The former chief executive of Dairygold has denied threatening to walk off the job if a certain board member was elected chairman.

Businessman Jerry Henchy (48) from Kilmallock, Co Limerick told the High Court that he had expressed reservations about Mr Vincent Buckley to vice chairman Patsy Kelleher before the board elections in December 2008, but that was all. He said that he had been worried about any future working relationship since Mr Buckley had previously refused to sign a code of conduct for board members.

The father of two is suing Dairygold for around €8m in damages arising from his dismissal for “spurious reasons” to do with alleged financial irregularities with his farm account. He is also suing the co-operative for defamation over articles that appeared in the national and international press subsequently. Dairygold contests all counts.

Counsel for Dairygold Mr Paul Gardiner SC told the court that it was Mr Kelleher’s evidence that Henchy had threatened to resign if Mr Buckley was elected chairman.  “You met Mr Kelleher and told him if Mr Buckley was elected you would be out of there that evening.”

Henchy said that he had said no such thing.  “I said I would find it hard to work with Mr Buckley, I did not say I would not work with him.” Henchy said he had been surprised when Mr Kelleher went into the meeting and told the committee what had been said. He said that, thinking about it later, he had assumed that Mr Kelleher had decided to engineer an adjournment to renew his own bid for the chairmanship.  “He wanted to stop the clock and get back into the ring.”

Henchy denied that he had had any issue with Mr Buckley because of his role in the remuneration committee that decided on the chief executive’s long-term incentive scheme. He agreed that the minutes of subsequent meetings suggested that this was the view of Mr Buckley. He told Mr Gardiner that he had not corrected this suggestion because he did not want to make an inflammatory situation any worse.

Mr Gardiner told the court that the minutes of the meeting showed that the chairman had asked for the election to be postponed to give the board the chance to explore the potential “grave consequences” for the society. Henchy agreed that the consequences would not be grave if there was simply a difficulty in the chairman and the chief executive working together. Mr Gardiner told him “the consequences for the society would be grave if you had followed through on your threat that you would be out the door if Mr Buckley was elected.”

Henchy once again denied making such a threat.

Mr Gardiner said that while Mr Buckley had not signed the code of conduct when it was first introduced in 2003 he had been instrumental in bringing introducing it in 2008, within five months of his election as chairman of the board.

Henchy had previously told the court that he had clashed with the Dairygold board over moves to outsource milk testing. He said after an IFA investigation in 2007 he had investigated the situation and decided that independent testing was the way to go. Henchy said he had clashed with vice chairman at the time Bertie O’Leary who was in favour of the Irish Co-operative Organisation Society (ICOS) taking over the testing.

Henchy agreed today that an article in Dairygold’s internal circular at the time quoted him as saying that outsourcing milk testing had been considered but not formally investigated. He also acknowledged that the article went on to quote him standing by Dairygold’s current testing process and describing the science of the IFA tests as flawed.

However he said that while both these assertions where true he had also conducted his own investigation and found that while the IFA method had been flawed their conclusions were correct.

The case continues tomorrow at the Four Courts in Dublin.