Benson Fuel Ltd is a small family business involved in the distribution of liquid gas in south Wexford and Wexford town under a contract with Flogas Ireland Ltd. It has been a long-standing business relationship under contract which was renewed from time to time.
Flogas sought to terminate the contract under the terms of the last agreement entered between the parties as it wanted to establish a new direct distribution model. Flogas claimed that upon the expiry of a written agreement, in September 2021, the contractual relationship between the parties ended. After that they claimed that they would transact business between each other on an “orders placed basis”. Flogas claimed that there was no obligation on it to give any notice of termination at all and, alternatively, a nine-month notice period given to Benson was reasonable in all the circumstances.
Benson sought from the High Court an injunction restraining the termination of the alleged agreement pending the full hearing of its case. Flogas opposed the application.
Benson has two full-time employees, David Benson and his nephew, Alan Benson jnr. The business was set up by Alan Benson snr in and around 1978 and has been distributing propane and LPG in the south Wexford area since about 1982. Benson was a profitable company and there was no suggestion that it had failed to perform its obligations as exclusive distributors.
The arrangement with Flogas accounts for about two-thirds of Benson’s revenue. David Benson believes the company would have to enter liquidation if the distribution arrangement with Flogas is terminated. Flogas and Calor Gas hold 90% of the market and it would be difficult to find an alternative supplier, it was submitted to the court.
The judge considered whether damages would prove an adequate remedy should the plaintiff succeed in its action or whether an injunction was merited at this stage.
The judge did not think there was any basis, in the absence of any detail of significant financial loss, to conclude that the undertaking as to damages (if it loses the case) provided by Bensons was worthless. Benson’s undertaking as to its ability to pay damages had to be of substance.
The judge ruled that he was satisfied Benson had established a serious issue to be tried.
In his decision on the injunction, the judge ruled that the balance of convenience supported the grant of an injunction for a short period restraining the defendant from terminating the existing arrangements pending the trial of the action.
Benson Fuels Limited v. Flogas Ireland Limited [2023] IEHC 214.
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