The High Court found that Patrick Michael O’Reilly breached an agreement to pay William Pearse Vavasour half the net profits from an Irish Holiday Autos franchise. The court also found that Windsor Rent a Car Limited owed Vavasour an IR£10,000 employment bonus for 1992, but rejected his claim that his employment had to continue while the franchise operated.
In a judgment delivered on 28 January 2005, Mr Justice Clarke held that the 1991 franchise agreement named O’Reilly and Vavasour personally as franchisees. The reference to Windsor Car Rentals Limited in the agreement gave their address, the judge found, rather than identifying a company as the contracting party.
The judge accepted that the two men had agreed to share the franchise’s net profits equally, after reasonable expenses. O’Reilly had agreed to arrange for Windsor group companies to provide the staff, premises and other support needed to run the business. The franchise income was paid through Globetrade Marketing Limited, a Windsor group company. The judge found that O’Reilly was obliged to procure payment of Vavasour’s half share.
The court rejected Vavasour’s argument that an implied term prevented Windsor Rent a Car from ending his employment while the franchise continued. The judge said continued employment was not necessary for the franchise or employment contract to operate. Vavasour had received notice and did not challenge its adequacy. He was, however, entitled to the IR£10,000 bonus, less tax and other deductions.
In assessing the franchise claim, the court excluded losses from 15 November 1994 to 22 June 1998 as statute-barred. For periods after 1995, it reduced the recoverable share to 60% to reflect the lost opportunity to remain involved after the franchise’s fourth year. It accepted the lower of two expert estimates, which counted all expenses recorded in Globetrade’s statutory accounts. The court calculated allowable franchise losses at £32,432, in addition to the bonus payment.
The judge also awarded Courts Act interest on the sums allowed, calculated from the end of each relevant year to the end of 2001. He invited the parties to agree the interest and convert the net award into euros. The judgment does not state the final euro total.