantive

37 Day 2 page 22 lines 24-25 27

agreement was to come".38 Mr Connolly suggested in evidence that the Shareholder

Agreement was a “holding document” or “an agreement to agree”.39 However he did accept

on cross-examination that it was binding until such time as a new agreement was drafted and

that no such new agreement ever materialised. He could not recall the date on which the

Shareholder Agreement was signed, but said he was aware that Mr Lane was speaking to a

friend of his, Mr Churchill, about it. His evidence was that the use of the word "partnership"

in the shareholder agreement related to "partners as the general word used in respect of co-

shareholders".40

55. Mr Connolly said this reference to partnership was in colloquial terms rather than in a

legal sense.

56. As the Shareholder Agreement envisaged, there was an immediate need post the closing

of the sale of Tinakilly for the injection of capital both as working capital and for capital

expenditure.

57. As matters ultimately transpired the corporate arrangements envisaged by the Shareholder

Agreement did not come to pass in identical terms to what was expressed. While Pointsetter

and Mezen became the Prop Co and the Op Co respectively, Pointsetter took the full title to

the property rather than becoming the shareholder in Hollowstone as purchaser. Furthermore,

while Mezen was envisaged in the Shareholder Agreement as being 99% owned by Mr Lane,

in fact Mr Connolly set up Mezen and none of the shares were ever transferred by him to Mr

Lane.

58. Mr Lane confirmed in oral evidence that “all of the outlays in excess of €5000 we agreed

between the two of us, in the early stages”.41

38 Day 6 page 126 lines 23-26 39 Day 7 page 147 line 20 40 Day 6 page 128 lines 4-5 41 Day 2 page 17 lines 4-6 28

59. In relation to clause 10 dealing with compliance Mr Lane said: “I had no experience in

business here and I didn't know what is required by the Irish authorities in terms of licences,

tax filing and all of the various things that the company has to comply with here. So I was

quite happy to let Denis handle all of those items”.42

60. Similar to the MOU, it became clear from the evidence tendered that neither Mr Lane nor

Mr Connolly had the benefit of legal advice before they executed the Shareholder Agreement.

Mr Lane did however send an unsigned copy of the Shareholder Agreement to a Mr John

Churchill, an Australian lawyer friend of his, on 10 July 2013 saying:

"I would appreciate if you could have a look at this draft Agreement, which is intended to be an informal, plain English understanding between my partner and I, hopefully to be shoved in a drawer and forgotten about. Please let me know if you see any major pitfalls, omissions, mistakes, foolishness etc."

61. Mr Churchill did not substantively comment on the Shareholder Agreement before it was

signed as he was on holiday, although he cautioned Mr Lane in general terms that the

document was “not clear/enforceable in a number of areas and not a great basis to invest 1

million” and that “[t]here is little basis to give away control”. He enquired whether Mr Lane

had “done your homework on your new partner?” and Mr Lane responded that “[m]y new

partner, Denis Connolly, is a close friend of Brendan’s”. While Mr Churchill did ultimately

send Mr Lane a far more detailed shareholder agreement template, this arrived after the

Shareholder Agreement had been signed by the parties. Mr Churchill was not called to give

evidence as to his understanding of matters at that point one way or the other and the draft

documentation he produced, which was subject to the law and jurisdiction of New South

Wales and never provided to Mr Connolly, is not in my view relevant to any issue this court

has to decide in this case.

42 Day 2 page 18/19 29

A (4) Refurbishment of Tinakilly and Room 66

62. In the early years Mr Lane confirmed that he had a very cordial and cooperative

relationship with Mr Connolly. He said: “I gave [Mr Connolly] absolutely total support in

everything we were trying to do, and the result is that the hotel itself benefitted

enormously”.43

63. A lot of refurbishment was carried out at Tinakilly in these early years. The gardens were

also extensively developed and Roisin Lane Walker (Mr Lane’s sister) gave evidence of the

works which had been carried out by her and under her direction and for which Mr Lane paid

(approximately €600,000). There is no dispute that the gardens were extensively upgraded

for the benefit of Tinakilly. A marquee was added with adjoining kitchens and this became

the hub of the wedding business for Tinakilly, greatly increasing the size of the weddings it

could host.

64. Mr Lane decided to refurbish room 66 in Tinakilly to use as his “home in Ireland” and as

“something permanent where I could stay whenever I come to Ireland”.44

65. There is no claim made by Mr Lane for this refurbishment or for the upgrading of the

gardens. There is no dispute that room 66 was substantially refurbished and furnished by Mr

and Mrs Lane. However a lot of evidence was given about the entitlement of Mr and Mrs Lane

to use this room exclusively. It was a row in relation to the use of this room in 2022 which

proved to be the trigger for the substantial deterioration in relations between Mr Lane and Mr

Connolly.

66. The evidence on the agreement reached in relation to room 66 was varied. Ms Roisin

Cassidy said in her witness statement that the room would be carefully staged with the personal

belongings of Mr and Mrs Lane before they arrived to Tinakilly. Mrs Lane gave evidence that

43 Day 2 page 29 lines 6-9 44 Day 2 page 30 lines 18-19 30

room 66 was referred to by the staff in Tinakilly as the “Lane Suite”.45 She referred in evidence

to an email she sent to Anna Windsor on 24 May 2018 following an incident when the room

was unavailable for the Lanes in which Mrs Lane advised that room 66 was “our home in

Ireland. Our only home in Ireland! It can be used as a last minute bonus to a wedding party,

but only when it is clear that we don't need it ourselves." That email was followed by another

on 26 May 2018 when Mrs Lane wrote: “I'm utterly appalled with this latest excuse. This is

just a clear message that there's no respect for the owners of this hotel. How would you feel

when you come home one night and you're locked out by strangers. Gerry will now ensure that

this will never happen again and this room must only be used by ourselves, our family and

friends." Ms Windsor replied to that email saying “I can promise you that this will not happen

again”. Mr Connolly’s evidence was that he did not believe Ms Windsor had checked with him

before sending that response.46 Ms Windsor confirmed in her evidence that she had not

discussed matters with Mr Connolly and that in sending the email she was “trying to

deescalate the situation and try and smooth things over”.47

A (5) Engagement on financial information

67. Evidence was given to the court remotely by Mr Alfred Grainger, a friend of Mr Lane,

who confirmed that in late 2013 or thereabouts he was asked by Mr Lane to review the

Mezen monthly management accounts for him. He said that his role was as an accountant,

looking at those management accounts and interpreting them in such a way as he could ask

what he thought were appropriate questions that they presented.48 He said these accounts

were generally sent to him by Noone Casey, who were accountants and also auditors to

45 Day 4 page 57 lines 6-8 46 Day 9 page 16 line 2 47 Day 10 page 133 lines 9-10 48 Day 5 page 7 lines 11-14 31

Mezen. He described these accounts as arriving on an ad hoc rather than a strict monthly

basis.

68. Mr Grainger’s evidence was that his understanding was that Mr Connolly and Mr Lane’s

arrangement was essentially a 50/50 relationship and partnership regarding any financial

benefits that might arise from the businesses. He said that “[t]his understanding underpinned

my entire involvement with Tinakilly’s financial affairs, whether in face-to-face conversations

or email communications. It was also how Noone Casey and others in the business interacted

with me as Gerry’s representative”.49 However Mr Grainger also confirmed that he had never

seen the MOU or the Shareholder Agreement and was not involved in advising Mr Lane in

relation to the acquisition of Tinakilly. He confirmed that it was “correct” to say that he did

not know the legal basis upon which Mr Lane and Mr Connolly went into business together.50

69. Mr Grainger said that he had raised concerns “from the get-go” in relation to the

accounts. He queried why monies that Mr Lane put into Mezen were described as a director’s

loan account when Mr Lane was not a director but a shareholder (albeit unregistered). Mr

Grainger said he believed that the balance sheet should have shown Mr Lane’s capital

investments recorded in a shareholder’s loan account. He accepted on cross-examination that

all of the monies that were put into Mezen by Mr Lane were recorded in a loan account.51 Mr

Grainger said that certain schedules showing Mr Connolly’s payments did not tally with the

Mezen balance sheet. In his view “[t]hey were being kept off the balance sheet for Denis's

personal reasons and that's very unbusinesslike and very worrying, yes”.52

70. He also confirmed that throughout the two years he was involved (2014 to September

2015), the contributions made by Mr Lane and Mr Connolly were “mismatched”.53 This issue

49 Para 13 witness statement of Alfred Grainger 50 Day 5 page 16 line 29 51 Day 5 page 55 line 14 52 Day 5 page 70 lines 12-14 53 Day 5 page 9 line 10 32

was raised by him with Mr Connolly. Mr Grainger said Mr Connolly’s reaction was that he

tended to make excuses indicating that he would make amends and introduce monies to

match Mr Lane’s at a subsequent date. He said that “Denis’ failure to match Gerry’s

contributions to Mezen gave rise to a fundamental concern for me”.54

71. Mr Grainger travelled to Tinakilly in May/June 2014 and again in August/September

2015. He gave evidence that on the occasion of his visits he “took over a role as being

partially an auditor”.55 When asked what authority he had to adopt this role Mr Grainger

replied that “indirectly I had the permission of Gerry to take on the role of an auditor”.56 He

accepted he had no permission from Mr Connolly or Mezen to take on this role or to directly

engage with the staff in Tinakilly about financial matters. It was in this role of quasi auditor

that additional concerns were noted by Mr Grainger. One of these was the concerns he had in

relation to payroll. He said that the highest paid person on the Mezen payroll was not in fact

an employee of Mezen but was an employee of another company owned by Mr Connolly. He

said that on the other hand neither the general manager, Colin Hatt, nor Mr Connolly were on

the Mezen payroll. Mr Grainger was informed that Mr Hatt was paid in cash, which Mr

Grainger viewed as being an irregularity. He did not know however how long these matters

persisted or whether or how they were ultimately resolved.

72. It was clear to the court that Mr Grainger and Mr Connolly did not see eye to eye on

many issues. Mr Grainger’s evidence was that “[m]y legitimate professional inquiries into

these financial matters were met with hostility and aggression from Denis. As I was departing

my first face-to-face meeting with Denis, in or around May 2014, he said words to the effect

that he did not ever want to see me again”.57 Things appear to have become more hostile

between the two men following Mr Grainger’s visit to Tinakilly in 2015 following which Mr

54 Para 18 witness statement of Alfred Grainger 55 Day 5 page 9/10 56 Day 5 page 40 lines 20-21 57 Paras 25 and 26 Witness statement of Alfred Grainger 33

Connolly sent what Mr Grainger described at para 28 of his witness statement as a “long and

aggressive email which had the effect of questioning my authority to pry, as he seemed to

regard it, into his relationship with Mezen.” This he said was followed by an email on 6

September 2015 from Mr Connolly stating that he “did not want to see me ever again-in any

shape or form!”. In fact the email stated: “I do not want you to correspond with the company

accountants in any shape or form.”

73. It was clear from Mr Connolly's evidence that Mr Grainger's visits to Tinakilly caused

some issue for him and the team. He stated in evidence that when Mr Grainger came to

Tinakilly in his quasi auditor role "the mood wasn't very good".58 He later referred to Mr

Grainger as Mr Lane's "Rottweiler" and to him " snooping around". He denied however, that

he had made the statements attributed to him by Mr Grainger in his evidence.

74. My assessment of Mr Grainger’s evidence is that his involvement was for a limited

period on a limited basis at a relatively early stage of the relationship. I am guided far more

strongly by the expert witnesses on the financial aspects given the extent of the exercise they

have carried out. Mr Grainger’s witness statement was more definite on issues than the

supporting materials tended to illustrate. I accept that the management accounts in 2014/2015

were not prepared with the level of detail and explanation that Mr Grainger would have liked

to see and that he was often dissatisfied with the level of follow up explanation he received to

the queries he raised. I am satisfied that there were some difficult engagements between Mr

Connolly and Mr Grainger, but I do not believe that they impact on any of the matters this

court is required to determine in these proceedings.

75. What can be said however is that there was a level of financial scrutiny engaged in during

this 2014/2015 period and tensions arose. Mr Grainger advised Mr Lane in an email dated 9

58 Day 6 page 141 line 14 34

May 2015 that he (Mr Grainger) had checked again and could “confirm that there is no

indication in the Tinakilly House balance sheet – of Denis’s matching (your) investment”.

76. The evidence shows that Mr Lane and Mr Connolly engaged directly with each other

during this period regarding the finances of Tinakilly. In an email from Mr Connolly to Mr

Lane dated 28 July 2015 Mr Connolly identified the desirability of agreeing the allocation of

(1) shareholder funds, (2) gifted funds/items and (3) loans made to the company.

Time Period (B): March 2017 - July 2022

B (1) Monasterio – its acquisition and subsequent refurbishment

77. The evidence confirms that in the years following the purchase of Tinakilly, Mr Connolly

brought multiple various investment opportunities to Mr Lane to ascertain his level of interest

in expanding their business together. One such opportunity was Monasterio. Monasterio was

a relatively newly built 21 bedroomed hotel, but was fashioned in a traditional Spanish style

with a pool and extensive gardens. The original developer of Monasterio had gotten into

financial difficulty and it was being sold for €2.5m – substantially less than its estimated €8m

build cost. Mr Connolly was convinced of its potential as a wedding venue and described it to

Mr Lane as “Tinakilly in the sun”.

78. In March 2017 Mr Lane visited Monasterio with Mr Connolly and Mr Lane was impressed

with the property. His evidence was that he and Mr Connolly agreed they would purchase,

develop and run Monasterio under a similar arrangement to Tinakilly. Mr Lane’s evidence was

that “essentially it was a continuation of the partnership that we already had”.59

79. The evidence confirms that no new written agreement was put in place so there is no

equivalent documentation to the MOU or the Shareholder Agreement specifically referencing

59 Day 2 page 147 lines 14-15 35

Monasterio. Mr Lane says Monasterio was viewed as an extension of the Tinakilly business60

and was to be governed by similar terms save that the respective percentage split was

reversed for Monasterio meaning that Mr Lane was to get 51% and Mr Connolly 49%. Mr

Lane said in evidence that the percentages were reversed in Monasterio as “[t]he principle is

the same, that one party needs to be able to break a deadlock in the case of a dispute. So, in

this case it was only fair, and Denis agreed, that we reverse the equity which in effect left us,

again, with a 50/50 shareholding, which we both thought was very fair”.61 Mr Connolly

denies there was a partnership but agrees that the shareholding for Monasterio was a 51:49

split in favour of Mr Lane. It was unclear from either the pleadings or the evidence whether

Mr Connolly accepted that the terms of the Shareholder Agreement also extended to the

purchase and operation of Monasterio. Mr Connolly did not however identify any other

agreement that he said applied to Monasterio.

80. The same type of Prop Co/Op Co structure was employed for Monasterio using Spanish

registered companies, NOL and MESL respectively, both 100% owned by Mr Connolly.

There had been some initial consideration as to whether Monasterio should be a wholly

owned subsidiary of Mezen, but Mr Lane did not favour that approach. Mr Connolly

explained in an email to Mr Lane’s son Dwad on 29 June 2018 that Noone Casey had advised

that Monasterio should be a wholly owned subsidiary of Mezen, with Mezen holding 98%

and Mr Lane holding 2% – thus, he explained, giving Mr Lane the majority share as agreed

but still allowing the benefits of tax and non-taxable transfers between the two companies.

This was not the structure agreed ultimately. It illustrates however the close interconnection

60 Day 2 page 31 lines 17-22 – when asked of the basis upon which he would purchase Monasterio he replied “It was on the basis, the same basis that we agreed in Tinakilly. We didn't draw up any new MOU or Shareholders' Agreement, we just carried forward everything that we understood, we were in partnership here and we were applying all of the same principles to the new acquisition in Monasterio.” 61 Day 2 page 31/32 36

from the outset between Mezen and Monasterio and the deliberate structuring of the

transaction to avail of the benefits of corporate entities.

81. Mr Connolly says the agreement reached was nothing more than that he and Mr Lane

would participate in and fund Monasterio as shareholders of NOL and MESL. The evidence

shows that Mr Lane never became either a director or shareholder of either NOL or MESL.

Mr Connolly says that at all times he held 51% of the shares in both companies in trust for

Mr Lane.

82. Evidence was given that Mr Lane had the contemporaneous understanding that he and Mr

Connolly were purchasing Monasterio as partners. For example in an email to third parties in

March 2017 Mr Lane wrote that “we have just negotiated the purchase of a beautiful four

star boutique hotel near Sotogrande in the south of Spain. Denis (my partner in Tinakilly)

and I will take possession in October but we’re already starting to upgrade.”

83. Furthermore, there was evidence of an email sent by Mr Connolly on 16 October 2017 to

the Spanish lawyers instructed in the purchase of Monasterio, Mr Connolly stated that he

wished to “introduce you to my business partner. We intend to conclude the purchase this

month”. Both Mr Lane and Mr Connolly attended the lawyers’ offices the following day.

84. Mr Connolly’s evidence was that he had negotiated the purchase price of €2.5 million. At

the time there was a tenant in place with 18 months left on his lease. Mr Connolly agreed to

contract on the basis that the sale of Monasterio would complete at the end of that lease. He

explained that he did not wish to buy a property with a tenant in place. Mr Connolly said that

he procured that Mezen would pay the deposit of €100,000 and that he informed Mr Lane he

was using this as a booking deposit on Monasterio. He said that he told Mr Lane that if he

(Mr Lane) was not interested in Monasterio then Mr. Connolly "will sort out the Mezen

transaction". He said Mr Lane confirmed he was fine with that.62

62 Day 6 page 152 lines 18-23 37

85. The evidence confirmed that in 2017 Mr Connolly concluded an option agreement in

respect of Monasterio on behalf of himself and Mr Lane. The €100,000 payment came from

Mezen with Mr Connolly advising Mr Lane by email dated 8 February 2017 that:

“Just to update you on progress with Monasterio. We/I have entered into an agreement with

the owner as an option agreement to purchase the property for 2.5 million. Completion 15th

January 2018. I shall require to draw down 100,000 from Mezen to complete the option.

If you do not proceed with the investment I shall reimburse you the 50% of the outlay? Is that

okay with you? Otherwise we shall lose the opportunity which I would not want to do.”

86. Mr Connolly says he was proceeding on his own account at that time but that Mr Lane

had the option to become involved as an investor if he wished to later. Mr Lane says that Mr

Connolly considered that he was entitled and empowered to bind Mr Lane in matters related

to their partnership relationship. Mr Connolly’s evidence was that Monasterio was “sitting in

isolation from what’s happening in Ireland…. there’s no indication that this is any

connections (sic) with Tinakilly whatsoever”.63 At a minimum however Mr Connolly’s

actions in relation to this option agreement demonstrates that the finances of Mezen and

Monasterio became intertwined even before Monasterio was purchased.

87. On 17 November 2017 a deed of sale of Monasterio for a total purchase price of €2.5

million was entered into by Mr Manuel Gonzalez (in his capacity as sole administrator of the

vendor, Hotel Camino Real de Montenegral Alto SL) and Mr Rincón (on behalf of NOL)

pursuant to the power of attorney granted by Mr Connolly in his capacity as sole

administrator of NOL.

88. The purchase price of €2.5 million (plus tax and costs) included the taking over of 2 loans

on Monasterio totalling of €730,000. The cash balance to be paid amounted to €1.7 million.

In addition, Spanish tax (IVA) of €58,000 was also paid.

63 Day 8 pages 54 and 55 38

89. Mr Lane’s 51% contribution to the balance of the purchase price of €1.7 million

amounted to €867,000. Mr Connolly claimed that he procured a loan from one of his own

businesses (Cassidys) to pay the €1.7 million cash balance due on the closing of Monasterio,

of which €833,000 was his share.64 He then requested Mr Lane to send his contribution of

€867,000 directly to Mezen and this was done by Mr Lane on 8 December 2017.

90. The receipt of that money by Mezen and its subsequent use by Mr Connolly to reduce the

balance on his own Mezen loan account was the subject of much fairly heated evidence at the

trial. It is a matter I will deal with separately in this judgment when I address the expert

evidence which was tendered.

91. On 21 November 2018 Mr Connolly emailed Mr Lane explaining that €680,000 (being

part of the loan balance taken on as a term of the Monasterio purchase) was due to be repaid

on 15 December 2018. He asked Mr Lane to fund Mr Connolly’s 49% portion. Mr Lane

agreed that he could cover the full €680,000 due. On 10 December 2018 Mr Lane sent

€680,000 to Servicios Legales RRW SL to repay the loan as part of the Monasterio purchase.

