A software company set up to help people with hearing difficulties, whose board includes the well-known British entertainer John Bishop, has sued an Irish-based former director and a related company for alleged fraud and misrepresentation.
The action, which was admitted to the fast-track Commercial Court list on Tuesday, has been brought by Hears Technology Limited against Maltese registered BAK Holdings Limited and Irish businessman Brendan Morrissey.
UK-based Hears, represented by Eoghan Cole Bl, claims that Mr Morrissey has defrauded the company of just over €1 million which was allegedly paid to BAK for software development services that were independently valued as being worth approximately €215,000.
The company also claims that a €548,000 credit for software services allegedly made available to Hears by BAK in consideration for shares in the plaintiff company was never actually provided.
The claims are fully denied.
Rossa Fanning SC for the defendant said Mr Morrissey, of the Pink House, Kells, Co Kilkenny, told the court that all the payments made by Hears to BAK were legitimate.
The claim against his clients was "misguided", counsel said.
Hearing tests
In its action, Hears claims that Mr Morrissey was a director of Hears Technology - which was set up by the comedian's son Joseph in 2020 - between June 2020 to May 2022, and that he is the owner and controller of BAK which is also a shareholder of Hears Technology.
Both John and Joseph Bishops are shareholders and directors of the plaintiff firm which was set up to develop software products or apps to provide hearing tests via smartphones or other devices. It was hoped the app could be expanded into the area of hearing aid sales.
It is claimed that when the business was set up Mr Morrissey's shareholding was held by BAK. In addition, BAK was also to provide various software services to the plaintiff.
It is alleged, however, that over a two-year period, BAK was paid €1 million for services, provided in the form of uncompleted software code, which Hears claims has been independently valued as costing approximately €215,000.
It is claimed that when this came to light last February, Hears' board agreed to make no further payments to BAK. However, it is alleged that further payments were made to BAK after that point without the board's full approval it is alleged.
Director
It is claimed that BAK was not entitled to those payments and Mr Morrissey, the court heard, was removed as a director of Hears earlier this year.
Mr Morrissey's wife, Karen Morrissey, was the company secretary of Hears until her removal last April, the court was told.
In a sworn statement to the court, John Bishop said he has made investments in companies he considers to be "worthy and pro-social projects."
He said his son, who has hearing difficulties, had come up with the idea for the app, which he said they both believed had "great potential".
He added he was introduced to Mr Morrissey, who was experienced in the tech sector, but that towards the end of 2021 and early 2022 he began to express concerns about the running of the company.
He claims his requests were refused and that he sought the code so he could have its value independently assessed. The figures he was provided resulted in the removal of the Morrissey from the board, which, he said, was not opposed by any of the other shareholders.
BAK and Mr Morrissey deny the allegations and claim BAK provided €1.6 million in services to Hears.
In a sworn affidavit to the court, Mr Morrissey said the claims against the defendants are "without substance".
He said he had worked in the entertainment industry, having been a member of a bank called My Little Funhouse, before becoming involved in tech sector while living in the US in the 1990s.
He has been involved in many projects involving technology companies with a combined estimated value of $211 million.
Despite operating in tech-for-good projects for many years, he has never been sued, nor has he sued any investors in these projects, the court heard.
Mr Morrissey said he believes Mr Bishop has seized control of Hears and was using it to attack his integrity and professional reputation.
He said he welcomed the opportunity to resolve the matters that are the subject of the claim at the full hearing of the proceedings.
Misrepresentation
In its action, Hears Technology seeks damages against the defendants for what it claims was fraudulent misrepresentation, negligence, breach of contract and fiduciary duty.
It also seeks various orders and declarations, including that while a director Hear Technology Mr Morrissey did not act in the plaintiff's best interests.
It further seeks a declaration that it is entitled to trace and recover money and assets it claims was misappropriated from the plaintiff by the defendants.
The plaintiff has also asked the court to require Mr Morrissey to disclose all sums of money, totalling approximately €1 million, which he is alleged to have paid BAK.
The matter was entered into the fast-track Commercial Court list by Mr Justice Denis McDonald.
The judge noted there was no opposition to the application for entry and said it was a suitable dispute for consideration by the High Court's big business division.
The matter stands adjourned and the hearing of the dispute is expected to take place early next year.
