Stone & Anor (t/a Tyre 20) v Fleet Mobile Tyres Ltd

Stone & Anor (t/a Tyre 20) v Fleet Mobile Tyres Ltd

The claimant's deductions from eTyres sales exceeded the contractual 6% and were not justified by the agreement; eTyres work was part of the franchised business and sales were to customers, not the franchisor. The claimant's branding instructions substantially impeded the franchisee's rights to promote the Fleet Mobile Tyres brand, amounting to a repudiatory breach. The defendants were entitled to accept the repudiation and were discharged from further obligations under the restrictive covenant.

Parties
Claimant/respondent: Fleet Mobile Tyres Limited; Defendant/appellant: Jeffrey Stone; Defendant/appellant: Lynn Ashwell (trading as “Tyre 20”)
Jurisdiction
England and Wales
Judgment Date
31 August 2006
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed; judgment for defendants on claim and counterclaim; injunction discharged; quantum to be determined at first instance.
Legal Topics
Repudiatory Breach, Restraint of Trade, Restrictive Covenants, Derogation From Grant, Franchise Agreements, Contract Construction
Contract Law Commercial Law Franchise Law Repudiatory Breach Restraint of Trade Restrictive Covenants Derogation From Grant Franchise Agreements +1 more

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Parties

Fleet Mobile Tyres Limited

Claimant/respondent

Jeffrey Stone

Defendant/appellant

Lynn Ashwell (trading as “Tyre 20”)

Defendant/appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the claimant wrongfully deducted sums from franchisee's gross sales in breach of the franchise agreement
  2. 2 Whether the claimant's instructions regarding branding and livery constituted a substantial derogation from grant and breach of contract

Ratio Decidendi

The claimant's deductions from eTyres sales exceeded the contractual 6% and were not justified by the agreement; eTyres work was part of the franchised business and sales were to customers, not the franchisor. The claimant's branding instructions substantially impeded the franchisee's rights to promote the Fleet Mobile Tyres brand, amounting to a repudiatory breach. The defendants were entitled to accept the repudiation and were discharged from further obligations under the restrictive covenant.

Court Disposition

Appeal allowed; judgment for defendants on claim and counterclaim; injunction discharged; quantum to be determined at first instance.

Orders

  • Injunction imposed by the judge discharged
  • Defendants entitled to sums wrongfully retained and to an account thereof