Betty Martin Financial Services Ltd. v EBS DAC [2019] IECA 327 (18 December 2019)

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JUDGMENT of Mr Justice Maurice Collins delivered on 18 December 2019

1. EBS DAC (“EBS”) appeals against the Judgment and Order of the High Court (Jordan J) of

13 February 2019 (as varied by Order of 21 February 2019) whereby, for the reasons set

out in its reserved judgment, the Court made various orders the effect of which was to

restrain the termination by the EBS of a number of Tied Agency Agreements with the

Plaintiff (“the Agent”) and to restrain the taking of any steps on foot of a notice of

termination that had been served by the EBS, pending the trial of this action. Those

Agreements related to agencies operated by the Agent in Lucan, Athlone and Longford, all

2. On 19 February 2018 the EBS gave 12 months’ notice of termination of those Agreements

(in terms said to be ineffective because of alleged non-compliance with the mandatory

requirements of the Tied Agency Agreements), in reliance on an express power to

terminate on the giving of such notice contained, in identical terms, in each of the Tied

3. The High Court Judge concluded that there was a serious question to be tried that the

termination was unlawful, both on the basis flagged above – the Agent’s argument that

the form of the notice did not comply with the mandatory requirements of the Tied

Agency Agreements and a further argument that the notice had not been served in

accordance with the Agreements – and by reference to a number of arguments made by

the Agent to the effect that the termination was substantively unlawful. The Judge

considered that damages would not be an adequate remedy for the Agent because

damages would not adequately compensate the damages to its reputation, and that of its

principals, that had been established over a lengthy period. In the Judge’s view, the

balance of convenience lay decisively in favour of granting the injunctions. The Judge also

considered and rejected the EBS’s argument that the relief sought should be refused on

grounds of delay. Having heard the parties on his Judgment, the Judge made an order for

costs in favour of the Agent. That order is also the subject of appeal by the EBS.

4. The proceedings were commenced some 12 months ago. At the start of the hearing of the

appeal, this Court was informed that the proceedings had been entered into the

Commercial list but were nonetheless “a long long way from trial” due, the Court was

told, to ongoing dispute as to the proper scope of discovery and in particular the extent to

which the Agent is entitled to EBS documents relating to agencies it has, or had, with

third parties. That discovery dispute has yet to be determined by the High Court. The

Court was also told that the EBS is seeking security for the costs of discovery.

5. It follows that, in event that the High Court injunctions are upheld, they are likely to

remain in place for some considerable time, a fact to which I will return below.

6. The three Tied Agency Agreements at issue were executed in April 2011. Each relates to a

particular branch agency carried on by the Agent but they are otherwise in identical

terms. The evidence before the Court discloses that the agencies were all operated by the

Agent prior to 2011 and that the agency businesses had been established by the late

Betty Martin. Betty Martin took over the EBS agency in Athlone in the 1990s and the

agency in Longford some time after that. Mr Declan Martin (a director of the Agent and

son of Mrs Martin) avers, without contradiction, that Betty Martin was the first woman to

operate an EBS tied agency in Ireland. Betty Martin Financial Services Limited was

established in 2004. In 2008, the Agent took over the Lucan branch of EBS. As

mentioned, the Tied Agency Agreements at issue in these proceedings were entered into

in April 2011, by which time Mrs Martin was less involved in the business due to illness.

Sheila Martin, a daughter of Betty Martin, has been involved in the business since 2012.

7. Although operated through a corporate entity, it is argued on behalf of the Agent that its

business was and is a family business and in his submissions to this Court, Declan

McGrath SC for the Agents submits that Declan and Sheila Martin have a “huge emotional

investment” in the business such as cannot properly or adequately be compensated by an

award of damages in the event that the termination is permitted to proceed and that

investment is lost (as it is argued would inevitably be the case).

8. The Tied Agency Agreements are detailed documents which, it appears, are in a standard

form adopted by the EBS from time to time. For the purposes of this Judgment, only

certain of the Agreements’ provisions require to be noticed, as follows:

Clause 3 appoints the Agent, on a non-exclusive basis, to carry on the Agency

Clause 4.1 provides for the commencement of the Agreement and for its

continuation “for the duration of the Term.” Clause 4.2 provides that the Agreement

“may be terminated at any time in accordance with the provisions of Clause 15.”

The effect of these provisions, along with the terms in which Term is defined, is

that the Agreement effectively operates as a contract of indefinite duration, but

There are a number of clauses that impose particular obligations, both positive and

negative, on the Agent. Clause 6.1 provides that the Agent is to act as such

“subject to and in accordance with the provisions of this Agreement and the

Procedures.” Procedures is defined as the procedure notices issued by EBS from

time to time. No such notices were before us but it seems reasonable to infer from

the reference to Procedures in clause 6.49 (see below) that these procedures cover

(inter alia) appropriate selling of financial products. Clause 6.13 requires the Agent

to submit a Compliance Statement annually, in the form set out in Schedule which

provides for the Agent’s confirmation that it has “complied with all applicable laws

and regulations” save to the extent disclosed on the form. Clause 6.49 (which is in

a section of the Agreement head “Regulatory Compliance”) requires the Agent to

comply “with Procedures regarding the sale of investment, saving and insurance

related products to ensure such products are not mis-sold.” Clause 6.55 requires

the Agent to notify the EBS of anything which has resulted or which may result in a

material breach of any Laws (a term defined expansively to include codes of

conduct, guidelines etc whether or not having the force of law) and which may

result in proceedings against the EBS or investigations involving it. Finally, Clause

13.1 requires the Agent to comply with all Laws relating to the operation of the

Agency and clause 13.2 - then identifies a number of legal instruments which the

Agent “shall, in particular, comply with..”, including the Investment Intermediaries

Act 1995 (as amended), the Consumer Protection Code and other Laws intended to

protect users of financial services. At the hearing of this appeal, there appeared to

be no dispute that the effect of these provisions was that the Agent was

contractually obliged not to engage in any mis-selling of financial products and, in

the event that it did so, it would be under an obligation to report that to the EBS.

Termination of the Agreement is addressed in Clause 15. Clause 15.1 and in

particular Clause 15.1(b) is central to the EBS’s defence to the injunction

“Without prejudice to any other rights which the parties may have to terminate this

Agreement, this Agreement shall terminate, whereupon its Term shall expire:

(a) three months from the date on which the Tied Branch Agent gives notice to

(b) twelve months from the date on which the Society gives notice to the Tied

Clause 15.3 provides that the Society may give notice of immediate termination in

any of the “events” listed in that sub-clause. The long list of events includes breach

of the Agreement by the Agent ((a) & (b)); breach of any law considered to be

detrimental to the Agency Business (i), insolvency ((d) & (e)) and many others.

Clause 17 is also relevant in the context of termination. In essence, it gives the EBS

the option of terminating the Tied Agency Agreement without cause, but with

immediate effect, on the basis of paying a termination payment calculated in the

manner provided for in clause 17.2 i.e. a payment in lieu of notice.

There are a number of other provisions on which the EBS relies. One is Clause 18.1

which provides that nothing in the Agreement shall create or be deemed to create a

partnership between the parties. This, EBS says, means that the Agreement cannot

be considered to be a “relational contract” such as might give rise to mutual

obligations of good faith. I return to this point below. The EBS also places

significant reliance on Clause 24, an entire agreement clause in the following

“24.1 This Agreement constitutes the entire agreement between the parties hereto

and supersedes all prior agreements and understandings oral or written

24.2 The Tied Branch Agent acknowledges that it has not relied upon any oral or

written representations made to it by the Society or its employees or agents

and has made its own independent investigations into all matters relevant to

The effect of this clause (according to the EBS) is to preclude the Agent from advancing

an argument to the effect that the operation of Clause 15.1 of the Agreement is affected

by the terms of a collateral contract alleged to have been entered into at or around the

time that the Tied Agency Agreements were entered into in April 2011.

Finally, Clause 28 should be noticed as it is an important element of the Agent’s

argument that notice of termination was ineffective. It provides:

“28.1 All notices and other communications required to be given or made under

this Agreement will be in writing and will be sent to the respective addresses

specified at the head of this Agreement or to such other addresses of which

notice in writing has been given by the Society or the Tied Branch Agent to

28.2 Any such notice or other communication shall be deemed to have been duly

(a) if sent by prepaid first class post, two Business Days after the date of

To anticipate the argument discussed in more detail below, the Agent makes two points

about the form of the notice of termination. Firstly, it is said that the notice is invalid

because it proceeds on the basis that there was one umbrella Tied Agency Agreement,

covering all three agencies operated by the Agent, when in fact each agency is the

subject of a separate Agency Agreement. Secondly, although the notice is addressed to

the Agent at the address specified in each of the Tied Agency Agreements (the branch

premises in Athlone), it was not in fact posted to that address but was rather handed to

9. I will summarise the issues in dispute between the parties, and the evidence that is

before the Court directed to those issues, as succinctly as possible. This is an application

for an interlocutory injunction, heard on affidavit, and the Court cannot determine any

factual disputes at this stage or seek to make any prediction how those disputes may be

10. Mr Martin has sworn a number of affidavits on behalf of the Agent. In addition, the Court

has the pleadings, including the Agent’s Statement of Claim and Amended Statement of

Claim, Replies to Particulars and Reply which set out the case being made by the Agent.

