Settlement in Belfast Telegraph case as Canadian takes control (1961)

He already owns one-third of the shares, and under the terms of a settlement announced in the Northern Ireland High Court in September 1961 he was enabled to purchase the 58,656 shares held in trust at a price of £22 2s each, or £1,296,297 12s altogether.

The majority of the shares, under the will of the late Robert Baird, who was chief shareholder, were held in trust for his son, Richard Hugh Healey Baird (aged 9), and his mother, Mrs Isobel Lee.

Originally Mr Thomson had offered £20 a share to the trustees, who accepted. Higher offers were made by other newspaper interests, and an interlocutory injunction preventing the completion of sale by the trustees to Mr Thomson was obtained, pending trial of an action to determine whether the sale would be in the best interests of the infant.

COMPROMISE REACHED

Mr M W Gibson, QC, for infant said that a compromise had been reached, the terms of which could be stated in two sentences: It had been agreed that the shares of the trustees should be sold to Mr Thomson, or to Thomson Newspapers Ltd. It had been further agreed that the present trustees should be replaced by two other trustees to be appointed by the Court.

When the hearing opened on September 19m 1961, Mr Gibson said: “It is a matter of great satisfaction, not only to those representing the infant plaintiff in this matter, but I believe to all the other parties to be able to inform your Lordship that the parties have reached a compromise. We feel it is not only in the best interests of the plaintiff, but also in the best interests of the other parties and of the newspaper itself.”

Mr Gibson said that the original contract for the sale of the trustees' shares to Mr Thomson was at a price of £20 a share.

“It was recognised that it would be unfortunate if the dissension which had hitherto existed in the company were to be perpetuated. Therefore, in endeavouring to settle this, we felt it ought to be accomplished in such a way that all the shares were vested under one control.”

ALREADY SOLD

The shares of Mrs Bellairs and Mrs Wilkinson, who between them held one-third, had already been sold to Thomson Newspapers Ltd, and these contracts were not subject to any proceedings.

Accordingly it was recognised that if the terms could be agreed, it would be in the best interests of all that the shares of the trustees should also be sold to Mr Thomson.

“The price which we have agreed to is £22 2s, an increase of two guineas a share,” said Mr Gibson.

“The total shareholding of the trustees is 58,656 ordinary shares, and the price which has been agreed is £1,296,297 12s. That is to be contrasted with the original price of £20 a share, which totalled £1,173,120. The result is an increase to the trustees, of £123,177 12s.

“Those representing the infant are satisfied that that is a fair and reasonable price having regard to all the circumstances of the case. It is an increase of slightly more than 10 per cent, over the original contract price, and has been reached in the light not only of various offers which were originally before the court, but also with the assistance on both sides of valuations by accountants here and in London. In the light of all the circumstances we are satisfied that the price is satisfactory to the infant and fair and reasonable to the purchaser.”

TRUSTEES' RESIGNATION

So far as the trustees are concerned, Mr Gibson said, the consent provided for their resignation and the appointment of other trustees.

“It was agreed that the trustees had no specialist qualifications, which it was felt by all parties would be necessary in order that they might invest and supervise a fund of such dimensions. Such a task would be very onerous and it was agreed that they should relinquish their trusteeship.”

Certain technical difficulties seemed to exist to their resigning ans appointing new trustees without the assistance of the court, Mr Gibson said. In addition it was felt desirable that certain additional powers should be conferred on the new trustees.

“We have provisionally agreed that we should apply to the court for the appointment of new trustees.”

PROCEEDINGS STAYED

Mr Gibson stated that the consent had been brought before the Lord Chief Justice and he had authorised the infant to compromise the action on the terms of this consent, provided the court felt it to be for the benefit of the infant.

It was agreed, Mr Gibson said, that all further proceedings should be stayed on the following terms: “1, Mr. Roy Thomson shall within seven days pay £896.297 12s, being £22 2s in respect of the 58,656 shares held by the trustees, (less £400,000 already paid, which will go to the new trustees) ;

“2, Mr Thomson shall be wholly released from obligations to make payments under the original sale agreements with the present trustees and Mrs Lee;

“3, All other undertakings shall be discharged, and the shares will be registered in Mr Thomson's name;

“4, The plaintiff shall be entitled to his costs out of the estate and the other parties shall bear their own costs;

EXTENDED POWERS

“5, The present trustees shall be relieved of the burden of office, and it being desired to extend the powers of the trustees in certain respects, which cannot be done without the assistance of the court, the court shall be requested to make an order appointing William Lawrence H Rodden, of Bank Street, Belfast, chartered accountant, and Frederick R Moore, Old Cavehill Road, director, as trustees, with such extended powers as the court might see fit. Thomson shall pay the said sum of £896,297 12s to the new trustees.

