Flogas Ireland Ltd v North West Gas Company Ltd

• Jurisdiction: Ireland
• Judge: Mr Justice David Keane
• Judgment Date: 09 October 2020
• Neutral Citation: [2020] IEHC 503
• Docket Number: [2020 No. 6166P]
• Court: High Court
• Date: 09 October 2020

BETWEEN

FLOGAS IRELAND LIMITED

AND

DCC ENERGY LIMITED

PLAINTIFFS

AND

NORTH WEST GAS COMPANY LIMITED

DEFENDANT

[2020] IEHC 503

David Keane

[2020 No. 6166P]

THE HIGH COURT

CHANCERY

Interlocutory injunctions – Unlawful interference with contractual relations – Breach of copyright – Plaintiffs seeking interlocutory injunctions – Whether the balance of convenience or balance of justice lay against the grant of the interlocutory injunctions sought

Facts: The plaintiffs, Flogas Ireland Ltd and DCC Energy Ltd, applied to the High Court seeking five separate interlocutory injunctions against the defendant, North West Gas Company Ltd, restraining it from: (a) soliciting any customer of Flogas or DCC; (b) interfering in the contractual relationship between Flogas or DCC and any customer of either of them; (c) infringing Flogas’s copyright in its standard form customer supply agreement; (d) breaching any of the terms of the settlement agreement; and (e) suggesting to any person that Flogas or DCC intends to cease doing business in County Donegal. North West opposed that application and joined issue with Flogas and DCC on all of their underlying claims. North West gave an undertaking to the court in terms of the fifth interlocutory injunction sought; that is to say, an undertaking pending the trial of the action that neither it, nor any of its servants or agents, would communicate or suggest to any person, natural or legal, that either Flogas or DCC is ceasing in whole or in part its operations in Donegal. North West emphasised that it gave that undertaking as a purely practical expedient to assist in the efficient conduct of the litigation, entirely without prejudice to its contention that neither it, nor any of its servants or agents, had ever made any such communication or suggestion.

Held by Keane J that there was a very good chance that the whole, or a substantial part, of the period of time covered by the injunctions sought in this case would, if they were granted, occur before the trial of the action; hence, there was a very real sense in which those injunctions would, in those circumstances, deal with a significant part of the action itself. He held that it follows that there was an obligation on the applicants in seeking to obtain them to satisfy the court that they had a strong arguable case. On the evidence before him and in the submissions made, the applicants had failed to satisfy him that they had a strong arguable case on their claims of breach of contract, breach of fiduciary duty and unlawful interference with their contractual relations. On that evidence and based on those submissions, he was satisfied that the applicants had established a strong arguable case of copyright infringement. He was not satisfied that an award of damages would be an adequate remedy for the loss caused to the applicants if they were refused injunctions but later succeeded at trial. Nor was he satisfied that damages would be an adequate remedy for the loss caused to the respondent if injunctions were granted against it but the claims against it failed at trial. Overall, he found that the balance of convenience or balance of justice lay against the grant of the interlocutory injunctions sought, save in respect of the infringement of the first applicant’s copyright in its standard industrial liquefied petroleum gas (LPG) supply agreement.

Keane J held that the injunctions sought as reliefs at paragraphs 1, 2 and 4 of the notice of motion would be refused. He ordered an injunction in terms of paragraph 3 of the notice of motion, that is to say: “An interlocutory injunction restraining the defendant, its directors, officers, servants or agents, from infringing the first plaintiff’s copyright in its standard industrial LPG supply agreement pending the trial of these proceedings.”

Interlocutory order restraining infringement of copyright granted. Other interlocutory orders refused.

JUDGMENT of Mr Justice David Keane delivered on the 9th October 2020

Introduction

1 This is an interlocutory injunction application in an action for breach of contract, breach of copyright, unlawful interference with contractual relations, breach of duty and defamation.

2 The first plaintiff, Flogas Ireland Limited (‘Flogas’) is an Irish company that has its registered office in Drogheda, County Louth. It is one of the State's leading suppliers of liquefied (or liquid) petroleum gas (‘LPG’) in industrial, commercial and domestic markets.

3 Flogas forms part of the energy division of the second plaintiff, DCC Energy Limited (‘DCC’), a United Kingdom company that has its registered office in the Belfast suburb of Sydenham, County Down.

