Claims by two Web Summit co-founders that the company has been substantially damaged by Paddy Cosgrave’s social media posts about Israel will be met “robustly”, the High Court has heard.
The former chief executive of the technology events company, who quit his role after controversy erupted over his online posts in the aftermath of Hamas’s attack on Israel in October, did not object to the new allegations being added to cases alleging minority shareholder oppression against him and the firm.
These new claims, made separately by Daire Hickey and David Kelly through their Web Summit shareholding entities, are not admitted and will be met robustly at trial, counsel for Web Summit holding company Manders Terrace and Mr Cosgrave, Bernard Dunleavy SC said.
However, the court ruled against Mr Dunleavy’s clients in their fight against Mr Hickey and Mr Kelly’s request to “reserve the right” to seek further documentation about speakers and clients who reacted to Mr Cosgrave’s posts made following Hamas’s October 7th attack on Israel.
The minority shareholders also want the entitlement to request records from the other side outlining the potential impact his online activities had on Web Summit’s value may also be needed, the minority shareholders claim.
After a short but tense hearing of submissions from lawyers for the three sides, Ms Justice Eileen Roberts decided all of the new allegations could be admitted to the case.
She was satisfied this does not cause any prejudice to the Web Summit side, and did not believe the objection to Mr Kelly and Mr Hickey reserving their right to seek discovery for the new allegations was justified.
She said the new subject matters relate directly to general issues already pleaded in the alleged shareholder oppression cases.
As the new allegations concern activities from October 2023 onwards, she said it was “simply not possible” for related documentation to have been sought before then.
The fact that the exchange of documents between the parties has already taken so long “cannot be used” by Mr Cosgrave and Web Summit to block further discovery on new matters that have just arisen, she said.
The amendments may lead to Mr Kelly and Mr Hickey requiring further documents from Mr Cosgrave and Web Summit, and this should not be used as a springboard for a further wide-ranging discovery request, she added.
There was no objection from Mr Hickey to new claims being added to Mr Cosgrave and Manders Terrace’s defence of his action.
The new allegations include that he earned €328,000 for “secret” consultancy work while still a director at Web Summit.
Ms Justice Roberts said she hopes the parties can agree a timetable for the next steps ahead of the matters returning to court on January 12th.
'Logistical prejudice'
Earlier, Mr Dunleavy, instructed by Clark Hill law firm, argued the discovery rights reservation should not be permitted as it would engender “logistical prejudice” where “considerable time” has been spent swapping documents to this point.
In July 2022, the High Court orderd his clients to hand over 47 categories of records as part of the discovery process, he said.
He expressed concern about the “breadth of discovery that is coming down the tracks, or at least the prospect of discovery” if the judge accedes to the other sides’ requests.
He asked the court to “effectively take this matter by the shirt collar” by giving directions to expedite matters.
“We are content to meet these allegations, but we want to have the discovery over and behind us and to get on with the trial,” he added.
Kelley Smith SC, instructed by Dentons solicitors, for Mr Hickey and his vehicle Lazvisax, which holds his 7 per cent share in Web Summit, said she was “quite taken aback” by her opponent’s characterisation of the document sharing process to date which, she said, has been dragged out by the other side’s insufficient and belated discovery which is ongoing.
Her client, as the applicant, is “always trying to move on with these proceedings”.
For Mr Kelly and Graigueridda, his entity holding his 12 per cent stake in Web Summit, Frank Kennedy BL, adopted Ms Smith’s submissions, while adding that the “potential universe” of documents connected with the new claims is “extremely confined”, as they relate only to events from October 2023.
Mr Kennedy, instructed by Dillon Eustace, said the objection to this is a “complete misuse” of the court’s resources and time.
The judge was satisfied she should allow all of the amendments to be added to the cases, which are among several suits and counter-suits involving the three Web Summit co-founders.
