KB-2021-000741 - [2025] EWHC 2096 (KB)

On the premise that the implied terms have been found to exist, the questions of good faith and fair dealing of JBL through Mr Benson have been highly relevant. The Court has taken into account the submissions made by Mr Andrew Butler KC on behalf of JBL. He rightly submits without discourtesy that the Court should operate in the ‘real world’. It should not expect a standard of angels in judging conduct in the workplace. It realises that from time to time there can be a robustness of language. There can be a toughness of approach in order to protect and preserve a business. Employees can be spoken to in a stern manner with a view to improving their conduct.

That said, there is a dividing line between conduct described in the previous paragraph and conduct which is intimidatory, aggressive, abusive and bullying. The problem about conduct of that kind is that it can undermine people's confidence, make them deeply unhappy and /or even suffer mental health problems. This has been the territory in which the court has had to consider the conduct of Mr Benson vis-a-vis the franchisee Claimants. In the course of his evidence, when it was put to him that some of the Claimants suffered from mental health problems, he said that it suited them to say that. That said more about Mr Benson than about those franchisees who did suffer.

As noted above, the breaches of contract are not because the parties entered into the agreements which they did, however improvident. The breaches are not because JBL operated the agreements according to their terms.

In its analysis, the Court has had to consider the power and effect of the common breaches said to be repudiatory. It has also had to consider the fact that some of the Claimants have been more impressive than others. It has to consider where specific allegations have not been proven whether that undermines the case more generally either of that franchisee or affecting other franchisees. Usually, one might expect in a case such as this that each and every franchisee must be considered separately. That has been undertaken.

There is the danger in this case that the solicitors who acted, namely Aquabridge Law, sent generic letters in which they made substantially the same allegations for all of the franchisees without breaking it down franchisee by franchisee. In another case that might have been fatal, but the question in this case is whether the case can be sustained as a repudiatory breach on that basis of commonality of allegation.

Mr. Benson used Facebook to make derogatory comments about female instructors. Of one person identified at para. 10(iii) of the Particulars of Claim, he called her in a posting of 10 May 2019 “a wrinkled old bag covered in moisturiser". Of a former instructor, also identified in the same paragraph of the statement of case, he called her a “a nasty piece of work".

Mr. Benson used the same forum on 14 October 2019 to publish racist slurs against Gypsies and Irish Travellers ("pikes"). It is an admitted fact that on various occasions, Mr Benson placed posts on the JB Facebook which referred to “pikes” or “pikeys”.

Mr Benson referred to a Chinese former franchisee as a "pussy chow mein”. He said that this was a reference to a Chinese dish and it was not meant to be offensive. He said that it was not directed at the particular instructor in question, but was said to an instructor about him. In fact, this was upsetting to numerous franchisees, and particularly to Mr Dzierzanowski who described him as a friend. Ms Thornton also described him as a friend, and one who helped her to pass her exams. She said, “he is a really good guy and never deserved anything like that.”. I do not regard this as information where people were confirming what others had seen in order to create a case. They were offended by such language, upset for the former franchisee and upset for themselves about being in such an environment.

Ms Rusted said (at para. 33) that she remembered being shocked by the public insults of Mr Benson from Just Benson on Facebook. She said (at para. 39) that it was completely untrue that Mr Benson was a friend of the Chinese franchisee. Mr Benson was often racist about him, including publicly on Facebook and the Chinese franchisee hated him for it. She said that she had spoken directly with the Chinese franchisee and she knew the truth from him.

Ms Rusted heard Mr Benson say racist comments often. Once he made a comment about Arab men having a harem. He referred to a bad smell in the car after a lesson with an Indian pupil. Ms Rusted found this particularly upsetting.

These comments had effects on franchisees who were not the direct object of the abuse and racism. As Mr Szatkowski put it, as a person of non-British origin, he was concerned about what names he would be called in the event that he decided to stand up to Mr Benson in the way in which the former Chinese franchisee had done. He also said that although he did not know the franchisees who had left and whom Mr Benson said that he would ruin financially, he thought that it was unbearable being chained by a long contract to someone like him. He came to the conclusion that he did not want to have anything to do with this person.

