The Court of Appeal rejected the plaintiffs’ argument that a general principle of good faith implied a restriction on Breccia’s ability to enforce a sale of Benray’s shareholding in Blackrock Hospital Ltd.
In a judgment delivered on 8 March 2017, Mr Justice Gerard Hogan agreed with the principal judgment of Ms Justice Finlay Geoghegan that there was no basis to imply the term sought by the plaintiffs. They argued that, as promoter, Breccia could not enforce the sale other than in accordance with clauses 3.4.3 and 3.4.5 of a shareholders’ agreement.
The appeal judgment did not decide whether Irish contract law contains a general principle of good faith beyond recognised examples, including insurance, suretyship and partnership. Mr Justice Hogan said that question was unnecessary to resolve because, even if such a general principle existed, it would not support the implied term sought in this case.
In discussing the broader question, Mr Justice Hogan referred to existing doctrines and decisions that may correspond, at least approximately, to aspects of good faith. These included rules against misrepresentation, self-induced frustration of a contract, sharp practice, and equitable doctrines such as unconscionability and clean hands. He also noted that common law development tends to proceed incrementally through cases.
The judgment cited examples from Irish and other common law decisions, as well as the UNIDROIT Principles and continental civil codes. Those observations were not a determination that Irish law recognises a general contractual duty of good faith. The court’s conclusion was limited to the plaintiffs’ appeal argument: the proposed principle, even if assumed to exist, did not imply the restriction they sought.
The supplied judgment excerpt records Mr Justice Hogan’s agreement with the principal judgment. It does not set out the full operative order or the principal judgment’s complete reasoning.