The apportionment of that loan repayment of €680,000 was €346,800 for Mr Lane and

€333,200 for Mr Connolly in line with their agreed 51%/49% holdings. Repayment of that

loan completed the financing of the purchase of Monasterio.

92. For reasons not explained, NOL received a refund of €516,000 from Servicios Legales on

8th May 2019. This money was not used to repay Mr Lane’s loan which he had advanced to

MESL to discharge the bank loan assumed as part of the Monasterio purchase. In the weeks

following this transfer a number of payments were made from NOL by Mr Connolly for his

own benefit including payment of personal debts and credit of part to his NOL shareholder

account. So the €680,000 advanced by Mr Lane was not in fact used to complete the purchase

64 In fact the accounts in Cassidys do not reflect this transaction as a loan to Mr Connolly but rather as a financial asset (Spanish investment by Cassidys). 39

of Monasterio although that was what Mr Connolly represented to him the funds were needed

for. Mr Connolly accepted in evidence that he had misled Mr Lane on that point.65

93. Monasterio was refurbished to a considerable extent after it was acquired by Mr Connolly

and Mr Lane. The former general manager of Monasterio, Mr Macias Ríos (speaking through

a translator) confirmed there were “many changes, especially the garden. The garden was

done from scratch. It was all new and there were many, many refurbished rooms as well in

these changes. It was like washing the face of the hotel”.66 Mr Lane displayed a particular

interest in the 5 acres of Monasterio gardens and they were substantially upgraded with funds

he provided. Mr Lane also advanced loans in the amount of €760,000. Monasterio became a

profitable and popular wedding venue. Mr Macias Ríos stated to the court that after the

investments and improvements “the business started booming”.67 However Monasterio’s

business was severely impacted by the covid pandemic which devasted their wedding

business for that period.

94. Mr Macias Ríos confirmed that the majority of guests holding their weddings in

Monasterio were foreigners i.e. not Spanish. It was put to Mr Lane that the big selling feature

of Monasterio was the fact that the guests had the exclusive use of Monasterio. Mr Lane’s

evidence was “[t]hat was never agreed. I would never have agreed to that” and “I was not

even consulted about that”.68 Mr Macias Ríos however confirmed that Monasterio was

always advertised as an exclusive resort for wedding parties and that guests paid an

exclusivity fee to have the full use of the hotel.

95. Mr and Mrs Lane refurbished and expanded a suite (Room 17) in Monasterio for their

own use and Mr Lane in evidence described the arrangement as “…the same understanding

that we had in Tinakilly where I would use this when I visit Monasterio, which would also be

65 Day 8 page 90 line 9 66 Day 5 page 74 lines 4-7 67 Day 5 page 75 line 15 68 Day 3 page 96 lines 22-25 40

about two or three times a year”.69 Mrs Lane similarly gave evidence at the trial that Room

17 was “an exclusive use for us”.70 The fact of the refurbishment was not disputed and Mr

Macias Ríos described the works carried out at Mr Lane’s expense and the furniture pieces

and decoration that Mr Lane procured from Seville for the room.

96. Similar to the position with room 66 in Tinakilly, there was a disagreement on the

evidence as to the entitlement of Mr and Mrs Lane to any exclusive use of Room 17 in

Monasterio. Mr Lane’s evidence was that he and Mr Connolly agreed that on the opposite

wing of Monasterio they would build a mirror image suite to Room 17 and that would be the

bridal suite. But he said “Mr. Connolly never built the suite on the other side. Instead he

renamed my suite to the bridal suite and then declared exclusivity and the predictable

outcome is that sooner or later there would be a clash which is what happened”.71

97. Mr Connolly disputed any such agreement. Mr Connolly's evidence was that Monasterio

was generally booked exclusively for between 80 to 100 nights a year for the 80 or so

weddings it hosted annually. He said Mr and Mrs Lane had been free to stay whenever they

wanted outside of those nights. The non-exclusivity of Room 17 for the Lanes was even more

strongly disputed by Mr Connolly for Monasterio than Room 66 for Tinakilly in light of his

acceptance that Mr Lane viewed Tinakilly as his home from home and the fact that Tinakilly

was, unlike Monasterio he says, not an exclusive wedding venue which couples would

completely book out for their wedding. Mr Connolly confirmed that after an incident in 2017

when there was no availability for the Lanes in Tinakilly there was some discussion between

him and Mr Lane about having the room exclusively for him. He said that what evolved from

that was that Mr Lane would give reasonable notice of when he was coming to stay in

Tinakilly and Mr Connolly said they accommodated those arrangements as best they could in

69 Day 2 page 34 lines 2-5 70 Day 4 page 64 line 15 71 Day 3 page 102 lines 9-13 41

the context of a 54 bedroom hotel that was a commercial enterprise. He said however the

arrangement in relation to Monasterio was different. While there was "an understanding

regarding room 66 to a loose extent",72 he denied any such arrangement regarding room 17 in

Monasterio. He said the basis of their investment in Spain was that the business was an

exclusive hire venue.

98. I accept the evidence of Mr Macias Ríos that Room 17 was generally known by staff in

Monasterio as Gerry’s room and that the Lanes had decorated this room to their own taste and

that it was intended to be available for them when they visited Monasterio. I also accept the

evidence that there were instances of tension when the Lanes wished to stay in Room 17

when weddings were booked for the same time. These tensions were, it seems to me,

inevitable as Room 17 was otherwise used as the bridal suite for Monasterio. Mr and Mrs

Lane may not have known or agreed to this use of Room 17 but it was the arrangement in

practice. I also accept that the exclusivity of Monasterio was an integral part of the hotel’s

offering for weddings.

99. I do not need to determine whether and if so what agreement was in fact reached between

the parties on the use of the rooms refurbished by the Lanes for their own use. Nor would any

such agreement depend on whether the parties were in partnership or otherwise. The evidence

is mentioned here simply to reflect the areas of disagreement and how this particular issue

was a sensitive one which ultimately became a trigger for the wider dispute – although not

the actual or sole cause of it.

B (2) Discussions regarding the potential sale of Tinakilly

100. Evidence was given that in July 2019 Mr Lane and Mr Connolly agreed in principle that

they would both like to sell their interests in Tinakilly. Some discussions were had by both

72 Day 7 page 8/9 42

men with a third party, Mr Stanley Quek, who met Mr Lane in Sydney in October 2019. Mr

Quek visited Tinakilly on 31 October 2019 and met with Mr Connolly. A draft email with

headline terms for sale was circulated between Mr Lane and Mr Connolly and sent to Mr

Quek on 6 November 2019 (this email from Mr Lane refers to “my partner Denis”). Earlier

emails from Mr Lane to Mr Quek, copied to Mr Connolly, also refer to “my partner, Denis

Connolly”.73 Indeed Mr Lane drafted an email to Mr Quek the text of which was sent to Mr

Connolly for advance approval on 4 November 2019 which suggested a sale price for

Tinakilly which Mr Lane proposed on behalf of both himself and Mr Connolly “having

discussed this with my partner Denis”. In the interests of balance I should also refer to an

email from Mr Lane to Mr Connolly dated 19 December 2019 which referred to the need to

straighten out Mezen’s finances “as you and I part company as shareholders in Tinakilly”.

Discussions continued with Mr Quek up until the onset of the covid pandemic in March 2020.

Ultimately however Mr Quek did not proceed with this transaction and Mr Lane and Mr

Connolly’s business relationship remained as it had been.

Time Period (C): August 2022 to date

C (1) The Room 66 incident

101. Mr and Mrs Lane’s son held his wedding at Tinakilly in August 2022. Although the

wedding celebrations were agreed by all to have been a great success, a major incident arose

just after the wedding when Mr and Mrs Lane were told they could not remain in Room 66 as

it had been booked by another wedding party. A heated exchange took place between Mr

Lane and Mr Connolly. Mr Lane described it as a “disastrous conversation” in which he said

he was treated with “arrogance and contempt”. His evidence was that: “It was a disastrous

wake-up call for me to find out what Denis -- he had gradually grown more arrogant and felt

73 For example email dated 30 September 2019 and email dated 11 October 2019. 43

that he didn't need interference from me, that I just had become a nuisance for him, and I was

extremely disappointed in all of this”.74

102. Mr Hatt gave evidence that Mr Lane “started in on me about that he's never been

treated so badly and that he was going to apologise in advance that I was going to be

collateral damage, that he was a partner from heaven for the last ten years, he's going to be

the partner from hell for the next ten years. And he was getting more irate as he talked on

about the situation”.75 Mr Lane admitted that he was angry at that time and had said to Mr

Hatt that because of how he (Mr Lane) had been treated there was going to be trouble going

forward and that he would become the partner from hell, or words to that effect.76

103. Mrs Lane gave evidence about the incident involving Room 66. She said: “We were told

by the manager there that we have to move out of our room because it's exclusive for

weddings. And I felt so insulted and so hurt about that because that's our room and how can

they even offer and have the audacity to offer it to brides? So really I was very, very hurt.

And I talked to my husband about it and he talked about it with Denis”.77

104. The meeting that day in August 2022 was the last time Mr Lane and Mr Connolly spoke

directly to each other.

C (2) Pre-litigation activity

105. Mr Lane instructed solicitors in May 2023. A detailed email was issued by Mr Lane to

Mr Connolly on 1 August 2023 in which Mr Lane said that he “now want[ed] to understand

if we can put aside the friction and tension between us and discuss the way forward”. The

email referred to the agreement of the two men “to partner up together” to buy Tinakilly and

to their relationship being “based on mutual trust with a view to making a successful business

74 Day 2 page 36 lines 19-23 75 Day 10 page 73 lines 9-14 76 Day 3 page 106 lines 4 and 9 77 Day 4 page 64 lines 21-27 44

and sharing the profit”. It continued that: “It was due to my trust and confidence in you as my

partner that I provided the majority of the funding to purchase both Tinakilly and Monasterio

and continued to support those businesses for our mutual intended benefit.” It said that the

parties needed to regularise and rebalance the payments made to that date. It stressed that Mr

Connolly had not repaid his Monasterio loan and that Mr Lane had never received any

payments from the profits of either Tinakilly or Monasterio “even though we had always

agreed that profits are to be shared”. The email ended with Mr Lane saying that he “would

appreciate your cooperation in putting last year behind us and getting things back on track.”

106. Mr Connolly’s evidence in relation to the 1 August 2023 letter was that it had a "totally

different tone from that I would normally be engaging with him on".78 Mr Connolly said that

on receiving that email he was surprised to see Mr Lane's use of the word “partnership”. Mr

Connolly's evidence was that the email of 1 August 2023 placed an emphasis on the phrase

"partnership" rather than simply "partner" for the first time and that this made him feel "very

concerned". But in fact this email was not the first time that "partnership" had been used.

Indeed the MOU and the Shareholder Agreement both expressly refer to this term as Mr

Connolly later acknowledged in his evidence.79

107. Mr Lane followed up his 1 August 2023 email with a further email to Mr Connolly on 9

August saying that he would appreciate the courtesy of a reply by return. Mr Connolly replied

by email: “Would you really”. Mr Lane answered on 10 August: “Yes, I think it’s important

for our future relationship” and sent a further email that day saying: “Yes. We need to

regularize our partnership without further delay. It’s important.” Mr Connolly sent his

response later on 10 August 2023 which read: “You are aware or should be aware of the

operation that was invested in, in Spain. At no time did I change or amend anything in

78 Day 7 page 10 lines 4-5 79 Day 7 page 60 line 7 45

relation to the Exclusive use of the property for weddings. You have already confirmed that

with Emily. Therefore, you are wrong in your assumptions. You are wrong in your disgusting

and bullying treatment of me and my fellow co workers.”

108. No further or substantive response was sent by Mr Connolly at that time. Mr Lane

sought further financial information from Noone Casey. The first solicitor’s correspondence

to Mr Connolly issued on 7 December 2023 in which it was confirmed that “Mr Lane also

agrees to the winding up of the partnership. We note that as part of any winding up,

adjustments will be required in order to reflect the parties’ respective contributions to your

partnership, particularly in circumstances where Mr Lane provided the majority of the

money required for the purchases of Tinakilly and Monasterio and also for the operation of

those businesses”.

109. Mr Connolly confirmed by email on 17 January 2024 that he did not at that point wish to

dispose of his shareholding in either business. Correspondence continued over the next

number of months with suggestions that perhaps Mr Connolly would buy Mr Lane’s share of

the partnership or that the businesses be sold to a third party. By letter dated 30 April 2024

Mr Lane’s solicitors issued a formal request for accounts and information pursuant to s. 28 of

the Partnership Act 1890.

110. By letter dated 31 May 2024 Mr Lane’s solicitors wrote to Mr Connolly advising that

Mr Connolly was in breach of the 1890 Act by not providing the financial information

requested and that this underlined the total breakdown in the trust and confidence of the

partnership between him and Mr Lane. The letter continued that “[a]ccordingly, our client

has decided to exercise his rights to dissolve the Partnership in accordance with sections

26(1) and 32(c) of the [1890 ]Act”. The letter attached a simple notice signed by Mr Lane

that the partnership “shall be dissolved with effect on or after 7 June 2024”. The letter sought

agreement to appoint independent parties to value the partnership assets and settle the 46

partnership’s accounts, failing which it was indicated that litigation to wind up the

partnership would follow.

111. Later that day Mr Connolly emailed Mr Lane’s solicitors stating: “It is unfortunate

timing that your client has chosen to take the steps of dissolving " The Partnership". It is

denied that a partnership exists between myself and your client as defined by the (

Partnership Act 1890)”. This was the first formal and express denial by Mr Connolly of the

existence of a partnership between himself and Mr Lane.

C (3) The issuing of proceedings and the sale and liquidation of Monasterio

112. These proceedings issued on 14 June 2024. The pleadings have been amended on

several occasions. The first amendments to the Statement of Claim were made on 3

December 2024 to plead reliance upon the Shareholder Agreement following its production

by Mr Connolly in replies to particulars. Further amendments were also made to reflect the

joinder of Mrs Lane as an additional plaintiff and the joinder of Mezen and Pointsetter as

additional defendants.

113. A second amended Statement of Claim was delivered on 7 May 2025 following the

plaintiffs becoming aware of the sale of Monasterio by Mr Connolly. Amendments made also

included an alternative claim of joint venture and further particulars of a claim in respect of

an increased equity interest in Tinakilly and Monasterio and their associated businesses and

undertakings and to include certain conspiracy claims between Mr Connolly and Mezen in

relation to certain identified financial transactions.

114. The third amendments to the Statement of Claim were made on 1 December 2025 to

amend the reliefs relating to equity contributions made by Mr Connolly following

information received on discovery. 47

115. The defendants’ Defence was also amended in response to these changes and to include

additional counterclaims by Mr Connolly (not pursued at trial in circumstances where no

leave of the court had been obtained to these amendments).

116. Further amendments were sought to be made by the plaintiffs at the trial and I deal with

those later in this judgment.

117. On 17 January 2025 Mr Connolly emailed Mr Lane’s solicitors stating that he "shall be

selling [Monasterio] with a very heavy heart". This correspondence caused Mr Lane’s

solicitors to write to Mr Connolly on 20 January 2025 confirming that Mr Lane did not

consent to the sale of Monasterio and they sought immediate confirmation from Mr Connolly

that he would not unilaterally take any steps to sell Monasterio. Mr Connolly confirmed by

emails on the 20th and 22nd of January 2025 that he “…shall not take any steps or action or

give instruction on behalf of [NOL] to put on the market or sell the property of the company,

namely Finca Monasterio”. Mr Lane confirmed in evidence that he relied on those

assurances80 and took no further steps at that time.

118. However, the evidence at the trial established that Mr Connolly had, by the date of those

assurances, and without the knowledge or consent of Mr Lane, in fact caused NOL to enter

into a binding agreement to sell Monasterio for €5,075,000 – having done so on 6 December

2024. Mr Connolly’s evidence was that he had been approached (unsolicited) by a property

agent Ms Elise de Lange in September 2024 with an indication that she might have a buyer

for Monasterio. Mr Connolly said that she then became NOL’s agent for the sale and NOL

was responsible for her fee – confirmed to be a net figure for NOL of €125,000. He

confirmed that he did not tell Mr Lane about this approach.81 He also did not tell the buyer

about Mr Lane’s 51% interest in the property.82 That interest would not have been obvious to

80 Day 2 page 34 lines 26-29 81 Day 9 page 38 line 13 82 Day 9 page 40 line 17 48

any buyer given that Mr Lane’s shareholding had never been registered in either NOL or

MESL.

119. The sale of Monasterio as a going concern was not an open market sale. Mr Connolly

referred to planning issues which he said meant any buyer would be unlikely to get a

mortgage and so would have to be a cash buyer. Mr Connolly agreed in evidence that he did

not obtain a valuation report on Monasterio at the time of the sale but relied on one obtained

the previous April. The sale included the sale of the personal belongings of Mr and Mrs Lane

held in Room 17. As Monasterio was sold as a going concern, the sale also included the

booking deposits in the region of €400,000 held for weddings booked to that date and the

stock of Mr Connolly’s Tandem whiskey. €750,000 of the sales proceeds continue to be held

in escrow and will only be released if Monasterio achieves a four star rating under the new

ownership. Mr Connolly agreed to that condition as part of the sale. There is no time limit on

the return of that escrow sum to the buyer or no guarantee that the buyer will satisfy the

conditionality of releasing the escrow by obtaining a four star rating on the property.

120. Mr Connolly gave evidence that he attempted to undo the Monasterio sale contract but

was advised that legally he was unable to do so. In any event the contract for sale proceeded

without further notice to the plaintiffs and despite the assurances which had been given by Mr

Connolly that no steps would be taken by him or NOL to sell Monasterio.

121. In around March 2025 Mr Lane became aware of the sale of Monasterio and his

solicitors immediately corresponded with Mr Connolly and his then newly instructed

solicitors. The focus of attention then turned to the proceeds of sale. Throughout the period

March to July 2025 assurances were sought that the sale proceeds would be placed in escrow

or otherwise secured to ensure they were not dissipated. Mr Connolly’s then solicitors

confirmed their instructions (repeated on several occasions) that Mr Connolly would not do

anything to dissipate the proceeds of sale of Monasterio and that “no further transfers will be 49

made from the proceeds of sale by NOL without notifying [Mr Lane’s solicitors] in

advance”.83

122. The plaintiffs and their solicitors relied on these various written confirmations and did

not seek a freezing order in respect of the proceeds of the sale of Monasterio at that time. I

find that it was entirely reasonable for these assurances to be accepted by the plaintiffs and

that they were given by Mr Connolly’s then solicitors on his behalf and with his instructions,

on the express understanding that the assurances would be relied upon by the plaintiffs and

their solicitors – as indeed they were.

123. On 29 August 2025 Mr Lane’s solicitors received correspondence from Mr Connolly

which indicated that “Mezen has called in the remaining outstanding loan from Spain”. This

alerted the plaintiff's solicitors to the fact that NOL had, in apparent breach of its assurances,

in fact transferred at least some of the Monasterio sales proceeds to Mezen. The evidence

confirmed that NOL and MESL had transferred funds to Mezen totalling €497,500 in four

tranches on dates ranging from 14 August 2025 to 21 August 2025. No prior notice of these

transfers had been given to Mr Lane.

124. On 2 September 2025 Mr Connolly wrote to Mr Lane’s solicitors stating:

“To crystallize all parties’ positions and determine entitlements to loan repayments and final

distribution of surplus finds, an independent liquidator was appointed on 21st August to

oversee the orderly winding up of the companies…. The assets of the companies are now

secure with the liquidator. As part of the winding up of the companies I no longer have

control over the company’s assets”.

83 Letter Dentons to Arthur Cox dated 28 March 2025. Note also letter dated 7 July 2025 stating: “We have confirmed on many occasions that our instructions are that neither NOL, nor Mr Connolly, intend to dissipate the proceeds of the sale of NOL’s assets. We have also confirmed on numerous occasions that Mr Connolly will not direct any further transfers to be made from the proceeds of sale of NOL’s assets without notifying you in advance”. 50

125. The evidence confirms that Mr Lane was not given any advance notice of the liquidation

of NOL and MESL. Significant funds as outlined at para 125 above were transferred out of

NOL and MESL just prior to the appointment of the Spanish liquidator to those companies.

