AGM Londis Public Ltd Company v Gorman's Supermarket Ltd and Another
| Jurisdiction | Ireland |
| Judge | Mr. Justice Barrett |
| Judgment Date | 28 February 2014 |
| Neutral Citation | [2014] IEHC 95 |
| Court | High Court |
| Date | 28 February 2014 |
[2014] IEHC 95
THE HIGH COURT
BETWEEN
AND
AND
AER RIANTA CPT v RYANAIR LTD 2001 4 IR 607 2002 1 ILRM 381 2001/1/68
HARRISRANGE LTD v DUNCAN 2003 4 IR 1 2002/12/2982
L'ESTRANGE v F GRAUCOB LTD 1934 2 KB 394 1934 AER REP 16
NORESIDE CONSTRUCTION LTD v IRISH ASPHALT LTD UNREP FINLAY GEOGHEGAN 4.10.2011 2011/40/11472 2011 IEHC 364
CURTIS v CHEMICAL CLEANING & DYEING CO LTD 1951 1 KB 805 1951 1 AER 631
REGAN v IRISH AUTOMOBILE CLUB LTD T/A ROYAL IRISH AUTOMOBILE CLUB & ORS 1990 1 IR 278 1990/5/1174
O'CONNOR v FIRST NATIONAL BUILDING SOCIETY & ORS 1991 ILRM 208 1990/8/2067
WESTERN MEATS LTD v NATIONAL ICE & COLD STORAGE CO LTD & NORDIC COLD STORAGE LTD 1982 ILRM 99 1981/12/2295
Debt recovery - Summary judgment sought - Plenary hearing - Leave to defend - Whether very clear that the defendant had no case - Fair or reasonable probability of bona fide defence
The issue for determination in these proceedings was whether the plaintiff, AGM Londis Public Trading Company (Londis), should be allowed to recover debt via summary proceedings or whether the matter should be referred to plenary hearing. Londis demanded monies from the second named defendant, Patrick Kerrigan, his liability for which arose out of his operation of a Londis branded shop. The operation of this shop was initially conducted through the medium of the first named defendant, Gorman”s Supermarket Limited, after which it was operated in a personal capacity. The money demanded from Mr Kerrigan came from a personal guarantee allegedly given in respect of the liabilities of Gorman”s Supermarket Limited in 2002 as well as a franchise agreement and product purchase agreement from July 2010.
The Court considered that the benchmark to be met for obtaining leave to defend was a low one. The relevant test, set out in Aer Rianta cpt. v Ryanair Limited was whether it was ‘very clear’ that the defendant had no case. The Court also considered the principles set out in Harrisrange Ltd v Duncan where it was stated that all that was required to allow leave to defend was a fair or reasonable probability of a real or bona fide defence. It was further noted that the jurisdiction to refuse leave to defend was to be exercised with ‘discernible caution’.
Mr Kerrigan denied that he ever signed the personal guarantee of 2002 and that this could be ‘borne out’ via comparison with other signed documents. The Court considered that this was a factual issue requiring determination at a plenary hearing. Mr Kerrigan also asserted that the nature of the franchise and the product purchase agreements were never explained to him and that he believed he was signing agreements to extend the credit limit for the first named defendant. He also stated that he believed that Gorman”s Supermarket Limited was the party with which Londis continued to trade rather than himself. This was because he received no confirmation of a closing of Gorman”s Supermarket Limited”s account and he received no request for ‘new trading bank account details or other documentation for opening a new trading account’ with Londis. Londis acknowledged that failing to close the existing accounts and open new accounts ‘complicated’ the calculation of the sums due. Nonetheless, they contended that Mr Kerrigan was bound to the agreements under the ‘signature rule’. The Court determined that, in instances where a significant degree of uncertainty in the dealings between parties existed, a less than rigorous application of the signature rule may be merited.
The Court determined that, given the matter of fact of the 2002 signature requiring determination and the uncertainty of amounts owed, that it was not very clear that Mr Kerrigan had no defence.
The Court therefore granted leave to defend and refused the application for summary judgment.
JUDGMENT of Mr. Justice Barrett delivered on the 28th day of February 2014.
1. The issue arising in this case is whether the plaintiff, AGM Londis plc, should be allowed to recover various debts by way of summary proceedings or whether the matter should go to plenary hearing. Any views expressed in this judgment are therefore tentative in terms of the strength or weakness of the case that either party might make at a plenary hearing.
2. Londis has demanded certain monies of the second named defendant, Mr. Kerrigan. His alleged liability to pay those monies arises out of his operation of a Londis-branded shop in Athboy, initially through the medium of the first named defendant, Gorman's Supermarket Limited and latterly in a personal capacity. Londis has already obtained judgment against Gorman's Supermarket. Now it is demanding money of Mr. Kerrigan pursuant to a personal guarantee that he allegedly gave in respect of the liabilities of Gorman's Supermarket on 28 th May, 2002. Londis is also demanding monies owed pursuant to a franchise agreement of 21 st July, 2010, and a product purchase agreement of 21 st July, 2010, both executed directly with Mr. Kerrigan after Gorman's Supermarket found itself in financial difficulties.
3. The hurdle to be surmounted by Mr. Kerrigan as regards obtaining leave to defend is a low one. As Hardiman J. stated in the Supreme Court in Aer Rianta c.p.t. v. Ryanair Limited [2001] 4 I.R. 607 at p. 623:
"In my view, the fundamental questions to be posed on an application such as this remain: is it 'very clear' that the defendant has no case? Is there either no issue to be tried or only issues which are simple and easily determined? Do the defendant's affidavits fail to disclose even an arguable defence?"
4. In Harrisrange Ltd. v. Duncan [2003] 4 I.R. 1 at p. 7, McKechnie J. summarised the relevant principles when a court approaches the issue of whether to grant summary judgment or leave to defend:
i "(i) the power to grant summary judgment should be exercised with discernible caution;
(ii) in deciding upon this issue the court should look at the entirety of the situation and consider the particular facts of each individual case…
(iii) in so doing the court should assess not only the defendant's response, but also in the context of that response, the cogency of the evidence adduced on behalf of the plaintiff…
(iv) where truly there are no issues or issues of simplicity only or issues easily determinable, then this procedure is suitable for use;
(v) where, however, there are issues of fact which, in themselves, are material to success or failure, then their resolution is unsuitable for this procedure;
(vi) where there are issues of law, this summary process may be appropriate but only so if it is clear that fuller argument and greater thought is evidently not required for a better determination of such issues;
(vii) the test to be applied, as now formulated is whether the defendant has satisfied the court that he has a fair or reasonable probability of having a real or bona fide defence; or as it is sometimes put, 'is what the defendant says credible?'…
(viii) this test is not the same as and should not be elevated into a threshold of a defendant having to prove that his defence will probably succeed or that success is not improbable, it being sufficient if there is an arguable defence;
(ix) leave to defend should be granted unless it is very clear that there is no defence;
(x) leave to defend should not be refused only because the court has reason to doubt the bona fides of the defendant or has reason to doubt whether he has a genuine cause of action;
(xi) leave should not be granted where the only relevant averment is the totality of the evidence, is a mere...
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Andrew Law and Another v Financial Services Ombudsman and Another
...application forms. He refers me to a judgment of Barrett J. in AGM Londis Public Ltd. Company v Gorman's Supermarket Ltd. and Kerrigan [2014] IEHC 95, and where he said the following at para. 14:- "However, in instances where a significant degree of uncertainty arises in the dealings betwee......