11. Mr Martin says that, from 2010 onwards, he began to have issues with an ESB Regional

Manager, Mr Tim Gleeson. Mr Gleeson initially had managerial responsibility for the Lucan

branch but as a result of restructuring within the EBS ultimately was responsible for (inter

alia) all three branches operated by the Agent. According to Mr Martin, the underlying

reason for these issues was the fact that Mr Gleeson sought to pressure the Agent to sell

unsuitable investment products to its customers, specifically to sell higher-risk investment

products to customers whose assessments indicated that they ought to be sold low-risk

products, such as deposits. The appropriate assessment of a potential investor’s

capacity/appetite for risk is, of course, a central element of financial services regulation in

the State and elsewhere and in this context the Court’s attention was brought to Chapter

5 of the Consumer Protection Code which sets out in detail the steps to be taken by

regulated entities in terms of knowing the consumer and assessing the suitability of

financial products prior to offering, recommending, arranging or providing them.

12. I should record immediately that Mr Gleeson has sworn an affidavit in this application in

which he categorically denies these allegations. The allegations are also denied on the

EBS’s behalf by Mr Des Fitzgerald, its Managing Director, in affidavits sworn by him.

13. Mr Martin says that he resisted Mr Gleeson’s efforts and refused to sell high risk

investment products to unsuitable customers. He says that things came to a head in

2017. He was (he says) concerned that if continued to resist Mr Gleeson’s pressure, he

would lose the EBS business. Having discussed the issue with his sister, he decided to

surreptitiously record a meeting with Mr Gleeson on 18 January 2017. A purported

“transcript” of that meeting was put before the High Court. The EBS makes the point that

this document has not been prepared by a professional stenographer but by a relative of

Mr Martin and also observes that it has never been provided with a copy of the audio

recording so as to verify the document. In his affidavit, Mr Gleeson complains that the

document contains select excerpts taken out of context and that it does not convey the

“mutual understanding of the position.” He also takes issue with the covert nature of the

14. In any event, by letter of 18 May 2017, signed by Mr Gleeson, the EBS gave 12 months’

notice of termination of the three Tied Agency Agreements pursuant to Clause 15.1(b). It

may be noted that this notice refers in clear terms to the three Agreements. In other

words, the notice did not suffer from the alleged frailty said to vitiate the notice served in

February 2018. The letter did not give any indication of the EBS’s reason(s) for

terminating the Agreements. The letter concluded by thanking the Agent “for [its]

15. In response, Mr Martin arranged a meeting with Mr Des Fitzgerald, the EBS’ Managing

Director, which took place on 29 May 2017. According to Mr Martin, at “that meeting, I

disclosed the mis-selling and misconduct of Mr Gleeson, Mr Fitzgerald confirmed that he

was withdrawing the Notice and that there would be an investigation into the matters

raised.” (Affidavit of 18 December 2018; para 28). Mr Fitzgerald says that the notice was

suspended rather than withdrawn but it does not appear necessary or useful to consider

that distinction further: the fact is that a further notice of termination issued in February

2019 and the EBS subsequently confirmed that it was not relying on the earlier notice.

16. It is also a fact that there was an investigation, undertaken by personnel from AIB Group

Internal Audit (AIB having taken over EBS in 2011). Mr Fitzgerald explains that he

considered it appropriate to suspend the termination decision pending that investigation

even though he was “satisfied the reason for the decision [to terminate] was in no way

linked to any alleged failure on the part of the Plaintiff to engage in the mis-selling of

products.” (Affidavit of 4 January 2019 at para. 20). Mr Fitzgerald and EBS are silent on

what was the reason for the decision to terminate the Agreements in May 2017.

17. As part of that investigation, Mr Martin was interviewed by the investigators and a

transcript of that interview was put before the High Court. Following that interview, the

investigators followed up with a request for various information/material touched on in

the course of the interview, including all recordings held by Mr Martin (it having been

suggested in a draft affidavit of Mr Martin which had been provided to the investigators

that he had recordings of more than one conversation with Mr Gleeson). It appears,

however, that Mr Martin did not provide any of this material to the investigators, for

reasons which are unexplained. That is the subject of criticism by Mr Fitzgerald.

18. In December 2017 AIB Group Internal Audit issued its Investigation Report. However,

only a short Executive Summary was provided to Mr Martin and it was this document only

that was before the High Court and this Court1. As Mr McGrath observed in his

submissions to this Court, there is a caveat at the start of the Executive Summary to the

effect that the section is just a summary which did not incorporate the full details of the

investigation and was intended only to provide an overview. It went on: “Decisions

relating to this case should be based on the summary.” In any event, the document

identified the two main headings of complaint as being pressure to mis-sell and pressure

to cold-call customers (such cold-calling is not permitted by the Regulator). The findings

of the Group Internal Audit, as summarised in the document, warrant notice. As regards

the issue of cold-calling, the document noted that it was not possible to determine

whether there had been cold-calling and that the investigation had instead sought to

determine whether Mr Gleeson had given any “explicit instruction” to the Agent, or to any

other agents in his region, to cold-call customers. There was no evidence of any such

explicit instruction, though it seems from the document that the investigation considered

that certain training material prepared by Mr Gleeson might be capable of being

understood as advocating cold-calling though it noted (without comment) Mr Gleeson’s

19. As regards mis-selling, the investigation noted that, because customer financial reviews

were not recorded, it was impossible to say whether customer’s responses were being

influenced. As regards the suggestion that low-risk customers were being sold investment

products when they should not be, the document noted what it referred to as a “disparity

between EBS’s and Irish Life’s views on how conversations with customers emerging from

the financial review questions with a risk score of 1 or 2 should be progressed. The

default option for such customers is deposits. Mr Gleeson is clear that it is appropriate for

the Financial Advisor to ask a customer with this risk score if they wished to be informed

about investment options. Mr Gleeson encourages his Agents to have this conversation

with customers and provides coaching to the Agents on how to conduct such

conversations. Irish Life contends that a conversation about investment options must only

be progressed by the Advisor, if the customer themselves initiates that discussion.” The

appropriateness or otherwise of an Agent initiating such a conversation with a customer

with a risk profile of 1 or 2 was “a question for EBS Management/Compliance to resolve

20. I should explain that, at the relevant time, EBS did not have investment products of its

own and instead sold Irish Life products to its customers through its branches, as agents

for Irish Life. The “disparity” identified by AIB Group Internal Audit therefore involved

what, on its face, appears to have been a material difference of view on the part of EBS

(who were selling the products) and Irish Life (whose products were being sold) as to the

appropriateness of the approach being advocated by EBS/Mr Gleeson. It is therefore

somewhat surprising that this identified “disparity”, and the compliance issues potentially

arising from it, are not addressed by Mr Fitzgerald in his affidavits. The Court is therefore

unaware how EBS Management/Compliance may have resolved the issue identified by the

21. I should also explain that the AIB Group Internal Audit document refers to, and relies to a

significant extent on, a separate report published by Irish Life in August 2017 which, it

appears, had concluded that there was no evidence to support the allegations made

against Mr Gleeson regarding the sale of Irish Life products. That report was never

furnished to the Agent and was not put before the High Court or before this Court on

appeal. Mr Martin complains about the non-production of this report and also makes the

point that Irish Life did not seek to speak to him in the course of preparing that report.

22. In his judgment, the High Court Judge observed that the AIB Internal Audit Report was

relied on heavily by EBS and questioned how it could be afforded the status the EBS

wished to give it when all that had been produced was an Executive Summary (Judgment,

at para 5a.). He also questioned why the “disparity” identified in the Executive Summary

was dispatched in such a “cavalier fashion” in the summary when the issue lay at the core

of Mr Martin’s assertions (5c.) and how it could be stated that Irish Life had concluded

that there was no evidence to support the mis-selling allegations given the disparity of

23. These are, it appears to me, fair questions, albeit it might be said that any criticism of

any failure to address the “disparity” ought more properly to be directed to the EBS than

to AIB Group Internal Audit. In fact, both Mr Fitzgerald and Mr Gleeson assert that the

AIB and Irish Life investigations exonerated the EBS/Mr Gleeson. Thus, at para. 26 of his

affidavit of 4 January 2019, Mr Fitzgerald says that the AIB investigation “found that there

was no substance to the complaints made by the Plaintiff” and Mr Gleeson in his affidavit

(para 11) states that he had been “exonerated by both investigations undertaken by

Allied Irish Banks plc and by Irish Life.” Absent sight of the full AIB Report and the Irish

Life Report, these averments are difficult to assess but what can be said is that the

Executive Summary leaves a number of unanswered questions that the EBS’s evidence

24. In any event, the AIB executive summary appears to have been furnished on 15 February

2018, followed very shortly afterwards by the second letter of termination of 19 February

2018. In common with the earlier notice of termination, it did not identify any reason for

termination and no reason has been identified by the EBS in its affidavits or submissions.