126. An undertaking was sought from Mr Connolly and his then solicitors that no further

transfers would be made out of the proceeds of sale of Monasterio pending the resolution of

these proceedings. The plaintiffs indicated that failing receipt of such an undertaking they

would seek liberty to apply for a freezing order. Mr Connolly's then solicitors confirmed that

they were seeking to come off record for him (which they subsequently did ) and for Mezen

and had no further instructions. Correspondence continued between the plaintiffs’ solicitors

and Mr Connolly in which information and undertakings regarding the proceeds of sale of

Monasterio were requested. Part of the undertakings requested were that the monies which

had been transferred to Mezen out of the proceeds of the sale of Monasterio would be

transferred to an escrow account pending the determination of these proceedings. Mr

Connolly did not provide the requested undertakings and denied dissipating any of the

proceeds of sale.

127. Accordingly, on 9 September 2025 the plaintiffs brought an ex parte motion seeking

interim reliefs concerning the proceeds of sale of Monasterio. The court made a number of

interim orders on that date, including that Mr Connolly and /or Mezen be restrained from

dealing with, dissipating, transferring, charging, encumbering or alienating any sums which

had been transferred to Mezen from the proceeds of sale of Monasterio. Following some

extensions of that interim order the matter was heard on an interlocutory basis on 27

November 2025 at which point Mr Connolly was self-represented. He appeared in person

both at the hearing and for delivery of the court’s judgment on 1 December 2025. The order

made by the court that day included an order that Mr Connolly and/or Mezen “are restrained

from dealing with dissipating transferring charging encumbering or alienating any sums 51

which have been transferred to [Mezen ] from the proceeds of sale of the property and/or

business known as Finca Monasterio”(the “Mareva Order”).

128. The court further directed that Mr Connolly swear an affidavit identifying all payments

which had been made from the proceeds of the sale of Monasterio and the dates, basis for and

payees of those payments. An affidavit in purported compliance with this requirement was

delivered by Mr Connolly on 6 January 2026 in which Mr Connolly identified payments

made to Mezen from the proceeds of sale but which did not identify any payments being

made out of Mezen or between Mezen accounts in relation to that part of the sales proceeds

held by Mezen. It is not in dispute that Mr Connolly is in sole control of Mezen as director

and the 99% shareholder (his brother being the registered holder of the remaining 1% on

trust).

129. The plaintiffs wished to ensure on an ongoing basis that the monies the subject of the

Mareva Order remained in Mezen’s bank accounts in compliance with the Mareva Order.

Further evidence was requested in the form of bank statements to confirm the up to date

position. On 13 February 2026, while this hearing was ongoing, Mezen’s bank statements

from 16 October 2025 to 13 February 2026 were provided to the plaintiffs. This information

was the basis of a motion seeking various reliefs against Mr Connolly and Mezen arising

from what the plaintiffs alleged to be evidence of improper payments having been made, in

breach of the Mareva Order, from monies which constituted the proceeds of sale of

Monasterio.

130. The Mareva Order remains in place and I deal later with the application made in relation

to it at the trial.

131. Mr Connolly confirmed in his evidence that he did not tell Mr Lane about the sale of

Monasterio until Mr Lane belatedly discovered this fact on 11 March 2025. Nor did Mr

Connolly advise Mr Lane about the appointment of liquidators to NOL and MESL on 21 52

August 2025. His reasoning for that was put in the following terms: "… I was under immense

pressure, there was proceedings against me, the business, the business in Spain, the outcome

of which was going to be appointing receivers over a Spanish property, probably through

Spanish receivers and a trading company. We were suffering detrimentally from the

proceedings themselves through customers and clients looking for refunds. We were under

immense pressure in both businesses. Not only a nose dive in bookings, but people who had

made bookings becoming very concerned about the prospects of a receiver being

appointed".84

132. Mr Connolly's evidence was that he regretted not telling Mr Lane or his solicitors about

his intentions. He emphasised the immense pressure he was under and how he wanted to

bring matters to a resolution and that he "didn't believe that I was dealing with somebody who

would be commercially minded in assisting in doing this because of the correspondence and

the heaviness and the, if you like, the threatening content of that".85

133. His evidence was more assertive later in the trial. He said:

“… from my point of view, this was an opportunity to sort out an awful lot of things that

relate to NOL 2 and Monasterio Exclusive, bearing in mind that if you look at the outcome

that Mr. Lane was seeking, to appoint receivers over a Spanish company holding a hotel

property and an operating company, that would only be detrimental to the business. We'd be

involving Spanish lawyers, we'd be involving Spanish law, tax codes, etc., and it would mean

we'd be down there for another three or four years, fighting away in the courts. It would only

extend and exasperate the situation. And by crystallising the position at what is absolutely

fair value and putting the asset into cash, which is ultimately what Mr. Lane is seeking to

achieve through the proceedings, I was hoping that we could just come to an understanding

84 Day 7 page 11 lines 6-16 85 Day 7 page 12 lines 14-18 53

on it, that we could tidy up the tax situation, wind up the companies and that we wouldn't be

sitting here now discussing this and we could've got on with the other position in relation to

Pointsetter and Mezen…. And in order to support Mezen, I felt that it would be important to

prop up the Irish business as well. And by virtue of the fact of crystallising the distributable

amounts through the sale of the property, that that allowed us to do that very thing and

monies were paid back to Mezen from Spain… the liquidator was appointed, so that any

funds or monies could be held in safe keeping, that, exactly what I wanted to do, the taxes to

be paid, creditors to be paid down, whatever claim Mr. Lane has against the companies

could be dealt with. I've never disputed the money that Gerry has put into the companies. I

would assist in any way whatsoever to ensure that he's paid back and that whatever rests with

the liquidator thereafter is divided between us in a fair and equitable manner. And that's all

I've ever sought from the beginning and that's all I've sought through this.”86

134. There is no doubt that all of the evidence establishes that Mr Connolly made a deliberate

and calculated decision to sell Monasterio, to pay out such funds as he wished, to then put

NOL and MESL into liquidation and to conceal and deceive Mr Lane about all of this until

everything was completed. Mr Connolly denied that he had sold Monasterio to raise money

to put into Mezen in an attempt to defeat Mr Lane’s claim in these proceedings. I believe Mr

Connolly had no entitlement and indeed knew he had no entitlement to sell Monasterio

without Mr Lane’s consent – even indeed if he and Mr Lane were merely co-shareholders. I

did not find his denial credible on this aspect.

135. On Mr Walsh’s evidence “from a mathematical point of view”87 there would have been

sufficient funds to repay Mr Lane prior to placing the companies in liquidation – but Mr

Connolly did not do so.

86 Day 9 pages 45-47 87 Day 10 page 58 line 4 54

136. The net effect of the appointment of the liquidator to NOL and MESL is that neither Mr

Connolly nor Mr Lane can now get access to the Monasterio proceeds of sale. This is

however a far more significant disadvantage for Mr Lane given the fact that Mr Connolly

pre-liquidation paid out the sums that were important from his own perspective and because

Mr Lane is not a registered shareholder. His difficulties will be compounded by the evidence

that NOL’s accounts do not appear to record the contribution of €867,000 he made to the

purchase of Monasterio by NOL and by the absence of any loan documentation as between

NOL and Mezen. No credible rationale was provided by Mr Connolly to explain the

appointment to solvent companies of the Spanish liquidator, now in control of approximately

€2 million.

137. I accept the evidence that this litigation has been damaging to the business of Tinakilly

and has had a significant impact not only on the parties but also on the staff. This is

unfortunate where it is clear that a very successful wedding business had been built up in the

years since 2013. I do not believe this has been the intention of any party to this dispute.

Rather it has been a regrettable consequence of the publicity surrounding the breakdown in

the relationship between Mr Lane and Mr Connolly and their inability to resolve matters

outside the glare of the inevitable publicity which litigation of this nature tends to attract.

The expert financial evidence and other financial evidence from Noone Casey

The expert evidence

138. The parties each engaged an expert financial witness. The level of cooperation those

experts displayed and their production of a detailed joint report on which agreement was

reached on a broad range of financial matters was an example of how independent expert

witnesses should approach their role and discharge their duty to the court. 55

139. Mr Lane engaged Mr Kieran Wallace. Mr Connolly engaged Mr Joe Walsh. Both

experts produced detailed reports. I propose to focus primarily on the areas of agreement and

disagreement identified by the independent experts in their joint report which provided

valuable information to the court and substantially reduced the areas that remain in dispute.

That joint memorandum provides a snapshot in time – namely the position as at 30 June

2025. It is worth noting in that regard that this date was after significant payments had been

made by NOL to Mezen in and around March 2025 following the sale of Monasterio.

140. In his evidence Mr Wallace confirmed his finding at para 2.1 of his report dated 20

November 2025 that “…the core financial information which, in my experience, should be

readily available for businesses of this nature, have not been provided for either Tinakilly or

Monasterio. The inability to access basic financial records has severely hampered the ability

to assess the true financial position and trading performance of both Tinakilly or

Monasterio”.

141. It was Mr Wallace’s evidence that the level of transactions on the directors loan

accounts in Mezen was particularly unusual with over 1500 transactions identified. It was his

opinion, as articulated at para 2.5.1 of his report that “[t]he evidence points to extensive use

of company assets and funds for the personal benefit of Mr. Connolly, his family and related

companies including personal expenses and payments to related companies. Many of these

transactions lack proper business justification or supporting documentation”.

142. Looking to the helpful joint memorandum prepared by the experts the following

evidence was proffered as agreed (as at 30 June 2025) in that memorandum and/or in oral

testimony:

(1) Both experts agreed that the financial records of Mezen, NOL and MESL are

incomplete and cannot be relied upon in full. There was however a degree of difference

between the experts as to the extent of that incompleteness. Mr Wallace believed the 56

Mezen accounts were misleading. Mr Walsh’s view is that: “These issues relate to

misclassifications and do not impact on the overall net position of Mezen, i.e. the total

assets and liabilities which remain the same”.

(2) The statutory requirement for an annual return for Pointsetter was only introduced in

BVI in 2023. There is a lack of underlying financial records for Pointsetter and the 2023

financial return does not appear accurate.

(3) Mandatory related-party disclosures regarding Mr Connolly's overdrawn director's loan

account have not been disclosed in Mezen's audited financial statements.

(4) The related-party transactions have been recorded through the director's loan account.

The audited accounts should have, but did not, include specific disclosures regarding all

related-party transactions identified.

(5) Mezen is in breach of s. 239 of the Companies Act 2014 arising from Mr Connolly’s

overdrawn director loan account balance as it exceeds 10% of the net assets of Mezen.

The balance owed by Provenance and the loan referred to in the Mezen accounts as the

Spanish loan also exceed 10% of the net assets of Mezen. Three separate instances of

breaches have been identified.

(6) Mr Connolly’s director's loan account included a credit of €323,000 relating to wages

for Mr Connolly for Monasterio. It is unclear whether this is a net or gross sum and no

vouching documentation was provided to support those payments. If gross, as Mr Wallace

believes, this figure should have been much lower to account for the tax liability on it and

therefore there would be a further amount owing by Mr Connolly to Mezen as well as tax

consequences. There was no evidence in the accounts of NOL or MESL that they recorded

such monies as owing to Mr Connolly or paid out. The experts agree that this transaction

should not have been in Mr Connolly’s loan account for Mezen and that it would be for

the Spanish liquidator to determine whether this unpaid wages claim of €323,000 should 57

be admitted.

(7) The experts came to a figure of €225,538 (minimum)88 as being owed by Mr Connolly

to Mezen as at 30 June 2025 by separating out all of the other transactions with related

entities, and including the credit of €323,000 referred to at (6) above.

(8) The experts agreed that Mezen owes Cassidys €512,204. Provenance owes Mezen

€728,869.89 Monasterevin Whiskey owes Mezen €14,508 and Caspian owes Mezen

€4,172. These are all related entities to Mr Connolly, but entirely separate legal entities

from him and from each other.

(9) The document provided in discovery as a fixed asset register of Mezen lacks the detail

that would allow any analysis of the underlying line items.

(10) Neither expert has been provided with documentation for any loans between Mezen

and the related entities associated with Mr Connolly. The accounts for Cassidys include

the Monasterio investment as a financial asset as opposed to Mr Connolly's position that it

was a loan. This financial investment is described in Cassidys' audited accounts as “Spain

investment”.

(11) The total consideration for Monasterio was €2.5m (excluding taxes and costs), which

included €730,000 in loans assigned to NOL of which €117,000 was discharged at the

time of the acquisition from the solicitor’s client account for NOL. At the time of the

purchase €2.112m was paid. This figure included the €117,000 referenced above and the

balance of the agreed consideration (less the remaining assumed loan) of €1.77m. That

cash balance was funded by way of a loan from Mezen of €1.3m. The breakdown of that

€1.3m was €867,000 for Mr Lane’s 51% interest and €833,000 for Mr Connolly’s 49%

interest. Mr Lane repaid his portion on 8 December 2017, not directly to Cassidys but

88 Mr Wallace’s evidence – Day 6 page 42 line 14 89 There does not appear to be any loan agreements in place in respect of this sum. 58

instead paid it to Mezen as outlined below. There was no evidence before the court that Mr

Connolly ever repaid his portion to Cassidys.

(12) The total funds paid into the NOL solicitor’s account was €2.769m which included a

loan from Mr Lane of €680,000 which he advanced on 10 December 2018 to repay the

assumed loan that by then had fallen due for repayment. Mr Connolly’s portion of that

payment would have been €333,200 in line with his 49% interest. The stated purpose of

this loan was “to meet payments from the borrower company and group companies,

among others, the company of Irish nationality, Mezen Consultancy”. Not all of the

funding paid into the solicitor’s account (by Mezen, Mr Lane and Cassidys) was however

used for the purchase of Monasterio. Following the purchase NOL received a payment of

€517,000 from Servicios Legales (surplus on purchase price for Monasterio) on 8 May

2019, which was used for other purposes unrelated to NOL’s business activities.

(13) In the weeks following the transfer of these funds to NOL payments were made from

NOL by Mr Connolly for his own benefit, including €364,000 paid to Mr Connolly's

Augustus Cullen Law client account and €133,000 credited to Mr Connolly’s shareholder

account in NOL. The experts agree that while the purchase price for Monasterio was

€2.5m (excluding taxes and costs) the sum paid over at or around the time of completion

was less than this amount (i.e. €1.885m). So, it has transpired that €2.5 million was not the

purchase price ultimately of Monasterio – it was less in light of the refund later received

from Servicios Legales. Mr Wallace expressed his view that excess funds borrowed for a

purchase should logically be repaid to the parties who contributed to the purchase. It was

agreed that the €680,000 loan was repaid to Mr Lane in 2025 (not in 2019 when the refund

was received).

(14) Pointsetter financial statements for the period ending 30 June 2014 record a

shareholder loan for Mr Lane of €543,130. 59

(15) Pointsetter financial statements for the period ending 30 June 2014 record a

shareholder loan with DB Hollowstone of €546,211. These accounts do not record

Mr Connolly as having provided the funds directly.

(16) Cassidys transferred €1.7 million for the acquisition of Monasterio, of which

€867,000 is attributed to Mr Lane's 51% interest. Mr Lane paid his contribution of

€867,000 directly to Mezen on 8 December 2017 but this transaction was never reflected

in NOL’s financial records.

(17) The balance of €833,000 represents the 49% shareholding of Mr Connolly in NOL

which Mr Connolly asserts was introduced by him through Cassidys. However, the

audited accounts of Cassidys do not reflect this position as the full €1.7 million is included

as a financial asset, (Spain investment and not as a loan).

(18) Mr Connolly’s director loan balance in Mezen as at 30 June 2025 is agreed at

€225,538. It is worth noting that this balance excludes related party transactions with

Connolly entities90 and Mr Connolly’s Monasterio wages claim and noting that an

overdrawn director’s loan account would be subject to tax and no provision has been made

for the quantum of any tax payable to Revenue. Neither expert has audited the underlying

transactions.

(19) Mr Lane provided loans totalling €760,000 in respect of Monasterio. €680,000 was

provided by Mr Lane to NOL on or about 10 December 2018 for the Monasterio

acquisition and a loan document was prepared for this. The remaining €80,000 was

advanced by Mr Lane to MESL in 2 tranches of €40,000 each on 30 April 2021 and 13

May 2021. Mr Connolly and the liquidator confirmed that these loans were not recorded in

NOL or MESL. The non-recording of this transaction will require Mr Lane to persuade the

90 The agreed figures for those related entities as at 30 June 2025 is Cassidys €512,204 (credit owed to Mezen including €867,000 repaid by Mr Lane to Mezen for his share of Monasterio); Provenance €728,869 (owed to Mezen); Monasterevin €14,508 (owed to Mezen) and Caspian €4,172 (owed to Mezen). 60

liquidator in Spain that they are legitimate amounts that are owed to Mr Lane.

(20) The sum of €134,800 was paid by Mr Lane to the benefit of Monasterio. This amount

has not been recorded in relevant books and records as being due to Mr Lane.

(21) €780,000 has been paid by NOL to Mr Lane since the sale of Monasterio in February

2025.

(22) €1,443,450 has been paid by NOL to Mr Connolly and related parties.

(23) Mr Lane provided agreed loans of €277,914 to Mezen which are recorded in Mr

Lane’s Mezen loan account. There is however disagreement between the experts as to the

full extent of Mr Lane’s outstanding Mezen loan balance as at 30 June 2025.

(24) Mr Lane provided €560,800 to Mezen which the experts do not classify as either

loans or capital contributions and that is a matter for this court to determine in its analysis

of the claim for an increased equity contribution under clause 5 of the Shareholder

Agreement. These payments were included with the Mezen Loan account balance for Mr

Lane.

(25) While there is no claim in these proceedings for the monies paid by Mr Lane for the

gardens in Tinakilly, Mr Wallace nevertheless believes those monies ought to have been

reflected somewhere in the Pointsetter or Mezen accounts. They are not.91 Mr Walsh did

not look at this point as there is no claim for these monies in these proceedings.

(26) In relation to the payments regarding Cúl an Tí, Mr Connolly claimed that payments

totalling €181,430 had been made for this purpose. He provided backup in relation to

€130,755.75 of this amount but no invoices were provided. Most of the funds paid out

appear to have come from Cassidys rather than Mr Connolly personally. There does not

appear to be a credit in Mezen to Mr Connolly and Mr Walsh could not confirm these

additions were included in the accounts of Pointsetter Limited.

91 Day 5 page 149 line 17 61

(27) The experts express no view on whether the sum of €504,000 paid to former solicitors

in respect of legal representation of Mr Connolly and Mezen in these proceedings were

legitimately paid by Mezen or whether they should in whole or in part have been

discharged by Mr Connolly personally. The letter of engagement was not produced to the

court. Mr Connolly confirmed in evidence that he did not personally pay any money to his

former solicitors but that the legal costs were paid by Mezen.92 The evidence of payments

made from Mezen’s bank account was corroborated by Ms Windsor’s evidence on day 10

of the trial as indeed was the continuing payment of legal costs to the current legal team.

Ms Windsor confirmed in her evidence that Mr Connolly instructed those payments.93

(28) Mr Walsh indicated in this evidence that the overall position on Mr Connolly’s loan

account balance was positive as at June 2022 without stripping out the related-party

transactions. He agreed that this positive figure had moved to a negative balance by June

2025, both for Mr Connolly personally and for the related-party transactions.

143. The experts disagreed on some matters as follows.

(1) They disagree on the extent of Mr Lane’s outstanding Mezen loan balance as at 30

June 2025. Mr Wallace put this figure at €633,757 owed to Mr Lane. Mr Walsh says the

figure owed to Mr Lane is €183,757. Both experts agree that after Monasterio was sold,

monies were remitted from the sale proceeds to Mezen. Of those monies remitted to

Mezen, €450,000 was paid to Mr Lane. The difference between the experts is explained

because Mr Wallace believes this €450,000 should be regarded as a distribution to

Mr Lane of part of the proceeds of sale of Monasterio whereas Mr Walsh believes the

€450,000 should be regarded as repayment by Mezen of loans due to Mr Lane. He points

out that the money has been received by Mr Lane and so it should in fact reduce the loan

92 Day 9 page 84 line 29 93 Day 10 page 160 line 20 62

balance due to Mr Lane and it must properly be reflected somewhere as the monies were

actually repaid to Mr Lane. Mr Lane's position is that monies that he is owed by Mezen

should be repaid by Mezen. He argues that taking money out of the sale of Monasterio is

worsening the net return to the individuals who own Monasterio. Mr Walsh says that the

calculation of a liability of €633,000 to Mr Lane, which ignores the payments made by

Mezen, presents a misleading position. However Mr Walsh agreed on cross-examination

that he was not in a position to put a label on the payments and could just identify what

the figures are.

