High Court

Bula Ltd (In Reveivership) and Others v TARA Mines Ltd and Others 

1986 No 10898P 

6 February 1997 

LYNCH J: 

This case arises out of circumstances which commenced more than a quarter of a century ago. It has its origin in business dealings undertaken in the hopes of arriving at a very large crock of gold, which in the end of the day turned into a bottomless pit of debt and misery for those who most avidly sought the crock of gold. It is from that bottomless pit that the remaining Plaintiffs in this action hope by this litigation to escape. 

The statement of claim contains such a multiplicity of allegations and claims many of which have been abandoned and withdrawn at various stages in the course of the trial, that I think it is desirable that I should state at the outset in broad terms what is the essence of the Plaintiffs claim. 

The Plaintiffs allege against the first fourteen Defendants that in spite of a provision in the first Defendants lease from the Minister that they should co-operate with the Plaintiffs as owners of the neighbouring mine those Defendants nevertheless wrongfully conspired together and sought to inflict and did in fact inflict economic loss and damage to the Plaintiffs to such an extent as to ruin the Plaintiffs in order to enable the first Defendant to acquire the Plaintiffs 1/6 share approximately of the Navan Zinc and Lead Ore Body at an undervalue with a view to working the same for their own benefit along with their own 5/6 share approximately of that ore body. The Plaintiffs allege against the fifteenth and sixteenth Defendants that by virtue of agreements made with the Plaintiffs and other agreements made with the first Defendant the fifteenth and sixteenth Defendants had power and were under an obligation to the Plaintiffs to prevent the first fourteen Defendants from acting in the manner aforesaid but that the fifteenth and sixteenth Defendants not only failed to prevent the first fourteen Defendants from so acting but on the contrary encouraged and assisted them in so acting. 

All of these claims so made by the Plaintiffs against the Defendants are vehemently denied by all the Defendants who allege on the contrary that the failure of the Plaintiffs' enterprise was due to the Plaintiffs own incompetence and unreasonable conduct leading to commercial errors of an irrational and disastrous nature. 

Preliminary Facts 

The first Plaintiff is a company incorporated on the 19 March 1971 and is hereinafter referred to as Bula. The second Plaintiff is a company incorporated on the 29 May 1974 whose name was changed to its present and above name on the 18 August 1975 and is hereinafter referred to as Holdings. Prior to the agreements hereinafter mentioned, Holdings owned 80% of the issued shares in Bula and was itself owned by the third to the sixth named Plaintiffs through the medium of other private companies. The remaining 20% of the issued shares in Bula were owned by Patrick Wright of Nevinstown, County Meath, who died in 1977. The third to the sixth Plaintiffs are in this Judgment referred to individually by their names or numerical position as Plaintiffs and collectively as the Holdings Personnel. 

On Tuesday, 4 October 1994, the third and fourth Plaintiffs, Mr Roche Senior and Mr Roche Junior withdrew their claims and I accordingly dismissed their action as against all Defendants reserving the question of costs until the end of the case. 

The first Defendant is a mining company, incorporated on the 31 of December 1970 and is hereinafter referred to as Tara. The first fourteen Defendants are collectively referred to as the Tara Defendants. The second Defendant is a Finnish mining company, and is referred to as Outokumpu. The third to the fourteenth Defendants were at various times Directors of Tara and/or Outokumpu and are referred to individually by their names. The fifteenth Defendant is the Minister for Energy, sued in his corporate capacity as such including but not in their personal capacity the various holders of that office in the relevant period and is referred to in this Judgment as the Minister. The sixteenth Defendant was at all material times a Civil Servant in the Department of Energy who was on the nomination of the Minister a Director of Bula from June 1977 to June 1982 and was reappointed such Director in April 1983 retrospectively from June 1982 and remained such Director until October 1986. 

During the period when the events giving rise to this litigation occurred, Messrs Gerrard Scallon & O'Brien were Solicitors to the Plaintiffs and Messrs Arthur Andersen were their Auditors and Accountants. MessrsMcCann Fitzgerald were Solicitors to Tara and the Tara Defendants and Messrs Ernst and Whinney were their Auditors and Accountants. Messrs Arthur Cox & Co were engaged specially as Legal Advisors to the Minister and Messrs Coopers & Lybrand as his special advisors on the accountancy and economic aspects of the Bula mine project assisted by Mergers Ltd subsequently called ICC Corporate Finance Ltd and referred to in this Judgment as Mergers ICC. 

The Navan Zinc and Lead Ore Body lies underneath the lands of Nevinstown and adjacent townlands to the North of the river Blackwater in the county of Meath, and extends under the river Blackwater and under the lands of Whistlemount and adjoining townlands to the south of the river. The late Patrick Wright owned in or about 120 acres of the lands of Nevinstown and also owned the minerals beneath those lands. The minerals beneath Whistlemount and the adjoining townlands to the south of the river were owned by the State. 

A Company which is not a party to this action but which is an associate or parent company of Tara namely Tara Exploration and Development Company Limited incorporated in 1953 (in this Judgment referred to as Exploration) carried out on its own behalf and on behalf of Tara extensive drilling for minerals in the Nevinstown area of County Meath in the late 1960's and the year 1970. Exploration and Tara discovered rich deposits of lead and zinc beneath the lands of Nevinstown, the property of Patrick Wright. These findings were published in official journals as required by Law and by Stock Exchange Regulations and therefore were available to interested members of the public. Tara sought to obtain a lease of these minerals from the Minister with a view to developing a zinc and lead mine. It was then discovered that the minerals under Patrick Wright's land were not State owned minerals but were owned by the said Patrick Wright. Tara and Exploration then sought to purchase from Patrick Wright his land and/or the minerals thereunder in the beginning of 1971. In March 1971 the two Messrs Roche offered Mr Wright a higher price than that which had been offered up to then by Tara and/or Exploration and Mr Wright sold his lands to Messrs Roche the conveyance being to Bula on their direction. Mr Wood joined in the venture later. 

Tara and the Minister were at this time in negotiation whereby the Minister would grant to Tara a lease of that part of the Navan Zinc and Lead Ore Body in Whistlemount and certain adjoining townlands to the south of the river Blackwater in County Meath. The Minister would have wished to include in this lease the minerals under Nevinstown to the north of the river, so that the Navan Ore Body which forms one single but extensive ore body might be worked as one. Accordingly the Minister sought to acquire compulsorily the minerals under the lands of Nevinstown by a Minerals Acquisition Order dated the 15 March 1971 pursuant to the powers in that behalf contained in the Minerals Development Act 1940. The compulsory acquisition of these minerals by the Minister was challenged by Mr Thomas C Roche and Bula as Plaintiffs against the Minister, the Attorney General and Patrick Wright as Defendants and that challenge was upheld and the compulsory purchase order was quashed in the High Court on 13 April 1973 and affirmed by the Supreme Court on 4 March 1974. See the case of Roche and Another v The Minister for Industry and Commerce and Others, reported in [1978] IR 149. 

The Minister remained anxious to have some measure of control or interest in the Nevinstown minerals. The Minister might have recommenced compulsory acquisition proceedings observing the matters which the courts had identified as necessary to be observed for a valid compulsory purchase order. On the other hand the Holdings Personnel were anxious to have the good will of the Minister towards Holdings and Bula's interest in and development of the Nevinstown minerals. To achieve these objectives Holdings, Patrick Wright, the Holdings Personnel and the Minister entered into an memorandum of agreement in principle on the 26 July 1974, a copy of which is set out in the First Schedule hereto. By the said agreement in principle, the Minister agreed to acquire 49% of the share equity in Bula but to give power of attorney over the voting rights of 21% of the share equity to Mr Roche senior or his nominees. 

The Agreement in principle was signed by the then Minister, Mr Justin Keating by Mr TC Roche and third Plaintiff by Mr Wright and by Mr Richard Wood. 

On the 19 September 1975 the Minister granted to Tara a lease of the minerals of Whistlemount and adjoining townlands to the south of the river Blackwater and west of the town of Navan in the County of Meath. The lease is of course a detailed and lengthy document but the only clauses relevant to this case are Covenant D relating to boundary mining, Covenant T prohibiting any activity by Tara other than mining the demised minerals, Clause (f) relating to co-operation with neighbouring mines and an arbitration clause. I now quote these four provisions of the lease by the Minister to Tara which is referred to in this Judgment as The Lease. 

"D That in working toward the boundary of any mine of the demised minerals the Lessee will ensure so far as it is within the power of the Lessee to do so, that any margins or pillars which are required for safety purposes will be shared equally between the Lessee and the operators of adjoining deposits. 

T That the acquisition or carrying on by the Lessee directly or indirectly of any business other than prospecting mining and milling of the demised minerals and prospecting mining and milling in the area described in the second schedule will require the consent of the Lessor. The consent of the Lessor to carrying out by the Lessee of prospecting work in Ireland will not be unreasonably withheld. 

(f) The Lessee undertakes to co-operate with the Lessor so as to ensure that the minerals hereby demised and any privately owned minerals in Nevinstown will be exploited in the most efficient and most economical manner with consequent benefit to all concerned and undertakes to act reasonably in all negotiations to achieve such end. And the Lessor agrees so far as it is within his power so to do to ensure that the operators of any such privately owned minerals in Nevinstown will act reasonably in all such negotiations. 

Arbitration Clause 

And it is hereby declared that if at any time hereafter any dispute difference or question shall arise between the Lessor and the Lessee or their respective successors in estate or any of them touching the construction meaning or effect of these presents or any clause or thing herein contained or the rights or liabilities of the parties or their successors in estate respectively or any of them under these presents or otherwise howsoever in relation to these presents or as to any action taken by a party hereto in purported execution of or compliance with these presents or as to the true and proper determination of any matter material to these presents (including the ascertainment of the profits of the Lessee the determination of the price for the minerals and products of the first schedule minerals and the ascertainment and determination of all things material to the effective and true operation and determination of the matters provided for in the schedules including the ultimate findings within those schedules) then every such dispute, difference or question shall be referred to arbitration under the provisions in that behalf contained in the Arbitration Act 1954 provided always that upon receipt of notice of request for arbitration by one party then each party shall do all acts matters and things necessary to secure an early determination of the matters in dispute" 

The Agreement envisaged by the memorandum of the 26 July 1974 was entered into on the 12 December 1975 between Holdings and Patrick Wright of the first part, the Holdings Personnel (in the said agreement referred to as the covenantors) of the second part and the Minister of the third part. A copy of the said Agreement is set out in the Second Schedule to this judgment. 

Under that Agreement, the Minister acquired 49% of the one million issued shares in Bula: Holdings retained 40.8% and Patrick Wright 10.2%. Although the Minister thus became the biggest shareholder in Bula, control of Bula was still retained by Holdings and the Holdings Personnel because the Minister had to surrender the voting rights in 21% of his shares to them and they therefore had an overall majority of voting rights in and control of Bula. That agreement is referred to in this Judgment as the Inter Party Agreement and is as a whole relevant to this case. The following clauses are however particularly relevant, namely 2.01, 3.01(a), 3.04, 4.05, 8.02, 805(a), 8.07, 8.08, 9.05, 9.06 and 10.10. Of these clauses, 8.02, 8.08(a), 9.06 and 10.10 are crucial and are therefore now quoted by me although also included in the Second Schedule. 

8.02 The parties hereto shall procure that the Company shall actively proceed to develop and exploit the mine in as expeditious a business manner as is possible (being consistent with the legal social and other obligations of the Company) and in such a manner as shall operate for the benefit of the holders of shares of the Company (considered as a whole) and further that the Company shall not engage in any other trade or business or enter into any transaction or carry out any activity or operation or make any investment sale or purchase of any nature whatsoever (save only as is envisaged pursuant to the provisions of Article 9.07 hereof) other than activities transactions operations sales purchases or investments reasonably necessary for the development of the mine and the disposal of the products of the mine to the best commercial advantage. All succeeding sections of this Article 8.00 shall be deemed to operate and to be without prejudice to the generality of the provisions of this Article 8.02. 

8.08 If at any time it shall appear to the Minister to be desirable that the Company should co-operate with persons having rights to work minerals adjoining those owned by the company for the purpose of developing the mineral assets in such area in a favourable economic manner (considering the area as a whole) the Shareholders shall forthwith upon receipt of a notice from the Minister to such effect procure that the Company shall comply with such reasonable directions as the Minister shall give in relation to the promotion and implementation of such co-operation Provided Always that the Shareholders shall not be required to procure the Company to comply with the terms of any such notice which shall require 

(a) the Company to depart from its plan to operate as an independent mining and milling concentrate production unit 

9.06 The Minister hereby undertakes to use his best endeavours to ensure that the Government of Ireland agrees to guarantee an amount not exceeding £10,000,000 (ten million pounds) in respect of the major financing required by the Company to develop the mine. 

10.10 This Agreement embodies the entire agreement and understanding between the Minister the Shareholders and the Covenantors and supersedes all prior statements representations agreements and understandings relating to the subject matter hereof whether between the Minister and the Shareholders and/or the Covenantors or the Shareholders inter se and/or the Covenantors inter se or between the Minister and/or the Shareholders and/or the Covenantors and any other party or parties." 

Article 18(f) of the articles of association of Bula annexed to the said Agreement provides that a quorum for Directors meetings shall require the attendance of at least one Director nominated by the Minister and one of the Holdings Personnel. 

In addition to the foregoing agreement, by a collateral agreement entered into at the insistence of the Holdings personnel as part of the overall transaction between the Minister and the Holdings personnel, 21% of the voting rights attached to the Minister's shares were surrendered and assigned to a company called Chimboraza controlled by the Holdings personnel or some of them. This left the Minister with voting rights of only 28% in respect of his 49% shareholding. 

Furthermore the 40.8% shareholding in Bula beneficially owned by the Holdings personnel was in fact held by and registered in the name of Holdings as I have already said. In turn the shares in Holdings were held and controlled by the Holdings personnel through the medium of other private companies in the following proportions: 

1. Mr Roche Senior and Mr Roche Junior 36% between them. 

2. Mr Wymes 36%. 

3. Mr Wood 24%. 

4. Mr Plunkett Dillon 2%. 

5. Mr Godson 2%. 

Arising out of that situation once any two of the three major shareholders in Holdings agreed to act in unison they would have complete control of Holdings and by virtue thereof they would also control the 40.8% voting rights of Holdings in Bula. I have to say however that the person or persons who would have control over the 21% voting rights in Bula surrendered by the Minister to Chimboraza for the benefit of some or all of the Holdings personnel was never precisely established to my satisfaction, despite requests by me for information on this point on a couple of occasions throughout the trial the last being in the course of closing oral submissions. See transcript 275 pages 41 and 42 and transcript 276 page 55. 

It appears however that once Mr Wymes and Mr Wood agreed to act in unison they not only completely controlled Holdings but also through Holdings Bula and I therefore infer that Chimboraza was controlled by whom so ever had control of Holdings and thus Mr Wymes and Mr Wood acting together would have complete control of Bula. 

Assume however that Messrs Roche Senior and Junior controlled Chimboraza then that would give them control of 21% of the voting rights in Bula but would not alter the position in Holdings. Thus Mr Wymes and Mr Wood through Holdings would have 40.8% of the votes in Bula: Messrs Roche Senior and Junior would have 21% and therefore if they co-operated with the Minister they could out-vote Mr Wymes and Mr Wood. No such co-operation ever arose throughout the quarter of a century history of this matter however and for the purposes of this case it appears therefore that Mr Wymes and Mr Wood acting in unison not only completely controlled Holdings but also through it Bula. See transcript 133 page 43 and 44, questions 222-233 as well as transcript 276 pages 55 and 56. 

Some Preliminary Remarks before finding the Facts 

Before I commence to make findings of substantive fact and/or law I want to make one thing clear. I said at the outset of the trial and I repeated a number of times during the trial that I did not wish and was not going to allow myself to be swamped by the massive amount of paper which this case has produced. The trial generated 277 transcripts. In addition Mr Wymes in the course of his evidence read through 19 books of correspondence, memoranda, minutes of meetings, notes of telephone calls and other documents, and these books are referred to in this Judgment as the MW Books. There were some thirteen Tara books put to Mr Wymes in cross examination and then there were individual books relating to the witness for the time being in the witness box. I counted in all about 67 such books of documents, correspondence etc of one sort or another. In addition again there were handed to me for perusal nine bulky reports of mining experts and accountants etc as well as two bulky draft contracts and numerous loose copies of documents of one sort or another. I reckon that there was put before me not less than 60,000 pages of material, but this included a great deal of duplication, triplication and even quadruplication and more. In addition, closing written submissions ran to 804 pages between the 3 sets of parties and on top of that again eight books of legal authorities. 

If I were to immerse myself deeply into that morass of documentation it would be impossible to see the wood for the trees and were I to quote extensively in this Judgment or give references to all the passages that well may be worthy of quotation or references the Judgment would be so long and so convoluted as to be incomprehensible. I want to emphasise therefore that I have listened attentively to the whole case; I have read all the transcripts in addition to having heard viva voce the evidence of which they are a record; I have considered all the documents which the parties wanted to refer to and I have formed clear views and have no doubt as to where the rights and wrongs of this case lie. 

There will be many points that I will not mention in this Judgment which those who are familiar with the case may think that I should have mentioned; but just because I do not mention them does not mean that I have forgotten all about them or their significance. In this Judgment I deal with the kernel of the case, or perhaps I should say the main issues in the case as there is no real kernel, on what I hope is a common sense basis. Even so the Judgment will probably appear to some as rather disjointed and repetitious; that is inevitable in such a lengthy trial where so many matters were put before the court and in rather a disjointed and repetitious fashion. 

Another point I want to mention before finding the facts is as follows. There is no doubt but that Mr Wymes is a difficult and eccentric person. I remind myself however that many valuable principles of law have been established for the benefit of all citizens by the persistence of people who were regarded by their contemporaries as difficult and eccentric. I also remind myself that the difficult and eccentric person is entitled to constitutional and legal rights every bit as much as any other citizen and does not forfeit one whit of such rights because he or she is difficult and eccentric. On the other hand of course the attitude and conduct of other people in dealing with a difficult and eccentric person may be rather different from their attitude and conduct towards ordinary citizens without such different attitude and conduct being regarded as in any way unreasonable in those circumstances. 

THE FACTS 

Mr Wymes was born in 1942. He qualified as a veterinary surgeon in 1965 and practised full-time as such for three years and part-time for a further three years during which three years he also studied for the bar and was called to the bar in 1971. He never practised as a barrister but early in the year 1971 when he would have been no more than 29 years of age he had become acquainted with Mr Patrick Wright of Nevinstown, Co Meath and thence began the events giving rise to this litigation. Transcript 33, pages 51-57. 

Mr Wymes was appointed Managing Director of Bula shortly after its incorporation and as such he exercised a dominant influence over its affairs. He is now about 54 years old and was therefore in or about 30 years of age when so appointed Managing Director. 

It is necessary to consider in the first place the attitudes of mutual distrust and antagonism on the part of Tara and the Tara Defendants towards Bula and the Holdings Personnel on the one hand and on the part of Bula and the Holdings Personnel (and especially Mr Wymes) towards Tara and the Tara Defendants on the other hand and especially the origins of these attitudes. 

Tara and/or Exploration expended some three hundred thousands pounds in drilling 152 bore holes in or about 1969 and 1970 on Patrick Wright's lands at Nevinstown, County Meath. They published the results of these drillings as required by law in Iris Oifiguil. These results indicated rich deposits of Zinc and Lead under the Nevinstown lands. Tara were in negotiation with Patrick Wright to purchase his lands and the minerals there-under. They had offered first one hundred and twenty thousand pounds and ultimately a half a million pounds. Mr Wymes heard of these negotiations and advised Patrick Wright to demand a continuing interest in any future mine which Tara might develop whereas Tara were adamant that they would not give such a continuing interest. Patrick Wright not unnaturally was anxious to get the best possible price for his lands and the minerals there-under and his wishes in this regard were encouraged by Mr Wymes especially in regard to requiring a continuing equity interest in the future mine which Tara as Mr Wymes well knew were adamant in refusing. Contracts were virtually ready for signature by Tara and Patrick Wright in March 1971 on the basis of a consideration of half million pounds immediate payment and seven thousand per annum into the future. 

During the same month, Patrick Wright on the introduction and with the encouragement of Mr Wymes was having secret negotiations with Mr Wymes and the two Messrs Roche availing of the services of a different firm of solicitors suggested to him by Mr Wymes from the firm through whom he was negotiating with Tara and without the knowledge of those latter solicitors. On the 18 March 1971 a contract for sale by Patrick Wright to Mr Roche Senior was executed behind the back of and unknown to Tara the effects of which were to deprive Tara of the fruits of their drilling programme which had cost them about three hundred thousand pounds in 1969 and 1970 monies or in terms of present day money some three to four million pounds. See White on Damages (1989) Volume 2 page 461, projecting the table therein to 1996/1997. This loss was such as almost to bankrupt Tara who survived only with the greatest of difficulty. The first Tara knew of these happenings was when they saw in the week following the St Patrick's Weekend 1971 excavation equipment working and excavating on Patrick Wright's lands. Such machinery was brought on to the lands by the two Messrs Roche encouraged by Mr Wymes in an effort to pre-empt an anticipated compulsory purchase order and in breach of and without regard to the planning laws of the State. 

This acquisition of Patrick Wrights lands of Nevinstown on behalf of Bula reflected no honour on the part of any of the principals involved in it. Tara were quite entitled to regard themselves as having been dishonourably gazumped and claim jumped and cheated of the very substantial investment in drilling which they had incurred. In these circumstances Tara were not unreasonable in viewing with distrust Bula and the Holdings Personnel. See transcript 101 for Friday 12 May 1995 where I have to say that I found Mr Wymes to be un-frank and evasive. See for example pages 4-16 and 48-54 of the same transcript. See also Mr Tully's evidence on the 23 July 1996 at transcript 259 pages 51-71. 

Another incident which naturally increased Tara's distrust of Bula and the Holdings Personnel and especially Mr Wymes, relates to the right to the minerals under the southern half of the river Blackwater opposite Bula's lands. It is clear that Bula's southern boundary is as one would expect the centre line of the river Blackwater which is also the townland boundary between the lands of Nevinstown to the north and the lands of Whistlemount to the south of the river. The lands of Whistlemount are owned by Tara but their land registry map shows their northern boundary as the southern bank of the river. Nevertheless there is a prima facie legal presumption of ownership in Tara to the centre line of the river. Not withstanding all the foregoing, Bula without any reference to Tara included in their application to Meath County Council for planning permission dated 24 August 1976 part of the lands of Whistlemount being the southern half of the river opposite their lands at Nevinstown. The one thing that is perfectly clear is that Bula owns the lands of Nevinstown but no part of the lands of Whistlemount. Mr Wymes says that he became aware that Tara's boundary is shown as the southern bank of the river and that it appears that the minerals under the southern half of the river may be private minerals rather than State minerals. He says that that being so and it appearing that there was no known owner of those minerals he felt that it was in order for him on behalf of Bula to claim ownership thereof and hence the inclusion of the southern half of the river and the minerals there-under in Bula's application for planning permission. He further says that having made this claim Bula must be regarded as being in possession of the minerals and entitled to retain possession as against all comers except those who can show a valid paper title. He concedes that his claim to the southern half of the river and the minerals there-under is not based on a paper title but is based solely on alleged possession. 

Tara regarded this claim by Mr Wymes on behalf of Bula as another instance of claim jumping on the part of Bula and the Holdings personnel and I am satisfied that this view of the claim by Bula on the part of Tara was justifiable. The claim by Bula to have possession of the southern half of the river merely by including a reference to Whistlemount in their planning application is without substance or reality. No act of physical possession has ever been done by Bula in regard to the southern half of the river. To adopt Tara's Counsel's question to Mr Wymes in cross examination and indeed my own remark in connection therewith, Bula have not had people boating or swimming up and down the southern half of the river nor more to the point have they fenced in the southern half of the river so as thereby to fence out Tara there-from. Still more to the point they have not mined any minerals under the southern half of the river for the simple reason that in the twenty five years and more since they acquired Nevinstown, Bula have not brought their proposed mine into existence at all; it never progressed beyond the drawing board. 

See transcript 105 for Friday 19 May 1995. I found Mr Wymes to be evasive in his answers regarding Bula's claim to the southern half of the river Blackwater and indeed at pages 88-90 of this transcript he was evasive to the point of prevarication. 

A third matter which naturally increased Tara's distrust of Bula and the Holdings Personnel and especially Mr Wymes relates to an underground stream known as the Whistlemount channel. This stream was discovered by Tara who informed Bula of its existence about the end of July 1976 because it might require precautions to be taken by both mines and perhaps on a co-operative basis should they be working in its vicinity at the same time and it also required to be borne in mind in connection with diversion of the river Blackwater which was at that time contemplated. By the spring of 1977 Tara were ready to go into production with their mine anticipating a start about May or June 1977 and in fact they started commercial production in June 1977. See transcript 260 of the 24 July 1996 at page 6. Bula had not yet obtained planning permission for their mine, their initial application having been lodged on 24 August 1976 and a detailed request by the local planning authority of the 3 February 1977 for further information not having yet been replied to -- it was not replied to until the 29 August 1979 and Bula did not obtain a workable planning permission until the 21 November 1983, over six and a half years after Tara were ready to go into production. 

In March 1977 Mr Wymes informed British and Irish Newspapers and RTE at the same time requesting them not to quote him as the source of their information, that there was a danger of catastrophic flooding of the Tara mine should it go into production at about that time. These allegations were published in Sunday Newspapers of the 30 March 1977. The allegations were in fact untrue and moreover I am satisfied that Mr Wymes did not have any solid reliable information which even though found to be erroneous later on might have justified the making of such a serious allegation at that time. The mere making of these allegations also implied that if there were such a danger Tara were aware of it and were ignoring it and taking no precautions against it and thus Tara were recklessly exposing their workforce to the risk of serious injury and death. 

I am satisfied and I find as a fact that these allegations were made by Mr Wymes with the intention of embarrassing and damaging Tara as in fact happened and for the purpose of pressurising Tara to agree to Mr Wymes's demands in regard to a route for diversion of the river Blackwater which was then contemplated and was in dispute between Tara and Bula. The mere making of these allegations in fact cost Tara between half a million pounds and a million pounds. See transcript 260 of the 24 July 1996, pages 11 & 12. Mr Wymes stated in evidence before me that in making these allegations to the media he acted out of a sense of public duty. If this were true it is surprising that he wished to conceal his identity as the source of the media reports. I regard his protestations of acting out of a sense of public duty as untrue and I reject them. See transcript 108 Friday 26 May 1995 pages 102-104; transcript 109 Tuesday 30 May 1995 pages 1-47 and transcript 110 of Wednesday 31 May 1995 pages 1-5. 

The foregoing are only three of many instances of conduct on the part of Bula and the Holdings Personnel most especially Mr Wymes which was not only unreasonable but was also irrational if as Mr Wymes claims he was anxious to establish good neighbourly relations with Tara towards whom he claims he bore no ill will. 

Tara for their part were not happy with the prospect of an independent mine next door to them competing for skilled labour and perhaps forcing labour costs up to an unsustainable level. Tara publicly criticised Bula's plans particularly in relation to open pit mining. In this regard Tara were upheld in their criticisms by the decision of An Bord Pleanala of the 28 April 1981 refusing Bula's appeal against Meath County Council's refusal of such permission. An Bord Pleanala's decision was never challenged and therefore stands as incapable of challenge in these proceedings. 

It is worth noting that Tara did not object to Bula's subsequent application lodged on 3 November 1981 for planning permission for a wholly underground mine. Planning permission for that mine was granted by Meath County Council on the 3 December 1982 subject to some conditions which Bula found unacceptable and on appeal An Bord Pleanala removed those unacceptable conditions on the 21 November 1983 just two years after the application for planning permission for the wholly underground mine. Over five years had been totally wasted from the time of the first application for planning permission for open pit mining of the 24 August 1976 to the application for wholly underground mining on the 3 November 1981 and during this time Bula's debts to third parties excluding what Bula owed to Holdings escalated enormously. 

The Basic Causes Of Bula's Failure 

The first cause of the failure of the Bula independent mine project is inherent in the Inter Party Agreement itself. The Minister wished to support and invest in the development of the Bula Zinc and Lead Mine in Nevinstown. The Minister originally and correctly envisaged that when the price had been determined he would pay the consideration or at least half of it to the company that is to say Bula, and the company would then issue the appropriate number of new fully paid shares to give the Minister a 49% share holding. The price which the Minister had to pay was subsequently determined by arbitration at 9.54 million pounds. If this sum or a substantial proportion of it had been thus paid to Bula then Bula would have had those funds to finance its activities until such time as it got planning permission for the mine, got the mine constructed and commenced production and earning revenue. 

This is not what happened however and I cannot understand why the Minister agreed in the Inter Party Agreement to pay the whole consideration to the then share holders Patrick Wright and the Holdings Personnel personally. Mr Holloway explained that he had succeeded in getting his way on behalf of the Minister on so many points regarding the Inter Party Agreement and that Mr Roche Senior was so adamant on the needs of the Holdings Personnel and Patrick Wright to have the consideration paid to themselves, that the Minister conceded this point to them. The effect of this was that the Minister did not really invest in the Bula Mine Project at all. He invested in the pockets of the private shareholders. They sold him 49% of the issued share capital of one million fully paid shares of one pound each which they owned and they received 9.54 million pounds consideration. Bula received nothing. All that Bula had before and after the Inter Party Agreement was the lands and minerals of Nevinstown. Those lands had been bought by Mr Roche Senior from Patrick Wright and they were transferred to Bula who paid for them by the issue of one million fully paid shares of one pound each. Every other item of expenditure incurred by Bula had to be paid for by borrowing at interest originally from a consortium of three banks, namely Northern Bank Finance Corporation (NBFC), Ulster Investment Bank (UIB) and Allied Irish Investment Bank (AIIB). 

All the parties to the Interparty Agreement assumed that interim finance would be obtained by Bank borrowing pending the start up of the mine, then anticipated to be in a couple of years' time. Transcript 185 pages 34/35. Transcript 188 pages 5 to 7. If any further finance was required the Minister assumed it would be provided by the Holdings personnel out of the consideration which they would receive and in fact did receive for their shares. The Holdings personnel did not think of such an eventuality at all at the time of entering into the Interparty Agreement, but when it became a reality, they provided additional interim finance until they began to find themselves financially strained, when for the first time they called on the Minister to contribute to such finance. 

This brings me to the second cause of the failure of the Bula venture and again it arises out of the terms of, or more correctly the absence of appropriate terms in the Inter Party Agreement for financing the venture during the period of development, including obtaining planning permission, and until it would go into commercial production and become self financing. The expenditure so to be financed included an extremely expensive purchase of the neighbouring lands of Rathaldron from a man called Kruger for 2.5 million pounds sterling payable by instalments with an escalation clause by reference to the United Kingdom cost of living index or the price of zinc whichever should be the greater. Despite having paid in or about one and a half million pounds in respect of the purchase of the lands of Rathaldron up to January 1985 there still remained at that time as a result of having fallen into arrears and the escalation clause due on foot of that contract more than the original price of 2.5 million pounds sterling. 

A team of qualified employees was recruited to design the mine and of course their wages were paid by borrowing. Save and except for the actual lands and minerals of Nevinstown the enterprise was dependent one hundred percent on loan finance and enterprises that can succeed on that basis are few and far between. Nevertheless the Bula independent mine project might just have succeeded if the task had been undertaken as one of the utmost urgency to get the mine constructed and into production and earning revenue in the minimum of time having regard to its total dependence on borrowed finance. The Holdings Personnel had complete control of the business of Bula and were under an obligation to the Minister by virtue of clause 8.02 of the Inter Party Agreement to attend to the business promptly and energetically and intelligently. That is the true origin of clause 8.02 and not the opposite way around as Mr Wymes throughout the case endeavoured to construe it, that is to say as imposing duties on the Minister to develop the mine rather than on himself and his colleagues so to manage the company Bula as to achieve the development of the mine. Were it not for the presence of clause 8.02 in the Inter Party Agreement the Holdings Personnel having received the consideration for their shares could simply have walked away from the project and invested it in other projects leaving the Bula mine to lie fallow forever. See MW 11 page 148 and transcript 223 pages 85-87. 

The third cause of the failure of the Bula venture was the manner in which the affairs of Bula were conducted by the Holdings Personnel and especially Mr Wymes. At the outset of their efforts to implement their obligations under the Inter Party Agreement and to get the development of the mine under way the Holdings Personnel made a disastrous error in opting to apply for planning permission for a large open pit mine to be followed by underground mining at a later stage. The easternmost point of Bula's Nevinstown lands is only about 200 or 300 metres from the Navan Carpets Factory at the western end of Navan Town and is only about 1500 metres from the eastern end of the town. The lands of Nevinstown lie west northwest of Navan Town and dust and noise and environmental deficits were bound to affect the town by open pit mining to a much greater degree than would be the case of a wholly underground mine. 

Tara's lands of Whistlemount lie due west of Navan Town and not much further away from it than Bula's lands. However Tara considered applying for permission for an open pit mine, but rejected the idea as impractical because of inevitable serious opposition of a reasonable and valid nature. They decided to apply instead for planning permission for a wholly underground mine; they obtained such planning permission without undue difficulty within some 2 1/2 years from the date of their application; and they were in a position to start commercial production of zinc and lead from their mine in June 1977 just one year and nine months after their lease from the Minister of 19 September 1975. 

The application by Bula for planning permission for open pit mining was bound to and did give rise to serious objections and complications including the necessity to divert the route of the river Blackwater. The decision was that of the Holdings Personnel who had control of Bula and its business and was not that of the Minister despite Mr Wymes's attempts to suggest that the Minister wholeheartedly backed it. He did not. There had not been time to prepare a mine development plan before the execution of the Inter Party Agreement. It follows therefore that the Minister did not have any real part in or control of the planned development of the mine by way of open pit. He had no option but to go along with what the Holdings Personnel decided as they had full control of the company. MW 2 page 71-80 (23/11/1977) 

The application for planning permission for the largely open pit followed by underground mining was ultimately refused by Meath County Council in December 1979. Bula appealed to An Bord Pleanala and that board ultimately refused the appeal on the 28 April 1981. 

It was the Holdings Personnel and especially Mr Wymes who persisted on the appeal to An Bord Pleanala in looking for a largely open pit mine followed by underground mining. They declined to put in a fresh application to Meath County Council for a wholly underground mine whilst they pursued the appeal which proved fruitless after a further delay of one year and four months. An Bord Pleanala refused the appeal on the 28 April 1981 following which at that time Bula had neither a planning permission for any mine nor any extant application for a planning permission. 

What is all the more regrettable about this persistence in looking for planning permission for an open pit mine is the fact that towards the end of 1978 or early 1979 Mr Wymes received from the NBFC a report on the viability of the mine prepared by a firm known as McKay and Schnellman which indicated that a wholly underground mine might be as profitable or even perhaps more profitable than the open pit followed by underground mine. I think it is worth quoting from page 20 & page 103 of this report. 

"Page 20 General. We suggest that the minimum open pit requested by the planning authorities and designed by Bula may prove to be less economic than exploiting the ore body by all underground mining methods. This is particularly pertinent if the price of zinc metal falls and requires the exploitation of the open pit at cut off grades of 5 & 6% combined metals." 

"Page 103. It may be inferred that the Meath County Council would not have asked for a minimum open pit plan if they were not prepared to permit one. 

Nevertheless we would like to see a technical and economic examination for a total underground mining operation. 

Consideration might be given to the possibility of using a vertical shaft sunk in an area of the mine where there is little ore or where it is very low grade. Further access to the underground workings might be achieved by a series of inclines (declines) driven on the dip of the ore body. These inclined shafts could be abandoned as mining operations progress. 

The above suggestions are raised because of the short life of the minimum open pit (three and a half to four years) the capital cost of the equipment, the relatively high operating costs due to the adverse waste to ore stripping ratio and the cost of restoration and landscaping the dumps and old workings." 

As I have said this report was received by Mr Wymes from NBFC towards the end of 1978 or early 1979. Mr Wymes never disclosed to the Board of Directors of Bula that he had received this report much less making a copy available for their perusal before the decision of An Bord Pleanala to refuse planning permission in April 1981. After that refusal Mr Wymes mentioned that he had received a report which was probably the Outokumpu Report of May 1980 which indicated that underground mining would be viable and Mr Wymes therefore now switched to concentrate on obtaining planning permission for a wholly underground mine. Not withstanding mentioning the existence of the Outokumpu Report in that context Mr Wymes never made any such Report available for perusal by the Directors of Bula before the Planning Appeal oral hearing and in 1983 and 1984 he refused to make a copy of the McKay & Schnellman report available to Mr O'Connell the sixteenth defendant. The basis of the refusal was that Mr Wymes said he had received the report from NBFC in confidence but this did not prevent him from making its contents available to Mr Stanley the Financial Controller of Bula and in those circumstances it obviously could and should have been made available to the Board of Directors. Mr Wymes's conduct in relation to this report and his refusal to make it available to Mr O'Connell despite repeated requests by letter to do so was indefenceable. 

In the Plaintiffs closing written submissions at page 32 of part 1, reference is made to a Bula board meeting held on the requisition of Mr O'Connell on the 6 day of July 1980 that is to say just two days before the commencement of the 20 day oral hearing of the appeal by Bula against the refusal by Meath County Council of planning permission for an open pit cum underground mine. The minutes of this meeting are to be found at MW 4 page 76-79. 

Outokumpu who were at the time Bula's Finnish advisors had issued to Bula a report dated the 19 May 1980 confirming that an underground mine could be viable. It is quite apparent from the minutes of the board meeting and indeed from the extracts cited at page 32 of the Plaintiffs closing submissions that this report had not been circulated to the Directors before the meeting and certainly not to the Minister's nominee directors. 

Mrs O'Connell is quoted as saying "that if the technical report on an underground mine showed it not to be viable the Tara offer may be of interest.' 

Mr Wymes is quoted as answering "as regards the viability of an underground mine the Company's Finnish advisors are satisfied that it is viable". 

That appears to be the total information available to the Directors at that board meeting as regards the viability and profitability of a wholly underground Bula mine making no mention of the fact that Mr Wymes was long since in possession of the McKay and Schnellman report of about November/December 1978 stating that a wholly underground mine could be as profitable if not more profitable than an open pit cum underground mine. 

One would have expected that Bula would have had everything ready on standby so as to be in a position immediately to lodge a new application for planning permission for a wholly underground mine in the event of an adverse decision on the appeal to An Bord Pleanala as in fact occurred. Nevertheless the Bula Management were not ready to lodge this fresh application for planning permission for a wholly underground mine until the 3 November 1981 over six months after the decision of An Bord Pleanala. During all this time Bula was incurring expenses and as it was producing nothing its debts were mounting. Mr Wymes seemed to be oblivious to the seriousness of delay. The application for planning permission for a wholly underground mine eventually was granted in a workable form by An Bord Pleanala on the 21 November 1983 that is to say eight years less one month from the execution of the Inter Party Agreement on the 12 December 1975. By contrast as I have already pointed out Tara started commercial production of zinc and lead in June 1977 being one year and nine months from the date of their lease of the minerals from the Minister on the 19 September 1975. 

It is extraordinary that Mr Wymes who is obviously an intelligent person seemed to be so blind to the importance and absolute necessity of expedition and concentration on the realities and substance of getting the mine into production. In the course of the sorry saga of Bula he alienated those with whom he should have sought to get on well. He misled them: he strung them along: and he met any resistance to such conduct with threats of litigation. He indulged in, and is a master of, interminable nit-picking legalistic and antagonistic correspondence with all and sundry and especially with the Minister and his Department with whom he should on the contrary have been seeking good relations. Transcript 197 pages 72-76 illustrates the sort of care required in dealing with Mr Wymes' correspondence. He is fascinated by detail. Unfortunately for him his grasp of detail is so all pervasive that he cannot distinguish between detail and essence or between the trivial and the substantial. 

The seriousness of the situation that debts were mounting at high rates of interest cannot be exaggerated. It was re-emphasised in the course of the evidence of Mr Gallagher, the Tax Consultant of Arthur Andersen on Wednesday 8 May 1996, transcript 218. In the course of his evidence he referred to a draft opinion letter which was being prepared by him in early 1985. In that draft letter there was reference to a figure of £24,468,313 which is described as deferred development costs. Of that figure a sum of £18,531,747 is described as financial charges and other. That figure is shown to include £11,772,654 interest paid or payable to banks; £4,718,799 interest payable to Holdings; and £1,273,180 escalation payments together with interest on late payments arising under the contract for the purchase of the Rathaldron lands. These are all financial losses arising through the delay in getting planning permission whereas the true expenses of planning for the mine and administrative costs generally came to just under £6,000,000. These deferred developments costs had risen from a figure of 2.378 million pounds in March 1977 to 24.598 million pounds in March 1984 that is to say a tenfold or one thousand percent increase in their amount in a period of 7 years during which no progress had been made apart from obtaining planning permission for a wholly underground mine. 

A rough draft balance sheet for the 31 March 1977 produced by Mr Breffni Byrne of Messrs Arthur Andersen on the 2 May 1996 transcript 215 shows deferred development costs of £2.378m and nett total current liabilities of £3.971m. Fully certified accounts for the 31 March 1981 produced by Mr Byrne on the 1 May 1996 transcript 214 show deferred development costs of £9.766m and nett total current liabilities of £9.262m. For the 31 March 1982 the figures are deferred development costs £12.845m and nett total current liabilities of £10.552m. Draft accounts prepared for the 31 October 1984 show deferred development costs of £24.498m and nett total current liabilities of £28.393m an increase of 269% in nett total current liabilities in a period of 2 years and 7 months. 

