Betty Martin Financial Services Ltd v EBS dac

• Jurisdiction: Ireland
• Judge: Mr. Justice John Jordan
• Judgment Date: 13 February 2019
• Neutral Citation: [2019] IEHC 74
• Docket Number: RECORD NO. 2018/10742/P
• Court: High Court
• Date: 13 February 2019

[2019] IEHC 74

THE HIGH COURT

Jordan J.

RECORD NO. 2018/10742/P

BETWEEN

BETTY MARTIN FINANCIAL SERVICES LIMITED

PLAINTIFF

AND

EBS D.A.C.

DEFENDANT

Injunctive relief – Collateral agreement – Termination notice – Plaintiff seeking interlocutory injunctive relief – Whether there was a fair and serious issue to be tried

Facts: The plaintiff, Betty Martin Financial Services Ltd, was a Tied Agent of the defendant, EBS D.A.C., having entered into three separate Tied Agency Agreements on the 20th April 2011 in respect of EBS Branches at Athlone, Longford and Lucan. The plaintiff applied to the High Court seeking interlocutory injunctive relief as a result of the defendant having served a “Notice of Termination of the Tied Agency Agreements on the 19th February, 2018”, the validity of which the plaintiff challenged. The plaintiff argued that: (a) the Termination Notice was served in breach of a collateral agreement that the Tied Agency Agreements would not be terminated without sufficient cause; (b) the Termination Notice was invalid because it was served capriciously and without a bona fide commercial reason; (c) the Termination Notice was served in breach of an implied term that the defendant would not terminate the Tied Agency Agreement because the plaintiff refused to mis-sell investment, savings and insurance related products and/or complained about the pressure applied to do so.

Held by Jordan J that there was a fair and serious issue to be tried on each of the above grounds. He held that damages were not an adequate remedy in this case. He held that the balance of convenience lay in favour of granting the relief sought. He held that it would be unfair and inequitable to refuse the plaintiff relief on the grounds of delay.

Jordan J held that he would grant the interlocutory relief sought.

Relief granted.

JUDGMENT of Mr. Justice John Jordan delivered on the 13th day of February, 2019

Introduction

1 The Plaintiff is a Tied Agent of the Defendant, having entered into three separate Tied Agency Agreements on the 20th April 2011 in respect of EBS Branches at Athlone, Longford and Lucan. The Plaintiff is the successor of Betty Martin, who died as a result of a terminal illness in 2014 at the relatively young age of 58. One thing is clear in these proceedings and that is that she was a quite extra-ordinary woman of great ability, energy and integrity. As a woman in a male dominated financial industry at the time, she broke the mould in setting up the successful businesses that lie at the core of this dispute. The Plaintiff company is an incorporation of the family business she created and is now run by her son and daughter, Declan and Sheila.

Discussion

2 In these proceedings, the Plaintiff seeks interlocutory injunctive relief as a result of the Defendant having served a ‘Notice of Termination of the Tied Agency Agreements on the 19th February, 2018’ – the validity of which the Plaintiff challenges.

3 The Plaintiff asserts that the reason behind the service of the Termination Notice is the Plaintiff's refusal to fall in with ‘encouragement’ from or ‘pressure’ exerted by a Senior Official of the Defendant to mis-sell financial products and to engage in selling practices which are contrary to regulatory obligations and that are unlawful.

4 In essence, the Plaintiff points to the Consumer Protection Code, which governs financial institutions and which requires certain steps to be taken by financial institutions and financial advisors in order to ensure that customers are not sold financial products which carry a greater investment risk than is appropriate to their circumstances or risk appetite. The Plaintiff's assertions in relation to the actions of the Defendant's Senior Official are set out in some detail in the Grounding Affidavits filed by and on behalf of the Plaintiff.