144. There is also some disagreement over Mr Connolly’s remuneration for Mezen as

recorded in his director’s loan account. It is agreed that the sum of €356,000 (being director's

fees for two years of €100,000 each and wages going back to 2019 of €156,000) was credited

to Mr Connolly’s loan account claimed to be remuneration for Mezen. Mr Wallace believes

this figure is gross and as a result Mr Connolly’s loan account is overdrawn by an additional

€195,800, being the estimated associated payroll taxes. If Mr Wallace is correct then Mr

Connolly’s loan account in Mezen is overdrawn to at least €420,000. Mr Walsh simply notes

Mr Connolly’s position that he is liable to pay the taxes due as part of his income tax returns

and he does not comment any further noting that the personal tax affairs of Mr Connolly are

outside the scope of his report.

145. There was a lot of evidence given in relation to the manner in which Mr Lane repaid his

portion of 51% of the Monasterio acquisition monies which amounted to €867,000. As

previously outlined, at Mr Connolly’s request this amount was sent by Mr Lane directly to

Mezen rather than to NOL. I do not accept Mr Connolly’s oral evidence, not in his witness

statement or any supporting documentation, that he had a discussion with Mr Lane about

possibly paying this money to Cassidys. Once received by Mezen (in December 2018) the

full sum was then credited to Mr Connolly’s director’s loan account in Mezen and was drawn 63

down by Mr Connolly over a period of time. Mr Wallace said he had no backup information

to support that credit because the Cassidys accounts record the sum of €1.7m as an

investment by Cassidys into Monasterio.94 He was of the opinion that there are tax

consequences to monies being credited to a director's loan account that should not have been

credited in the first place, particularly if that account becomes overdrawn.

146. Mr Connolly's evidence on the €867,000 paid by Mr Lane in respect of his portion of the

purchase price of Monasterio was that "Gerry owed me or Cassidy's 867,000 as paying back

for the money I put down to the solicitors…. Gerry has some issues transferring money or

money comes back to him and there's just a couple of things there, I think the BIC numbers

and such. I was in Spain at the time when he rang me. I said, "Look, Gerry, the easiest thing

for you to do, because I know you have the Mezen bank account number and that you're

capable of transferring money", I don't mean capable "your bank know the number, the

easiest thing for you to do is, why don't you put in Mezen because my shareholder's account

is overdrawn there at the moment and that would just rebalance it and put me in a plus

position". So Gerry is paying me the 867 that he owes me".95

147. Mr Connolly was not receptive to criticisms regarding the intermingling of Monasterio

money with Mezen money or the idea that the money was owed to Cassidys and not to him

personally. His evidence was: "The reality of the situation is, I put down 1.7 on behalf of

myself and Gerry. Gerry owed me the 867 and he gave it back to me. That's the beginning,

the middle and the end of it".96

148. An effort was made by Mr Connolly's legal team to suggest that in a general sense of

"money in/money out", all of the connected entities (being Cassidys, Provenance,

94 Mr Wallace said that “the same accountants for Cassidys were the accountants who were preparing the accounts in Mezen in 2018 when that director's loan account was being prepared. There is a very common element to both.” Day 6 page 18 lines 11-14 95 Day 6 page 156/157 96 Day 6 page 157/158 64

Monasterevin Whiskey and Caspian) should feature in the overall calculation of the monies

outstanding so that the overall figure owed by "Related Entities" to Mezen was €235,344

when the individual transactions were netted off. They also argued that if Mr Lane actually

received money from any of these entities, it should be counted in respect of any

indebtedness owed to him by Mr Connolly. They said this represented the reality on the

ground.

149. Mr Lane's legal team did not agree. It was Mr Wallace's evidence that he did not

understand how it could be contended that an amount owed by one corporate entity can be

offset by an amount owed by another corporate entity when there is no agreement in place

and the entities are not a group.

Other financial evidence tendered by Noone Casey

150. It is worth referencing briefly the evidence that was tendered by Mr Anthony Casey,

one of the founding partners of Noone Casey who have acted as accountants, tax agents and

auditors to Mezen since 2014. This evidence was of limited value to the court in

circumstances where Mr Anthony Casey was not personally involved in the affairs of Mezen.

Mr Andrew Noone, who was directly responsible for the Mezen account, retired on 31

December 2024 and was not available as a witness. Mr Casey confirmed however that he had

reviewed the Mezen audit files prior to giving his evidence. Although a qualified accountant,

he gave his evidence in a factual rather than an expert capacity.

151. Mr Casey confirmed that Noone Casey was not asked at any time to prepare partnership

accounts or partnership tax returns and they never did so. He acknowledged that Mr Connolly

was the principal person who gave instructions on behalf of Mezen. Mr Casey could not

explain why the description of “shareholder funds” was changed to “director’s loan” in the

Mezen accounts or who, if anyone, had instructed this. 65

152. Mr Casey confirmed that management accounts were made available to Mr Connolly

and Mr Lane on an ongoing basis between 2014 and 2020. He did not however have personal

knowledge of that given that he was not involved in this aspect. He said that in 2020 Noone

Casey ceased preparing management accounts when Tinakilly closed as a result of covid. Mr

Casey said that the files showed that Noone Casey engaged with Mr Grainger when he was

involved and tried to address Mr Grainger’s queries and requests for additional information.

153. Mr Casey confirmed that there were no audited accounts for Mezen for 2023, 2024 or

2025 (and no draft financial statements for 2025). He said that Noone Casey had no opinion

on the accuracy or otherwise of the draft 2023 and 2024 accounts or whether they represented

a true and fair view.

154. He said that Mezen qualified as a small company for the purposes of accounting

standards which characterisation meant that Mezen could disclose less in the notes to its

financial statements. Ordinarily Mezen, as a small company, should not be subject to audit.

However Mezen lost its audit exemption in various years because of late filing of its annual

returns. In effect Mezen did not require an audit for 2014, 2015, 2016 and 2019 but did

require an audit for 2017, 2018, 2020, 2021 and 2022. Therefore four of the nine years which

Noone Casey reported on were non-audit.

155. It was Mr Casey’s evidence that from the outset, and with the agreement of Mr Connolly

and Mr Lane, Noone Casey accounted for all receipts and payments in the director’s loan

accounts – without distinguishing between related party transactions or transactions sourced

through third parties for their benefit. He said that the parties and Mr Grainger believed that

this was the true reflection of the balances during that period – although Mr Casey was not

personally involved in any such discussions. He acknowledged that the experts have

expressed a different view on disclosure of related party transactions and said that “I believe 66

they’re wrong”.97 In Mr Casey’s view the payments were not related-party transactions but

rather payments on behalf of and to the benefit of Mr Connolly and Mr Lane.

156. He accepted that a significant amount of transactions both in number and value had

passed through the directors’ loan accounts. He said however that all of the transactions had

been recorded accurately in the director’s loan account balance. He said that Noone Casey

had advised Mr Connolly that he should not be processing so many personal transactions

through the company accounts and he believed in later years the number of such transactions

reduced.

157. Because Mr Lane was neither a director nor a shareholder, the monies owed to him by

Mezen appeared under a heading of “other creditors” in Mezen’s audited accounts. In fact Mr

Connolly was also treated in the same way although Mr Connolly was both a director and a

shareholder. Mr Casey agreed that it would have made more sense to identify Mr Connolly

specifically. When asked why this happened Mr Casey replied: “I think other than historic

reasons that from the incorporation of the company for many years the two accounts were in

effect bundled together in the statutory accounts. There's no reason why Mr. Connolly's

should not have been disclosed separately”.98

158. On cross-examination Mr Casey agreed that related-party transactions should be

separately disclosed.99 He also agreed that if Mr Connolly’s personal director’s loan account

was overstated (which Mr Casey did not believe it was) it would be reported separately.

159. Noone Casey were also the auditors to Cassidys. Mr Casey was taken through the

accounting treatment of the €1.7m advanced by Cassidys towards the purchase of Monasterio

in 2017 which is still showing as an asset of Cassidys in its balance sheet. He agreed this

treatment was “inconsistent” with that is evident from the Mezen accounts.100 Mr Casey said

97 Day 9 page 125 line 8 98 Day 9 page 161 lines 3-8 99 Day 9 page 156 lines 21-22 100 Day 9 page 133 line 7 67

that he had recently spoken to Mr Barry Connolly (a director of Cassidys) and he agreed that

the figure paid to Mezen (by Mr Lane) was made on behalf of Mr Denis Connolly. He could

not however give contemporaneous evidence of any such enquiry as he was not involved at

the time. He said that payment made no difference from Mezen’s perspective but he agreed

that there are possible tax issues for Cassidys relating to it.

The evidence of Anna Windsor

160. I propose to deal separately with the evidence tendered by Ms Windsor because it took a

somewhat unexpected turn at the trial in the course of cross-examination on matters which

had not been included in her witness statement.

161. Ms Windsor has worked in Tinakilly for more than 30 years. Since July 2013 she has

been employed by Mezen. She gave evidence that her official title is Assistant Manager, but

that her main role is the day-to-day financial administration of the business including

bookkeeping and monitoring all financial transactions. She confirmed that she had assisted

Mr Connolly while he was a lay litigant in these proceedings.

162. Her evidence was that Mezen was at all times operated as a limited liability company

and not as a partnership although she was not aware until recently of the MOU or

Shareholder Agreement between Mr Lane and Mr Connolly.

163. Ms Windsor was questioned regarding the large increase in the volume and amount of

transactions going through Mezen’s account since 2020 which reimbursed payments made on

company or private credit cards or payments made in cash. Ms Windsor explained that during

Covid, work was undertaken to convert eight of the Tinakilly rooms into studio apartments.

She said: “I was purchasing some items at that time through my own account and then getting

reimbursed”.101 When asked if such purchases could explain all the increase in payments of

101 Day 10 page 143 line 8 68

approximately €90,000 for 2021, Ms Windsor said: “No, some of that relates to some work that

Mr. Connolly was doing on the stone yard, on the premises”.102

164. On further questioning she advised that the stone yard was across the avenue from

Tinakilly. It is not owned by Mezen or Pointsetter but by a different company, Green Hill

Developments, a company owned by Mr Connolly’s son.

165. When asked could she explain how the reimbursed payments continued to increase in

the years up to 2024 (when to her knowledge no large renovations were being undertaken at

the hotel – although she later changed her evidence on this), Ms Windsor replied that she

imagined this was due to payments she would have made to third parties on behalf of

Mr Connolly, for which she was reimbursed by Mezen.

166. When given an opportunity to look at the specific transactions for the single year 2024

Ms Windsor said: “… in June 2024 we were carrying -- we had employed some carpenters

and a plasterer to do work around the building and they were being paid cash. So the money

went through my account. So, in order for me to have the cash to pay them, I would transfer

it to my account. So that's what that actually is for. So it was cash payments to carpenters

and plasterers and people doing work around the hotel”.103

167. She confirmed that Mr Connolly knew about the payments being made by Mezen for the

stone yard works and that in making any payments she was acting on Mr Connolly’s

instruction.104

168. What was unclear to the court at that time was whether the payments in question were

accounted for by Mr Connolly in his Mezen loan account or otherwise. This was not an issue

that had been considered by the experts. Counsel sought and was given time to take further

instructions on this point as Mr Connolly had taken ill.

102 Day 10 page 143 lines 23-24 103 Day 10 page 147 lines 18-25 104 Day 10 page 152 lines 23-24 69

169. When Ms Windsor resumed her re-examination she indicated that in the intervening

time she had sought to break down the sum of €174,000 odd that featured in Mezen’s bank

statements for 2024 as having been paid or reimbursed to Ms Windsor. Some of the payments

were salary for Ms Windsor which are entirely uncontroversial. Other payments were made

on the Mezen credit card (held in the name of Anna Windsor).105 These payments totalled

approximately €48,000 and Ms Windsor stated that these expenses were incurred for day to

day business of Mezen and were clearly recorded on the Mezen credit card statements. A

small additional amount of approximately €2,300 was categorised as reimbursement to Ms

Windsor for items she paid for Mezen from her own personal account. The bulk of payments

amounting to €89,000 were in Ms Windsor’s evidence “… payments [were] to workmen

doing works in the hotel. The payments were not on behalf of Mr. Connolly, the payments

were entirely on behalf of Mezen and are fully recorded in the books and records”.106

170. I was not prepared to allow any reliance on documents that should have been but were

not discovered. Ms Windsor explained that the vast bulk of the money was for the benefit of

Mezen saying it was used to pay tradesmen to improve the premises including staff studios,

the tasting room and work during Covid in the reception area of the hotel. She said such

payments were recorded as improvements to the premises in the books and records.

171. In essence, Ms Windsor’s evidence changed from a position where there were no

significant renovations going on in the hotel in 2024 and a sum of approximately €120,000

was paid out from Mezen to third parties on behalf of Mr Connolly, to a position where there

were significant renovations going on in the hotel in 2024 and that all the cash payments of

€89,000 were paid out from Mezen to third parties on behalf of Mezen. When the court

enquired as to the difference in the evidence given by Ms Windsor previously regarding what

105 The evidence is that there is also a Mezen credit card in the name of Barry Connolly. 106 Day 11 page 18 lines 12-15 70

works were carried out with the cash payments she said: “I actually felt completely ambushed

and I was looking at this document for the first time. I honestly -- I don't really know what I

said on Friday, I'll be completely honest. I was completely, I was just -- I just was in

complete brain freeze, I'm not going to lie”.107 She later said on further cross-examination: “I

accept I changed - I told the facts on the 25th. I felt completely ambushed on the 20th”.108

Insofar as there was a difference in Ms Windsor’s evidence I prefer as more accurate and

credible the instinctive evidence she gave on the 20th February. Ms Windsor was asked open

questions and the court would not and did not permit her to be ambushed.

172. Of course the court does not have audited accounts or even managements accounts for

the years in question. I note with some concern the high level of cash payments utilised by

Mezen and the conflicting evidence as to what the funds in question were in fact spent on. Ms

Windsor confirmed to the court that Mezen did not receive any invoices in respect of the cash

payments. There was no evidence of precisely what works were carried out in Tinakilly itself

to improve the premises. It appears that monies were spent by Mezen on other properties near

Tinakilly used but not owned by Mezen. These properties appear to be owned by another

Connolly related-entity. I appreciate that such properties may be a useful add-on to

Tinakilly’s business but I do not see how capital expenditure on those properties by Mezen

could properly be accounted for in Mezen’s accounts as improvements to Tinakilly’s

premises.

173. The large amount of cash payments raises a query regarding the proper expenditure of

Mezen funds, even if those monies are recorded in Mezen’s accounts as improvements to the

premises. If these monies were spent to benefit other Connolly related-entities who own

adjoining properties, Mezen should not bear the burden of that expense as an improvement to

107 Day 13 page 28 lines 19-24 108 Day 13 page 31 lines 24-25 71

its own premises (which in fact, in any event are owned by Pointsetter). It was not suggested

that these monies were accounted for in Mr Connolly’s loan balance or that any third party

owed these monies to Mezen on foot of a loan agreement. The closest Mr Connolly came to

an explanation was in correspondence exchanged during the latter stages of the trial where his

solicitors advised that: “[The Tasting Rooms] has proven to be a great success and has

assisted in the business greatly in securing bookings. The situation in respect of the staff

studios is similar. Mezen has not [been] charged rent in respect of the staff studies in

recognition of the monies expended by Mezen. It has been intended to regularise the

relationship between Mezen and Greenhill but the within proceedings intervened.”

174. In her evidence tendered after that correspondence Ms Windsor confirmed that Mezen

paid for construction in the stone yards saying: “They paid, but they get the use of the studios;

there's no lease. They renovated the apartments and we have staff living there”.109 She also

confirmed that Mezen had paid for the construction of the tasting rooms. She denied any

knowledge of Mezen making a payment in respect of an application for planning permission

for the development of a house on the stone yard lands. She said she did not know why the

process for recording individual transactions in the director’s loan account had been changed

in 2024 to refer to aggregated entries rather than individualised entries.

175. Overall, the evidence of Anna Windsor confirmed an unsatisfactory degree of

informality in the documenting of cash payments made by or on behalf of Mezen to third

parties (some alleged to be for the benefit of Mr Connolly or related entities).

Late amendment of pleadings during the trial

176. An application was made by the plaintiffs almost at the conclusion of the oral evidence

on day 11 seeking to further amend their statement of claim.

109 Day 13 page 48 lines 2-4 72

177. Notwithstanding the late application, and as set out in my ex tempore judgment dated 3

March 2026 delivered on day 12 of the hearing, I permitted the amendments to be made on

conditions, including that the defendants would be permitted to re-call Mr Lane (who had

completed his testimony by that point). The defendants took up this opportunity on day 14 of

the trial. Of course my allowing the amendments to be made did not mean that I accepted the

validity of those amendments. In that regard I set out my findings in the following paragraphs

of this section.

178. One group of amendments can be described as technical amendments to which no

particular objection was taken and I do not need to address those here.

179. The amendments also sought to include a more fulsome plea for an equitable account.

The following amendment was sought as new para 34B:

"In breach of his duty to act in good faith, not to profit from his fiduciary position and/or his

duty to account to the first Plaintiff in respect of any profits or benefits received from Tinakilly,

Mezen and Pointsetter, the First Defendant has caused the Second Defendant to make

payments which were improper, in that the Second Defendant received little or no benefit from

the said payments, while the First Defendant received all or almost all of the benefit from the

said payments. Given the failure of the First Defendant to provide sufficient financial

information, the Plaintiffs are not in a position to identify all such payments, but examples of

such payments are set out in the Third Schedule.

The Plaintiffs shall seek an order for an equitable account to be taken and the taking of an

account of all financial transactions which the First Defendant has caused the Second

Defendant to enter into, other than those entered into in the ordinary course of business and

for all necessary consequential orders on foot of the settled accounts. Insofar as the existence

of a partnership or alternatively a joint venture is established, the First Plaintiff will seek the

rebalancing of the contributions made, the benefits received and the profits payable by the 73

partners or joint venturers. In the alternative, the First Plaintiff will seek damages for the

financial loss suffered."

180. I accept that amendment noting that from the very outset of these proceedings the

plaintiffs have sought an account, specifically requesting the taking of all necessary accounts

and inquiries. The examples relied upon emerged or were expanded upon in large part during

the course of the evidence. This amendment is not seeking to introduce a new cause of action.

It is certainly aimed at determining the issues in dispute between the parties. I am also

mindful of the ongoing complaint about the provision of financial information and the

adequacy of the discovery provided in these proceedings.

181. Finally, the most controversial amendment sought was the implication of an implied

term to the Shareholder Agreement in the following terms:

“It was a further implied term of the Shareholders’ Agreement that either party would be

entitled, upon reasonable notice being given to the other, to terminate the Shareholders’

Agreement, following which Tinakilly House Hotel and its business and undertaking would

be sold on the open market, with the profits (after payment of all debts) being distributed to

the parties in accordance with their equity entitlements, as adjusted as necessary in

accordance with clause 5."

182. There was a considerable dispute between the parties regarding the implication of this

term. Mr Connolly contended that it was clearly and on its face a term that would not meet

the requirements for implying a term at law and was in any event advanced far too late and

represented a fundamental shift in the pleaded claim. Furthermore he argued that such a term

would self-evidently be inconsistent with clause 6 of the Shareholder Agreement and in

particular the right of first refusal for each party to buy the shares of the other. He also argued

that such a term is inconsistent with the partnership argument and with the corporate structure

agreed and expressly set out in the Shareholder Agreement. 74

183. Mr Lane argued that if the Court finds that a partnership exists then there are statutory

remedies open in terms of dissolving that partnership. However if the Court doesn't find that

it's a partnership then a situation would arise where the parties were locked into a commercial

relationship which Mr Lane would wish to terminate. It was argued that in the absence of the

above implied term there would be a dispute as to how that relationship could be determined

at all including what the period of reasonable notice should be and this could itself give rise

to further litigation.

184. On being recalled, Mr Lane described the implied term as a “fallback position” in case

the court were to hold that the parties were not in a partnership. He accepted that the purpose

of clause 6 of the Shareholder Agreement was to give each party a right of first refusal if the

other party wished to sell their shares and that this clause was intended to protect both

parties.110 It was suggested to him that the implied term now sought would be entirely

inconsistent with clause 6 as its effect would be to allow either party to terminate the

Shareholder Agreement (without affording any pre-emption rights to the other) and instead

force a sale of the entire property on the open market. Mr Lane did not accept this and argued

that the implied term would apply equally to both parties and so was fair to each of them.

That of course misses the point as to whether it is inconsistent with an expressly agreed term.

