Family firm secures temporary order preventing termination of alleged agreement with Flogas

A small family company involved in the distribution of liquid gas is entitled to an injunction preventing the termination of an agreement it says it has with Flogas pending the full hearing of a High Court dispute over the matter, a judge ruled.

Benson Fuels Ltd, distributor of Flogas products in south Wexford and Wexford Town, has brought proceedings against Flogas Ireland Ltd claiming the defendant was not entitled to terminate an “authorised retail & filling distribution arrangement” between the parties, effective from April 30th, 2023.

Flogas claims that upon the expiry of a written agreement, in September 2021, the contractual relationship between the parties ended.

After that they transacted between each other on an “orders placed basis”, it says. Flogas says 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.

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Benson asked the High Court for an injunction restraining the termination of the alleged agreement pending the full hearing of its case. Flogas opposed the application.

Mr Justice Rory Mulcahy granted an injunction but said it should be clear that he was influenced by the fact that an early trial of the full action could be accommodated.

Benson had made clear that it would facilitate such an early trial, he said. If an early trial proved impossible, or Benson delayed in progressing the case, Flogas could apply to discharge the injunction, he said.

In his judgment, Mr Justice Mulcahy said Benson had 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.

The judge said the company was profitable and there was no suggestion that it had failed properly 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 per cent of the market and it would be difficult to find an alternative supplier, it is claimed.

In his decision on the injunction, Mr Justice Mulcahy said he was satisfied Benson had established a serious issue to be tried.

He did not think there was any basis, in the absence of any detail of significant financial loss, to conclude that Benson’s undertaking as to damages (if it loses the case) provided was worthless. Benson’s undertaking as to its ability to pay damages must be considered to be of substance, he said.

The arrangement between the parties had, historically, been a successful one, he said.

Even if a new direct distribution model proposed by Flogas ultimately proved to be more successful, 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, he said.