Dealer fails to stop VW terminating contract

A Co Cork Volkswagen main dealer has failed to get an injunction preventing the termination of his dealership as part of a nationwide reorganisation of VW outlets.

Pat O’Leary, who operates from Lissarda, near Macroom, Co Cork, claimed a plan by the car distributors, VW Group Ireland (VWGI), which involves the ending of the dealership he has for 24 years, was not justified and not supported by objective evidence.

He sought a High Court injunction preventing VWGI terminating three dealership contracts pending a full hearing into the move, which he said would do irreparable harm to his business which employs 29.

VWGI opposed the application, claiming there was an “extraordinary delay” by Mr O’Leary in challenging the termination which it says he was notified of more than two years ago. It said the contract has been validly terminated, that an injunction would adversely impact on other VW dealers, and damages will be an adequate remedy if he succeeds in his main action.

Yesterday, Mr Justice Michael Moriarty found that while Mr O’Leary had a bona fide question to be tried, he had not satisfied another test required for an injunction — that he had a case which was likely to succeed at a full trial.

The judge said he may have considerable sympathy for Mr O’Leary and it may be that he establishes at full trial that he had been unfairly treated.

But he had to taken account of previous case law on the granting of injunction in such situations.

He could also not lose sight of arguments made by VWGI, and accepted by Mr O’Leary’s side, that it is for the defendant to decide where to locate its business “even in an improbable location like Sherkin Island.”

During the hearing, the judge was told that the reorganisation of the VW network, cutting the total number of main dealers from 40 to 35, was put forward in 2011. There had been a “catastrophic” 56% fall in car sales nationwide between 2007 and 2011, the court heard.

In a statement yesterday, Mr O’Leary said while he was disappointed, he intended to further contest VW’s plans to reduce their sales offering outside of Cork City.

“O’Leary’s Lissarda is open for business and will continue to serve our Volkswagen customers beyond Cork City and surrounding areas,” he said.


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