185. In fact in response to counsel’s question as to whether Mr Lane accepted that the

suggested implied term means that Mr Lane can end the relationship without giving Mr

Connolly a right of first refusal, Mr Lane responded “Yes”.111

186. Mr Lane said on cross-examination: “There has to be a mechanism for this whole thing

to end. And that is not satisfied by Clause 6, it needs the implied term”.112 His evidence was

that the implied term first occurred to him during the course of the trial when he discovered

110 Mr Lane’s evidence on day 2 was that “It’s also only fair, I think, that we agree that, in the event that one partner wants to sell, he has to give the other party the right of first refusal, which I think is only fair”. 111 Day 14 page 17 line 16 112 Day 14 p 21 lines 8-10 75

the amounts of money being taken out of the companies into which he had put millions of

euro. He said the need for the implied term “…became clear as the proceedings proceeded,

so to speak”.113

187. The Shareholder Agreement does not contain an express right of termination. Mr Lane

was asked, but did not answer, why he had never served notice to terminate the Shareholder

Agreement if he believed there was in fact an implied right to terminate it. Mr Lane accepted

that the implied term now alleged was never discussed, referred to or acted upon by either

party since 2013. When asked did he accept this term was never part of the agreement

between the parties he said: “ … the implied term is a very recent introduction”.114

188. There was no dispute between the parties as to the principles the court should apply in

relation to the implication of terms. The implication of the particular term itself however was

hotly contested. The plaintiffs argued that the Shareholder Agreement was a document

drafted without the benefit of legal advice and that it therefore fell within the category of a

less formal document to which a court would be more willing to imply a term.115 It was

argued that the implied right to terminate by reasonable notice has been recognised in many

cases in the Irish courts including Irish Welding v Phillips Electrical Limited [unreported,

High Court, 8 October 1976] and Q&E Telephones v Alcatel [unreported, High Court, 17

May 1995]. I accept and adopt the statement of principle noted by Andrews that “…the

courts will recognise that long-term contracts (unless there is an express or sufficiently clear

contrary provision or indication) contain an implied term that either party can terminate the

contract, without breach of contract, by giving the other reasonable notice”.116

113 Day 14 p 23 lines 24-25 114 Day 14 page 33 line 1 115 Relying on UTB LLC v Sheffield United [2019] EWHC 2322, para 206 116 Contractual Duties: Performance, Breach, Termination and Remedies (2020, 3rd Ed., Thompson Reuters), para 9-066 76

189. It is true that courts will not readily accept the proposition that the parties intended to

remain in a relationship in perpetuity. However, the term sought to be implied by Mr Lane

goes beyond termination on reasonable notice and looks to determine what is to happen as

between the parties when termination occurs. It is the second half of the implied term sought

that, in my view, brings it outside the scope of a mere “termination on reasonable notice”

implied term. Of course, if the relationship is a partnership then there is an entire statutory

framework for the termination of same and this implied term would be unnecessary in any

form.

190. I have to consider whether the suggested implied term conflicts with an express term

agreed between the parties. In that regard the provisions of clause 6 of the Shareholder

Agreement come into play. It provides that:

"Sale of shares: Should either party wish to sell or transfer part or all of their shares, it is agreed that the other party will have the right of first refusal. The party purchasing will have a period of 90 days to complete the purchase. Thereafter, either party is free to sell shares to third parties. Any issuance of new shares to third parties must be agreed in writing by both DC and GL."

191. Mr Connolly says this is the contractually prescribed mechanism to bring the

relationship to an end. He says that the proposed implied term would enable a party to

terminate on reasonable notice without first affording any pre-emption right to the other party

as required by clause 6 and that this entirely undermines the express agreement and is

inconsistent with the pre-emption rights which the parties have granted to each other.

192. Mr Lane argues that the pre-emption rights do not provide an exit mechanism in many

scenarios such as where there is no market for the shares because the business has been

mismanaged by the other party. He says that even if an investor could be found, the price

they would be willing to pay to purchase a minority shareholding in a company such as

Mezen, with its significant corporate governance issues and potential liabilities, would be so 77

low that it wouldn't offer any practicable route to exit the relationship for Mr Lane. He

argues that Mr Connolly is effectively incentivised to run down the business so he can buy it

at a knock down price if Mr Lane wishes to exit. On the other hand it is argued that if the

suggested term is implied, there would be the option to sell the hotel and business as a going

concern and Mr Connolly could still bid for it. The implied term, it is said, would create

another exit mechanism not totally controlled by Mr Connolly and his behaviour. This

argument focussed on Mezen only and not on Pointsetter, as owner of the hotel.

193. Irish law permits the implications of terms in limited circumstances only. First in

circumstances generally described as the “officious bystander” test where the term can be

inferred on the basis of the presumed intention of the parties – being a term so obvious that it

goes without saying and where that is no need to express it. Irish law also recognises the

“business efficacy” test – again based on the presumed intention of the parties and being a

term necessary to give commercial or business efficacy to their agreement. In reality, both

tests are generally treated as being, in substance, one test, although the Court of Appeal in

Flynn v Breccia [2017] IECA 74 left open the possibility that the tests are true alternatives

and do not represent cumulative conditions. Second, a term can be implied deriving from the

nature of the contract itself.117

194. As noted by O’Donnell J (as he then was) in Law Society of Ireland v Motors Insurers’

Bureau of Ireland [2017] IESC 31: “Whether a term is implied pursuant to the presumed

intention of the parties or as a legal incident of a definable category of contract it must be not

merely reasonable but also necessary. Clearly it cannot be implied if it is inconsistent with

the express wording of the contract and furthermore it may be difficult to infer a term where

it cannot be formulated with reasonable precision”.

117 See Murphy J in Sweeney v Duggan [1997] 2 IR 531 78

195. In my view the suggested implied term is on its face inconsistent with clause 6. Indeed,

although Mr Lane did not accept that inconsistency, he acknowledged in fact the

inconsistency in his evidence by agreeing that the term would mean that he could end the

relationship without giving Mr Connolly a right of first refusal. I also do not believe that the

term arises pursuant to the presumed intention of the parties as necessary to give business

efficacy to the Shareholder Agreement nor as a term so obvious that it goes without saying.

Mr Lane in his evidence confirmed that the implied term now sought was never discussed,

referred to or acted upon by either party since 2013. All of this leads me to the conclusion

that it is not a term that should be implied into the Shareholder Agreement. A term cannot be

implied merely because it would be fair or improve the bargain made between the parties.

196. It was suggested that the court might amend the implied term to make it “subject to

clause 6” so that any possible inconsistency could be avoided. This would require the court

to become involved in a level of post-facto drafting that in my view is not appropriate or

permissible.

Increased equity share claim

197. It is agreed that the starting point in terms of equity shares was 49% for Mr Lane and

51% for Mr Connolly for Tinakilly and 51% for Mr Lane and 49% for Mr Connolly in

respect of Monasterio. Mr Connolly says that is how the respective interests always remained

and that the court should not order otherwise.

198. Mr Lane seeks to increase his percentage shareholdings on the basis of his alleged

capital contributions which were not matched by Mr Connolly. Reliance is placed by Mr

Lane in that regard on clause 5 of the Shareholders Agreement. The precise figures moved

around as new financial information was received by Mr Lane but the most recent claim as

articulated in the Third Amended Statement of Claim delivered on 2 December 2025 was a 79

contention by Mr Lane that his equity holding should be increased to 67.88% in Tinakilly

(Pointsetter and Mezen) and 54.6% in Monasterio – with Mr Connolly’s share in both

reducing accordingly.

199. Mr Lane spent monies refurbishing Room 66 in Tinakilly (estimated by him at “over

€100,000”118) and Room 17 in Monasterio. However no financial claim is made by him for

those refurbishments. The evidence (agreed by the respective financial experts in terms of

quantum but not classification) was that 3 other types of (unmatched) payments were made

by Lane in respect of both Tinakilly and Monasterio as follows:

The Garden

(1) US$680,086.07 and €13,998.75 was provided by Mr Lane for works to restore and

renovate the gardens at Tinakilly.

(2) US$117,328.78 was provided by Mr Lane for works to restore and renovate the

gardens at Monasterio.

No claim is made by Mr Lane in respect of these categories of payments.

Loans

(1) €277,941.45 was advanced by Mr Lane as loans to Mezen for Tinakilly

(2) €760,000 was advanced as loans in respect of Monasterio.

No claim is made to an increased equity contribution by reason of those loans. The loans are

however claimed as being monies repayable with interest to Mr Lane.

118 Day 2 page 30 line 11 80

Alleged Capital Payments

(1) Payments totalling €595,908.08 and US$17,487.01 (alleged by Mr Lane to be capital

payments) were claimed to have been made by Mr Lane between August 2013 and

January 2019 in connection with the Tinakilly business. Most payments were made to

Mezen but some were made directly to other third parties.

(2) Payments totalling €134,800 (alleged by Mr Lane to be capital payments) were made

in relation to Monasterio.

200. It is the category of alleged capital payments that gives rise to Mr Lane’s claim for an

increased equity share under clause 5 of the Shareholder Agreement.

201. Mr Connolly had also claimed in para 29A of the Third Amended Defence and

Counterclaim dated 9 December 2025 that he made unmatched payments entitling him to an

increased share – although that claim was not advanced at the hearing. The evidence was that

Mr Connolly spent €125,782.15 on the refurbishment of Cúl an Tí. Mr Connolly pleaded that

if Mr Lane is deemed to have made capital contributions then Mr Connolly’s expenditure on

Cúl an Tí must also be deemed to be a capital contribution which would require to be

reflected in any re-balancing of the equity.

202. I do not agree with Mr Connolly for the following reasons. Cúl an Tí is a residential

property owned by Pointsetter. It is not however part of the Tinakilly business and sits

outside of the lease between Pointsetter and Mezen. The property is used as a residence for

Mr Connolly and his family. Any expenditure on Cúl an Tí was for the benefit of Mr

Connolly and not the business of Tinakilly. More relevantly however, the monies expended

by Mr Connolly on repairs to Cúl an Tí were not capital contributions. Evidence was given

that Mr Lane emailed Mr Connolly on 30 November 2017 when he was told of the

expenditure and Mr Lane confirmed that he had “…no objection to [Mr Connolly] charging

the company for necessary repairs to the house, which I think is fair”. 81

203. In those circumstances I am satisfied that there is in fact no evidence of any unmatched

capital contributions made by Mr Connolly to the business of Tinakilly or Monasterio such as

might potentially trigger clause 5 of the Shareholder Agreement. This point was sensibly

dropped by Mr Connolly at the trial.

204. The only question for the court on the equity contribution aspect therefore is whether

some or all of the payments made by Mr Lane as alleged capital contributions give rise to an

entitlement to an increased equity contribution for him pursuant to clause 5 of the

Shareholder Agreement.

205. The payments claimed as capital contributions to Tinakilly comprise 18 payments made

on dates between August 2013 and January 2019. Of those payments, two payments were

made in 2013 amounting to €100,000. Thirteen payments were made in 2014 amounting to

€386,884.48. Two payments were made in 2015 amounting to €100,000 and the final single

payment was made in January 2019 in the amount of €9017.60. The total of such payments

amounts to €595,902.08.119 Further alleged capital contributions in the amount of

US$17,487.01 were made – comprising a payment of $1,505 in 2013; $6703.44 in 2016;

$3,200 in 2019 and $6078.57 in 2020. While Mr Lane made many of these payments, others

were made by companies or individuals on his behalf.

206. Mr Lane was asked on cross-examination why he was now saying these payments were

capital contributions when the accounting records created at the time showed them as loans to

Mezen. His response was: “Well, they were never covered by any loan accounts and in the

Shareholders', in Clause 5, it was clearly understood that they were capital contributions”.120

207. This answer in its vague terms was not particularly helpful to the court. Certainly the

evidence confirms that these monies were in fact advanced and were not formally

119 This figure differs slightly from the total claimed in the plaintiffs’ schedule of €595,908.08. 120 Day 3 page 35 lines 13-15 82

documented as loans (as certain other payments had been). They were not formally

documented as capital contributions either. They were actually accounted for by Mezen’s

auditors as a liability due to “other creditors” – consistent with their treatment as a loan to

Mezen. Mr Lane’s response in evidence was that: “All accounts from Noone Casey are totally

unreliable and full of false information. I would rely on Clause 5 of the Shareholders'

Agreement to show that clearly these were capital contributions and not loans. That loan of

680,000 for Monasterio was in fact covered by a loan agreements. Where are the loan

agreements for all of these here? There is none”.121

208. Evidence was given of a specific email request to Mr Lane from Colin Hatt on 1 August

2013 in which he sought payment from Mr Lane of €50,000 as “[t]he capex 50K is now

urgently needed”. That sum was provided by Mr Lane on 6 August 2013. When put to Mr

Connolly that this was not a request for a loan but rather for capital expenditure Mr Connolly

replied “[w]ell, the loan would be provided to allow for capital expenditure”.122 He agreed

however that it was not stated to be a loan. It is clear from the evidence that in many cases

Mr Lane expressly documented payments he made as loans. It is where other payments were

made for capital expenditure that he relies on clause 5.

209. The evidence confirms that the capital contributions made by Mr Lane were recorded in

the books of Mezen as shareholder funds right up until June 2021 when the funds were

described as “Mezen director’s loan, Gerry’s input to Mezen”. The parties were not agreed

as to whether shareholder funds were loans or capital contributions to the company. Mr

Connolly says shareholder funds cannot be converted into equity – rather they should be

repaid as a loan from the paying party.

121 Day 3 page 29/30 122 Day 8 page 22 line 24-25 83

210. In an email on 10 July 2017 from Mr Lane to Mr Connolly, Mr Lane stated “[t]his might

also be a good time to square up shareholders’ funds in Tinakilly”. It was put to Mr

Connolly that he must have understood this to mean that Mr Lane was making significant

capital contributions to Tinakilly and into Mezen which had not been matched by Mr

Connolly. Mr Connolly disagreed.

211. In response to a question as to whether Mr Lane discussed increasing his shareholding

as a result of requests for money by Mr Connolly, Mr Lane replied: “Well, I think it was

understood, right, when he's asking me for additional capital contribution, particularly

during Covid, for example. I think it's understood in that request, I know the Judge will

decide that but it seemed to me that it's clearly understood if he's asking me for more capital

contributions it's understood that that's going to increase my equity”.123 He later said “I don't

recall any specific conversation to that effect”.124

212. Mr Connolly accepted that there had been several requests made to Mr Lane for money

to allow creditors to be paid and to complete essential works.125

213. Mr Connolly says that the wording of clause 5 of the Shareholder Agreement is based on

an agreement – a right to participate rather than a unilateral decision by one party to increase

their shareholding. It was Mr Connolly's evidence in relation to clause 5 of the Shareholder

Agreement that the parties "never anticipated or discussed the potential variation of shares

between us".126 He stressed the importance of his 51% interest which he described as

"obviously crucial" and said "I couldn't see a situation occurring whereby simply lending

money to a company on a shareholder's loan account could entitle you in retrospect 12 years

later to increase your equity in that company".127

123 Day 2 page 161 lines 3-10 124 Day 2 page 161 lines 24-25 125 Day 8 page 19 line 26 and page 20 line 5. For example, email from Anna Windsor to Mr Lane dated 1 February 2001. 126 Day 6 page 130 lines 18-19 127 Day 6 page 130 lines 21-25 84

214. For the reasons I later set out in the Analysis section of this judgment I reject Mr Lane’s

claim for an increased share of equity based on clause 5 of the Shareholder Agreement.

Analysis

Interpretation and application of the Shareholder Agreement

215. Both parties agree the arrangement they entered into is recorded in the Shareholder

Agreement, insofar as Tinakilly is concerned.

216. I am satisfied that the Shareholder Agreement is properly to be interpreted subject to the

implied term pleaded in paragraph 10.9 of the second amended statement of claim which

pleads that:

"Further, it was an implied term of the Shareholders’ Agreement that neither party would

unilaterally sell, transfer or encumber or cause Mezen or Pointsetter to sell, transfer or

encumber any partnership assets.”

217. In fact, it is clear from the provisions of clause 11 of the Shareholder Agreement that

there was an express prohibition on either party imposing any charge/debenture against the

business (and not just the SPV) unless by mutual consent. It is not therefore necessary for a

term to be implied that neither party would unilaterally encumber or cause Mezen or

Pointsetter to encumber any assets of the business. The implied term therefore really only

concerns a prohibition on either party unilaterally selling or transferring any assets of the

business. It seems to follow inexorably from the express prohibition on encumbrances that

the parties also intended that they would each be precluded from unilaterally selling or

transferring the business. Indeed Mr Lane’s evidence reflected his understanding that “one of

the partners cannot sell the business without the full knowledge and consent of the other 85

party”.128 Mr Connolly also accepted in his evidence that he understood that Mr Lane could

not sell Pointsetter or Tinakilly without Mr Connolly’s consent and that Mr Connolly was not

entitled to sell the business of Mezen without Mr Lane’s consent. I am satisfied that this term

should be implied by reference to the presumed intentions of the parties and because it would

also clearly meet either the officious bystander test or the business efficacy test, particularly

in light of the express prohibition on encumbrances. I therefore interpret the Shareholder

Agreement subject to that implied term in relation to the business generally.

218. I decline however to interpret the Shareholder Agreement as being subject to the implied

term pleaded by Mr Lane in his fourth amended statement of claim. My reasons for this

decision are set out in some detail in paras 197-214 and do not need to be repeated here.

219. The next issue which arises is whether the Shareholder Agreement (as I have now

interpreted it) also extends to the relationship of the parties in respect of Monasterio.

Certainly it was Mr Lane’s evidence that the Shareholder Agreement continued to govern the

Monasterio transaction albeit that the companies involved were different companies and the

overall level of shareholding between him and Mr Connolly was reversed from Tinakilly.

220. It was suggested by counsel for Mr Lane that Mr Connolly had also accepted in

evidence that the Shareholder Agreement governed the Monasterio transaction. In that regard

reliance was placed on Mr Connolly’s evidence that it was clearly the intention of the parties

to be shareholders in the Spanish companies although that wasn’t formalised through the

paperwork or documentation. When asked if the intention of the parties he was referring to is

“what we see in the Shareholders’ Agreement, is that right?”, Mr Connolly replied “[t]he

Shareholders’ Agreement , yes”.129

128 Day 2 page 26 lines 24-26 129 Day 7 page 54 line 4 86

221. The closing submissions on behalf of Mr Connolly did not really engage with this point.

The written submissions merely stated that there “…was no Shareholders Agreement in

respect of NOL2 and MESL” . In his oral closing submissions however counsel for Mr

Connolly denied that Mr Connolly in the evidence quoted above accepted that the

Shareholder Agreement governed the Monasterio transaction. I agree that this matter is not as

clear an admission as was presented by Mr Lane.

222. While it is true that the Shareholder Agreement was never amended or updated to reflect

the Monasterio transaction, I am satisfied on the evidence that the Shareholder Agreement

was understood by all parties as applying to the Monasterio transaction. There were many

instances of Mr Lane and Mr Connolly referring to both Monasterio and Tinakilly in the

same breath, most readily depicted by Mr Connolly’s reference to Monasterio as “Tinakilly in

the sun”. Mr Connolly confirmed that the footer of Tinakilly emails referred to Monasterio

as “our sister hotel in Spain”. Mr Hatt confirmed that he had been brought over to

Monasterio from Tinakilly to set up the operations side of it – showing a clear link between

the two hotels and a sharing of staff expertise between them. The evidence showed that

Mezen funds were used to purchase items for Monasterio refunded to Mr Hatt’s credit card.

Mezen funds were also used to cover the initial deposit for Monasterio. Conversely, Mr Lane

was asked to refund his portion of Monasterio purchase monies to Mezen and part of the

proceeds of sale of Monasterio were used to repay debts relating to Mezen activities.

223. In my view the failure of Mr Connolly to identify or articulate any other agreement

between him and Mr Lane regarding Monasterio points strongly to the conclusion that the

parties did in fact operate at the time on the basis that the Shareholder Agreement also

extended to Monasterio. There were never any steps taken to prepare a new written document

by either party, as they had done for Tinakilly. I believe this was because each understood

that the existing Shareholder Agreement would govern Monasterio, subject to the oral 87

agreement between them that the respective shareholdings be reversed (with Mr Lane holding

51% against Mr Connolly’s 49%) and that the nominated Spanish companies be set up to act

as the Prop Co/Op Co structure in the same way Pointsetter and Mezen did for Tinakilly.

224. I therefore find that the Shareholder Agreement governed the relationship between the

parties in relation to Monasterio subject to the agreed different Prop Co and Op Co used for

the transaction (being NOL and MESL respectively) and the agreed reversal of shareholding

to reflect 51% for Mr Lane and 49% for Mr Connolly. This finding of course means that the

provisions of the Shareholder Agreement otherwise applied to Monasterio including the pre-

emption provisions in clause 6.

