Reaney v Interlink Ireland Ltd (t/a D.P.D.)

• Jurisdiction: Ireland
• Judge: Ms. Justice Finlay Geoghegan
• Judgment Date: 29 July 2016
• Neutral Citation: [2016] IECA 238
• Date: 29 July 2016
• Court: Court of Appeal (Ireland)
• Docket Number: 2014/741 [Article 64 Transfer]

Finlay Geoghegan J.

Hogan J.

Mahon J.

BETWEEN

CYRIL REANEY

AND

ITA O'REGAN

AND

TRAVALON LIMITED

PLAINTIFFS/RESPONDENTS

AND

INTERLINK IRELAND LIMITED (T/A D.P.D.)

DEFENDANT/APPELLANTS

[2016] IECA 238

Finlay Geoghegan J.

2014/741

[Article 64 Transfer]

THE COURT OF APPEAL

Lodgements - Awards - Interest - Appellant seeking consideration of the validity of notices of lodgement - Whether trial judge failed to consider whether or not he should exercise discretionary jurisdiction

Facts: The defendant/appellant, DPD, operates a network of franchises throughout Ireland involving courier activities. The first and second plaintiffs/respondents, Mr Reaney and Ms O'Regan, from 1986 onwards purchased franchises for areas principally in Cork and sold certain of these. From 2005 they retained the franchise area relating to depot 28. It operated that franchise pursuant to an agreement of the 22nd December, 1995 between the first and second plaintiffs and the defendant. Judgment was given in favour of the plaintiffs. On the 17th July, 2008, the plaintiffs issued a plenary summons against the defendant seeking damages for breach of contract and certain declarations in relation to amendments relating to the Franchise Agreement and its performance. On the 29th September, 2009, DPD gave six months' notice of termination to the plaintiffs, pursuant to s. 13 of the Franchise Agreement to expire on the 31st March, 2010. The franchise terminated and on the 8th July, 2010, the plaintiffs issued a further plenary summons against DPD seeking inter alia, payment of monies allegedly due to them pursuant to clause 13 of the Franchise Agreement and an injunction preventing DPD from enforcing a restraint of trade clause in the Franchise Agreement. They also sought and were refused interlocutory relief by order of the High Court (Hanna J) on the 29th July, 2010. An order, on consent was made by the High Court (Laffoy J) on the 9th December, 2010, consolidating the 2008 and 2010 proceedings and directing that they proceed as one action. By first notice of lodgement of the 6th January, 2011, DPD lodged a sum of €253,075 in court and the notice specified that "the sum is enough to satisfy all of the plaintiffs' claims in these consolidated proceedings, and liability is denied in respect of the said claims". On the 4th October, 2011, DPD lodged an additional sum of €109,168.23 and the notice of additional lodgement specified "that the sum is enough to satisfy all of the plaintiffs' claims in these consolidated proceedings, and liability is denied in respect of the said claims". On the 31st July, 2012, Gilligan J, delivering judgment on the substantive claims, refused to award interest. An issue arose as to the entitlement of the plaintiffs to the payment of VAT on the three sums awarded to them pursuant to that judgment. Issues also arose in relation to costs in part by reason of the lodgements made. On the 30th November 2012, the trial judge determined that the plaintiffs were entitled to be paid VAT on the sum of €31,900 awarded in respect of the Parceline account and on the sum of €255,307 being the value of the franchise as terminated. He determined that they were not entitled to VAT on the amount in respect of the Pulsar account as the agreed figure had included VAT. The total amounts payable to the plaintiffs by DPD pursuant to the two judgments then aggregated €356,200. However, the total amount lodged following the additional lodgement on the 4th October, 2011, was €362,243.23. Those facts gave rise to an application under O. 22, r. 6 of the Rules of the Superior Courts and a consideration of the validity of the notices of lodgement which the trial judge also determined in his ruling of the 30th November, 2012. The plaintiffs in both the 2008 and 2010 proceedings had included claims for "interest pursuant to Statute", namely s. 22 of the Courts Act 1981. The plaintiffs, on appeal to the Court of Appeal submitted that the trial judge failed to consider whether or not he should exercise the discretionary jurisdiction given him by s. 22 and that the mere fact that there was no express contractual agreement for the payment of interest on the sums claimed was not of itself a reason to reject a claim for interest under s. 22.

