| 3.8°C Dublin

Car retailer loses appeal over 2013 termination of Cork VW dealership


Stock picture

Stock picture

Getty Images/iStockphoto

Stock picture

A car dealer has lost his appeal over the termination of his Volkswagen dealership seven years ago as part of a nationwide reorganisation of the company's outlets.

The reorganisation reduced the number of Volkswagen dealers following what the company described as a "catastrophic" fall in overall car sales, from 186,000 in 2007 to 79,000 in 2012.

Volkswagen Group Ireland (VGI) had terminated all existing dealerships and invited them to re-tender for a dealership contract in whatever area they thought fit, with VGI ultimately deciding between ideal and non-ideal locations.

Pat O'Leary, a main dealer based in Lissarda near Macroom in Cork, took High Court proceedings.

He claimed notices sent by VGI to him in 2011, giving two years' notice that three contracts held with it would be terminated with effect from April 30, 2013, were invalid. O'Leary's of Lissarda had been selling VW and Audi vehicles since 1989, employing 30 people, and a new 3,500 sq ft showroom was built in 2002, following a new EU regulation permitting motorists to take their cars to any garage for servicing.

In judgments in 2016 and 2017, the High Court found breach of a requirement set out in contracts of 2003 to give "detailed, objective and transparent" reasons in the termination notice.

However, Mr Justice Donald Binchy declined to declare the termination of contracts was unlawful and said damages were the appropriate remedy for breach of contract.

Both sides appealed over various findings of the High Court.

Giving the three-judge Court of Appeal judgment yesterday, Ms Justice Caroline Costello dismissed Mr O'Leary's appeal and allowed VGI's cross-appeal over various findings.

The judge concluded the 2011 notices gave detailed, objective and transparent reasons for termination of the contracts, and were valid notices in compliance with the 2003 contracts.

Irish Independent