This second notice also concluded with an expression of EBS’s gratitude for the Agent’s

25. Mr Martin makes other allegations of inappropriate conduct by the EBS/Mr Gleeson in the

affidavits sworn by him and in particular his affidavit of 11 January 2019. These

allegations are, it should be noted, disputed by Mr Fitzgerald and by Mr Gleeson. In

addition to Mr Martin’s affidavits, the Agent has put before the Court a number of

affidavits from former tied agents of the EBS which canvass complaints about the manner

they were treated by the EBS and suggest – in varying terms and tone – that they had

felt pressured to achieve sales even at the cost of breaching applicable

26. A further issue canvassed in the affidavits concerns the representations alleged to have

been made to the Agent at or around the time it entered into the Tied Agency

Agreements in 2011 which are relied on as giving rise to a collateral contract. I will track

what has been said by the Agent in the affidavits and in its pleadings.

At para 14 of his affidavit of 18 December 2018, Mr Martin avers that “at the time

that BMFS entered into the Tied Agency Agreements, I was expressly assured by Mr

Gerry Middleton that EBS would never terminate it save for exceptional reasons

Mr Middleton had died in 2013 so obviously there was no direct response to this

assertion though Mr Fitzgerald made observations to the effect that it was plausible

Para 7 of the Agent’s Statement of Claim – delivered on 11 January 2019 –

contains a plea in the same terms as in Mr Martin’s affidavit, with the additional

plea that the parties thereby entered into a collateral contract.

In Mr Martin’s second affidavit – also dated 11 January 2019 - he gives what

appears to be a quite different account, stating that “firstly such assurances were

given to my mother, Betty Martin, who raised this point specifically with Mr Gerry

Middleton and Mr Tony Moroney when the plaintiff entered into the agreements”

before going on to say that such assurances were repeated to him by Mr Middleton

at a meeting on 28 January 2013 and a follow up call the following day.

On 4 March 2019 an Amended Statement of Claim was delivered which included an

amendment to para 7 by which it was pleaded that the EBS has represented

to/assured the Agent that the Agreements would not be terminated “save for good

In Replies to Particulars dated 18 April 2019, further particulars of the alleged

representations/assurances were given, in substantially the same terms as Mr

Martin’s second affidavit i.e. to the effect that representations were made to Mrs

Martin prior to the Agent entering into the Tied Agency Agreements (in April 2011)

27. The final factual matter that it is necessary to note relates to events occurring since the

service of notice of termination in February 2018. Curiously, the Agent appears to have

taken no step to question or challenge the termination until 7 December 2018 when these

proceedings were commenced by the issue of a summons (which was not served

immediately). On 11 December 2018, a letter was sent by its solicitors which referred to

the firm’s instructions “that the purported terminations are proceeding and that staff have

[been] informed of same” and sought the withdrawal of the “purported terminations” or,

in the alternative, an undertaking not to take any steps on foot of them, failing which

proceedings would issue and injunctive relief would be sought. No grounds for impugning

the validity and/or lawfulness of the terminations (and the letter consistently refers to

terminations in the plural) were identified in that letter. This letter received a quick

response confirming that EBS would not be withdrawing the notice of termination or

giving the undertaking sought. The proceedings were then served and this application

28. Mr Martin seeks to explain the Agent’s failure to take steps to challenge the termination in

the period between February and December 2018 by saying that he understood from

speaking to persons in the business (by which, presumably, he means EBS) that “matters

would calm down”, “the personal animosity would dissipate” and “common sense would

prevail” (affidavit of 1 January 2019, paras 34 and 35). In all the circumstances, this is

difficult to understand, unless of course there was engagement between the parties that

29. However, there are curious features to the position of EBS also. While Mr Fitzgerald refers

to the “extensive preparation for the termination (which has been in train since February

2018)”, the available evidence suggests that no concrete step was taken by EBS until

November 2018, when (according to Mr Fitzgerald) notification of the termination was

given to the Central Bank. Customers were not notified of the change in agent until 18

December 2018, i.e. after the letter before action of 11 December 2018 and while the

notices to customers identified the new agent as Woods Financial Services Limited, the

agreements between that entity and EBS were only entered into on 7 January 2019,

2after the commencement of these proceedings and the bringing of this injunction

application. Whatever about the date of execution of the formal agreements, it is not at

all clear from the evidence, such as it is, that, as of February 2018 (when the notice of

termination was served), Woods Financial Services Limited had been chosen to replace

the Agent or had agreed to act as such, even in principle. Mr Woods, the principal of the

company, has sworn an affidavit but that simply says that had discussions with the EBS

about taking over the agencies going back to 2017, that these discussions “revived in

2018” and culminated in the agreements of January 2019. I think it is a reasonable

inference from this evidence that, as of February 2018, no definite arrangements were in

place in respect of the succession which, it seems to me, throws into sharp relief the issue

30. There is also some evidence – in the form of a further “transcript” of another conversation

surreptitiously recorded by Mr Martin, this one with Mr Woods 3– that, if accepted at trial,

might be thought to cast doubt on the reality of the arrangements between EBS and

Woods Financial Services Limited. That is, however, a matter for trial.

31. The power to grant an interlocutory injunction in an appropriate case is, of course, a

critical part of the effective administration of justice. The absence of such a power would

significantly impair the capacity of the Courts to vindicate rights and prevent injustice.

However, the grant of an interlocutory injunction also has the capacity to give rise to

injustice in that it may restrain a party from taking action which, it transpires, they were

fully entitled to take or (in the case of mandatory injunctions) require them to undertake

some course of action they do not wish to undertake and which, it transpires, they were

32. As the Supreme Court (per Clarke J, as he then was) observed in Okunade v Minister for

Justice v Minister for Finance [2012] IESC 49; [2012] 3 IR 152, the problem that a court

faces in determining an application for an interlocutory injunction “stems from the fact

that the court is being asked, on the basis of limited information and limited argument, to

put a place a temporary regime pending trial in the full knowledge that the court does not

know what the result of the trial will be” (at [67]). In these circumstances, Clarke J went

on, the “underlying principle must be that the court should put in place a regime which

minimises the overall risk of injustice”. As the Supreme Court (again per Clarke J)

observed in Dowling v Minister for Finance [2013] IESC 37; [2013] 4 IR 576, that

problem presents itself to any court deciding, in advance of a final determination on the

merits, whether to make any form of interim intervention. Thus, albeit not identical to the

criteria applicable in this jurisdiction for the granting of interlocutory measures (which in

turn closely reflect the position in England and Wales), the criteria applied by the Courts

of the European Union for deciding whether to grant interim measures are functionally

similar, as indeed is evident from the detailed discussion in Dowling. As Clarke J points

out (at [92] it is hardly surprising that there is such a similarity: the problem is the same

33. The recent decision of the Supreme Court in Merck Sharp & Dohme Corporation v

Clonmel Healthcare Limited [2019] IESC 65, where the sole judgment was given by O’

Donnell J (Clarke CJ and McKechnie, Dunne and O’ Malley JJ agreeing with that judgment)

is also relevant.4 It will be necessary to refer in more detail below to O’ Donnell J’s

discussion of the interaction of the adequacy of damages (for applicant and respondent)

and the balance of convenience. That discussion takes place in a context where O’ Donnell

J. emphasises the “essential flexibility” of the injunction remedy (para 27) and cautions

against a tick-the-box approach to the grant or refusal of an interlocutory injunction (para

47). Elsewhere in his judgment, O’ Donnell J reminds us that the decision of the House of

Lords in American Cyanamid v Ethicon [1975] AC 396 – the fons et origo of the modern

law of injunctions both in England and Wales and, given its adoption by the Supreme

Court in Campus Oil v Minister for Industry (No 2) [1983] IR 88, in this jurisdiction also -

should not be seen be approached “as though it were the laying down of strict mechanical

rules for the control of future cases” (at para 33) or “as akin to statutory rules” (at para

34. Allowing that establishing a serious issue to be tried is a necessary (but not sufficient)

condition to the grant of an injunction (at least where that issue, if established at trial,

would provide a basis for a permanent injunction), the decision to grant or refuse

thereafter becomes a matter of overall assessment of where the balance of justice lies,

though with particular (and, in many cases, decisive) weight being given to the adequacy

of damages within that overall assessment. That is not to imply that the outcome is or

ought to be a matter of impression or intuition. As the decision in Merck Sharp & Dohme

Corporation v Clonmel Healthcare Limited concretely illustrates, a decision to grant or

4 The Court brought Merck Sharp & Dohme Corporation v Clonmel Healthcare Limited to the attention of the parties at the

hearing of the appeal and also gave them an opportunity to provide supplementary submissions addressing the decision.

