Sheridan v The Louis Fitzgerald Group Ltd and Another

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 04 April 2006
• Neutral Citation: [2006] IEHC 125
• Docket Number: [No.933P/2006]
• Court: High Court
• Date: 04 April 2006

SHERIDAN v LOUIS FITZGERALD GROUP LTD & BURSTON LTD

distillery 4

Have you signed out this item?

Law Library Dublin

00222478

BETWEEN

DAMIEN SHERIDAN

PLAINTIFF

AND

THE LOUIS FITZGERALD GROUP LIMITED AND BURSTON LIMITED

DEFENDANTS

[2006] IEHC 125

[No.933P/2006]

THE HIGH COURT

INJUNCTIONS Interlocutory Contract - Lease - Specific performance - Whether fair issue to be tried - Whether damages adequate remedy - Whether onus on plaintiff as matter of probability to demonstrate that damages would not be adequate remedy - Balance of convenience - Whether it was desirable that two parties be compelled to trade when one party does not want to carry on such trading - Interlocutory injunction refused - (2006/933P - Clarke J - 4/4/2006) [2006] IEHC 125

Facts: The plaintiff who operated a catering business in the premises of the defendant, applied for interlocutory relief by way of injunction in proceedings to obtain specific performance of an agreement to enter a lease. The defendants disputed the existence of the lease.

Held by Clarke J. in refusing the relief sought, that to grant an injunction would require the parties to have to work together and would be fraught with difficulty given the nature of the dispute as between the parties.

Reporter: E.F.

MACKEY v WILDE & LONGIN 1998 2 IR 578 1998 1 ILRM 449

MCMANUS v COOKE 1887 35 CH 681 1887 56 LJ CH 662 1887 56 LT 900 1887 3 TLR 622

IRISH SHELL & BP LTD v JOHN COSTELLO LTD 1981 ILRM 66

CURUST FINANCIAL SERVICES LTD v LOEWE-LACK-WERK OTTO LOEWE GMBH 1994 1 IR 450

SMITH KLINE BEECHAM & GLAXO SMITH KLINE CONSUMER HEALTHCARE (IRL) LTD v GENTHON BV & SYNTHON BV UNREP HIGH COURT KELLY 28.2.2003 2003/47/11541

O MURCHU T/A TALKNOLOGY v EIRCELL LTD UNREP SUPREME 21.2.2001 2001/20/5410

JUDGMENT of

Mr. Justice Clarke

delivered the 4th day of April, 2006

2 1.1 The plaintiff ("Mr. Sheridan") operates a catering business. The defendants ("Fitzgerald") are connected companies which operate a chain of well known public houses. In particular Fitzgerald operates a public house at Temple Bar in Dublin City Centre known as "The Quays Kitchen". In the middle of 2005 Mr. Sheridan and a colleague, a Mr. Alan Hughes, became the proprietors of a company called Damal Catering Limited ("Damal"). Mr. Sheridan was already involved in business with Fitzgerald having entered into an agreement in the form of a licence to provide restaurant and catering facilities at another public house premises owned by Fitzgerald and known as "The Big Tree" on Dorset St. in Dublin.

3 1.2 However as of June 2005 Damal had been established for the purposes of running the business at the Big Tree and also entered into negotiations to conduct a business at the Quays Kitchen.

4 1.3 While there is a dispute between the parties as to the nature and terms of the agreement entered in respect of the Quays Kitchen, it is common case thatan agreement was entered into which resulted in Damal commencing to provide catering and restaurant services at the Quays Kitchen.

5 1.4 It is also clear that Damal ran into financial difficulties in the latter part of 2005 and was put into voluntary liquidation by resolutions passed at meetings of creditors and members held on 19^th December, 2005. By that time Damal had been operating the restaurant at the Quays Kitchen for a number of months.

6 1.5 While I will return to certain aspects of the contentions of the parties as to the relevant agreements allegedly entered into, in the course of this judgment, in substance Mr. Sheridan contends that in August, 2005 (after two trial periods of one month each), it was agreed between himself on behalf of Damal and Mr. Alan Murtagh, Group Operations Officer of Fitzgerald, that Damal would obtain a lease in respect of the Quays Kitchen restaurant for a term of five years at an initial rent of €100,000 per annum payable weekly which was to be "fixed for eighteen months and reviewable thereafter". Mr. Sheridan contends that Mr. Murtagh also required that a deposit of €30,000 would be paid and that the relevant lease would be drafted by Fitzgerald's solicitors. Mr. Sheridan further contends that on the day after Damal went into liquidation he met again with Mr. Murtagh who agreed, on behalf of Fitzgerald, that a lease in the same terms as had previously been agreed in favour of Damal would be granted to Mr. Sheridan personally. On his case the only reason why a lease had not been executed in favour of Damal was because no lease had been produced to him for signature.