Ms Newman heard Mr Benson comment on a pupil, "When they got out of my car it used to smell like curry. I class him as being a full on racist" (at para 28 of her witness statement). Mr Chapman at para.22 said that on Facebook, Mr Benson had no filter: he was just disrespectful and angry. Ms Newell (para. 17) referred to a gang of people whom he described as Mr Benson’s lackeys who would join in with his racist and sexist remarks.

Mr Benson commented to Ms Freeman about Thurrock, where she was teaching that it was “full of Pakis and blacks”, whereupon she told him that she was half Indian, and he raised his eyebrow and went quiet. She said that his remarks made her feel uncomfortable as did the raising of the eyebrow. She thought that this was a very racist comment and from that point she felt that Mr Benson was particularly cold towards her. Whether or not he was, this is a sign of how hurtful such remarks can be and the impact which they can have. Mr Benson denies that he said this, but I am satisfied that he did so. In the context of everything else in this case, it was in character. JBL says that the allegation is of events more than three years before termination but that does not make it untrue. If it was the only allegation, then it would not form a basis for termination, but it is a part of a course of conduct, one of which is repeated racist, sexist and homophobic remarks.

Even in the course of his evidence, there were unnecessary and potentially offensive references to the origin of people. Mr Benson was asked about a message to him in what appeared to be competent English by a former franchisee Javid Rahimi who wrote “If you’re in a manipulative, deceiving contract, do you not try (sic) find a solution for it? You have all these instructors in the knot John.” When it was suggested that Mr Rahimi had been referring to a financial trap, Mr Benson replied saying that the term “knot” came from an Afghan gentleman who had only been in the country for a few years. It seemed telling that Mr Benson referred to his country of origin as if what Mr Rahimi could be dismissed out of hand, whereas in fact Mr Rahimi expressed himself clearly.

As regards homophobic remarks, reference is made to the evidence of Mr Dean and Mr Court referred to above. The evidence of Mr Dean about homophobic remarks is accepted. There was a reference on Facebook in December 2014 by Mr Benson to a franchisee as “lesbian butch” and then referring to her as a “stupid bitch”. Mr Benson accepted that that was what he called her and he showed no sign of regret or embarrassment. Mr Tanfield (para. 26 of this witness statement) referred to a conversation in which he described an instructor as “proper fit” and said that it was a shame that she was a “Libyan”, referring not to her nationality but to her sexuality. He explained that this was a joke, identifying the source of the joke and again without any regret.

I am satisfied that the breaches of the implied terms of good faith are made out not only where such remarks are directed to a person, but also where they are said about a person or against a group of persons, whether about an ethnic minority or about gender or about sexual orientation. I accept the evidence of the franchisees who said that they were upset and distressed about such remarks and being expected to be part of such a culture. I do not treat it as a convenient script repeated for effect to get out of inconvenient agreements.

Ms Freeman had had spinal surgery before she became a driving instructor. As a result, she struggled with perception of her feet. The effect of the surgery, that is being bed bound for eight weeks, and because of difficulties of exercising since, she had put on weight. On one occasion, when she was struggling to get down from the large step of the training bus, Mr Benson said to her in the presence of the other trainers that she was a bit fat and maybe she should lose some weight. This allegation is denied by Mr Benson. However, I accept that it was said. There is no reason for Ms Freeman to have made this up. It is consistent with Mr Benson’s uninhibited and hurtful remarks at other people’s expense. It is suggested that it might have been pre-contractual (because of an answer in cross-examination that it occurred in December 2016 or early 2017), but it is more likely than not that it was after her contract because it was in the context of a bus training day and she entered into her franchise agreement when she had not yet been trained. This allegation has a like significance to the remark about people from Thurrock as just set out above.

It is accepted that there was no evidence of actual violence on the part of Mr Benson. Despite his conviction for possession of a firearm and ammunition, which was sufficiently serious to pass the custody threshold, there is no evidence that he was violent. Nonetheless, his behaviour was frequently aggressive and coarse. There was a contretemps with Terry Faulkes during a training meeting. This was witnessed by Ms Summers who found it particularly traumatic in view of matters in her personal life. There was what Mr Benson accepted was a ‘nasty confrontation’ with Wendy Smith and Ciera Rogers with agricultural language. Ms Rusted was outside the office when Mr Benson screamed at her, a young woman of twenty-five, saying “F*** off out of my office, you stupid cow.” It was witnessed by Ms George.