It is very strange that there appears to have been a complete failure on the part of the Holdings personnel and especially Mr Wymes to appreciate the cost of time and borrowed money. The affairs of Bula were conducted and correspondence was engaged in by Mr Wymes as though time did not matter. It is a pity that the Financial Controller, Mr James Stanley did not impress upon Mr Wymes the views which he expressed in evidence before me namely that in the case of Bula the most damaging factor so far as its viability was concerned, even more than metal prices, was the delay in getting the mine into production. Transcript 246 of the 3 July 1996 page 105 and I quote the questions and answers at 573 and 574: 

"573 Q Most people have indicated it is the most, it is number one? 

573 A In certain circumstances you are producing -- in some circumstances your delay is a very significant factor as is seen in this case. Its been the most significant factor. 

574 Q Existing debt, but as regards predicting how a zinc mine is going to operate in the future, for better or worse you know your accumulated debt. As regards prediction -- 

574A You don't, I beg to differ. You don't know. I mean, if you for all sorts of reasons have a delay of five years in your project with the best zinc price in the world it can kill your project more than your zinc price." 

The certified accounts for the year ended the 31 March 1982 show at note four thereof that bank interest (excluding interest on the Holding's loans) amounted to £1.682m in that year which means that interest ran during that year at £4,608 per day. By 1984 bank interest was running in excess of £5,000 per day and yet Mr Wymes called for the removal of Mergers/ICC as the Minister's advisors regarding the viability of the Bankers Trust/Outokumpu proposal and their replacement by somebody else which would of course have involved still further delay and increased interest to the prejudice of such viability. This is over and above the two to three years delay in the period 1976-1979 in the planning permission process for an open pit followed by underground mining caused by Mr Wymes insisting that Tara bind themselves to accept the route for river diversion to be determined by Professor Pryor whilst he adamantly refused that Bula be likewise bound and the further delay in persisting with the open pit application not withstanding vehement opposition thereto justified by the decision of Meath County Council and on appeal therefrom of An Bord Pleanala although aware from experts reports in his possession but not disclosed to the Minister or the Minister's nominee directors that wholly underground mining could be as viable as open pit followed by underground mining. 

Further Examples of Bad Management 

At this stage I propose dealing with an issue which was withdrawn and abandoned on Wednesday 5 June 1996 (transcript day 228 P 1-3) but which was a major aspect of the Plaintiff's case on which many days and indeed weeks had been spent up to then. The issue to which I refer is the question of boundary mining and the observance or otherwise by Tara of Covenant D of the lease which I have quoted above and which provides that Tara will observe a regime of mining in the boundary area between their mine and Bula's mine such that each mine will bear equally the necessary support pillars both for the ground above and in particular for the support of the river Blackwater. Tara had brought their mine into commercial production by June of 1977 whereas Bula were still not near getting even a planning permission and that meant therefore that Tara would be mining on a commercial basis -- and perhaps close to the boundary area with Bula without any corresponding mining on the Bula side. That situation naturally called for some form of monitoring. 

It was precisely to create a satisfactory system of monitoring Tara's mining generally but more especially in the boundary area that the Minister set up what became known as the Experts Group in 1979. The functions of the Experts Group were to monitor Tara's mining in general and particularly in the boundary area and to report to the Minister from time to time. The group consisted of a chairman nominated by the Minister who was originally Professor Pryor who was succeeded following his death by Mr John Taylor, a representative to be nominated by Tara's bankers the Toronto Dominion Bank, a representative to be nominated by Tara and it was envisaged a representative to be nominated by Bula. Mr Wymes however declined to nominate any representative to this group despite the fact that he was twice invited to do so and that such a representative could have kept Bula informed of what was going on in the boundary area in the Tara mine. 

This decision was so irrational and wrong as to be incomprehensible. It is all the more so when Mr Wymes admits that he refused to join or nominate a representative to the Experts Group in 1979 because he was "miffed". Transcript 115, 20 June 1995, page 101, questions 648-651. What was to be monitored by the Experts Group was something involving the future ability of Bula to mine millions of pounds worth of Bula ore and yet Mr Wymes declined to nominate a representative because he was miffed. No Directors Meeting was called to consider and decide whether or not to nominate a representative to this group. Mr Wymes took it upon himself as so often regarding the vital interests of Bula to decide this matter without first submitting it for consideration by the Board of Directors and in this case he clearly decided irrationally and wrongly and at least to some extent out of some form of injured pride causing him to be miffed. 

Mr Wymes was again pressed by the Department of Energy to nominate a representative to the group in July 1984 and again refused for no valid reason that I can discern. He was therefore certainly well aware as of July 1984 and probably for some years before that of the continued existence and functioning of the Experts Group and that one of their main functions was to monitor Tara's mining in the boundary area between the Tara mine and the proposed Bula mine with a view to ensuring that any support pillars required for safety purposes should be shared equally between the two mines. 

This whole question of Mr Wymes' refusal to nominate a representative to the Experts Group makes for very strange reading indeed. See transcript 41, pages 47 & 48. Transcript 43, pages 13-18. Transcript 102, pages 29-37. Transcript 106, pages 68-70. Transcript 115, pages 16-26: page 54: pages 65-90: and page 101. Transcript 116, pages 90-94: pages 100-105: and pages 106 & 107. And as referred to in the said transcripts see also MW 2 pages 214 & 215: pages 238-241: pages 255-265 and page 298. MW 12 page 37: page 101: and page 126 and 126 A. 

In 1974 a Geologist named Dr White had reported on the extent of pillars required in the boundary area and especially under the river Blackwater that should be left un-mined and therefore intact on each side of the boundary in order to support the surface and the river safely. He clearly stated that his recommendations might be revised in the light of further knowledge to be gained in the course of mining. When Bula were first offered a place on the Experts Group regarding boundary mining one of the main issues at that stage was whether Dr White's report should still stand in the year 1979 then some five years or so later than the date of the report or whether it should be modified in the light of the mining experience carried on in the meantime since June 1977 by Tara. The Experts Group reported on the 15 March 1979 that "the dimensions of the White pillars may therefore now be disregarded". 

On 1 April 1981 the Experts Group reported again and their report is to be found in MW 5 page 37 & 38. At paragraph 8 they stated: 

"with regard to clause D of Tara Mines Lease the mining which has taken place and that which is scheduled up to 1985 is entirely consistent with equal sharing of any margins or pillars required for safety purposes: that is to say the extraction which will have taken place will in no way prejudice a similar percentage of extraction being made in the adjoining property." 

On 7 December 1983 MW 9 page 241 A at paragraph 7 the Experts Group stated: 

"Tara mines programme of future stoping was reviewed and found to be in accord with the original recommendations of the Experts." 

On 16 October 1984 MW 12 page 356 A and B the Experts Group reported at paragraph 7 as follows: 

"the Experts agree that plans should be made and implemented in due course to extract the party wall: indeed this is desirable in accord with good mining practice. This decision takes account of the following factors:- 

(a) The experience now obtained (and referred to above) clearly indicates that it can be done without causing instability in the overlying rocks or surface subsidence. Stoping spans will be no greater than those already created. 

(b) It is apparent that when the Bula mine comes into production mining there can proceed in the same way with the same degree of extraction and leaving the same proportion of haulage and other pillars in situ. Thus Tara will continue to comply with the terms of the mining lease." 

No other reports from the Experts Group were included in Mr Wymes' MW books and this is understandable because his books ended with the commencement of these proceedings in November 1986. Nevertheless all of these reports were discovered by Tara up to the date of their affidavit of discovery in 1992. They were therefore available for inspection by the Plaintiffs. I will give further quotations from just three of these later reports. 

First on 14 January 1988 the Experts Group reported at paragraph 7 as follows: 

"as has been previously reported Tara is fully complying with the terms of its lease so that the Bula mine could extract an equal percentage of its ore in the temporary abutment pillar. However the point has been reached where Tara's ability to extract the maximum amount of ore which could economically be mined will be adversely affected by the apparently endless delay in putting the Bula mine into production." 

On 1 December 1991 the Experts Group again reported and concluded with the following two paragraphs: 

"Tara is as it always has done fully complying with the terms of its lease so that the Bula property can be worked to the same extent. The position however is not satisfactory because the Bula property has not been put into production. The party wall below the Blackwater river should by now have been worked out together with the temporary abutment pillar on the Bula side. while fortunately ground conditions in the mine are so good that no serious deterioration has occurred the continuing delay in mining out the area below and adjacent to the river will inevitably lead to increased mining costs and possibly lower recovery of the resource. Good mining practice would have been to extract this first. 

From the point of mining this very important ore body properly priority should be given to speeding up the resolution of the problems which are preventing the exploitation of the Bula part." 

Finally I quote from a report based on a meeting of the Experts Group on 3 September 1992 and issued sometime towards the end of 1992. This report post dated discovery and was therefore not available to the Plaintiffs but would have been available to them had they, as any sensible business man would have done, nominated a representative to the Experts Group. 

"As has been repeatedly pointed out in the past, Tara is complying fully with the terms of its lease in regard to its mining policy and in relation to the eventual mining of the adjacent Bula property. 

However, due to no fault of Tara's the position is not satisfactory. The section of ore below and either side of the Blackwater River should have been mined out many years ago, but this has not been possible due to the Bula property not having gone into production. The Tara Mine's position has been adversely prejudiced because haulage pillars, containing many million tons of high grade ore, have had to be maintained long after they should have been mined, having completed their useful life. This has resulted in loss of revenue both to the Mine and to the State. 

The longer this situation continues, the more difficult and expensive will it be to mine out the remaining ore in the temporary abutment pillar on the Tara side and the adjacent ore in the Bula property. 

There is nothing that Tara can do to remedy this situation until production can be started in the adjoining property." 

On Tuesday 21 May 1996 and continuing into Wednesday 22 May 1996, the Plaintiffs called in support of their allegations that Tara had disregarded the boundary mining obligations on them a Mr John Warren Summers who is undoubtedly a highly qualified rock mechanic and rock engineer. Mr Summers had been briefed with what the Plaintiffs doubtless indicated to him were the full relevant facts of the case so far as he was concerned. He was given a copy of the Experts Group report of 15 March 1979 and an amendment thereto of 19 May 1979 but he was given no subsequent report whatsoever from the Experts Group. 

Mr Summers has very good reason to be miffed by the hopelessly inadequate way in which he had been briefed by the Plaintiffs. He was given instructions/information that was so sparse and wanting as to be down right misleading. I actually felt embarrassed and sorry for Mr Summers listening to his efforts to cope with the cross examination based largely upon a mere putting to him of the various reports from the Experts Group which he should have but had not been supplied with. Mr Summers concluded his evidence on Wednesday 22 May 1996 -- see transcript 226. Towards the end of his cross examination by counsel on behalf of Tara at question 449 he was asked:- 

Q 449 "Can his Lordship safely ignore your intuitive doubts if the Expert evidence of those who have detailed information about the ore body at Navan and the river Blackwater is to the contrary? 

Answer: Its hard for me to defend any of my statements against such an overwhelming amount of evidence -- that's correct." 

At the end of his cross examination by counsel on behalf of the State he was asked at questions 474 & 475 and answered as follows:- 

Q 474 "And if the Minister had a duty, which I don't agree for the moment, but if he had a duty as between Tara and Bula, a situation where the parties either couldn't or wouldn't agree or whether they were willing or unwilling to co-operate, it was a sensible and prudent thing to ask some group of experts whose qualifications were beyond question. It was a sensible thing for him to do wasn't it? 

Answer: Absolutely. 

Q 475 Against that background it would be a sensible thing for him having obtained the group of the views of experts, both parties having been asked to make a contribution, to abide by them unless there was some real reason for dissenting from them; it would be a sensible thing to do, wouldn't it? 

Answer: It would be sensible." 

This whole question of boundary mining was a major aspect of the Plaintiffs claim in this action. It was alleged that by reason of Tara's mining activities in the boundary area large quantities of ore on Bula's side of the boundary had been sterilised or frozen and rendered incapable of being extracted thus causing substantial loss to Bula if and whenever it were to get into production. I was not surprised when two sitting days later on Wednesday 5 June 1996 transcript 228, all claims related to boundary mining were withdrawn by the Plaintiffs. I cannot understand why so much expensive court time was wasted on this issue when the Plaintiffs had available for inspection by them long before the start of the trial of copies of the almost Annual Reports of the Experts Group which had been discovered and which specifically stated that Tara's mining in the boundary area did not in any way inhibit equal mining by Bula on its side of the boundary. It must also be remembered that the Plaintiffs and especially Mr Wymes alleged that not only had Tara mined so close to the boundary as to freeze valuable ore on the Bula side but that Tara had actually trespassed and mined into Bula territory and extracted and therefore in effect stole substantial tonnages of ore from the Bula side. 

Those allegations had prior to the abandonment of the boundary mining issue already been shown to be wholly groundless and had been withdrawn. Had any attention been paid to the reports from the Experts Group which had been disclosed on discovery of documents it would have been manifest that there could be no possible basis for allegations of trespass and theft of ore and general fraudulent conduct on the part of Tara which were made in the course of these proceedings. 

Other groundless allegations made by Mr Wymes imputed bribery and corruption by Tara of leading politicians, including Taoisigh, in respect of contributions by Tara to the funds of their respective political parties. These imputations of bribery and corruption were untrue: the contributions were usual and normal such financial assistance to political parties and were not for the purpose or in expectation of any favours. The allegations were made by Mr Wymes with an air of sanctimonious self-righteousness which acquired an odour of hypocrisy when it transpired that he, on behalf of Bula, had contributed £25,000 to the funds of a political party. 

However Mr Wymes' suspicions of Tara persisted right to the very end of the case. Despite the previous abandonment of any claims related to boundary mining or trespass, through his counsel Mr Wymes cross examined Mr O'Connell on the basis of a query raised by Messrs Coopers and Lybrand in a report of the 15 August 1986 to the Department of Energy as to whether Tara had penetrated the party wall at some time previously. This was on the last day of the evidence in the case namely Tuesday 15 October 1996, transcript 273. This query related to a very slight penetration of the party wall towards the end of 1978 when in accordance with Dr White's recommendations the boundary pillar under the river Blackwater was still 50 metres wide that is to say 25 metres on each side of the actual boundary. There was no question of Tara penetrating anywhere near or as far as the actual boundary. Mr O'Connell in reply to such cross examination stated: 

"My recollection was that the penetration of the party wall was of such insignificant proportions that it didn't make any difference one way or the other." 

It was after that incident towards the end of 1978 that the Expert's Group was established early in 1979 and to which Mr Wymes foolishly refused to nominate a representative as I have already mentioned. See transcript 273, pages 27-29. 

In addition to Mr Wymes' refusal to nominate a representative to the Experts Group there are many other examples of wrong decisions by him to the detriment of Bula. I give a few examples only. 

Mr Wymes refused: 

A. To supply the Minister with a copy of the Matthew Hall Report relating to the viability of an underground mine which had been made available to Mr Wymes by NBFC. 

B. To supply the Minister with a copy of the Outokumpu Report of May 1980 relating to the viability of a wholly underground mine, from the 19 May 1980 to the 16 September 1981. 

C. To furnish to the Minister and to fellow directors in Bula a copy of the 1978 McKay and Schnellman Report which supported a wholly underground mine as being as viable as a reduced open cast plus underground mine. 

D. To furnish to Tara a copy of Bula's revised planning application plans of 28 September 1979 although he had previously promised to furnish such to them, with a view to discussing same and possibly avoiding a Tara objection. 

E. To appoint a representative to attend a meeting between Tara and the Minister in November 1979 regarding Tara's concerns about and objections to Bula's revised planning application -- see MW 3 pages 59 to 68a. 

F. To attend tripartite talks as suggested by the Minister between the Minister and Outokumpu and Bula for some months in Spring 1982, until June 1982. 

G. To consent to Bula's Banks talking to the Department. See transcript 201 pages 34 & 78. MW 13 page 171. 

H. To allow the State Directors of Bula in May 1984 to take away with them copies of the Holdings Loan Terms which had in 1981 increased the interest rate from 12% to 20%. MW 11 page 104 A & B. 

I. To supply the Department of Energy with the telephone number of Mr Shultz of Preussag so that the Department might get in touch with Preussag in order to assist Bula in getting Preussag to come in as a partner to develop the mine. See transcript 60 (26th January 1995) pages 2-6 and the word "objective" is a misprint for "obstructive". 

On 17 January 1984 to tell the Department of Energy whether or not he was in discussion with a third party (in fact Boliden) MW 10 page 78. 

K. To submit the majority of these various decisions to the Board of Directors of Bula for their consideration and directions before taking and implementing such decisions. 

Mr Wymes without justification wrongly questioned the independence and/or impartiality and/or competence of many persons if they did not wholly support his views for example: 

L. Mergers/ICC (advisors to the Minister). 

M. Professor Shaw. 

N. Mr John Taylor (Chairman of the Experts Group and the group in general). 

O. Mr Brian Barry of Cooper & Lybrand. 

P. Mr Burns of Minorex. Transcript 106 pages 56-59. 

Mr Wymes failed to disclose promptly: 

Q. The increase in interest rates of the Bula Holdings Loan from 12% to 20% until April/May 1984 after having implemented it in 1981. Transcript 64 page 34-37 and 64-65. MW 11 page 104 A & B. MW 12 page 199-200 and 212-213 and 387. 

I do not say that the 20% interest rate was excessive: I express no views on that. However the proposed increase should obviously have been submitted to a Bula board meeting at which a Minister's Nominee Director was present before being implemented and not concealed from the Minister for three years as was in fact done. 

R. The purported rescission by Mr Kruger in May 1984 of the sale by him to Bula of the Rathaldron Lands. 

The rescission of the Kruger contract was deliberately concealed by Mr Wymes from the Minister. All he said to the Department and Mr Barry of Coopers & Lybrand was that he was having problems with Mr Kruger; they knew that the Holdings Personnel were having financial difficulties and they therefore reasonably assumed that the problems referred to were simply in meeting the instalments of the purchase price for the lands. If Mr Wymes mentioned to Mr Barry that it might be necessary to look for an Ancillary Rights Order, as he says he did, but which I do not accept, that did not convey, and Mr Wymes knew it would not convey, to Mr Barry the information that the contract was or purported to have been rescinded by Mr Kruger. 

The Kruger/Rathaldron lands were essential if an independent Bula mine was to come into being. Despite all their financial difficulties, it was or should have been a first priority for the Holdings Personnel to ensure that their rights to those lands could not be challenged. It was gravely incompetent management on their part to allow a situation to arise where Mr Kruger could purport to rescind the contract and in using the word purport, I am not to be taken as expressing a view that the rescission was not valid. 

It is also extraordinary that no director's meeting of Bula was called to discuss this disaster but on the other hand it is not surprising because the Minister would have learned of it in that way through his nominee directors and Mr Wymes wanted to conceal it from the Minister. The deliberate concealment of the Kruger rescission from the Department was very serious. It had led the Minister to give assurances to potential partners or buyers that Bula's title to all the lands, the subject matter of their planning permission, was in order when it clearly was not. 

The Minerals Development Act, 1979 was passed into law on the 20 June, 1979. Thereafter, in order for Bula to work the Nevinstown minerals, they required to get an exception under Section 15 of that Act from the Mining Board. As Bula had decided before the 15 December, 1978 to develop a mine in accordance with plans based on a comprehensive study indicating a reasonable prospect of commercial development and as that decision still stood at the 20 June, 1979, they were entitled to such a declaration of being excepted from the provisions of the Act. Notwithstanding the foregoing and the fact that Holdings had agreed to sell their share in Bula to Anglo United/Munster Base Metals in the Spring of 1982 and were negotiating in 1983/1984 with Outokumpu for a development and management of the mine and late in 1984 for the Bankers Trust Package, Bula still had not got their mining exception at the end of 1984, that is to say, some five and a half years after the passing of the 1979 Act. 

This failure created great difficulties when it came to trying to implement the Tara takeover deal of the 21 December 1984 throughout 1985. When the exception came to hand in March 1985, it created further problems which Mr Wymes perceived as mere mala fide obstruction by Tara but I reject that perception. I am satisfied that whether the objections of Tara were well founded or not (which I do not have to decide), they were bona fide and based on opinions and a draft further application by eminent Senior Counsel which I must say I find very persuasive. Mr Wymes was clearly wrong and he conceded as much in evidence in thinking as he did at the time that Tara's objections were mala fide delaying tactics aimed at causing damage to Bula and the Holdings personnel. 

In 1985 Tara were negotiating to take over Bula. A site in Drogheda Harbour had been taken on lease or agreed to be taken on lease by Bula from the Drogheda Harbour Commissioners with a provision that Bula would erect at an estimated cost of about one and a half million pounds facilities on the site to assist in the export of concentrates if Bula had succeeded in developing an independent mine. However if Tara took over Bula then the site in Drogheda Harbour would not be required as Tara had their own extensive export facilities in Dublin port and in addition were able to and in fact did export a small amount of concentrate through Drogheda port. Tara agreed as part of their offer to take over Bula to bear the first three hundred thousand pounds of the cost of cancelling the contract for the lease with the Drogheda Harbour Commissioners. Mr Wymes had agreed or more correctly had tentatively agreed with the chairman of the Drogheda Harbour Commissioners to settle the terms for abandoning the lease for ten thousands pounds together with one thousand pounds legal costs and also the cost of restoration of works which Bula had commenced in order to preserve their planning permission for the facilities. 

This offer or tentative settlement was not accepted at a subsequent meeting of the Drogheda Harbour Commissioners and instead the Commissioners looked for fifty thousand pounds at the end of March 1985 and agreed that they would settle at that figure if Mr Wymes accepted their figure before the end of April 1985. Mr Wymes did not take up this offer but stood on his perceived settlement of ten thousand pounds together with incidental payments and later on there was talk by Drogheda Harbour Commissioners of requiring a quarter of a million pounds to settle. Mr Wymes emphatically blames Tara for the increase in the figure for settlement from ten thousand pounds to fifty thousand pounds and thereafter to about a quarter of a million pounds saying that Tara personnel had put these figures into the minds of Drogheda Harbour Commissioners in order to frustrate the settlement which he says he had negotiated. 

When it was pointed out to Mr Wymes by counsel for Tara that if this were so Tara would be costing themselves the extra monies because they had by their offer of the 20 March, 1985 agreed to bear the first three hundred thousand pounds of the cost of getting out of the lease with the Drogheda Harbour Commissioners, Mr Wymes did not challenge this factual position but nevertheless he maintained his opinion as to why his perceived settlement had gone off and increased figures were demanded by the Drogheda Harbour Commissioners. See Transcript 139 of Wednesday 2 August, 1995 at pages 49-70 and especially questions 449 & 450 which read as follows: 

"449 Question: Having heard all these matters would you like to withdraw your complaints against Tara? 

Answer: Certainly not. 

450 Question: I didn't think you would? 

Answer: Certainly not." 

Exactly four sitting days and two weeks later (because I did not sit in the bank holiday week commencing Monday 7 August 1995) Mr Wymes gave evidence which is undoubtedly contradictory to that just referred to. He said that there was no way that he would or could settle with the Drogheda Harbour Commissioners for the abandonment of the lease unless and until the takeover deal by Tara was executed by and binding on all parties because otherwise if it went off Bula would be in a hopeless position so far as developing an independent mine was concerned because they would have no facilities for exporting their concentrates. See Transcript 143 of Wednesday 16 August 1995 at pages 44-48. While I can fully understand the dilemma in which Bula found themselves in 1985 I do not see how this evidence and that of Wednesday 2 August 1995 referred to above can be reconciled. 

When this matter arose very much later in the trial and I pointed out yet again the foregoing position that Tara had made themselves liable for the first three hundred thousand pounds cost of getting out of the Harbour Commissioners lease Counsel for the Plaintiff explained that Mr Wymes's worry was not so much the amount of money to be paid to Drogheda Harbour Commissioners but rather that Tara might build facilities on the site at a cost of perhaps one and half million pounds and try to charge that cost to Holdings and the Holdings Personnel. See transcript 263 of the 29 July 1996 at pages 86-91 where reference is made to MW 14 page 283 document of the 25 February 1985 and page 295E a document of the 27 February 1985. See also transcript 267 of the 8 August 1996 at pages 125 and 126. 

I found at the time and I still find this explanation surprising. Tara did not want the Drogheda site: They wanted to get out of the lease and have nothing to do with the site. 

In a telephone conversation on the 29 January 1985 noted at MW 14 page 144 with Mr Denis Bergin of Arthur Cox & Co, solicitors for the Minister and the Department of Energy at the time in connection with this matter, Mr Tully of Tara said: 

"Why not jump on our bikes and go down to Drogheda Harbour Commissioners and settle next Monday or Tuesday" 

The next Monday or Tuesday would have been the 4 or 5 of February 1985 and Mr Tully suggested that the delegation should comprise; Mr Bergin representing the Minister, Mr Frank Plunkett Dillon Solicitor representing Bula and Holdings, and Mr O'Mahony and himself representing Tara. That suggestion was not in fact acted upon and the matter was then dealt with in the revised and improved offer of the 20 March 1985 at paragraph 2(d) as follows: 

"(d) Drogheda Harbour Lease 

Tara will consent to Bula Limited's balance sheet at the Acquisition Date reflecting a provision and/or contingent liability for an arrangement with the Commissioners for the Port and Harbour of Drogheda ("the Commissioners") involving the expenditure of up to IR£300,000. This amount is in addition to the amounts provided in Condition 5(f) of the Proposal. Should any arrangement with the Commissioners involve the expenditure by Bula Limited of an amount exceeding IR£300,000 in association with the Commissioners agreeing to cancel the lease which Bula Limited has from the Commissioners, then such excess shall effectively be for the account of Bula Holdings and be covered by the indemnity provisions of Condition 5(h) of the Proposal. 

The amount of IR£300,000 referred to above shall be considered to be excluded from the aggregation provisions of Conditions 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi). 

This provision is conditional on: 

I Either (a) Discussions being held forthwith, on the receipt by Tara of written acceptance by the Department of Energy of this Improved Proposal, and the written consent of Bula Limited to enter into such discussions between Tara and the Commissioners with a view to securing an agreement with the Commissioners prior to the Acquisition Date which would enable Bula Limited to cancel the Lease granted to Bula Limited which agreement could only be effected after Tara acquires Bula Limited. At the election of Bula Limited, Tara will agree to a representative of Bula Limited joining with Tara in all such discussions with the Commissioners. 

or (b) Bula Limited negotiating a settlement with the Commissioners prior to the Acquisition Date at a cost of not more than IR£50,000. 

II In the event that agreement as referred to at I immediately above is not secured with the Commissioners prior to the Acquisition Date, then Tara will agree to the following provisions: 

(i) Discussions will be held, after the Acquisition Date, between Bula Limited, Bula Holdings and the Department of Energy prior to all meetings between Bula Limited and the Commissioners. 

(ii) If the initial or any subsequent discussions by Bula Limited with the Commissioners lead Bula Limited to believe that any arrangement with the Commissioners will involve an expenditure exceeding IR£300,000, all subsequent negotiations with the Commissioners will take place with a combined team of the Department of Energy, Bula Limited and Bula Holdings; the Department of Energy, Bula Limited and Bula Holdings shall agree on the action to take before each meeting with the Commissioners or their representatives. In any such negotiations between Bula Limited and the Commissioners, the Department of Energy and Bula Holdings will be represented respectively on an observer basis at meetings with the Commissioners by Mr D Bergin ofArthur Cox & Co and a representative of Bula Holdings." 

I have added emphasis by underlining the references to cancelling the lease. As will be seen the whole basis of the discussion with the Drogheda Harbour Commissioners was to achieve a cancellation of the lease and yet Mr Wymes persists right up to the end of the trial in a fear that Tara would keep the lease and build facilities on the site which they did not want and would try to charge Holdings and the Holdings Personnel with the cost of such facilities. 

I am satisfied and I find as a fact that there is no substance whatsoever in Mr Wymes's suspicions against Tara in relation to this matter of the lease from the Drogheda Harbour Commissioners and I reject them. Indeed I wonder did Mr Wymes ever really read the Tara improved offer of the 20 March 1985. If he did, he certainly does not appear to have fully understood it. 

Credibility 

Mr Wymes is utterly convinced of the justice of his cause and that Tara have been intent on destroying him and his colleagues ever since the Holdings Personnel gained ownership and control of the Nevinstown area of the Navan Ore Body in March 1971. Mr Wymes is not only utterly convinced of these ideas but is truly obsessed by them to the extent that he has spent the last nine or ten years of his life pursuing this litigation; seeking more and more discovery of documents; immersing himself more and more deeply in the study of these discovered documents with the result he has become more and more obsessed with detail and has become a real living example of a person who cannot see the wood for the trees. He insisted when giving his direct evidence in introducing more and more documents into the nineteen volumes of documents which were read to me by him as lead through them by his counsel and which in effect constitute his evidence not withstanding that most of these additional documents had not been adjudged to be of sufficient importance to be included in the books by his legal team in the first instance and also not withstanding that he had great difficulty in deciphering his own manuscript notes of telephone conversations and the like and was unable at all to decipher a significant proportion of them. In any event the vast majority of these handwritten additional documents added nothing to what was already adequately covered by other typewritten and therefore legible documents. 

Mr Wymes as a witness was very difficult to control. He disregarded rulings and relevance and also indulged in long speeches in answer to questions which he was not asked instead of answering the questions he was asked. Just one small example of his disregard of rulings regarding hearsay is to be found in transcript 169 at page 27 where he quotes a Mr Hughes of Noranda which is a Canadian company who were substantial beneficial shareholders in Tara. The Plaintiffs did not and never intended to call Mr Hughes as a witness. Yet Mr Wymes quotes him as saying something detrimental to Tara and thus drags in once again blatant hearsay in complete disregard of my previous rulings. At transcript 113 pages 38-40, question 243-254, Mr Wymes deliberately mentions the making of an offer or offers by Tara in the course of negotiations to settle the case knowing full well that such a revelation is wholly improper. 

An example of self contradiction by Mr Wymes relates to December 1984 and how to go about deciding on share or equity split as between the then proposed developers of Bula as an independent mine pursuant to the Bankers Trust Outokumpu package. At Transcript 174 pages 19-21 Mr Wymes says that to assess equity division one must look to the inputs of the various parties and to do otherwise would be stupid. In the same transcript at pages 76-80 he quotes Mr Holloway with approval as saying that the equity split must determine the inputs required of each party and adopts that proposition with enthusiasm. It is only when the contradiction is pointed out to him that he explains that this latter was Mr Holloway's proposition and not his own. Much the same again is to be found in Transcript 175 at pages 16-18 and pages 85 & 86. 

Again at Transcript 168 at page 86 Mr Wymes says that the fifteen million pound equity referred in his letter of the 9 August 1984 in MW 12 page 170 to the Austrian Trade Commissioner could include subordinated loan as well as conversion of loan to equity/shares or new money for issue of shares. Within a half an hour or so at pages 91 and 92 Mr Wymes says that the same fifteen million pounds would have to be pure equity that is to say shares either paid for with new money or by conversion of loan to equity but not including subordinated loans. 

Mr Wymes quite often says whatever at the particular moment of answering seems to him to suit his claims. There are times when in answering present questions he cannot remember what he said a day or two or even an hour or so before. 

An example of this is to be found in Transcript 146 & 147 for Tuesday 3 and Wednesday 4 October 1995 respectively. At transcript 146 at pages 72-74 Mr Wymes suggests that because Mr Hynes valued the extra cost of the Holdings Personnel eight point demand in September 1985 which I discuss later at ten to fifteen million pounds that that meant that Mr Hynes accepted that Bula was worth ten to fifteen million pounds more than Tara had offered. At Transcript 147 at pages 25-27 Mr Wymes repeats this allegation. Then immediately afterwards at pages 32-34 it is demonstrated beyond yea or nea that the estimate of ten to fifteen million pounds as the extra cost of the Holdings Personnel eight point demand has absolutely nothing to do with the true value of Bula whereupon at pages 34-36 within half an hour or so or having repeated the allegation Mr Wymes denies that he ever alleged that Mr Hynes accepted that the true value of Bula was ten to fifteen million pounds more than Tara's offer in August/September 1985. See especially question 167 in transcript 147. 

Mr Wymes has very strange ideas about obligations and rights. Other people have obligations towards himself and Bula and he and Bula have rights to the benefit of such obligations but the reverse does not seem to apply. This is most obvious when one considers Mr Wymes' concept of arbitration. In relation to river diversion the late Professor Pryor was to determine the route. On such a determination Tara were to be bound by it but Bula would not be bound unless the chosen route coincided with their contentions. Likewise in regard to tolling. Mr Wymes contended that if Tara would not negotiate reasonably to implement tolling proposals which Bula might put forward to them the matter should be referred to arbitration pursuant to the Arbitration Clause in Tara's lease. Tara would then be bound by the arbitrator's decision and directions but Bula would not be bound unless the decision and directions suited them because Mr Wymes contends that the Inter Party Agreement would take priority for Bula over the provisions of Tara's lease. 

So also Mr Wymes contends that the Minister had obligations actively to proceed to develop and exploit the Bula mine but I heard little or nothing about the obligations of the Holdings personnel. Whilst the Minister undoubtedly had obligations to lend such assistance as he reasonably could the contention that he had an obligation actively to proceed to develop and exploit the mine is of course a mis-reading of Clause 8.02 of the Inter Party Agreement which provides that "the parties hereto shall procure that the company shall actively proceed to develop and exploit the mine in as expeditious a business manner as is possible". Mr Wymes and the other Holdings personnel had total control of the company through their 61% voting rights and it was therefore primarily their duty to procure that the company fulfilled the aspiration in Clause 8.02. It can hardly be said that that aspiration "to develop and exploit the mine in as expeditious a business manner as is possible" was fulfilled by the Holdings personnel in so managing the company's planning applications that it took 8 years less one month from the date of the execution of the Inter Party Agreement for the company to obtain a workable planning permission. 

Having listened to and observed Mr Wymes in the witness box for 146 days and throughout the trial I have come to the conclusion that he is an unreliable witness. Wherever and whenever his evidence conflicts with the evidence of another witness I prefer the testimony of the other witness unless Mr Wymes's evidence is corroborated by yet another witness whom I prefer to the contradictory witness. The only exception I make on this finding as to credibility is regarding Tara's initial 4 line letter of objection to Bula's original planning application of August 1976. Tara's 4 line letter was dated 14 October 1976 and I am satisfied that Mr Wymes was never actually told that this letter had been sent by Tara to Meath County Council. The circumstances were such however that he had been warned that Tara probably would make an objection to the planning application for open pit mining and Mr Wymes was well aware of these circumstances although he was never specifically told that the actual letter had been sent. This is however a thing of nothing as circumstances turned out and it has been abandoned as an issue in this case. Transcripts 210 pages 59-66: transcript 211 pages 10-12, and especially transcript 212 pages 1-5. 

The fifth plaintiff Mr Richard Wood is completely under the influence of and has been effectively brain washed by Mr Wymes. His evidence does not add any weight to that of Mr Wymes. Even the letters which Mr Wood wrote to Politicians asking for their help were at least partly drafted for him by Mr Wymes and sent on Mr Wymes' directions. Transcript 187 (23/2/96) P 73. 

By contrast with Mr Wymes and Mr Wood I found the witnesses from the Department of Energy to be careful, accurate and reliable. The principal such witnesses in the order of being called to give evidence were, Mr Scanlon, Mr O'Connell and Mr Holloway. Mr Wymes was almost totally dependent on the correspondence and records for his evidence and even with their assistance he seemed not to have any actual recall of many of the events recorded in such records. That did not however prevent him from giving his reading of the documents as his evidence and indeed occasionally telling me what other people meant or were thinking by reference to what they were reported to have said even at meetings at which Mr Wymes was not present. 

The witnesses from the Department of Energy with the assistance of the documents did have an actual recollection of the events of which they gave evidence and spoke much more authoritatively on these events. I prefer their evidence and also the evidence of Mr Brian Barry of Messrs Coopers & Lybrand to that of Mr Wymes and Mr Wood. They are also more accurate and reliable than Mr Joseph O'Gorman. 

I also found the evidence of the Tara witnesses to be preferable to that adduced by and on behalf of the Plaintiffs. I am satisfied as to the truth and reliability of the evidence of Mr Tully, Mr O'Mahony and Mr O'Shaughnessey. 

I did not have the benefit of Mr Hynes as a witness. It is clear that he deeply resented the manner in which the Holdings personnel claim jumped and Mr Wright gazumped Tara in 1971 in relation to the Nevinstown lands and minerals. It also seems clear that Mr Hynes is of a fiery temperament and liable to fly into a violent temper far more readily than the average person. 

Nevertheless I am satisfied from all that I have heard and read throughout the course of this case that Mr Hynes' attitude to Mr Wymes was much more rational than Mr, Wymes' attitude to Mr Hynes. Mr Wymes conceived such a distrust of Mr Hynes that he disbelieved any information which he was given by Mr Hynes. For example Mr Hynes wrote to Mr Wymes on the 29 April 1982 giving Mr Wymes details of Tara's mining programme for the next 6 years up to and including 1988. MW 6 page 132. This information was true and accurate. Mr Wymes did not believe it: if he had believed it he could never have made the wholly unfounded allegations which he did make of the theft of vast tonnages of Bula ore by Tara. These allegations were demonstrated in the course of the trial to be utterly groundless and were then abandoned by the Plaintiffs. There are many other instances to be found in the transcripts of Mr Wymes disbelieving Mr Hynes when the latter gave information to Mr Wymes about Tara's business affairs which was true and accurate in every respect. 

There is no evidence, nor was it even suggested before me, that any information given by Tara to Bula was false or misleading. In the course of time, Tara gave quite an amount of information to Bula such as that just referred to. All such information was true and accurate, but Mr Wymes never fully accepted its truth. He always believed that Tara and especially Mr Hynes were trying to mislead and trap him in some way or other. 

Mr Wymes developed such an obsessive distrust of Mr Hynes that he came to hate him and wanted nothing to do with him as is apparent from Mr Wymes' attitude to Tara's take over bids for Bula. For his part Mr Hynes wanted no close association with Mr Wymes or the Holdings personnel because he feared and his fellow directors likewise and I am satisfied with good reason that such a close association would lead to such unending disputes and quarrels and litigation that the proper running of the Tara business would be adversely affected. Mr Wymes attributes every refusal by Mr Hynes of close association with the Holdings personnel to a desire by Mr Hynes to do down Bula and the Holdings personnel. I reject these allegations. For example Mr Hynes' letter of the 14 April 1983 to Anglo United who were then contemplating a purchase of the Holdings personnel shares in Bula is unobjectionable although Mr Wymes thinks otherwise. See MW 8 pages 61 & 62. The same may be said for Mr Hynes' well reasoned and lengthy letter of the 31 August 1983 to Professor Shaw (MW 8 page 257-259 with appendices running to page 322) demonstrating that a tolling arrangement by Tara of Bula's ore at that time would be uneconomic for Tara. 

Mr Hynes' first duty was to protect and further the economic health of Tara. I am satisfied that in rejecting any close association with Bula as personified by Mr Wymes and the Holdings personnel Mr Hynes was motivated by a bona fide belief that any such close association would be inimical to the economic health of Tara. In that belief he was supported by the Board of Directors of Tara and indeed also by independent persons. 

FURTHER FACTS 

Despite the multiplicity of allegations and claims made in the statement of claim in this case the real substance of the case now remaining for decision by me is as follows: 

(A) As against the Minister whether he should have supported an independent Bula mine project in 1984/1985 known as the Bankers Trust or Bankers Trust/Outokumpu Package, and 

(B) As against Tara whether they wrongfully induced the Minister not to support the Bankers Trust Package but to support instead proposals put forward by Tara in the latter half of 1984 first to take over the Minister's 49% shareholding in Bula and later in November/December 1984 to take over 100% of the shareholding in Bula. 

There is no doubt but that the Inter Party Agreement obliged the Minister to support an independent Bula mine provided that a viable and bankable project for such a mine emerged. If it did, then the Minister was under an obligation by virtue of Clause 9.06 of the Inter Party Agreement to use his best endeavours to obtain from the Government a guarantee not exceeding £10,000,000 in support of major finance and in addition to that he had already promised by 1984 with the approval of the Government to inject £5,000,000 new equity into Bula. This arose after discussions with the Holdings personnel requesting support for the independent mine in respect of which satisfactory planning permission for a wholly underground mine had issued in April 1983. As a result of these requests the Minister wrote to NBFC, Bula's lead bankers on the 2 March 1984 (MW 10 page 184) as follows: 

"I am directed by the Tanaiste and Minister for Energy to refer to the Bula mine project and to state that the State confirms its support for the negotiations currently in progress between Bula Limited and Outokumpu oy towards a fixed price turnkey and management contract, which negotiations are being conducted on the basis that significant export financing would be involved, the State and private shareholders would provide £10,000,000 equity with the State contribution being up to £5,000,000 thereof and the State would provide the £10,000,000 guarantee referred to in the Shareholders Agreement. The provision that would be necessary for continued financing of the Company's current indebtedness and for working capital is also being addressed in the negotiations and a direct contribution by Outokumpu to the financing arrangements is being sought. 

