Supermac's Ireland Ltd. v. Katesan (Naas) Ltd.

Factual and Procedural Background

In November 1997 the parties executed two documents styled “Headings of Agreement” under which Company A (franchisor) was to purchase six restaurant premises and associated business assets from Company B (franchisee) for a composite price of £4 million. Five of the six sales were later completed; the sixth, involving premises in The City of Naas, remained outstanding.

On 22 May 1998 the Plaintiffs (Company A and its controlling shareholder, “Plaintiff”) issued High Court proceedings seeking specific performance of the alleged composite contract. Before delivering a Defence, the Defendants (Company B and its principal, “Defendant”) brought a motion dated 10 October 1998 to strike out the claim and vacate a lis pendens, contending that the action was unsustainable and an abuse of process. Judge [Last Name] (High Court) refused the motion on 15 March 1999. The Defendants appealed. The Supreme Court (Judges Geoghegan, Hardiman and Denham) heard the appeal and delivered judgment on 7 June 2000, dismissing the appeal and affirming the High Court order.

Legal Issues Presented

1. Whether, in the exercise of the Court’s inherent jurisdiction, the specific-performance action should be struck out as frivolous, vexatious or an abuse of process.
2. Whether the absence of express agreement on a deposit, completion date and vacant possession meant that no concluded contract existed between the parties.
3. Whether the alleged agreement was unenforceable for want of a sufficient written note or memorandum under the Statute of Frauds.
4. Whether acts of part performance could, in any event, take the agreement outside the Statute of Frauds at this procedural stage.

Arguments of the Parties

Defendants’ Arguments

• No concluded contract existed because the parties never agreed (a) the amount of the deposit, (b) a completion date, or (c) arrangements for obtaining vacant possession of the Naas premises.
• Even if an oral agreement existed, it is unenforceable because neither of the November documents constitutes a sufficient memorandum: only the first document is signed (by the Mediator), the second is unsigned, and neither records an agreed deposit.
• The correspondence between solicitors was consistently marked “subject to contract,” demonstrating an intention that no binding agreement would arise until formal contracts were executed.
• Accordingly, the proceedings are obviously unsustainable and should be struck out under the Court’s inherent jurisdiction.

Plaintiffs’ Arguments

• The November 1997 documents evidence a concluded composite agreement; the absence of an express deposit term is not fatal, and a reasonable deposit (or no deposit) can be implied.
• The documents, singly or read together, constitute a sufficient memorandum signed by an authorised agent (the Mediator) for Statute of Frauds purposes; any later variation can be proved by oral evidence.
• Completion of five of the six transfers, payment of purchase monies, and delivery of business assets amount to part performance, removing the agreement from the Statute even if the memorandum were deficient.
• Whether a deposit was essential, or the Naas tenant an impediment, are factual issues requiring oral evidence; therefore the high threshold for summary strike-out is not met.

Table of Precedents Cited

Court's Reasoning and Analysis

The Supreme Court began by reaffirming the stringent standard for exercising the inherent jurisdiction to strike out: the Court must be “confident” that the plaintiff’s case is inevitably doomed, regardless of what evidence may emerge at trial.

Applying Jodifern v Fitzgerald, the Court held that the motion confronted multiple disputed factual issues—most notably whether the parties intended a deposit at all, the status of the completion date, and the implications of the vacant-possession problem. Such disputes require oral evidence and cannot be resolved on affidavit.

On the deposit issue, the Court distinguished Boyle v Lee, noting that in that case the parties had expressly agreed a deposit would be paid but left its amount open, whereas here the evidence permits several alternative inferences, including that no deposit was contemplated. Because other authorities (Black v Kavanagh, Barrett v Costelloe) recognise situations in which a contract may be complete without a deposit term, the claim could not be labelled hopeless.

Regarding completion dates and vacant possession, the Court noted the established principle (Simpson v Hughes) that, absent agreement, the law implies completion within a reasonable time. Evidence also suggested that a monetary adjustment was contemplated if vacant possession of the Naas premises were delayed, further undermining the Defendants’ “no agreement” argument.

On the Statute of Frauds point, the Court accepted—solely for interlocutory purposes—that the Mediator signed as Defendants’ agent. Whether the first document alone, or both documents read together, satisfy statutory requirements was deemed a matter for trial, especially in light of the possibility that an oral agreement existed and the second document represented merely an agreed variation (McQuaid v Lynam).

Finally, the Court found that completion of five of the six property sales, transfer of equipment, and payment of monies constituted arguable acts of part performance, further militating against summary dismissal.

Holding and Implications

Appeal dismissed; High Court order refusing to strike out the proceedings affirmed.

The Plaintiffs’ specific-performance action may proceed to trial. The decision underscores the high threshold for striking out proceedings under the Court’s inherent jurisdiction and clarifies that the absence of an express deposit clause, completion date, or immediate vacant possession does not necessarily negate the existence of a concluded contract. No new legal test was created, but the judgment reinforces a cautious, evidence-based approach to summary termination of contract actions.