Clarity Telecom Limited and (1) John Britton Megahey; and (2) Barclay Telecom Limited
| Jurisdiction | Northern Ireland |
| Judge | Scoffield J |
| Judgment Date | 06 January 2022 |
| Neutral Citation | [2022] NICh 21 |
| Court | Chancery Division (Northern Ireland) |
1
Neutral Citation No: [2022] NICh 21
Judgment: approved by the court for handing down
(subject to editorial corrections)*
Ref: SCO11724
ICOS No: 19/090102/01
Delivered: 06/01/2022
IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
___________
CHANCERY DIVISION
___________
Between:
CLARITY TELECOM LIMITED
Petitioner
-and-
(1) JOHN BRITTON MEGAHEY; and
(2) BARCLAY TELECOM LIMITED
Respondents
___________
David Dunlop QC and Wayne Atchison (instructed by Millar McCall Wylie, Solicitors)
for the Petitioner
Frank O’Donoghue QC and Alistair Fletcher (instructed by Tughans, Solicitors; and
latterly, McKees, Solicitors) for the First Respondent
___________
SCOFFIELD J
Introduction
[1] This is an application on behalf of the first respondent in the above
proceedings, Mr Megahey, seeking security for costs from the petitioner, Clarity
Telecom Limited (“Clarity”). In these proceedings, Clarity has petitioned for the
winding up of the second respondent, Barclay Telecom Limited (“Barclay”), in
which Clarity and Mr Megahey each hold 50% of the shares. The winding-up order
is sought pursuant to Article 102(g) of the Insolvency (Northern Ireland) Order 1989
(the 1989 Order) on the basis that it is just and equitable that the company should be
wound up. The factual background to the petition is set out in further detail below.
[2] The first respondent, the moving party in this application, was represented by
Mr O’Donoghue QC and Mr Fletcher; and the petitioner, opposing the application,
was represented by Mr Dunlop QC and Mr Atchison. I am grateful to all counsel for
their comprehensive written submissions and their focused oral submissions.
2
Factual Background
[3] Barclay – the company sought to be wound up – was a telecommunications
business providing Voice over Internet Protocol (VoIP) services using technology
supplied by Voxbit Limited, in which Clarity is the majority shareholder.
Mr Megahey is a shareholder of Fonezone Telecommunications Limited
(“Fonezone”), which trades under the Barclay brand as Barclay Communications.
Barclay was established as a joint venture company, which was initially wholly
owned by Clarity and Fonezone but Mr Megahey later elected to personally acquire
the Fonezone shares in Barclay in 2012.
[4] Barclay was intended to work jointly between Clarity and Fonezone. Clarity’s
business was focused on landline telecommunications services, whereas Fonezone
was based in mobile services. The new company, Barclay, was therefore able to
provide a corporate vehicle with synergy to service both Clarity’s and Fonezone’s
respective customer bases and it proved to be a successful and profitable business.
[5] Pursuant to a shareholders’ agreement, Clarity was tasked with the
day-to-day management of Barclay and would charge Barclay for the services it was
providing in that regard. However, in or around the summer of 2018, Clarity and
Mr Megahey had a dispute as to what was owed to Clarity by Barclay. The nature
and details of this dispute are all highly contentious.
[6] In short, Mr Megahey believed that Barclay had been overcharged by Clarity
and he therefore refused to authorise payments to Clarity unless the charges were
fully vouched. For its part, Clarity contends that Mr Megahey saw an opportunity to
use a different product to provide VoIP services (Gamma Horizon), rather than
Voxbit’s technology, and became involved in selling products in direct competition
to Barclay. Clarity also contends that Fonezone – through a connected company
(Barclay Digital Services Limited) – “poached” Barclay staff and sought to novate
Barclay’s customers to benefit itself. These claims are disputed by Mr Megahey but
both sides contend that the other was in breach of the shareholders’ agreement and
was responsible for the breakdown in relations and, hence, the breakdown of
Barclay’s successful business model.
[7] Clarity is critical of the first respondent for failing to use the provisions of the
shareholders’ agreement to investigate any financial queries he had. Instead, it is
said that he froze the bank accounts and effectively terminated Barclay’s operations,
denying Clarity any of its rights as a shareholder. This has led to a range of
litigation. In autumn 2018 Clarity sought injunctive relief and there was an
agreement, referred to at times as an interim agreement, reached between the parties
in September 2018, which resulted in an agreed order of the court of 19 October 2018.
The basic effect of the agreed position at that time was that Clarity would continue
to service Barclay and would be paid for those services whilst the company was run
down in a managed way. Clarity says that there is a sum of around £308,000 owed
to it from invoices for services provided to Barclay which have not been discharged
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