If a suitable major financing package incorporating the above facets can be arranged with the involvement of Outokumpu or any other like party, the State on the basis of present information would consider that the project holds out the prospect of being viable and it would accordingly be ready to give the project serious and urgent consideration with a view to the commitment of State funds as mentioned above and to the project being progressed to full production." 

The Minister through his Departmental Officers assisted by their Advisors Messrs Coopers and Lybrand and Mergers/ICC prepared a memorandum for the Government on the 4 December 1984 and a supplementary note for the Government shortly after a meeting on the 11 December 1984 between Officers and Advisors of the Department, the Holdings personnel except Mr Roche Senior, Mr Sutcliffe of Bankers Trust and representatives of Outokumpu one of the main proposed supporters of the package. I am satisfied that the memorandum and the supplemental note for the Government are substantially true and accurate and in fact give an excellent account of the whole history of Bula down to that date December 1984. However, some of the assumptions and assertions against Tara, such as that Tara wrongfully dissuaded third parties from dealing with Bula, have not been verified or established in evidence. Mr Holloway accepted that, now that he had a better knowledge of the facts on both sides, his criticisms of Tara were too harsh and Mr O'Connell spoke likewise. The memorandum and supplemental note for the Government are as follows. 

OIFIG AN AIRE FUINNIMH 

MEMORANDUM FOR THE GOVERNMENT 

Development of Bula Portion of Navan Orebody 

1. Agreement with the State in relation to Navan orebody 

The Bula portion of the lead/zinc orebody at Navan which was discovered in 1970 constitutes about one sixth of the whole orebody and has estimated recoverable reserves of about 10 million tonnes. The remainder of the orebody, the State owned part, is held under a State Mining Lease by Tara Mines Limited, which commenced production in 1977. 

In 1971, the then Minister made a Compulsory Acquisitions Order aimed at transferring the Bula portion of the orebody into the hands of the State and then into the hands of Tara Mines. Bula took the matter to the Courts, which held the Order to be invalid, thus effectively confirming the minerals in the possession of Bula Ltd. The State subsequently acquired a 25% free shareholding in Tara Mines Limited and 49% shareholding in Bula Limited, of which 25% was obtained free of consideration and 24% at a price fixed by arbitration at £9.54m. The 51% private shareholding in Bula Limited is held as to 40.8% by Bula Holdings (in which the main shareholders are Thomas Roche, (Snr) Thomas Roche (Jnr) Michael Wymes and Richard Wood), and 10.2% by Wright family interest, the Wright family being the original owners of the minerals purchased from them by Bula Ltd. There is a formal State/Bula shareholding agreement dating back to 1975. The State's decision to take a 49% stake in the Bula operation was a strategic one, influenced essentially by the need to have this leverage to secure an appropriate interest in the larger Tara operation alongside. 

2. Bula Planning Permission. 

Bula Limited sought planning permission originally in August, 1976 for an open-cast cum underground mining operation. The application was turned down in December, 1979. In July, 1980, Tara made an offer of tailings pond facilities to Bula "at cost" if Bula opted for an underground operation. Despite pressure by a State Director on the Bula board for discussions with Tara to explore the offer, the Bula board rejected the offer and went ahead with an appeal against rejection of their open-cast application. It subsequently emerged at a Board meeting in June, 1983 that at the time of the 1980 meeting, Mr Wymes, the Bula Managing Director, was in possession of a consultants' report which said that an underground mine could give as good a return as an open-cast mine. In April, 1981 An Bord Pleanala rejected the appeal. In November, 1981, Bula Limited applied to Meath County Council for planning permission for an underground mine development and on 3 December, 1982 the application was approved subject to 23 conditions, among them being requirements that further submissions be made by the company to the Council on dust control and water levels in the tailings pond. The permission also involved certain onerous financial commitments by the company, such as £400,000 towards road improvement costs by the Council and a deposit of £250,000 towards the cost of the eventual restoration of the mine site. 

3. Debts of Bula Ltd 

The costs which Bula Ltd had to meet in the lead up period to the grant of planning permission included various capital costs (land purchase mainly), staff and overhead costs, technical and consultancy expenses and interest charges. The financial liabilities of the company now, in round terms, are:- 
	
Bank debts -- to Northern Bank Finance Corporation, AIIB	- £12.3m	
and Ulster Investment Bank		
Bula Holdings Loan	- £11.Om	
State Loans	- £ .7m	
Munster Base Metals Loan	- £ .7m	
Other creditors	- £ 2.0m	
* Due in respect of land purchase (estimated)	- £ .7m	
In the situation that Bula Ltd defaulted on payments falling due under the	
land purchase agreement, the land was repossessed by the vendor early	
this year; the Department was not advised of this until 26 November,	
1984. The issue of title to this land is dealt with later in the	
Memorandum.	

The bank loans are secured by mortgages on the Bula orebody plus joint and several guarantees from the main private shareholders in respect of part of the borrowings. Since late 1979 Bula has been pressing the State to contribute towards the interim financing of the company on a pari passu basis with Bula Holdings Limited (as indicated above Bula Holdings' contribution to date is £11 million). Bula has submitted Counsel's opinion that by virtue of the terms of the Bula/State agreement, the State is under a legal obligation to do so. The State has itself got legal advice from Counsel and the Attorney General that it is under no such obligation and, given all the circumstances, the State has steadfastly refused to contribute on the pari passu basis sought. Bula has threatened to take legal action against the State to secure compensation but has not done so to date. While rejecting the claim for contributions on a pari passu basis and the existence of an obligation on the State's part to contribute towards interim financing, the State has nevertheless advanced loans totalling £665,000 at certain stages to avert action by the banks at a time when serious negotiations were in progress that held out the prospect of a development of the Bula orebody, and has recently agreed to guarantee payment of interest not exceeding £235,000 to the NBFC if no project acceptable to the Bank emerges by 30 November, 1984. On the advice of the Attorney general, it was made clear that the Minister was not providing the above support in his capacity as shareholder but as Minister with responsibility for developing the country's mineral resources. There is a legal obligation on the Minister under the State/Bula Agreement to use his best endeavours to ensure that the Government agrees to guarantee loans not exceeding £10m, in respect of senior, as distinct from, interim financing. This latter obligation has been discharged and, as indicated later in this Memorandum, the Government has agreed to provide a £10 million State guarantee if an acceptable mine development project comes forward and if certain specific conditions are satisfied. 

4. Negotiations with Potential Investors in Bula Ltd prior to 1984. 

(a) Tara Mines Ltd 

Extended negotiations in 1982/83 to secure an arrangement under which the Bula orebody would be developed using Tara facilities proved to be abortive. The final Tara offer for a take-over of the interest of the private shareholders in Bula Ltd, would have involved excessive burdens on the State and in any event, the offer was subsequently withdrawn. 

(b) Outokumpu 

Outokumpu Oy, the Finnish mining group, expressed an interest early in 1982 in acquiring a 45% stake in Bula Limited. The Government agreed in March, 1982 to lend £1.75m to Bula Ltd, to meet operating costs; this was conditional on agreement being reached with Outokumpu on equity participation in Bu!a Ltd. Talks took place with a view to achieving this, but were unsuccessful partly because of demands by Bula Holdings but also as a result of pressure from Tara on the Finnish company not to become involved. Outokumpu withdrew and accordingly no advance was made on foot of the £1.75m loan. 

(c) Other Parties 

During 1983, three companies (Anglo United, Preussag and Penarroya) showed some interest in participation in Bula Ltd, but all withdrew because of doubts about the economic viability of the project. Legal proceedings between Anglo United and Bula Holdings are in train, Bula Holdings claiming damages for breach of contract and Anglo seeking the return of £700,000 advanced on loan to Bula Ltd. 

5. Conditional offer of Government Support (late 1983) 

In November, 1983 following review of the Bula situation between the Minister and Cabinet colleagues, the Minister informed the Board of Bula Ltd, that the Government would be prepared to make a capital contribution of up to £5m towards the development of a Bula project (in addition to the loan guarantees of £10m provided for in the Bula/State agreement) on conditions as follows: 

-- that a viable and bankable project would emerge; 

-- that there would be a three-way injection of equity-type finance from the existing shareholders, the State and a competent third party to reduce the indebtedness of the company to a level consistent with viability of the project; 

-- that the third party would have a significant role in the planning and management of the project; 

-- that if the development of agreed arrangements on the foregoing lines was not completed by the time the payments to the Northern Bank Finance Corporation became due in January, the State would not provide any funds or assurance to secure extra time. 

6. Developments since mid 1984 

Over the past six months or so, attention has focused on four principal development options: 

-- Outokumpu turnkey proposal 

-- Austromineral/Voest Alpine turnkey proposal 

-- Chevron Resources joint venture proposal 

-- Tara Mines buyout proposal 

Earlier approaches by Outokumpu and Tara have already been mentioned. 

(i) Outokumpu 

The company's approach, which has been developed on the basis of a detailed technical economic evaluation of the orebody by its own experts, is for a "turnkey" development project. Essentially, Outokumpu would enter a fixed-price contract for opening up the mine and for the construction of infrastructural and surface facilities, including the concentrator (mill). The Company's engineering division would design and construct most of the specialised plant and machinery involved. 

Following this initial development and construction phase, and a proving period governed by exacting performance guarantees, Outokumpu would enter a further contract with Bula for the overall management of mining and concentrator operations over the entire 17-year life of the mine. (Bula management acknowledges that it has neither the expertise nor the practical experience to fulfil these functions itself). The Outokumpu project is based, inter alia, on the promise that the Boliden company of Sweden would enter a long-term contract to purchase from Bula 30,000 tonnes per annum of zinc concentrate, together with Bula's entire annual production -- some 14,000 tonnes -- of lead concentrate. Outokumpu would itself enter into a long-term contract for the purchase of a further 30,000 tonnes of zinc concentrate. These two contracts, to be based on prevailing arm's length commercial terms, would together absorb two thirds of the mine's entire concentrate output. The remainder would be traded on a spot basis, also on the best available commercial terms. 

Financing of the project would be by means of additional cash equity to be contributed by Outokumpu and the Irish Government; the conversion into equity of the existing debt of Bula Limited to Bula Holdings (approximately £11 millions); and the provision by the Nordic Investment Bank, Finnish Export Credit and a commercial banking syndicate headed by the London-based Bankers Trust International of an extensive loan finance facility supported by a stringent security package (shareholder guarantees and collateral). 

The detail of the Outokumpu proposal, as currently constituted, is discussed more fully later in this memorandum. 

(ii) Austromineral and Voest Alpine 

These are two Austrian state-owned companies with mutually related interests in the base metals mining, smelting and engineering sectors, The essence of their turnkey project is similar to that prepared by Outokumpu. 

The development and construction contract terms offered by the Austrian group have, however, emerged as significantly less attractive than those offered by Outokumpu. Moreover, the terms of the financing packaged offered are most unattractive, requiring cash commitments by the Irish Government of at least £20 millions (and possible as much as £30 millions), with further Government guarantee or similar commitments of £30-35 millions. Accordingly, the Austrian proposals cannot be recommended for acceptance by the Government, and are not further discussed in this memorandum. 

(ii) Chevron Resources 

This company, a component of the US-based multinational of the same name, at one point earlier this year offered to acquire Bula's mining rights in return for, essentially, the settlement of the company's existing third-party debt and the payment of an annual production-based royalty to Bula's private and public sector shareholders. Subsequently, it put forward outline proposals for a joint-venture enterprise to develop the mine. This would involve each of two joint venture partners being responsible for its own share of the total investment costs involved, for the financing of production operations, and for the marketing and sale of concentrate output. 

This joint venture concept -- particularly attractive to Chevron in US tax terms -- was developed with a view to Bula's involvement as the second of the two partners, but this proposal was frustrated by Bula Holdings shareholder demands which were unacceptable to Chevron. Early in November, however, Chevron informed Bula management and the Department that the project could not -- principally because of the already high level of Bula's external indebtedness -- meet Chevron's minimum return-on-investment criteria, and that its interest in the project was therefore at an end. 

(iv) Tara Mines 

Its concern with, and opposition to, an independent venture based on the Nevinstown portion of the Navan ore body is a matter of public record. For much of the current year -- as indeed for many years past -- its posture has been characterised by a sustained campaign of public and private opposition to Bula's development efforts, punctuated by offers of an unacceptable nature to acquire Bula, its mineral rights, and/or the State's shareholding in Bula. Over the past two months, however, Tara has pursued a more circumspect strategy. It has abandoned, for the most part, its campaign of public opposition to, and obstruction of, the Bula project, and focused its efforts, instead, on ascertaining the broad parameters within which it might formulate realistic proposals for the integrated development of the entire Navan ore body on terms acceptable to all the parties involved. 

These efforts have culminated, within the past fortnight, in the submission by Tara to Bula's shareholders of comprehensive buyout proposals. Within the terms of these proposals Tara would acquire the entire share capital of Bula Limited, together with its bank and trade debts; pay the Wright family interests a sum of £500,000 for their shares; acquire the shareholdings of the State and Bula Holdings for nominal amounts; pay the Bula Holdings shareholders a sum of £2 millions in respect of their loan to Bula Ltd; and relieve them of all their personal guarantees in respect of Bula Limited's bank borrowings; and pay the State a total of £4 millions in two instalments in recognition of the fact that the most efficient working of Nevinstown minerals can be achieved through the Tara State Mining lease workings and the Tara facilities associated therewith. Tara would, in addition, expand its concentrator facility so as to cater for additional ore production of up to 450,000 tonnes per annum. The State would, in respect of the expanded and integrated operation, be entitled to the same royalty (41/2%) and profit participation (25%) terms that it already enjoys in respect of the existing Tara operation. 

This Tara offer was rejected by the Bula Holdings private shareholders on 27 November, 1984 but is still open for acceptance in principle by the Bula share-holders until mid-day on Friday, 7 December. It is described and evaluated more fully at a later point in this memorandum. 

7. Issues and Concerns 

The entire history of the Bula project, and especially the detailed evaluation in recent months of the firm development options just discussed, has highlighted a number of issues and areas of concern. 

Inherent project risk: An inherently high degree of risk attaches to the development of the Nevinstown ore body as an independent project not least because of the high level of capital which must be remunerated. Almost every evaluation exercise carried out by potential investors and their advisors has highlighted the project's particular sensitivity to metal prices (particularly zinc), exchange rates (zinc prices being denominated in US dollars) and, because of the high debt/equity ratio during the first 7-8 years of production, interest rates. Although the Outokumpu proposals, in common with those developed by Austromineral/Voest Alpine and Chevron, adopt conservative assumptions with respect to all three of these factors, the risk is still sufficiently perceived to prompt the lending institutions to impose stringent security conditions in terms of shareholder guarantees and collateral. This has the effect -- clearly intended by the financial institutions -- of requiring the relatively narrow equity base to carry virtually the entire risk structure of the enterprise. 

Labour rates: Although all three independent development options considered in recent months -- Outokumpu, Austromineral/Voest Alpine and Chevron -- have been predicated on labour rates directly competitive with those currently operated by Tara, there is a perception amongst all potential investors that the co-existence of two independent but immediately adjacent mining operations will have the effect of bidding up labour rates in both operations. 

There are, indeed, grounds for believing that this perception is shared by Tara management, and that it may be a significant factor in that organisation's desire to secure an integrated project. A closely related consideration is the fear on the part of potential investors in an independent Bula project -- especially the financial institutions -- that competitive pressures in the local labour market might ultimately lead to labour unrest and possibly even strike disruption. Should this happen during the first 7-8 years of Bula production, when debt service and repayment commitments were still at a high level, the project would be financially highly exposed. It is this consideration which has led the financial institutions supporting the Outokumpu project, particularly the longest-term lender, the Nordic Investment Bank, to seek stringent shareholder undertakings in respect of business interruption due to industrial relations problems. 

Existing Bula indebtedness: Despite the fact that mine development work has not yet commenced, the external indebtedness of Bula Limited (including its debt of £11 millions to Bula Holdings) exceeds £27 millions. This has been perceived by all potential investors as a potentially crippling burden on the project, and was specifically identified by Chevron as the principal reason for withdrawing their interest in what, in other respects, they considered a viable project. 

Bula Holdings equity: Another difficulty with respect to future development of the Bula project is the unwillingness -- almost certainly based on inability -- of Bula Holdings (ie the Roche, Wood and Wymes interests) to contribute equity capital to the new project. This has led to the insistence by all other potential investors -- including Outokumpu and the financial institutions supporting their proposals -- that as a minimum contribution Bula Holdings must convert the entire £11 millions debt owed to it by Bula Limited into equity. 

This proposition has been, and is still being, resisted by Bula Holdings, which has expressed a strong wish to have a significant though undefined, proportion of this debt repaid in cash at the outset. This latter proposal has been consistently rejected by the State, Outokumpu and the financial institutions (as, indeed, it has been by all other potential investors). All other parties have also rejected Bula Holdings' contention that its advances, when converted to equity, should rank pari passu with the new cash equity contributions of other shareholders. 

Title to land: A further impediment relates to absence of clear title to all the land required for independent development of the Nevinstown ore body. An area of 250 acres of land required for the project (which does not overlie the ore body, but is essential for surface facilities including the tailings pond) was originally acquired by Bula Limited on an instalment payment contract. The company fell behind with its payments, and problems arose with the vendor. In the context of general enquiries made of Bula management by the Department's advisors in May of this year, it was stated that attempts were being made to resolve the matter in negotiation with the vendor. Within the last two months, however, it has emerged that the vendor rescinded the contract in March last. This disclosure has gravely embarrassed the Department in its dealings with potential investors, who had previously been informed, on the basis of assurances received from Bula management, that the matter could be resolved at little additional cost. Bula now claims that the vendor is prepared either to withdraw the rescission or to enter a new contract, but that either course of action will increase pre-development expenditure by as much as £1.5 millions. It should be noted that if this land were not available, there could be no development of an independent mine. 

Lack of confidence in Bula management: For a wide variety of reasons, including some of the factors just discussed, virtually every potential investor and banking institution associated with the various development proposals has expressed total lack of confidence in Mr Wymes. It appears to be this factor which has led to the insistence by Outokumpu, Nordic Investment Bank, Finnish Export Credit and Bankers Trust International that the private shareholders should in future control less than 25% of the project. The Minister is entitled to nominate two State Directors to the Bula Board. Meetings of the board of the company have been infrequent. Up to 1983, there had been two or three meetings a year but the situation deteriorated subsequently. There was a Board meeting in June, 1983 but the next meeting was not until May, 1984 and there have been no meetings since then. It has been obvious to the State Directors from time to time that the Managing Director was withholding information from them. For instance, only in May, 1984 were the state Directors informed that the rate of interest on Bula Holdings loan to Bula Ltd had been increased from 12% to 20%. Mr Wymes also on a number of occasions neglected to advise them of negotiations he had in hands with various parties and did not advise them at all of the rescinding of the land purchase agreement. He withheld from them until September, 1981 and from the officers of the Department an underground mining study which he had in his possession in July, 1980. 

In his dealings with the Department, Mr Wymes has been loud in insistence that the Minister observe his obligations under the State/Bula agreement but he has been slow to accord the Minister normal rights of information and consultation. He has constantly appeared to endeavour to trap the Minister into situations which Mr Wymes could use as a basis for a case for breach of the agreement with appropriate damages -- for instance, by frequently and repeatedly claiming in correspondence that the Minister is obliged to contribute to interim financing in the apparent hope that one such claim would go unchallenged by inadvertence thus, presumably, enabling him to claim tacit acceptance of his claim. 

Domestic banks: Finally, it is a matter of record that Bula's existing domestic bankers -- who are currently owed in excess of £12 millions by the company -- share other parties' lack of confidence in Bula's project development and management capabilities. These banks have already obtained court judgments against the Bula Holdings shareholders in respect of their personal guarantees. It is only the recent action of the State in securing current interest payments, in the hope of early resolution of the project's financing problems, that has prevented these judgements from being executed, with all the consequences that would follow. 

8. Current Situation 

It is against this general background, and in the particular light of the issues and concerns just mentioned, that the two development possibilities still open for consideration must be appraised, namely: 

-- independent development and exploitation of the Nevinstown ore body within the framework of the Outokumpu proposal and its associated financing package; 

-- integrated development and exploitation of the Nevinstown and Tara orebodies within the terms of Tara Mines' current buyout proposals. 

Should neither of these options gain general acceptance, it is the Department's view, given the current position of Bula's bankers, that the court judgments against the principal private shareholders would be enforced, with the inevitable result that the Company would be placed in receivership. 

9. Outokumpu Proposal 

The Outokumpu development proposals have been described above. Details of the related financial and security package are set out in the attached Annexe. Critically important features which should be stressed include: 

(a) the fact that financing arrangements have yet to be finalised including the bridging of the shortfall; 

(b) the heavy reliance of the project on debt financing (£64-75 millions); 

(c) the stringent security requirements of the lending institutions, including: 

-- commitment by shareholders of a cash bond of £10 millions; 

-- the allocation of all cash surpluses to a trust fund for the benefit of lenders for between 7 and 9 years from project completion (ie for 9-11 years from commencement of the development and construction programme); 

-- the consequent deferral of dividend payments; 

-- additional recourse to shareholders in the event of investment cost over-runs and subsequent interruption of production. 

(d) the fact that these security requirements fall disproportionately heavily on the State (for example, £8 millions of the £10 millions security bond), reflecting Outokumpu's unwillingness to match the State's contribution and the private shareholders' inability to do so; 

(e) the requirement that Outokumpu and the State should each contribute £5 millions in cash equity; 

(f) the possibility that the £10 millions cash equity injection may be increased by the time the financing package is finalised; 

(g) the requirement that the £11 million currently on loan to Bula Limited from Bula Holdings be converted to equity; 

(h) Outokumpu's requirement that it should have 40% of both dividends and voting rights; 

(i) the requirement of all the lending institutions, and of Outokumpu, that at least 75% of voting control should reside with Outokumpu and the State. 

In relation to the last three points mentioned, it should be noted that the Bula Holdings shareholders have not yet agreed to loss of voting control, and have expressed their opposition to the dividend participation requirement of Outokumpu and the further requirement to convert the entire Bula Holdings loan to equity. 

It is the view of the Department and its advisors that the terms and conditions of the financing package impose extremely heavy burdens on the State. The following considerations apply: 

(i) The State's equity commitment of £5 millions is a minimum figure. 

It could well reach or exceed £7 millions, even in the short-term future (depending on what measures are adopted to bridge the current financing shortfall, and on possible project cost over-runs). 

(ii) The bond subscription of £8 millions required of the State at the outset will accrue to a guarantee total of over £19 millions at the end of the seventh year of production (the minimum period for which the bond must be available to the banks by way of collateral). Even after 3 years of production, the State's £8 millions share of the bond is equivalent to a guarantee of over £13 millions. 

(iii) Thus, even within these parameters, the commitment required of the State clearly exceeds the limit of £5 millions in equity and £10 millions in guarantees within which Bula management was last year given authority to enter into negotiations on a provisional basis. 

(iv) Nor is the State's risk exposure confined to these totals. 

Additional, and potentially significant exposure arises from: 

-- the fact that all dividends may be withheld for a period of up to 11 years from commitment of the equity in the first instance, forfeited in the event that scheduled interest payments and loan repayments are not met, and recoverable in the event that similar problems arise after dividends have already been released; 

-- the further possibility of recourse to shareholders in the event of business interruption arising, for example, from a sustained period of adverse market conditions or from strike disruption. 

An added complication is that it has not yet been agreed amongst the potential equity shareholders -- Bula Holdings, the Wright family interests, Outokumpu and the State -- how dividend participation rights should be allocated. It is inconceivable that the State could seek less than the 40% dividend share required by Outokumpu, given the respective cash contributions and bonding commitments involved, and even making allowance for Outokumpu's unique exposure under its stringent post-completion contract guarantees. This would leave the private shareholders with a maximum 20% share in dividend payments, a proportion which, as already noted, is explicitly rejected by Bula Holdings. 

Nonetheless, on the following assumptions: 

-- that the State's contribution is confined to the minimum level currently envisaged (£5 millions cash equity, £8 millions bond); 

-- that the State obtains a 40% share of dividend payments; 

-- that no dividends are actually paid out (even if they are earned) during the first six years of trading; 

-- that only a limited proportion of shareholder earnings is retained in the business beyond the sixth year of trading; 

-- that, on average, metal prices do not fall below, nor operating costs rise above, projected levels; 

-- that all bank commitments are met in full and on schedule; 

-- that the collateral bond of £10 millions, with accumulated interest, is released by the banks in full in the seventh year of trading; 

-- and that the State, given the high degree of exposure attaching to its funds, requires a risk-related return of at least 10% over and above its cost of funds, estimated at 15%, (the Minister's advisers are satisfied that this return is the appropriate level). 

It is unlikely, in the view of the Minister's advisers that the present value of the State's future income from the project would exceed £7 millions. Given the initial minimum commitment of £13 millions required, this yields a Net Present Value of minus £6 millions for the State's incremental investment. Even if a simple "cost-of-funds" approach is adopted -- that is, if the extensive risk factors involved are totally ignored -- the Net Present Value of the State's incremental investment would be less the £3 millions. If the State's equity participation were less than 40% the future income would be proportionately reduced and the net present values would be adversely affected to a corresponding degree. 

Moreover, neither of these calculations takes any account of the cost of the additional loan facilities (should they prove available) required to bridge the existing financing shortfall of nearly £10 millions; the taxation, in the hands of the company, of the interest accruing to the collateral bond and retained earnings; or of the investment of about £10 millions already made by the State in the enterprise. 

It might finally be noted, in this general context, that on the assumption that the Bula Holdings shareholders would also require a pre-tax return of 25% on their investment, and that they are restricted to a profit participation of 16% (equivalent to a total private shareholder participation, including the Wright family interests, of 20%), and adopting the same assumptions as those already stated with regard to dividend payments, the present value of likely future dividend payments to Bula Holdings amounts to about £1.6 millions. This compares with Tara's current offer to Bula Holdings of £2 millions. 

10. Tara Proposal 

The general nature of Tara's proposal has already been outlined earlier in this memorandum. At a more detailed level, the most important features of the proposal are that: 

(a) the entire Navan orebody would be exploited as a single unit and on the best commercial terms, with annual extraction of ore being increased by up to 450,000 tonnes beyond Tara's existing extraction levels; 

(b) the capacity of the Tara concentrator would be expanded to cater for this additional throughput; 

(c) expanded mining operations would commence immediately, with access from the State-owned mineral body already being mined by Tara, yielding considerable savings on access costs compared with independent operation; 

(d) in recognition of such access the State would receive a fixed royalty-type payment of £4 millions (£2 millions each in December 1985 and December 1986); 

(e) the State would also, in respect of the expanded and integrated operation, be entitled to the same royalty (4 1/2%) and profit participation (25%) terms that it already enjoys in respect of the existing Tara operation, and Tara would be governed by restrictive covenants similar to those that already apply to their mining of the State minerals; 

(f) Notwithstanding that the incremental ore extraction rate in an integrated operation would be 25% below the level planned for the independent Bula/Outokumpu development, the State's tax receipts from such an operation would probably be larger, because of the tax implications of the lower investment costs involved. 

(g) Bula Holdings would be paid £2 millions in full and final settlement of its loans to Bula Limited, provided that Bula Limited's external liabilities do not exceed the levels currently specified by Bula management; 

(h) Tara would take over Bula Limited's bank debts (while reserving the right to re-negotiate them), and would free the Bula Holdings guarantors from all their guarantees and related collateral commitments associated with those bank debts; 

(i) the State's (49%) and Bula Holdings' (40.8%) shareholding in Bula Limited would be acquired by Tara for, in each case, a nominal consideration, while the Wright family (10.2%) would receive a payment of £500,000 for their shares; 

(j) the State would not be required to enter any guarantee commitments with respect to the expanded mining operation. 

It has to be recognised that, to the extent that this project would fall to be financed by Tara mines Ltd, the State's return from that company would be diminished. 

From the State's viewpoint, the Tara proposals on balance are attractive. Some of these will be evident from the points just listed, particularly in comparison to the situation that would apply were the Nevinstown ore body to be independently developed. It will, of course, be a matter for each party concerned to evaluate where its best interest lie in relation to the Tara proposal and each will be free to accept or reject. 

The fundamental stumbling block at present is Bula Holdings' out-of-hand rejection of Tara's terms. This rejection is perceived by the Department to stem from Bula Holdings' assumption -- which is utterly without foundation -- that Outokumpu, and the three financial institutions associated with the Outokumpu proposal, will withdraw their preconditions, already discussed above, with respect to control, equity shareholdings, and the conversion to equity of the Bula Holdings debt. It has been pointed out earlier that the present value of likely future dividend payments to Bula Holdings would amount only to £1.6m compared with the £2m available to them in the Tara offer. 

Uncertainty surrounds the attitude to the Tara proposals of the Wright family, of which there are nine members. The solicitor who acts as trustee for their interests has already canvassed their views in this regard, but the outcome of their deliberations is not yet known. 

It must be noted that should the State or either of the two private shareholder groupings fail to communicate their acceptance in principle of its proposals to Tara by mid-day on Friday, 7 December, Tara retains the right to withdraw these proposals. It would appear from the attitudes being adopted by the banks that, in that event, receivership will immediately follow. 

11. Conclusion 

The Minister for Energy has concluded that, bearing in mind the circumstances of the case relating to an independent mine project, including the latest information regarding the requirements of the proposed participants, there is no evidence that a proposal acceptable to the State can reasonably be foreseen. In view of this, the Minister recommends against the provision of further State support in respect of interest payable to the banks. If the Government agree, it is the Minister's intention to write to the private shareholders in Bula Ltd, on this basis today. 

OIFIG AN AIRE FUINNIMH 

SUPPLEMENTARY NOTE FOR THE GOVERNMENT 

Development of Bula Portion of Navan Orebody 

1. In a memorandum to the Government on 4 December, 1984, the Minister for Energy reported on an approach by a Finnish Company, Outokumpu Oy, for Bula Mine development. It was indicated in the memorandum that the initial cash investment required of the State would be: 

-- £5 million equity contribution. 

-- £8 million contribution to a separate Guarantee Trust Fund. 

In addition, the State and Outokumpu would be required to enter into an agreement with the lending institutions to assume certain shareholder obligations which could involve a further substantial cash contribution by the State during development of the project ie: 

-- Provision of agreed ratio of required funds to meet project cost overruns; 

-- Undertaking to service debt interest until completion of the development and construction phase of the project to the extent that committed funds were not sufficient for this purpose; 

-- Further commitments to the extent that warranties and indemnities by Bula Holdings might prove inadequate to meet any claim arising in relation to the existing liabilities of Bula Limited. 

2. The Government concluded on 5 December, 1984 that there was no evidence that a proposal acceptable to the State for an independent mine development could reasonably be foreseen, and decided that they were unable to provide further State support in respect of interest payable to the banks. Following the Government decision a meeting took place with representatives of Outokumpu, the banking interests involved and the private shareholders of Bula Limited with a view to clarifying various aspects of the project including, in particular, the full extent of the State's exposure. 

3. Indications had been given by Bula Holdings over the week-end that an additional cash contribution from Outokumpu or other sources might be forthcoming and that this might reduce to some extent the State's exposure. In the event this information proved incorrect. It transpired, if anything, that Outokumpu were concerned at their existing level of exposure and in fact an increase of £.75m was envisaged in the initial cash contribution by the State, representing its share of a training grant of £1.5m towards the project. Outokumpu were also insistent that the loans totalling £900,000 advanced by the State to Bula Ltd in respect of interest due to the company's banks, should not be repaid until a late stage in the project. 

4. It was mentioned in the previous memorandum that efforts were still under way to bridge a £9.6m financing shortfall. In the further discussions which have taken place it was suggested that this shortfall could be reduced to £3.2m by various adjustments, which sum could possibly be bridged by extension of the loan facilities from the lending institutions. The Minister's advisers are concerned, however, that the financial package has still not been finalised. 

5. The first area of State exposure not quantified in the previous memorandum is the provision of funds to meet development and construction cost overruns which could arise in various ways eg design changes, unanticipated construction problems, disruption caused by strikes other than on the construction site and possible environmental problems. The amount of the commercial bank facility earmarked for such overruns is £5m and the present stance of the lead bankers is that they would expect a matching contribution by the State and Outokumpu; they have not sought a contribution by Bula Holdings or the Wright family shareholding because they do not regard them as parties with the resources to contribute to additional cash requirements. If the matching contribution was borne proportionately between the State and Outokumpu, the contribution required of the State could be as much as £3m. 

6. The second area of State exposure not previously quantified is the undertaking to pay certain debt interest until completion of development and construction. Immediately prior to completion, when the loan facilities would have been almost fully drawn down, the interest charge would be of the order of £10m per annum. Assuming a disruption of the project for 6 months at that time, the exposure of the State would be approximately £3m. 

7. The sums totalling £6m mentioned in the preceding paragraphs have been calculated on the notional premise that the shareholdings of the contributing shareholders would be 40% (State) and 19% (Outokumpu) respectively. The latter figure is the maximum shareholding that Bula Holdings is prepared to concede to Outokumpu. Such a low shareholding is not acceptable to Outokumpu. Neither is it acceptable to the State because any reduction below 40% in the Outokumpu shareholding would mean that the State would have to bear a proportionately higher share of the burdens in relation to project cost overruns and debt interest during construction. 

8. Any State exposure arising from the need to finance the payment of undisclosed liabilities of the existing company cannot be quantified. However, it is unlikely to be significant. 

9. On the basis of the estimates in the immediately preceding paragraphs, the total exposure for the State thus could be of the order of £20m. 

10. The further discussions have clarified certain aspects of the Bula Holdings' attitude to the concessions sought from them viz: 

(i) they have agreed to the conversion into equity of their existing advances to Bula Ltd of about £11m (£5m principal plus £6m accumulated interest) subject to retention by them of an acceptable dividend bearing equity position; 

(ii) they have agreed to 75% voting control being exercised by the Minister and Outokumpu, subject to certain monitoring of the Company's management; 

(iii) they have indicated a readiness to contemplate a State equity holding of 40%. On the other hand, however they are strongly resisting an Outokumpu stipulation that it must receive a 40% equity stake, and it is understood that the maximum amount they have been prepared to concede is 19% with, as yet unascertained conditions. If they remain intransigent on this point, the withdrawal of Outokumpu from the project could result. The implications for the State, if Outokumpu is prepared to settle for a lower equity participation than 40%, have already been mentioned. 

11. In the previous memorandum it was indicated on the basis of various assumptions, including an assumption that the State's contribution would be confined to the level of £5m equity and £8m cash bond, and assuming a discount factor appropriate to the risk involved, that it was likely in the view of the Minister's advisers that the present value of the State's future income from the project would not exceed £7m. Given the initial commitment of £13m required, this would yield a net present value of minus £6m for the additional investment now envisaged for the State. Even if a simple "cost of funds" approach were adopted, and the risk exposure ignored, the net present value of the State's additional investment would be less than £3m. Moreover, a detailed re-examination of projected cash flows which is now being undertaken on the basis of the increased exposure for the State discussed above, and in the light of new information still coming to hand, is almost certain, in the view of the Minister's advisers, to reduce considerably these present value figures. 

12. The salient features of the case to be taken into account are that: 

(i) the upfront cash commitment of the order of £13.7m now sought from the State clearly exceeds the commitment given by the Government in late 1983 (£5m equity + £10m non- cash guarantee); 

(ii) because of the factors referred to in paragraphs 5 and 6 above there is a significant possibility that this commitment will be further increased, because of the readily identifiable short term risk factors already discussed; 

(iii) there is still no proposal that the State will achieve anything approaching a commercial rate of return on this investment. Indeed, it seems likely that it will not even get a sufficient return to cover the interest cost of the additional funds now required of the State for the project; 

(iv) the financing package still remains to be finalised and there are still major differences of view, particularly as between Outokumpu and Bula Holdings, on the share of future dividends to be applied to each equity participant. It is extremely unlikely that anything will emerge which would improve the position of the State; and 

(v) the attitude of the Wright family shareholding interest to the arrangement envisaged is not known and the equity shareholding to which they might agree has not been explored. As parties to the Bula agreement with the State their concurrence would be necessary to any new arrangement. 

In the light of these features, the Minister for Energy considers that the conclusion reached in the previous memorandum (ie that there is no evidence that a proposal acceptable to the State for an independent mine development could reasonably be foreseen) has, if anything, been reinforced by the recent discussions. Accordingly, if the matter is approached on a commercial basis there is no case for commitment of further State funds. The Minister for Energy recommends accordingly that the Government should decide against State investment in the independent mine project which is being promoted. 

That concludes the Memorandum and the Supplementary Note for the Government. 

In fact the forecasts and valuations prepared by the Minister's Advisors were over optimistic being based on figures for metal prices and exchange rates prognosticated by Bankers Trust/Outokumpu which turned out to be much too favourable. For example based on the projected output of ore by the proposed Bula independent mine of 600,000 tonnes per year Mr Barry in 1984 assumed that sales revenue for 1994 would be £50.516 million. With the benefit of hind sight and applying actual metal prices and exchange rates as calculated by the Plaintiffs' Accountants Messrs Arthur Andersen in their computer out-turn model of the 4 June 1996 the sales revenue for 1994 would have been only £18.616 million that is to say just 36.85% of the 1994 revenue projected in 1984. 

There were in 1984 significantly varying forecasts for metal prices that is to say zinc and lead and exchange rates that is to say as between the US dollar and the Irish pound. Those used by the Plaintiffs' experts tended to show that the Bula independent mine project was viable and bankable and would yield satisfactory returns. Other forecasts tended the opposite way and experts bona fide differed in their views as to the viability, bankability and profitability of the proposed independent Bula mine. 

I prefer the evidence of Mr Brian Barry the Minister's Advisor and the evidence of Tara's experts namely Dr Malcolm Scoble, MS Claire Hassall, Mr Michael Maher, Mr Brian Redmond and Mr David McCabe to that of their opposite numbers called for the Plaintiffs Messrs Michael Sutcliffe, David Hudson, Allen Sykes, William Bruce Evans and Vincent George Rich. The Plaintiffs' experts laboured under the difficulty that they were inadequately and inaccurately briefed, the most notable example of course being Mr John Warren Summers with whose evidence I have already dealt. 

I am satisfied that if the Minister and the Government had backed the Bankers Trust Package the Bula independent mine would have turned out to be a disastrous failure and Bula's debts today would be at least as many millions of pounds as they in fact are now. The Minister would have thrown good money namely the £5 million equity and the £8 million to the guarantee fund after bad money namely the £9.54 million which he had paid for his shares in Bula in the mid 1970's. The extra £13 million between the £5 million equity and the £8 million to the guarantee fund would probably not be all that would have been lost. The probability is that as the mine got deeper and deeper into debt great pressure would have put on the Minister to invest in further equity in order to save jobs but even if he did so invest it would have been to no avail unless he and the Government were prepared to bail out Bula with very large sums of tax payers money which would have been quite wrong. Transcript 207 pages 74 & 75. 

In the second last sentence of the supplementary note for the Government which I have quoted in full above it is stated "accordingly, if the matter is approached on a commercial basis there is no case for commitment of further State funds." 

I am satisfied that the Minister was correct in approaching on a commercial basis the question as to whether or not further State funds should be committed to the project and insofar as the Plaintiffs or their experts say otherwise they are wrong. 

At page 58 paragraph 6.4.1. of his proof of evidence Mr Allen Sykes (the Plaintiffs' mining finance expert witness) says as follows: 

"As far as I know there was no Government cost/benefit study done or if done it has not been disclosed. I understand however that it was a general requirement of the Ministry of Finance that there should be an assessment of the expected economic and social returns (my italics) -- see a paper headed circular 2/1983 reference S212/7/83 issued by the Department of Finance and entitled RE CAPITAL EXPENDITURE IN THE PUBLIC SECTOR -- and in particular the top of page 10. Quite regardless of specific instruction however, I would have expected any western Government to carry out such cost/benefit studies as a matter of routine. I have worked frequently with national Governments on many projects throughout my career and cost/benefit studies were the rule. As no such study is available to me I have provided the best estimate I can of the relative factors and amounts in section 6.4.5. below." 

The quoted reference to economic and social returns is from paragraph 3 of the circular S212/7/83 referred to. I now quote paragraph 3 in full: 

REVIEW OF CASE FOR PROJECT 

The case for the proposed investment should be reviewed in the light of the results of the detailed appraisal. In agencies other than commercial State bodies, the responsible planning officials and senior management should make an assessment as to whether the expected economic and social returns are likely to warrant proceeding any further with the outline proposal. The criteria used to assess these returns should be explicitly defined. 

As regards capital expenditure by commercial semi-State bodies, it must be established by the responsible planning officials, senior management and the Board that the proposed investment, taking account of all possible costs and potential risks etc associated with the project, is capable of achieving a commercially acceptable rate of return on capital employed before proceeding any further. 

The return should be greater than the average cost of the funds over the life of the project. (All funds used should be costed, whether internal, equity or borrowed). In addition it should cover the risk factor which will vary from project to project. In this regard, the rate of return in a high risk project in a new technological area would have to provide a margin of 7% + over the cost of funds but lower risk projects would be acceptable at a lower margin." 

It is clear to me that the reference to "social returns" relates to State projects of a non-commercial or minimal commercial nature. The Bula project was essentially a commercial project and whilst not strictly a semi-State body project the capital expenditure envisaged was commercial rather than social in its essential nature. 

