Flogas Ltd v Flogas Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Barrington
• Judgment Date: 01 January 1985
• Neutral Citation: 1983 WJSC-HC 2166
• Court: High Court
• Date: 01 January 1985

1983 WJSC-HC 2166

THE HIGH COURT

No. 8733p/1982

FLOGAS v. ERGAS

FLOGAS LIMITED

PLAINTIFFS

AND

ERGAS LIMITED AND IRISH NATIONAL GASLIMITED

DEFENDANTS

1 Judgment of Mr. Justice Barringtondelivered the 31st day of July,1984

2 In this case the plaintiffs claim against the defendants damages for allegedly procuring a breach or breaches of contract.

3 The facts of the case are as follows.

4 On the 13th January, 1982 Flogas entered into a contract with Shannon Dairies Limited whereby Flogas agreed to supply, and Shannon Dairies Limited agreed to take, its total requirements of liquified petroleum gas for a period of five years from that date. On the 11th March, 1982 Flogas entered into a similar contract with Crosstown ServicesLimited.

5 The second named defendants - Irish National Gas Limited - are an associate company of the first named defendants, Ergas Limited. On the 2nd February, 1982 Shannon Dairies Limited entered into an agreement with Irish National Gas Limited under which Irish National Gas Limited agreed to sell, and Shannon Dairies Limited agreed to buy, Shannon Dairies Limited's total requirements of liquified petroleum gas from Irish National Gas Limited fora period of five years from the 1st February, 1982.

6 On the 27th May, 1982 Crosstown Services Limited entered into an agreement with Irish Rational Gas Limited under which Crosstown Services Limited agreed to take, and Irish Rational Gas Limited agreed to supply, Crosstown Services Limited1s total requirements of liquified petroleum gas for a period of three years on the 1st day of June, 1982.

7 Irish Rational Gas Limited and Ergas Limited represent the same interest and, at the hearing of the action before me, it was found convenient to refer to the plaintiffs as "Plogas" and to the defendants collectively as "Ergas".

8 Flogas on hearing that its customers, Shannon Dairies Limited and Crosstown Services Limited, had entered into inconsistent contracts with Ergas Limited naturally assumed that Ergas Limited, who are their competitors in trade, had poached two of their customers from them and it was this suspicion on the part of Plogas Limited which led to their instituting these proceedings against Ergas for procuring a breach of contract. On the 2nd June, 1982 Plogas, having heard from Mr. Kinsella, a director of Crosstown Services Limited, that he had been offered better terms by Ergas, telexed Ergas informing them that Flogas had a binding written contract with Crosstown Services Limited and requestedErgas to withdraw any offer it had made to Crosstown ServicesLimited.

9 On the 4th June, 1982 Flogas sent a similar telegram to Ergas in respect of their contract with Shannon Dairies Limited

10 On the 23rd June, 1982 Ergas sent a telex to Flogas in which theystated:

"Crosstown Service Station: Customer is adamant that he has not contract with Plogas. Please submit documental evidence.

Shannon Dairies: Customer has Ergas contract for over six months. Please submit documental evidence."

11 On the 14th July, 1982 Flogas wrote to Ergas sending them copies of extracts from their contracts with Crosstown Services Limited and Shannon Dairies Limited. They added:

"As a consequence of our company furnishing you with this information we must now insist that you will acknowledge in writing within seven days from the date of this letter that you will withdraw all offers to the above contracted customers, and in addition, in the case of Shannon Dairies Limited, that you will uplift your equipment within four days."

"Should you not give us this undertaking in the manner requested we will have no alternative but to institute legal proceedings against your company."

12 On the 22nd July, 1932 Ergas replied to Flogas in a letter which contained the following paragraph:-

"I wish to inform you that our sales personnel have advised both Crosstown Service Station and Shannon Dairies Limited, regarding your allegation, but both of them are adamant that they did not sign contracts or give the go ahead to instal equipment. The matter now as far as we are concerned is between yourselves and the above-mentionedpeople."

13 It was quite wrong of Messrs Ergas to state in their telex of the 23rd June, 1982 that Shannon Dairies had "Ergas contract for over six months". The contract between the second named defendants and Messrs Shannon Dairies Limited was dated 2nd February, 1982. This error or misstatement naturally added to the plaintiffs'suspicions.

14 I have however heard the evidence of the defendants" sales representatives Mr. Louis Campion and Mr. Denis O'Riordan who negotiated the respective contracts with Messrs Shannon Dairies Limited and Messrs Crosstown Services Limited on behalf of the defendants and I am quite satisfied that bothMr. Campion and Mr. O'Riordan negotiated in good faith and without any knowledge of any prior or inconsistent contract between these two companies and the plaintiffs. There is no question therefore of the defendants having induced these two companies to break their contracts with the plaintiffs.

15 I should also state that both Shannon Dairies Limited and Crosstown Services Limited maintained at all times (including at the hearing before me) that they had not any binding contracts with the plaintiffs. Mr. Kinsella, on behalf of...