Ms Rusted described how Mr Benson behaved badly to or about a trainer Mr Kieran Williams, who was suffering from stress, referring to him as a ‘pansy’ and a ‘pussy’. Mr Benson wrote “The pussy's wife was awy (sic) at the weekend so he stayed at his mummies and she wrote to me yesterday making out it was him and saying that his anxiety is affecting him and he can't continue Tosser!” He also wrote “he’s a mummies boy…pussy. Bringing his account and family friend to help him through his anxiety when he meets with me Friday. I hate stpid (sic) people that think they are clvouir (sic) the idiot.” There was no empathy due to his being unwell. Mr Benson acknowledged that he used not very nice language. This behaviour as contributing to an intimidatory atmosphere. This was a part of a wider pattern of conduct.

Other franchisees took exception to racism in a more general way. Mr Hayward (para. 13) referred to Mr Benson’s posts on Facebook being “racist, sexist…absolutely horrible”. Mr Tanfield at paras. 23-27 referred to Mr Benson making racist, homophobic, and sexist remarks, including about an instructor whom he named; he would also post misogynistic comments on Facebook. In Ms Freeman’s statement at paras. 23-24, she commented about racist comments. Mr Stubbings said at para. 38: “I simply could not remain an instructor with JBL as Mr Benson had revealed his true colours of being a dishonest bully, a dictator, someone who is racist, controlling, sexist, and childish... All in all, he made it intolerable for me to stay." Ms Newman (especially at paras. 28, 32) said that she was upset by his comments: she classed him as a “full on racist”. She said It was embarrassing and upsetting and it made me feel uncomfortable to be in his presence, because he was also disrespectful towards women.”

This evidence has been challenged in cross-examination and in evidence by Mr Benson in particular and other witnesses. The challenges which have been made include the following points, which I have considered carefully. They are to the effect that (a) they are in general and unspecific terms, not evidenced by contemporaneous documents and not specifically timed, (b) they are of a piece from which it is to be inferred that during the events in question or more probably in preparation for the case they were the product of “groupthink”, the incremental development of evidence. There were examples of this at paras. 9-11 of JBL’s final closing submissions.

I broadly accept the tenor of the above evidence and reject the criticisms insofar as it is suggested that they did not take place. It may not have been accurate in every detail, but it speaks to the overall toxicity of the environment. If any of that language were less reprehensible in a bygone age, as appears to be suggested, that does not make it any more acceptable for Mr Benson to have used it. The reflections of witness after witness about how they were deeply uncomfortable about such behaviour are accepted. This was not an occasional lapse but a culture created and/or accepted by Mr Benson.

I prefer their evidence to that of Mr Benson for the following reasons, namely:

The Court is invited to be “worldly enough to recognise that in real life people do not always talk with the refinement and courtesy which tends to characterise conversations in Lincoln’s Inn.” Whilst that is attractive advocacy, it does not begin to address a culture of homophobia, misogyny and racism of the kind described by the witnesses. If it is suggested that some people of a certain age remain unreconstructed and without filters, that does not make it acceptable. Those who are in the workplace and who have close business relationships with other people of diverse backgrounds, must be expected to conform with the respect and decency expected in human interaction. I am satisfied that Mr Benson did act in such a way that would be regarded as offensive by decent people and that it was foreseeable that the Claimants and the other witnesses would be offended in the way in which they were. They did indeed find the working environment toxic.

It is alleged that John Benson created “an abusive and intimidating environment in which the claimants were required to work.” Mr Benson denies that this was the case by responding to the allegations, but also by referring to corporate hospitality and entertainment which he says was at odds with the picture of abuse and intimidation. Reference is made to holidays being arranged for Portugal for the office manager, members of staff and staff trainers and to a weekend away for eight people including Mr Ellis to Ghent in 2019. Mr Benson also referred to a yearly quiz night to raise money for charity, to a charity bike ride and BBQ in 2019 and to annual coach trips mainly to seaside resorts, to Christmas parties and to other company meals and other events to say thank you. Mr Benson says that these matters have been excluded from the franchisees’ evidence because it does not suit their narrative.