5 The Defendant is as robust in denying the assertions made by the Plaintiff in this regard as the Plaintiff is in making the assertions. I need not decide where the truth lies but I am driven to the conclusion that this is a serious issue which will form part of those in dispute at the full hearing. It is important to observe that serious and, as yet unproved, assertions are made by the Plaintiff. These allegations are not lacking in detail and I am not prepared to dismiss them as not deserving of a full hearing and determination. In this regard, I do have to say the following about the AIB Group Internal Report which is relied heavily on by the Defendant;

a. I do not quite understand how it can be afforded the stature the Defendant wishes it to be given when all we are given is an Executive Summary. Where is the full Report?

b. How can the report be set up by the defendant as impartial and independent as it were when it is prepared by AIB Special Investigations Unit - Group Internal Audit?

c. Why is the issue mentioned in the executive summary concerning the disparity between Irish Life's views and those of EBS and under the heading mis-selling despatched in such a cavalier fashion in the Summary when it lies at the core of Mr. Martin's assertions?

d. How does Mr. Fitzgerald, in his affidavit sworn on 4th January 2019, state at paragraph 21 that Irish Life concluded that there was no evidence to support the mis-selling allegations made given the disparity of views referred to in the executive summary?

6 I note also the assertions in affidavit evidence of the Defendant to the effect that Mr. Martin's allegations only materialised after the first Termination Notice dated 18th May 2017 [see paragraph 8 of the affidavit of Mr. Tim Gleeson, dated 18th January 2019 and paragraph 19 of the affidavit of Mr. Des Fitzgerald, dated 4th January 2019]. Mr. Martin says the issue had been complained of as far back as 2010 [see paragraph 24 of this affidavit sworn on 11th January 2019]. Although I am not deciding the issue, I am not persuaded that these issues came as a “bolt out of the blue” after 18th May 2017. Quite apart from anything else, no reason whatsoever is advanced as to why the first termination notice was served. I am told no allegations had been made beforehand. From what is put before me by the Defendant, it appears that the Defendant simply decided to oust the Plaintiff from three successful branches and to replace it with a new agent in each so that business would continue as normal. “Move along”, I am being told – there is nothing to see here. The Agreements do contain a clause concerning termination without a reason being given, but that does not negate the need for the Court to look for some reason or explanation given the background averred to on affidavit by the Plaintiff. It is the case that I can find no reason other than that advanced by the Plaintiff.

7 In Campus Oil Limited -v- Minister for Industry and Energy [No.2] 1983 IL 88 O'Higgins C.J. sets out the test to be applied when considering an application for an interlocutory injunction. The test can be summarized as follows:-

• Whether a fair bona fide question has been raised by the parties seeking relief.

• Whether the apprehended injury or harm is irreparable in the sense that the Applicant could not be fairly or properly compensated by an award of damages.

• Whether inconvenience, loss or damage would be caused to the other party if the injunction is granted.

• Whether the Applicant has shown that the balance of convenience is in his favour.

8 In Okunade v. Minister for Justice [2012] 3 I.R 88, 180, Clarke J. stated as follows, in reference to the test formulation by McCracken J. in B. & S. Ltd. v. Irish Auto Trader Ltd. [1995] 2 I.R. 142:-

‘The party seeking the injunction must show that there is a fair or bona fide or serious question to be tried.

• If that be established, the court must then consider two aspects of the adequacy of damages. First, the court must consider whether, if it does not grant an injunction at the interlocutory stage, a plaintiff who succeeds at the trial of the substantive action will be adequately compensated by an award of damages for any loss suffered between the hearing of the interlocutory injunction and the trial of the action. If the plaintiff would be adequately compensated by damages the interlocutory injunction should be refused subject to the proviso that it appears likely that the relevant defendant would be able to discharge any damages likely to arise.

• If damages would not be an adequate remedy for the plaintiff, then the court must consider whether, if it does grant an injunction at the interlocutory stage, a plaintiff's undertaking as to damages will adequately compensate the defendant, should the latter be successful at the trial of the action, in respect of any loss suffered by him due to the injunction being enforced pending the trial. If the defendant would be adequately compensated by damages, then the injunction will normally be granted. This last matter is also subject to the proviso that the plaintiff would be in a position to meet the undertaking as to damages in the event that it is called on.

• If damages would not adequately compensate either party, then the court must consider where the balance of convenience lies.

• If all other matters are equally balanced the court should attempt to preserve the status quo.’

9 In AIB -v- Diamond [2012] 3 I.R. 570, Clarke J. referred to the Campus Oil Principles and the Judgment of Kelly J. in Shelbourne Hotel -v- Torriam Limited [2010] 2 IR 52 and stated as follows:-

‘Kelly J....