The former operator of a Spar supermarket and his solicitor wife are entitled to a full hearing of their claims against franchise owners, the High Court ruled. They claim the Spar franchise owners misrepresented to them how long personal guarantees on a credit agreement for supply of goods would operate.
BWG Foods Unlimited Company sued Sean and Bernadette Glynn claiming they had provided personal guarantees on any debts their Spar store could run up.
Mr Glynn operated as a Spar franchisee in Unit 1, Bluebell Woods, Oranmore, Co Galway for 12 years from 2005. His wife operated her solicitor’s practice next door. They were both directors of a company called Glynnco Ltd.
In February 2017, Glynnco ceased trading and owed €63,000 for goods supplied. In 2020 BWG, owners of the Spar franchise, issued proceedings over the debt and in 2023 the Circuit Court granted summary judgment against the Glynns for €63,655.
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The Glynns appealed to the High Court where Mr Justice Conleth Bradley set aside the Circuit Court order. The judge said there was a fair or reasonable probability of the Glynns having a real or bona fide defence to the BWG claim.
BWG had argued that the Glynns, as directors of their company, signed personal guarantees shortly after signing a trading/credit agreement for supply of goods and therefore summary judgment should be entered against them.
The Glynns said the trading/credit agreement was a stand-alone contract to supply goods and not conditional on them signing personal guarantees.
BWG did not refer to a personal guarantee requirement before, or at the time of, the signing of the trading/credit agreement on April 1st, 2005, they said.
They said that three days later Seán Carter of BWG came to their home following a query from Ms Glynn as to why personal guarantees were sought at this late stage.
The judge said Mr Carter stated it was for only a short while as the store was a start-up business with no credit rating.
The Glynns argued they had been assured by Mr Carter the guarantees were for a short period only, namely two-three years, and that was the basis on which they signed them.
They also signed a corrected personal guarantee the following April 11th after Mr Carter returned to say there had been an error as the Glynns, in the first document, guaranteed to pay their own debts rather than those of their company.
The Glynns contended the personal guarantee was obtained by alleged misrepresentation from Mr Carter concerning them being needed for only a short while for a start-up business.
Mr Justice Bradley said some matters would need to be determined at a full hearing. These include that there was a prospect that some material support for the Glynns’ case could emerge if the case proceeded to a full trial in the Circuit Court with oral evidence.
These matters included that the trading/credit agreement they signed did not contain any express reference to the requirement for a personal guarantee.
The judge said he was prepared to set aside the Circuit Court order and return it to that court for full hearing.
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