I am satisfied therefore that Mr Brian Barry of Coopers & Lybrand adopted a method of valuing the Bula project in 1984 which was in accordance with the guidelines in the circular referred to and in particular was correct in adopting commercial criteria only to the exclusion of social criteria. It was argued on behalf of the Plaintiffs, especially by Mr Sykes that Mr Barry adopted an excessive hurdle test in taking a discount factor of 25% made up of 15% cost of funds and 10% risk factor. The point made was that the cost of funds was unlikely to remain so high as 15% in the long term. Nevertheless the Minister was entitled to rely on his advisors in considering whether to advise the Government to commit further State funds in an effort to salvage the 9.54 million invested in the Bula shares some 10 years or so previously and which looked less and less likely ever to yield a dividend or be re-cooped. Moreover, Mr Barry took very favourable exchange rates to Bula. With US dollar and the Irish pound at par he got a Nett Present Value at 25% discount of -- £6 million. At $1.10 to the IR£ he got -- £8.6 million at 25% and even at 15% discount it was still -- £2.5 million. 

I should explain that zinc is always paid for in US $'s. Almost all of Bula's outgoings such as salaries, wages, electricity etc would have to be paid in IR£'s. Therefore the weaker the IR£ as against the US Dollar the better for Bula because its Dollar income would buy more Irish Pounds. Hence the worsening of the Nett Present Value at an exchange rate of $1.10 to the Irish Pound as compared with par and of course it now requires more that $1.55 to buy an Irish Pound. 

I am satisfied that the Bula independent mine project was not a medium risk project. It was a high risk project fully justifying the addition of a 10% risk factor to the cost of funds and even if one took a long term cost of funds of 8% giving a discount factor of 18% I am satisfied that the project was not viable. I am not at all satisfied with the evidence adduced by the Plaintiffs that the Bula independent mine project viewed from a 1984/1985 perspective was an attractive project such that the Minister should have supported it. Viewed in a fully informed and careful manner from a 1984/1985 perspective without the benefit of hindsight and knowledge of the actual out-turn the project was more likely to fail and become insolvent long before its projected life span rather than to yield any form of handsome return. 

A point in Mr Sykes's evidence which I find difficulty in reconciling is that he says that the Bula independent mine project in 1984 even though Bula then had bank and third party debts totally £15 1/2m-£16m (not counting the Holdings debt of about £11m) was viable and had an attractive Nett Present Value. Sykes also says that Bula if sold by the banks today freed of all those bank and third party and Holdings debts is not viable and has a minus or border line Nett Present Value. Transcript 253 at page 30. I appreciate that Bula's planning permission has lapsed but it would be unlikely that any real difficulty would be encountered in getting a new planning permission for a wholly underground mine. So far as the costs of developing the mine are concerned these cannot be more in real money terms today than they were in 1984/1985 and would probably be somewhat less having regard to the advances made in mining technology in the last ten years as emphasised by Mr Evans of Steffan, Robertson and Kirsten, Mining Engineers called as a witness of behalf of the Plaintiffs. 

This reinforces my finding of fact that in view of the actual out turn of metal prices and exchange rates in the intervening years if the Bankers Trust/Outokumpu package had gone ahead in 1984/1985 the Independent Bula mine would have been a disastrous failure for all the equity participants and most especially for the State for the reasons I have already outlined. Neither the Minister nor the Government were under any obligation by virtue of the Interparty Agreement to throw £13,000,000 and probably more tax payers good money after the £9,540,000 and the £840,000 bank interest tax payers bad money which was lost through the incompetence of the Holdings personnel in the management of Bula. Accordingly neither the Minister nor the Government were obliged to support financially the Bankers Trust/Outokumpu package in 1984/1985 as claimed. 

I turn now to the second major issue still subsisting namely whether Tara wrongfully induced the Minister not to support the Bankers Trust Package but to support instead a Tara takeover of Bula. An important part of the allegation of wrongfully inducing the Minister is an allegation that Tara were never in a position to complete such a takeover within the time limits specified by themselves having regard to their financial standing in 1984/1985 and to restrictive covenants in their loan agreements with their bankers of whom the Toronto Dominion Bank in Canada was the lead bank. 

As must be apparent from the history of the two companies already outlined in this Judgment Tara always had an ambition if circumstances permitted to acquire the Bula minerals. Transcript 264, page 15, question 90. They were well aware as was everyone in the natural resources industry that by the middle of 1984 Bula were very heavily in debt and having great difficulty in staving off a receivership -- indeed they were described as on their last legs by one of their own accountants. Mr Hynes wrote to the Minister on the 31 August 1984 MW; 12 page 223-224, offering to buy the Minister's 49% shareholding in Bula. The Minister and Mr Holloway ignored this offer and a later one sent in or about the 8 October 1984. MW 12 page 297. However further approaches were made to the Department by Tara in October 1984 and towards the end of that month Mr Holloway had discussions with Tara regarding a possible total buy out of the Bula shareholding if all shareholders would agree. The reason why Mr Holloway entertained such discussions at that time was because the Bankers Trust Package which he was attempting to bring forward at the same time was beginning to look quite doubtful and the Finnish financiers were looking for guarantees from the Minister and support in general for the project well in excess of not merely the State's obligations to provide a guarantee of £10 million under Clause 9.06 of the Interparty Agreement but also in excess of the extended offer of £5 million equity in addition to the guarantee. Hence the Minister through Mr Holloway was anxious to have an alternative proposal in case the Bankers Trust Package collapsed and the only realistic proposal at that time appeared to be the Tara Takeover Proposal. Tara had no knowledge of the Bankers Trust Package when they made these proposals. Transcript 260 page 56 & 79, transcript 264, page 12-16. Tara and Outokumpu knew each other well: they had been doing business with each other for over 10 years and Tara knew that Outokumpu had been interested in acquiring a share in the Bula mine but were not aware of the 1984 Bankers Trust/Outokumpu Package. 

If a viable independent mine project had emerged from the Bankers Trust Package not requiring State support in excess of that of which commitments had been given then the Minister would have been bound by the Interparty Agreement to support the independent mine and would indeed have been delighted to do so. Transcript 185 pages 59-60, Transcript 252, pages 3-5. However no such viable project ever emerged from the Bankers Trust discussion or discussions with any other established mining company to develop the Bula minerals as an independent mine. As I have already pointed out with the benefit of hindsight the Bankers Trust Project would have been a disastrous and very costly failure and even Mr Wymes conceded that with the benefit of hindsight the independent mine project would have been barely viable. Transcript 149 (6/10/95) page 37 & 39. 

In entering into these discussions with Tara Mr Holloway was well aware of the parlous financial position of the Holdings personnel and he strove to ensure that Tara would offer a deal which would save the Holdings personnel from financial ruin (Transcript 186 page 14) and at the same time protect the Minister's rights and interests in relation to minerals exploration and development in the State. Mr Holloway rejected Tara's offer to buy 100% of the Bula shareholding in letters of 2/11/84 MW 12 page 283 A,B,C and 8/11/84 MW 12 page 390-392 as not being adequate for the private shareholders. Ultimately, at Mr Holloway's instigation Tara made an offer by a letter of the 19 November 1984 MW 12 page 421-426 addressed to Mr Holloway to buy out 100% of the shareholding in Bula dealing directly with the State as regards its 49% and the Holdings personnel as regards their 40.8% and the Wright Family as regards their 10.2%. The Holdings personnel were unwilling to deal directly with Tara not wishing to have any privity of contract with them. As a result the offer by Tara was altered to buy directly from the Minister alone the 49% of his own shareholding and the 40.8% of the shares of Holdings he in turn to buy from Holdings their 40.8%. Tara intended to deal directly also with the Wright family. This offer was of course an offer which could only become in any sense binding if all shareholders agreed to accept it. During all this time Bula's banks were threatening to appoint a receiver and were only being held at bay by the payment of interest by the Minister. The threats by the banks and indeed their intention to appoint a receiver were at their own initiative and not at the behest of the Minister or as a result of any action on the part of the Minister. 

Tara put forward their proposal to acquire the Minister's and the Holdings' shareholding in Bula from the Minister in a document dated 21 December 1984. This proposal is very detailed and quite complex and was accompanied by five side letters also dated the 21 December 1984. It is not necessary to read the side letters because they were superseded by an improved offer of 20 March 1985. I do not therefore schedule the side letters but the Proposal of the 21 December 1984 is set out in the third schedule to this Judgment 

The Holdings personnel accepted this offer after consultation with their Solicitor Mr Plunkett Dillon of Messrs Gerrard Scallan & O'Brien and with Mr Gallagher the Tax Consultant in their auditors and accountants Messrs Arthur Andersen. The most important feature of the proposal is really the indemnification of the Holdings personnel from their liabilities to Bula's bankers as guarantors of Bula's debts and from the judgments obtained on foot of such guarantees. The banks had obtained judgments against the Holdings personnel by the NBFC in December 1982 and by the UIB in March 1983 for sums to the limits of their guarantees which were in or about £1 million each and of course interest was accruing on these judgments ever since. The £2 million mentioned in paragraph 3(i) of the Proposal was earmarked for the Holdings personnel so that if the Proposal had been completed the Holdings personnel were assured of reasonable assets freed of debt. 

It was alleged by the Plaintiffs that the Minister through his officers entertained these Proposals by Tara not really as a bona fide solution to the financial and other problems of the Bula shareholders as a whole regarding the development of Bula's minerals but for the benefit of the Minister himself particularly in relation to certain rights which Tara had to issue preference shares which would dilute the Minster's 25% shareholding in Tara. Beyond the fact that there was a coincidence of timing when these two matters were concluded there is no evidence to support this rather serious allegation that the Minister entertained the Tara Takeover Proposal of Bula for his own benefit regarding the protection of his shareholding in Tara and without regard to his obligations under the Interparty Agreement to the other shareholders in Bula. I have called this allegation a rather serious one because it seems to me to imply an allegation of virtual corruption and dishonesty. 

The truth is that when Mr Holloway came back into the Department at the end of February 1984 (he had been in the Department in the mid 1970's to the year 1980 and was involved in the negotiation of the lease and the Interparty Agreement) he identified the Minister's agreement with Tara to allow the issue of preference shares as an agreement that should never have been entered into by the Minister and he set about challenging it. The agreement had been made following the end of a strike in Tara from July 1981 to February 1982 when Tara was in grave financial difficulties and wanted to be in a position to raise money by the issue of these preference shares. By 1984 the picture had completely changed. Tara were then awash with money and were paying back millions of pounds of their banks debts over and above normal repayments including bank interest and there was no further need or justification for the right to issue preference shares. 

Mr Holloway set about challenging this right early in 1984 even before he formally took up office on the 28 February 1984 and long before either the Bankers Trust Package or the Tara Takeover Proposal had appeared on the horizon. When Mr Wymes queried the waiver by Tara of the right to issue preference shares, Mr Holloway replied in the most emphatic terms refuting any link between the Tara Takeover Proposal and the surrender by Tara of their right to issue preference shares. Furthermore Mr Holloway has sworn emphatically before me on at least three separate occasions to be found in three separate transcripts that the facts which I have summarised are true and that there never was any link whatsoever between the surrender by Tara of its right to issue preference shares and its takeover offer for Bula. See transcript 231, pages 27-29: transcript 249, pages 65-68: and transcript 254, pages 84-98. Mr O'Connell gave similar evidence. Transcript 212 page 31-33 and page 53. So also did Mr Tully at paragraph 31 of his proof of evidence and transcript 260 pages 49-54. I accept unreservedly Mr Holloway's, Mr O'Connell's and My Tully's evidence on this topic but nevertheless it does not surprise me that the Plaintiffs in their closing written submissions repeat this allegation at part 1 page 70 and pages 121 and 122 of those submissions. I say that it does not surprise me because it does not seem to cost Mr Wymes a thought to make the most serious allegations against all and sundry and then if his allegations are shown to be utterly groundless this does not seem to bother him either and he just moves on to the next point. The repetition of this allegation in the closing written submissions inevitably involves an accusation of perjury on the part of Mr Holloway, Mr O'Connell, and Mr Tully. I reject that accusation which as I have said does not have a shred of evidence to support it and appears to be made simply and solely because there was a coincidence of time between the waiver of the right to issue preference shares and the making of the take over proposals. 

Let me just refer to another but completely unrelated example. At paragraph 56(m)(ii) of their statement of claim the Plaintiffs allege: 

"Tara sought vexatiously to initiate court action by Navan and Kilbride Anglers Association in relation to the planned diversion of the river Blackwater, for the purpose of interfering with the planning application and/or forcing a sale of the Bula minerals to Tara" 

I regard that as an allegation of serious wrong doing on the part of Tara. Not only was no evidence whatever adduced in support of it but it was casually abandoned in a throw away fashion. The Court was offered no word of explanation as to how or why this allegation was made in the first place nor was Tara offered any word of apology. Mr Wymes lives in Navan and must know at least some of the anglers referred to but none were proffered as witnesses before me. The case just moved on to the next point as though nothing of importance had happened when it was stated simply that the Plaintiffs were not relying on that allegation. If I had to draw any inferences they would have been that the Anglers were not unnaturally worried at the prospect of the diversion of the river Blackwater coupled with the dust, noise and vibrations of open pit mining and indicated an intention to object, whereupon Mr Wymes jumped to the conclusion that Tara had put them up to it and did not hesitate so to allege without a shred of evidence adduced before me to justify his allegation. 

To come back however to the Tara Takeover Proposal of the 21 December 1984 the Proposal did not envisage a due diligence investigation by Tara's Auditors Messrs, Ernst & Whinney. It provided by Clause 5(h)(i) for an audit report by Bula's Auditors Messrs Arthur Andersen subject only to a going concern qualification. It further provided by Clause 5(o) that Tara might meet with Bula's bankers to discuss Bula's financial affairs and that Arthur Andersen would provide other audit reports and balance sheets and draft accounts. Things did not work out as anticipated. Bula's Auditors Messrs Arthur Andersen through no fault of theirs were not in a position to furnish audit reports or accounts within the time span provided or any where near it. Moreover no sooner had Mr Wymes authorised a meeting between Tara and Bula's bankers than he withdrew his consent a couple of days later. Then Tara's auditors had pressed Bula's auditors for some sort of accounts. Bula's auditors against their better judgment handed over what they emphasised were only rough and ready accounts and not really capable of being relied upon and then Tara's auditors discovered a potential liability for £1 1/2 million not readily appearing from the rough and ready accounts handed over to them. Following this Tara's auditors advised Tara to insist on a due diligence investigation which Tara accordingly insisted upon and this of course caused further delay. Then there were problems about provisions for settling with Mr Kruger regarding the contract for the purchase of his lands and with the Drogheda Harbour Commissioners regarding the contract for a lease of a plot in Drogheda Harbour. An exception from the mining board under the Minerals Development Act 1979 to enable the Bula minerals to be worked was not granted until the 21 March 1985 and when the exception came to hand on the 25 March 1985 Tara as advised by their lawyers including eminent senior counsel queried the adequacy of the exception. 

Mr Wymes assumed that all these points were being raised by Tara and especially by Mr Hynes mala fide in order to delay the completion of the deal and thereby damage Bula and the Holdings personnel. I am satisfied that there is no validity in any of these suspicions. Indeed, Tara paid the salaries of Bula's Navan based staff during this period in order to preserve Bula from immediate total collapse and enable these difficulties to be overcome, which is a reasonable earnest of the genuineness of their stated desire and intention to complete the acquisition of Bula. The points were raised bona fide: they were points of substance and they required to be attended to and dealt with before the takeover of Bula could be completed. Matters dragged on and of course interest was running against the Holdings personnel on the judgments against them on foot of their guarantees. Mr Holloway pressed Tara to increase their offer to cover the additional bank interest and other expenses and Tara agreed and further terms were negotiated and adjustments made to the Proposal of the 21 December 1984 in order to cover the matters that had arisen since then and were still outstanding. Tara embodied all these matters in a supplemental offer document called the Improved Proposal of the 20 March 1985 a copy of which is set out in the fourth schedule to this Judgment. 

The concluding paragraphs of the Improved Proposal required acceptance in writing: the Minister accepted in writing but the Holdings personnel did not do so. They accepted orally through Mr Plunkett Dillon their Solicitor by a telephone call on the 4 April 1985 to Mr Denis Bergin of Messrs Arthur Cox & Co, Solicitors for the Minister and the Department. This verbal acceptance was availed of by Mr Wymes sometimes to say that the Holdings personnel had accepted the Proposal and at other times to say that they had never accepted. See letter from Mr Wymes of the 26 September 1985 to Messrs Cox & Co, in MW 17 page 403/4. 

Detailed contracts were being negotiated throughout the following months between Tara and the Minister and a corresponding contract between the Minster and the Holdings personnel. The Holdings personnel's Solicitor was involved in discussions regarding the drafts of their agreement with the Minister. Finally every thing was agreed and settled between the Minister and Tara in or about the 23 August 1985 and it only remained for final agreement between the Minister and Holdings and the Holdings personnel to bring matters to a conclusion with binding detailed agreements between all three parties. 

At a meeting on the 9 September 1985 between the Minister and his officials on the one hand and the Holdings personnel on the other hand, the Minister presented the draft detailed contract between himself and Holdings and the Holdings personnel to them and they took it away with them. By a letter of the 11 September 1985 MW 17 page 291 Mr Wymes wrote to the Minister stating that the contract was unacceptable to Holdings and the Holdings personnel. Mr Holloway did not communicate the contents of this letter to Tara but arranged instead for a further meeting in the hopes of persuading the Holdings personnel that they ought to accept what was on offer. This further meeting took place on the 26 September 1985 at which the Holdings Personnel (except Mr Roche Senior) Mr Plunkett Dillon and Mr Shields, solicitor to Mr Wymes personally and Mr James Stanley the Financial Controller of Bula were all present. Mr Holloway pointed out the improvements in the latest proposals over and above the offer of the 21 December 1984 and the Improved Offer of the 20 March 1985. The Minister was making available to the Holdings personnel extra monies well in excess of what they had accepted in December 1984 and April 1985. The State in effect was making available to the Holdings personnel substantial sums to which it itself was really entitled from Tara. The offer available in September 1985 ensured the Holdings personnel payments totalling 5.3 million provided that there were then no undisclosed liabilities in Bula payable in three instalments the last on the 30 June 1987. For a comparison of the value of these payments reduced to January 1985 money terms see the calculations prepared by Mr Brian Barry a copy of which is set out in the fifth schedule hereto. The Minister was also offering an extra £385,000 being interest on the £840,000 owing to the Minister for bank interest paid by him and Mr Holloway had negotiated a waiver of about £300,000 by Bula's banks of interest due to them. All of this of course over and above the indemnification of the Holdings personnel against and release from their guarantees of Bula's bank debts and the judgments against them on foot of such guarantees. See Mr Holloway's explanation of these figures at transcript 247 pages 51, 55 and 56: transcript 248, pages 55-58: and transcript 249 pages 1-11 and page 53. 

As is apparent from some of the extracts in the transcripts to which I have just referred instead of paying attention to what was being offered to them the Holdings personnel (excluding Mr Roche Senior who was absent) put forward what became known during the trial as the eight point demand. A copy of this document is to be found in the sixth schedule to this judgment. It became common case that these demands and especially paragraphs 3 & 4 thereof would have cost Tara an extra £10-£15 million over and above the cost to them of their offers at that time. As their offer was already going to cost Tara about £25 million these figures represented demands for an extra 40%-60% so far as Tara was concerned. 

The extraordinary thing about these demands is that neither Mr Wymes nor his two colleagues present at that meeting had any idea as to what these demands would cost. Still more extraordinary they had no idea as to precisely what was the minimum figure which they would accept. How they expected to negotiate when they did not know their own bottom line figure really escapes me. It is a pity that Mr Roche Senior did not attend the meeting because from what I have heard it seems he did appreciate the necessity for definite figures if negotiations were to take place and not just unquantified propositions as contained in the eight point demand. Moreover Mr Roche Senior also appreciated that this offer from Tara and the State assured the Holdings personnel of more than they could ever expect to get out of the Bankers Trust Package even on their own forecasts. See transcript 243, page 24. 

Indeed Mr Wymes' approach to these "negotiations" as he wrongly regarded them (because Mr Holloway had squeezed the last penny from Tara, the Banks and the State itself and there was no room for any financial improvement, transcript 264 page 17-18) mirrored his approach to Outokumpu in relation to the share or equity split in Bula between Outokumpu and the private shareholders in negotiations for the Bankers Trust/Outokumpu Package. Outokumpu if they were to back that package wanted 40% of the Bula Shareholding initially and later indicated that they were prepared to drop to 37% and possibly they would have dropped to 35%. Mr Wymes offered them 17 1/2% and then advanced to 19 1/2% in the course of some 2 1/2 days face to face negotiations. Thereafter Mr Niitti came out of an Outokumpu Board Meeting being held in Helsinki and telephoned Mr Wymes in order to see if there was any realistic advance on this figure of 19 1/2% that he could bring back to his board of directors only to be told by Mr Wymes that there was none. I would infer that if Outokumpu retained any real interest in the Bankers Trust Package after that it would not have been a very enthusiastic interest. Again here Mr Roche Senior showed more wisdom if the documents read to me are correct. He favoured 25% for either Holdings alone or all the private shareholders including the Wright Family and if the latter then that would have left 35% for Outokumpu. Again however in relation to these negotiations between Mr Wymes and Outokumpu as regards the appropriate share split between them the Holdings personnel had not agreed any bottom line figure amongst themselves. 

Mr Wymes went into those negotiations not knowing what he or his colleagues were really willing to accept as their share of the Bula equity just as he and they went in to the meeting with the Department on the 26 September 1985 not really knowing what they were willing to accept by way of money for their 40.8% shareholding in Bula. 

Before I continue with the history of what happened following the presentation of the eight point demand to the Minister through his officers I divert to consider Mr Wymes' contention that Tara were never in a position to complete the take over of Bula either within the time limits specified by themselves or at all because of their lack of financial resources in 1984/1985 and more especially because of restrictive covenants in their loan agreements with their bankers which were never released. 

The allegation of a Tara lack of financial resources in 1984/1985 is quite unreal. Mr Leo O'Shaughnessey gave evidence on the last day of the hearing of evidence in this case namely the 15 October 1996 transcript 273. Mr O'Shaughnessey's evidence establishes to my satisfaction that Tara had an obligation to pay any excess cash flow in any year ending the 31 March to their Canadian Bankers in prepayment of Tara's debts to such banks. These prepayments were over and above mandatory payments of $12 million to one bank and $5 million to another. Such excess cash flow was to be ascertained and paid not later than the 31 July following the year ending the 31 March. There was however a cap on such prepayments of $20 million in respect of any one year and if excess cash flow exceeded $20 million in any year ending the 31 March Tara could apply such excess as they thought fit. 

In respect of the year 1 April 1984 to 31 March 1985 Tara had made prepayments of $22 million by October 1984 and were therefore already above the cap of £20 million in respect of that year and were free to apply any further excess cash flow as they thought fit. In fact Tara made further prepayments of $10 million in February 1985 making the total prepayments for the year ending 31 March 1985 $32 million being $12 million above the cap. It is clear therefore that Tara had at their disposal in December 1984 and January and February 1985 ample funds to meet their obligations as undertaken in the take over Proposal of the 21 December 1984 but by February 1985 it was quite apparent that it would require a lot more time before the deal could be closed because of accountancy and title problems on the Bula side. See transcript 273 pages 4-21. Hence Tara prepaid the further $10 million in February 1985 rather than leave it idle waiting for Holdings to get their title in order to enable them to close. 

I have already remarked in connection with the dispute regarding Tara's right to issue preference shares that by the latter end of 1984 Tara were awash with money and so they were. They would have had no difficulty in financing the proposal of the 21 of December 1984 for the take over of Bula in December 1984/January 1985 as they initially intended to do from their own surplus cash. However although that was their financial position they still required the consent of their bankers because of restrictive covenants in their loan agreements. I am satisfied that had the take over deal gone through Tara would have been granted consent by their bankers and waiver of those covenants to proceed and complete the deal. In this connection I accept the evidence of Mr Tully given on the 24 July 1996 in transcript 260 page 38-40 and page 83-85 and on the 26 July 1996 in transcript 26 pages 1-40. 

Mr Wymes makes the point that he should have been told of the existence of these restrictive covenants at the time when Tara made their proposal of the 21 December 1984 and as he was not so told the first he knew of the existence of these restrictive covenants was when a Mr Keenan of Independent Newspapers published an article in the business section of the Irish Independent of the 30 August 1985 in which he stated that Mr Hynes had informed him that Tara had now repaid all their debts to get freed from the restrictive covenants and to enable him to buy out Bula. For the reasons stated by me during the Minister's closing submissions on the 26 November 1996 transcript 274 at pages 44-46 the Holdings personnel must have known that there would be some such covenants in Tara's loan agreements: if they did not, it raises a big question mark over their competence as business men. 

While I appreciate that in closing the case for the Plaintiffs, counsel rightly sought to summarise the important points of this case and not to bury them under a rehash of the mass of detail which was put before me by Mr Wymes I noted the fact that nothing was said or submitted to me on this point which I had raised. Despite the remarks of Mr Hynes to Mr Keenan I am satisfied that Tara at all material times would have had no difficulty in securing the waiver of the restrictive covenants in their loan agreements and in providing the money necessary to comply with their proposals of the 21 December 1984 and improved proposal of the 20 March 1985 and detailed agreed terms of contract of the 23 August 1985 between themselves and the Minister. See also the evidence of Mr Nathaniel Healy of Messrs A & L Goodbody Solicitors for Tara's bankers. Transcript 239 Friday 21 June 1996. 

The obligation of Tara regarding payment of the purchase price was the same obligation as that on any other purchaser of any property namely to produce the purchase money when the time and circumstances for payment arrived. The Minister and his officers well knew of the existence of these normal covenants in the Tara bank loan agreements. Indeed it would have been strange if no such covenants existed requiring the borrower to apply the borrowed monies to the designated project and the bulk of any profits to the repayment of such borrowings and prohibiting the diversion of profits to other projects until the debts had been discharged. Mr Holloway rightly declined to allow any mention of the consent of Tara's bankers or any other third party to be included in the proposals as a condition of the liability of Tara to complete. I am also satisfied that Tara were bona fide committed to their proposals of December 1984 and March 1985 and the detailed terms of the contract between themselves and the Minister agreed towards the end of August 1985 and that they could and would have honoured their commitment and completed the deal if Holdings and the Holdings personnel for their part had honoured their acceptances of December 1984 and April 1985. 

Moreover as was stated in evidence by the last named Defendant Mr O'Connell the Tara take over deal broke down not because of the restrictive covenants in Tara's bank loan agreements or any lack of finance on the part of Tara but rather for want of agreement between Tara and Bula. In other words the parties never reached a position where they were ad idem. The eight point demands by the Holdings personnel which as I have said would cost something between £10 and £15 million over and above what was on offer and which amounted to a demand to an extra 40% to 60% was never accepted by Tara and it was that demand and the lack of agreement and mutuality between the parties that caused the break down of the take over deal and not any problems of Tara regarding finance or restrictive covenants with its own banks. See transcript 211 page 36. 

There was and is nothing in the Tara lease or the Interparty agreement to prohibit Tara from putting forward the proposals which they did in fact put forward to take over Bula. These proposals depended for their efficacy on the agreement of all shareholders in Bula and all the parties to the Interparty agreement and Mr Wymes' evidence when cross examined on that basis was convoluted, illogical and unconvincing. I am also satisfied that Tara did not put their proposals forward for the purpose of frustrating the Bankers Trust/Outokumpu Package. They were unaware of those negotiations and they put their proposals forward bona fide as a normal business proposition. 

I now return to the history of what happened following the presentation by Mr Wymes to the Minister of the eight point demand at the meeting on the 26 September 1985. MW 17 page 407-413. It was clearly understood by everyone at the meeting that this demand would have to be passed on to Tara to see to what extent if at all Tara would agree. MW 17 page 411 & page 416. Transcript 186 page 65 & 66. This was done the very next day in a meeting with Mr Hynes and Mr Reynolds the Financial Controller of Tara. Mr Hynes immediately costed the demands at the figures of £10-£15 million which was accepted at the trial as being correct. Mr Hynes did not however indicate acceptance or rejection of the demands at that meeting. 

A Tara board meeting was held on the 4 October 1985 (MW 18 page 49A-D) at which the eight point demand was fully discussed and it was resolved to reject the demand and to withdraw all offers to take over Bula. A letter to that effect was written to the Minister on the same day. A flurry of activity then ensued. Bula's banks appointed a receiver on the 8 October 1985. In so doing and in all the various demands which the banks had made over the previous four or five years the banks acted on their own initiative and not in any way at the instigation of the Minister or of Tara. See transcript 193 page 28-30. 

At a meeting in the Department on the 9 October 1985 (MW 18 page 81-87) the Holdings personnel finally agreed that they would accept the terms offered to them on the 9 September 1985. Following this belated agreement on the part of the Holdings personnel the Minister and his officers made strenuous efforts to persuade Tara to reinstate their offer and Tara held a number of board meetings at which the matter was fully discussed as recorded in the minutes of those meetings. Ultimately Tara decided not to reinstate their offer. 

The acquisition of Bula seemed an attractive business proposition to Tara when they made their initial offers to the Minister in 1984 and the improved offer in March 1985. Prices for zinc had been very high for some considerable time and especially so through 1984 and hence Tara had made a remarkable financial recovery since the end of the prolonged strike from July 1981 to February 1982. However as one came through the summer and into the autumn of 1985 the market for zinc declined to an unprecedented extent with prices falling from over $1,000 per tonne to $730 per tonne in October 1985 with break even for Tara at $680. MW 18 page 139-142. 

The effect of this downturn in prices was that the acquisition of Bula changed from being an attractive business proposition to a rather dubious proposition. As I have already said towards the end of 1984 and in the early months of 1985 Tara were awash with money but by October 1985 they were producing zinc at a cost which was little better than break even. An investment of in or about £25,000,000 over the next few years would therefore be very expensive as no return by way of profit over and above the extra bank interest could be expected for a long time. 

Mr Wymes said that this downturn in prices did not really matter and should not have been used by Tara as a reason for withdrawing their offer because zinc prices have always been cyclical and prices would have improved again by the time that Tara would be ready to produce ore from Nevinstown. The fact is however that while zinc prices have always been cyclical the rate of fall in the latter half of 1985 was unprecedented and prices never recovered to their former expected level since 1985 except for 1989 when they rose to $1,105, only to fall again in 1990 to $808 and in 1991 to $592 and so remained ever since: all such figures being expressed in terms of constant 1986 money. See Mr Michael Mahers' proof of evidence at page 26 and transcripts 271 and 272 of 11 and 14 October 1996. That explains also why the outturn computer model prepared by the Plaintiffs auditors Arthur Andersen for the Bankers Trust/Outokumpu package gives such dramatically different results from their base case model prepared on the basis of the far higher zinc prices projected in 1984 for the then future years up to and beyond the year 2000. 

In any event Tara declined to reinstate their offer. In the summer and autumn of 1985 Tara felt at least morally if not legally bound to keep their offer open and complete the deal and could and would have done so not withstanding the drop in zinc prices and the fact that exchange rates had also moved against the dollar during that time. However the presentation of the eight point demand by the Holdings personnel relieved Tara of their obligations, moral and otherwise. The Tara Defendants reconsidered the deal on a purely rational basis and arrived at their decision bona fide in the commercial interests of Tara. MW 18 page 139-142 and page 247-250. Transcript 261 page 72-74 and transcript 262 page 16 and 17, but it should be noted that the answer to question 97 is "and fortunately" not "unfortunately" as typed in error. 

As I have already said the Tara take over proposal and improved proposal as further improved by the agreement of the Minister to concede to the Holdings personnel substantial sums which were rightly his own was very much better than even the over optimistic assumptions regarding the Bankers Trust/Outokumpu Package. It provided for the release of the Holdings personnel from their guarantees of Bula's debts and from the judgments against them and any indebtedness to the banks and in addition it ensured to them monies far in excess of the expectations of the average citizen of this State. Of all the irrational and wrong decisions made by the Holdings personnel led by Mr Wymes (but excluding Mr Roche Senior who appeared to have a more realistic understanding of the issues) this was far and away the worst. They chose bankruptcy instead of comfortable wealth. See transcript 52, 12/1/95 at pages 26 & 27 and transcript 100, 11/5/1995 at pages 50-57 and especially question 195. Mr Stanley the Financial Controller of Bula described the eight point demand as outlandish and out of all proportion to the figures that were being discussed at the time and such that would effectively scupper the deal. And so it was and so it did. Transcript 247 pages 8 & 9. 

I have now dealt with the major issues subsisting in this case but so many issues were raised in the statement of claim that I think it is necessary to go through the statement of claim and deal briefly with each issue which may still be subsisting. 

Paragraph 15 alleges that the Minister made various representations and warranties to induce the Plaintiffs to enter into the Interparty Agreement. In sofar as any of these (if any) are not included in the Interparty Agreement I do not accept that such representations and warranties were made and in any event they are excluded as having any force or effect by Clause 10.10 of the Interparty Agreement and this applies also to paragraph 17 and I do not accept the allegations against Tara in this paragraph either. Paragraph 18 misinterprets Clause 8.02 of the Interparty Agreement. Paragraphs 19 and 20 deal with river diversion and planning and have been abandoned. 

Paragraph 21 of the Statement of Claim refers to what Mr Wymes called the Accord. In the list of issues included in the Plaintiffs' written closing submissions at part 2 page 5 paragraph 7(f) it is alleged that in making the takeover offers for Bula, Tara were in breach of the Accord. This Accord is nowhere else mentioned or discussed in the 486 pages of the Plaintiffs' written closing submissions not withstanding that they include 261 pages of what are called "background to the common venture" which commence with the year 1971 and discuss at length issues which were long ago abandoned in the course of the trial such as river diversion and the planning application for an open pit mine. However as the Accord still appears in the list of issues in the terms which I have quoted I had better deal with it. 

On the 30 December 1977 My Hynes visited Mr Wymes at the latter's home near Navan and had a discussion with him as regards the future relationship between Bula and Tara. The object of the discussion was to try to achieve a position where the two companies might co-exist with less and if possible no friction. One of the reasons which induced Mr Hynes to call upon Mr Wymes for the purpose of this discussion was in the hopes of creating an atmosphere and situation where the sort of unjustified allegations which Mr Wymes had made the previous March in relation to alleged catastrophic flooding dangers to the Tara mines by the Whistlemount Channel would not be made by either party against the other again. 

The discussion between the two men was entirely a verbal discussion but afterwards Mr Wymes reduced his understanding of what had been discussed and agreed between them to writing on a piece of paper as follows: 

"1. Good relations between Bula and Tara are desirable and both companies will strive to establish such relations. 

2. The future relationships between the companies will be based on each company accepting and respecting the autonomous independent plans of the other. 

3. Cooperation is necessary between the companies in certain areas." 

A copy of this document is to be found in MW 2 at page 84D. 

Subsequently Mr Wymes paid a return visit to Mr Hynes at the latter's home and produced this document as recording what had been agreed between Mr Wymes and Mr Hynes on the 30 December 1977. Mr Hynes agreed with paragraphs 1, 2 & 3 of the document as set out above but the document remained unsigned and unexecuted in any way. Mr Wymes claims that this document constitutes a binding and enforceable agreement or alternatively a representation on which he and his colleagues and Bula acted and that therefore Mr Hynes and Tara must fulfil their side of the bargain. I ask myself what must Mr Hynes and Tara do as clearly required by this Accord? The only answer I can give is that I simply do not know. 

Mr Wymes in the course of his evidence laid great stress on the Accord and relied upon it as fixing Tara with various obligations legally enforceable and as prohibiting Tara from doing various things which they might otherwise have done were it not for the Accord. In my opinion the whole thing is so utterly vague as to amount to no more than a pious aspiration to get on better in the future and in this regard it was a shining failure. This so called Accord is wholly incapable of enforcement on the basis of it being a contract binding the company Tara and the company Bula or a representation. 

The only thing that I can usefully infer from this Accord is the clear understanding of Bula through Mr Wymes at that time that Bula were to have an independent stand alone open pit followed by underground mine without any question of being forced into any form of partnership or close cooperation with Tara in development of the Nevinstown minerals whether by way of tolling or otherwise. This in itself is no more enforceable than any other aspect of the Accord but it throws light on the thinking and intentions of the various parties at the time two years before when they executed the lease and the Interparty Agreement respectively. See transcript 106, 23/5/95 pages 70-77 and transcript 107, 24/5/95 pages 1-6 and pages 22-25. The subsisting allegation in relation to the Accord appears to be that it prohibited Tara from putting forward the Bula take over proposals of December 1984, March 1985 and the detailed agreement of August 1985. I have really dealt with this contention already. Those proposals could only become effective with the consent of all shareholders including of course Holdings and the Holdings personnel and could not therefore be in breach of the Accord. That this is so is of course demonstrated by the outlandish eight point demand made by the Holdings personnel which amounted to a refusal by them of the then proposals and hence those proposals were withdrawn and died and with them the fortunes of the Holdings personnel. 

Paragraphs 22-32 of the statement of claim mainly relate to boundary mining and are abandoned. In any event they are without substance and I reject them insofar as they allege or imply wrong doing by the Tara Defendants or the Minister. 

Paragraph 26 of the Statement of Claim however raises a claim by the Plaintiffs that they are third party beneficiaries and that the Minister is a trustee for them of the obligations of Tara under the lease and other contracts and that the Plaintiffs are entitled to enforce these obligations. 

I reject this claim and I deal with it only in so far as it relates to Clause (f) of the lease because the Plaintiffs complaints regarding Clause D of the lease, the Boundary Mining Agreement, the River Diversion Agreement and the Planning Agreement have all been abandoned, all be it belatedly, in the course of the trial. It should also be noted that the claim in the last sentence of paragraph 26 that the River Diversion Agreement, the Boundary Mining Agreement and the Planning Agreement were made and accepted as between Bula, Tara and the Minister by way of contract is not made in relation to the lease and as I have said the complaints in relation to those other agreements have been abandoned. Consequently the subsisting claim made by the Plaintiffs in paragraph 26 is as follows: 

"By reason of the matters aforesaid, the Plaintiffs are third party beneficiaries of the lease and in particular Clause (f) thereof and the Minister is the contractual trustee of Tara's obligations under the said clause for the benefit of the Plaintffs." 

The Plaintiffs are not parties to the lease which is a contract made between the Minister of the first part with the concurrence of the Minister for Finance of the second part and Tara of the third part. If the Minister were to be a contractual trustee for the Plaintiffs of Tara's obligations under Clause (f) that would have had to have been clearly understood and agreed by both the Minister and Tara at the time of the execution of the lease. There is no evidence of any such understanding or agreement. The Plaintiffs seek to link Clause 8.02 and 8.08 of the Interparty Agreement with Clause (f) of the lease in order to raise their alleged rights under Clause (f). This is contrary to Clause 10.10 of the Interparty Agreement. Even without Clause 10.10 the Plaintiffs submissions that they can adduce evidence of their alleged intentions to influence the construction of Clause (f) of the lease are contrary to established legal principles. I agree with Tara's written submissions at page 147 paragraph 2.14 that "much of what is set out in part 1 of the Plaintiffs' submissions, and all of the section entitled the co-operation clause in the Tara lease (at pages 7-13) is absolutely inadmissible." 

Moreover the claim made by the Plaintiffs to benefit under Clause (f) of the lease would involve arrangements of such a complex nature as to rule out the sort of benefits claimed. See Cadbury Ireland Limited v Kerry Co-operative Creameries Limited and Dairy Disposal Company Limited [1982] ILRM 77. In addition the clause raises the problems of the enforceability of agreements or undertakings to co-operate and to negotiate reasonably. See the judgment of Murphy J in this case Bula Limited and Others v Tara Mines Limited and Others (number 2) (1987) IR1852. The benefit claimed by the Plaintiffs is a tolling arrangement between Bula and Tara. The only such arrangement with any sort of concrete proposal put forward by the Plaintiffs was that mentioned by Mr Evans in 1996 during the course of the trial and his suggestion would involve Tara entering into contractual arrangements with Bula's bankers to enable Bula to raise finance to pay for an expansion of Tara's mill. Transcripts 250, 256 and 258. Tara would certainly not be acting unreasonably in refusing any such proposal. Furthermore Bula is not a party to the Interparty Agreement so that Bula itself could not avail of Clause 8.02 or 8.08 of that agreement to invoke rights under Clause (f) of Tara's lease. The parties to the Interparty Agreement are Holdings and the late Patrick Wright of the first part, the Holdings personnel of the second part and the Minister of the third part. 

If one looks at the factual matrix existing in the year 1975 when the lease and the Interparty Agreement were executed that matrix or surrounding circumstances were such that it cannot have been within the contemplation of Tara or the Minister that the Minister was to be a trustee of the obligations of Tara under Clause (f) of the lease for the benefit of Bula or that Bula or the Holdings personnel could sue Tara on foot of the first sentence of Clause (f). Nor was it in the contemplation of Bula or the Holdings personnel in 1975 that they might have such rights or conversely a liability to be sued by Tara on foot of the second sentence of Clause (f) of the lease read in the light of Clause 8.08 of the Interparty Agreement if Bula had succeeded in getting their mine up and running. 

I deal further with the question of tolling in the context of paragraph 58 subparagraph (i) of the Statement of Claim below. 

I reject paragraphs 33-55 inclusive insofar as they allege or imply any wrong doing by the Tara Defendants or the Minister. 

