Murphy & Ors -v- Gowan Distributors Ltd [2011] IEHC 126 (5 April 2011)

Murphy & Ors -v- Gowan Distributors Ltd [2011] IEHC 126 (5 April 2011)

The Murphy brothers, as guarantors, are liable for all arrears of rent and service charges due under the sublease up to the expiry of the dealership agreement on 31 May 2010, but not thereafter. Their obligation to take up a new lease after Westland's liquidation is limited to the unexpired term ending 31 May 2010. There was no bad faith or actionable misrepresentation by Gowan. The outside investors are not liable as guarantors.

Citation
[2011] IEHC 126
Parties
Applicant (2009 1834 S), Respondent (2009 4983 S): Finbar Murphy; Applicant (2009 1834 S), Respondent (2009 4983 S): Enda Murphy; Applicant (2009 1834 S), Respondent (2009 4983 S): Stephen Murphy; Applicant (2009 1834 S), Respondent (2009 4983 S): Ronan Murphy; Applicant (2009 1834 S), Respondent (2009 4983 S): Chris Giblin; Applicant (2009 1834 S), Respondent (2009 4983 S): Patrick Doyle; Respondent (2009 1834 S), Applicant (2009 4983 S): Gowan Distributors Limited
Jurisdiction
Ireland
Judgment Date
05 April 2011
Procedural Posture
Civil (commercial/contract/guarantee) / High Court Judgment
Outcome
Partially in favour of Gowan Distributors Limited; Murphy brothers liable as guarantors for arrears up to 31 May 2010 and for a new lease for the unexpired term; outside investors not liable as guarantors.
Legal Topics
Personal Guarantees, Lease Agreements, Dealership Agreements, Termination of Contracts, Misrepresentation, Bad Faith, Contra Proferentem, Primary Liability
Contract Law Commercial Law Landlord and Tenant Law Guarantee Law Personal Guarantees Lease Agreements Dealership Agreements Termination of Contracts +4 more

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Parties

Finbar Murphy

Applicant (2009 1834 S), Respondent (2009 4983 S)

Enda Murphy

Applicant (2009 1834 S), Respondent (2009 4983 S)

Stephen Murphy

Applicant (2009 1834 S), Respondent (2009 4983 S)

Ronan Murphy

Applicant (2009 1834 S), Respondent (2009 4983 S)

Chris Giblin

Applicant (2009 1834 S), Respondent (2009 4983 S)

Patrick Doyle

Applicant (2009 1834 S), Respondent (2009 4983 S)

Gowan Distributors Limited

Respondent (2009 1834 S), Applicant (2009 4983 S)

Procedural Posture

Civil (commercial/contract/guarantee) / High Court Judgment

Legal Issues

  1. 1 Whether the Murphy brothers as guarantors are liable for rent under the sublease after the dealership agreement expired or was terminated.
  2. 2 Whether Gowan acted in bad faith or made misrepresentations sufficient to void the guarantees.
  3. 3 Whether the outside investors have liability as guarantors.

Ratio Decidendi

The Murphy brothers, as guarantors, are liable for all arrears of rent and service charges due under the sublease up to the expiry of the dealership agreement on 31 May 2010, but not thereafter. Their obligation to take up a new lease after Westland's liquidation is limited to the unexpired term ending 31 May 2010. There was no bad faith or actionable misrepresentation by Gowan. The outside investors are not liable as guarantors.

Court Disposition

Partially in favour of Gowan Distributors Limited; Murphy brothers liable as guarantors for arrears up to 31 May 2010 and for a new lease for the unexpired term; outside investors not liable as guarantors.

Orders

  • Murphy brothers to pay all arrears of rent and service charges due up to 31 May 2010.
  • Murphy brothers to execute a new lease for the unexpired term ending 31 May 2010 if required by Gowan.