Financial services firm secures injunction against EBS

A financial services company has secured a High Court injunction preventing EBS from terminating an agency agreement to operate three of the building society's branches. The injunction applies until the full legal dispute has been resolved.

The injunction was granted on Wednesday by Mr Justice John Jordan to Betty Martin Financial Services Ltd, which under an agency agreement operates EBS branches in Athlone Co Westmeath, Longford and Lucan in Dublin.

BMFS claimed the agreement, which it has operated for many years, was terminated over its refusal to engage in the mis-selling of financial products to customers.

EBS denies the claims. In his decision, Mr Justice Jordan said, while EBS’s denial of the mis-selling claims is “robust”, he was driven to the conclusion the allegations are a serious issue that will feature in the full hearing of the dispute.

These allegations. the judge said, “were not lacking in detail” and the court was not prepared to dismiss them as not deserving of a full hearing and determination.

The judge said EBS had claimed BMFS’s complaint about alleged mis-selling only materialised after BMFS was informed the building society was terminating the agency agreement in May 2017.

However the judge said he was not satisfied that the complaints came as “a bolt from the blue” to EBS.

The judge said that no reason had been given by EBS as to why the agreement with BMFS had been terminated.

The judge said that from what was put before him, it appeared EBS had simply decided to oust BMFS from three successful branches and replace it with a new agent so the business would continue as normal.

“Move along, I am being told, there is nothing to see here,” the judge said.

The agreements, he said, do contain a clause concerning termination without a reason being given.

That, he said, did not negate the need for the court to look for some reason or explanation given the claims advanced by BMFS for the proposed termination of the agreement.

The judge said that he could not find any reason for the proposed termination other than those advanced by BMFS.

Mr Justice Jordan said while he was not deciding the issue he was satisfied that BMFS had made out a serious issue to be tried, that damages would not be an adequate remedy, and the balance of justice favoured the granting of the injunction.

Mediate

The judge, noting that the two sides had worked together for some years, also suggested that the parties seek to mediate their dispute.

He asked if the parties were committed to doing business in accordance with the regulatory requirements that exist then “what possible obstacle stands in the way of both sides starting on a new page, even if some compromise is required.”

If the business relationship could be salvaged, it might help restore the public’s trust and confidence in banks and financial institutions, he added.

The judge said while that may be “a high-minded and naive recommendation on my part” it was something he urged of both parties.

He said BMFS was founded by Betty Martin, who died in 2014 aged 58.

One thing was clear, the judge said, she was quite an extraordinary woman of great ability, energy and integrity.

As a woman in a male-dominated financial industry, she had broken the mould in setting up the businesses at the core of the dispute.

BMFS brought proceedings seeking an injunction aimed at preventing EBS DAC from terminating their agreement – known as a tied agreement – to operate the three branches

Another financial services entity was due to take over the operation of the EBS branches later this month.

BMFS, represented by Declan McGrath SC and Keith Farry BL, had argued the purported termination is invalid, was done for no good reason, and will result in the collapse of BMFS’s business.

The company is now run by Mrs Martin’s children Declan and Sheila.

The case has been adjourned for two weeks.