The first paragraph 56 of the statement of claim (because there are two paragraphs so numbered) is headed "Particulars of Wrongdoing of Tara Defendants" and is very long running to six full pages and 15 subparagraphs (a)-(o) inclusive but most of these have been abandoned. Subparagraphs (a)-(l) inclusive and subparagraph (m) except its internal subparagraphs 4, 6, 7, 8, and 9 and also subparagraph (p) which was added in a notice giving further particulars have all been abandoned. As regards subparagraph (m) internal subparagraphs 4, 6, 7, 8 and 9 none of these allegations has been established to my satisfaction and I reject them. I reject also subparagraph (n) which alleges that Tara induced the Minister to depart from the Interparty Agreement and I also reject subparagraph (o) which makes vague complaints about the Tara Defendants having discussions about the Plaintiffs affairs with various parties and even if they did no damage resulted therefrom. 

The second paragraph 56 and paragraph 57 are headed "Duties of the Minister". Whilst there was a vague arrangement to the effect alleged in the second paragraph 56 of the Statement of Claim the Minister in compliance with that arrangement was represented at the substantive meeting between Tara and Bula's banks. Moreover even if there was a breach by the Minister of the arrangement (which I do not accept) it could not conceivably have caused any loss or damage to the Plaintiffs. 

As regards the duties alleged in paragraph 57 of the Statement of Claim these are overstated as against the Minister, for example subparagraph (i), and are really dealt with by what I say in relation to paragraph 58. 

Paragraph 58 is headed "Particulars of Breach of Duties by the Minister" and is extremely long running to 16 pages with 13 subparagraphs (a)-(m) inclusive with numerous internal subparagraphs in those. The Plaintiffs have abandoned subparagraphs (a) (b) (c) (iii) (e) (f) (ii & iii) (j) & (l). 

The remaining internal paragraphs of subparagraph (c) relate to interim finance and the Plaintiffs contention that the Minister should have contributed to the interim financing of Bula on a basis proportionate to the contributions of the Holdings personnel pending the development of the mine and its commencing to earn revenue. 

The shares in Bula owned by Mr Wright, Holdings and the Holdings personnel in 1975 were one million fully paid ordinary shares of one pound each the consideration for which had been the transfer to Bula of the Nevinstown lands and minerals. The Minister agreed in the Interparty Agreement to acquire 49% that is to say 490,000 of those fully paid ordinary shares. He was to pay for 24% of them in the manner provided in the Interparty Agreement the remaining 25% to be transferred free of any further consideration. Agreement was not reached on the price for the 24% and accordingly the matter went to arbitration as provided by the Interparty Agreement. The result of the arbitration was a resounding success for Mr Wymes and the Holdings personnel who ran the arbitration on behalf of themselves and Mr Wright and a corresponding defeat for the Minister. 

The Minister was contending for a valuation of about £1,000,000 to £3,000,000. The arbitrator fixed £9.54 million. Obviously the arbitrator accepted the evidence given on behalf of the Holdings personnel and Mr Wright which included: 

(A) forecasts of zinc prices in 1996 of over $5,000 per tonne whereas in fact the price in 1996 has been only in or about $1,050 per tonne; 

(B) evidence that an open pit mine should be up and running within a matter of two to three years from the time of the arbitration hearing in 1976 and we know only too well how wrong that forecast was; and 

(C) evidence that Bula were the owners of the minerals under the southern half of the river Blackwater opposite the lands of Nevinstown. 

In any event what the Minister acquired was 490,000 fully paid ordinary shares of £1.00 each in Bula which is a limited company. Under company law the Minister could not be made liable to pay any further monies in respect of his shareholding in Bula. The contention is however that he was liable to contribute proportionately by virtue of the Interparty Agreement. I have already emphasised the absence of any express provision in the Interparty Agreement for the payment of interim finance by anyone. It is suggested that such a provision must be implied in the Interparty Agreement. Clause 10.10 requires the agreement to be construed in the light of its own terms and nothing else. By clause 9.06 express provision is made for assistance by the Minister in the major financing of the mine by his undertaking to use his best endeavours to ensure that the Government of Ireland would agree to guarantee an amount not exceeding £10,000,000 for that purpose. The inclusion of this clause in the Interparty Agreement emphasises the absence of any provision for the payment of interim finance by the Minister. 

If one were to go outside the Interparty Agreement and look for extraneous evidence to assist in the construction of that Agreement (which one is not allowed to do) I have already found that all parties assumed that interim finance would be obtained 100% by bank borrowing. When the banks declined to roll up interest any further after 1979 the Holdings personnel being with the Wright family the only persons then in profit from Bula provided such assistance and the Minister resolutely maintained his stance of no liability to assist with interim finance. Moreover the question of interim finance had been mentioned at a much earlier time and Mr Holloway had made it quite clear that the Minister would not undertake any liability in respect of interim finance which would have to be arranged by the Holdings personnel who had complete control over Bula and its affairs. Transcript 230 page 40-42. MW 2 page 71-80 (23/11/77). 

I therefore reject the Plaintiffs allegations and claims as contained in the subsisting internal paragraphs of subparagraph (c) of paragraph 58 of the statement of claim. 

I reject subparagraph (d) and all its internal subparagraphs regarding alleged breaches of Clause 8.02. I particularly reject the allegations of intimidation coercion and duress. The only pressure on the Holdings personnel was the commercial pressure of Bank debt which is a common incidence of business life and usually arises, as in this case, from bad management and/or wrong commercial decisions. The Minister endeavoured to save the Holdings personnel from the consequences of their own incompetence and folly but failed because they persisted in their folly right through to dooms day. 

Subparagraph (f)(i), the only remaining part of subparagraph (f), is absurd and untrue and in any event could not result in any damage and I also reject subparagraph (g). Subparagraph (h) relates to the Bankers Trust/Outokumpu Package which I have already dealt with in detail and I reject the subparagraph accordingly and each of its eighteen internal subparagraphs insofar as they allege or imply any wrongdoing by the Minister. 

Subparagraph (i) relates to the Minsters' not invoking the arbitration clause in Tara's lease to compel tolling for the benefit of Bula pursuant to clause (f) of the lease and the case on tolling is now confined to 1986 a time when a receiver had already been appointed. I have already quoted earlier in this Judgment clause (f) of the lease and touched on the question of tolling. As it is a clause in the lease it is something agreed between Tara and the Minister. At the time when the lease was executed there was no mine whatever in the Navan area. The clause was making provision for the future and anticipated two independent mines working the Navan orebody side by side. It is clear from the reference to "the operators of any such privately owned minerals in Nevinstown" that the clause envisaged an independent Bula mine every bit as much as an independent Tara mine. 

A question which arose at the trial was whether the clause was intended to govern merely operational matters so as to ensure the safe and efficient working of two independent mines beside each other or whether it was intended to have a wider application requiring a close association and mingling of the operations of the two companies in particular in the form of a tolling arrangement. The clause itself read as one covenant within the lease and without regard to extraneous matters does not envisage a close association with Bula which would involved any mingling of the two mining operations and much less of the two corporate bodies: it simply provides for such co-operation as is reasonably required to ensure safe and efficient working of two separate mining operations working in proximity to each other. If one allows consideration of extraneous matters to be taken into account this construction is reinforced. It was never within the contemplation of the Holdings personnel when they entered into the Interparty Agreement some three months after Tara had entered into their lease that the Holdings personnel would have any close association with Tara. See transcript 101 page 1 & 2: Clause 8.08(a) of the Interparty Agreement and what I say above in relation to the Accord. More importantly because I am considering a clause in Tara's lease to which Bula and the Holdings personnel are not parties, it was never in the contemplation of Tara or their executives when they entered into their lease in September 1975 that Clause (f) or any clause in their lease would oblige them to enter into a close association with Bula and the Holdings personnel whom they regarded as having claim jumped them out of Nevinstown and if any such clause had been suggested by the Minister they would have refused to accept it. See transcript 264 of 30/7/96 page 20 & 21 and pages 120-123. 

Mr Wymes' approach to Clause (f) and the Interparty Agreement is that so long as Bula was seeking planning permission for an open pit mine they would not and could not be forced into any form of close association with Tara but when An Board Pleanala finally refused the open pit planning application Bula became entitled to require Tara to provide tolling facilities if called upon by Bula to do so. The form of tolling envisaged by Mr Wymes and the Holdings personnel gave rise to what I christened the Ghost Bula. This was because Tara was to mine and mill Bula's Nevinstown ore and store the concentrates arising therefrom, arrange transport for the concentrates to a suitable port and arrange shipping for the concentrates to the buyer and perhaps also to arrange the terms of their sale although the negotiation of contracts of sale of the concentrates might be done by Bula. Tara would get a percentage to be agreed with Bula of the profits or over and above the cost of production of the concentrates and the bulk of the profits would go to Bula. If Tara were not satisfied with Bula's proposals there could be an arbitration pursuant to the Arbitration Clause in the lease to settle the tolling terms and Tara would be bound by the arbitrators decision. Bula would only be bound if they were satisfied with the decision: if they were not satisfied they would not be bound because the Interparty Agreement took precedence over the lease so far as they were concerned. Tara would be bound to provide tolling facilities even if such an arrangement might involve an economic detriment or operational or technical disadvantages to Tara. See the Plaintiffs closing written submission part 1 page 56. This last proposition completely contradicts what Mr Wymes said in answer to a question by me and is untenable. Transcript 119 (27/6/95) page 21 & 22. 

If one construes Clause (f) of the lease as relating only to operational co- operation in the context of two independent mines working in proximity to each other then I think that it might be possible to give the Clause business efficacy and enforceability by the Minister because the operational problems which might arise would be clear when they did arise so that the question of uncertainty as to what was required would not arise. However the problem of enforcing an undertaking to co-operate and to act reasonably in all the negotiations remains and might just as likely be regarded as no more than an agreement to agree which is a nullity. I do not have to express a firm view on this aspect of the clause in view of my other findings in regard to it. If one construes Clause (f) as extending to require a close association between Tara and Bula in the working of the Bula minerals such as by a tolling arrangement and more especially by a tolling arrangement giving rise to a ghost Bula situation the possible combinations and permutations of such an arrangement are such as to render the clause unenforceable and void for uncertainty. 

In the situation of a Ghost Bula development of the Nevinstown minerals it is Tara and not Bula who are the operators of the mine. See the evidence of Mr William Bruce Evans at transcript 256 page 64-67 and especially the last question to him on page 67. So returning to Clause (f) and accepting Mr Evans' evidence it would follow that Clause (f) requires the Minster to ensure that Tara will act reasonably in all negotiations with themselves !! I find Mr Wymes' chameleon construction of Clause (f) of the lease read in the light of the Interparty Agreement as meaning an independent stand alone Nevinstown mining and milling operation at one time and the very opposite namely a Ghost Bula operation at another time quite unacceptable and I reject it. Clause (f) of Tara's lease did not and does not require Tara to enter into any arrangement involving a close association with Bula and/or the Holdings personnel in the mining and or milling of the Navan orebody. 

A final word on tolling. I listened carefully to Mr Wymes' evidence regarding his requests for tolling in 1986 after the appointment of the receiver by the banks on the 8 October 1985 and I followed and carefully considered the correspondence on that topic in 1986 and especially Mr Wymes' letters. At that time Mr Wymes had no right to deal with the Nevinstown orebody: that asset together with all the other assets of Bula were in the control of the receiver. I got the clear impression that what Mr Wymes was doing in 1986 was trying to lay the grounds for this litigation and that his proposals for tolling were a sham. I was interested therefore to find Mr Tully expressing similar views on 25 July 1996 transcript 261 page 74-77 and especially page 77. Mr Tully suggested in addition that these manoeuvres by Mr Wymes were also aimed at obstructing the receivership. I agree with Mr Tully that Mr Wymes' tolling demands were a sham aimed at laying the ground for this litigation and obstructing the receivership. 

Accordingly I reject subparagraph (i) of paragraph 58 of the Statement of Claim. 

I reject also subparagraph (k) and in any event no damage could possibly have resulted from this. I also reject subparagraph (m) and its five internal subparagraphs. The internal subparagraphs (ii) and (iii) are quite extraordinary complaints at the Minister's paying bank interest to stave off the receivership when one recalls Mr Wymes' wearisome wad of correspondence (to borrow Mr Holloway's expression in another context in transcript 230 page 73-74) demanding that the Minister contribute to interim finance and then when he does help out complaining about it. 

Paragraphs 59-66 of the Statement of claim are headed: "Post The Receivers Appointment" and display a refusal by the Plaintiffs to face up to and accept the realities created by the receivership. In so far as they impute any wrong doing to the Minister and/or the Tara Defendants I reject them. Furthermore these paragraphs are redolent of the sham which I have already found in relation to the 1986 tolling claims put forward by Mr Wymes. 

Paragraphs 67-69 of the Statement of Claim are headed "Appointment of Mr O'Connell" and paragraphs 70 & 71 are headed "Breach of Duties of Mr O'Connell". I reject each and every one of the allegations of wrongdoing by Mr O'Connell and/or the Minister made in these paragraphs. Mr O'Connell was well and truly able to deal with and demolish these allegations and also any other matters about which he was questioned in his evidence in transcripts 206-213 and I accept his evidence as I have already said. See especially regarding the alleged conflict of interest, transcript 207 page 31 and pages 65-74; transcript 209 page 45-48; and transcript 212 page 93. Regarding the allegation that Mr O'Connell should have informed Bula and the Holdings personnel of the restrictive covenants in Tara's loan agreements I say three things. 

First as I have already said, the Holdings personnel must have been well aware at all times that some such covenants would be included in Tara's loan agreements with their banks because Tara, like the proposed independent Bula mine, was to the knowledge of the Holdings personnel a one project company and monies advanced for that project would not be permitted to be diverted to another project without the consent of the lenders. Secondly Mr O'Connell acquired detailed knowledge of the Tara loan agreements from his position as an officer in the Department of Energy. That knowledge thus acquired was confidential to the Department and Tara and it would have been wholly wrong for Mr O'Connell to disclose such information to or discuss it with Bula or the Holdings personnel whether by supplying to them copies of Tara's loan agreements or otherwise. Thirdly I have already found as a fact that Tara were able to fulfil their obligations in their takeover proposals for Bula and the restrictive covenants had nothing to do with the breakdown of those proposals. Transcript 211 page 36. 

The only remaining paragraph in the Statement of Claim namely paragraph 72 deals with alleged loss and damage and I have therefore now gone through the whole of the Plaintiffs Statement of Claim relating to liability. I have rejected each and every allegation of wrong doing on the part of the Tara Defendants, the Minister, and Mr O'Connell and it follows therefore that the Plaintiffs action must be and is hereby wholly dismissed. 

I was, however, asked by counsel for the Minister to assess what would have been the damages against the Minister if the Plaintiffs had succeeded in their contention that the Minister ought to have backed the Bankers Trust/Outokumpu Package. I have no doubt at all that the Minister had no obligation to do so in view of the advices which he had received from his experts and the realities of the situation in October/December 1984 but I will nevertheless deal shortly with the losses on the assumption that the Minister ought to have backed the Bankers Trust/Outokumpu Package. 

No profits would ever have been earned by Bula or dividends ever paid to the shareholders. Bula's bank debts, as matters turned out with the benefit of hind sight over the last twelve years, would be every bit as enormous as they now are and therefore neither Bula nor Holdings would be at any loss or entitled to any damages. However Mr Wood and Mr Wymes would have benefited from the release of their guarantees of Bula's bank debts and of the judgments against them on foot of such guarantees. Whatever is the amount of such judgments with interest thereon at the present time would be the measure of their loss at the present time from the failure of the Bankers Trust/Outokumpu Package to be implemented. 

I had at one stage thought, in debate with Counsel during closing submissions, that Mr Wood and Mr Wymes should also be entitled to reimbursement of the amounts realised by Bula's banks by the sale of their assets. However on reflection, I accept Counsel for the Defendants point of view that the amount of the Bula bank debts which were being provided for repayment in the Bankers Trust/Outokumpu package was after crediting these realisations and hence they would not have been reimbursed if the Bankers Trust/Outokumpu package had gone ahead and therefore would not fall to be compensated in damages in any event. 

However that is not the end of the matter. The Holdings personnel had available to them in September 1985 the Tara takeover proposals of Bula which would have achieved the same benefits of release of their guarantees of Bula's bank debts and of the judgments in favour of the banks against them on foot of such guarantees and in addition to that substantial monies. The Holdings personnel had accepted the original such deal of the 21 December 1984: the improved such deal of the 20 March 1985 and they had available to them in September 1985 the same deal with still further improved money benefits offered to them. 

The Holdings personnel recklessly refused this offer in September 1985 and presented their eight point demand which involved a demand for an extra ten to fifteen million pounds. As Mr Stanley said those demands were outlandish and bound to scupper the deal and in those circumstances the Plaintiffs conduct in refusing the offer made to them in September 1985 and instead putting forward their eight point demand must be viewed as gross contributory negligence. 

This discussion on damages assumes fault on the part of the Minister in not backing the Bankers Trust/Outokumpu package. As is apparent from what I have already said, I have no doubt but that the Minister was right not to back that package and was not in any way at fault in so refusing. Proceeding on the contrary assumption, however, some fault would have to be measured against him. Through the agency of Mr Holloway's firm and skilful negotiations the Minister had obtained for the Plaintiffs the Tara Takeover Proposal of August/September 1985 which would have restored the Plaintiffs' fortunes to a degree significantly better than the Bankers Trust/Outokumpu package could ever have done. In those circumstances the measure of fault to be attributed to the Minister could not exceed 20%, whereas the recklessness and folly of the Plaintiffs' rejection of the Tara Takeover Proposal of August/September 1985 and their £10,000,000 to £15,000,000 eight point demand were such that the measure of fault attributable to the Plaintiffs could not be less than 80% all within the meaning of Section 34 subsection (1) of the Civil Liability Act 1961. 

Along with the closing written submissions I was supplied with eight volumes of copies of reported cases: four volumes by the Plaintiffs: three by the Tara Defendants and one by the Minister. Whilst I listened attentively to such of these cases as were opened to me and have considered them and borne them in mind in preparing this judgment, I do not find it necessary to summarise the legal arguments or to discuss the authorities opened to me. There are 804 pages of written submissions in addition to the eight volumes of copies of reported cases available for those who may wish to delve deeper into the law submitted for my consideration. This case is really one of fact and having found the facts the legal consequences are clear. Indeed in his closing oral submissions counsel for the Plaintiffs submitted as much except of course that he submitted that the consequences should be the opposite of my conclusions. Transcript 276 page 56. 

I have annexed to this Judgment as the seventh schedule an index of witnesses in the order in which they were first called to give evidence including a note of the transcripts in which their evidence is to be found and the dates upon which they gave their evidence. I have also annexed as the eight schedule a table of the contents of this judgment. 

In the result, as I have already said, the claims of the Plaintiffs and each and all of them as against the Defendants and each and all of them are hereby dismissed. 

THE FIRST SCHEDULE 

"Memorandum on the Development of Nevinstown Minerals. 

Proposal for 49% State Equity in Bula Limited. 

1. Bula Limited Shareholders will make available 25% of their share capital to the State for no consideration. 

2. Bula Limited Shareholders will make available an additional 24% of their share capital to the State for a consideration. The price to be calculated as 24% of an agreed valuation of the Bula property. 

3. In the event of non-agreement on the valuation within two months of the signing of the formal contract based on this agreement in principle an independent Consultant will be commissioned within three further weeks thereof to evaluate the property as soon as possible. The Consultant will be acceptable to both parties. In the event of failure to agree on a Consultant the President of the Institute of Arbitrators (London) or some other suitable authority will be requested within one week thereof to select an independent Consultant. The independent Consultant shall be instructed to present his findings within six months of the assignment commission. The findings of the Consultant shall be binding on both parties and the cost of the valuation shall be divided equally between Bula Limited and the State. The Department of Industry and Commerce and Bula Limited shall immediately make available to the Consultant such information in respect of the property (being information which they are entitled to give) as the Consultant deems necessary to carry out an accurate valuation. 

4. Each share shall have one vote. However in respect of the voting rights attached to the equity obtained for no consideration the Minister will give power of attorney to Mr Roche or his nominees over the voting rights attached to 84% of that equity. 

5. The payment schedule for the purchase price of the 24% equity referred to in paragraph 2 above shall be: 

(a) 50% of consideration payable within three months of agreement on the valuation of the property or receipt of the independent Consultant's written valuation; 

(b) 25% of consideration payable one year later; 

(c) 25% of consideration payable two years later. 

6. A 24% share interest in Bula Limited shall be transferred to the State on contract completion and payment of the first instalment of the purchase price. The 25% equity interest referred to in paragraph 1 will be transferred to the State within one month of payment of the first instalment of the purchase money. 

7. Should the State wish at any time to transfer any of its shares in Bula Limited to non State interests it shall offer those shares in the first instance to the other shareholders of Bula pro rata to their shareholding. In default of agreement on price the price would be determined by Consultants appointed in the same manner as that applicable to the valuation of the 24% equity to be acquired for a consideration by the Minister. 

8. The State will have the right to appoint two Directors of Bula Limited. The other shareholders will have the right to appoint five Directors one of whom shall be the nominee of the Shareholder representing the interest of Mr Wright in accordance with the agreement of 18 March 1971 between Mr Roche and Mr Wright. 

9. The articles of association will be re-drafted so as to have special regard to the rights conferred on Mr Patrick Wright by the Agreement of 18 March 1971 between him and Mr Roche and to the rights of the other parties to this Agreement in principle. 

10. This Agreement in principle is subject to the condition that a formal contract based on it cannot be entered into unless the terms of that formal contract are approved by the Government and all the Bula Shareholders." 

"2.01 Each of the Shareholders shall sell the number of shares listed after his name in the third column of the Second Schedule hereto and subject to the provisions of Article 4.00 hereof the Minister shall purchase the aggregate number of Shares listed in the said third column of the said Second Schedule hereto free from any lien charge or other encumbrance and together with all accrued benefits and rights for the consideration and payable in the manner set out in Article 3.00 hereof and otherwise upon the terms and conditions set forth. 

3.01(a) Forthwith upon the execution hereof the Minister and the Shareholders shall jointly request the President for the time being for the Institute of Arbitrators in London to nominate a Board of three independent consultants who acting by majority decision shall fix the consideration payable for the sale and purchase referred to in Article 2.01 hereof. 

3.04 The amount payable by the Minister to the Shareholders in accordance with the price certified under the provisions of this Article 3.00 shall be satisfied in the following manner:- 

(a) One half of the sum payable shall be paid on Completion. 

(b) One quarter shall be payable on the first anniversary of Completion. 

(c) One quarter shall be payable on the second anniversary of Completion. 

4.05 The Board of Directors of the Company shall consist of seven directors two of whom shall be nominees of the Minister. 

SECOND SCHEDULE 

BULA LIMITED 

INTER-PARTY AGREEMENT 

BULA LIMITED 

INTER-PARTY AGREEMENT 

CONTENTS 

PAGE 

Index (i)-(v) 

ARTICLES 

1.00 INTERPRETATION 
	
1.01 Definitions	2	
1.02 Further Definitions	4	
1.03 Headings	5	
1.04 Proper Law	5	
2.00 ACQUISITION BY MINISTER OF SHARES		
2.01 Sale and Purchase	6	
2.02 Further Shares	6	
3.00 CONSIDERATION		
3.01 Consultant's Appointment	6	
3.02 Effect of Appointment	8	
3.03 Further Appointment	9	
3.04 Payment	9	
4.00 CONDITIONS		
4.01 Compliance with Warranties	10	
4.02 Fulfilment of Obligations	10	
4.03 Financial Position	10	
4.04 Title to Properties	10	
4.05 Board of Directors	11	
4.06 Legal Actions	11	
4.07 Delivery	11	
4.08 Termination of Agreements	11	
ARTICLE	PAGE	
5.00 WARRANTIES AND UNDERTAKINGS		
5.01 Recitals Correct	12	
5.02 Directors and Secretary	12	
5.03 No Governing Directors	12	
5.04 Accounts	12	
5.05 Taxation	14	
5.06 Tax Returns	14	
5.07 Section 530 ITA 1967	14	
5.08 No Compensation Payments	14	
5.09 Payments to Revenue Made	14	
5.10 No Subsidiary Companies	15	
5.11 No Issues or Options	15	
5.12 Compliance with Statutory Requirements	15	
5.13 Properties	15	
5.14 Plant etc is Owned by the Company	175.15 Value of Plant etc	
17		
5.16 Valuing Stock etc	17	
5.17 No Unusual Contracts	18	
5.18 No Guarantees or Unusual Liabilities	18	
5.19 No Charges or Loan Capital	18	
5.20 Book Debts Good	19	
5.21 No Enforcement of Securities	19	
5.22 Employee Dismissal Liability	19	
5.23 No Pension Scheme	19	
5.24 Remuneration of Employees	19	
5.25 No Litigation or Default in Obligations	20	
5.26 Grants etc not Repayable	20	
5.27 Non-Contravention of Statutory Provisions	20	
5.28 Insurance	21	
5.29 Patents and Trade Marks etc	21	
5.30 Name of Business	21	
5.31 Memorandum and Articles	22	
5.32 Returns up to Date	22	
5.33 Records Properly Kept	22	
5.34 Stamp Duties	22	
5.35 Disclosure of all Material Facts	23	
5.36 Notice to the Minister	23	
ARTICLE	PAGE	
6.00 PROVISIONS RE PERIOD PRIOR TO COMPLETION		
6.01 Access	24	
6.02 Business of the Company	24	
6.03 Prohibited Transactions	24	
6.04 Conduct of Business	26	
6.05 Capital Structure	26	
6.06 Articles of Association	27	
6.07 Deed of Indemnity	27	
7.00 COMPLETION ARRANGEMENTS	
7.01 Time and Place	27	
7.02 Deliveries	27	
7.03 Meeting	28	
7.04 Payments	28	
8.00 PROVISIONS RE PERIOD AFTER COMPLETION		
8.01 Continuance	28	
8.02 Business	29	
8.03 Restricted Transactions	29	
8.04 Dividends$32		
8.05 Supply to Smelter	33	
8.06 Auditors	34	
8.07 Information	34	
8.08 Joint Development	34	
8.09 Availability of Expertise	35	
9.00 COVENANTS AND DECLARATIONS		
9.01 Voting Right	36	
9.02 Evidence of Control	38	
9.03 Competition Covenant	38	
9.04 Waiver of Pre-Emption Rights	40	
9.05 Planning Permission	40	
9.06 State Guarantee	40	
ARTICLE	PAGE	
9.00 COVENANTS AND DECLARATIONS Contd		
9.07 Participation in Refinery	40	
9.08 Obligation of Covenantors	41	
9.09 Compliance by Company	42	
10.00 GENERAL PROVISIONS		
10.01 Survival of Obligations	42	
10.02 Binding on Successors	42	
10.03 Further Assurance	42	
10.04 Basis of Consent	43	
10.05 No Waiver	43	
10.06 Assignment	43	
10.07 Counterparts	44	
10.08 Effect of Investigation	44	
10.09 Notices	44	
10.10 Entire Agreement	45	
FIRST SCHEDULE		
The Covenantors	45	
SECOND SCHEDULE	
The Shareholders Details of Shareholdings and	
Consideration	46	
THIRD SCHEDULE		
Particulars of Directors and Secretary	47	
FOURTH SCHEDULE		
The Property	47/48	
	PAGE	
FIFTH SCHEDULE		
Articles of Association	49/64	
SIGNATURES	65/66	

THIS AGREEMENT made the 12th day of December 1975 

BETWEEN: 

BULA HOLDINGS an unlimited company having its registered office at 69/71 St Stephen's Green Dublin 2and PATRICK WRIGHT of Boyne Cottage Navan County Meath (hereinafter called "the Shareholders"). 

Of the First Part 

THE PARTIES SET OUT IN THE FIRST SCHEDULE HERETO(hereinafter called "the Covenantors") 

Of the Second Part 

and 

THE MINISTER FOR INDUSTRY AND COMMERCE Kildare Street Dublin 2(hereinafter called "the Minister") 

Of the Third Part 

WHEREAS 

A. Bula Limited (hereinafter called "the Company") is a limited company incorporated in the Republic of Ireland on 19 March 1971 and now has an authorized capital of £1,000,000 divided into 1,000,000 shares of £1.00 each all of which have been issued and are fully paid up. 

B. The Shareholders are the registered and beneficial owners free from any lien charge or other encumbrance of the entire issued share capital of the Company. 

C. The Minister has agreed to purchase and the Shareholders have agreed to sell 240,000 Shares on the terms and conditions hereinafter contained and the Shareholders have further agreed to transfer 250,000 Shares to the Minister as a further consideration to the Minister for entering into this Agreement such sales and purchases being upon the terms and conditions hereinafter contained. 

D. The Shareholders and the Minister have agreed to enter into these presents to give effect to the said sale and purchase and transfer of such number of Shares and to govern certain aspects of their future relationship as shareholders in the Company. 

E. The Covenantors together directly or indirectly control Bula Holdings (one of the Shareholders) and have agreed to enter into these presents for the purposes hereinafter appearing. 

NOW IT IS HEREBY AGREED as follows:- 

ARTICLE 1.00 - INTERPRETATION 

DEFINITIONS 

1.01 In this Agreement the recitals and the schedules hereto the following expressions shall unless the context otherwise requires have the meanings following: 

"the Accounts"the Consolidated Balance Sheet of the Company as at the relevant accounting date a copy of which is annexed hereto and for the purposes of identification signed by or on behalf of each of the parties hereto. 

"the Articles of Association"the Articles referred to in Article 6.06 hereof and set out in the Fifth Schedule hereto. 

"business day"a fully working week-day in Dublin. 

"Completion"Completion of the obligations of the parties hereto in accordance with the provisions of Article 7.00 hereof. 

"emoluments"the meaning attached to such expression by Section 191 of the Companies Act, 1963. 

"family interests"in respect of any of the Covenantors - his wife child grandchild brother or sister. 

"financial year" the meaning attached to such expression by Section 2 of the Companies Act, 1963. 

"the mine"the mineral assets owned by the Company and the workings ancillary to their development. 

"permitted nominee"any person duly authorised by the Minister to hold Shares on his behalf being an officer of the Department of the Minister or a body corporate wholly owned by or on behalf of any Minister of the Government of Ireland. 

"permitted transferee"a transferee of Shares pursuant to the provisions of Article 10.06 hereof. 

"the property"the property or properties short particulars of which are set out in the Fourth Schedule hereto and such expression shall include any part or parts thereof. 

"the relevant accounting date" 31 March 1975 

"Shares"Ordinary issued shares in the capital of the Company. 

"subsidiary" and "equity share capital"the meaning attached to such expressions by Section 155 of the Companies Act 1963. 

FURTHER DEFINITIONS1.02 (a) The expression "the Minister" shall refer to the holder for the time being of the office of Minister for Industry and Commerce (or of such other Department as shall replace the same) of the Government of Ireland. 

(b) Any reference to "the Minister" herein shall include a reference to any person duly authorised by the Minister to exercise on his behalf any of the rights conferred on the Minister by this Agreement. 

(c) The expressions "the Shareholders" "the Covenantors" and "the Warrantors" shall include the respective personal representatives successors and permitted assigns of such persons. 

(d) Any document expressed to be "in the approved terms" means in a form approved and for the purpose of identification signed by or on behalf of the parties hereto prior to the execution hereof. 

(e) Any reference to any provision of any Act shall include any modification re-enactment or extension thereof. 

(f) The masculine gender shall include the feminine and neuter and the singular number shall include the plural and vice versa. Words such as "hereunder" "hereto" "hereof" and "herein" and other words commencing with "here" shall unless the context clearly indicates the contrary refer to the whole of this Agreement and not to any particular Article of section thereof. 

HEADINGS1.03 The headings and marginal descriptions of all paragraphs and Articles hereto are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement. 

PROPER LAW1.04 This Agreement shall in all respects (including the formation thereof and performance thereunder) be governed by and construed in accordance with the laws of the Republic of Ireland. 

ARTICLE 2.00 -- ACQUISITION BY MINISTER OF SHARES 

SALE AND PURCHASE2.01 Each of the Shareholders shall sell the number of Shares listed after his name in the third column of the Second Schedule hereto and subject to the provisions of Article 4.00 hereof the Minister shall purchase the aggregate number of Shares listed in the said third column of the said Second Schedule hereto free from any lien or charge or other encumbrance and together with all accrued benefits and rights for the consideration and payable in the manner set out in Article 3.00 hereof and otherwise upon the terms and conditions herein set forth. 

FURTHER SHARES2.02 As further consideration for the sale and purchase provided for in Article 2.01 each of the Shareholders shall transfer to the Minister on Completion without further payment and free from any lien charge or encumbrance and together with all accrued rights and benefits the number of Shares respectively listed after his name in the fourth column of the Second Schedule hereto upon the terms and conditions herein set out. 

ARTICLE 3.00 -- CONSIDERATION 

CONSULTANT'S APPOINTMENT3.01 (a) Forthwith upon the execution hereof the Minister and the Shareholders shall jointly request the President for the time being of the Institute of Arbitrators in London to nominate a Board of three independent consultants who acting by majority decision shall fix the consideration payable for the sale and purchase referred to in Article 2. 

(b) The appointment of such consultants pursuant to the provisions of paragraph (a) of this Article 3.01 shall be binding upon the parties hereto. Such consultants (hereinafter called "the Consultants") shall be instructed to value as at the date hereof the undertaking of the Company at such date and that the purchase price is to be calculated as twenty four per cent (24%) of such valuation. In determining the said valuation the Consultants shall follow the most approved practice in the mining industry and take into account all known property assets and liabilities of the Company at the date hereof. The valuation shall be on the basis that all the minerals owned by the Company shall be worked by the Company in the most efficient manner that can be achieved having regard inter alia to the character and location of the orebody the minerals legislation and other laws of Ireland such requirements of relevant authorities as may reasonably be anticipated and the fact that it is the intention of the Minister to give such assistance as may be within his proper competence in the procurement of ancillary rights under Part VI of the Minerals Development Act, 1940 for the efficient development of the mine. 

(c) The Consultants shall be required to present their findings on a date not later than six calendar months from the date of their appointment and to certify to the parties hereto as to the amount payable by the Minister to the Shareholders hereunder. 

(d) The Consultants shall have the right to consult with each of the parties hereto and each of the parties hereto hereby covenants that he will make available to the Consultants all such information as they shall request in respect of the Company and its assets and liabilities forthwith upon receipt of a request from the Consultants provided always that in the case of the Minister such information is information which is within the reasonable procurement of the Minister and which the Minister is entitled to make available to the Consultants and in the case of any other party hereto that such information is within the reasonable procurement of such party. 

(e) Any information submitted in writing to the Consultants by or on behalf of the Shareholders and/or the Covenantors shall also be submitted at the same time to the Minister and any information submitted in writing to the Consultants by or on behalf of the Minister shall also be submitted at the same time to the Shareholders. 

(f) The Minister and the Shareholders shall procure that the fees and expenses of the Consultants shall be borne in equal moieties by the Minister and the Company. 

EFFECT OF APPOINTMENT 

3.02 The Consultants shall be deemed to act as experts and not as arbitrators and the findings of the Consultants when certified to the parties hereto shall be final and (save in the case of manifest error) shall bind the parties hereto. The provisions of the Arbitration Act 1954 shall not apply to the appointment or the functions of the Consultants hereunder. 

FURTHER APPOINTMENT 

3.03 If the Consultants for any reason whatsoever shall not certify a price to the parties hereto within seven days after the expiry of the period of six months referred to in Article 3.01 (c) hereof or if at any time they shall notify the parties hereto that they or any of them is or are unable or unwilling to so certify or if any of them shall die the appointment hereunder of such one or more of the Consultants (as the case may be) shall be revoked and either the Minister or the Shareholders shall be entitled to request the President for the time being of the Institute of Arbitrators in London to nominate a further independent consultant or further independent consultants (as the case may be) and the provisions of Articles 3.01 and 3.02 hereof shall apply mutatis mutandis in the case of such appointment. 

PAYMENT 

3.04 The amount payable by the Minister to the Shareholders in accordance with the price certified under the provisions of this Article 3.00 shall be satisfied in the following manner:- 

(a) One half of the sum payable shall be paid on Completion. 

(b) One quarter shall be payable on the first anniversary of Completion. 

(c) One quarter shall be payable on the second anniversary of Completion. 

ARTICLE 4.00 -- CONDITIONS 

Notwithstanding any other provision hereof this Agreement is subject to and conditional upon the following terms and conditions which are for the exclusive benefit of the Minister to be fulfilled and/or performed at or prior to Completion. 

COMPLIANCE WITH WARRANTIES 

4.01 That there shall have been no breach of any of the representations and warranties contained in Article 5.00 and that no circumstances shall have arisen which require disclosure to the Minister in writing in accordance with the provisions of Article 5.36 thereof. 

FULFILMENT OF OBLIGATIONS4.02 That each of the matters set out in Article 6.00 hereof shall have been performed and complied with and that the Shareholders and the Covenantors shall have fulfilled and performed all of the obligations which whether under the terms of Article 6.00 hereof or under any other provisions hereof they are to have performed and fulfilled on or before completion. 

FINANCIAL POSITION 

4.03 That the Company shall have furnished to the Minister such evidence as the Minister shall reasonably request for the purpose of ascertaining the accuracy of the representations and warranties of the Shareholders and the Covenantors contained in this Agreement with regard to the financial position and affairs of the Company. 

TITLE TO PROPERTIES 

4.04 That the Company shall have furnished to the Minister such evidence of title as the Minister shall require for the purpose of ascertaining the accuracy of the representations and warranties of the Shareholders and the Covenantors set forth in Article 5.13 hereof. 

BOARD OF DIRECTORS 

4.05 That the Board of Directors of the Company shall consist of seven directors two of whom shall be nominees of the Minister. 

LEGAL ACTIONS 

4.06 That there shall not have been instituted or threatened any legal proceedings seeking to prohibit the consummation of the transactions contemplated by this Agreement (or any agreement relating thereto) in accordance with its terms or to obtain damages with respect thereto. 

DELIVERY 

4.07 That there shall have been delivered to the Minister at or prior to Completion such documents (including certificates of officers of the Company) as the Minister may reasonably request in order to enable the Minister to determine whether the conditions to his obligations under this Agreement have been met and otherwise to carry out the provisions of this Agreement. 

TERMINATION OF AGREEMENTS 

4.08 That the Shareholders shall have produced evidence to the satisfaction of the Minister that all existing agreements with regard to the conduct of the affairs of the Company or the exercise of rights conferred by shareholding in the Company shall have been terminated. 

CONSEQUENCES OF NON-COMPLIANCE 

4.09 In the event of any of the foregoing conditions not being fulfilled and or performed to the satisfaction of the Minister at or before Completion the Minister may rescind this Agreement by notice to the Shareholders provided that such right of rescission shall be additional to and without prejudice to any other remedies available to the Minister at law or otherwise in respect of such non-compliance and that any of the said conditions may be waived in whole or in part by the Minister without prejudice to his rights of rescission in the event of the non-performance of any other condition or conditions any such waiver to be binding on the Minister only if the same is 

ARTICLE 5.00 -- WARRANTIES AND UNDERTAKINGS 

Each of the Shareholders and the Covenantors (being in this Article 5.00 together referred to as "the Warrantors") hereby jointly and severally undertakes with and warrants to the Minister and his successors in title in accordance with the provisions of this Article 5.00 to the intent that the provisions of this Article shall continue to have full force and effect notwithstanding Completion and which undertakings and warranties are given subject to such disclosures as are contained in a letter of even date herewith addressed to The Minister. For the purposes of this Article 5.00 "the Company" shall mean and include Newderry Properties Limited a former wholly owned subsidiary of the Company. 

RECITALS CORRECT 

5.01 The facts set out in the Recitals hereto are and will be at Completion true and correct. 

DIRECTORS AND SECRETARY 

5.02 The Directors and Secretary of the Company are and will be immediately prior to Completion the persons listed in the Third Schedule hereto. 

NO GOVERNING DIRECTORS 

5.03 At the time of Completion there will be no permanent or governing Directors of the Company and the Company will not be under a liability to pay any sum whatsoever to any former Director or Governing Director. 

ACCOUNTS 

5.04 (a) The Accounts have been prepared in accordance with the requirements of the relevant statutes and in accordance with good accountancy practice and are true and accurate in all respects and show a true and fair view of the state of affairs of the Company as at the relevant accounting date and full disclosure and provision is made in the Accounts of all actual liabilities and proper provision or note of all contingent or other liabilities whether quantified or not and of all financial commitments of the Company in existence at the relevant accounting date. 

(b) Since the relevant accounting date and until Completion the business of the Company has been and will be carried on in the ordinary and usual course and the Company has not parted or contracted to part with and further will not prior to Completion part with any of its fixed assets. 

(c) Since the relevant accounting date no bonuses dividends or other distributions have been declared paid or made on or by reference to the issued share capital of the Company. 

(d) The Company has not disbursed and pending Completion will not disburse any cash except in the ordinary course of its business and all amounts received by the Company have been or will be deposited with the Company's bankers and appear or will appear in the appropriate books of account. 

(e) At the date hereof the Company has and at Completion will have no contingent liabilities save such liabilities as are not of a material nature and are incurred in the normal course of business. 

TAXATION 

5.05 The Accounts make full provision and reserves for all taxation or other sums payable for which the Company at the relevant accounting date was or may have become liable to be assessed in respect of its trading results and other taxation liabilities for any period ending on or before the relevant accounting date. 