Both parties did so and their submissions were helpful and to the point.

refuse an interlocutory injunction is a judicial decision, deriving from a structured and

careful assessment of the relevant considerations that is (or at least ought to be)

reasoned and capable of review. However, there are likely to be multiple considerations to

be weighed in the balance, pointing in different directions, none of which are likely to be

35. What is before this Court is, of course, an appeal from the decision of the High Court and,

citing Lawless v Aer Lingus [2016] IECA 235 and Ganley v RTE [2019] IECA 18, the Agent

contends that that decision was made in the exercise of the Judge’s discretion, based on a

correct application of the applicable principles and that the decision was one that was

clearly open to him on the evidence and, accordingly, a significant margin of appreciation

should be afforded to that decision (para 11 of the Agent’s written submissions to this

Court). In his oral submissions, Mr McGrath SC refined that position somewhat, accepting

(correctly, in my view) that a distinction is to be drawn in this context between the

analysis of whether a fair question/serious issue had been established on the one hand

and, on the other, the Judge’s consideration of adequacy of damages, balance of

convenience and delay. In respect of the former, Mr McGrath accepted that if this Court

identified an error of principle in the analysis of the Judge, it could properly intervene but

as regards the latter, intervention was appropriate only if this Court was satisfied that

36. Mr Gardiner SC did not seriously dispute the proposition that the hearing of an appeal

from an interlocutory injunction application did not involve a re-hearing. His primary

submission in this context was that the High Court Judge had failed to deal with the

issues and arguments and had provided no reasons for his determinations in respect of

the crucial questions presented for decision. In these circumstances, Mr Gardiner

submitted, this Court had to conduct a rehearing of the application and, given that it had

the same material before it as the High Court had, it was entitled to determine the

37. In Lawless v Aer Lingus (a discovery appeal), Irvine J (with whose judgment Hogan and

Keane JJ agreed), referred to her judgment (for the Court) in Collins v Minister for Justice,

Equality and Law Reform [2015] IECA 27 (an appeal to this Court against the High Court’s

refusal to dismiss the proceedings on grounds of delay) which comprehensively analysed

the authorities before expressing its conclusion in the following terms:

“79. For all of these reasons, therefore, we consider that the true position is that set out

by MacMenamin J. in Lismore Homes, namely, that while the Court of Appeal (or, as

the case may be, the Supreme Court) will pay great weight to the views of the trial

judge, the ultimate decision is one for the appellate court, untrammelled by any a

priori rule that would restrict the scope of that appeal by permitting that court to

interfere with the decision of the High Court only in those cases where an error of

38. In Lawless, Irvine J added the following qualification to that statement:

“23. However, it seems to me that all too often parties who are somewhat dissatisfied

by interlocutory orders made in the High Court seek to use this Court as a venue to

re-argue their application de novo in the hope of persuading this court to exercise

its discretion in a somewhat different fashion from that which was adopted by the

High Court judge at the original hearing. That is a practice which I believe is not to

be encouraged. In order for this Court to displace the order of the High Court in a

discovery matter the appellant should be in a position to establish that a real

injustice will be done unless the High Court order is set aside. It should not be

sufficient for an appellant simply to establish that there was a better or more

suitable order that might have been made by the trial judge in the exercise of their

39. Accordingly, while as a matter of principle, “great weight” is to be given to the views of

the High Court Judge, the ultimate decision on this appeal is for this Court. It is also clear

that the EBS is not required to establish any error of principle as a pre-requisite to this

40. The particular point made by Mr Gardiner remains to be considered. As a matter of

principle, it appears to me that Mr Gardiner is correct. Where the High Court does not

explain its basis for taking a particular view on a contested issue and/or fails to engage

appropriately with the arguments made to the Court by one or other party on that issue,

that will necessarily affect the weight to be attached to the Court’s view on appeal. An

obvious parallel is provided by the appropriate approach to findings of fact made by the

High Court. In general, such findings will bind an appeal court: Hay v O’ Grady [1992] 1

IR 210. That will not be the case, however, where the Judge fails to engage with the

evidence of both sides and explain why one side or the other has been preferred: Doyle v

41. Separately, it is clear that a judge must give sufficient reasons for his or her decision such

that the parties can understand the basis for that decision: see, for example, the decision

of this Court in Law Society v Callanan [2017] IECA 217; [2018] 2 IR 195, at paras 80-8-

42. Neither party takes issue with the Judge’s view that the requirement to show a fair

question/serious issue does not mean that the Agent must establish a very strong case

and that the threshold to be surmounted is generally recognised as low (para 11 of the

Judgment under appeal). It may be useful to regard this threshold as akin to the

threshold that applies where a party seeks to dismiss a claim against it pursuant to the

inherent jurisdiction and that was the approach taken by the High Court in a number of

decisions cited to us including Wingview Limited v Ennis Property Finance DAC

[2017] IEHC 674 (per Haughton J, at para 14) and O’ Gara v Ulster Bank DAC [2019] IEHC 213

43. In the jurisprudence “fair question”, “bona fide issue” and “serious issue” (and other

variants of these phrases) have been used interchangeably. As a matter of language, I

prefer the expression “serious issue” (in the sense of serious issue to be tried) but in

using it I do not mean to suggest that the threshold is higher than it is.

44. Notwithstanding its acceptance that the threshold is a low one, the EBS contends that no

serious issue has been established by the Agent. That is not a merely formal position: it

was in fact the primary focus of the EBS’s appeal before this Court.

45. In deference to the forceful submissions that have been made by Mr Gardiner, and having

regard also to the EBS’s complaints regarding the adequacy of the Judge’s analysis, I

consider it appropriate to analyse and discuss the question whether the Agent has

established a serious issue to be tried in more detail than might normally be warranted.

46. The Judge concluded that there was a serious issue to be tried that the notice was

defective because it did not refer specifically to the three Tied Agency Agreements, that it

referred in fact to an agreement which did not exist and was not in any event served as

required by the Agreements: para 13. He went to indicate that he would have expected

“three tailor made Notices to be served” in circumstances where the EBS sought to avail

of a condition which it asserted was a “strict condition” allowing the termination of a long-

standing business relationship without having to give a reason (or have) a reason and

47. It may be noted, firstly, that the Agent does not in fact contend that three separate

notices of termination were required, as Mr McGrath made clear in the course of his

submissions to this Court. Its complaint is, rather, that the notice as served in February

2018 (in contrast to the earlier notice given in 2017) refers to a Tied Agency Agreement

(rather than Agreements in the plural, though in fact there are a number of references in

the notice to “Agreements”). It is not suggested that the form of the notice gave rise to

any lack of clarity, confusion or prejudice; the Agent’s argument is a net legal one,

namely that, in order for there to be a valid termination, there has to be precise

observance of all applicable contractual conditions. Given the argument being made by

the Agent, it appears to me that the decision in Allam & Co Ltd v Europa Poster Services

Ltd [1968] 1 WLR 638, on which Mr Gardiner relied significantly, is of limited assistance.

48. In support of its position, the Agent relies on a passage from Chitty on Contracts (32nd

ed) in which following a discussion about requirements as to notice the editors state that

“prima facie the validity of the notice depends on the precise observation of the specified

conditions”. (para 22-05`). However, the text goes on to note that a consideration of the

relationship of the notice requirements to the contract as a whole and regard to general

considerations of law may show that a contractual stipulation was intended to be an

intermediate term, breach of which was intended to give rise to a claim in damages only

and not invalidating the notice. More pertinently, perhaps, the very statement relied on to

support the Agent’s argument is further qualified by a footnote to it, which suggests that

“the prima facie rule may have to give way on the facts of the case when regard is had to

the underlying commercial purpose of the termination clause and the modern approach

would appear to place less emphasis on the need for precise compliance.”