The legal status of the relationship between the parties

225. The next and indeed central issue to be determined is whether the relationship between

Mr Lane and Mr Connolly is properly characterised as a partnership. If successful in his

claim of partnership, Mr Lane seeks all necessary and appropriate orders to give effect to the

dissolution of the partnership, including the appointment of receivers over the partnership

assets and the taking of a full account of all partnership dealings. In the alternative to his

claim of partnership, Mr Lane contends that the parties were engaged in a joint venture as

regards the business and property of Tinakilly and Monasterio and that the same fiduciary

duties as a partnership arise equally in that joint venture relationship.

226. Parties in a partnership have authority to bind each other in respect of matters entered

into in the course of their partnership business. They must account to each other for the

assets, business opportunities and income which belong to the partnership.

227. The range of fiduciary duties alleged by Mr Lane to arise in this business relationship,

consequent on its being a partnership or joint venture comprising a relationship of trust and

confidence, include in general terms: 88

- a duty to act honestly and in good faith;

- a duty to act in the best interests of the partnership;

- a duty to account for any profits of the partnership;

- a duty to provide full accounts and financial information and to make all partnership

books available for inspection;

- a duty to avoid conflicts of interest.

228. A partnership agreement need not be in writing, and indeed may even arise inadvertently.

The question as to whether there is a partnership between parties is an objective test. It

therefore does not matter whether a party believed they were in a partnership or did not so

believe. Ultimately the court decides on the evidence whether or not a partnership existed. As

noted by Lindley and Banks on Partnership130 in determining the existence of a partnership

“regard must be paid to the true contract and intention of the parties as appearing from the

whole facts of the case”. Once a partnership exists, the relationship between the partners is

governed by the terms of their agreement or, absent an agreement, on all or particular points,

by the terms of the Partnership Act 1890 (the “1890 Act”). The onus of proving the existence

of a partnership is on Mr Lane in this case as the party alleging it.

229. Section 1(1) of the 1890 Act defines a partnership as: "The relation which subsists between persons carrying on a business in common with a view of profit."

230. Twomey on Partnership, (2nd Edition, 2019, Bloomsbury) at chapter 2 considers the six

separate requirements or pre-requisites to partnership based on the above definition (each

element of which must be satisfied), while noting that all the relevant factors require to be

weighed up in order to determine the true nature of the relationship. Those requirements are

as follows:

130 21st Ed, Sweet and Maxwell para 5-03 89

(1) A relation, (2) which subsists between persons, (3) carrying on (4) a business, (5) in

common (6) with a view of profit.

231. Some of the requirements are self-explanatory and are not controversial in the present

case. Taking each requirement in turn however, the following is clear:

(1) “A relation”

232. A partnership must be consensual and it is a contractual relationship. However a

partnership does not require a written agreement and can be based entirely on an oral

contract. The requirement that the relationship be consensual does not mean that the parties

must intend to create a partnership per se, only that the relationship itself is based on

consensus and agreement.

233. There is no suggestion that the parties did not voluntarily enter into their relationship or

sign the MOU and Shareholder Agreement. The requirement of a consensual and contractual

relationship is clearly satisfied on the facts of this case even if the parties differ on whether it

constitutes a partnership and even if Mr Connolly did not intend to be in partnership with Mr

Lane.

(2) “which subsists between persons”

234. This criteria is also clearly satisfied. Mr Connolly and Mr Lane are both separate

persons who entered into the MOU and the Shareholder Agreement individually and who

cooperated with each other in the running of the businesses.

(3) “carrying on”

235. This criteria is also satisfied. The evidence clearly shows that the business of both

Tinakilly and Monasterio commenced and became fully operational. This pre-requisite does

not require that all partners be active in the day to day operation of the business. 90

236. I do not accept the argument that neither Pointsetter nor NOL can properly be

characterised as vehicles through which Mr Lane and Mr Connolly “carried on business”

within the meaning of the 1890 Act because they were not trading companies but rather

property holding companies. In fact, both companies were part of the Prop Co/Op Co

structure that was agreed and they self-evidently were an integral and crucial component to

the carrying on of the business, because they held the assets.

(4) “a business”

237. Section 45 of the 1890 Act defines the term “business” in a non-exclusive manner as

“including every, trade, occupation or profession”. The commercial activities of both

Tinakilly and Monasterio clearly constitute businesses for this purpose. Furthermore, as is

stated by Twomey at para [2.50], parties still carry on business even where they have come

together for a single venture.

(5) “in common”

238. This requirement is the one which goes to the heart of the question as to whether a

partnership exists. It is noted by Twomey at para [2.68] that “most cases of doubt about the

existence of a partnership revolve around this issue.”

239. This requirement is a question of fact, to be decided by reference to the particular

circumstances of each case. In para [2.70], Twomey expands upon this requirement: “In

general terms, parties will be acting in common when they have a community of interest in

the business in question or in other words are co-owners of the business (as distinct from any

property used by the business). A strong indicator of this co-ownership is the fact that they

share profits of the business or that they jointly control or manage the business.”

240. An important factor in determining a community of interest in the business will be

whether the parties are capable of being each other’s agent for the purposes of that business. 91

The fact that the parties have authority on behalf of each other to undertake business is a

strong indication that they are undertaking their business in common. As noted in the

evidence and as referred to in para 84 of Mr Lane’s witness statement, Mr Connolly

concluded an option agreement in 2017 on behalf of himself and Mr Lane to purchase

Monasterio in 2018. The consideration for the option was €100,000 which was provided from

Mezen funds. A further example of the parties representing each other was the evidence

regarding the attempt to buy San Roque Golf Club, where Mr Connolly put forward a

proposal to buy based on the “combined net worth” of himself and Mr Lane.

241. Another aspect of acting in common is the extent to which the parties each have an input

into the business. It is not necessary that both have the same level of operational control or

the same level of entitlement to profit share.131 Pure investment in common, without anything

further, is unlikely to be sufficient to satisfy this criteria.

242. The evidence shows that right from the outset, Mr Lane and Mr Connolly undertook

necessary tasks together (such as instructing solicitors and surveyors), on a joint basis.

Throughout the years since acquisition, both Mr Lane and Mr Connolly acted together in

multiple and varied ideas and decisions regarding the business of Tinakilly (and later,

Monasterio) – ranging, for example, from investment decisions, staff uniforms, business

plans, marketing, fixtures and fittings. They expressly agreed to consult each other on the

incurring of future capital expenditure for the business – indicating a common interest

between them regarding the development of the business into the future. Mr Connolly agreed

in evidence that while he was responsible for the day to day running of the business, on

significant strategic decisions in relation to the business, he and Mr Lane “cooperated on

those decisions”.132 Mr Hatt accepted in his evidence that Mr Lane was always involved with

131 See Greenham v Gray (1855) 4 ICLR 501 132 Day 7 page 35 line 28 92

Mr Connolly in the “important decisions” but said his involvement in the day to day

operations was “very minuscule”.133 Mr Hatt accepted that Mr Lane was regarded by him and

the staff as a co-owner of Tinakilly. Mr Lane appears to have taken the lead on (and funded)

the significant landscaping works in both Tinakilly and Monasterio, an important aspect of

the business of both hotels.

243. The parties agreed in clause 11 of the Shareholder Agreement that “any action by one

party which may affect the interests of the other party must have prior agreement in writing”.

Mr Connolly accepted in evidence that this restrained his freedom of action and that he

couldn’t do anything that might affect the interests of Mr Lane.134

244. I am satisfied that Mr Connolly and Mr Lane acted in common in relation to the

businesses of Tinakilly and Monasterio.

(6) “with a view of profit”

245. The motivation of profit (even if a loss actually results) is central to a partnership

relationship. Lord Lindley in A Treatise on the Law of Partnership (5th edn, 1888, Jersey

City: L F.D. Linn & Co.) spoke of:

“An agreement that something shall be attempted with a view to gain and that the gain shall

be shared by the parties to the agreement is the grand characteristic of every partnership and

is the leading feature of nearly every definition of the term.”

246. This “grand characteristic” of the partnership relationship is reflected in clause 8 of the

Shareholder Agreement which expressly refers to “profit distributions” and provides that:

“Dividends: dividends/profit distributions will be mutually agreed and determined by the

cash flow needs of the business and available funds. Distribution shall be in accordance with

equity percentages.”

133 Day 10 page 102 line 26 134 Day 7 page 166 line 29 93

247. Section 2(3) of the 1890 Act provides that the receipt by a person of a share of the

profits of a business is prima facie evidence that he is a partner in the business, but the receipt

of such a share, or of a payment contingent on or varying with the profits of the business,

does not of itself make him a partner in the business.

248. The evidence clearly supports the proposition that Mr Lane and Mr Connolly intended to

operate the business of Tinakilly (and later Monasterio) with a view to making a profit.

Business plans were prepared with specific financial targets. Investments were made in

multiple aspects of the business, such as the Tinakilly wedding marquee and the gardens,

with a view to increasing the turnover from weddings, and ultimately the profit to be made

from hosting them. Such investments also increased the capital value of the assets of the

business of both Tinakilly and Monasterio. A profit includes an increase in the value of

capital assets as well as the generation of trading profit. Both are present in this case.

249. Of course, a partnership does not exist in every case in which parties carry on a business

with a view to profit. Certain relationships between persons which might otherwise satisfy the

above criteria for partnership are excluded from constituting partnerships by s. 1(2)(a) of the

1890 Act which provides that the relationship between members of a company formed under

the Companies Act 2014 (or its predecessors) is not a partnership within the meaning of the

1890 Act. Mr Connolly relies heavily on this provision. Mr Lane accepts that the relationship

between shareholders does not, without more, constitute a partnership. He argues however

that the evidence in this case demonstrates the existence of a partnership separate and distinct

from the parties’ relationship as (beneficial) shareholders of the various companies and says

that s. 1(2)(a) does not preclude the partnership he contends exists in this case. In summary,

the fact that there is a relationship as shareholders does not preclude the finding of a

partnership if the evidence supports the existence of a partnership – but the relationship of

shareholders simpliciter is not a partnership. 94

250. Mr Connolly says that what happened in reality was the incorporation of companies, the

filing of corporate tax returns, the payment of corporation tax and the operation of the

business through corporate structures. I accept that bona fide companies were formed and

were operated and filed accounts. However, the evidence substantiates that simply looking at

the activities of the companies themselves would not yield much information about what was

happening in reality. No formal board meetings took place. No shareholder meetings were

convened. No formal transfers of shares ever took place with the effect that in fact Mr Lane

and Mr Connolly are not and never were registered shareholders together in any single

company. Neither were they co-directors in any of the companies. No formal deeds of trust

were ever put in place in respect of shareholdings. There was no evidence that any company

resolutions were passed. Decisions about the business were not actually taken through

company structures at all but rather by Mr Lane and Mr Connolly and/or other people

instructed by one or other of them – generally on foot of emails or conversations. Monies

were regularly requested informally by or on behalf of Mr Connolly and were often paid over

to the companies or to Connolly related entities without being documented as to their nature

or purpose. No dividends were ever declared or paid. Mr Connolly accepted on cross-

examination that Mr Lane could not vote as a shareholder in Mezen, because he wasn't on the

register, and the relationship between them could not actually be regulated through corporate

governance mechanisms in Mezen or indeed in NOL or MESL.135

251. Mr Lane argues that because he and Mr Connolly are not, as a matter of law, co-

shareholders in any of the relevant companies this in itself distinguishes this case from the

usual case in which the putative partners are registered as the legal owners of shares but their

relationship goes no further than that of co-shareholders. He also says that the voluntary

interposition of a trust relationship as regards the various shareholdings in this case, as

135 Day 7 page 52 line 8 95

reflected in the Shareholder Agreement, already imports fiduciary duties as between him and

Mr Connolly.

252. Under the 1890 Act the partnership itself has no separate legal personality and the

individual partners have unlimited personal liability. Partners under the 1890 Act can

however use limited liability companies to conduct their business and it is not uncommon for

a partnership to be structured via shareholdings in companies.

253. Mr. Connolly has been a director of a large number of companies during his career. As

well as those companies relevant to these proceedings, Mr Connolly was formerly a director

of six now inactive Irish companies and nine inactive UK companies, some which went into

liquidation and some were dissolved. Mr Connolly is therefore someone well familiar with

company structures and indeed someone who has, of his own admission, availed throughout

his career of the benefits of separate corporate legal personalities.136 Mr Lane of course was

also familiar with corporate vehicles and both men had the benefit of the structure that was

put in place.

254. In closing submissions the defendants accepted that in certain circumstances a

partnership may use corporate vehicles. They argue that in such a case however the shares

would have to be held on trust for the partnership and not the individuals personally. I was

provided with no legal authority to support this proposition and indeed it does not appear to

me to be correct, not least because one cannot hold shares on trust for an entity with no legal

personality. Given the evidence and unusual circumstances in this case I find that the use of

corporate entities is not per se inconsistent with the existence of a partnership between Mr

Lane and Mr Connolly. The real question will be whether the relationship of Mr Lane and Mr

Connolly was truly that of shareholders and no more, or whether, notwithstanding the use of

corporate vehicles, the true nature of their relationship was one of partnership.

136 Day 7 page 20 line 1 96

255. It is necessary therefore to look at the remaining evidence to ascertain the true nature

and substance of the relationship. I do so mindful of the provisions of s. 2 of the 1890 Act

which sets out rules for determining the existence of a partnership including that:

(1) Property ownership does not of itself create a partnership even where the owners

share the profits made by the use of the property;

(2) Sharing gross returns does not of itself create a partnership;

(3) The receipt of a debt by a person out of the accruing profits of a business does not

make that person a partner in the business;

(4) The advance of money by way of loan does not make the lender a partner in the

borrower’s business even where the rate of interest varies with the profits of the

business or the lender is otherwise entitled to receive a share of the profits arising

from carrying on the business.

Partnership in the context of the Shareholder Agreement

256. Mr Connolly argues that the Shareholder Agreement is not called a “partnership

agreement”. That is correct but it ignores the opening recital to the agreement which refers

expressly to the agreement as being for the purposes of a partnership between Mr Lane and

Mr Connolly regarding Tinakilly.

257. Specifically, Mr Connolly argues that the following terms of the Shareholder Agreement

are fundamentally inconsistent with the existence of a partnership:

(1) Use of corporate vehicles: I accept entirely that a shareholder is legally different to a

partner. For the reasons set above however I do not accept that in this case the

reference to corporate vehicles in the Shareholder Agreement, when considered in

light of all the evidence in this case as to how those corporate vehicles actually

operated and the rationale for them, means no partnership could arise between Mr

Lane and Mr Connolly. 97

(2) Unequal shareholdings: I do not accept this point. The shares in a partnership are not

required to be equal, although this is the default position under the 1890 Act. Partners

can agree a different allocation by the express terms of s. 24(1) of the 1890 Act.

(3) Casting vote: A casting vote does not negate the existence of a partnership. Partners

are free to agree to change the default position under s. 24(8) of the 1890 Act, and did

so in this case.

(4) Sale to third parties: I accept that the Shareholder Agreement made provision for the

sale to a third party by either party of part or all of their shares in the relevant

companies subject of course to the pre-emption entitlement. Undoubtedly, if the sale

of shares to third parties occurred this would bring any partnership between Mr Lane

and Mr Connolly to an end. The parties’ interests qua partners could only have been

assigned in accordance with s. 31 of the 1890 Act. I do not believe however that the

possibility of such a sale subject to pre-emption rights of itself negates the existence

of a partnership in this case. No sale ever occurred.

(5) Issuance of new shares: The Shareholder Agreement made express provision for the

issuance of new shares to third parties, but it required the consent of both Mr

Connolly and Mr Lane before this could happen. I believe this provision simply

reflects the fact that the parties used corporate vehicles to carry on their business and

this is not of itself inconsistent with the existence of a partnership in this case. No new

shares were ever in fact issued.

(6) Third Party Directors: I do not believe that the possibility of the appointment of

third parties as directors of the corporate entities (requiring consent of both parties)

impacts on whether there is a partnership.

(7) Dividends: It is suggested that because the dividends or profits would be distributed

in accordance with the equity percentages, that is inconsistent with a partnership. I do 98

not agree. The purpose of this provision is to give effect to the agreement between the

parties on their agreed share of profits or any later changed share if clause 5 was

operative. It is argued that the distribution of dividends to a shareholder is not a

partnership sharing of profits. However, the express reference in the Shareholder

Agreement is to an agreement to share profits and this is on its face consistent with

the existence of a partnership. No dividends were ever declared.

(8) No reference to “partners”: I think this point overlooks the express reference in the

Shareholder Agreement to there being a partnership between the parties.

258. In summary, I do not accept that there is anything specifically in the Shareholder

Agreement that is inconsistent with a partnership between Mr Lane and Mr Connolly. This

case can clearly be distinguished, for example, from the shareholder agreement that was

considered by the Court of Appeal in Breccia v Sheehan [2017] IECA 74 which included an

express “no partnership” clause.

Applying partnership principles to the working relationship between the parties

259. I turn now to the matters which Mr Connolly says are instances which point in clear

terms to the absence of partnership indicia. In that regard Mr Connolly emphasises, and

indeed the evidence supports, that no partnership accounts were ever prepared. Furthermore

no partnership tax returns were ever made nor was the partnership registered with the

Revenue Commissioners (and no name was ever given to the partnership). Mr Connolly also

says that neither he nor Mr Lane filed an annual tax return under the Revenue’s self-

assessment system or paid tax qua partner.

260. In response, Mr Lane says little weight should be given to the absence of partnership

accounts or registration. Mr Connolly was responsible under the Shareholder Agreement to

comply with all regulatory requirements, which he failed to do. He says Mr Connolly should

not benefit from his own wrongdoing by relying on his own non-compliance. He says that if 99

Mr Connolly had prepared proper accounts for Mezen, they would have performed the

function of partnership accounts.

261. It is also of course the case that Mr Lane never received any income from the

partnership on which any tax would be payable. Had he done so and failed to declare it as

partnership income this would be a point of some significance. The undisputed evidence is

however that this did not arise.

262. The experts were not agreed on when there was a need to register a partnership for tax.

Mr Wallace gave evidence that a partnership formed in Ireland has an obligation to register

with the Revenue Commissioners “at some point”.137 In his experience the registration of a

partnership for tax arises when that partnership believes it is going to receive income. His

evidence was that there is “no point registering the partnership if there's no income and

there's no intention any income is going to come, there's no point registering because you're

not going to be paying tax”.138 He said that the person with responsibility to register a

partnership for tax is a precedent partner who is someone who is tax resident in Ireland. Mr

Lane confirmed in his evidence that he is not tax resident in Ireland. Mr Walsh’s evidence

was that “...there's an obligation to notify and register with Revenue once you form a

partnership. There is a requirement to have what's called a precedent partner. The Revenue

would expect that to be the tax resident individual, but that's not a requirement. You would

need to explain to the Revenue why it wasn't the tax resident individual”.139 His

understanding was that thereafter each individual would include the partnership income

within their own income tax returns.

263. Overall these particular arguments weigh in favour of Mr Connolly’s position but, in my

view are outweighed by the overall assessment of the relationship as shown by the evidence.

137 Day 6 page 37 line 13 138 Day 6 page 38 lines 17-20 139 Day 9 p 194 lines 6-12 100

264. While accepting that the test is an objective one, it is nevertheless the case that Mr Lane’s

evidence was that he always understood he was in partnership with Mr Connolly. This was his

evidence right from the inception of the relationship until it’s breakdown where he indicated he

intended to become, in his words, and as noted by Mr Hatt, "the partner from hell." His

evidence was supported by Mr Murphy who is the closest to an independent factual witness

that was available to the court. Mr Connolly denied he ever viewed the relationship as a

partnership, although I am of the view that his evidence on this point is simply not credible. I

do not believe that the parties would have used the term “partnership” in both the MOU and

the Shareholder Agreement unless there had in fact been some agreement on partnership in the

discussions between them leading up to their signing these documents.

265. I therefore do not accept Mr Connolly’s contention that the concept of partnership was

something introduced retrospectively by Mr Lane when their relationship broke down.