TAX RETURNS 

5.06 All necessary tax returns have been properly made by the Company and such returns are not disputed in any material respect by the fiscal authorities and none of the Warrantors is aware of any matters which may lead to dispute with such authorities. 

SECTION 530 ITA 1967 

5.07 No directions or apportionments have been made by or on behalf of the Revenue Commissioners under Section 530 of the Income Tax Act 1967 in respect of the income (including deemed income) of the Company for any year or period or part of any year or period up to Completion. 

NO COMPENSATION PAYMENTS 

5.08 The Company has not paid and will not pending Completion pay any remuneration or compensation for loss of office or make any gratuitous payment to any of its present or former directors or employees. 

PAYMENTS TO REVENUE MADE 

5.09 At Completion all amounts due for payment to any taxation or revenue authorities in respect of tax on goods sold prior to Completion will have been paid so that the Company will have no liability in respect thereof and at Completion all Social Welfare contributions (both employers and employees) due in respect of the employees of the Company will have been duly paid by the purchase and cancellation of Insurance stamps and further all amounts due to the Revenue in respect of deductions made by the Company in accordance with PAYE regulations and in respect of income tax deductible from any interest on the payments by the Company shall have been paid. 

NO SUBSIDIARY COMPANIES 

5.10 The Company has not had since the date of its incorporation and will not at Completion have any subsidiary companies or company. 

NO ISSUES OR OPTIONS 

5.11 The Company has not since the relevant accounting date issued or agreed to give any option in respect of any shares nor issued or agreed to issue or give any option in respect of any debenture or other securities and there are outstanding no options in respect of any such shares debentures or securities. 

COMPLIANCE WITH STATUTORY REQUIREMENTS 

5.12 All Statutory municipal and other like requirements applicable to the business of the Company have been and will at Completion have been complied with by the Company and there are and will at such date be no such requirements outstanding. 

PROPERTIES 

5.13 The Property comprises all the freehold and leasehold property owned controlled under option to occupied by or contracted to be purchased by the Company and subject as provided in the Fourth Schedule hereto the Company has and will at Completion have a good and marketable title thereto (including rights to all minerals and mineral deposits on or under the same) and each part thereof: 

(a) is now held and will at Completion be held by the Company free from any lease tenancy mortgage charge encumbrance option or other agreement. 

(b) is not subject to any covenant restriction or condition which is of an unusual or onerous nature or which affects the use or continued use of the Property for the purposes for which it is now used and all covenants restrictions and conditions affecting such property been observed and performed. 

(c) is not affected by any closing order whether served or threatened any enforcement notice not complied with any order or proposal publicly advertised or of which written notice has or shall then have been given for the compulsory acquisition or requisition of the whole or any part thereof or the modification of any planning permission or the discontinuance of any use or the removal of any building or any notice or summons by any County local public statutory or other authority or by any other person whether the same is issued or served or threatened or pending. 

(d) complies with the relevant planning legislation and any permission given in respect thereof and the present user of such property is and at Completion shall be the permitted user under such planning legislation no development thereof contravenes such legislation and there are no agreements which any Planning Authority regulating the use or development thereof or in relation to any compensation received or to be received in respect of a refusal of any planning consent or the imposition of restrictions in relation to any planning consent. 

(e) complies with any regulation applicable to it in relation to fire or public health made under Statute or by way of regulation or bye law. 

PLANT ETC IS OWNED BY THE COMPANY 

5.14 The fixed and loose plant machinery furniture fixtures and fittings and other chattels equipment and vehicles (including but without limitation all stock work in progress raw materials and supplies books records customer lists costing details and all other written information) used in connection with the business of the Company are and will at Completion be the absolute unencumbered property of and held by the Company free from any charge lien hypothecation hire or hire purchase agreement or agreement for payment on deferred terms or bill of sale and will be held in possession by it. 

VALUE OF PLANT ETC 

5.15 Adequate depreciation and provisions for obsolescence have been made having regard to the condition and age of the plant machinery fixtures fittings and equipment included in the Accounts and with regard to such plant machinery fixtures and equipment and also any such acquired by the Company since the relevant accounting date: 

(a) None has been retaken into possession by the owner under any hire purchase agreement 

(b) None has been sold or disposed of at less than book value. 

(c) None was acquired at a price substantially in excess of market value. 

VALUING STOCK ETC 

5.16 The basis of valuing stock and work-in-progress included in the Accounts is the same as that adopted in the three immediately preceding accounting periods by the Company and redundant and obsolete stock as at the relevant accounting date has been wholly written off and any slow moving stock included in the Accounts has been attributed to the remaining stock included in such accounts does not exceed the lower of cost or market value as at the relevant accounting date. 

NO UNUSUAL CONTRACTS 

5.17 There are not now and will not on Completion be any long term onerous or unusual contracts binding upon the Company and no contract subsisting at Completion will contain any onerous unusual or other provision material for disclosure to an intending purchaser of Shares of the Company. 

NO GUARANTEES OR UNUSUAL LIABILITIES5.18 Except as disclosed in the Accounts there are not at the date hereof and will not be on Completion any loans guarantees material undertakings material commitments on capital account or unusual liabilities which have been made given entered into or incurred by or on behalf of the Company. 

NO CHARGES OR LOAN CAPITAL 

5.19 Except as disclosed in the Accounts there are not at the date hereof and will not be on Completion: 

(a) Any mortgages charges liens or other similar encumbrances on any estate or interest in the assets of the Company or any part thereof; or 

(b) In respect of any such encumbrances any increase in the amount for which it is available as security beyond that for which it was security at the relevant accounting date or in the case of a mortgage or charge created subsequent to that date the amount disclosed to the Minister for the purpose hereof; 

(c) Any loan capital or other loans to the 

BOOK DEBTS GOOD 

5.20 The book debts owing to the Company at Completion are expected to be paid in full and are not known to be subject to any counterclaim or set off (except to the extent that provisions or reserves have been made in the Accounts for such debts). 

NO ENFORCEMENT OF SECURITIES 

5.21 The Company has not received notice (whether formal or informal) from any lenders of money to such company in respect of or as a preliminary to the enforcement by such persons of any security which they may hold over any of the assets of the company and none of the Warrantors is aware of any circumstances likely to give rise to such notice being given to the Company. 

EMPLOYEE DISMISSAL LIABILITY 

5.22 The terms of the engagements of all the officers and servants of the Company are and will at Completion be such that save as disclosed as aforesaid they may be terminated at not more than one months previous notice given at any time and without any liability for payment of compensation damages or otherwise other than liability under the Redundancy Payments Acts and for holiday pay. 

NO PENSION SCHEME 

5.23 There are no top-hat schemes pension schemes or other pension arrangements in operation in relation to the Company or its Directors or employees and there will continue to be no such schemes or arrangements in operation pending Completion and the Company neither is nor will pending Completion be under any obligation (legal or moral) regarding the payment of any retirement benefits. 

REMUNERATION OF EMPLOYEES 

5.24 Full disclosure has been made to the Minister of all remuneration payable to each officer and employee of the Company earning in excess of £4,000 per annum and there has been no substantial increase in any fees or emoluments paid or payable to any officer or servant of the Company since the relevant accounting date. 

NO LITIGATION OR DEFAULT IN OBLIGATIONS 

5.25 Neither the Company nor any person for whose acts or defaults the Company is vicariously liable is engaged in any litigation or any arbitration and no litigation or arbitration affecting the Company is threatened or to the best of the knowledge and belief of the Warrantors is pending and the Company is not and shall not at Completion be in the course of being prosecuted for any criminal offence and none of the Warrantors is aware of any circumstances likely to lead to such litigation arbitration or prosecution and the Company is not in default in respect of any material obligation whether contractual statutory or municipal and the said purchase herein agreed will not result in any contract to which the Company is a party becoming determinable by a third party. 

GRANTS ETC NOT REPAYABLE 

5.26 Save for disposals in the ordinary course of business or losses the Company has not done or failed to do any act or thing which could result in all or any part of a Government Grant or other similar payment or allowance made or due to be made to it becoming repayable or being forfeited by it and pending Completion the Company shall not do any such act or thing. 

NON-CONTRAVENTION OF STATUTORY PROVISIONS 

5.27 The Company has not done or omitted to do any act or thing in contravention or breach of any of the provisions of the Exchange Control Acts, The Restrictive Trade Practices Acts, The Road Traffic Acts or the Companies Acts or any statutory modifications thereof and pending Completion the Company will not do or omit to do any such act or thing. The Company is not and pending Completion will not be a party to any agreement arrangement or or 86 of the Treaty of Rome in respect of which application for negative clearance or notification has been made or ought to have been made to the Commission of the European Economic Community. 

INSURANCE 

5.28 All the assets of the Company of an insurable nature and to the extent that Companies carrying on similar business consider it prudent or normal to insure have at all material times been and are at the date hereof and will pending Completion be insured in amounts to the full replacement value thereof against fire and other risks (including without limiting the generality of the foregoing loss of profits) normally insured against by persons carrying on the same classes of business as those carried on by the Company and the Company has at all material times been and is at the date hereof and will pending Completion be adequately covered against accident third party public liability and other risks normally covered by insurance and nothing has been and pending Completion will be done or omitted to be done which would make any policy of insurance void or voidable. 

PATENTS AND TRADE MARKS ETC 

5.29 The Company has no interest in any patents trade marks registered designs or copyrights nor has the Company entered into nor will it prior to completion enter into any agreement for licensing of patents or copyrights and user of trade marks registered designs or the provision or acquisition of technical information or assistance nor does the Company require any patent trade mark or registered design or a licence to use the same in order to carry on its business as presently constituted. 

NAME OF BUSINESS 

5.30 The Company does not use on its letterhead books or vehicles or otherwise carry on business 

MEMORANDUM AND ARTICLES 

5.31 The copies of the Memorandum and Articles of Association of the Company which have been supplied to the Minister are true copies annexing of embodying all alterations which have been made up to the date hereof. 

RETURNS UP TO DATE 

5.32 All returns particulars resolutions and other documents required to be filed or to be delivered on behalf of the Company with or to the Registrar of Companies have been at the date hereof and will at Completion have been correctly and properly made up and so filed or delivered within the period prescribed. 

RECORDS PROPERLY KEPT 

5.33 All the accounts books ledgers and financial and other material records of whatsoever kind of the Company have at the date hereof been fully properly and accurately kept and completed and will pending Completion continue to be so made up kept and completed and there are at the date hereof and will pending Completion be no material inaccuracies or discrepancies of any kind contained or reflected therein or any of them and at the date hereof they give and reflect and at Completion will give and reflect a true and fair view of the financial contractual and trading position of the Company and of its plant and machinery fixed and current assets and liabilities (actual and contingent) debtors and creditors and stock-in-trade and work-in-progress. 

STAMP DUTIES 

5.34 All documents in the possession or under the control of the Company to which it is a party which attract stamp duty have been properly stamped and the Warrantors will notify the Minister before Completion if the Company has been a party to a scheme contract or arrangement in respect of which relief from duty has been obtained under the provisions of Section 19 of the Finance Act 1952 $99 of the Finance Act 1973 during the past five years. 

DISCLOSURE OF ALL MATERIAL FACTS 

5.35 The Warrantors are not and will not at Completion be aware of any material fact or circumstance relative to the business or affairs of the Company which on the basis of the utmost good faith should be and has not been disclosed to the Minister or which would render any of the information given by or on behalf of the Warrantors to the Minister or his advisers during the negotiations leading to this Agreement untrue or misleading at that date or which might if disclosed affect the decision of a person offering to acquire a substantial interest in the Company. 

NOTICE TO THE MINISTER 

5.36 If subsequent to the date hereof and prior to Completion the Warrantors or any of them shall become aware of any material fact or circumstance relative to the business or affairs of the Company which on the basis of the utmost good faith should be and has not been disclosed to the Minister or which would render any of the warranties herein contained or any information which to their knowledge was given by or on behalf of the Warrantors or any of them to the Minister or his advisers during the negotiations leading to this Agreement untrue or misleading at that date or which might if disclosed affect the decision of a person offering to acquire a substantial interest in the Company such person or persons shall forthwith disclose the same in writing to the Minister. 

ARTICLE 6.00 -- PROVISIONS RE PERIOD PRIOR TO COMPLETION 

The Shareholders and the Covenantors hereby covenant with the Minister that they and each of them from the date of these presents until Completion shall procure the performance of and compliance with the matters set out in the succeeding paragraphs of this Article 6.00 to the satisfaction of the Minister. 

ACCESS 

6.01 The Company shall afford the Minister free and full access to the properties books and records of the Company and shall from time to time furnish the Minister with such additional financial and operating data and other information as to the business and properties of the Company as the Minister from time to time may request. 

BUSINESS OF THE COMPANY 

6.02 The affairs of the Company shall be conducted so as to ensure that the business and other activities of the Company are confined to matters exclusively and necessarily related to the proper development of the mine. 

PROHIBITED TRANSACTIONS 

6.03 In addition and without prejudice to the provisions of Article 6.02 hereof the Company shall not without the prior written consent of the Minister 

(a) Create extend grant or issue or agree to create extend grant or issue any mortgages charges lien debentures guarantees warranties hypothecations or other securities other than (in respect of any of the above matters) pursuant to the bona fide requirement of any third party providing finance to the Company necessary for the development of the mine PROVIDED ALWAYS that the Company shall not enter into any such transaction obligation unless it shall have given to the Minister fourteen days prior notice (or such lesser period as the Minister may into the said transaction or obligation and shall have given to the Minister a reasonable opportunity of expressing to the Board of the Company his opinion in relation to the proposed transaction 

(b) Create or issue or agree to create or issue any share or loan capital or give or agree to give any option in respect of any share or loan capital or enter into any commitment to borrow money 

(c) Enter into any contract or capital commitment materially affecting the business or assets of the Company 

(d) Declare or pay any dividend or bonus or make any other distribution of profits or assets or do or suffer anything whereby its financial position shall be rendered less favourable than at the date hereof. 

(e) Pass any resolution of its members in general meeting which would or might reasonably be interpreted as being detrimental to the interests of the Minister under this Agreement or make any alterations to any provisions of its Memorandum or Articles of Association (save as herein provided) 

(f) In respect of any Agreement disclosed under the provisions of Article 5.00 hereof make any default or fail to observe or perform any of the provisions hereof 

(g) Engage any person at a remuneration in excess of a figure which would be normal and reasonable for the work to be done or services to be provided by such person taking into account remuneration payable for similar work in the international mining industry generally. 

(h) Pay or agree to pay to its Directors Shareholders officers or employees or any of them any remuneration or other emoluments or benefits whatsoever in excess of the remuneration emoluments and benefits being paid at the date hereof (except normal salary increases not in the case of any person exceeding in the aggregate 15% of the amount paid to such person at the date hereof) or 

(i) Dispose of any part of its fixed assets. 

CONDUCT OF BUSINESS 

6.04 The Company shall conduct its affairs so that at Completion no representation or warranty in relation to the affairs of the Company shall be inaccurate by reason of the actions or omissions of the Company or any of the Shareholders or of the Covenantors. 

CAPITAL STRUCTURE 

6.05 The Company shall pass such special and other resolutions as may be necessary to alter its capital structure to that referred to in Article 3 of the Articles of Association and shall procure that all Shares to be acquired by the Minister pursuant to Article 2.01 hereof are designated as 'A' Shares and all Shares to be acquired by the Minister pursuant to Article 2.02 hereof are designated as 'D' Shares and that the balance of Shares held by Bula Holdings are designated as 'B' Shares and the balance of Shares held by Patrick Wright are designated as 'C' Shares Articles of Association. 

ARTICLES OF ASSOCIATION 

6.06 The Company shall adopt as its Articles of Association the Articles set out in the Fifth Schedule hereto in substitution for and to the exclusion of all other pre-existing Articles. 

DEED OF INDEMNITY 

6.07 The Shareholders and the Covenantors shall deliver to the Minister a Deed of Indemnity in the approved terms. 

ARTICLE 7.00 -- COMPLETION ARRANGEMENTS 

TIME AND PLACE 

7.01 Subject to the provisions of Article 4.00 hereof Completion shall take place on such day as shall be ninety days after the date of delivery by the Consultants of their certificate referred to in Article 3.00 hereof or if such day shall not be a business day on the next following business day thereafter. Completion shall take place at the offices of the Department of Industry and Commerce Kildare Street Dublin 2 or at such other place as may be agreed between the parties hereto whereupon the matters referred to in Article 7.02 to 7.05 shall take place. 

DELIVERIES 

7.02 The Shareholders shall deliver to the Minister 

(a) Share Transfer Forms duly executed together with the relevant share certificates in respect of all of the 'A' Shares acquired by the Minister pursuant to Article 2.01 hereof and all of the 'D' Shares acquired by the Minister pursuant to Article 2.02 hereof in favour of 

(b) The Deed of Indemnity referred to in Article 6.07 hereof duly executed by each of the Shareholders and the Covenantors. 

MEETING 

7.03 The Shareholders shall procure that a meeting of the Board of Directors of the Company is held at which two persons nominated by the Minister are duly appointed as Directors of the Company and that any Directors of the Company in excess of the five to be appointed by the Shareholders as the holders of 'B' Shares and 'C' Shares pursuant to the Articles of Association shall retire without any claim for compensation or otherwise and further that the Minister or his permitted nominee or nominees is registered as a member of the Company in respect of the Shares acquired pursuant to Article 2.00 hereof. 

PAYMENTS 

7.04 Subject to the provisions of Article 7.03 having been complied with the Minister shall pay to the Shareholders (in the proportions set out in column five of the Second Schedule hereto) the first instalment of the consideration payable in respect of the acquisition of such Shares. 

ARTICLE 8.00 -- PROVISIONS RE PERIOD AFTER COMPLETION 

CONTINUANCE 

8.01 The provisions of this Article 8.00 shall take effect immediately upon Completion and in so far as any rights are granted under such Article to the Minister shall continue in force for so long as the Minister or any permitted nominee or permitted transferee of the Minister shall hold at least 25% of the issued share capital of the Company and in so far as any rights are granted to the Shareholders under this Article 8.00 shall continue in force for 

BUSINESS 

8.02 The parties hereto shall procure that the Company shall actively proceed to develop and exploit the mine in as expeditious a business manner as is possible (being consistent with the legal social and other obligations of the Company) and in such a manner as shall operate for the benefit of the holders of shares of the Company (considered as a whole) and further that the Company shall not engage in any other trade or business or enter into any transaction or carry out any activity or operation or make any investment sale or purchase of any nature whatsoever (save only as is envisaged pursuant to the provisions of Article 9.07 hereof) other than activities transactions operations sales purchases or investments reasonably necessary for the development of the mine and the disposal of the products of the mine to the best commercial advantage. All succeeding sections of this Article 8.00 shall be deemed to operate and to be without prejudice to the generality of the provisions of this Article 8.02. 

RESTRICTED TRANSACTIONS 

8.03 The Shareholders shall procure that the Company without the prior written consent of the Minister shall not 

(a) create grant extend or issue or agree to create grant extend or issue any mortgage charge debenture warranty hypothecation lien or other security interest or acquire or agree to acquire any assets subject to any such encumbrances or enter into any commitment to borrow money other than (in respect of any of the above matters) pursuant to the bona fide requirement of any third party providing financial to the Company necessary for the development of the mine 

(b) pay or agree to pay to any employee independent contractor or other person any amount in excess of the value of work done by or on behalf of such person for the Company 

(c) pay or agree to pay to its Directors or employees or any of them any remuneration or other emoluments or benefits whatsoever in excess of the remuneration, emoluments and benefits paid in the international mining industry generally to comparable persons for comparable work 

(d) enter into any contract or transaction 

(i) except in the ordinary course of the business and upon an arms length basis 

(ii) whereby it will receive less than a fair commercial price for any of its products or pay more than a fair commercial price for any goods or services supplied to it, or 

(iii) whereby any person would or might receive remuneration calculated by reference to the net or gross assets the income expenditure or profits of the Company or whereby its business or any part of its business would be controlled otherwise than by its Board of Directors 

(e) enter into any capital transaction which represents in value 15% or more of the net asset value of the Company at the time of such transaction whether such transaction is an acquisition or disposal of assets 

(f) enter into any onerous or unusual contracts arrangements or understandings with regard to the business or assets of the Company 

(g) make any loan or advance of any material amount or give any guarantee or indemnity with regard to the obligations of any other person 

(h) increase its authorised capital or issue any shares or consolidate or subdivide or alter any of the rights attaching to any of its issued shares or reduce its share capital or repay any amount outstanding to the credit of any share premium account or capital redemption reserve fund or capitalise any reserves or otherwise reorganise its share capital in any way or create any new class of shares or grant any options over any of its unissued share capital or enter into any contractual commitment which might oblige it to do any of the foregoing things or enter into any scheme of arrangement with its creditors. 

(i) subscribe for purchase or otherwise acquire any part of the share capital or security or promote any subsidiary 

(j) pay or agree to pay any royalty or commission (other than as is normal in the international mining industry generally and is of an amount commensurate with consideration received by the Company in respect thereof) 

(k) change its financial year end 

(l) pass any resolution of its members in general meeting the effect of which would be to alter in a material way the nature of the Company and/or its business as envisaged by this Agreement or alter its Memorandum or Articles of Association in any way, or 

(m) pay fees to its Directors at a lesser rate than such reasonable rate as may be specified by the Minister from time to time. 

(n) allow the ore produced by the Company in any calendar year to exceed one million one hundred thousand short tons 

DIVIDENDS 

8.04 (a) The Shareholders shall procure that save as provided in paragraph (b) of this Article 8.04 the Company in so far as it shall not be prohibited by law from so doing shall in respect of each of its financial years ending after the relevant accounting date distribute by way of dividend the entire profits of such financial year as shown in the audited accounts of the Company remaining after taxation applicable thereto. 

with paragraph (a) of this Article 8.04 if the Minister shall so consent and such consent of the Minister shall not be unreasonably withheld in the following circumstances 

(i) If and so long as the Company shall be prohibited from payment of dividends in accordance with any Loan Agreement bona fide entered into by the Company 

(ii) If and to the extent that the Auditors for the time being of the Company shall certify that in their professional opinion to make any such dividend payment (or part thereof) would not be possible or desirable having regard to the cash available to the Company or required in view of the current commitments of the Company. 

SUPPLY TO SMELTER 

8.05 (a) The parties hereto shall procure that if at any time a Zinc Refinery is established in Ireland which could satisfactorily process the concentrates produced by the Company all such concentrates produced by the Company after the relevant date shall be disposed of to such Zinc Refinery unless the Board of Directors of the Company with the consent of the Minister shall decide to dispose of such concentrates elsewhere Provided Always that the Company shall not be obliged to dispose of the concentrates to such Zinc Refinery other than on normal and reasonable commercial terms taking all relevant factors into account including the price obtainable for comparable quantities and qualities of zinc concentrates elsewhere. 

(b) The Minister hereby agrees with the Shareholders that he shall not enforce compliance by the Company with the provisions of paragraph (a) of this Article 8.05 in respect of such proportion of the output of the mine as shall exceed the proportion of the output of the major mine operated by the holder of the State mining lease already granted in respect of the Navan ore-body which (on average and taking one year with another) is required to be disposed of by such party to such Zinc Refinery as aforesaid. 

(c) In this Article 8.05 the expression "the relevant date" shall mean such date as shall be the fifth anniversary of the date which the Minister shall determine to be the date upon which the Company shall have commenced commercial production of concentrates. 

AUDITORS 

8.06 The parties hereto shall procure that the Company shall appoint for each of its financial years a firm of Auditors approved by the Minister and that no change of auditors shall be made without the prior written consent of the Minister. 

INFORMATION 

8.07 The Shareholders shall procure that the Company shall from time to time furnish to the Minister all such information as he shall require with regard to the business and properties of the Company and shall allow the Minister free and full access to the properties books and records of the Company. Nothing in this Article 8.00 shall be taken as in any way limiting the rights of any persons appointed by the Minister as Directors of the Company. 

JOINT DEVELOPMENT 

8.08 If at any time it shall appear to the Minister to be desirable that the Company should co-operate with persons having rights to work minerals adjoining those owned by the Company for the purpose of developing the mineral assets in such area in a favourable economic manner (considering the area as a whole) the Shareholders shall forthwith upon receipt of a notice from the Minister to such effect procure that the Company shall comply with such reasonable directions as the Minister shall give in relation to the promotion and implementation of such co-operation Provided Always that the Shareholders shall not be required to procure the Company to comply with the terms of any such notice which shall require 

(a) the Company to depart from its plan to operate as an independent mining and milling concentrate production unit 

(b) any fundamental change in the operation or proposed operations of the Company which in any material way would be to the detriment of the interests of the Company, or 

(c) the use of any property owned by the Company until such time as the property requirements of the Company in respect of its mining and milling development have been determined by the granting of planning permission to the Company for the major development of the mine. 

AVAILABILITY OF EXPERTISE 

8.09 Each of the Shareholders and the Covenantors (as may be individuals) shall for so long as he may be beneficially interested directly or indirectly in the Company upon request of the Minister make available to the Company at all reasonable times his knowledge and expertise and all relevant information (not being information which he is precluded from disclosing) available to him and also use his best endeavours at all times to promote the interests welfare and business of the Company. 

ARTICLE 9.00 -- COVENANTS AND DECLARATIONS 

VOTING RIGHT 

9.01 (a) The Minister shall forthwith upon Completion enter into such documentation as Chimborazo Investments shall reasonably require to give to it the right to exercise as it shall think fit the votes carried by 210,000 of the Shares acquired by the Minister under Article 2.01 hereof. Such voting rights shall be exercisable at all general meetings of the Company other than in respect of any resolution of the Company which has for its purpose or effect 

(i) the implementation ratification or confirmation of any transaction which would in any way conflict with the rights granted under this Agreement to the Minister or with the intention of this Agreement regarding the business and activities of the Company 

(ii) the alteration of the Memorandum or Articles of Association of the Company in any way, or 

(iii) the winding up of or the sale of the undertaking of the Company 

The share certificates for such Shares shall be enfaced with a memorandum to the effect that they are subject to the provisions of this Article 9.01. 

(b) The rights to be granted to Chimborazo Investments shall be personal to it and shall not be assignable and also shall forthwith cease if 

(i) the Covenantors shall fail to produce to the Minister on 31 December in any year evidence satisfactory to the Minister that control of Chimborazo Investments is then and at all times since the previous 31 December has been held by the Covenantors or their family interests 

(ii) Bula Holdings (one of the Shareholders) shall cease to be the registered holder and beneficial owner of at least 20% of the equity share capital of the Company, or 

(iii) Bula Holdings shall fail at any time to produce the evidence required by Article 6 (a) of the Articles of Association 

(c) Nothing in this Article 9.01 shall be taken as imposing any restrictions or obligations upon the Minister in respect of any disposal of the Shares acquired by him hereunder whether under Article 2.01 or 2.02 

(d) For the purposes of this Article 9.01 

"control" shall mean the unconditional and beneficial right to exercise in all circumstances the entire voting rights attached to or exercisable in respect of shares in Chimborazo Investments and to receive a corresponding amount of any dividend or other distribution made paid or declared by such company. 

EVIDENCE OF CONTROL 

9.02 The Minister hereby covenants with the Covenantors that he shall procure that the rights and powers granted to the "A" Directors and "A" Shareholders under the Articles of Association in relation to any event coming within the scope of Article 6 of the Articles of Association shall not be exercised if within thirty days of 31st December in each year there is produced to the Minister a certificate in writing from the Auditors for the time being of the Company to the effect that they have produced to them all relevant information to enable them to identify the persons who at that time directly or indirectly control the entire of the "B" Shares of the Company (specifying such information) and that all relevant information in relation to such persons has been produced to them and that in the professional opinion of such Auditors such persons are persons of good financial standing and repute and are not persons to whom the Minister could reasonably object as a fellow shareholder in the Company. 

COMPETITION COVENANT 

9.03 As a further consideration for the Minister entering into this Agreement each of the Shareholders and the Covenantors hereby covenants with the Minister as follows: 

(a) that otherwise than through the medium of the Company he will not for a period commencing on the date hereof and terminating five years from the date hereof or three years from the date of ceasing to be a member of the Company (or in the case of the Covenantors Bula Holdings ceasing to be such a member) whichever shall be the later either as principal partner agent servant assistant director or otherwise howsoever whether directly or indirectly carry on or help or assist in any activities or operations in around or related to the Navan ore body involving or directly connected with the mining and/or milling of such minerals and/or mineral deposits. 

(b) that he will not during the like period within the like area either as principal partner agent servant assistant shareholder director or otherwise howsoever whether directly or indirectly be engaged concerned or interested in the carrying on of the said businesses. 

(c) that he will not at any time hereafter make use or disclose for his own benefit or for or to or on behalf of any other person firm company or corporation any confidential information which he may at any time possess appertaining to the business or affairs of the Company or of any other persons having dealings with the Company. 

(d) that he will not for the like period either on his own behalf or on behalf of any other person firm company or corporation competing or endeavouring to compete with the Company directly or indirectly solicit or endeavour to solicit or obtain the services of any person employed by the Company or use his personal knowledge or influence over any person firm company or corporation known to him as contracting with or having dealings with the Company to or for his own benefit or that of any other person firm company or corporation in competition with the Company. 

(e) the benefits of each and every of the covenants set out in paragraphs (a) to (d) of this Article 9.03 shall be deemed to be separate and severable and enforceable by the Minister accordingly. In the event of any covenant contained in this Article 9.03 being held unreasonable by reason of the area duration or type or scope of restriction contained therein the said covenant shall be given effect to in its reduced form as may be decided by any Court of competent jurisdiction. 

WAIVER OF PRE-EMPTION RIGHTS 

9.04 Each of the Shareholders hereby waives all pre-emption rights to which he may be entitled in any way whatsoever and declares that on Completion of this Article 9.04 shall become and shall be deemed to be a consent in writing for the purposes of Article 5 (p) of the Articles of Association and accordingly hereby authorizes the Directors of the Company to register in the name of the Minister or his permitted nominee the share transfers in respect of the shares acquired by the Minister pursuant to Article 2.00 hereof. 

PLANNING PERMISSION 

9.05 It is the intention of the Minister to give such assistance as may be within his proper competence in the procurement of planning permission for the development of the mine. 

STATE GUARANTEE 

9.06 The Minister hereby undertakes to use his best endeavours to ensure that the Government of Ireland agrees to guarantee an amount not exceeding £10,000,000 (ten million pounds) in respect of the major financing required by the Company to develop the mine. 

PARTICIPATION IN REFINERY 

9.07 (a) The Minister undertakes that if such Zinc Refinery as is referred to in Article 8.05 hereof is established in Ireland he shall ensure that there shall be offered to the Company a right to participate in the equity share capital of the body corporate operating the said Refinery on such terms and conditions and to such an extent as at the relevant time may seem fit to the Minister taking into account (inter alia) the percentage of such equity available for private interests and the quantities and qualities of concentrates contracted to be supplied (and the length of such contract) by the Company to such Refinery. The terms conditions and extent of the participation offered to the Company shall not be less favourable than the terms conditions and extent of the participation offered to other mining interests operating in Ireland. 

(b) The Minister does not anticipate that the State will have higher than a 20% beneficiary shareholding in the Zinc Refinery or a voting interest higher than 30%. The Company and other mining interests associated with it will be offered in the aggregate a substantial shareholding in the body corporate operating the said Refinery but will not be bound to accept or take up such shareholding. It is the intention of the parties hereto that the extent of the participation to be offered to the Company will be based on the quantities and qualities of concentrates which the Company contracts to supply to the said Refinery. 

OBLIGATION OF COVENANTORS 

9.08 Each of the Covenantors hereby covenants and agrees with the Minister that he shall procure that Bula Holdings (one of the Shareholders) complies in all respects with each and every obligation placed upon it hereunder and the Covenantors and each of them hereby jointly and severally agree to indemnify the Minister against any loss arising out of or in consequence of the non-fulfilment of or failure to comply with any of the liabilities or obligations of Bula Holdings hereunder (including any contingent liability pursuant to Article 10.06 hereof). 

COMPLIANCE BY COMPANY 

9.09 Each of the parties hereto hereby undertakes with each other party hereto not to exercise his voting rights in the Company in such a manner as would or might cause the Company in any way to be in breach of any of the provisions of this Agreement and further each party hereto in so far as the same shall be within his power or procurement (individually or collectively with any other party hereto) shall not suffer or allow any Director of the Company (or the Directors collectively) to act or continue to act in any way which would or might be in breach of this Agreement. 

ARTICLE 10.00 -- GENERAL PROVISIONS 

SURVIVAL OF OBLIGATIONS 

10.01 The representations undertakings and warranties contained in this Agreement together with any of the provisions of this Agreement which shall not have been performed at Completion shall remain in full force and effect notwithstanding Completion. 

BINDING ON SUCCESSORS 

10.02 This Agreement shall enure to the benefit of and be binding upon the respective parties hereto and their respective heirs executors administrators successors and permitted assigns. 

FURTHER ASSURANCE 

10.03 At the request of the Minister the Shareholders shall (and shall procure that any other necessary party shall) execute and do all such documents acts and things as may be reasonably required subsequent to Completion by the Minister for assuring to or vesting in the Minister (including his nominee or nominees) the beneficial ownership of the Shares acquired by him hereunder. 

BASIS OF CONSENT 

10.04 Any consent given by the Minister in respect of any transaction otherwise prohibited by the provisions of this Agreement shall be deemed to be given on the basis that such consent is a consent for that particular transaction only and is not deemed to be a waiver in respect of any subsequent breach. Such consent shall be deemed further to be given on the basis that if such consent relates to the entering into of a contract or making of a commitment that such contract or arrangement shall not be cancelled or renegotiated in any material way without the consent of the Minister. 

NO WAIVER 

10.05 Any liability to the Minister under the provisions of this Agreement may in whole or in part be released varied compounded or compromised by the Minister in his absolute discretion as regards any of the Shareholders or other party under such liability without in any way prejudicing or affecting his rights against any other party under the same or a like liability whether joint and several or otherwise. A waiver by the Minister of any breach by any party hereto of any of the terms provisions or conditions of this Agreement or the acquiescence of the Minister in any act (whether commission or omission) which but for such acquiescence would be a breach of aforesaid shall not constitute a general waiver of such term provision or condition or of any subsequent act contrary thereto. 

ASSIGNMENT 

10.06 The parties hereto shall procure that no Shares shall be transferred to any party other than the Minister or one of the Shareholders unless prior to the meeting of the Board of Directors of the Company at which such transfer is to be considered such transferee shall have entered into and lodged with the Company a binding legal commitment (in form and content satisfactory to assigns) to the effect that such transferee accepts and shall be bound by the terms of this Agreement as if he had been named herein as a party hereto in place of the transferor of such Shares and PROVIDED that such transferor (not being an individual who is deceased or the Minister) shall also lodge with the Company an undertaking (in form and manner as aforesaid) in favour of the remaining parties hereto or their permitted assigns to indemnify such parties in respect of any loss arising out of or in consequence of the non-fulfilment of or failure to comply with any of the terms of this Agreement by such transferee. The provisions of this Article 10.06 shall be deemed to be in addition to and not in any way a waiver of any of the restrictions on transfer of Shares to be contained in the Articles of Association. 

COUNTERPARTS 

10.07 This Agreement may be executed in any number of Counterparts each of which when executed and delivered shall be deemed to be an original and all of which shall together constitute one and the same instrument. 

EFFECT OF INVESTIGATION 

10.08 No investigations made by the Minister under any of the rights provided for the Minister hereunder shall in any way affect or be deemed to be a waiver of any warranties indemnities or undertakings given hereunder by the Shareholders and/or the Covenantors to the Minister. 

NOTICES 

10.09 Any notice of other communication required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given in delivered by hand against receipt of the addressee or his duly authorised agent or if sent by pre-paid registered post addressed to the party to whom it is addressed at the address set out for such party herein (or such other address in the State as he may from time to time designate in writing to all other parties hereto in accordance with the provisions of this Article 10.09) and any such notice shall be deemed to have been given if delivered at the time of delivery and if sent by pre-paid registered post as aforesaid 24 hours after the same shall have been posted. 

ENTIRE AGREEMENT 

10.10 This Agreement embodies the entire agreement and understanding between the Minister the Shareholders and the Covenantors and supersedes all prior statements representations agreements and understandings relating to the subject matter hereof whether between the Minister and the Shareholders and/or the Covenantors or the Shareholders inter se and/or the Covenantors inter se or between the Minister and/or the Shareholders and/or the Covenantors and any other party or parties. 

IN WITNESS whereof these presents have been entered into the day and year first herein written. 

FIRST SCHEDULE 

The Covenantors 
	
Name	Address	
Thomas Celestine Roche	Chesterfield, Cross Avenue,	
	Blackrock, Co Dublin.	
Thomas James Roche	Woodford, Booterstown	
	Park, Co Dublin.	
Michael James Wymes	Kilshane House, Fingla	
	Dublin 11.	
Richard Francis Wood	Rockrohan, Carrigrohan,	
	Co Cork.	

SECOND SCHEDULE 

The Shareholders Details of Shareholdings and Consideration 
	
(1)	(2)	(3)	(4)	(5)	
Name	Shares	Shares purchased	Shares acquired	Proportion of	
	held	by Minister	by Minister	consideration	
		(Article 2.01)	(Article 2.02)	payable	
		'A' Shares)	'D' Shares)		
BULA HOLDINGS	800,000	192,000	200,000	80%	
PATRICK WRIGHT	200,000	48,000	50,000	20%	
	1,000,000	240,000	250,000		

THIRD SCHEDULE 

Particulars of Directors and Secretary 

Directors:- 

Thomas Celestine Roche 

Michael James Wymes 

Francis Plunkett Dillon 

Thomas James Roche 

Richard Francis Wood 

Cathal Noel Young 

Secretary:- Francis Plunkett Dillon 

FOURTH SCHEDULE 

The Property 

Registered Freehold Land 
	
	FOLIO	COUNTY	
1.	22810	Meath	
2.	15473 & 16035	"	
3.	18031	"	
4.	15550	"	
5.	24575 & 20397	"	
6.	15549	"	
7.	1145	"	
8.	18033 (portion of)	"	
9.	11069	"	
10.	18875	"	
11.	18033 (other portion of)	"	
12.	4614	"	
13.	18034	"	
14.	17924	"	
15.	26646	"	

FOURTH SCHEDULE 

Continued 

Unregistered Freehold Land 

All that and Those the premises described in an Indenture of Conveyance dated 19 March 1971 between Patrick Wright of the one part and the Company of the other part and therein described as "ALL THAT AND THOSE parts of the lands of Nevinstown (otherwise Navanstown) in the Barony of Lower Navan and County of Meath containing 117 acres and 26 perches statute measure or thereabouts as more particularly described and delineated in the map annexed to a certain Land Judges Conveyance dated the 2nd day of August 1881 under the hand and seal of Henry Ormsby a Land Judge of the Chancery Division of the High Court of Justice in Ireland whereby the said Lands were conveyed to Nannie (otherwise the said Anne) Bradley her heirs and assigns forever". Subject to the quit rent tithe rent charge and perpetual annuity of £40 therein mentioned together with "all mines and minerals thereon and thereunder". 

Leasehold Property 

Premises 14 Fitzwilliam Square Dublin 2 held under lease dated 16 June 1975 for a term of 35 years from 15 May 1975 at a rent of £10,000 per annum for 5 years and subject to review thereafter. 

FIFTH SCHEDULE 

The Articles of Association 

COMPANIES ACT, 1963 

COMPANY LIMITED BY SHARES 

ARTICLES OF ASSOCIATION 

OF 

BULA LIMITED 

(Adopted by Special Resolution dated the day of 197 ) 

PRELIMINARY 

1. Subject to hereinafter provided, the Regulations contained in or made applicable by Part II of Table A in the First Schedule to the Companies Act, 1963 (hereinafter called "Table A") shall apply to this Company. 

2. Regulations 5, 11, 55, 61, 63, 75, 77, 79, 81, 91(a), 92-102 (inclusive), 107 and 138 of Part I of Table 'A' and Regulations 3 and 9 of Part II of Table 'A' shall not apply to the Company but the remaining Regulations of Part II of Table 'A' shall, subject to the modifications hereinafter expressed and the Articles hereinafter contained, be the Regulations of the Company. 

SHARE CAPITAL 

3. (a) The capital of the Company at the date of adoption of these Articles is £1,000,000 divided into 240,000 "A" Shares of £1 each, 408,000 "B" Shares of £1 each, 102,000 "C" Shares of £1 each and 250,000 "D" Shares of £1 each. 

(b) The said "A" Shares, "B" Shares, "C" Shares and "D" Shares shall each comprise a different class of shares. 

(c) Save as otherwise provided in these Articles the said "A" Shares, "B" Shares, "C" Shares and "D" Shares shall rank pari passu in all respects. 

4. (a) Save with the consent in writing of all the members all unissued shares in the capital of the Company at the date of adoption of these Articles and all new Shares of whatever kind shall on issue be offered in the first offer within which the accepted, will be deemed to be declined, and after of such time, or on receipt of an intimation from any member to whom such notice is given that he declines to accept the shares offered, the Directors may allot or otherwise dispose of the same to such persons and upon such terms as may be most beneficial to the Company. 

(b) No shares of a particular class shall be issued other than to a member holding a share of that class. 

