PSG Franchising Ltd v Lydia Darby Ltd [2012] EWHC 3707 (QB) (20 December 2012)

PSG Franchising Ltd v Lydia Darby Ltd [2012] EWHC 3707 (QB) (20 December 2012)

Clause 18.3.1 is limited to prohibiting competition within the defined Territory, is reasonable in scope and duration, and remains binding until 31 August 2013 by virtue of the deed of surrender. The claimant is entitled to an injunction to enforce the covenants, subject to any competition law defence.

Citation
[2012] EWHC 3707
Parties
Claimant: PSG Franchising Limited; Defendant: Lydia Darby Limited; Defendant: Lydia Victoria Darby; Defendant: David George Darby
Jurisdiction
England and Wales
Judgment Date
20 December 2012
Procedural Posture
High Court Civil Claim (queen's Bench Division) / Preliminary Issues Determination (interlocutory)
Outcome
Injunction granted in favour of the claimant, covenants enforceable until 31 August 2013 or further order.
Legal Topics
Post Termination Restraints, Reasonableness of Covenants, Construction of Franchise Agreements, Injunctions, Enforceability of Restrictive Covenants
Contract Law Franchise Law Restrictive Covenants Post Termination Restraints Reasonableness of Covenants Construction of Franchise Agreements Injunctions Enforceability of Restrictive Covenants

Case Brief

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Parties

PSG Franchising Limited

Claimant

Lydia Darby Limited

Defendant

Lydia Victoria Darby

Defendant

David George Darby

Defendant

Procedural Posture

High Court Civil Claim (queen's Bench Division) / Preliminary Issues Determination (interlocutory)

Legal Issues

  1. 1 Proper construction of post-termination restrictive covenants in a franchise agreement
  2. 2 Whether the covenants are reasonable and enforceable at common law
  3. 3 Whether the covenants expired prior to the deed of surrender or remain binding until 31 August 2013

Ratio Decidendi

Clause 18.3.1 is limited to prohibiting competition within the defined Territory, is reasonable in scope and duration, and remains binding until 31 August 2013 by virtue of the deed of surrender. The claimant is entitled to an injunction to enforce the covenants, subject to any competition law defence.

Court Disposition

Injunction granted in favour of the claimant, covenants enforceable until 31 August 2013 or further order.

Orders

  • Defendants restrained from providing property search reports to customers with an address within the specified Milton Keynes post codes until 31 August 2013 or further order.
  • Defendants restrained from soliciting business from any person who was a customer of or in the habit of dealing with the first defendant during the period from 1 September 2011 to 31 August 2012 until 31 August 2013 or further order.