Whilst this evidence is taken into account, it does not provide an answer to abuse and intimidation. The fact that in some respects he might behave in a generous way does not excuse behaviour which is insulting and abusive. There are a number of respects in which this was alleged to have taken place. It included:

Examples of insulting and abusing franchisees on posts on Facebook in the Particulars of Claim included statements such as:

“whomever wants to see how many times they can poke me in the chest before they get their faces split open it's one”

“for coronavirus see holiday time for lazy ****ers.”

“Finally – an instructor with a brain cell.”

The first of those was sent on 18 August 2018 and only to the trainers’ group, and therefore only Ms Summers of the Claimants saw it, and she says that she was very upset by it. Towards the end of her time with JBL, Mr Benson posted on Facebook that “2 guys with a baseball bat on their way to you Susanna (actually, make that 3).” As she said in her witness statement, she does not care whether this was supposed to be a joke, it was not funny and it was uncalled for. Without saying that these were to be treated literally, they contributed to the toxic atmosphere.

As regards the second remark about Coronavirus which was posted on 7 May 2020, this was dismissed on behalf of JBL on the basis that it was a remark about what was going on at a post office with the suggestion that a competitor driving school (Mutlows) will not be working. That is to ignore the context in which this was written. It was in the period of lockdown when the franchisees had considerable anxiety about the loss of business. This statement in this context was, as stated in the Reply, found by franchisees to be “crass and insulting”.

As regards the third remark about the brain cell which was posted in June 2020, the only person with the brain cell, Mr Leech, responded positively, but it was insulting to the remaining franchisees. This too was at a sensitive time, in that 11 June 2020 was towards the end of a lengthy period of lockdown. It is not an answer that Mr Benson believed that these remarks were funny when they were at the expense of franchisees and were upsetting to them.

There are many examples which emerge from the evidence. They include the following:

There are numerous instances in the evidence of sanctions for breach out of all proportion to the original breach. These have been used in an intimidatory way to procure compliance and to punish. They are instances of controlling behaviour. Examples are as follows:

There is also the evidence of the communications with Mr Tanfield of Mr Benson mentioning that his father who had just died was a guarantor. Mr Benson also instructed his lawyers to write before the funeral had even taken place.

The evidence is that JBL has been involved in a large number of cases against former franchisees. Over a course of 30 years, it was said that there had been about 80 to 100 cases. That was said to be out of about 1400 franchisees over a period of 33 years, and therefore much less than 10% of the franchise community. There was an attempt in the course of evidence to piece together how many franchisees had terminated early, and there were many instances which were the subject of settlement agreements. That started from a list of 70 franchisees whose agreements ended prematurely. They were named in the witness statement of Ms Summers at para. 25.

The suggestion in the closing submissions of the Claimants that it was 100 cases in 10 years is not borne out by my note of the evidence. There were said to be 52 settlement agreements, although it is not clear whether there is any overlap between any of those and the court cases or whether the others were in the context of a dispute or the settlement being used as protective device so that the settlement to prevent a potential dispute is effective.

There was not a coherent picture of which franchisees were the subject of litigation following allegations of breaches of contract. This could not be pieced together in the witness box without relevant documents. The Claimants had sought from JBL both before trial and at trial details of the claims which had been made. Such information provided was not precise, and did not identify particular claims. JBL submits that as a percentage of the total body of franchisees, there were not a lot of claims. That might have been more credible if JBL had provided information when requested with the assistance of their solicitors Holmes & Hills who had acted for years for JBL. They would have been able to piece together a more coherent and detailed picture than that provided. Without such information, the Court is not prepared to assume in favour of JBL that the number of instances of litigation or settlement agreements was ‘normal’. It appeared to evidence problems such that all was not well within the franchise and conflict was a norm rather than an occasional problem. This could have been addressed in detail to show that that was not the case: it was not.

The material before the Court shows that Mr Benson did not simply exercise contractual rights on breach but used such controversies as a stick with which to beat not only the defaulting franchisee but the franchisees generally. He did so in particular by his postings on the Just Benson Facebook group and in his conversations with franchisees. The language employed was not simply informative. It was intimidatory to any franchisee who might be contemplating this path, or more worrying still, to those who were drifting into breach because of a business model which they could not sustain.