49. The underlying “commercial purpose” of Clause 15.1(b) was to enable the EBS to

terminate the Tied Agency Agreements by giving twelve months’ notice of its intention to

terminate. As Mr Gardiner emphasised, it is not a unilateral power: the Agent is also

entitled to terminate the Agreement on giving notice, though in that situation only three

months’ notice is required: clause 15.1(a). Notably, Clause 15.1(b) does not stipulate any

particular form of notice. In fact, it does not in terms even require such notice to be in

writing. While the effect of clause 28.1 is to require written notice, it is perhaps significant

that the requirements of clause 28.1 apply generally to all “notices and other

communications” under the Agreement and its requirements are not specific to clause

50. It seems to me, therefore, that the position here is remote from the oft-cited example

given by Lord Hoffman in Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd

[1997] AC 749 where the use of pink paper for a notice exercising an option would

(according to Lord Hoffman) render the notice invalid if the relevant contractual clause

had stipulated the use of blue paper. That fact is implicitly acknowledged by the fact that

51. In the absence of any stipulated form of notice, and absent any suggestion that the notice

here was ambiguous or confusing or that it otherwise caused any prejudice to the Agent, I

am not persuaded that a serious issue has been shown that the form of the notice, and in

particular its reference to Tied Agency Agreement rather than Agreements, renders it

52. I have come to same view on the service point. Again, there is no suggestion that the

notice was not duly received by the Agent. In fact, the mode of delivery used ensured

that it came to the attention of the Agent immediately, rather than a day or two later as

would have been the case if the notice had been posted. The commercial purpose of

clause 28, insofar as it relates to the giving of notice, is clearly to ensure that notices etc

can be effectively delivered and that, where delivery is effected in accordance with its

terms, notices etc will be deemed to have been given at a particular time. There is

nothing in clause 28 which suggests that it was intended to exclude other means of

delivery or that a notice served otherwise than in accordance with clause 28.1 should be

regarded as ineffective where, as a matter of fact, that notice has been delivered and

53. It follows that I respectfully differ from the conclusion of the Judge on this issue. For

completeness, I would add that, even if I had been persuaded that a fair issue had been

established under this heading, I would nevertheless have been of the view that such a

finding could not sustain the injunctions granted by the High Court in any event. At the

conclusion of his judgment in Merck Sharp and Dohme v Clonmel Healthcare Limited, O’

Donnell J sets out a useful series of steps which might be followed in injunction

applications such as this (at para 64). The first is these is that the court should consider

whether, if the plaintiff succeeded at the trial, a permanent injunction would be granted.

If not (he continues) then it is “extremely unlikely” that an interlocutory injunction could

be granted. In my opinion, even if at trial the Agent were to succeed in establishing any

deficiency in the form of the termination notice and/or in its service, that would not be

such as to lead to the conclusion that the termination should be permanently enjoined.

Rather, any such deficiency would, in my view, be addressed by way of damages (though

indeed it is difficult at this point in time to see how anything other than nominal damages

54. The High Court Judge considered the collateral agreement argument along with the

Agent’s implied terms arguments. He noted that authorities had been opened by both

parties. Having noted that there was no authority on all fours with the case before him,

he stated that it “would be easy to dismiss the arguments by reference to Clause 15 and

the express wording of the commercial contracts entered into” but to do so would be find

that there was no fair or serious issue to be tried, which was not his view having

considered the evidence and authorities. He concluded by stating that, in light of the

submissions made and having regard to the authorities, there was a fair and serious issue

55. Mr Gardiner criticises the Judgment for not giving any explanation for this conclusion and

for failing to engage with the arguments that had been made on the EBS’s behalf about

the meaning and effect of the Tied Agency Agreements, and in particular clause 15.1(b).

In my opinion, these criticisms have considerable force. It appears from the Judgment

that the Judge may have been of the view that, having formed the view that a serious

issue (or series of such issues) had been established, it was not appropriate to say

anything further and, as Mr McGrath observed in his submissions, it may be that the

Judge had in mind the approach taken in summary judgment applications where, if an

arguable defence is found to be established, courts conventionally refrain from further

comment because the merits or otherwise of any such defence will then a matter for final

56. This is not an application for summary judgment and an order such as that made by the

High Court cannot be equated with an order adjourning such an application for plenary

hearing. The order made by the High Court had immediate and significant effects for the

EBS in that it suspended the termination of the Tied Agency Agreements in circumstances

where the EBS argued that the terms of those Agreements gave them an unambiguous

and unqualified entitlement to terminate, excluded any reliance on any collateral contract

and precluded the implication of any terms of the kind argued for by the Agent. Those

arguments were not of course necessarily determinative of the application before the High

Court but the EBS was entitled to some explanation as to the basis on which the Court

had concluded that a serious issue had nonetheless been established. I do not mean to

suggest that any form of elaborate analysis is necessary. In many injunction applications

there will be little or no dispute that a serious issue has been raised and, even where

there is a dispute, the position may be relatively straightforward. Here, however, the

question was vigorously disputed in the High Court (as it was in this Court) and in those

circumstances, something more than a conclusionary statement was required.

57. It follows that, even if as a matter of principle any degree of deference ought to be given

by this Court to the High Court’s views on the serious issue question – and as already

noted Mr McGrath appeared to accept that that was not the case - no question of any

58. For my part, I am not persuaded that the Agent has established a serious issue to be

tried to the effect that there is a collateral contract in existence which modifies (and on

the Agent’s argument, radically alters) the EBS’s contractual entitlements under clause

15.1(b). Quite apart from the evident (and significant) inconsistencies in the Agent’s

evidence as to what is alleged to have been said, to whom and when (see para 26

above), I agree with Mr Gardiner that this argument fails in the face of clause 24 of the

59. Mr McGrath places significant reliance on the decision of the Queen Bench Division (Gray

J) in Ryanair Limited v SR Technics Ireland [2007] EWHC 3089 (QB). It appears to me

that that decision (which is not, of course binding on this Court in any event) is clearly

distinguishable, legally and factually. The entire agreement clause was in different terms,

with no provision equivalent to clause 24.2 of the Tied Agency Agreements. Factually, the

collateral contract relied on by Ryanair (which was recorded in a formal and detailed side

letters executed by the parties and other written communications) addressed an issue –

the need for DAA consent to any lease or licence which SRT might grant to Ryanair –

60. Here the collateral contract argument relies on representations/assurances purportedly

made before the execution of the Agency Agreements. However, the whole purpose of

clause 24.2 (which, again, had no equivalent in the Ryanair/SRT contract) is to preclude

any such reliance. Furthermore, unlike the position in Ryanair, the collateral contract

relied on by the Agent cannot properly be characterised as supplemental to the Tied

Agency Agreements; rather it would radically alter Clause 15 (not just clause 15.1 but

61. The Agent next relies on certain contractual terms which, it argues, ought to be implied

into the Tied Agency Agreements. The first such implied term is that the EBS would not

terminate the agreement capriciously or for an improper motive. The second – and

narrower – implied term is to the effect that the EBS would not terminate the Tied Agency

Agreements on the ground that the Agent refused to mis-sell financial products or, as it

was also put, on the basis that the Agent complied with its contractual obligations not to

62. Before addressing the arguments of the EBS as to why no such terms can or should be

implied, I should note that the EBS accepts that the implied term issue is not affected by

clause 28 of the Tied Agency Agreements. In other words, the EBS does not contend that

the entire agreement clause precludes the implication of terms such as those contended

63. What the EBS says forcefully is that these terms do not satisfy the requirements for the

implication of a term set out in the jurisprudence, with particular reference to the decision

of the Supreme Court in Sweeney v Duggan [1997] 2 IR 531. According to the EBS,

neither of these implied terms can be said to be “not merely reasonable but necessary”

(per Murphy J in Sweeney v Duggan at 539). They also argue that such terms cannot be

implied because they would be inconsistent with the express terms of clause 15 and that

they are not capable of being formulated with reasonable precision (criteria also

64. According to the EBS, clause 15.1(b) of the Agreements gives an unqualified power to the

EBS to terminate for any or no reason and the Court has no function to inquire into the

reason(s) for termination in any given case. In answer to a question that I put to him in

the course of oral argument, Mr Gardiner did not shrink from the position that, even if

there was irrefutable proof that the Tied Agency Agreements had indeed been terminated

because the Agent refused to succumb to pressure to mis-sell investment products, it

would no difference to the validity of the termination. Consistently with that position, Mr

Gardiner also resisted any suggestion that evidence of discriminatory motives, such as

racial or religious animus, could be relied upon to impugn a termination on notice

pursuant to clause 15.1(b). The right to terminate on giving twelve months’ notice was,

65. In support of this submission, Mr Gardiner brought the Court to a decision of the Privy

Council, Reda v Flag Ltd [2002] UKPC; [2002] IRLR 747 and a recent decision of the (EW)

Court of Appeal, Ilkerler Otomotiv Sanayai v Perkins Engines Co Ltd [2017] EWCA Civ 183;

183; [2017] 4 WLR 144. In response, Mr McGrath relied on another decision of the (EW)

Court of Appeal, Paragon Finance plc v Nash [2001] EWCA Civ 1466; [2002] 1 WLR 685.

66. I do not consider that it either necessary or appropriate to examine these authorities in

detail. This Court is adjudicating on an interlocutory appeal, not an appeal from the final

determination of these proceedings. It would not be appropriate to determine complex

legal issues at this stage. I will limit myself to observing that, in my opinion, neither the

Privy Council’s decision in Reda nor that of the Court of Appeal in Ilkerler necessarily

forecloses the arguments advanced by the Agent on the implied terms issue.

