Dairygold deny that they owed former chief executive Jerry Henchy any duty of care as he did not work for them. In the second day of proceedings at the High Court in Dublin, legal documents were read out in which the company maintained that Mr Henchy had always been an employee of subsidiary company Reox Holdings Ltd and his role as CEO of Dairygold was contracted out from this company.
Mr Henchy is suing Dairygold for breach of contract, loss of earnings and damage to his professional reputation as a result of the termination of his employment. Dairygold said in a statement after Mr Henchy’s departure in January 2009 that the company had decided it was now time for them to have a separate CEO to Reox Holdings and that this had been a long held plan, something Mr Henchy denies. He says that his termination came as the result of a concerted campaign from several members of the board.
Today, counsel for Mr Henchy, Mr Patrick Hanratty SC told Judge Daniel Herbert that Mr Henchy had been paid by both Dairygold and Reox Holdings. In addition he received bonuses from Dairygold and was also in receipt of a generous 'length-of-service' bonus from the company. Mr Hanratty told the court that after Mr Henchy had left his role as chief executive of the company “the fact that Dairygold determined his position put him in an impossible position in Reox”.
Mr Hanratty told the court that Reox Holdings and Dairygold were publicly perceived to be the same company, the majority of the shares of Reox Holdings were owned by members of the Dairygold Co-operative Society while Dairygold held a quarter of the shares. The two companies shared several board members with Dairygold holding the right to appoint four members of the Reox board.
Shortly after he left Dairygold Mr Henchy was made redundant from his position of chief executive of Reox Holdings with immediate effect. The company informed him in a letter that his role was no longer necessary.
Yesterday the court heard that Mr Henchy had owed around €159,000 on the farm trading account he held with the agri-trading division of Dairygold. Vincent Buckley, who was chairman of the company at the time of Mr Henchy’s leaving, denies demanding the money to be paid in four days, otherwise he would take the matter to the board.
Mr Henchy maintains he told Mr Buckley he could not get such a large amount in such a short time. He made two separate payments of €40,000 and €129,000 before a board meeting on January 26th. Dairygold claim that Mr Henchy subsequently failed to explain his actions to the board.
Mr Hanratty told the court that correct procedures had not been followed and the only solution considered by the company was the removal of Mr Henchy. The amount owed was a fraction of the money Mr Henchy received from the company, he said, “It was not a hanging offence”. He told Mr Justice Judge Herbert that the matter of the debt was simply a “fig leaf” to conceal the real motives of Mr Buckley and the then vice-chairman Mr Bertie O’Leary, who, he said, had long-held grudges against Mr Henchy.
“All it took was a letter but that really wasn’t the agenda, the agenda was to get rid of Mr Henchy,” he claimed.
He claimed that it was clear from legal documents before the court that Mr Buckley was trying to reinterpret actions taken as part of a personal vendetta as being those of the company.
Details of Mr Henchy’s financial affairs subsequently appeared in both the Irish and international press. Mr Hanratty told the court that those details could only have come from one of two places. The first was Mr Henchy himself but the second was the board of Dairygold. Mr Hanratty told the court that these stories were allegedly defamatory and claimed that if they had come from Dairygold, the company was as guilty as if it had published the stories itself. Mr Hanratty added that Mr Henchy had suffered such damage to his reputation that he was unable to find another management role. In a letter read out in court Mr Henchy wrote that he had effectively been branded a thief.
The trial continues tomorrow in the Four Courts in Dublin and is expected to take four to six weeks.
By Abigail Rieley in the High Court today
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