The Claimants say that such a large number of actions is telling about the business model and about the attitude of Mr Benson. What does emerge from the evidence is that the allegation that Mr Benson boasted of having sued former instructors and taking their homes or their guarantors homes is well made out.

Examples of posts on the Just Benson Facebook account about what franchisees could expect to happen to them are as follows:

A close reading of the 19 pages of guidance provided to franchisees shows that Mr Benson was up front about his modus operandi. He said the following:

“Fundamental Breaches/Illegal Termination of the Franchise Agreements and Claims. About two or three times each year sometimes more we have instructors that terminate their agreement earlier than permitted. This happens for various reasons.” [He then referred to people leaving after having been provided with a tuition vehicle and having had work and weeks of free fees and then leaving when having to pay their first fee]. “It's not a bad figure to lose less than probably 4% of the total instructors franchised to the company each year but in my personal and professional opinion I consider it appalling behaviours; disrespectful and selfish with every other franchisee honouring their responsibilities and “paving their way”.

This appetite for litigation and parading the litigation and the consequences of the litigation (‘financially disastrous’, ‘financially ruin’, ‘bankrupt’, home ‘repossessed’). References to “good riddance to bad rubbish” have the inevitable effect of frightening existing franchisees, particularly those who are having difficulties paying the franchise fees and making ends meet. There was at lowest an absence of sensitivity or compassion for the existing franchisees, but it was more deep-rooted than that: it was to scare them into compliance and to let them know that any action would be vigorously pursued to the end.

Conduct after the termination of the franchise agreements cannot be characterised as a breach of contract because the good faith obligations came to an end on termination. However, there should be noted Mr Benson’s reaction to posting on Facebook by Mr Chapman saying that a group was terminating because they found “intolerable the abusive intimidating and discriminatory culture created by Mr Benson”. The posting also referred to finding it intolerable “pretending that we are genuinely in business on our own account when we are almost certainly not.” Whilst Mr Benson was entitled to respond in terms, and the duty of good faith had ceased vis-à-vis the terminated franchisees, Mr Benson posted the following on 14 December 2020:

“Although they may have found a way to lie out of their agreements they have not left behind or sneaked out of damages claims. A lot of people and/or their guarantors are going to have a deservingly and horrible and life changing 2021/2022 onwards….Watch this space.”

This is relevant because it is this kind of language that was used to the Claimants whilst they were franchisees. It helps corroborate for example Ms Rusted’s witness statement at para. 38 that Mr Benson used to brag that he had taken ex-instructors’ houses. He used to say all the time that he always won or “Oh. Another house”. He used to mention it at training sessions on the bus, saying to anyone who spoke up “you carry on mate because I'll see you in court.” The evidence of Mr Benson is that he would look to identify whether the franchisee had a property of their own or could provide a guarantor with a property. Likewise, the evidence of Ms Newell is credible and is accepted that whilst waiting in the office she heard Mr Benson saying that he earned more money by taking people to court then out of the driving school.

The defence of JBL is that JBL did what it could to discourage franchisees including bringing proceedings against them when they sought unlawfully to terminate their agreements. Part of that was to make it known to franchisees who might otherwise be tempted to breach their agreements. That was not boasting of success, but warning of the consequences of breach.

Even if that were the case, which is doubtful, the postings went far beyond what was necessary. Their tone and message were intimidatory and were designed to be in terrorem, that is to instil fear of the consequences of breach to the franchisees. It is one thing to say from time to time that JBL will enforce its legal rights in the courts. It is quite another to use the aggressive and intimidatory language used, celebrating the impending financial ruin and even the possession of houses. They had a significant detrimental impact on the franchisees, which is to be seen not just for itself but in the context of other intimidatory behaviour.