Held by Finlay Geoghegan J that the plaintiffs' cross appeal against the dismissal of the claim for interest including pursuant to s. 22, for the reason stated in the judgment of 31 July 2012 must succeed; the fact that the Franchise Agreement does not provide for the payment of interest and in particular clause 13 does not provide for the payment of interest on the sum payable thereunder does not preclude the court having jurisdiction under s. 22 to order interest to be paid on the sums awarded. Finlay Geoghegan J did not consider that there was any reason for which the Court should interfere on appeal with the costs order made in respect of the interlocutory hearing.

Finlay Geoghegan J held that she would dismiss the appeal, allow the cross appeal and make an order varying the order of the High Court of the 11th December, 2012, so as to provide that the amount for which judgment was granted on 30th November 2012 was the sum of €413,525.

Appeal dismissed in part.

JUDGMENT of Ms. Justice Finlay Geoghegan delivered on the 29th day of July 2016

1 This appeal highlights uncertainties in O. 22 of the Rules of the Superior Courts concerning the making of lodgements and what constitutes an award for the purposes of O. 22 r. 6. It also concerns the principles to be applied in awarding interest pursuant to s. 22 of the Courts Act 1981.

Background

2 The defendant/appellant (‘DPD’) is a subsidiary of La Poste. It operates a network of franchises throughout Ireland involving courier activities. The first and second named plaintiffs from 1986 onwards purchased franchises for areas principally in Cork and sold certain of these. From 2005 they retained the franchise area relating to depot 28. It operated that franchise pursuant to an agreement of the 22nd December, 1995 (‘the Franchise Agreement’) between the first and second named plaintiffs and the defendant. Judgment was given in favour of the plaintiffs. The notice of appeal raises an issue in relation to the position of the third plaintiff which was not a party to the Franchise Agreement. Nothing turns on this and for simplicity in this judgment I propose referring simply to the plaintiffs which may properly in certain places only refer to the first and second named plaintiffs.

3 Disputes appear to have arisen prior to 2008. On the 17th July, 2008, the plaintiffs issued a plenary summons against the defendant seeking damages for breach of contract and certain declarations in relation to amendments relating to the Franchise Agreement and its performance. No steps appear to have been taken to progress those proceedings prior to 2010. On the 29th September, 2009, DPD gave six months notice of termination to the plaintiffs, pursuant to s. 13 of the Franchise Agreement to expire on the 31st March, 2010. The franchise terminated and on the 8th July, 2010, the plaintiffs issued a further plenary summons against DPD seeking inter alia, payment of monies allegedly due to them pursuant to clause 13 of the Franchise Agreement and an injunction preventing DPD from enforcing a restraint of trade clause in the Franchise Agreement. They also sought and were refused interlocutory relief by order of the High Court (Hanna J.) on the 29th July, 2010. An order, on consent was made by the High Court (Laffoy J.) on the 9th December, 2010, consolidating the 2008 and 2010 proceedings and directing that they proceed as one action. By this point in time statements of claim in each had been delivered.

4 By first notice of lodgement of the 6th January, 2011, DPD lodged a sum of €253,075 in court and the notice specified that ‘the sum is enough to satisfy all of the plaintiffs' claims in these consolidated proceedings, and liability is denied in respect of the said claims’. A defence had been delivered in the 2010 proceedings in October 2010 and on the 6th January DPD also delivered a defence in the 2008 proceedings. The defences did not, as then required by the Rules of the Superior Courts, plead the fact of the lodgement. This was pointed out by the solicitors for the plaintiffs and an amended defence so pleading was delivered in each proceeding on the 25th January, 2011.

On the 4th October, 2011, DPD lodged an additional sum of €109,168.23 making a total sum lodged of €362,243.23 and the notice of additional lodgement specified ‘that the sum is enough to satisfy all of the plaintiffs' claims in these consolidated proceedings, and liability is denied in respect of the said claims’.

High Court Judgments

5 The action came on for hearing before Gilligan J. in June 2012, and he delivered a written judgment on the substantive claims on the 31st July, 2012. Save in respect of his refusal to award interest, there is no appeal against the decisions in that judgment, but they are relevant to the issues on appeal.

6 The trial judge identified the principal issue arising in the proceedings as being ‘to determine the effect of clause 13 and further commentary to determine the appropriate sum of money pursuant to clause 13 to compensate the plaintiffs in respect of the termination of the defendants' franchise area relating to depot 28’.

7 Clause 13 of the franchise agreement provides:-

If notice is given by the owner under Clause 2 hereof, then the owner shall purchase or produce a purchaser of the business from the operator at a sum equal to the purchase price set out in the Schedule 3 hereto plus such further sum as is agreed between the parties which sum is to fairly reflect the turnover of the business carried on by the operator as of the date of the notice.’

8 Schedule 3 set out €95,000 but there was a...