Will Hard Rock case stop rolling through Jersey courts after more than a decade?

Tuesday 07 May 2024

A company claiming it entered a franchise deal to run a Hard Rock Cafe in the Cayman Islands on the base of misrepresentations about the likely profitability of the business has lost its case in Jersey's Court of Appeal.

In a dispute which has been running in the Jersey courts for more than a decade, HRCKY Limited failed to persuade the Court of Appeal that it was the victim of an injustice over its agreement with Hard Rock Limited to run the Cayman Islands franchise.

The company had entered into an agreement in 1999 but it was terminated by Hard Rock 14 years later for alleged defaults, including a failure to make franchise payments. Hard Rock was awarded damages of $90,000 in 2013.

HRCKY made a counterclaim, alleging they had entered into the agreement on the basis of misrepresentations made by Hard Rock, an argument rejected by the Royal Court.

Last month, Lord Anderson of Ipswich, Jeremy Storey KC, and the Bailiff of Guernsey Sir Richard McMahon sat to hear an appeal against that decision.

Kevin Doyle, who represented the company in person, offered nine grounds of appeal, arguing that indications given by Hard Rock of the likely profitability of the business given before the agreement was signed were unrealistic, and that the company "knew that all [Hard Rock] restaurants were losing money, and the [Cayman] restaurant never could be profitable"

Central to the appeal was the question of whether 'dol par réticence' – under French civil law, the withholding of information that a person has an obligation to reveal – applied in Jersey law to the franchise agreement.

Giving judgment, the court said: "Our conclusion... is that the Royal Court was right to conclude that dol par réticence did not apply to enable HRCKY to treat the franchise agreement as a nullity.

"For the purposes of determining this appeal, we do not need to decide whether this principle applies to all Jersey law contracts, but our conclusion that it does not apply to this particular relational contract inevitably means that we agree with the [Royal Court's] conclusion."

Dismissing the appeal, the court said it was minded to order that HRCKY should pay Hard Rock's costs on the standard basis and invited any written submissions on costs to be lodged within 14 days of its judgment.

READ MORE...

Claim that company was misled about Hard Rock profitability rejected (2023)

Hard Rock Case: deliberate concealment “plain as a pikestaff” (2022)

Hard Rock case "immensely important" for Jersey contract law (2019)

Final note sounds in Hard Rock court case (2018)

Hard Rock court case rumbles on (2017)