A franchisee operating a Spar premises in Cloghan, Co Offaly had sufficient interest in the premises to seek revival of wine, beer and spirits off-licences, the High Court has ruled.
Mr Justice Meenan delivered the judgment on 8 July 2020 in a consultative case stated under section 52(1) of the Courts (Supplemental Provisions) Act 1961. The District Judge asked whether the franchise agreement gave Galfer Filling Station Limited sufficient estate or interest in the premises, and whether its lawful occupation under the agreement entitled it to apply for a licence in its sole name.
The court said the company’s interest arose from its franchise agreement with Triode Newhill Cloghan Limited. The agreement allowed it to use the premises to conduct the specified business, required it to pay outgoings and insurance, and restricted its ability to transfer the agreement without the licensor’s written consent. It set a ten-year term from 27 May 2018, subject to earlier termination for failure to comply with its terms after written notice and a 14-day period to remedy the failure.
One clause required the applicant, if asked, to acknowledge in writing that it had no estate, rights or entitlements in the premises. The judge said that clause pointed against the company having the interest needed for a licence, but noted that it had not been asked to give such an acknowledgement.
Other terms indicated more than a bare permission to use the premises, the judgment said. The fixed term restricted the licensor’s ability to end the agreement, while the transfer restriction suggested there was something tangible to transfer. The judge concluded that, although the company was not described as a tenant, it had a clear entitlement to occupy the premises.
The judgment considered an earlier Court of Appeal decision concerning franchise arrangements and licensing requirements. In that case, the court had left open whether a franchise agreement could amount to more than a bare licence, or whether lawful occupation short of a lease or tenancy could suffice for an application in the franchisee’s own name. Mr McDonagh, for the applicant, argued that the present case raised those questions directly.
The notice party, Superintendent Patrick O’Callaghan, took a neutral position on the answers. No person had objected to the application before the District Court, where the necessary statutory proofs had been adduced.
The High Court answered “yes” to both questions referred. It held that the agreement provided sufficient estate or interest to allow the District Judge to grant the application to revive the licences in the franchisee’s name. The judgment answered the referred questions; it did not itself state that the District Judge had granted the licence revival.