266. The examples of the communications consistently used over an extended period provide

contemporaneous evidence that right from the outset both in their communications with each

other and with third parties, Mr Lane and Mr Connolly treated each other privately as being

in partnership and held each other out publicly as partners.140 Evidence was also given that

Mr Connolly too described himself as being in partnership with Mr Lane. In various emails to

Mr Lane directly Mr Connolly signed off as “partner”.141 He also, in an email dated 9 April

2021, expressed to Mr Lane the words “Proud to have you as my partner”.142 In an email

dated 8 June 2020 to Jersey lawyers Collas Crill LLP Mr Connolly, in looking to regularise

the shareholding in Pointsetter, stated that:“Currently, as you know the entire [shareholding]

140 For example, in addition to the numerous examples from Mr Lane, the court notes the email dated 16 October 2017 sent by Mr Connolly to Mr Rincon a Spanish lawyer advising on the purchase of Monasterio, in which Mr Connolly introduced Mr Lane as his business partner. 141 For example, at page 543 of Booklet 35, Book of Documents in Plaintiffs Witness Statements, where Mr Connolly, then thinking of selling his interest in Tinakilly, states that “I have always worked with our (Denis and Gerry) best interest at heart and enjoyed the amazing journey over the past six years….Your partner, Denis”. 142 Booklet 36, Book of Documents in Plaintiffs Witness Statements, page 653 101

is held by my partner, Gerry Lane….”. I believe they in fact considered themselves to be

partners. For example, in an email sent by Mr Connolly to Mr Lane dated 14 July 2019 Mr

Connolly wrote that: “I have always worked with our (Denis and Gerry) best interest at

heart….” Furthermore, the evidence is that primarily through Mr Connolly’s ongoing efforts

they sought out several other business opportunities together, eventually leading to the

purchase of Monasterio. They also agreed not to make further hotel investments without

inviting the other to participate. These examples are not consistent with an ordinary

shareholder relationship. They reflect a unique personal relationship between Mr Lane and

Mr Connolly in relation to Tinakilly and Monasterio extending far beyond the beneficial

shareholding arrangement in the companies.

267. The MOU and Shareholder Agreement explicitly refer to the creation of a partnership

between the two men. While that nomenclature is certainly not conclusive, I do place some

reliance on it in the circumstances of two seasoned business people. Mr Connolly on entering

these agreements was an experienced businessman with a personal knowledge of corporate

structures and the benefits of limited liability. I find it implausible that he would have drafted

and entered into the MOU and subsequently the Shareholder Agreement, which each

contained an express acknowledgement of partnership, unless that accorded with his

understanding at the time. Even if it did not so accord, the test to be applied is an objective

one. I was not persuaded by Mr Connolly’s evidence that he used this phrase on the basis that

it was not intended by him to mean a legal partnership.

268. While the MOU was superseded from a legal perspective I am satisfied that I can

consider it as important evidence of what was discussed and agreed between the parties at the

point in time during which it was operative. The Shareholder Agreement reflects the same

declaration of partnership as do numerous contemporaneous documents.

269. My impression of Mr Connolly was that he was very guarded in his evidence and at pains 102

throughout to avoid making any concession about being in partnership with Mr Lane or

accepting any of the indicia of a legal partnership. So for example, when asked if there was a

relationship of trust and confidence between him and Mr Lane he replied: “I know where this is

going and I just want to be careful”.143 He accepted that he did have a relationship of trust and

confidence with Mr Lane.144 However he entirely changed his position on that point in his

evidence the following day.145 I believe this change of position was tactical and untrue. There

clearly was trust placed by the two men in each other, at certain points in time at least.

270. I find that the evidence supports the true nature of the relationship as one of trust and

confidence – forged initially on the close friendship each had with Mr Murphy. Mr Lane says

that the relationship he had with Mr Connolly was one of trust and confidence where Mr

Connolly, correctly, understood that he could not do anything with the partnership assets

unilaterally. The evidence of Mr Connolly’s actions and communications in 2019 regarding

the potential sale of Tinakilly clearly demonstrate that this was also understood by Mr

Connolly.

271. The evidence also establishes that Mr Connolly was the person with hospitality

experience and the person operating Tinakilly on a day to day basis. Mr Lane had extensive

business experience, but no specific hospitality experience. He was living on the opposite side

of the world. Indeed these facts were the very reason he had decided not to buy and operate

Tinakilly himself. He relied on and reposed trust in Mr Connolly to run the business day to day

and Mr Lane agreed to and indeed suggested that Mr Connolly have a 51% share of the

business to ensure that Mr Connolly could have the casting vote to make those day to day

decisions if he needed to. Mr Lane provided considerable funds for the business when

requested to do so on foot of advice and recommendations by Mr Connolly about the business.

143 Day 7 page 173 lines 17 -18 144 Day 7 page 174 line 2 145 Day 9 page 10 line 20 103

I accept Mr Lane’s evidence that he reposed trust and confidence in Mr Connolly by virtue of

their relative and respective positions. I also believe that Mr Connolly reposed trust and

confidence in Mr Lane, at least in the early years of their relationship, despite Mr Connolly’s

assertions otherwise in his evidence. By way of example, Mr Connolly procured the advance

of funds to cover Mr Lane’s share of certain expenditure on the basis that he trusted Mr Lane

to repay his share – which he did. Mr Connolly engaged with Mr Lane on strategic decisions

for Tinakilly including capital improvements, operational matters, design decisions, financial

budgets and business plans. The two men also agreed not to enter into any future opportunities

in the hotel sector without inviting the other to participate.146 They held each other’s

shareholdings “on trust” with no back-up documentation. In an email sent by Mr Connolly to

Mr Lane on 27 October 2015 (related to queries raised by Mr Grainger) Mr Connolly stated

that: “Trust is well and truly gone between us. I have never in my entire life been treated in

such a low suspicious way by anyone, let alone a business partner". This is, on its face, an

acceptance that up until that time, at least, Mr Connolly believed there was trust between the

parties who were operating as business partners. These examples support a relationship of trust

and confidence by both men in each other – and not just a shareholder relationship simpliciter.

272. I was not persuaded by the credibility of Mr Connolly's evidence to the effect that the

email from Mr Lane dated 1 August 2023 made him feel “very concerned” for the first time

because it placed an emphasis on the phrase “partnership” rather than simply “partner”. The

phrase “partnership” had been used in the MOU and the Shareholder Agreement from the

very outset of the relationship. I believe his concern at that time arose not because of the

mention of partnership but rather because of his appreciation of the fiduciary duties and other

146 See para 79 Witness Statement of Gerard Lane 104

legal obligations and the remedies available to a partner under the 1890 Act, which Mr

Connolly admitted in evidence he had researched around that time.147

273. For the first ten years of their relationship Mr Connolly did not take any steps (with

third parties or otherwise) to correct Mr Lane’s description of him (Mr Connolly) as Mr

Lane’s partner, either in relation to Tinakilly or Monasterio. Indeed Mr Connolly also himself

used that term. It was not until the service of the notice of dissolution of partnership that Mr

Connolly expressly denied there had ever been a partnership between him and Mr Lane and

indeed that denial thereafter became Mr Connolly’s main concern. This was also very evident

in the manner in which he gave his evidence – constantly prefacing his answers with a

narrative about there being no partnership and in effect advocating for his position rather than

answering questions in a straightforward manner. It is my assessment that many of his

answers to questions were affected by what he considered to be the legal consequences of his

answers. This impacted his credibility and truthfulness as a witness.

274. The court is also entitled to take into account in assessing Mr Connolly’s credibility his

conduct in relation to the covert sale of Monasterio and the deliberately misleading

representations he made to Mr Lane and his solicitors in relation to that.

275. Mr Connolly agreed that there was no documentation whatsoever where either he or Mr

Lane had referred to the other as a shareholder. In contrast, there were many examples where

Mr Lane described Mr Connolly as his partner both to Mr Connolly and to third parties and

indeed, also instances where Mr Connolly so referred to Mr Lane. Mr Connolly's evidence

however was that reference to partner related to being a co-shareholder. He said: "I wouldn't

be calling him my partner if he wasn't a shareholder in the company because we wouldn't

have a relationship outside of that".148

147 Day 7 p 28 lines 6-7 148 Day 7 page 45 lines 1-4 105

276. Of course the analysis of co-shareholders suffers from one fundamental difficulty which

is that Mr Lane and Mr Connolly were not in fact co-shareholders in any single company.

The evidence confirms that the various shareholdings were not transferred into the names of

the respective parties so as to reflect their legal ownership of those shares. Thus Mr Lane is

not the legal owner of any shares in Mezen, NOL or MESL and Mr Connolly is not the legal

owner of any shares in Pointsetter (although a trust arrangement for Pointsetter was what Mr

Connolly had specifically required in both the MOU and the Shareholder Agreement). The

reality of this was that there was never a formal process of company resolutions or

shareholder meetings for the purposes of making decisions. The formal corporate structures

were simply not used (nor could they be on the facts here) to operate the business of either

Tinakilly or Monasterio as between the parties.

277. I accept that the companies were bona fide and operational. They operated however in

the context of an overarching personal relationship of trust and confidence and partnership

between Mr Lane and Mr Connolly. I believe the real purpose and rationale for the

companies was to secure the protection of limited liability for possible losses, to provide a

favourable means of earning and distributing profits and, in Mr Connolly’s case, to do so

with minimum disclosure.

278. Another practical illustration of the reality of the relationship and how it was presented

to third parties was the extent to which Mr Lane was personally approached to discharge

certain bills by third parties who had dealings with Tinakilly. In para 66 of his witness

statement he gave evidence that “…between 2013 and 2015, often when I was staying at

Tinakilly, I was approached by several local suppliers requesting payment for long overdue

invoices. I would pay these directly when required.” This direct evidence was not challenged.

Ms Roisin Lane Walker also gave evidence that she was approached by certain individuals

from time to time looking to see if Mr Lane was around so that they could engage directly 106

with him regarding invoices although I have otherwise discounted any hearsay element of

that evidence beyond what Ms Lane Walker could testify was her own experience and

knowledge.

279. I do not accept Mr Connolly’s argument that the parties were commercial

counterparties at arm’s length and not parties in a relationship of special trust and confidence.

In my view, the Shareholder Agreement was not simply an agreement that the parties would

become shareholders in certain companies, but was rather an agreement designed to regulate

their overall business relationship, introducing protections and obligations well beyond a

normal shareholder relationship. It was an agreement which recognised that the parties were

combining their capital, experience and skills towards the business. It was open to the parties,

while agreeing to use corporate vehicles, to have an overarching agreement between them

governing their relationship and I find that they had such an agreement on the totality of the

evidence presented.

280. I am satisfied in all the circumstances that the true nature of the relationship between Mr

Lane and Mr Connolly was undoubtedly one of trust and confidence and, in substance, one of

partnership. That being so, the relationship attracts the rights and obligations afforded by the

1890 Act and is a relationship imbued with fiduciary duties owed by each to the other.

Share Rights

281. I find that the 1% holding of Mr Barry Connolly in Mezen, while not envisaged by the

Shareholder Agreement, does not materially impact on Mr Lane’s entitlement to his

shareholding in Mezen. Mr Connolly retains sufficient shares to comply with his obligation to

transfer the full legal ownership to Mr Lane of the shares Mr Lane is entitled to.

282. The holding of the Pointsetter shares by Mr Lane and Mrs Lane in joint tenancy with

rights of survivorship is, in my view not in compliance with the Shareholder Agreement. In 107

particular, if Mr Lane were to predecease Mrs Lane then Mr Connolly would find himself

depending on Mrs Lane to continue to hold his shares in trust but he has no agreement with

Mrs Lane to do so. This arrangement could therefore see Mr Connolly’s shareholding

adversely impacted although there might be arguments that the shares have already been

impressed with a trust. Mr Connolly never agreed to go into any form of business relationship

or partnership with Mrs Lane.

283. It is also argued that this joint tenancy arrangement is in direct conflict with the

provisions of clause 6 of the Shareholders Agreement which gives Mr Connolly the right of

first refusal in the event that Mr Lane was to transfer part or all of his shares.

284. I am satisfied on the evidence that Mr Lane did not seek to conceal this joint tenancy

arrangement from Mr Connolly. However there is no credible evidence that Mr Lane ever

discussed this proposed structure with Mr Connolly at the time of setting up the structure149

or that Mr Connolly ever agreed to it at that time.

285. It was Mr and Mrs Lane who were responsible for the corporate compliance of

Pointsetter and they cannot complain about Mr Connolly in relation to those issues. In order

to comply with the Shareholder Agreement, the only shareholder in Pointsetter should be Mr

Lane who should continue to hold shares on trust for Mr Connolly, as agreed, unless and until

Mr Connolly wishes to become the registered owner of his shares.

286. The shareholding in Mezen should be amended to reflect Mr Lane’s legal shareholding.

Mr Barry Connolly should not be permitted to hold any shares in Mezen and should transfer

those shares back to Mr Connolly for whom he holds them on trust.

287. Assuming those amended structures can be put in place, it does not seem to me that any

damages should be payable by either party to the other for the manner in which the

shareholdings have been held to date. No party has yet suffered a loss for that reason alone

149 Day 3 page 13 line 19 108

and the shareholdings can be regularised to conform with the Shareholder Agreement as part

of the overall resolution of matters.

Increased equity share claim

288. There are no formalities prescribed in clause 5. The clause simply states that capital

contributions shall be funded by Mr Lane to the extent of 49% and by Mr Connolly to the

extent of 51% and that “[s]hould further funding become necessary in the future, each party

has the right to participate or allow the other to increase his equity percentage.”

289. Clause 5 refers to an increase in equity percentage in general terms. I do not accept that

it is referable only to Mezen either on its terms as drafted or because it was only Mezen who

received the monies that are the subject of the increased equity claim. Given that the business

of Tinakilly was conducted through a combination of both Mezen and Pointsetter, any

increase in equity percentage should apply equally to the shares in both. The same situation

pertains for NOL and MESL regarding Monasterio’s business.

290. Mr Lane says that he made capital contributions that were not matched by Mr Connolly

– Mr Connolly thus did not participate in that funding and so Mr Lane’s equity percentage

should be increased. Mr Connolly says that this issue was never discussed between the parties

when the various contributions were made by Mr Lane. Mr Lane relies on the lack of

formality in clause 5 and says such discussion was not necessary and that there were no

representations made that clause 5 would not apply. It appears from the evidence that the

issue of clause 5 equity increase was never expressly addressed. Mr Lane simply made

contributions he now says were capital contributions rather than loans and he has, after the

fact, sought an increase in his equity holding based on those unmatched contributions.

291. Mr Connolly argues that the clause requires some discussion as it uses the word “allow”.

I do not accept that a party must consent to the other’s increased share but it seems to me that 109

the other party must be given notification and called upon to make their matching percentage

contribution under clause 5. Only if they fail to do so should there then be a formal

adjustment of the respective equity holdings. Otherwise there is the potential for constant

movement in percentage holdings perhaps without the parties being fully aware of what

capital contributions are being made by the other. I appreciate that in this case the monies

were all contributed by Mr Lane – but clause 5 has to be interpreted not just for that scenario

but also if, for example, there were different (unmatched) contributions being regularly made

by each party.

292. Mr Lane never raised the issue of an increased equity contribution and indeed he did not

include such a claim in these proceedings until the second amendment to his statement of

claim in May 2025 (re-calculated in the third amended statement of claim in December

2025). This amendment was not advanced for almost a full year after proceedings issued. The

evidence was that Mr Lane did not even have a copy of the Shareholder Agreement to hand

until after these proceedings issued. I do not believe in those circumstances that Mr Lane

actually operated at the time of making these payments on the assumption that his equity

percentage in the partnership would be or had been increased under clause 5 due to the capital

payments he had made – and I do not accept his evidence to the contrary. He continued to

claim a 49% interest in Tinakilly (and a 51% interest in Monasterio) right up to the time of

amending the pleadings, which was long after the payments had been made and after Mr

Lane had sought to terminate his partnership with Mr Connolly. Furthermore he did not

question the treatment of those monies in Mezen’s accounts nor was the percentage allocation

ever questioned by Mr Lane or Mr Grainger in those earlier years after the payments had

been made, even when Mr Grainger expressly advised Mr Lane that Mr Connolly was not

matching his contributions. 110

293. I am of the view for those reasons that Mr Lane is not now entitled to unilaterally invoke

an additional equity share entitlement after he has terminated the relationship. I note the

alternative plea by Mr Lane that if any of the monies paid were not capital contributions, they

were loans in respect of which Mr Lane is entitled to be repaid with a commercial rate of

interest.

294. There is no dispute that these monies were advanced by Mr Lane for the purpose of the

business. I am conscious that the Shareholder Agreement does not refer at all to loans. Loans

have however clearly been provided by Mr Lane and there is no dispute in relation to those

which have been documented as such – with an acceptance that such loans, which are subject

to agreed rates of interest, must be repaid to Mr Lane. I am satisfied that in the context of the

dissolution of the partnership, Mr Lane is also entitled to be repaid the monies he provided

which he has identified as capital contributions. The MOU, which did envisage the provision

of loans for both trading and refurbishment purposes, stated that such loans should carry an

interest rate of 6% and it is clear at that point that this was what the parties agreed. The MOU

is no longer binding of course but it is evidence of an agreement reached at that time that

there would be a commercial rate of interest accruing on monies advanced by way of loan.

The Shareholder Agreement did not provide otherwise such as would evidence a change in

that position – it is simply silent on the point. I find that the monies advanced by Mr Lane

which he identifies as unmatched capital contributions are repayable to him subject to a

reasonable market rate of interest accruing from the date the monies were provided. The

court will fix that rate of interest if the parties cannot agree same.

Provision of financial information

295. The evidence confirms that there were never any accounts provided to Mr Lane in

relation to Monasterio and indeed a very significant concealment of the financial transactions 111

involving Monasterio. In relation to Tinakilly the evidence confirms that the last audited

accounts for Mezen were for the year ended 30th June 2022. Mr Lane stopped receiving

management reports for Tinakilly in March 2020. Companies Act breaches were noted by the

experts in relation to the accounts.

296. Furthermore the experts agree that the accounts that were produced cannot be relied

upon and that there has been a failure to make the required disclosures of related-party

transactions in the accounts.

297. I am satisfied in the circumstances that there has been a breach by Mr Connolly of

Clauses 9 and 13 of the Shareholder Agreement with regard to both Monasterio and

Tinakilly.

Monasterio

298. While there are many issues in dispute in this case, Mr Connolly does not dispute that

Mr Lane is the majority beneficial shareholder in the companies associated with

Monasterio. Despite acknowledging this to be the case, the evidence confirms that Mr

Connolly covertly caused Monasterio and its business to be sold to a third party purchaser

without the knowledge or consent of Mr Lane. It was possible for Mr Connolly to do so in his

capacity as the sole administrator and registered shareholder of both NOL and MESL. This

action was taken at a time when Mr Lane had brought the present proceedings regarding his

interest in Monasterio.

299. I am satisfied that the Shareholder Agreement should, for the reasons I have articulated,

be read as subject to the implied term that Mr Connolly could not unilaterally sell the

business or property of either Tinakilly or Monasterio. Mr Connolly’s unilateral sale of

Monasterio clearly and, on the evidence, deliberately, breached clause 11 of the Shareholder 112

Agreement. The sale of Monasterio by Mr Connolly would have been impermissible even if

there had simply been a shareholder relationship in place.

300. The evidence shows that Mr Connolly made a number of payments to various related

parties before he put NOL and MESL into liquidation. Mr Connolly alone chose who to pay –

and it is true that some payments were made to Mr Lane. Having made all of the payments he

wished to make, and without any notice to Mr Lane, Mr Connolly then put both NOL and

MESL (as solvent companies) into liquidation. No clear rationale has been provided by Mr

Connolly for doing so. Mr Walsh indicated in his evidence that there may be some tax reason

but this was not an aspect on which he was giving expert evidence and so I do not rely on

that. It was up to Mr Connolly to explain his actions regarding the liquidation process. The

height of his explanation was “…so that any funds or monies could be held in safe keeping,

that, exactly what I wanted to do, the taxes to be paid, creditors to be paid down, whatever

claim Mr. Lane has against the companies could be dealt with”.150 The effect of the

liquidation was to cause difficulties for Mr Lane by locking up the monies that are due to him

from Monasterio, and leaving him to deal with the Spanish liquidator in circumstances where

Mr Lane is not even on the share register.

301. The only party who decided to appoint the liquidator was Mr Connolly. In those

circumstances I direct that the full costs of the liquidation must accordingly be borne by him

from his share of the partnership proceeds.

Extant motions

302. There are two extant motions that need to be addressed here, both brought by Mr Lane.

The first is a motion seeking to have Mr Connolly’s Defence and Counterclaim struck out for

150 Day 9 page 47 lines 12-16 113

failure to make discovery (the “discovery strike out motion”) and the second relates to an

alleged breach of the Mareva Order.

