Vavasour v O'Reilly and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 28 January 2005
• Neutral Citation: [2005] IEHC 16
• Docket Number: [No. 859 P/1993]
• Court: High Court
• Date: 28 January 2005

Vavasour v O'Reilly

BETWEEN

WILLIAM PEARSE VAVASOUR

PLAINTIFF

AND

PATRICK MICHAEL O'REILLY AND WINDSOR MOTORS LIMITED

AND

BY ORDER

WINDSOR RENT A CAR LIMITED

DEFENDANTS

[2005] IEHC 16

[No. 859 P/1993]

THE HIGH COURT

CONTRACT

Terms

Implied terms - Franchise - Whether signatories to franchise agreement contracting personally or on behalf of company - Breach of contract - Compensation - Damages - Calculation - Appropriate basis for calculation - Loss of opportunity - Philp v Ryan (Unreported, Supreme Court, 16/12/2004) considered - Plaintiff awarded ú43,903 plus Courts Act interest as damages for breach of contract (1993/859P - Clarke J - 28/1/2005) [2005] IEHC 16

Vavasour v O'Reilly

EMPLOYMENT

Termination

Terms - Implied terms - Whether implied term that plaintiff's employment would not be terminated as long as franchise agreement subsisted - Whether termination unlawful - Breach of contract - Sweeney v Duggan [1997] 2 I.L.R.M. 221 applied - Termination of employment held not to be unlawful (1993/859P - Clarke J - 28/1/2005) [2005] IEHC 16

Vavasour v O'Reilly

The plaintiff’s contract of employment with the third named defendants was terminated in 1993 by reason of redundancy. Prior to that termination, Holiday Autos, a company based in the United Kingdom appointed the third named defendant as agent of its inward business. The plaintiff contended that Holiday Autos subsequently entered into a franchise agreement regarding outward business with the plaintiff personally and the first named defendant personally. Following the termination of the plaintiff’s employment he instituted proceedings claiming damages for breach of his contract of employment and breach of that franchise agreement. In support of that claim, the plaintiff contended that there was an implied term that his contract of employment with the third named defendant would not be terminated as long as the franchise agreement remained in place.

Held by Clarke J. in awarding damages to the plaintiff by way of compensation for breach of contract:

1. That the benefit of the franchise agreement, which provided for the granting of the outward business of Holiday Autos within Ireland was conferred upon the plaintiff and the first named defendant personally.

2. That an agreement existed between the plaintiff and the first named defendant that they would jointly operate the franchise and the first named defendant agreed to procure the provision of the necessary facilities from within the Windsor Motor Group and both parties were to participate in the net profits to the extent of 50%.

3. That it was not appropriate in the circumstances of the case to imply a term into either the agreement between the plaintiff and the first named defendant regarding the operation of the franchise to the effect that the first named defendant would procure that the plaintiff’s contract of employment with the third named defendant would be coterminous with the franchise agreement or a term in the contract of employment with the third named defendant to the same effect. Consequently, the termination of the plaintiff’s contract of employment was not unlawful and accordingly his claim in that regard failed.

4. That the first named defendant was guilty of a breach of contract in that he failed to procure that 50% of the profits of the franchise would be paid to the plaintiff.

Reporter: L.O’S.

SWEENEY v DUGGAN 1997 2 IR 531 1997 2 ILRM 211 1997/6/2236

SHIRLWA v SOUTHERN FOUNDRIES (1926) LTD & FEDERATED FOUNDRIES LTD 1939 2 KB 206 1939 2 AER 113

PHILP v RYAN & ORS 2004 4 IR 241 2004/42/9677

DAVIES v TAYLOR 1974 AC 207 1972 3 WLR 801 1972 3 AER 836

HICKEY & CO LTD v ROCHES STORES (DUBLIN) LTD 1980 ILRM 107

Mr. Justice Clarke

1 The plaintiff in these proceedings makes a number of complaints about the circumstances in which he ceased to be involved in aspects of the car hire rental business being conducted under the auspices of the Windsor Motor Group. The plaintiff has represented himself at all recent times in the course of these proceedings.

