A software company set up to help people with hearing difficulties, whose board includes the well-known British entertainer John Bishop, has sued an Irish-based former director and a related company for alleged fraud and misrepresentation.
The action, which was admitted to the fast-track Commercial Court list on Tuesday, has been brought by Hears Technology Limited, which provides software products to help person with hearing difficulties, against Maltese registered BAK Holdings Limited and Irish businessman Brendan Morrissey.
UK based Hears, represented by Eoghan Cole BL, claims that Mr Morrissey has defrauded the company of just over €1 million, which it is alleged was paid to BAK for software development services which were independently valued as being worth approximately €215,000.
It also alleged that a €548,000 credit for software services allegedly made available to Hears by BAK in consideration for shares in the plaintiff company was never actually provided.
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The claims are fully denied.
Rossa Fanning SC for the defendant said that Mr Morrissey of the Pink House, Kells, Co Kilkenny, told the court that all of the payments made by Hears to BAK were legitimate.
The claim against his clients was “misguided”, counsel said.
In its action Hears claims that Mr Morrissey was a director of Hears Technology, which was set up by the comedian’s son Joseph in 2020, between June 2020 to May 2022, and that he is the owner and controller of BAK which is also a shareholder of Hears Technology.
Both of the Bishops are shareholders and directors of the plaintiff firm which was set up to develop software products or apps to provide hearing tests via smartphones or other devices.
It was hoped that the app could be expanded into the area of hearing aid sales.
It is claimed that when the business, which was the idea of Joseph Bishop, was set up Mr Morrissey shareholding was held by BAK.
In addition, BAK was also to provide various software services to the plaintiff.
It is alleged however that over a two-year period BAK was paid €1 million for services, provided in the form of uncompleted software code which Hears claims has been independently valued as costing approximately €215,000.
It is claimed that when this came to light last February Hears claims its board agreed to make no further payments to BAK.
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However further money after that period were made to BAK without the board’s full approval, it is alleged.
It is claimed that BAK was not entitled to those payments. Mr Morrissey, the court heard was removed as Hears director earlier this year. Mr Morrissey’s wife Karen Morrissey was the company secretary of Hears, until her removal last April. the court also heard.
In a sworn statement to the court Mr Bishop said he has made investments in companies he considers to be “worthy and pro-social projects”. He said his son Joe, who has hearing difficulties had come up with the idea for the app, which he said they both believed had “great potential”.
He said that he was introduced to Mr Morrissey, who was experienced in the tech sector.
However, Mr Bishop said that towards the end of 2021 and early 2022 he began to express concerns about the running of the company.
He claims that his requests were refused, and that he sought the code so he could have its value independently assessed.
The figures he was provided resulted in the removal of the Morrissey’s from the board, which he said was not opposed by any of the other shareholders.
BAK and Mr Morrissey deny the claims and say that BAK provided €1.6 million in services to Hears.
In an affidavit to the court Mr Morrissey said the claims against the defendants are “without substance”.
He said he had worked in the entertainment industry, having been a member of a band called My Little Funhouse. before becoming involved in tech sector while living in the US in the 1990s.
He has been involved in many projects involving technology companies with combined estimated values of $211 million (€213 million).
Despite operating in tech-for-good projects for many years he has never been sued or has sued any investors in these projects.
He said that he believes Mr Bishop has seized control of Hears and was using it to attack his integrity and professional reputation.
He said he welcomed the opportunity to resolve the matters that are the subject of the claim at the full hearing of the proceedings.
In its action Hears Technology, seeks damages against the defendants for it claims were fraudulent misrepresentation, negligence as well as breach of contract and fiduciary duty.
It seeks also seeks various order and declarations including that while a director Hear Technology Mr Morrissey did not act in the plaintiff’s best interests.
It further seeks a declaration that it is entitled to trace and recover money and assets it claims was misappropriated from the plaintiff by the defendants.
The plaintiff has also asked the court requiring Mr Morrissey to disclose all sums of money, totalling approximately €1 million, he is alleged to have paid BAK.
The matter was entered into the fast-track Commercial Court list by Mr Justice Denis McDonald. The judge noting that there was no opposition to the application for entry, said it was a suitable dispute for consideration by the High Court’s big business division.
The matter stands adjourned, and the hearing of the dispute is expected to take place early next year.