7 1.6 Fitzgerald denies that any agreement was ever entered into in respect of a lease and further denies that any long term agreement was ever entered into in respect of any other form of arrangement. In substance Mr. Sheridan brings these proceedings for the purposes of enforcing the contract which he contends exists between the parties for a lease on the terms which I have outlined above.

8 1.7 Matters came to a head in the latter part of February of this year. It would appear that at a meeting on 30^th January, 2006, Mr. Murtagh indicated that no long term arrangement would be entered into between the parties. While there is some dispute as to precisely what was said at the relevant meeting (a dispute which cannot be resolved at this interlocutory stage) it seems clear that as a result of that meeting Mr. Sheridan became aware that Fitzgerald did not intend to execute any long term arrangement whether lease or otherwise. Fitzgerald's position was and is that, as a result of the meeting of 30^th January, Mr. Sheridan was required to vacate the premises by late February. It is accepted that Mr. Sheridan received a formal letter requiring him to vacate the premises by 26^th February. It appears clear that locks were changed as of the 26^th February and other actions taken to exclude Mr. Sheridan from that time. It would appear that between the weekend of the 25^th/26^th February and the commencement of proceedings on 1^st March arrangements with a third party were entered into by Fitzgerald to provide for the continuance of restaurant/catering services at the Quay Kitchen. Thereafter these proceedings followed.

2 2.1 The matter came before me as an application for an interlocutory injunction. Having regard to the urgency of the matter I indicated to the parties that I would deliver a brief ruling within a short number of days of the conclusion of the hearing and would give further details of the reasons behind such ruling in due course. Accordingly, having reserved judgment for two days, I indicated to the parties that I did not consider it appropriate to make an interlocutory order. The purpose of this judgment is to set out the detailed reasons which led me to that conclusion.

2 3.1 In essence each of the three matters of which I am required to be satisfied in order to grant an interim or interlocutory injunction was in contest. There was a dispute as to whether there is a fair issue to be tried between the parties. There was a dispute as to whether damages would be an adequate remedy. There was a dispute as to where the balance of convenience lies.

3 3.2 In those circumstances it is necessary for me to start with a consideration as to whether the plaintiff had established that there was a fair issue to be tried. The plaintiff's principal claim in these proceedings is for specific performance of what he alleges is an agreement to enter into a lease in the terms which I have set out earlier in the course of this judgment. There is a significant contest on the facts as to whether any such agreement was ever entered into. It is common case that Mr. Sheridan and/or Damal commenced providing catering and restaurant services at the premises concerned on foot of a short-term trial agreement. The first major factual dispute between the parties is as to whether there was a subsequent agreement with Damal for a lease. The second major factual dispute between the parties is as to whether any such agreement (if it existed) was replaced, on Damal going into liquidation, with an agreement in similar terms in favour of Mr. Sheridan personally.

4 3.3 The position adopted by Fitzgerald is that there were ongoing discussions about the possibility of the parties (whether Damal or Mr. Sheridan personally) entering into a long-term agreement. However, it is contended that no conclusion was ever reached to such discussions and that, in any event, the discussions related to the possibility of a long-term licence agreement for the provision of catering and restaurant services rather than a lease.

5 3.4 In support of this contention, Fitzgerald refers to the fact that the arrangements between the parties in respect of "the Big Tree" were such a long-term licence agreement. Reliance is also placed upon the fact that Fitzgerald (and other similar public house proprietors) do not normally enter into leases for any restaurant portions of such public houses for a variety of reasons but including the fact that there would, almost certainly, be significant difficulties in respect of the licensing status of the premises should a lease be entered into in favour of a third party. While the matters relied upon by Fitzgerald in that regard are all, doubtless, matters which Fitzgerald will be able to advance at the trial of the action as a means of seeking to persuade the court that no agreement of the type contended for by Mr. Sheridan was entered into, I agree with the submission of counsel for Mr. Sheridan to the effect that they are only matters which go to the likelihood or otherwise of an agreement having been entered into. They do not affect the question of whether it has been established that there is a fair issue to be tried. Similarly both sides place reliance on contentions that the position now adopted by their opponent differs from the stance adopted in initial...