TRANSFER OF SHARES 

5. (a) For the purposes of this Article where any person is unconditionally entitled to be registered as a holder of a share he and not the registered holder of such share shall be deemed to be a member of the Company in respect of that share. 

(b) No shares in the Company shall be transferred unless and until 

(i) the proposing transferee shall have entered into and lodged with the Company a binding and legal commitment (in form and content satisfactory to the other members) to the effect that such proposing transferee accepts and shall be bound by the terms of an agreement dated the day of 1975 made between Bula Holdings and Patrick Wright of the first part, the parties set out in the First Schedule thereto of the second part and the Minister for Industry & Commerce of the third part (such agreement being hereinafter in these Articles referred to as "the said Agreement" as if such proposing transferee had been named therein as a party thereto as a party of the same part as the proposing transferor of such shares, 

(ii) the provisions of Article 6 hereof have been complied with, and 

(iii) save as hereinafter provided until the rights of pre-emption hereinafter conferred shall have been exhausted. 

(c) Subject to the provisions of Article 6 hereof every member who desires to transfer any share in the Company (hereinafter called "the proposing transferor") shall give notice in writing (hereinafter called a "Transfer Notice") to the Directors of such desire. The Transfer Notice shall specify the shares the proposing transferor wishes to sell (hereinafter called "the said shares") and the price at which he wishes to sell them and such person shall at the same time deposit with the Company the Share Certificate(s) in respect of the said shares. No Transfer Notice shall relate to more than one class of shares. Subject as hereinafter mentioned a Transfer Notice shall constitute the Company the Agent of the proposing transferor for the sale of the said shares at the sale price in one or more lots of discretion of the Company to the members other than the proposing transferor at whichever shall be the lower of the price specified or the fair value thereof as between a willing seller and a willing buyer such fair value to be fixed by an independent firm of chartered accountants (hereinafter called "the Accountants") appointed by the proposing transferor and the Company (or failing agreement by the President for the time being of the Institute of Chartered Accountants in Ireland). Such lower price or value is in this Article referred to as "the sale price". 

(d) The Company shall forthwith after receipt of a Transfer Notice instruct the Accountants to value the said shares on the same basis as that set out in Article 3.01 of the said Agreement save that the percentage figure referred to in paragraph (b) of such Article shall be replaced by a percentage figure which shall be the same percentage as the said shares shall be of the entire equity share capital of the Company and that the relevant date for valuation and ascertainment of the assets and liabilities of the Company shall be the date of the Transfer Notice. The Accountants shall be instructed to certify within 30 days the sum which on the basis aforesaid in their opinion is the fair value. In so certifying the Accountants shall be considered to be acting as experts and not as arbitrators and their certificate shall (save in the case of manifest error) be final and binding upon all persons interested. The provisions of the Arbitration Act 1954 and any statutory modification or re-enactment thereof for the time being in force shall not apply. 

(e) Forthwith after the fair value shall have been certified by the Accountants as aforesaid the Company shall give notice in writing to the proposing transferor of the sum so certified. Within a period of seven days after notice of the fair value as so certified being given to the proposing transferor the proposing transferor may by further notice in writing to the Company revoke the Transfer Notice as to the whole of the said shares and thereupon the Share Certificate(s) in respect of the said shares shall be returned to him. After the expiration of such period of seven days a Transfer Notice shall not be revocable except with the sanction of the Directors. 

(f) Forthwith upon the expiration of ten days after the Company shall have given notice to the proposing transferor of the sum so certified as the fair value of the said shares the Directors shall (unless the proposing transferor shall have revoked the Transfer Notice within the period specified in paragraph (d) hereof) if there shall be no other members holding shares of the same class as those comprised in the Transfer Notice by notice in writing inform each such member of the number and class of the said shares and of the sale price and invite each such member to apply in writing to the Company within 30 days of the date of despatch of the notice (which date shall be specified therein) for such maximum number of the said shares (being all or any thereof) as he shall specify in such application. 

(g) If the said members shall within the said period of 30 days apply for all or any of the said shares, the Directors shall allocate the said shares (or so many of them as shall be applied for as aforesaid to or amongst the applicants and in the case of competition pro rata (as nearly as possible) according to the number of shares of the class of which the shares comprised in the Transfer Notice form part for which such applicants are registered as holders provided that no applicant shall be obliged to take more than the maximum number of shares specified by him as aforesaid. 

(h) If there shall be no other members holding shares of such class as aforesaid the Directors without awaiting the expiry of the period of 30 days referred to in paragraph (f) hereof shall forthwith proceed in accordance with the provisions of paragraph (i) hereof. 

(i) If pursuant to any offer made under the provision of paragraph (f) of this Article the members holding shares of the class comprised in the Transfer Notice do not agree to apply for all the shares comprised therein in the said period of 30 days then 

(i) If the shares comprised in the Transfer Notice are "A" Shares the shares or such of them as shall not have been applied for shall be offered to the holders of the "B" Shares and "C" Shares. 

(ii) if the shares comprised in the Transfer Notice are "B" Shares the shares or such of them as shall not have been applied for shall be offered to the holders of the "C" Shares. 

(iii) if the shares comprised in the Transfer Notice are "C" Shares the shares or such of them as shall not have been applied for shall be offered to the holders of the "B" Shares. 

(iv) if the shares comprised in the Transfer Notice shall be "D" Shares the shares or such of them as shall not have been applied for shall be offered to the holders of the "B" Shares and "C" Shares. 

Any such offer as aforesaid shall be in writing and shall inform each such person to whom it is addressed of the number and class of the said shares and of the sale price and invite each such member to apply in writing to the Company within 30 days after the date of despatch of the notice (which date shall be specified therein) for such maximum number of the said shares (being all or any thereof) as he shall specify in such application. If the said members shall within the said period of 30 days apply for all or any of the said shares the Directors shall allocate the said shares (or so many of them as shall be applied for as aforesaid) to or amongst the applicants and in the case of competition pro rata (as nearly as possible) according to the number of shares of the relevant class of shares in the Company (or where such offer is made to the holders of more than one class of shares the aggregate number of shares of such classes) of which such applicants are registered or are unconditionally entitled to be registered as holders provided that no applicant shall be obliged to take more than the maximum number of shares specified by him as aforesaid. 

(j) Forthwith upon any allocation pursuant to paragraph (g) or (i) of this Article the Company shall give notice of such allocations (hereinafter in this Article called an "Allocation Notice") to the proposing transferor and to the persons to whom the shares have been allocated and shall specify in such notice the place and time (being not earlier than 21 and not later than 35 days after the date of such notice) at which the sale of the shares so allocated shall be completed. 

(k) The proposing transferor shall be bound to transfer the shares comprised in an Allocation Notice to the purchasers named therein at the time and place therein specified and if he shall fail to do so the Chairman of the Company or some other person appointed by the Directors shall be deemed to have been appointed Attorney of the proposing transferor with full power to execute complete and deliver in the name and on behalf of the proposing transferor transfers of the shares to the purchasers thereof against payment of the price to the Company. On payment of the price to the Company the purchaser shall be deemed to have obtained a good quittance for such payment and on execution and delivery of the transfer the purchaser shall be entitled to insist upon his name being entered in the Register of Members as the holder by transfer of the shares. The Company shall forthwith pay the price into a separate bank account in the name of the Company and shall hold such price in trust for the proposing transferor. 

(l) If any shares comprised in a Transfer Notice are not applied for by members in accordance with the foregoing provisions of this Article the Directors may offer the shares comprised in the Transfer Notice or the balance thereof (as the case may be) to any other person whom the Directors may decide to admit to membership and who is willing to purchase the same at a price not less than the sale price provided always that any such sale is completed and the sale price paid to the Directors in trust for the proposing transferor within a period of 45 days from the expiry of the period within which the said shares were on offer to the other members of the Company pursuant to the foregoing provisions hereof. 

(m) If the Directors do not dispose of all the shares comprised in any Transfer Notice in accordance with the foregoing provisions of this Article they shall so notify the proposing transferor forthwith and during the period of 90 days next following the despatch of such notice the proposing transferor shall be at liberty to transfer to any persons and at any price (not being less than the sale price) any share not allocated by the Directors in an Allocation Notice. 

(n) If any member at any time attempts to deal with or dispose of any shares in the Company otherwise than in accordance with the foregoing provisions of this Article or in the case of a corporate member if such member shall enter into liquidation whether compulsory or voluntary (not being a voluntary liquidation for the purpose of and followed by a reconstruction or amalgamation while solvent) or in the case of an individual become or be adjudged a bankrupt he shall be deemed immediately prior to such attempt or commencement of liquidation or bankruptcy as the case may be to have served the Company with a Transfer Notice in respect of all the shares registered in the name of such member and the provisions of this Article shall thereupon apply to such shares and such Transfer Notice shall be deemed to have been served on the date on which the Directors shall receive actual notice of such attempt or commencement of liquidation or bankruptcy as the case may be. 

(o) Subject to the provisions of sub-paragraph (b) and paragraphs (q) and (r) of this Article any share may be transferred by a member to the spouse or child of that member and any share of a deceased member may be transferred by his personal representatives to any widow, widower or such child of such deceased member and further any share for the time being held by or on behalf of any Minister of any Government Department of the Government of Ireland or any body corporate wholly owned by any such Minister as aforesaid, may be transferred to any other Minister of the Government of Ireland or any permitted nominee (as defined in the said Agreement) and the rights of pre-emption hereinbefore conferred in this Article shall not arise on the occasion of any such transfer or any transfer made pursuant to the provisions of Article 6 hereof. 

(p) With the consent in writing of all the members for the time being the provisions of this Article may be waived in whole or in part in any particular case. 

(q) Notwithstanding the foregoing provisions of this Article the Directors may decline to register 

(i) any transfer of any share on which the Company has a lien 

(ii) any transfer of a share (not being a fully paid share) to a person of whom they do not approve; and 

(iii) any transfer the registration of which would cause a number of members to exceed the maximum permitted by regulation 2 of Part II of Table 'A'. 

(r) Nothing in this Article shall in any way affect or be deemed to affect any of the rights granted to the "A" Directors hereunder. 

6. (a) If and for so long as any "B" Shares are held by any person being a body corporate (hereinafter referred to as "the Owner") it shall produce to the Board on 31 December in each year evidence satisfactory to the Board that control of the Owner is then and at all times since the previous 31 December has been held by the appropriate parties (as hereinafter defined). If at any time the Owner shall fail to produce such evidence as aforesaid the Board may if it thinks fit by serving upon the Owner at any time and from time to time thereafter notice in writing to that effect require the Owner to offer for sale to the members of the Company holding "A" Shares at the date of such notice such number of the "B" Shares held by the Owner as shall be specified in such notice PROVIDED ALWAYS that the number of shares specified in all notices given under this Article 6 shall not exceed such number of shares as shall constitute 2 per cent of the entire equity share capital of the Company (in this Article the shares comprised in any notice are referred to as "the said shares"). Upon the service of any such notice being effected the Company shall be constituted the agent of the Owner for the sale of the said shares at the sale price hereinafter specified in one or more lots at the discretion of the Directors to the members holding "A" Shares. 

(b) Forthwith after the service upon the Owner of any such notices aforesaid the Board shall on each such occasion proceed to have the fair value of the said shares as at the date of the notice referred to in paragraph (a) hereof determined in accordance with the procedure specified in Article 5 (d) hereof and the provisions of which paragraph as to the basis upon which such determination is made shall also apply in relation to any determination made hereunder. 

(c) Forthwith after the sale price shall have been certified as aforesaid the Company shall inform the Owner thereof in writing and shall by notice in writing inform each member holding "A" Shares of the number of the said shares and the sale price and invite each such member to apply in writing to the Company within thirty days of the date of despatch of the notice (which date shall be specified therein) for such maximum number of the said shares (being all or any thereof) as he shall specify in such application. 

(d) If the said members holding "A" Shares shall within the said period of thirty days apply for all of the said shares the Directors shall allocate the said shares to or amongst the applicants and in case of competition pro rata (as nearly as possible) according to the number of "A" Shares of which they are registered or unconditionally entitled to be registered as holders provided that no applicant shall be obliged to take more than the maximum number of shares specified by him as aforesaid and the Company shall forthwith give notice of such allocations (hereinafter called an "allocation notice") to the Company and to the persons to whom the shares have been allocated and shall specify in such notice the place and time (not being earlier than fifteen and not being later than thirty days after the date of the notice) at which the sale of the shares so allocated shall be completed. 

(e) The Owner shall be bound to transfer the shares comprised in an allocation notice to the purchasers named therein at the time and place therein specified and if it shall fail to do so any person appointed by a majority of the holders of the "A" Shares for such purpose shall be deemed to have been appointed attorney of the Owner with full power to execute complete and deliver in the name and on behalf of the Owner transfers of the said shares to the purchasers thereof against payment of the sale price to the Company. On payment of the sale price to the Company the purchaser shall be deemed to have obtained a good quittance for such payment and on execution and delivery of the transfer the purchaser shall be entitled to insist upon his name being entered in the Register of Members as a holder by transfer of the shares. The Company shall forthwith pay the sale price into a separate bank account in the name of the Company and shall hold such price in trust for the Owner. 

(f) A transfer notice under Article 5 may not be served upon the Company by the Owner unless with such notice it shall produce such evidence to the Board as would be required on 31 December in each year pursuant to paragraph (a) hereof and no transfer notice shall be operative unless such evidence is to the satisfaction of the Board in accordance with the terms of paragraph (a) hereof nor shall the Owner be entitled to serve any such transfer notice for so long after the Company having served upon the Owner a notice under paragraph (a) of this Article as the Owner may become obliged to transfer the said shares in accordance with the provision of this Article. 

(g) For the purpose of this Article 

(i) "control" shall mean the unconditional and beneficial right to exercise (whether directly or indirectly) more than 51% of the voting rights attached to or exercisable in respect of the shares in the Owner. 

(ii) "the appropriate parties" shall mean the parties defined as being the Covenantors for the purpose of the said Agreement together with the family interests of such persons. 

(iii) "family interests" in respect of any of the Covenantors shall mean his wife child grandchild brother or sister. 

7. In Regulation 22 of Part I of Table 'A' the words "and transferee" shall be omitted. 

REDEEMABLE PREFERENCE SHARES 

8. Subject to the provisions of Section 64 of the Act, any Preference Shares may be issued on the terms that they are, or at the option of the Company are, liable to be redeemed on such terms and in such manner as the Company before the issue of the shares may by special resolution determine. 

ALTERATION OF CAPITAL 

9. In Regulation 44 and 45 of Part I of Table 'A' the words "special resolution" shall be substituted for the words "ordinary resolution". 

LIEN 

10. The Company shall have a first and paramount lien upon all shares held by any member of the Company (whether alone or jointly with other persons), and upon all dividends and bonuses which may be declared in respect of such shares, for all debts, obligations and liabilities of such member to the Company. Provided always that, if the Company shall register a transfer of any shares upon which it has such a lien as aforesaid without giving to the transferee notice of its claim the said shares shall be freed and discharged from the lien of the Company. The Company's lien, if any, on any share shall extend to all dividends payable thereon. 

VOTES OF MEMBERS 

11. (a) No business shall be transacted at any general meeting unless a quorum of members if present at the time when the meeting proceeds to business. Two members of whom at least one shall be a holder of "A" Shares and one a holder of "B" Shares present in person or by proxy shall be a quorum. 

(b) If within half an hour from the time appointed for the meeting a quorum is not present the meeting shall stand adjourned to the same day in the next week, at the same time and place and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the members present shall be a quorum. 

12. In Regulation 59 (b) of Part I of Table 'A' the words "one member" shall be substituted for the words "three members". 

13. At every General Meeting of the Company the following provisions shall apply in relation to votes of members:- 

(a) On a show of hands every member present in person or by proxy shall have one vote 

(b) On a poll (subject to paragraph (c) hereof) 

(i) every member being a holder of "A" Shares, "B" Shares or "C" Shares shall have one vote for each share of which he is the holder, and 

(ii) the holders of the "D" Shares shall collectively have such number of votes as shall be the greater of one vote per "D" Share issued or such number as shall equal one quarter of all voting rights of members (including the rights attached to the "D" Shares) capable of exercise at any such meeting. 

(c) Notwithstanding the provisions of paragraph (b) hereof, if, on a poll being taken on any of the resolutions set out in paragraph (d) hereof, the votes cast in favour of a particular resolution shall exceed the votes cast against it, but the holders of not less than one half in nominal value of the issued "A" Shares shall have voted against the resolution, such holders shall be deemed to have been entitled to and to have cast collectively so many additional votes as shall equal the excess with the consequence that the resolution shall be deemed not to have been carried. 

(d) The resolutions referred to in paragraph (c) hereof are: 

(i) any resolution which would in any way alter vary restrict or affect the rights of the "A" shareholders or the "D" shareholders as a class 

(ii) any resolution the effect of which would be to in any way alter the provisions of the Memorandum and Articles of Association of the Company. 

14. The resolution in writing mentioned in regulation 6 of Table 'A' Part II may consist of several documents in the like form each signed by one or more members (or being bodies corporate by their duly authorised representatives). 

DIRECTORS 

15. (a) The Directors holding office on the date these Articles come into force shall continue to hold office subject to the provisions of these Articles. 

(b) The number of Directors shall be not less than four and not more than seven of whom not more than two shall be "A" Directors, not more than four shall be "B" Directors and not more than one shall be a "C" Director. 

APPOINTMENT AND REMOVAL OF DIRECTORS 

16. (a) The holders of a majority in nominal value of the issued "A" Shares shall be entitled at any time and from time to time to appoint any person an "A" Director (but so that the maximum number of "A" Directors fixed in accordance with these Articles is not exceeded) to determine the period for which such person is to hold office and to remove any "A" Director from office. 

(b) The holders of a majority in nominal value of the issued "B" Shares shall be entitled at any time and from time to time to appoint any person a "B" Director (but so that the maximum number of "B" Directors fixed in accordance with these Articles is not exceeded) to determine the period for which such person is to hold office and to remove any "B" Director from office. 

(c) The holders of a majority in nominal value of the issued "C" Shares shall be entitled at any time that over fifty per cent of the issued "C" Shares are in the beneficial ownership of Patrick Wright (party to the said Agreement) and/or any person or persons who are relatives of the said Patrick Wright and/or a company controlled by the said Patrick Wright and/or a company controlled by a relative of the said Patrick Wright to appoint any person to be the "C" Director, to determine the period for which such person is to hold office and to remove such person from office. In this sub-article the terms "company" and "control" shall have the meanings assigned to them respectively by Section 20 of the Finance Act 1965 and in the event of the said Patrick Wright or any relative of the said Patrick Wright or any company controlled as aforesaid ceasing to hold a majority of the issued "C" Shares the "C" Director shall cease to hold office. 

(d) Every appointment, determination or removal made pursuant to this Article shall be made by notice in writing signed by or on behalf of the holders of a majority in nominal value of the issued "A" Shares, "B" Shares or "C" Shares as the case may be. Every such notice shall be delivered or sent to the Secretary at the registered office of the Company and shall take effect from the time of receipt. 

BORROWING POWERS 

17. The Directors may raise or borrow for the purposes of the Company's business such sums as they shall think fit and may exercise all the powers of the Company to borrow money, and to mortgage or charge its undertaking, property and uncalled capital or any part thereof, and to issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party. 

PROCEEDINGS OF DIRECTORS 

18. (a) The Directors may meet together for the despatch of business and adjourn and otherwise regulate their meetings as they think fit. 

(b) A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of Directors. Seven days notice at the least (exclusive of the day of the meeting and the day on which the notice is served or is deemed in accordance with paragraph (d) hereof to have been served) of every meeting of the Directors shall be given to every Director and alternate Director entitled to receive the same and every such notice shall specify the place, the day and the hour of the meeting and the general nature of the business to be transacted: PROVIDED that any meeting may be convened on such shorter notice as each Director or his alternate Director may approve. 

(c) If the Directors so resolve it shall not be necessary to give notice of a meeting of Directors to any Director who, being resident in the State, is for the time being absent from the State. 

(d) Every notice of a meeting of Directors may be given orally (personally or by telephone), served personally or sent by pre-paid letter post or telegram to the person to whom such notice is addressed at the address for the time being supplied for the purpose to the Secretary of the Company by such person (or if no address has been so supplied by any such person to his last known address). Every notice given orally shall be confirmed in writing but shall nevertheless be deemed to have been served at the time when it was given orally; every notice so sent by letter post shall be deemed to have been served on the expiry of twenty-four hours from the time of posting; and every notice so sent by telegram shall be deemed to have been served on the expiry of twelve hours from the time when the telegram was handed in by the Company for despatch. 

(e) All meetings of the Directors shall be held in the State. 

(f) The quorum necessary for the transaction of the business of the Directors shall be two of whom at least one shall be an "A" Director and one a "B" Director. 

(g) If within half an hour from the time appointed for the meeting a quorum is not present the meeting shall stand adjourned to the next business day following at the same time and place and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting the Directors present shall be quorum. 

(h) Save as provided in paragraph (i) of this Article questions arising at any meeting of Directors shall be decided by a majority of votes provided that no resolution relating to any of the matters specified in paragraph (j) of this Article shall be passed or deemed to be passed if an "A" Director votes against it. 

(i) On any matter coming before the Board relating to any decision to be made or action to be taken by the Board pursuant to the terms of Article 6 hereof whether or not any such resolution shall refer to the evidence satisfactory to the Board pursuant to such Article or to a decision to serve a notice on any person pursuant to paragraph (a) of such Article or otherwise howsoever on any such matter the "A" Directors (or so many of them as shall be present at any such meeting) shall be deemed to be entitled collectively to cast such number of votes as shall exceed by one vote all other votes capable of being cast at such meeting and consequently any such matters upon which the "A" Directors (or so many of them as shall be present at the meeting) shall vote in the affirmative and shall be deemed to have been passed by the Board irrespective of any other votes cast against the resolution. 

(j) The following are the matters referred to in paragraph of this Article: 

(i) any alteration variation restriction of or other matter affecting the rights of the "A" shareholders or the "D" shareholders as a class. 

(ii) any proposal to convene a meeting or otherwise to effect any alteration of the provisions of the Memorandum & Articles of Association of the Company. 

(iii) any issue of shares in the capital of the Company. 

(iv) the carrying on by the Company of any trade or business or the entry by the Company into any transaction or the carrying out of any activity or operation other than is provided for in Article 8.02 of the said Agreement, or 

(v) the registration of any transfer of shares in the Company not being a transfer to an existing member of the Company or a transfer pursuant to the provisions of Article 5 (o) hereof or a transfer to a person who has produced to the Board such a certificate (in respect of such matters as pertain to that person only) as is referred to in Article 9.02 of the said Agreement (whether or not such person is a person referred to in such Article 9.02. 

19. In Regulation 91 (f) of Part I of Table 'A' the words "other than an offence under the Road Traffic Acts," shall be inserted after the words "indictable offence". 

20. Any such Resolution in writing as is referred to in Regulation 109 of Part I of Table 'A' may consist of several documents in the like form each signed by one or more of the Directors. 

21. A Director (or his alternate) present at a meeting of the Directors shall in addition to his own vote be entitled to one vote in respect of each other Director not present at the meeting who shall have authorised him in respect of such meeting to vote for such other Director in his absence. Any such authority may relate generally to all meetings of the Directors or to any specified meeting or meetings and shall be in writing or by telegram or telex message and shall be produced to the Secretary for filing prior to the first meeting at which a vote is to be cast pursuant thereto. 

ALTERNATE DIRECTORS 

22. (a) Any Director may appoint (i) any other Director, or (ii) any other person who is approved by the majority of the Directors as the case may be to be his alternate; and every such alternate shall (subject to his giving to the Company an address within the State at which notices may be served on him) be entitled to receive notices of all meetings of the Directors and, in the absence from the Board of the Director appointing him, to attend and vote at meetings of the Directors, and to exercise all the powers, rights, duties and authorities of the Director appointing him (other than the right to appoint an alternate hereunder but including the powers granted by Article 18 (h) and (i) hereof. A Director may at any time revoke the appointment of an alternate appointed by him, and subject to such approval as aforesaid appoint another person in his place, and if a Director shall die or cease to hold the office of Director the appointment of his alternate shall thereupon cease and determine. An alternate Director shall not be counted in reckoning the maximum number of Directors allowed by the Articles of Association for the time being. A Director acting as alternate shall subject to the provisions of the Articles of Association have an additional vote at meetings of Directors for each Director for whom he acts as alternate but he shall count as only one for the purpose of determining whether a quorum be present. 

(b) Every person acting as an alternate Director shall be an officer of the Company and shall alone be responsible to the Company for his own acts and default and he shall not be deemed to be the agent of or for the Director appointing him. The remuneration of any such alternate Director shall be payable out of the remuneration payable to the Director appointing him and shall consist of such portion of the last mentioned remuneration as shall be agreed between the alternate and the Director appointing him. 

COMMITTEE 

23. A Committee may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a majority of votes of the members present. 

24. The Directors may but only by resolution delegate any (but not all) of their powers to committees consisting of such member or members of the Board (including in each case at least one "A" Director) as they think fit. Any committee so formed shall, in the exercise of the powers so delegated, conform to any Regulations that may be imposed on it by the Directors. 

DIVIDENDS 

25. Notwithstanding any rights attached to any other class of shares of the Company the holders of the "D" Shares shall be entitled on payment of each and every dividend by the Company collectively to receive (as between themselves in proportion to their holdings of "D" Shares) such portion of the aggregate amount of such dividend payment as shall be the greater of the following:- 

(a) Such portion thereof as bears the same proportion to the total of such dividend payment as the amount paid up or credited as paid up on the "D" Shares bears to the amount paid up or credited as paid up on the entire ordinary share capital of the Company, or 

(b) One quarter of the aggregate amount of such dividend payment. 

WINDING UP 

26. If the Company shall be wound up any surplus assets remaining after the payment of the debts and liabilities of the Company and the cost of liquidation shall be applied first in payment to the holders of the "D" Shares (in proportion to their holdings of such "D" Shares) of such amount as shall be the greater of the following amounts:- 

(a) Such portion of the amount to be applied as bears the same proportion to the total of such amount as the amount paid up or credited as paid up on the "D" Shares bears to the amount paid up or credited as paid up on the entire ordinary share capital of the Company, or 

(b) One quarter of the total amount to be distributed and the balance of such amount shall be divided amongst the holders of the "A" Shares, "B" Shares and "C" Shares according to the respective amounts paid up thereon. 

INDEMNITY 

27. Every Director, Managing Director, Agent, Auditor, Secretary or other Officer of the Company shall be entitled to in relation thereto, including any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any application under Section 391 of the Act in which relief is granted to him by the Court, and no Director or other Officer shall be liable for any loss, damage or misfortune which may happen to or be incurred by the Company in the execution of the duties of his office or in relation thereto. But this Article shall only have effect in so far as its provisions are not avoided by Section 200 of the Act. 

NOTICES 

28. A member who has no registered address in the State and has not supplied to the Company an address within the State for the giving of notices to him shall not be entitled to receive any notices from the Company. 

29. Every person who, by operation of law, transfer, or other means, shall become entitled to any share shall be bound by every notice or other document which previous to his name and address being entered on the register in respect of such share, shall have been given to the person in whose name the share shall have been previously registered. 

PRESENT when the Common Seal of BULA HOLDINGS was affixed hereto: 

SIGNED SEALED and DELIVERED by PATRICK WRIGHT in the presence of: 

SIGNED SEALED and DELIVERED by THOMAS CELESTINE ROCHE in the presence of: 

SIGNED SEALED and DELIVERED by THOMAS JAMES ROCHE in the presence of: 

SIGNED SEALED and DELIVERED by MICHAEL JAMES WYMES in the presence of: 

SIGNED SEALED and DELIVERED by RICHARD FRANCIS WOOD in the presence of: 

PRESENT when the Seal of Office of the Minister for Industry and Commerce was affixed and was authenticated by the signature of: 

. . . 
	
Signature:	A person authorised	
	under Section 15(1)	
Address	of the Ministers and	
	Secretaries Act, 1924	
	to authenticate the	
	Seal of the said	
Occupation	Minister	

BULA LIMITED 

INTER-PARTY AGREEMENT 

Wm Fry & Sons Solicitors 

13/14 Lower Mount Street 

SCHEDULE 

TARA MINES LIMITED 

162 Clontarf Road, Dublin 3, Ireland 

Telephone: 332211 Telex: 25881 IBAM EI 

Mr JC Holloway, 

Secretary, 

Department of Energy, 

25 Clare Street, 

Dublin 2. 

December 21, 1984. 

Proposal for the Development of Nevinstown Ore Reserves (Proposal) 

Dear Mr Holloway, 

Further to discussions on December 20, 1984, I enclose our Proposal. 

Our consultations indicated that the Government would be prepared, subject to the provisions of the relevant agreement, to consider disposing of the Government's 49% equity interest in Bula Limited to Tara Mines Limited together with the Government's 40.8% equity interest in Bula Limited should the Government purchase the Bula Holdings' 40.8% equity interest in Bula Limited. 

This Proposal has been prepared to meet as many aspirations as possible. The Proposal involves the following Undertakings and Conditions; the Undertakings by Tara are: 

1. To expand the capacity of its mill to provide for additional milling capacity of up to 450,000 dry metric tons per year. The actual mining rate in Nevinstown each year will depend on the mining plan for the overall Navan orebody. Initial development mining in Nevinstown would be scheduled to commence within one month of formal agreement. 

2. In recognition of the fact that the most efficient working of Nevinstown minerals can be achieved by access via the Tara Mines Limited State Mining Lease workings and processing through the Tara Mines Limited facilities associated therewith, Tara will, having regard to the Conditions herein; 

Pay to the Government a fixed royalty of IR£4 million payable as to IR£2 million in December 1985 and IR£2 million in December 1986 and a royalty of 4 1/2% of the profits which will be made from mining and milling of ore from Nevinstown on the royalty basis defined in accordance with the provisions of the Third Schedule, Part Two, Clause (i) of the Tara State Mining Lease. Accounts will be prepared on a consolidated basis for royalty calculation purposes. The fixed royalty of IR£4 million referred to above is in addition to the royalty payable under the Tara Mines Limited State Mining Lease of September 19, 1975. 

3. (i) Tara will, having regard to the Conditions herein, acquire for a consideration of IR£2 million the Government's 49% equity interest in Bula Limited together with the Government's 40.8% equity interest in Bula Limited should the Government purchase Bula Holdings' equity interest in Bula Limited. 

3. (ii) Tara will, having regard to the Wright Family's equity interest in Bula Limited, pay IR£0.5 million for the Wright Family's 10.2% equity interest in Bula limited. 

4. Tara will, having regard to the Conditions herein and with regard to the Bula Holdings' advances to Bula Limited: 

(i) Pay a nominal consideration for Bula Holdings' current advances ("Bula Holdings' Advances") to Bula Limited which may be acquired by the Minister for Energy prior to the Acquisition Date; 

(ii) Tara will either procure the release of the personal guarantees of MR TC Roche, Mr TJ Roche, Mr R Wood and Mr M Wymes (the "Four Guarantors") on the bank borrowings of Bula Limited, or indemnify the Four Guarantors of the bank borrowings of Bula Limited against any and all losses by the Four Guarantors under their guarantees of bank borrowings of Bula limited provided by the Four Guarantors and the Four Guarantors shall be obliged to accept at Tara's discretion either the release secured by Tara or the indemnity provided by Tara. 

5. These Undertakings by Tara are dependent on the following Conditions which shall be complied with absolutely; 

(a) The Minister for Energy will consent to the acquisition of Bula Limited by Tara Mines Limited in accordance with Section 6 of the Principal Agreement of September 19, 1975. 

(b) Tara will be permitted by the Minister for Energy to borrow, secure borrowings and guarantee such borrowings of Bula Limited as Tara may require on an arms length and commercial terms basis. 

(c) Any consequential changes in any other agreements which may be required from the Minister for Energy to give effect to this proposal will be permitted by the Minister for Energy. 

(d) Bula Limited's balance sheet as of the Acquisition Date will reflect provisions for bank liabilities not exceeding IR£12.3 million subject to the provisions of Condition 5(h)(iii). 

(e) The acquisition by Tara Mines Limited of 100% of the ordinary share capital of Bula Limited and 100% of the Bula Holdings' Advances on the Acquisition Date, being a date no later than December 31, 1984. 

(f) Bula Limited's balance sheet as of the Acquisition Date will reflect provisions for creditors (the "Creditors"), other than banks, Bula Holdings, Haras el Chorro SA and Anglo United Development Corporation Limited, which will be maintained at the lowest possible level and will not exceed IR£2 million subject to the provisions of Condition 5(h)(iii). 

(g) The contract with Haras el Chorro ("Haras) for the purchase of land can be terminated and such termination will involve a financial outlay by Bula Limited of not greater than IR£300,000 subject to the provisions of Condition 5(h)(iii). Tara agrees that it will consent to Bula Limited's balance sheet at the Acquisition Date reflecting a provision and/or contingent liability for Haras el Chorro SA up to the extent of IR£300,000. This is in addition to the sum of IR£2 million referred to at Condition 5(f) above. 

(h)(i) Prior to the Acquisition Date, the Minister for Energy will provide to Tara an Audit Report by Arthur Andersen & Co, subject only to a "Going Concern" qualification, together with the related balance sheet and financial statements of Bula limited as of October 31, 1984, together with a separate letter by Arthur Andersen & Co expressing their opinion on both all the tax liabilities of Bula Limited as of October 31, 1984, and the tax allowances applicable to Bula Limited on Bula Limited's commencement of trading in respect of expenditures prior to October 31, 1984. 

(ii) The Minister for Energy indemnifies Tara in respect of all Bula Limited's liabilities or contingent liabilities, other than advances of Bula Holdings and all liabilities in respect of Anglo United Development Corporation Limited at the Acquisition Date, which are in excess of IR£14.6 million at the Acquisition Date and to the extent not recovered in accordance with the provisions of Condition 5(h)(iii) and further indemnify Tara against any liabilities which arise subsequent to the Acquisition Date due to any events which took place prior to the Acquisition Date. The Minister for Energy further indemnifies Tara in respect of all Bula Limited liabilities or contingent liabilities to Anglo United Development Corporation Limited in excess of IR£700,000 at the Acquisition Date and to the extent not recovered in accordance with the provisions of Condition 5(h)(iv). 

(iii) The payment provided at 3(i) above will not be made until one week after an Audit Report by Arthur Andersen & Co subject only to a "Going Concern" qualification and reflecting Condition 5(m) of this Agreement, together with the related balance sheet and financial statements of Bula Limited as of the Acquisition Date, together with a separate letter by Arthur Andersen & Co expressing their opinion on both all tax liabilities of Bula Limited as of the Acquisition Date and the tax allowances applicable to Bula Limited on Bula Limited's commencement of trading in respect of expenditures prior to the Acquisition Date shall be delivered to Tara, the Four Guarantors and the current Shareholders. If the total amount of the bank liabilities, Creditors and the provision on the balance sheet for Haras at the Acquisition Date exceed the total of the amounts referred to at (d), (f) and (g) above, such excess shall be deducted to the extent possible from the payment provided for at 3(i) above and any remaining excess from the payments provided for in 2 above. 

(iv) In the event the liability to Anglo United Development Corporation Limited provided for in the balance sheet at the Acquisition Date exceeds IR£700,000, then the excess over IR£700,000 shall be deducted to the extend possible from the payment provided for at 3(i) above and any remaining excess from the payments provided for in 2 above. 

(v) The Minister for Energy indemnifies Tara in the period post the Acquisition Date in respect of all Bula Limited's liabilities and contingent liabilities as at the Acquisition Date, other than advances from Bula Holdings and all liabilities in respect of Anglo United Development Corporation Limited, which are in excess of IR£14.6 million to the extent that the liabilities over IR£14.6 million have not been recovered in accordance with the provisions of Condition 5(h)(iii). The Minister for Energy further indemnifies Tara in respect of all Bula liabilities or contingent liabilities to Anglo United Development Corporation Limited in excess of IR£700,000 at the Acquisition Date to the extent that the liabilities over IR£700,000 have not been recovered in accordance with the provisions of Condition 5(h)(iv). 

(vi) In the event the total amount of all settlements with all the Creditors and Haras ("the Settlements") is less than the amount provided for in the balance sheet for Creditors and Haras as of the Acquisition Date ("the Amount"), and providing that a deduction from the payments provided for at 3(i) and 2 above had been made in accordance with the provisions of Condition 5(h)(iii) above, then a payment equal to the difference between the total of both the Settlements and any and all reasonable Costs incurred in securing such Settlements and the Amount shall be paid to the Minister for Energy provided however the payment to the Minister for Energy under this provision will not exceed the deduction made in accordance with the provisions of Condition 5(h)(iii) above. 

(vii) In the event the settlement of Bula Limited's liability to Anglo United Development Corporation Limited (the Additional Settlement") is less than the amount provided for in the balance sheet as of the Acquisition Date ("the Provision"), and providing that a deduction from the payments provided for at 3(i) and 2 above had been made in accordance with the provisions of Condition 5(h)(iv) above, then a payment equal to the difference between the total of the Additional Settlement and any and all reasonable Costs incurred in securing such Additional Settlement and the Provision shall be paid to the Minister for Energy provided however the payment to the Minister for Energy under this provision will not exceed the deduction made in accordance with the provision of Condition 5(h)(iv) above. 

(viii) The Minister for Energy warrants Tara that no material assets or rights of Bula Limited as at December 31, 1983 other than their rights to purchase land from Bula will have been disposed of without the approval of Tara prior to the Acquisition Date. 

(ix) The indemnities provided for in Condition 5(h) by the Minister for Energy shall be in respect of claims arising within a period of five years from the Acquisition Date. 

(j) Prior to the Acquisition Date Bula Limited will not have disposed of any material assets or rights of Bula limited which Bula Limited owned as of December 31, 1983, other than their rights to purchase land from Haras. 

(k) Bula Limited's balance sheet at the Acquisition Date will reflect a provision in respect of a liability to Anglo United Development Corporation Limited up to the extent of IR£700,OO0 at the Acquisition Date subject to the provisions of Condition 5(h)(iv) above. Tara and Bula Limited will endeavour to minimise payments by Bula Limited of any amounts to Anglo United Development Corporation Limited. 

(1) Tara Mines Limited will not require any Guarantee from the State in respect of the development of the Nevinstown orebody and further will agree to waive the "best Endeavours" guarantee of IR£10 million at Section 9:0:6 of the Bula/State Interparty agreement of December 12, 1975. 

(m) All Employment Contracts, Consultancy agreements and other Contracts of Service or for Services or other Obligations will be terminated no later than December 31, 1984 and will not increase the liabilities of Bula Limited as of the Acquisition Date. The employees of Bula Limited other than Directors and Alternate Directors will remain as employees at the Acquisition Date although all employees will be deemed to be terminated as employees prior to the Acquisition date for the purpose of preparing the Balance Sheet and Financial Statement of Bula Limited at the Acquisition Date. 

(n) At the Acquisition Date Bula Limited will have no contracts, agreements or obligations which; 

(i) Oblige Bula Limited to pay any royalty or commission of any type on the Nevinstown minerals or the products of the minerals other than referred to in this Proposal; 

(ii) Oblige Bula Limited to sell any zinc or lead concentrates produced to any person or organisation, or 

(iii) Restrict Bula Limited's ability in any way whatsoever to use or dispose of any of its assets with the sole exception of restrictions arising from provisions of agreements between Bula Limited and the Banks. 

(o) This Proposal is also conditional on Bula Limited and the Four Guarantors providing written consents by 5.00 pm on December 22, 1984, that Tara and the Bankers to Bula Limited may meet without condition to discuss the financial affairs of Bula Limited and the guarantees provided by the Four Guarantors in respect of bank borrowings by Bula Limited and also that the Minister for Energy will provide to Tara Audit Reports by Arthur Anderson & Co together with the related balance sheets and financial statements of Bula Limited as at March 31, 1980, March 31, 1981, March 31, 1982, and draft accounts as of March 31, 1983, together with draft accounts for the nine months to December 31, 1983, prior to 5.00 pm on December 22, 1984. 

(p) No other conditions shall be accepted by Tara in respect of Tara's agreement to acquire the entire ordinary share capital of Bula Limited together with all the Bula Holdings' Advances and the other provisions of this Proposal. 

(q) This Proposal is open for consideration and agreement in principle to be confirmed in writing by all the Shareholders of Bula limited and the Four Guarantors not later than 5.00 pm on December 22, 1984. 

Yours sincerely, 

for and on behalf of 

TARA MINES LIMITED 

John J Tully 

Director/Secretary 

FOURTH SCHEDULE 

TARA MINES LIMITED 

162 Clontarf Road, Dublin 3, Ireland. 

Telephone: 332211 Telex: 25881 IBAM EI 

Mrs JC Holloway, 

Secretary, 

Department of Energy, 

25 Clare Street, 

Dublin 2. 

March 20, 1985. 

Response to Department of Energy Proposal for Improvements to the Proposal for the Acquisition of Bula Limited ("Improved Proposal") 

Dear Mr Holloway, 

Further to our discussion with you and in response to your suggestion that Tara Mines Limited ("Tara") consents to Bula Limited's balance sheet as at the Acquisition Date including more liabilities than the amount of Bula Limited balance sheet liabilities as at the Acquisition Date which Tara consented to in the Proposal of December 21, 1984 ("the Proposal"), we wish to present the following improvements to the Proposal. 