The Discovery Strike Out Motion

303. While maintaining the position that there was a failure by Mr Connolly to make proper

discovery, ultimately Mr Lane did not proceed with the discovery strike out motion. It was

argued however that the deficiency in discovery was evident even at the trial with the late

introduction of the petty cash account introduced into evidence by Ms Windsor. There was an

argument as to whether this document was within the scope of the discovery order made by

Sanfey J on 1 December 2025. Mr Lane says it clearly fell within the scope of “… any

relevant documents by which management information is collated and utilised”. Mr Connolly

disagreed saying this sentence in a ruling of Sanfey J was quoted out of context and that the

petty cash document was not covered by the discovery ordered.

304. I do not need to determine this issue although I believe that in the absence of

management accounts the petty cash document was a document likely to be relevant to the

method by which management information was collated and utilised in the relevant period.

Mr Connolly did not explain whether his assessment of the relevance of the document was

made at the time he was due to make discovery or only when Ms Windsor came to deal with

it in her evidence. Overall the approach to the discovery of this document was unsatisfactory.

Ultimately Mr Lane did not proceed with the discovery strike out motion although he

maintained his complaint regarding the adequacy of the discovery made. I do not believe any

purpose would be served at this point in making a determination one way or the other on the

discovery issue in the circumstances arising.

305. The second extant motion was Mr Lane’s motion alleging a breach of the Mareva Order

by Mr Connolly. 114

The Alleged Breach of the Mareva Order

306. On 13 February 2026, while this hearing was ongoing, Mezen’s bank statements from

16 October 2025 to that date were provided to the plaintiffs. This information was the basis

of the motion seeking various reliefs against Mr Connolly and Mezen arising from what Mr

Lane alleged to be evidence of improper payments having been made, in breach of the

Mareva Order, from monies which constituted the proceeds of sale of Monasterio.

307. Following further engagement between the experts it was agreed that of the €497,500 sent

to Mezen from Monasterio (NOL and MESL) on 25 August 2025, €216,837 of that amount

remained in the Mezen account as of 9th September 2025 when the Mareva Order was

obtained. There was however no agreement as to whether the €497,000 represented the

proceeds of sale of Monasterio or funds relating to the trading activities of MESL.

Consequently there was also no agreement as to whether the balance in Mezen’s account as at

9 September represents the proceeds of sale (in respect of which the Mareva Order applied). If

they are sales proceeds there has been a breach of the Mareva Order as the amount of funds in

the Mezen account clearly decreased after the Mareva Order was obtained. If they are not sales

proceeds then the Mareva Order does not attach to them.

308. In his oral submissions to the court at the hearing of the Mareva application Mr Connolly

indicated that all monies sent to Mezen by NOL and MESL between March and August 2025

(in the amount of €897,000) came from the sale of Monasterio. On 6 January 2026 Mr

Connolly swore an affidavit identifying all payments “which had been made from the proceeds

of the sale of Monasterio and/or the business known as Finca Monasterio”. That affidavit

referred to the August 2025 payments to Mezen – but the heading to the schedule refers both to

sale proceeds and to trading payments so it is not as definitive as Mr Lane argues. It was only

in his cross-examination at the trial that Mr Connolly suggested that the Mezen funds were not

part of the Monasterio proceeds of sale. 115

309. It is clear that Mr Lane applied for the interim Mareva on the understanding that the

monies transferred to Mezen came from the proceeds of sale of Monasterio. If Mr Connolly

had suggested otherwise there is no doubt in my view that Mr Lane would have sought a

different form of order to freeze the monies absolutely and not just as proceeds of sale.

310. Mr Lane did not bring a motion for attachment and committal against Mr Connolly –

rather the relief sought was ultimately confined to an invitation to the court to make an order

that Mr. Connolly repay €216,837, either into court or into a ring-fenced account.

311. The difficulty the court faced was that the experts were not in agreement as to whether

any part of the funds in Mezen’s account as at 9 September 2025 represents or could

represent Monasterio proceeds of sale. Neither expert had given oral testimony to the Court

on this point – the court was working from an informal document prepared during the course

of the hearing which the experts sought to agree at very short notice. It was not possible in

the circumstances for the court to determine which expert was correct in his analysis. On that

basis and by agreement of the parties the motion was adjourned for a short period to enable

the experts to further engage.

312. Ultimately following further engagement between the experts the parties agreed to

adjourn the motion to the closing submissions.

313. At that point Mr Lane argued that based on the evidence there was a clear breach of the

Mareva Order. Mr Lane acknowledged however that Mr Connolly had managed to bring

about a situation where, although he swore to the fact that proceeds of sale were being

transferred into the Mezen account, most of the monies did not constitute proceeds of sale.

This, Mr Lane argued, did not however take away from the fact that Mr Connolly intended to

breach the Mareva Order but simply didn't manage to breach it to the extent intended.

314. Generally the evidence on this matter was not clear. The experts managed to agree that

there was probably a sum of €76,295 in the Mezen 018 account which could be said to 116

represent proceeds of sale on the date the Mareva Order was obtained. While the balance on

this single Mezen account was below that level during the trial I was advised in closing

submissions that the balance taking both Mezen accounts together was in excess of that figure

– although the actual balance was not available for the court. Of course it was only the

Mezen 018 account that was covered by the Mareva Order so it is only that account that is

relevant in my view. Mr Connolly said there was no risk of dissipation of funds. I do not

agree however as the account in question is a trading account and so specific protection

would be warranted.

315. I do not believe there is sufficiently clear evidence of a deliberate breach of the Mareva

Order in this case by Mr Connolly although I am concerned that, for a period of time at least,

the balance fell below what the experts now agree was the figure to which the Mareva Order

attached. I am unimpressed by the manner in which Mr Connolly engaged with Sanfey J.

regarding the characterisation of the account balance and the confusion that he caused

regarding the true nature of those funds. I direct that the balance on the Mezen 018 bank

account should not be reduced below €76,295 pending the conclusion of these proceedings. If

additional monies are required to be lodged to that account to bring up the balance to that

level then Mr Connolly should repay any additional amount necessary within 14 days of this

judgment.

Validity of the notice of termination.

316. I need to consider if the partnership was validly terminated by the notice of termination

served with effect from 7 June 2024. This was not a point that was disputed to any particular

degree – rather it was disputed that the relationship was a partnership.

317. On 31 May 2024 Mr Lane’s solicitors served a letter purporting to terminate the

partnership with effect from 7 June 2024. The notice was served expressly in accordance 117

with sections 26(1) and 32(c) of the 1890 Act. The notice contained no reference to the

Shareholder Agreement. The evidence appears to confirm that Mr Lane did not have a copy

of the Shareholder Agreement to hand at that time and so this likely explains the omission of

any reference to it.

318. Mr Connolly’s position is that the purported dissolution is of no legal effect as the

parties never in fact became partners. He says that all the steps taken by Mr Lane after the

notice have been unlawful including the institution of these proceedings.

319. Section 26 (1) of the 1890 Act provides that: “Where no fixed term has been agreed

upon for the duration of the partnership, any partner may determine the partnership at any

time on giving notice of his intention so to do to all the other partners.”

320. Section 32(c) of the 1890 Act provides that: “Subject to any agreement between the

partners, a partnership is dissolved …. (c) If entered into for an undefined time, by the

partner giving notice to the other or others of his intention to dissolve the partnership”

321. No grounds are required for termination under these provisions. The default position

under the 1890 Act was not amended or otherwise agreed in this case.

322. Upon the dissolution of the partnership, a statutory lien in respect of the partnership

property arises under s. 39 of the 1890 Act and the right to demand a sale of the partnership

assets to the best bidder arises. As noted by the court in Meagher v Meagher [1961] IR 96 at

page 109, only if the assets cannot be sold on the open market will a valuation be made.

323. I find that the partnership between Mr Lane and Mr Connolly was a partnership at will

and was validly terminated by Mr Lane by the notice served with effect from 7 June 2024.

324. As Twomey notes at para [26.65]: “…the value of a partner’s share of the partnership

assets is the value of those assets on dissolution, but as a general rule, this is to be taken as

the price realised on the sale of the assets, whenever that may be, unless there is a plausible

case that the value at dissolution varied appreciably from that realised by sale.” 118

Payment of legal fees by Mezen

325. Mr Connolly says that the payment of legal fees by Mezen was appropriate. Mezen was

joined as a party to the proceedings and needed to defend its position. It was appropriate that

it use its own funds to do so. Mr Connolly could not as a matter of law represent Mezen. For

a period of time Mr Connolly was self-represented. Mr Connolly referred to what he

described as the inequality of arms between him and Mr Lane. The evidence seems to

confirm that the vast bulk of legal fees in this case were paid by Mezen and I did not receive

a clear account of how much of those fees were properly for the account of Mr Connolly.

326. As Twomey notes at para [20.09] the more usual action in a dispute between partners is

for a partner to sue his co-partners rather than the firm. However I accept in the present case

that Mezen and indeed Pointsetter were joined as parties to the proceedings by the amended

statement of claim in December 2024. Neither could, as a corporate entity, legally represent

itself.

327. The stated reason for the joinder of Mezen and Pointsetter was “…to ensure that all

questions regarding ownership of the shareholdings in those companies can be resolved in

these proceedings, and to ensure that any Orders made in that respect will effectually bind

those companies”. It was expressly stated in the amended statement of claim that “[i]t is not

anticipated that Mezen or Pointsetter will play an active role in the proceedings”.

328. Pointsetter took no active part in the proceedings. However, Mr Connolly and Mezen

appear to have jointly instructed the same solicitors. The court was not furnished with letters

of engagement or details of the apportionment of legal costs between Mr Connolly and

Mezen.

329. If this was a minority oppression claim or a shareholders' dispute, the company funds

could not be used to fund the defence of the person in control of the company in question. 119

Mr Lane argues that essentially this is what has happened in this case with Mezen’s funds

being used to pay Mr Connolly’s own legal costs.

330. It is argued that Mezen could have adopted a role similar to Pointsetter – effectively

requiring little or no legal fees to be incurred by it. However I accept that there was some

difference between the position of the two companies including that Mezen was the operating

company and had much more documentation of relevance to the proceedings. Furthermore

Mezen was at a later stage alleged to be involved in a conspiracy with Mr Connolly. A

company joined to proceedings would usually secure legal representation separate from the

controlling party who is the main defendant in the proceedings. Regrettably this did not

happen in the present case. Separate representation would have avoided any confusion as to

what legal costs Mezen was paying on its own behalf.

331. Mr Connolly is responsible for his own legal costs and will have to account for any costs

paid on his behalf by Mezen. It will therefore be necessary for the legal costs which have

been paid to be apportioned as between those which correctly relate to Mr Connolly and

those which correctly relate to Mezen.

The taking of an account

332. By the end of the trial the primary relief sought by Mr Lane was for an order that an

equitable account be taken. It was argued that this would enable the court to assess the

measure of damages or equitable compensation payable to the plaintiffs. Mr Connolly

objected to that remedy arguing that it was unnecessary and that it would unduly prolong

matters and would be used as an instrument of oppression by Mr Lane. He also said this

remedy was not available in the circumstances of this case. He confirmed that he had made

an open offer during the trial to end the relationship by the exercise of the pre-emption rights

in clause 6 of the Shareholder Agreement following the appointment of a valuer to assess the 120

value of the shareholdings in Mezen and Pointsetter. He said that the offer envisaged the open

market sale of relevant assets if agreement could not be reached on a purchase by him of the

shares and it also envisaged the appointment of an independent accountant as expert to settle

the sums due to each party with each party to bear their own costs. Mr Lane was not

agreeable to this proposal. In his view the ending of the partnership goes well beyond simply

valuing the shareholdings in Mezen and Pointsetter on the basis of the assets and liabilities

currently held.

333. It is well established that a court can order an equitable account to be taken in aid of

common law rights, for example in instances of fiduciary or quasi-fiduciary relationships or

on the dissolution of partnership. There is also authority for the taking of an account where

accounts are otherwise too complicated to settle at common law.151 For each of these reasons

or indeed a combination of them, I am satisfied that the court should now make such an order

in this case.

334. Furthermore, the right to have an account of a partnership’s dealings and transactions is

enshrined in s. 28 of the 1890 Act which provides that “[p]artners are bound to render true

accounts and full information of all things affecting the partnership to any partner or his

legal representatives”. As Twomey notes at para [20.24], where the partnership is in

dissolution, an action for account will be granted almost as a matter of course.

335. Overall, the evidence confirms that there was a high degree of informality in the manner

in which the parties engaged with each other. From time to time payments were made by one

on behalf of the other and later reimbursed, or not. Monies were often requested informally

by Mr Connolly and were paid over to various parties often without being documented as to

their nature or purpose.

151 See Meagher, Gummow and Lehane's Equity Doctrines and Remedies (5th edn, Butterworths 2015) para 26- 070 121

336. There was also a high degree of informality as to the manner in which personal payments

of Mr Connolly were funded through the Mezen director’s loan account and the manner in

which funds were intermingled and/or transferred between Mezen and NOL and MESL and

indeed between Mezen and other companies related to Mr Connolly.152

337. There is no loan documentation supporting any of the loans that Mr Connolly suggested

were in place between Mezen and other companies related to Mr Connolly and the accounts of

those companies do not describe those monies as loans by them. Mr Connolly’s director loan

account in Mezen had an unusually high level of transactions relating to personal, family and

related-party expenditure with personal and business costs mixed and in some cases incorrectly

classified or recorded. The experts found repeated instances of transactions involving separate

corporate entities such as Caspian, Provenance and Cassidys appearing in Mr Connolly’s

director loan account. Mr Wallace was clear in his evidence that this was not a proper

operation of a director’s loan account.153 I also believe the matters identified by Ms Windsor

warrant further investigation and it is a further factor that persuades me to direct an account be

taken regarding the affairs of Mezen.

338. I agree with the observations of Mr Wallace in his evidence that there is a "co-mingling

of everything… the swapping of individuals for corporate entities. It is just

everywhere…."154 It would be neither mathematically nor legally correct in my view for the

court to make any determination at this point on the actual sums due as between the parties

on the dissolution of the partnership. Incomplete or no meaningful evidence is available at

this point to the court, for example, on the amount of interest payable on loans, on the various

tax liabilities likely to be due, on the net funds which will be available for distribution in the

152 Mr Wallace said in his evidence on Day 6 page 64 lines 13-18: “…it goes to the heart of issues in this case is the washing around of money at just a whim. It's like confetti at a wedding. Just moving money around from one company to the next without any real rationale as to why that money is moving. We have a bill here, let's throw money at it.” 153 Day 5 page 131 line 11 154 Day 6 page 84 lines14-16 122

liquidation of Monasterio or on the series of disbursements made by Mr Lane in connection

with that sale or in relation to his own legal costs. Neither are there any Mezen audited

accounts available from 2023 to date or any management accounts since 2020. There are

recurring themes (backed up in the evidence) of both conflation and concealment of interests

by Mr Connolly. The experts were clear that their evidence represented a snap-shot in time

only. The timing and outcome of this snap-shot was heavily influenced by the use of

Monasterio sales proceeds to shore up the financial transactions in Mezen. There will be no

prospect of any resolution of these complex financial issues or restoration of confidence in

the finances until these queries are satisfactorily addressed.

339. At this point it is my view that the manner in which the businesses of Tinakilly and

Monasterio have been run from a financial perspective has been so casual and haphazard that

it requires a proper account to be taken by a suitably qualified and independent party who

must have full access to the books and records of Mezen and the power to engage directly

with the Spanish liquidator as necessary. In my view that account should particularly focus

on the period from 1 January 2020 to date. Prior to that date managements accounts were

being prepared and the parties were cooperating together in the business. Since 1 January

2020 however, there has been a marked change in the business, including the changes arising

from Covid 19 restrictions; the cessation of management accounts and audited accounts; the

breakdown in the relationship; the unilateral sale of Monasterio and the evidence of

significant cash payments being made in that period. The account will obviously build on the

work carried out by the experts and the discovery already made in these proceedings and it

will provide a more detailed analysis over a longer period of time.

340. At the conclusion of that exercise and with the benefit of its findings the court will be in

a position to make further orders as necessary. The process of account should reflect the

determinations reached on the various aspects of this dispute as set out in this judgment and 123

as summarised in the conclusions sections below. I am not at this point proposing to make

any further orders regarding the appointment of a receiver and/or manager or in relation to

the sale of partnership assets or the winding up of the partnership or for damages (including

in respect of any conspiracy claim).

341. If anything can be learned from this case it is the importance of taking legal advice at the

outset of a business venture and properly documenting the arrangements to apply. Disputes of

this nature are always regrettable and particularly so in the present case where there is a

thriving underlying business employing staff and contributing to the local economy. I do not

however accept Mr Connolly’s submission that this case is being pursued out of a desire to

punish and to overwhelm Mr Connolly rather than for a legitimate commercial purpose. Mr

Connolly’s actions and inactions have primarily brought about this litigation and the trust

issues which have to date prevented it being resolved amicably.

342. Counsel for Mr Connolly urged the court to treat this case in straightforward terms as

being one about money in/money out. He says that Mr Lane’s case substantially changed

over the course of the proceedings and trial and that after all the evidence there is in fact no

missing money as Mr Lane originally argued at the start of the case. It is said that Mr

Connolly has in fact accounted for all monies in the relevant accounts – the only real issue

relates to misclassification, rather than the overall net asset position.

343. I do not agree that this case can be viewed in this simplistic way – although it may of

course emerge that the financial differences between the parties are not as significant in

quantum as Mr Lane believes. That will be what the taking of the account in this partnership

action will determine. 124

Conclusions and Orders to be made

344. I find that the true nature of the relationship between Mr Lane and Mr Connolly

regarding the businesses of Tinakilly and Monasterio was as partners. Their relationship is

accordingly governed by the provisions of the 1890 Act. The Shareholder Agreement was

intended to and did in fact cover both businesses.

345. I reject Mr Lane’s claim for an increased equity share in the partnership. Accordingly,

Mr Lane is entitled to his originally agreed share of 49% in Tinakilly and 51% in Monasterio

and Mr Connolly is entitled to the corresponding percentage of 51% in Tinakilly and 49% in

Monasterio.

346. Mr Connolly is responsible for the liquidation costs arising in relation to Monasterio and

same should be borne from his share of the distribution of proceeds. Any shortfall should be

borne from his share in relation to Tinakilly.

347. Mr Connolly must repay to Mezen the amount of legal costs incurred by Mezen on his

behalf in these proceedings. Mezen’s own legal costs are properly a matter for Mezen to

discharge on its own behalf. The solicitors who acted on behalf of both Mezen and Mr

Connolly should provide a breakdown of the total costs paid indicating those for the account

of Mezen and those for the account of Mr Connolly. The costs should be adjudicated in the

event that no agreement can be reached as to the relevant apportionment.

348. I find that the notice served by Mr Lane on 31 May 2024 was an operative notice of

termination of the partnership at will between him and Mr Connolly. Accordingly, the

partnership was terminated with effect from 7 June 2024.

349. I direct the taking of an account in relation to the business of both Tinakilly and

Monasterio to address the financial standing of Mr Connolly and Mr Lane as partners inter

se; the financial standing between them and third parties (including all Connolly related-

entities) and that account be taken of advances made by each of them to the businesses. The 125

purpose of the account is to seek any necessary rebalancing of the financial position as

between the partners. The account should extend to the date on which matters are finally

resolved as between Mr Lane and Mr Connolly. While ordinarily I accept a partnership

account would be taken from the commencement of the partnership, in the present case and

based on the evidence and the work carried out by the experts to date, I believe that an

account from 1 January 2020 would likely be sufficient to properly compute the respective

financial obligations of Mr Lane and Mr Connolly to each other. If enquiry is required for an

earlier period however that is permissible and I will hear the parties on that matter as well as

how, practically, the taking of an account can be advanced in this case.

350. I reserve the question of the costs of taking the account until the conclusion of that

exercise, and having regard to how it is conducted and the levels of co-operation achieved.

351. I will make no further order or direction pending the outcome of the account. The parties

will have an opportunity to address the Court on the outcome of the account and what further

reliefs should be granted at that stage, including in relation to costs.

352. To comply with the existing Mareva Order, I direct that Mr Connolly must ensure that

the balance on the Mezen 018 bank account is not reduced below €76,295 pending the

conclusion of these proceedings. If additional monies are required to be lodged to that

account to bring up the balance to that level, Mr Connolly should repay any additional

amount necessary to achieve that balance within 14 days.

353. I will list this matter for mention before me on Tuesday 14 July at 10am and at that

time will expect the parties to address me on the practical issues arising from this judgment

and on any further directions they require to comply with the court’s judgment or to

otherwise advance resolution between the parties.