67. As a general observation, it appears to me that the question of whether or not it is

appropriate to imply a term into a contract depends on an assessment of the nature of

the implied term suggested, consideration of the express terms of the contract and – at

least arguably – the (objective) context in which the contract was entered into and its

(objective) purpose. It follows that I am not convinced that it is possible or appropriate to

read across from the rejection of the implied terms contended for in Reda to conclude

that the implied terms contended for here must necessarily be rejected also. The contract

in Reda was a different form of contract, it appears that the termination clause was in

different terms to the termination clause here, the implied terms contended for were not

the same and the overall context was, it seems to me, quite different also. The same

points may be made regarding Irkerler. In addition, I would observe that the Court of

Appeal in Irkerler did not appear to exclude in principle the possibility of implying a term

(though it agreed with the judge below that the particular terms contended for should be

given “short shrift”) and, further, that the judge below clearly contemplated the possibility

of implying a general good faith term, in reliance on the observations of Yam Seng Pte Ltd

68. It would, in my view, be to go too far to conclude in this interlocutory appeal that

termination of the Tied Agency Agreements cannot in any circumstance be impugned by

reference to what is said to be an improper reason for termination or that the Court

cannot in any circumstance seek to look behind a notice of termination given pursuant to

clause 15.3(b). That may be the conclusion reached at trial but, in my opinion, it is not so

clear that such a conclusion is inevitable that the Court could on this appeal properly

69. I would add that I am not at all convinced that the decision of the Court of Appeal in

Paragon Finance has the import contended for by Mr McGrath. It related to – and

subsequent case law suggests is limited to – the exercise of a unilateral contractual

discretion by one contracting party (there the power vested in the mortgagee to vary the

interest rate payable by the mortgagor). No authority has been opened to the Court that

suggests that a term such as was implied in Paragon Finance can or should be implied

into a contractual provision such as clause 15.1(b) of the Tied Agency Agreements.

70. Yam Seng was considered by the High Court and by this Court in Flynn v Breccia

[2015] IEHC 547 (H Ct); [2017] IECA 74 (CoA). While reversing the High Court’s judgment, this

Court left open the issue of whether it should be followed here. Furthermore, while

endorsing the proposition that there is no general principle of fair dealing and good faith

in Irish contract law and holding that the shareholder agreement was not an agreement of

a type to which any general duty of good faith applied, this Court sensibly did not seek to

identify a priori those categories of contract to which such a duty might apply. There may

be further developments in this area of the law. However, in the course of his

submissions, Mr McGrath made it clear that the Agent was not contending that a duty of

good faith should be implied here. The terms for which he was contending were, he

71. In any event, looking at these issues through the prism of the Supreme Court’s decision

in Sweeney v Duggan, I consider that it is at least arguable that the second (and

narrower) term contended for by the Agent ought to be implied into clause 15.1. of the

Tied Agency Agreements. In other words, I consider that it is arguable that the clause

15.1(b) termination power cannot properly be exercised where the basis for its exercise is

the performance by the Agent of its express contractual obligations under the Agreements

not to engage in mis-selling and its refusal to succumb to pressure to do so exerted on it

by the EBS. That is, of course, sufficient to establish a serious issue to be tried.

72. I will briefly explain why I have come to that conclusion, emphasising the provisional and

qualified nature of what follows. As for the need for such an implied term to be necessary

(and not merely reasonable), it is I think important to avoid any exaggerated

understanding of what this requires. Rarely can a party demonstrate that, absent a

particular implied term, a contract simply cannot operate. That point is made by Lord

Neuberger in his judgment in Marks & Spencer plc v BNP Paribas Securities Services

[2015] UKSC 72; [2016] AC 742 in which, in a passage cited by Haughton J in Wingview,

he suggested that it may be more helpful to express that aspect of the test in terms of a

term being implied only if, without that term, “the contract would lack commercial or

73. Here, given the nature of the contracts at issue, including the express obligations placed

on the Agent, and having regard to the the regulatory context in which they were entered

into and in which they fall to be performed, (which in my opinion is a very significant

consideration), it is arguable that such an implied term is necessary to give business

efficacy to the Tied Agency Agreements or (in the words of Lord Neuberger) to give it a

“commercial or practical coherence”. The tests of necessity and obviousness are often

used interchangeably (as indeed Murphy J in Sweeney v Duggan used them: see at page

540) and, applying the test of obviousness, it is in my opinion arguable that if the fabled

officious bystander had asked the parties in 2011 whether the Agreements could be

terminated (albeit on notice) because the Agent was performing its express contractual

obligations (which of course reflect general obligations imposed by the general law, in the

interests of consumer protection) and resisting pressure to breach those obligations by

mis-selling investment products, the answer would have been a testy “of course not”.

74. As regards the other considerations identified in Sweeney v Duggan, it seems to me

arguable that such an implied term is not inconsistent with or contradictory of clause

15.1(b) but would rather operate as a very limited qualification to it. Lastly, I consider

that it is arguable that such a term can be formulated with sufficient precision.

75. It follows that, in my opinion, the Agent has established a serious issue to be tried that,

as a matter of law, the Tied Agency Agreements could not be terminated on the grounds

that the Agent declined to be pressurised into mis-selling financial products to its

76. Is there an arguable issue that such was the basis for the termination here? In the

absence of any contrary basis having been advanced by the EBS and having regard to the

evidence of Mr Martin, as well as the contents of the Executive Summary considered

above and the EBS’s silence on the “disparity” identified by AIB Group Internal Audit, I

am satisfied that there is. It is only proper to emphasise that this is a low threshold and is

remote from any form of finding that EBS and/or Mr Gleeson actually engaged in the

conduct alleged by the Agent. Any findings on that issue can only be made after a full

77. As regards the wider form of implied term argued for by the Agent (namely a term to the

effect that the EBS would not terminate the Tied Agency Agreements capriciously or for

an improper motive) in light of the conclusion I have just reached on the narrower term,

it is not strictly necessary to address this argument further. I would, however, observe

that the arguments made by the EBS as to why the narrower term ought not be implied

appear to apply with greater force to this wider term. This wider term would not operate

as a limited qualification of clause 15.1(b) but would rather recast it significantly. Further,

though Mr McGrath was careful to disavow any such argument, the implication of any

such term would arguably carry with it a corollary obligation on the EBS to give reasons

for termination (at least if asked) which would involve a further recasting of clause

15.1(b). Any argument that such a term was necessary would also appear to be

considerably more difficult. Nevertheless, if it was necessary to reach a conclusion on this

point, I would have been very reluctant to conclude that this argument did not raise a

78. The Judge considered the issue of the adequacy of damages and the balance of

convenience sequentially. As to the former issue (discussed at para 15 of his Judgment)

he considered that damages would not be an adequate remedy for the Agent. It had

established its business over a period of 17 years and its reputation, and the reputation of

its principals, would be dealt a severe blow if the Agreements were to be permitted to be

terminated pending trial. Lost confidence, the Judge observed, is not easily restored.

Furthermore, the business of the Agent would be “gone” if it was ousted. The case was

not of the kind identified in Curust Financial Services Limited v Loew-Lack-Werk [1994] 1

IR 450 and, similarly, the Judge considered that the decision of the High Court (Laffoy J)

in Relax Food Corporation Limited v Brown Thomas [2009] IEHC 181 was readily

79. As to the balance of convenience, the Judge considered that it clearly favoured granting

the relief sought: paragraph 16 of his Judgment. The Agent was operating the three

branches and there was no suggestion that it was not doing so as before and successfully.