The Improved Proposal should be considered as an integral part of the Proposal and where any conflict arises, the provisions of the Improved Proposal override the provisions of the Proposal. 

1. COMPLETION ARRANGEMENTS 

In the light of additional information which has become available on February 26, 1985, discussions with Mr Dick Spring, TD Tanaiste and Minister for Energy on February 27, 1985 and the discussions since then with you and your officials, Tara are prepared to proceed to complete the proposed transaction on the bases set out in the Proposal of December 21, 1984 and herein. This procedure is conditional on the shareholders of Bula Limited, Bula Holdings, the Directors and management of Bula Limited providing Tara with their written agreement by 5.00 pm on March 25, 1985 that all the books, journals, records and files of Bula Limited will be physically delivered to the Minister for Energy immediately prior to closing as a condition of closing on the Acquisition Date in proper condition and as currently classified and filed. This requirement will also be included within the contract providing for the purchase of the 89.8% of the share capital of Bula Limited from the Minister for Energy ("the Acquisition Contract"). However Tara agrees that all elements of correspondence between the Department of Energy and Bula Limited entered into during the six months prior to the Acquisition Date will, following the Acquisition Date, remain confidential between the parties and not be released without the express written consent of the Minister for Energy. 

2. CREDITORS 

In addition to the provision for creditors of IR£2.0 million, in Condition 5(f) of the Proposal, Tara will consent that the Bula limited balance sheet will include financial provisions for the following matters subject to the following assurances and conditions which will be provided for in the Acquisition Contract: 

(a) Additional Pension Liabilities 

In the event that Bula Limited's pension liabilities exceed the IR£228,000 estimate provided by Irish Pensions Trust, Tara will accept that in the event of an excess in total creditors occurring due to pension liabilities exceeding IR£228,000, such excess will not be considered to be covered by the provisions of Condition 5(f) of the Proposal or the indemnity provisions of Condition 5(h) of the Proposal. The relevant amount above IR£228,000 shall be considered to be excluded from the amounts referred to in Condition 5(f) of the proposal and the aggregation provisions of Conditions 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi). 

This provision is conditional on: 

(i) no changes being made to the pension entitlements of any employee after October 31, 1984; and 

(ii) written agreement, prior to the Acquisition Date, that no pension liabilities arise for the Secretary and any Director other than Mr Wymes and that any liability for pension in respect of Mr Wymes and Mr Stanley is not greater than the amounts provided in the Irish Pensions Trust estimate of January 8, 1985 and is as is necessary to purchase the pension entitlements for Mr Wymes and Mr Stanley as set out in (i) above. 

(b) Back Pay 

Should liabilities arise in respect of back pay, (to the extent provided for in the draft balance sheet of Bula Limited at October 31, 1984 supplied by Arthur Andersen & CO, on February 1, 1985) Tara will accept that any excess in total creditors as provided in Condition 5(f) of the Proposal arising due to back pay liabilities, will be considered not to be covered by the provision of Condition 5(f) of the Proposal or the indemnity provisions of Condition 5(h) of the Proposal. The relevant amount shall be considered to be excluded from the amounts referred to in Condition 5(f) of the Proposal and the aggregation provisions of Conditions 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi). 

This provision is conditional on: 

(i) Mr Wymes and Mr Stanley waiving in writing prior to the Acquisition Date all their rights to back pay and 

(ii) Bula Limited taking no actions with regard to claims for back pay prior to the Acquisition Date which would prejudice Bula Limited's ability to deal with all current back pay claims immediately after the Acquisition Date. 

(c) Salaries 

Tara will accept that costs incurred by Bula Limited in respect of salaries and wages (together with the associated pension and PRSI costs) paid to or due to Bula Limited's employees for the period January 10, 1985 to March 15, 1985 will not be covered by the provisions of Condition 5(f) of the Proposal or the indemnity provisions of Condition 5(h) of the Proposal. The relevant amount shall be considered to be excluded from the amounts referred to in Condition 5(f) of the Proposal and the aggregation provision of Conditions 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi). 

This provision is conditional on: 

(i) Mr Wymes and Mr Stanley waiving in writing prior to the Acquisition Date all rights to salary and pension entitlements from January 10, 1985; and 

(ii) the Directors and/or the management of Bula Limited taking no action which would increase the salary and benefit entitlements of any employee in excess of that paid in the 1984 calendar year and if any such action is taken by the Director and/or the management of Bula Limited then the indemnity provisions of Condition 5(h) of the Proposal will apply. 

(d) Drogheda Harbour Lease 

Tara will consent to Bula Limited's balance sheet at the Acquisition Date reflecting a provision and/or contingent liability for an arrangement with the Commissioners for the Port and Harbour of Drogheda ("the Commissioners") involving the expenditure of up to IR300,000. This amount is in addition to the amounts provided in Condition 5(f) of the Proposal. Should any arrangement with commissioners involve the expenditure by Bula Limited of an amount exceeding IR£300,000 in association with the Commissioners agreeing to cancel the lease which Bula Limited has from the Commissioners, then such excess shall effectively be for the account of Bula Holdings and be covered by the indemnity provision of condition 5(h) of the Proposal. 

The amount of IR£300,000 referred to above shall be considered to be excluded from the aggregation provisions of Conditions 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi). 

This provision is conditional on: 

I Either (a) Discussions being held forthwith, on the receipt by Tara of written acceptance by the Department of Energy of this Improved Proposal, and the written consent of Bula limited to enter into such discussions between Tara and the Commissioners with a view to securing an agreement with the Commissioners prior to the Acquisition Date which would enable Bula Limited to cancel the Lease granted to Bula Limited which agreement could only be effected after Tara acquires Bula Limited. At the election of Bula Limited, Tara will agree to a representative of Bula Limited joining with Tara in all such discussion with the Commissioners. 

or (b) Bula Limited negotiating a settlement with the Commissioners prior to the Acquisition Date at a cost of not more than IR£50,000. 

II In the event that agreement as referred to at I immediately above is not secured with the Commissioners prior to the Acquisition Date, then Tara will agree to the following provisions: 

(i) Discussions will be held, after the Acquisition Date, between Bula Limited, Bula Holdings and the Department of Energy prior to all meetings between Bula Limited and the Commissioners. 

(ii) If the initial or any subsequent discussions by Bula Limited with the Commissioners lead Bula Limited to believe that any arrangement with the commissioners will involve an expenditure exceeding IR£300,000, all subsequent negotiations with the Commissioners will take place with a combined team of the Department of Energy, Bula Limited and Bula Holdings; the Department of Energy, Bula Limited and Bula Holdings shall agree on the action to take before each meeting with the Commissioners or their representatives. In any such negotiations between Bula Limited and the Commissioners, the Department of Energy and Bula Holdings will be represented respectively on an observer basis at meetings with the Commissioners by Mr D Bergin of Arthur Cox and Co and a representative of Bula Holdings. 

(e) Additional Operating Costs 

Tara will consent to Bula Limited's balance sheet as at the Acquisition Date reflecting the costs incurred by Bula Limited in maintaining the Navan-based operations of Bula Limited for an additional period of up to two weeks beyond March 15, 1985 provided that written acceptance of this Improved Proposal is received by Tara by 5.00 pm on Monday, March 25, 1985 and the Acquisition Contract is completed by 5.00 pm on Friday, March 29, 1985. The relevant amount shall be considered to be excluded from the amounts referred to in Condition 5(f) of the Proposal and the aggregation provisions of Conditions 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi). 

3. ADDITIONAL TERMINATION LIABILITIES 

In the event that Bula Limited's termination liabilities exceed the IR£300,000 provided in the First Addendum to the Proposal, Tara hereby consents that any such excess will be considered not to be subject to the indemnity provisions of Condition 5(h) of the Proposal. The relevant amount shall be considered to be excluded from the amounts referred to in Condition 5(f) of the Proposal and the aggregation provisions of Conditions 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi). 

This provision is conditional on: 

(i) the current Directors and Secretary of Bula limited waiving in writing any and all rights as Directors, Secretary and as employees of Bula Limited to compensation for loss of office or employment; and 

(ii) Mr Stanley's written agreement that any claim by him for compensation for loss of office or employment would be limited to not more than one year's salary; 

(iii) in the event that legal difficulties arise in securing the agreements referred to at (i) and (ii) immediately above or difficulties arise in enforcing such written agreements then any liabilities of Bula Limited which arise as a result of claims in respect of compensation for loss of office or employment from Directors and the Secretary and any claims from Mr Stanley exceeding one year's salary shall be considered to be covered by the indemnity provisions of Condition 5(h) of the Proposal. 

4. HARAS EL CHORRO 

In addition to the IR£300,000 liability accepted in Condition 5(g) of the Proposal in respect of the land purchase contract between Haras el Chorro and Bula Limited of February 17, 1975, Tara will accept that any liabilities over IR£300,000 incurred by Bula Limited in dealing with Haras el Chorro will not be covered by the indemnity provisions of Condition 5(h) of the Proposal. 

This provision is conditional on: 

(i) The provisions of the Proposal which provide for the aggregation of the amount provided for in Condition 5(g) of the Proposal with other liabilities of Bula Limited specified in Conditions 5(d) and 5(f) of the Proposal will be considered to be excluded from Conditions 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi) of the Proposal. 

(ii) Receipt by Tara prior to the Acquisition Date of written assurances from Bula Holdings' and Bula Limited's current Directors that all correspondence, documents and discussions by Directors, the Secretary, employees, advisers and agents of Bula Holdings and Bula Limited which would have any effect whatsoever on the status of the land purchase contract of February 17, 1975, between Haras el Chorro and Bula Limited have been fully disclosed to Gerrard Scallan & O'Brien and Gerrard Scallan & O'Brien's written assurance that Gerrard Scallan & O'Brien had disclosed in writing by February 28, 1985 all such correspondence, documents and discussions to McCann FitzGerald Sutton Dudley, together with all similar correspondence, documents and discussions which Gerrard Scallan & O'Brien may have had with the legal advisers to Haras el Chorro, and Bula Holdings', Bula Limited's and Gerrard Scallan & O'Brien's written assurances that no further correspondence, documents or discussions will be entered into by or on behalf of Bula Limited with representatives of Haras el Chorro prior to the acquisition of Bula Limited by Tara: Tara also requires similar written assurances from the Department of Energy and Arthur Cox & Co prior to the Acquisition Date. 

(iii) Modifying the provisions of Conditions 5(g), 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi) of the Proposal, so that these provisions reflect Tara's responsibility, subject to (iv) immediately below, for all of the costs incurred by Bula Limited after the Acquisition Date in dealing with Haras el Chorro with regard to resolving matters between Haras el Chorro and Bula Limited arising from the land purchase contract of February 17, 1975. 

(iv) If the conditions (ii) and (iii) immediately above are not complied with by Bula holdings, Bula Limited, Gerrard Scallan & O'Brien, the Department of Energy and its legal advisers, Arthur Cox & Co or persons purporting to act on their behalf and any additional liabilities (in excess of IR£625,000) to Haras el Chorro emerge subsequent to the Acquisition Date, then the indemnity provisions of Condition 5(h) of the Proposal will apply to such liabilities in excess of IR£625,000. 

(v) The agreement dated February 17, 1975 providing for the sale of the private minerals in Rathaldron by Haras el Chorro to Bula Limited being confirmed by the current Directors and Shareholders of Bula Holdings and Bula Limited but excepting the State Directors, the Director representing the Wright Family and the Wright Family as shareholders as being still valid and in existence between Bula Limited and Haras el Chorro and their further confirmation that they have taken no action to prevent any mines and minerals under the Rathaldron lands being legally vested in Bula Limited under the terms of that contract or to prevent any such rules and numerals under the said Rathaldron lands being legally capable of being mined by Bula Limited in accordance with usual mining practices under the terms of that contract subject only to the provisions of (vi) immediately below. 

(vi) The Minister for Energy and the Minister for Finance agree that the right to work the private minerals in Rathaldron and the appropriate royalty payment to the State will not be finalised as a condition of the Acquisition Contract other than as provided immediately below. Following the completion of the Acquisition Contract, Bula Limited will endeavour to negotiate with Haras el Chorro on a reduction in the amount of the royalty payments provided for in the agreement made between Haras el Chorro and Bula Limited dated February 17, 1975 which provided for the sale by Haras el Chorro of all private minerals in Rathaldron to Bula Limited. The Minister for Energy will grant to Bula Limited by way of lease the rights to work the private minerals in Rathaldron. The Minister for Energy covenants that the terms and conditions of the agreement under which the Minister for Energy will grant to Bula Limited the exclusive rights to mine the private minerals in Rathaldron will be without conditions of any type other than the provisions of the Tara State Mining Lease and other than a royalty provision, in consideration of the grant of such rights to Bula Limited, providing for the payment of a royalty to the Minister for Energy at a level to be agreed between the Minister for Energy and Bula Limited. Without prejudice to the rights of the Minister for Energy under the Minerals Development Acts 1940-1979, the Minister for Energy will, in fixing the royalty payable to the State in respect of mining the private minerals in Rathaldron, have regard to any royalties or compensation payable to Haras el Chorro. PROVIDED HOWEVER that in no circumstances will the Minister for Energy and the Minister for Finance require Bula Limited to be obligated to pay or to pay a royalty to the Minister for Energy on any basis in excess of 41/2% of profits which will be made from mining the private minerals in Rathaldron, which profits are as defined in accordance with the provisions of the Third Schedule, Part Two, Clause (i) of the Tara State Mining Lease. The Minister for Energy and the Minister for Finance further covenant that when the Minister for Energy and the Minister for Finance reach agreement with Bula Limited on the basis for royalty payments to the Minister for Energy in consideration for the grant to Bula Limited of the rights to mine the private minerals in Rathaldorn, the Minister for Energy will promptly grant by lease and the Minister for Finance will consent to the grant by lease to Bula Limited the exclusive rights to mine the private minerals in Rathaldron. 

5. BANK LIABILITIES 

(i) Tara will consent that a liability for IR£170,000 of Bula Limited to the banks will be considered not to be covered by Condition 5(d) of the Proposal and that the Conditions 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi) of the Proposal will be modified to exclude IR£170,000 of bank liabilities to make such provisions consistent with this Improved Proposal. 

(ii) Tara will consent that an additional liability for IR£170,000 of Bula Limited to the banks will not be considered to be covered by Condition 5(d) of the Proposal and that the Conditions 5(h)(ii), 5(h)(iii), 5(h)(v) and 5(h)(vi) of the Proposal will be modified to exclude an additional IR£170,000 of bank liabilities to make such provisions consistent with this Improved Proposal. 

(iii) Tara will consent that an extra additional liability for up to IR£85,000 of Bula Limited to the banks will be excluded from the conditions of the Proposal on the same basis as provided in (i) above immediately above. This amount is the current estimate of the interest costs on the current Bula Limited liabilities to the banks which interest costs will arise during a two-week period beyond March 15, 1985. 

(iv) The provisions of (i) and (ii) immediately above are conditional on the receipt by Tara of written acceptance from the Department of Energy of this Improved Proposal by 5.00 pm on Monday, March 25, 1985, the receipt by Tara of the written agreement of Bula Holdings and Bula Limited to the provisions of 1 and 2(d) I above by 5.00 pm on Monday, March 25, 1985 and the completion of the Acquisition Contract by 5.00 pm on March 29, 1985. 

6. ANGLO UNITED/MUNSTER BASE METALS 

The provision of IR£700,000 in Condition 5(k) of the Proposal is based on the repayment of advances made to Bula Limited by Munster Base Metals Limited, interest on these advances until the repayment date and legal fees incurred by Munster Base Metals. 

Tara agree that Condition 5(k) of the Proposal does not constitute any restriction on Bula Holdings' freedom of action in dealing with Anglo United Development Corporation Limited. This provision does not constitute any modification of the indemnity provisions of Condition 5(h) of the Proposal. 

7. DIRECTORS' ACCOUNTS WITH BULA LIMITED 

Tara will consent to the balance sheet of Bula Limited as of the Acquisition Date being prepared on the basis that each Director's account is drawn up so that directors' fees payable to each individual Director will be waived to the extent of the balance due to Bula Limited by each Director. 

8. BALANCES DUE FROM BULA HOLDINGS 

Tara consents to the balance sheet of Bula Limited as at the Acquisition Date being prepared on the basis that the advances by Bula Limited to Bula Holdings may be offset against advances by Bula Holdings to Bula Limited. 

9. BULA HOLDINGS/DEPARTMENT OF ENERGY TRANSFERS OF BULA LIMITED SHARES TO TARA 

The Proposal was structured on the basis that Tara would purchase 89.8% of the outstanding shares of Bula Limited from the Department of Energy. The Proposal was therefore based on the premise that the Department of Energy would purchase the shares of Bula Limited currently owned by Bula Holdings before selling the Department of Energy's current shareholding (49.0%) and the Bula Holdings' current shareholding (40.8%) to Tara. 

Tara are prepared to have the transfer of the 40.8% shareholding in Bula Limited currently owned by Bula Holdings transferred directly to Tara but only on the strict conditions that: 

(i) the revised procedure will have no adverse effect whatsoever on Tara, and 

(ii) the revised procedure will have no adverse impact on the indemnity provisions of Condition 5(h) of the Proposal as modified by the Improved Proposal. 

10. ADDITIONAL CONDITIONS 

(a) Tara requires written agreement from Bula Holdings and appropriate authorities prior to the Acquisition Date for Northern Bank Finance Corporation ("NBFC") to offset the Suspense Accounts of approximately IR£384,699 together with any interest against the NBFC bank advances to Bula Limited. 

(b) Tara requires written confirmation from the Department of Energy of the amount of the State's right to advances of IR£840,000 (made to or on behalf of Bula Limited) ("State Advances") which the State will transfer to Bula Holdings at the Acquisition Date. 

(c) Any and all liabilities of any type whatsoever exceeding the amounts provided in the Proposal for particular liabilities or groups of liabilities and the amounts or provisions provided for particular liabilities which are for Tara's account as set out in provisions 2, 3, 4, 5, and 6 of the Improved Proposal, will be subject to the indemnity provisions of Condition 5(h) of the Proposal. 

(d) The written consent of the Department of Energy that the payments provided under the terms of the Promissory Notes in the principal amount of Can.$3.7 million held by the Minister for Energy will be payable by Tara to the Minister for Energy not later than December 31, 1999 and no interest shall be due or payable on the principal amount of such Promissory Notes or the Promissory Notes issued to Tara Exploration and Development Company Limited. 

(e) The Improved Proposal together with the Proposal represents the entire understanding in respect of the acquisition of Bula Limited by Tara and no discussions or any other correspondence will have the effect of varying Condition 5(p) of the Proposal or any provision of this Improved Proposal. 

(f) The written agreement of the Minister for Energy and the Minister for Finance that the Tara State Mining Lease will be extended to cover all the area of Nevinstown (other than the private minerals therein) ("the Amended Tara State Mining Lease"). The agreements which are necessary to effect extension to the area covered by the Tara State Mining Lease will be executed as soon as practicable by the Minister for Energy and the Minister for Finance and will not include terms or conditions of any type other than the royalty amount provided for in this provision, the royalties payable by way of fixed amounts and by way of a royalty based on profits as provided for in Condition 2 of the Proposal subject to the conditions contained in the Proposal, and an annual dead rent of IR£2,500 payable in respect of the area of Nevinstown covered by the Amended Tara State Mining Lease. In addition to the royalty payments provided for in Condition 2 of the Proposal dated December 21, 1984, Tara will agree to pay to the Minister for Energy an additional fixed royalty of IR£200,000 within one month of the date of the agreement of the Tara State Mining Lease to cover the State Minerals in Nevinstown. 

(g) The indemnity provisions of the Proposal of December 21, 1984 as modified by the terms of this Improved Proposal will be implemented on the basis that the provisions of the Acquisition Contract do not "water down" the effect of the indemnity provisions contained in the Proposal and the Improved Proposal. 

(h) The entire contents of the Proposal and this Improved Proposal and any and all correspondence and agreements of any type between the Department of Energy and Tara in connection with this transaction and all elements of such correspondence and agreements will remain confidential between the parties and will not be released by either party without the express written consent of the other party. However to such extent as it may be appropriate for the Minister for Energy, as the Minister with responsibility for the development of the country's minerals resources, to furnish information on and copies of the Acquisition Contract to the Houses of the Oireachtas, Tara accepts that this Condition shall not apply provided that in the case of any item which is not yet finalised, Tara will have the right to have publication of that item deferred and identification of any such item withheld until finality is reached. 

(i) The Proposal and this Improved Proposal are conditional on Bula Limited having the unfettered right to mine the private minerals in Nevinstown without restriction of any type and without any requirement to pay any royalty or compensation of any type for mining such private minerals to any body or organisation of any type other than as provided in Condition 2 of the Proposal of December 21, 1984 and subject only to securing planning permission as may be necessary. This Improved Proposal is conditional on the Mining Board's registration of the private minerals in Nevinstown as excepted minerals in accordance with Section 15 of the Minerals Development Act 1979 prior to the Acquisition Date and the Mining Board's determination prior to the Acquisition Date that Bula Limited is absolutely entitled to the compensation (if any) howsoever arising, but particularly under the provisions of the Minerals Development Acts 1940-1979 in the event of any of the provisions of the Minerals Development Acts 1940-1979 applying to the mining of all or any of the private minerals in Nevinstown. Tara will also require the written assurance of Bula Holdings that Bula Limited is the person absolutely entitled to the compensation (if any) howsoever arising, but particularly under the provisions of the Minerals Development Acts 1940-1979 in respect of the private minerals in Nevinstown and will also require an additional assurance from Bula Holdings and Bula Limited that the mineral rights in respect of the private minerals in Nevinstown and all compensation rights (if any) howsoever arising, but particularly under the provisions of the Minerals Development Acts 1940-1979 in respect of all the private minerals in Nevinstown have not and will not be disposed of by Bula Limited and have not or will not have been devolved from Bula Limited prior to the Acquisition Date. 

This condition will be subject to the indemnity provisions of Condition 5(h) of the Proposal. 

CONCLUSION 

We require written acceptance of the Improved Proposal by 5.00 pm on Monday, March 25, 1985, together with the written consent of Bula Limited as provided for in provision I above. 

We trust that the Improved Proposal will enable the matter to be completed by the execution of an Acquisition Contract by 5.00 pm on Friday, March 29, 1985. 

Yours sincerely 

BJ Hynes 

FIFTH SCHEDULE 

TARA/BULA 

COMPARISON OF DECEMBER 1984 and SEPTEMBER 1985 OFFERS 

18 September 1985 

INTRODUCTION 

This document seeks to compare the original (ie December 1984) offer to Bula with the current (ie September 1985) offer. 

The dates of the first payment to Bula under the two offers are assumed to be 10 January 1985 and 15 September 1985, respectively. In fact, of course, payment would have been (in the case of the original offer) and is likely to be (in the case of the current offer) some time after these dates. However, there is no reason to assume a longer delay in one case than in the other, and thus the impact of this assumption on the analysis may be regarded as negligible. 

To permit meaningful comparison, all payments are, in the case of each offer, discounted back to 10 January 1985 money terms. The discount rates used are 16.4% for the period 10 January 1985-15 September 1985, and 14% per annum thereafter. These rates represent, respectively, the weighted average interest rate charged by NBFC, UIB and AIIB on Bula limited's bank borrowings in the period 10 January-15 September 1985, and the equivalent current rate specified by the banks adjusted for the recent reduction in rates. 

The sources of these computations and assumptions are set out in the various schedules attached hereto. Where possible, data on Bula's liabilities have been derived directly from information supplied either by the Company itself or by its auditors, Arthur Andersen & Company. 

RESULTS OF ANALYSIS 

The results of the analysis are set out in Tables 1 and 2 overleaf. Comparison of the two Tables indicates that the current offer represents, to Bula Holdings, an improvement of £318,000 over the December 1984 offer in January 1985 money terms, equivalent to an improvement of £352,000 in current (ie September 1985) money terms. The improvement in nominal terms is £670,000. 

TABLE 1 

PAYMENTS TO BULA UNDER ORIGINAL (DEC 1984) OFFER 
	
	Nominal	10.1.85	
	value	value	
	(£000)	(£000)	
Initial payment (10.1 .85)*	1,136	1,136	
2nd payment (31.12.85)	1,500	1,304	
3rdpayment (31.12.86)	2,000	1,521	
	4,636	3,961	
* See Schedule 1			

TABLE 2 

PAYMENTS TO BULA UNDER CURRENT (SEPT 1985) OFFER 
	
	Nominal	10.1.85	
	value	value	
	(£000)	(£000)	
Initial payment (15.9.85)*	1,806	1,630	
2nd payment (30.06.86)	1,500	1,221	
3rd payment (30.06.87)	2,000	1,428	
	5,306	4,279	

* See Schedule 3 

SCHEDULE 1 

ORIGINAL (DEC 1984) OFFER 

COMPUTATION OF FIRST PAYMENT TO BULA 

All data refer to 10.1.85 
	
	£000	£000	Note	
A. COMPUTATION OF DEDUCTIONS				
Bank indebtedness	12,674		(1)	
Haras-el-Chorro	1,000		(1)	
Munster Base Metals	7,00		(1)	
State Advances	1,079		(1)	
Sundry creditors/accruals	1,929		(2)	
		17,382		
To Tara's account:	
Bank indebtedness	12,300	
Haras-el-Chorro	300	
Munster Base Metals	700	
Sundry creditors accruals (inc State	2,000$	
Advances)		
15,300		
Deduction from first payment		2.082	

Notes: (1) Per Arthur Andersen pro-forma balance sheet for 10/1/85, adjusted (by AA) for post-balance sheet date adjustments to the 31/10/84 balance sheet on which the 10/1/85 pro-forma was based. 

(2) Figure of £1,785,000 from AA pro-forma balance sheet for 10/1/85, adjusted for omissions and additional items. See Schedule 2. 

SCHEDULE 1 

(cont'd) 
	
	£000	£000	Note	
B. COMPUTATION OF FIRST				
PAYMENT				
Payment by Tara:				
Initial payment	2,000			
less deductions (per A above)	(2.082)			
(82)				
Payment by State		840	(3)	
Repayment of NBFC suspense account	378	
		1,136	

Note: (3) Payment of State Advances as specified in Tanaiste's letter of 31 December 1984 

SCHEDULE 2 

BULA LIMITED: COMPUTATION OF "SUNDRY 

CREDITORS/ACCRUALS" AT 10/1/85 
	
Per AA	Revised	
pro forma	estimate	
	(£000)	(£000)	Note	
Pensions	228	262	(1)	
Back-pay	80	90	(2)	
Bankers Trust	130	130		
Termination costs	300	300		
Costs (salaries, PAYE, etc)				
1.11.84-10.1.85	57	57	
Bula Resources	90	102	(3)	
Drogheda Harbour	--	75	(4)	
Directors Fees	] 13	(5)		
Other	] 900	] 900		
TOTAL	1,785	1,929		

Notes: (1) AA pro-forma relates to 31.10.84. The additional £34,000 is pro-rata with the increase between that date and 29.3.85 as specified in MJ Wymes's letter to the Secretary date 26.3.85. 

(2) AA pro-forma relates to 31.10.84. Increase of £10,000 calculated by data (supplied by AA) quoted by E&W in Appendix 4 of their letter ("Liabilities of Bula Ltd") dated 22 February 1985. 

(3) Increase of £12,000 derived in same manner as for pensions in Note (1) above. 

(4) Not included in AA pro-forma. 

(5) Increase of £13,000 for directors' fees derived in same manner as for pensions in Note (1) above. 

SCHEDULE 3 

CURRFNT (SEPT 1985) OFFER 

COMPUTATION OF FIRST PAYMENT TO BULA 

All data refer to 15.9.85 
	
	£000	£000	Note	
A. COMPUTATION OF DEDUCTIONS				
Bank indebtedness	14,037		(1)	
less suspense account	(378)		(2)	
13,659				
State Advances	1,225			
Sundry creditors/accruals	2.000		(3)	
16,884				
To Tara's account:	
Bank indebtedness	12,725	
Pensions (est excess over £228,000)	75		(4)	
Back-pay (estimated)	140		(4)	
Salaries 10.1.85 -- 15.3.85 (estimated)	20		(4)	
Navan costs 15 -- 29.3.85 (estimated)	5			
Sundry creditors (inc State Advances)	2.000 		14,965	
Deduction from first payment		1,919		

Notes: (1) Obtained from banks. 

(2) Draft (9.9.85) Bula agreement: Schedule 3, Part I, Paragraph (5). 

(3) Based on preliminary Arthur Andersen data for 31.7.85 audit. Excludes termination costs and Drogheda Harbour liability (also excluded below under "To Tara's account"). 

(4) Based on AA data reproduced by E&W in their letter of 22 February 1985. 

SCHEDULE 3 

(cont'd) 
	
	£000	£000	Note	
B. COMPUTATION OF FIRST				
PAYMENT				
Payment by Tara:				
Initial payment	2,000			
less Deductions (per A above)	(1,919)			
		81		
Payment by State (State Advances)		1,225		
Payment by State		500	
1,806			

SIXTH SCHEDULE 

1. Bula Holdings is prepared to enter into an agreement with the State for the sale of its Shares and Advances but will not allow itself to be placed in a position where it is open to be pursued or sued by Tara. 

2. Payments to be made to Bula Holdings cannot be dependent on Tara honouring its commitments to the State. 

3. The consideration payable to Bula Holdings for its 41% shareholding should be related to the value of the underlying asset and not be discriminatory as between shareholders in the Company, as proposed. 

4. The amounts due from Bula Ltd to Bula Holdings should be repaid in full and there should not be discrimination between Creditors, as proposed. 

5. Bula Holdings is not prepared to be burdened with unquantifiable ongoing contingent liabilities in respect of Haras el Chorro, Drogheda Harbour Commissioners, Voest-Alpine or Munster Base Metals. 

6. The liability under warranties/indemnities shall not exceed the consideration quoted for the Bula Holdings shareholding. 

7. The release of the personal guarantees of the Covenantors and the release of their pledges of personal assets should take place within one month of completion. 

8. There should be no discrimination between existing employees in respect of Pay, Back-Pay and Pension Rights, which rights should be determinable as of completion. 

BULA LIMITED AND OTHERS v 

TARA MINES LIMITED AND OTHERS 

SEVENTH SCHEDULE 

Index of Witnesses in the order in which they were first called to give evidence 
	
1. Michael Wymes	Direct Evidence Thursday	
	17/11/94-Thursday 11/5/95.	
(6 named Plaintiff and the main	Transcripts 33-100.	
moving force behind this		
litigation).	Cross Examination on behalf of	
	Tara from Friday 12/5/95-	
	Friday 13/10/95.	
	Transcripts 101-153.	
	Cross Examination on behalf of	
	the Minister from Friday	
	13/10/95 -Tuesday	
	19/12/95.	
	Transcripts 153-180.	
	Re: Examination on Wednesday	
	20/12/95.	
	Transcript 181.	
2. Stephen Coughlan	Transcript 182.	
	Wednesday 14/2/96.	
(Department of Energy and he	
prepared a summary of Mr	
Reynolds' tenure of office as	
Minister of Energy).	
3. William Scally	Transcripts 182 & 183.	
	Wednesday 14/2/96 & Thursday	
(Economic Advisor to the	15/2/96.	
Tanaiste).		
4. Michael Guilfoyle	Transcript 183.	
	Thursday 15/2/96.	
(Department of Finance).	
5. Robert Curran	Transcript 183.	
	Thursday 15/2/96.	
(Department of Finance).		
6. Stephen O'Neill	Transcripts 184 & 185.	
	Tuesday 20/2/96 & Wednesday	
(Department of Finance)	21/2/96.	
7. Richard Wood	Transcripts 185 to 189.	
	Wednesday 21/2/96-Wednesday	
(5th named Plaintiff and active	28/2/96.	
continuing supporter of this	
litigation).	
8. Cathal Young	Transcripts 189 & 190.	
	Wednesday 28/2/96 & Thursday	
(Solicitor and Trustee for the	29/2/96.	
Wright Family).		
9. Brian P Lillis	Transcript 190.	
	Thursday 29/2/96.	
(of UIB)		
10. Thomas Barry	Transcript 190.	
	Thursday 29/2/96.	
(of UIB)		
11. Michael Buckley	Transcript 191	
	Friday 113196.	
(Department of Finance).		
12. Brendan Keenan	Transcript 191.	
	Friday 1/3/96.	
(Financial Editor of Independent		
Newspaper who got information		
from Hynes).		
13. Liam Byrne	Transcripts 192 & 193.	
	Tuesday 5/3/96 & Wednesday	
(of NBFC and verifies it was	6/3/96.	
bank's own decision to put		
pressure on Bula and not done at		
the request of Tara or the		
Minister. In latter years before		
the collapse Wymes had no		
credibility whatever with the		
banks).		
14. Joseph O'Connor	Transcripts 193 & 194.	
	Wednesday 6/3/96 & Thursday	
(of AIIB).	7/3/96.	
15. Michael Sutcliffe	Transcripts 195 & 196.	
	Tuesday 12/3/96 & Wednesday	
(Representative of The Bankers	13/3/96.	
Trust and the very experienced		
Financier involved in putting		
together the package for the		
Independent Bula Mine Project).		
16. Michael Scanlan	Transcripts 197, 198 & 199.	
	Thursday 14/3/96-Tuesday	
(Assistant Secretary of the	19/3/96.	
Department of Energy in charge		
of oil and minerals between 1979		
& 1988).		
17. James Dudley	Transcript 200.	
	Wednesday 20/3/96.	
(of Gerrard Scallon and O'Brien		
Solicitors).		
18. Frank Plunkett Dillon	Transcript 200.	
	Wednesday 20/3/96.	
(of Gerrard Scallon and O'Brien		
and acted as Solicitor for the		
Plaintiffs up to the		
commencement of litigation).		
19. Kieran Condell	Transcripts 201 & 202.	
	Thursday 21/3/96 & Friday	
(of NBFC).	22/3/96.	
20. Padraig O'Huiginn	Transcript 202.	
	Friday 22/3/96.	
(Secretary Department of the		
Taioseach).		
21. Joseph O'Gorman	Transcripts 203, 204 & 205.	
	Tuesday 26/3/96 to Thursday	
(Consultant Engineer and	28/3/96.	
Representative in Ireland for		
Outokumpu).		
22. Dermot Nally	Transcript 205.	
	Thursday 28/3/96.	
(Secretary to the Government).	
23. Michael O'Connell	Transcripts 206-213.	
	Wednesday 17/4/96-Tuesday	
(16th named Defendant and the	30/4/96.	
Minister's nominee as a Director		
of Bula).	Transcript 273.	
	Tuesday 15/10/96.	
24. Breffni Byrne	Transcripts 213, 214 & 215.	
	Tuesday 30/4/96-Thursday	
(of Arthur Anderson Chartered	2/5/96.	
Accountants).	
25. David Hudson	Transcript 217.	
	Tuesday 7/5/96.	
(Merchant Banking expert		
expressing views on Tara's ability		
to pay for the takeover of Bula).		
26. James Gallagher	Transcript 218.	
	Wednesday 8/5/96.	
(of Arthur Anderson. Taxation		
Partner in 1970-1990).		
27. Allen Sykes	Transcripts 220, 221, 223, 228,	
	229, 253, 254 & 268.	
(Mining Finance expert and	Tuesday 14/5/96, Wednesday	
dealing with damages).	15/5/96, and Friday 17/5/96.	
	Wednesday 5/6/96% and Thursday	
	6/6/96.	
	Friday 12/7/96, and Monday	
	15/7/96.	
	Tuesday 8/10/96.	
28. Wllliam Bruce Evans	Transcripts 222, 250, 256 & 258.	
	Thursday 16/5/96.	
(of Steffan, Robertson and	Tuesday 9/7/96, Wednesday	
Kirsten Mining Engineers and	17/7/96 and Monday 22/7/96.	
experts on operating costs of		
mines).		
29. Cormac Murphy	Transcripts 224, 225 & 257.	
	Monday 20/5/96, Tuesday	
(of Arthur Anderson Chartered	21/5/96 and Thursday 18/7/96.	
Accountants and he helped		
prepare the computer models		
produced by them).	
30. Sir John Lawrence Knill	Transcript 225.	
	Tuesday 21/5/96.	
(Engineering Expert and		
Geologist).		
31. John Warren Summers	Transcripts 225 & 226.	
	Tuesday 21/5/96 & Wednesday	
(Expert in Rock Mechanics and	22/5/96.	
Rock Engineering).		
32. Roderick Ryan	Transcript 227.	
	Thursday 23/5/96.	
(Arthur Anderson's current Tax		
Partner who assisted in the		
creation of the computer models).		
33. Joseph Holloway	Transcripts 230-245 inclusive.	
	247, 248, 249, 251, 252, 254 &	
(Secretary Department of Energy	255.	
and principal witness for the	Monday 10/6/96-Tuesday 2/7/96	
Minister for Energy).	and Thursday 4/7/96--Monday	
	8/7/96 and Thursday 11/7/96,	
	Wednesday 12/7/96, Monday	
	15/7/96 and Tuesday 16/7/96.	
34. Nathaniel Healy	Transcript 239.	
(Solicitor A&L Goodbody	Friday 21/6/96.	
advising Tara's Bankers on		
documentation to permit and		
assist take over of Bula)		
35. James Stanley	Transcripts 246 & 247.	
	Wednesday 3/7/96 & Thursday	
(Financial Controller of Bula and	4/7/96.	
now Managing Director of Bula	
Resources which is a public	
company and unconnected with	
Bula).	
36. Vincent George Rich	Transcript 251.	
	Wednesday 10/7/96.	
(of the Economist Intelligence		
Unit who prepared forecasts of		
future mine prices).		
37. John Tully	Transcripts 259-264.	
	Tuesday 23/7/96-Tuesday	
(Secretary and In-house Solicitor	30/7/96.	
to Tara and principal witness for		
the Tara Defendants).		
38. Brian Redmond	Transcript 264.	
	Tuesday 30/7/96.	
(Accountant in Ernst & Whinney,		
advising Tara in connection with		
the Bula take over proposals of		
1984-1985		
39. Michael O'Mahoney	Transcript 264.	
	Tuesday 30/7/96.	
(Solicitor and Partner in McCann		
Fitzgerald and also a main		
witness for the Tara Defendants).		
40. Brian Barry	Transcript 265.	
	Wednesday 31/7/96	
(partner in Coopers and Lybrand		
Chartered Accountants and	Transcripts 266 & 267.	
important witness for the	Wednesday 7/8/96 Thursday	
Minister).	8/8/96.	
41. Malcolm Scoble	Transcripts 269 & 270.	
	Wednesday 9/10/96 & Thursday	
(Mining Expert called by Tara	10/10/96.	
Defendants)		
42. Claire Hassall	Transcript 271.	
	Friday 11/10/96.	
(Metal Prices Expert from Brook		
Hunt re future zinc and lead		
prices, called by Tara)		
43. Michael Maher	Transcripts 271 & 272.	
	Friday 11/10/96.	
(Price Waterhouse/Craig Gardner Monday	14/10/96.	
called by Tara re viability of Bula		
Mine and damages)		
44. David McCabe	Transcript 272	
	Monday 14/10/96	
(Corporate Banking Expert called		
by Tara		
45. Leo O'Shaughnessy	Transcript 273.	
	Tuesday 15/10/96.	
(Financial Controller of Tara		
verifying figure re Tara operating		
costs etc.)		

BULAWIT.1 

BULA LIMITED AND OTHERS v 

TARA MINES LIMITED AND OTHERS 

EIGHTH SCHEDULE 

Table of Contents of the Judgment 
	
TOPIC	PAGES	
Introduction	1-3	
Preliminary Facts	3-17	
Preliminary Remarks	18-20	
Facts	20 et seq	
Mr Wymes' Background	21 & 21	
Acquisition of Nevinstown by Bula	22-24	
Bula's Claim to the "River Sliver"	24-26	
The Whistlemount Channel	27-29	
The Basic Cause of Bula's Failure	30 et seq	
No Initial Capital	31-33	
No Provision for Interim Finance	33 & 34	
Bad Management	35 et seq	
Application for Open Pit Mine	35-41	
Lack of Expedition	41-46	
Further Examples of Bad Management	47 et seq	
Refusal to join the Expert's Group	47-50	
Boundary Mining	50-60	
Other Wrong Decisions	61-64	
Recision of Kruger Contract	64 & 65	
		
TOPIC PAGES		
Mining Board Exception	65-67	
The Drogheda Harbour Lease	67-75	
Credibility	75-83	
Mr Brendan Hynes	83-86	
The Bankers Trust/Outokupmu Package	86 et seq	
Memorandum for the Government	90-119	
Supplementary Note for the Government	120-128	
Inaccuracy of Forecasts	128-130	
Test of Commercial or Social Factors	130-136	
The Tara Takeover Proposal	136 et seq	
First Proposals	137-140	
The Tara Preference Share Waiver	141-144	
The Tara Takeover (Continued)	145-148	
The Rejection of the Tara Proposals	148-152	
Tara's Finance and Restrictive Covenants by their	152-157	
Bankers		
Tara's Withdrawal of their Proposals	157-162	
The Statement of Claim	162 et seq	
The Accord	163-166	
Bula's Claim to enforce Clause (f) of Tara's Lease	167-170	
Interim Finance	172-175	
Further Consideration of the Claim under Clause	176-180	
(f) The Case against Mr O'Connell	182 & 183	
What Damages if the Plaintiffs had won?	184-185