The Burke Partnership (a firm) v The Body Shop International Limited
[2023] EWHC 2897 (Ch)
Winkworth Franchising Ltd v Nicholas Goble
17 July 2023
[2023] EWHC 2883 (Comm)
High Court
Winkworth sued Goble for not giving them the right paperwork for their business agreement. The judge said Goble broke the agreement by not giving the papers, so the agreement is over. Another part of the lawsuit about rent was thrown out.
Key Facts
- •Winkworth Franchising Ltd (WFL) sought summary judgment against Nicholas Goble regarding the termination of five franchise agreements (FAs).
- •The FAs, dated 25 October 2002, had a 20-year term, expiring on 25 October 2022, with options for two 10-year extensions.
- •Goble exercised his right to extend, but WFL issued counter-notices (CN1 and CN2) opposing the extension, citing Goble's breaches of contract.
- •The main dispute centered on whether WFL's objections were valid, particularly regarding Goble's failure to provide requested information (accounts, rent receipts) as per the FAs.
- •WFL also claimed termination for repudiatory breach, but this was deemed unsuitable for summary judgment.
Legal Principles
Summary judgment principles under CPR Part 24, as set out in Easyair Ltd v. Opal Telecom Ltd [2009] EWHC 339 (Ch) and AC Ward & Son Ltd v. Catlin (Five) Ltd & Ors [2010] Lloyds Rep IR 301 (Comm).
Easyair Ltd v. Opal Telecom Ltd [2009] EWHC 339 (Ch); AC Ward & Son Ltd v. Catlin (Five) Ltd & Ors [2010] Lloyds Rep IR 301 (Comm)
Material breach requirement for opposing renewal under clause 18.3(a) of the FA and the interpretation of clause 14.12's obligation to provide information.
Franchise Agreement (FA), clauses 14.12, 18.3(a)
Estoppel by convention principles, as established in HM Revenue and Custom Commissioners v. Benchdollar Ltd & Ors [2010] 1 All ER 174, Stena Line Ltd v. Merchant Navy Ratings Pension Fund Trustees Ltd [2010] Pens LR 411, and Tinkler v. Revenue & Customs [2022] AC 886.
HM Revenue and Custom Commissioners v. Benchdollar Ltd & Ors [2010] 1 All ER 174; Stena Line Ltd v. Merchant Navy Ratings Pension Fund Trustees Ltd [2010] Pens LR 411; Tinkler v. Revenue & Customs [2022] AC 886
Interpretation of contractual clauses, particularly clause 5.6(b) regarding the production of rent receipts.
Franchise Agreement (FA), clause 5.6(b)
Application of Lombard North Central Plc v. Butterworth [1987] QB 527 principles regarding the interpretation of contractual clauses.
Lombard North Central Plc v. Butterworth [1987] QB 527
Bairstow Eves (Securities) Ltd v. Ripley (1993) 65 P & CR 220 regarding the enforcement of leasehold covenants.
Bairstow Eves (Securities) Ltd v. Ripley (1993) 65 P & CR 220
Outcomes
Summary judgment granted to WFL.
Goble's failure to provide accounts within the required timeframe constituted a material breach of clause 14.11 and 14.12 of the FA, thus entitling WFL to oppose the extension under clause 18.3(a). The estoppel argument did not change this outcome.
Clause 5.6(b) breach claim rejected.
The court interpreted clause 5.6(b) to require the production of existing rent receipts, not the procurement of alternative proof of payment. Since no receipts existed, this claim failed.
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