The Judge also noted that the notice of termination mandated the Agent to continue to

operate the branches throughout the notice period (which I take to be a reference to the

fact that the EBS could have, but did not, terminate the Agreements with immediate

effect pursuant to clause 17). The Judge addressed the issue of loss/prejudice to the EBS

under the rubric of the balance of the convenience. In his view, the potential loss averred

to by the EBS was “difficult to fathom” and any postal costs (associated with notices

required to be sent to customers) could be ascertained and compensated in damages. The

Judge expressed puzzlement at the fact that the Agreements between the EBS and the

new agent had been entered into after these proceedings had commenced but in any

event he was of the view that the provisions of those Agreements, and in particular,

clause 16.3, would protect the EBS vis a vis the new Agent in the event that the

80. Before addressing the submissions of the parties on these issues (and I will address

separately the arguments made by the EBS on the issue of delay), it is appropriate to

refer again to the decision of the Supreme Court in Merck Sharp & Dohme Corporation v

Clonmel Healthcare Limited. The plaintiff sought an injunction restraining the sale by the

defendant of a generic equivalent of an anti-cholesterol drug manufactured by the plaintiff

which was protected by a Supplementary Protection Certificate (SPC). The defendant

alleged that the SPC was invalid. An interim injunction was not continued by the High

Court on an interlocutory basis and the Court of Appeal dismissed the plaintiff’s appeal

(Hogan J dissenting). The Supreme Court heard and determined a further appeal by the

plaintiff despite the fact that it was likely (as in fact was the case) that the SPC would

expire before the Court was in a position to give its decision. It was agreed that the Court

would determine the appeal by reference to the position as at the date of the initial

application for an interlocutory injunction in the High Court in April 2018, effectively de

novo, untrammelled by any constraints that might be argued to apply when an appellate

court is invited to review the decision of a trial court on an interlocutory application: para

81. One of the important questions discussed in Merck Sharp & Dohme is whether the issue of

the adequacy of damages is antecedent to or part of the balance of convenience. In O’

“the preferable approach is to consider adequacy of damages as part of the balance

of convenience, or the balance of justice, as it is sometimes called. That approach

tends to reinforce the essential flexibility of the remedy. It is not simply a question

of asking whether damages are an adequate remedy. As observed by Lord Diplock,

in other than the simplest cases, it may always be the case that there is some

element of unquantifiable damage. It is not an absolute matter: it is relative. There

may be cases where both parties can be said to be likely to suffer some irreparable

harm, but in one case it may be much more significant than the other. On the other

hand, it is conceivable that while it can be said that one party may suffer some

irreparable harm if an injunction is granted or refused, as the case may be, there

are nevertheless a number of other factors to apply that may tip the balance in

favour of the opposing party. This, in my view, reflects the reality of the approach

taken by most judges when weighing up all the factors involved.” (at para 35)

82. The reference to Lord Diplock is, of course, a reference to his speech in American

Cyanamid and O’ Donnell J went on to observe that a noteworthy feature of that speech

was his acknowledgement that, save in the simplest cases, both parties will be able to

show some damage that cannot be adequately compensated for in damages. Even if (O’

Donnell J observed) “a very structured and sequential approach is taken, therefore, it is

important to keep in mind that, while the end point of most civil cases is the award of

damages, the interests that the law exists to protect often extend beyond the purely

financial.” (para 36) This is, in my view, a critically important observation, particularly in

83. As to Curust, for many years reliance had been placed on the judgment of Finlay CJ as

authority for the position that damages were to be taken as an adequate remedy for an

applicant for an injunction unless it was shown – as a matter of probability6 – that it was

strictly impossible to quantify such damages. As every practitioner will be aware, very

many injunction applications have fallen at that daunting hurdle. According to O’ Donnell

J., however, the relevant passages from the judgment of Finlay CJ should be understood

in context and should not be understood as establishing a rule of general application that

if damages may be awarded, an injunction must be refused.7 The fact that is possible to

award damages does not preclude the grant of a permanent injunction – even in the

context of a purely commercial transaction, a court may grant damages for a prior breach

of contract and an injunction restraining future breach – and should not be understood as

an absolute bar to the grant of an interlocutory order.8 Damages “are not a perfect

remedy, and cannot be a complete answer to an application for an injunction whether

permanent or interlocutory.9” The key question at interlocutory stage, according to O’

Donnell J, is whether “the remedy in damages can be said to be necessarily

commensurate with any possible injury so as to preclude the possibility of the grant of an

injunction.” 10 O’ Donnell J went on to explain that, where the balance of convenience was

finely balanced, it may be appropriate to have some limited regard to the merits.11

84. At the conclusion of his judgment O’ Donnell J helpfully sets out “the steps which might

“(1) First, the court should consider whether, if the plaintiff succeeded at the trial, a

permanent injunction might be granted. If not, then it is extremely unlikely that an

interlocutory injunction seeking the same relief upon ending the trial could be

(2) The court should then consider if it has been established that there is a fair

question to be tried, which may also involve a consideration of whether the case

will probably go to trial. In many cases, the straightforward application of the

American Cyanimid and Campus Oil approach will yield the correct outcome.

However, the qualification of that approach should be kept in mind. Even then, if

the claim is of a nature that could be tried, the court, in considering the balance of

convenience or balance of justice, should do so with an awareness that cases may

not go to trial, and that the presence or absence of an injunction may be a

6 I confess that I have always been puzzled as to how it could be said that any element of the test for granting an

interlocutory injunction – where, of course, only affidavit evidence will be before the Court and where, accordingly, the

court is not in a position to make any form of factual finding – could require to be established as a matter of probability.

(3) If there is a fair issue to be tried (and it probably will be tried), the court should

consider how best the matter should be arranged pending the trial, which involves

a consideration of the balance of convenience and the balance of justice;

(4) The most important element in that balance is, in most cases, the question of

(5) In commercial cases where breach of contract is claimed, courts should be robustly

(6) Nevertheless, difficulty in assessing damages may be a factor which can be taken

account of and lead to the grant of an interlocutory injunction, particularly where

the difficulty in calculation and assessment makes it more likely that any damages

awarded will not be a precise and perfect remedy. In such cases, it may be just and

convenient to grant an interlocutory injunction, even though damages are an

(7) While the adequacy of damages is the most important component of any

assessment of the balance of convenience or balance of justice, a number of other

factors may come into play and may properly be considered and weighed in the

balance in considering how matters are to be held most fairly pending a trial, and

(8) While a structured approach facilitates analysis and, if necessary, review, any

application should be approached with a recognition of the essential flexibility of the

remedy and the fundamental objective in seeking to minimise injustice, in

circumstances where the legal rights of the parties have yet to be determined.”

85. In my view, Merck Sharp & Dohme effects a significant (and, if I may say so, welcome)

restatement of the appropriate approach to applications for interlocutory injunctions,

mandating a less rigid approach, both generally and with particular reference to the issue

of the adequacy of damages and emphasising that the essential concern of the court is to

regulate matters pending trial pragmatically and in a manner calculated to minimise

86. The Judge here applied the conventional approach of considering adequacy of damages

(at least from the Agent’s point of view) prior to and separate from the balance of

convenience. Rightly, no criticism is made of that approach, according as it did with

general understanding pre-Merck Sharp & Dohme. The Judge is, however, criticised by

the EBS for concluding that damages would not be an adequate remedy for the Agent in

the event that interlocutory injunctive relief was denied and the Agent was successful at

trial. According to Mr Gardiner, damages would be easy to calculate by reference to the

commission that the Agent would have earned in the period between 19 February 2019

and the ultimate High Court decision and, in the event that the Agent succeeded in its

claim, it would be restored to the three agencies, restored to the premises from which

those agencies operated and its reputation (and, so far as relevant, the reputations of its

87. Countering the argument that implementation of the termination of the Tied Agency

Agreements would result in the collapse of the Agent, Mr Gardiner pointed to the paucity

of evidence before the Court as to the financial position of the Agents. In his submission,

there is nothing to stop the Agent from setting up business as financial advisors.

88. It is correct that no financial information regarding the Agent is before the Court. The

Court is therefore unaware of its profitability, financial reserves and so on (though we

were told that the EBS is seeking security for costs in respect of discovery which seems to

imply that it may have an adverse view of the solvency of the Agent). That is rather

unsatisfactory. However, what is clear is that, in the event that the injunctions granted by

the High Court are discharged, the Agent will lose its EBS tied agency business (at least

pro tem) which, the evidence clearly establishes, is in fact its only business. As to its

capacity to develop an alternative business, far from being “ideally placed” to do so (as is

stated at para 54 of the EBS’s submissions to this Court), the reality would appear to be

that the Agent would be left trying to establish such a business without premises (the

premises from which it has traded being the property of the EBS) or staff (because, the

Court is told, it is anticipated that all staff will transfer to the new Agent under the

89. The argument that, if successful at trial, the Agent will simply be restored to the three

agencies also strikes me as simplistic. In the first place – and Mr McGrath made this point

in argument – it is very difficult to reconcile that argument with the contention

simultaneously advanced by the EBS to the effect that relationship between the parties

has broken down to such an extent that the EBS should not be compelled to deal further

with the Agent, even on an interlocutory basis. Secondly, I do not consider that the Court

can or should ignore the fact that, in the event that the injunctions are discharged, that

will immediately lead to a significant change in the status quo. The new Agent takes over

the branches. In the period between now and trial, there may be changes in the nature

and/or level of business being done by those branches. Customers may move their

business elsewhere. There would, in principle, be nothing to prevent the EBS from closing

any of the branches and/or disposing of the premises from which they trade. Even in the

absence of any such step, it will be open to the EBS to argue at trial that, even if some

breach of contract is established, by reason of the circumstances existing at that stage –

such as the fact that the new Agent may by then have been in place for a considerable

time, the impact on staff of another TUPE transfer and so on – the Court should not grant

injunctive relief, but should instead confine the Agent to a remedy in damages.