2 The proceedings commenced in 1993 in the immediate aftermath of the termination of the plaintiff's contract of employment with the third named defendants ("Windsor Rent a Car"). An immediate application for interim relief was granted by Lardner J. on 5th February, 1993 which restrained the then defendants (that is the first and second named defendants) from carrying on the business of a franchise arrangement, from terminating the employment of a Ms. Collins in relation to that franchise business or from procuring any alteration in the telephone or facsimile numbers of that business. The matter subsequently came before Costello J. (as he then was who delivered judgment in respect of an interlocutory application on 3rd March, 1993. There is extant an agreed counsel's note of the ex tempore judgment delivered by the court. From same it is clear that Costello J. was satisfied that the plaintiff had established aprima facie case to the effect that a contract existed between the plaintiff and the first named defendant whose terms included a provision that the profits of the franchise arrangements (to which I will refer in more detail later on in the course of this judgment) were, after deduction of all appropriate expenses, to be divided equally. Costello J. was also satisfied that a prima facie case had been established to the effect that there was an implied term in the aforementioned arrangements to the effect that the plaintiff's employment with Windsor Rent a Car would be retained during the currency of the franchise agreement. The court was not satisfied that there had been established a prima facie case to the effect that there was a breach of that agreement in various other respects which were then argued including in respect of the termination of Ms. Collins employment and the moving of the phone and fax lines. No order, in respect of these latter matters was, therefore, was made. In those circumstances Costello J. was not persuaded that he could make an order requiring the defendants to maintain the plaintiff in employment pending the trial of the action but by virtue of being satisfied that there was a prima facie case in respect of an entitlement on the part of the plaintiff to a 50% share in the net profits of the franchise the court ordered the first named defendant to account to the plaintiff's solicitors on a monthly basis "in respect of the turnover of the business of Holiday Autos Ireland Limited both in respect of the incoming and outgoing business the accounts to commence on 1st day of May, 1993 until the trial of the action or until further order".

3 For reasons some of which will be touched upon in the course of this judgment it has taken a very long time indeed for this action to come on for trial. It should be noted that the matter came on for hearing on 22nd June, 2004 before Kelly J. As I understand it by that stage the plaintiff was conducting the case himself. In the course of his presentation of the case to Kelly J. it became clear that some of the matters which he wished to pursue as part of his claim to damages were not pleaded. In that context Kelly J. considered an application made by the plaintiff for leave to amend his pleadings. I have had the opportunity of reading a transcript of the ex tempore ruling made by Kelly J. on 22nd June as a result of which such leave was granted.

4 It is therefore on foot of the amended pleadings authorised by that order of Kelly J. that this matter finally came on for hearing before me.

5 The plaintiff left school in 1970 with what he described as a "good" leaving certificate. During the 1970s he had a successful and rising career. However he suffered a reversal in the early 1980s when, as a result of a change of direction in a major firm by whom he had been headhunted he was effectively left with no job to do. Thereafter the 1980s proved to be a most difficult period for him. He candidly outlined in evidence that he would have been, in effect, unemployed for three to four years of that decade and had also been involved in what ultimately turned out to be a failed hotel business venture. He also very candidly informed the court that he began, during that period, to suffer from serious alcohol problems. Ultimately those problems led him to seek, successfully, the assistance of a charitable agency experienced in dealing with such problems. Having come through those difficulties the plaintiff assisted in fundraising for that agency and it was in that context that he first met the first named defendant ("Mr. O'Reilly"). For those reasons it was common case that Mr. O'Reilly was well aware of the plaintiff's background at all material times.

6 Mr. O'Reilly had been the proprietor of a successful motor group for a significant period of time prior to the early 1990s. The primary business of the group was concerned with the sale of motor cars through, I am informed, a series of subsidiary companies which operated separate outlets. These companies were under the umbrella of the second named defendant. A further limb to the business was Windsor Rent a Car which carried on a relatively traditional car hire business.

7 It is again common case that Mr. O'Reilly offered the plaintiff a job whose principal initial focus was intended to be to bring marketing skills (an area in which the plaintiff had an established expertise) to bear on the car hire business. It is common case that his contract of employment was with Windsor Rent a Car.

8 The plaintiff and Mr. O'Reilly had first met during 1990 and the plaintiff joined Windsor Rent a Car in March 1991.

9 Holiday Autos is a large company based in the United Kingdom. No representative from the company gave evidence in the proceedings before me. However it would appear that its principal...