THE COMPANY operating Dublin’s five-star Shelbourne Hotel will ask the Supreme Court tomorrow to continue a stay on a High Court order directing it to give the hotel owners access to its books and records.
Torriam Hotel Operating Company Ltd, part of the Marriott hotel group, wants the stay to continue pending the outcome of its appeal against a decision of Mr Justice Peter Kelly last month requiring it to make available to Shelbourne Hotel Holding Company Ltd (SHHL) a range of material including minutes of management meetings, Torriam’s internal control system manual and details of internal audits and reports.
The judge also ordered Torriam to provide details of actions it took as a result of any risk identified during an internal audit at the Shelbourne and details of the scope of a taskforce sent in by the Marriott group to review the operation of the hotel.
He ordered that SHHL should be given details of access rights to each computer system, customer names and details of employees including their salaries, bonuses, benefits, disciplinary action and tax information.
SHHL had sought access to the books and records after claiming the 262-room hotel, bought and refurbished by SHHL at a cost of €1 million per room, was being run in a “shambolic style” with nobody in charge.
Torriam denied those claims and said it had complied with its obligations under a 20-year hotel management agreement with Torriam. It also said the public airing of the owner’s claims was causing “huge damage” to the hotel and sought a stay on SHHL’s proceedings to terminate the management agreement to allow the matter go to arbitration.
Last month, the judge agreed to grant a stay on the proceedings to terminate the management agreement pending arbitration, and also later agreed to put a stay until Friday on his order directing access to the hotel’s books and records. Torriam will apply to the Supreme Court tomorrow to continue that stay pending its appeal.
The case was before Mr Justice Kelly again yesterday to deal with costs. The parties initially sought to adjourn the costs application for a week, but the judge said such an adjournment made no sense and would just incur further costs and take up more time at the Commercial Court.
After a short adjournment to allow senior counsel attend court, the costs application proceeded and, having heard submissions from Brian O’Moore SC, for SHHL, and Michael McDowell SC, for Marriott, the judge ruled SHHL should get the costs against Marriott of the application for the books and records injunction.
While Torriam had secured a stay on the proceedings to terminate the management agreement, the judge said he would award Torriam just one-quarter of the costs of the stay application as much of the hearing was taken up with Torriam’s unsuccessful arguments that the stay application disentitled the court dealing with the books and records injunction application. He also directed that the issue of the costs of the substantive proceedings concerning termination of the management agreement should be dealt with by the arbitration panel.
Mr McDowell applied for a stay on the costs orders, including the order in favour of his clients for 25 per cent costs of the stay. Mr O’Moore remarked he believed it was a “world first” for a party to seek a stay on a costs order in its favour and the judge agreed, but said he would grant the stay.