90. Even if a permanent injunction(s) were to be granted at trial, it would not necessarily

follow that damages assessed on the basis suggested by the EBS (the lost commission

accruing in respect of the period to trial) would adequately compensate the Agent given

that the profile of the agency businesses could alter significantly, and irreversibly, in that

91. Therefore discharging the injunctions would, in my view, give rise to a position where the

status quo is significantly altered and that alteration may significantly prejudice the

position of the Agent in this litigation, not just in the period between now and trial but

92. In this context, it is also relevant that there is, in my opinion, prima facie plausible

evidence before the Court that the Agent’s business is, in substance, a family business in

which Mr Martin and his sister have a particular emotional/familial investment given the

circumstances in which the business was first developed by their mother and her apparent

pioneering role as the first woman to be appointed as a branch agent by the EBS in

Ireland. The position disclosed by the evidence here is, it seems to me, materially

different to the position in O’ Gara v Ulster Bank Ireland DAC where, on the evidence

before him, Barniville J concluded that the assets at issue were effectively purely

commercial assets without any special feature or emotional attachment for the plaintiffs. I

do not think the evidence before this Court leads to that conclusion here. The Judge

attached considerable weight to this factor and in my opinion he was entitled to do so.

93. In these circumstances, I am not satisfied that it can confidently be said the remedy in

damages would, for the Agent, “be necessarily commensurate with any possible injury as

to preclude the possibility of the grant of an injunction.” That is not to say that damages

would not be an available remedy at trial – clearly they would – but rather that the

interests that the Agent is seeking to vindicate in these proceedings extend beyond the

purely financial and, in my view, there is a very real risk that, if the injunctions granted

by the High Court were to be discharged, and if the Agent is successful at trial, an award

of damages at trial in respect of the intervening period will not adequately vindicate those

94. As for the EBS, I am accept that it will suffer uncompensatable damage if the injunctions

are continued and it ultimately succeeds at trial, in that it will in such a scenario have

been restrained, without justification, from exercising its contractual entitlement to

terminate the Tied Agency Agreements and appoint a replacement agent(s) in its stead.

95. It is not suggested that the EBS will suffer any other form of loss or damage if the

injunctions are continued. No case is made that the EBS will be at any

commercial/financial loss if the Agent, rather than Woods Financial Services Limited,

continue to operate the branches between now and a trial. This is perhaps unsurprising as

there has never been any complaint by the EBS of any inadequate performance by the

96. As for wider considerations of the balance of convenience (or balance of justice) the Judge

was firmly of the view that these weighed decisively in favour of granting the injunctions

sought. The Judge is criticised for failing to address the submission made by the EBS to

the effect that it would be wrong to require the EBS to continue to deal with the Agent, in

circumstances where serious (and, on the EBS’ case, unfounded) allegations had been

made by the Agent. The decision of the High Court (Laffoy J) in Relax Food Corporation

Limited v Brown Thomas & Company [2009] IEHC 181 was relied on in support of this

97. I do not think that the Judge overlooked this argument. It is addressed, in substance, in

para 16 of his judgment where he observed that there was no evidence or suggestion that

the Agent was not operating (and/or would not continue to operate) the branches as

successfully as before and where he also observed that the termination notice had

mandated the Agent to continue to operate the businesses during the termination period.

In making that latter observation, the Judge clearly had in mind the fact that clause 17 of

the Tied Agency Agreements gave the EBS the option of terminating under clause 15.2(b)

with immediate effect (subject to the payment of compensation). That option had not

been exercised, thus indicating, in a very concrete way, that the EBS was content to

continue to deal with the Agent during the 12 months’ notice period.

98. Relax Food Corporation must be understood by reference to its particular facts, which (so

far as relevant) were that the plaintiff’s concession traded from the department store

operated by the defendant and operated check-by-jowl with the defendant’s own trading

operations on the third floor of that store. (The fact that the concession agreement had

only 11 months to run was also a significant factor in the decision to refuse the

99. While the EBS was entitled to have this argument considered, as I read his judgment it

was in fact considered by the Judge and rejected by him. I see no basis for taking a

different view. The evidence was that, in the period while the Agent’s complaints were

being investigated by AIB Group Internal Audit, the relationship between the EBS and the

Agent was managed professionally, and no issues arose. That was the position during the

termination period (and, as already noted, the EBS could have elected to pay

compensation in lieu of notice but did not) and, as Mr Gardiner fairly acknowledged before

this Court, in the period of approximately 9 months between the High Court Judgment

100. It is, of course, an imposition on the EBS to be compelled to deal with the Agent as their

agent pending trial, in circumstances where, on their case, the Tied Agency Agreements

terminated last February. I do not mean to underestimate that imposition when I express

the view that the Judge’s conclusion that the balance of convenience favours the granting

of the injunctions sought (and their continuance by this Court) appears to me to be

plainly correct. Albeit that the EBS has to continue to deal with the Agent, the Agent is an

entity whose competence, diligence and/or integrity has never been impugned by the

EBS. There is no reason to believe that the three branches will not continue to operate

successfully pending trial in the event that the injunctions remain in place. On the other

hand, were the injunctions to be discharged, that would have a significant and immediate

adverse impact on the Agent. Its business would be lost, until trial at least. Its capacity to

pursue these proceedings effectively could be undermined. Its relationship with existing

staff would be ruptured. The status quo that has been in place since 2011 (and earlier)

101. The question of delay remains to be considered, however.

102. It is clear that, as a general principle, a party seeking interlocutory relief is bound to

move with reasonable expedition: Nolan Transport (Oaklands) Limited v Halligan

(Unreported, High Court, Keane J, 22 March 1994), followed in Futac Services Limited v

Dublin City Council (Unreported, High Court, Smyth J, 24 June 2003).

103. The EBS complains that no plausible explanation is offered by the Agent for its delay in

seeking interlocutory relief. It will be recalled that the notice of termination was served on

or around 19 February 2018, following which no step appears to have been taken by the

Agent to dispute the termination until December 2018, with a summons being issued (but

not then served) on 7 December 2018 and a pre-action letter being sent on 11 December

104. The Judge expressly addressed the issue of delay in his Judgment, concluding that it

would be unfair and inequitable to refuse the Agent relief on grounds of delay: para 17.

That conclusion is one to which this Court is required to give weight and, notwithstanding

the forceful arguments of Mr Gardiner on this issue, I am not persuaded that that

conclusion was wrong, still less that it was not reasonably open to the Judge.

105. The following considerations appear to me to be relevant in this context:

There was some – albeit limited – evidence from Mr Martin to the effect that he had

been led to understand that the EBS might not act on the second notice.

That might be said to be consistent with the fact that, as I have already observed,

little or nothing appears to have been done by the EBS in the immediate aftermath

Notably, the EBS gave notice to its customers of the termination of the Agent after

The Agreements with the new agent were entered into after the commencement of

these proceedings and after the Agent had brought the injunction application.

106. It is also relevant that, despite the timing of the injunction application, it was possible for

the High Court and hear and determine it before the expiry of the notice period.

107. Having regard to all of these considerations, and allowing that there was delay on the part

of the Agent and also allowing that the Agent has not convincingly explained that delay, I

agree with the Judge that it would not be just or equitable to refuse the injunctive relief

108. At the commencement of the hearing of the appeal, the Court indicated that it was

minded to defer consideration of the EBS’s appeal against the order for costs made by the

Judge. The parties will have an opportunity to address the Court further on that appeal

with the benefit of this Court’s decision on the substantive appeal.

109. For the reasons set out above (at, I fear, excessive length) I would dismiss the EBS’s

appeal against the injunctive relief granted by the Judge (in the terms as varied by him

110. I am very conscious that the effect of the orders made by the Judge, and now upheld by

this Court, is to continue the involuntary relationship between the EBS and the Agent for,

potentially, a significant further period of time. The Court was informed at the hearing of

the appeal that the proceedings are being managed in the Commercial list of the High

Court and accordingly it is reasonable to assume that the proceedings will get on for

hearing with all due dispatch. However, in the event that the EBS considers that the

Agent is guilty of any undue delay, then it will be open to it to apply to discharge the

injunctions. In making that observation, I do not intend to appear to encourage the

bringing of such an application or imply that the Agent will deal with the proceedings in a

way which will give grounds for such an application. It simply reflects the well-established

principle that, where a party has sought and obtained an injunction pending trial, that

party is under a particular duty to take all reasonable steps to ensure a timely trial.

111. Equally, in the event that there is any material change in circumstance which appears to

impact on the continuing operation of the injunctions, it will be open to either party to

bring whatever application appears appropriate arising from that.

112. The EBS’s appeal is accordingly dismissed.

Result: Dismiss appeal

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You are here: BAILII >> Databases >> Irish Court of Appeal >> Betty Martin Financial Services Ltd. v EBS DAC [2019] IECA 327 (18 December 2019) URL: http://www.bailii.org/ie/cases/IECA/2019/2019IECA327.html Cite as: [2019] IECA 327

Irish Court of Appeal