4 The defendant, North West Gas Company Limited (‘North West’) is an Irish company that has its registered office in Carndonagh, County Donegal. As its name suggests, it is engaged in the sale or distribution of LPG in the North West region of the island, primarily in Donegal.

Background

5 The precise nature of the pre-existing contractual relationship between the parties is in dispute. On 28 August 2019, Flogas wrote to North West giving 12 months' notice of its intention to terminate that relationship with effect from 28 August 2020. When a dispute arose about whether the relevant contractual relationship was one between DCC and North West, DCC wrote to North West giving 12 months' notice of its intention to terminate its relationship with North West with effect from 19 March 2021.

6 North West issued High Court proceedings against DCC and Flogas on 26 March 2020, alleging that what it described as the ‘exclusive distribution agreement’ between them for the ‘supply and re-sale’ of Flogas LPG could not be terminated on less than 42 months' notice (‘the North West proceedings’).

7 After a process of mediation, the parties entered into a settlement agreement in the North West proceedings on 27 June 2020. That agreement contains the following recitals explaining the background to the underlying dispute between them:

‘A. [North West] has been a distributor for [Flogas] for almost 30 years.

B. A dispute has arisen between the parties in relation to changes to the terms of their contractual relationship proposed by Flogas, including in relation to; (i) the relevant parties to the contractual relationship; (ii) the applicability of an agreement entered into between [Flogas] (then ‘Ergas Limited’) and Inishowen Oil Company Limited (an associated company of [North West]) dated 12 December 1989; (iii) the appropriate notice period for termination of the contractual relationship; and (iv) the ownership of customer relationships (‘the dispute’).

C. High Court proceedings were issued by [North West] against DCC and Flogas in relation to the dispute on 26 March 2020 bearing High Court record number [2020 No. 2390P] (‘the proceedings’).

D. The parties have now settled their differences and have agreed terms for the full and final settlement of the proceedings and the dispute and the parties now record those terms of settlement, on a binding basis, in this agreement.’

8 Among the terms of the settlement agreement in the North West proceedings are the following:

‘1. The parties agree that all and any contractual agreements between the parties and/or any company associated with and/or connected with the parties, will terminate on 1 June 2021 (‘the termination date’).

2. As and from the termination date, the parties will be free to compete in all respects and in all markets.

…

9. The parties each individually agree not to make, or cause to be made, any statements or communications, whether verbally or in writing, which are derogatory or disparaging of the other, or either of them, to any third party, including customers.’

The present application

9 Flogas and DCC seek five separate interlocutory injunctions against North West, restraining it from: (a) soliciting any customer of Flogas or DCC; (b) interfering in the contractual relationship between Flogas or DCC and any customer of either of them; (c) infringing Flogas's copyright in its standard form customer supply agreement; (d) breaching any of the terms of the settlement agreement; and (e) suggesting to any person that Flogas or DCC intends to cease doing business in County Donegal.

10 North West opposes that application and joins issue with Flogas and DCC on all of their underlying claims. North West has given an undertaking to the court in terms of the fifth interlocutory injunction sought; that is to say, an undertaking pending the trial of the action that neither it, nor any of its servants or agents, will communicate or suggest to any person, natural or legal, that either Flogas or DCC is ceasing in whole or in part its operations in Donegal. North West is at pains to emphasise that it has given that undertaking as a purely practical expedient to assist in the efficient conduct of the present litigation, entirely without prejudice to its contention that neither it, nor any of its servants or agents, has ever made any such communication or suggestion.

Procedural history

11 Flogas and DCC procured the issue of a plenary summons on 4 September 2020. They filed the present motion on the same day. North West entered an appearance on 10 September.

12 When the motion came on for hearing, Flogas and DCC had not yet delivered a statement of claim. In the absence of a properly particularised claim, it is necessary to attempt to identify the issues that they seek to have tried (and, thus, that form the basis of their injunction application) from the contents of the indorsement of claim on the plenary summons; the averments contained in the affidavits that have been exchanged; and the written and oral submissions of the parties.

13 The application is grounded on an affidavit of John Rooney, sworn on 4 September 2020. Mr Rooney is the managing director of Flogas and a director of DCC. It is supported by an affidavit...