“6, The new trustees shall be empowered to appoint and pay a specialist investment adviser and accountant.

“7, Until the £896,297 12s is invested according to specialist advice, the new trustees shall lend the whole or any part of it at interest to Belfast Corporation, Belfast Harbour Commissioners, or any United Kingdom joint stock banking company. Mrs. Lee shall be entitled to the interest in accordance with the will of William Robert Baird.

“8, During the infancy of the plaintiff neither the new trustees nor their successors in office shall pay out any part of the capital to Mrs Lee without the decision of the court.”

PARAMOUNT CONSIDERATION

Mr Patton, for the trustees and Mrs Lee, explaining how no conflict arose under the terms of the consent, stated that the trustees attitude all along had been that their paramount consideration was the benefit of the trust.

He said: “It was with this object, and this object alone, that they sold the shares for what they believed and still believe was the best price then obtainable, and, as is now apparent, with great foresight practically at the top of the market.

“Since then the position may have changed, but they consider that the question for them is still the same, namely, what is the best thing they can do for the trust, laying aside entirely their own interests and feelings? So far as the plaintiff is concerned the burden of making up their minds on this question has been transferred to the court. So far as Mrs Lee is concerned, once they have laid aside their own interests and feelings, the question for them and for Mrs Lee is the same.

“The vital and determining consideration for Mrs Lee lies in the fact that so long as this action remains undetermined she, who alone has any responsibility or means for maintaining her son, has not been and will not be entitled to any income from this trust.

INCOME LOST

“Unfortunately, it is not possible to predict a date for the final determination of the questions raised in this action, and the income lost in the meantime will be lost to the trust estate for all time it is imperative for her, both in her own and her son's interest, to bring these proceedings to a speedy termination, and for the trustees by every means available to them, whether by encouraging Mrs Lee to agree to terms which for her are not unreasonable, or by themselves waiving- every punctilio which might have stood in the way of settlement, to hasten that settlement.

“Mrs Lee wishes me to acknowledge her gratitude not only for the manner in which the trustees have facilitated this settlement, but also for their careful and intelligent conduct of this trust In nursing these shares, not without much trouble and worry to themselves as she knows, from a value of less than £10 each to their present position. Though not vouchsafed a wisdom equal to that which comes after the event, they have in no small measure contributed to the prosperous condition of this trust.

“She wishes me to say that she understands the motives which impel them to wish to be relieved of further responsibility for a trust which has been productive of more trouble than gratitude, and to acknowledge her indebtedness to Mr Moore and Mr Rodden for accepting the responsibility for the future conduct of this now very substantial and burdensome trust.”

ORDINARY DEAL

Mr Nicholson, for Thomson Newspapers Ltd, said that from the beginning Mr Thomson regarded the purchase of the Belfast Telegraph as an ordinary business deal, except in the sense that it involved one and a quarter million pounds. He was shocked to find himself involved in litigation for the first time in his life. He had bought at what he considered to be a fair market price, which was confirmed on subsequent valuation.

“Faced with this litigation, which was likely to be protracted, he successfully endeavoured to assist in the preservation of the assets of the Belfast Telegraph by offering to provide personnel, including Mr Coltart, who came over to assist the board through this difficult time. I am glad that sufficient confidence was shown in him by the other parties to enable that to be done.

“It became increasingly obvious that the further uncertain course of litigation might cause irreparable damage to the newsroom and prudent business demanded an immediate resolution of the difficulties involved. In these circumstances it is that the present settlement has been arrived at. It is, I believe, a business-like settlement, arrived at in a business-like way, and in the best interests of all concerned, particularly perhaps the workers who are on the staff of this newspaper.

COMPLICATED ISSUES

“But this willingness to settle the action and the complicated issues arising in it, is not to be regarded as an admission that the transaction was impeachable, or that Mr. Thomson's integrity and honour were in any way in question.”

Mr Nicholson said that Mr Gibson had assured him that no such suggestion had been made or was ever intended to be made against Mr Thomson's good name.

Mr Justice McVeigh said that the action had been before him on four occasions. It was a difficult, important, and complex matter, and no doubt if it had been litigated to a lengthy end it would have engendered a great deal of hard feeling and friction. It had been compromised in a way which seemed to him to be highly sensible. The result was one on which all parties could be satisfied.

He had no hesitation in stating that he would approve of the terms of the consent, and would make it a rule of court.

He confirmed the appointment of the new trustees.