Former MD of stormwater firm allegedly conspired to expropriate business, court told

business
Former Md Of Stormwater Firm Allegedly Conspired To Expropriate Business, Court Told
A company which distributes industrial stormwater storage tank solutions claims its former managing director was intimately involved in an alleged conspiracy to expropriate the business of the firm.
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A company which distributes industrial stormwater storage tank solutions claims its former managing director was intimately involved in an alleged conspiracy to expropriate the business of the firm which had an €11.5 million turnover in 2019, a court has heard.

Microstrain Ltd, trading as CubicM3, has been the agent in Ireland for the "Stormtech" system of collecting stormwater under residential, commercial, parking lot and roadway developments.

CubicM3 was set up in 2004 by Australians Trevor Loffel and Katrina Walsh, who returned to live in Australia in 2006.

Stephen Neill of Nanikin Avenue, Clontarf East, Dublin, was appointed managing director of CubicM3.

He was replaced in May last year and his replacement, Justin Elliott, claims he was intimately involved in a conspiracy to unlawfully expropriate CubicM3's business and confidential information along with six other former employees who set up a rival firm called Resolute Engineering Group.

Counterclaim

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In High Court proceedings CubicM3 sought orders, including for the return of computer files, against former employees John Delaney, of Bolton Green, Knocksedan, Swords; Ivan McFadden of Courtlough, Balbriggan; Joe Brennan, Moyne Road, Baldoyle; Lukasz Piorunkiewicz, Prussia Street, Stoneybatter; Jackie McGovern, Millpark, Clondalkin, all Dublin; and Pat Gavin, Ballinashina, Shrule, Co Mayo. The proceedings are also against Resolute Engineering of Baldoyle, Dublin.

Last November, CubicM3 obtained an injunction on consent preventing the ex-employees, apart from Mr Neill who had not at that stage been joined to the case, from deleting or destroying confidential information relating to CubicM3.

Following certain admissions made in the response to those injunction proceedings, Mr Neill, along with the companies which supply Stormtech products, Ohio-registered ADS Inc and Advanced Drainage Systems Inc, were joined as defendants by order of the court. Mr Neill counterclaimed for allegedly unpaid bonuses for his last three years with the firm.

Mr Elliot says in an affidavit the ADS companies assisted the defendants in attempting to supplant CubicM3 and divert business to the new company. Mr Neill, he says, permitted Resolute Engineering to obtain a distribution agreement with ADS while he was still MD of CubicM3.

'Encouraged'

Mr Elliot says one of the employees, John Delaney, swore in an affidavit that Mr Neill "encouraged us" (the other personal defendants) to start the Resolute Engineering business.

On Monday, Marcus Dowling SC, for CubicM3, applied to have the case admitted to the fast-track commercial list saying the substance of the case was that there was a conspiracy in which the Resolute defendants set out to damage the business of his client to the benefit of Resolute.

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Frank Beatty SC, for Resolute Engineering side, and John O'Regan BL, for Mr Neill, opposed the application and denied CubicM3's claims.  They argued, among other things, it was essentially an employment, not a conspiracy, case and was worth around €500,000, not the €6.85 million claimed by CubicM3.

David Whelan BL, for the ADS defendants, said his clients were neutral on the application to enter the case into the commercial list but they vehemently deny the claims, in particular the conspiracy claim.

Mr Justice Denis McDonald refused to admit the case as it did not fall within the ambit of Commercial Court rules.  There had also been a lack of urgency in seeking to have it admitted which would justify admission to a division of the High Court with scarce resources, he said.

The case will now proceed through the normal High Court list.

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