An example of this is in the case of Ms Freeman. She said (para. 25 of her witness statement) that she had a conversation with Mr Benson about a late franchise fee payment, which had since been paid. During the meeting, Mr Benson referred to other instructors who had fallen behind on franchise payments, saying that he had taken them to court for breach of their contracts and had taken their homes or the homes of their guarantors. He said that people should feel scared of him and then made a gun shape with his fingers she said that she found this extremely frightening and left the meeting feeling really fearful and threatened by him. She cried most of the drive home. Mr Benson denies that this occurred and he said of her evidence that it was “rubbish, absolute rubbish.” Despite the strength of his denial, there is no reason to disbelieve Ms Freeman. This was an experience which would have been impactful. Although it was not specific in time and although it did not form the subject of a contemporaneous document or a complaint, I accept her evidence in substance.

Related to this analysis is JBL’s suggestion that the Claimants are a peculiar assortment of franchisees who are not representative of franchisees as a whole. On this analysis, they are to be treated as some amorphous group who were not able to cut it, from which the Court should conclude that their allegations reflect their own inadequacies rather than any breach, let alone repudiatory breach, of JBL. I do not accept JBL’s suggestion, bearing in mind the following matters or any of them, namely:

The specific allegation is “JBL acted capriciously when asked for permission to advertise personal telephone numbers on their cars. Almost all such requests were refused. Permission was only granted on the basis of favouritism.”

There was a contractual clause about signwriting the vehicles to the specifications of JBL. The evidence is that in respect of Ms Rusted, she was allowed to display both her name and her mobile number on her vehicle. Ms Summers was allowed to display her name but not her mobile number. Other requests of Claimants were refused. This was also a specific breach alleged by Mr Hayward, Mr Monk, Mr Robins, Ms Newell and Ms Newman and it appears in other witness statements of franchisees.

The case of JBL is that they did not prevent the franchisee from advertising, but they had to advertise the franchise business, and in this particular respect, the reason given was that it was preferable that potential pupils would telephone central office. They would have a greater expertise in taking the call. They would be able to direct it among the franchisees. It was stated in the Defence at para. 10(xv) that JBL acceded to requests from experienced franchisees to have their name and telephone number sign-written on their vehicle, but this is not permitted in respect of inexperienced franchisees. A reason given in evidence for not allowing franchisees to display their mobile numbers is that they might miss calls due to being involved instructing pupils. If that was a decisive reason, it would have led to JBL never acceding to such requests, but JBL’s Defence is that they did accede to them: see Defence para. 10(xv). It is also contradicted by Mr Benson’s evidence (at para. 26 of his witness statement) that the franchisees were encouraged to include their own telephone numbers on their promotions.

It is apparent from the welter of evidence that franchisees regarded it as of importance to be able to advertise themselves by having their numbers on their vehicles. As the instructor went around their own locality in their own vehicle, they would be expected to be seen and to strike up conversations and for word of mouth to get around that they were a good instructor. There was nothing more tangible than having their personal number on the vehicle. When inquiries followed, the business would go to them if they had availability, failing which they would pass it on to head office. On the other hand, the fact that the only number was almost invariably that of head office meant that it depended on head office to whom the business would be referred.

In my judgment, there was an implied discretion on the part of JBLas to what they included in the signwriting on each car and as to whether to allow a franchisee to have their number on the vehicles. JBL's case is that they did permit franchisees to display their mobile numbers on their vehicles, They claim that they did not allow inexperienced franchisees to do this because they would be less competent than those who worked in the office.

The evidence before the Court is that the Claimants save for Ms Rusted did not display their mobile number, and only Ms Summers was able to display her name on her vehicle. The fact that the other Claimants did not have this available, and the absence of specific evidence about what was permitted to other franchisees, make the Court prefer the evidence that few franchisees were given the permission to display their own mobile number. I am satisfied on the facts of this case and in the context of the evidence as a whole that the discretion was exercised capriciously. Whilst in the round, the experience of head office may count, the weight of the evidence is to the effect that this was a part of controlling the franchisee and emasculating their ability to generate their own business. It rendered the franchisee dependent on head office for distributing the work. At its worst, save for a favoured few, it gave head office the ability to prefer instructors who were in favour and to withhold business from those who were not. There is evidence that Mr Benson gave an instruction that those who had upset him should be withheld work.

If there was a real concern about how franchisees would deal with inquiries, then they could be taught by head office. If they were not taught, that is an indicator that it was not a genuine concern and/or the real concern was, subject to a small number of exceptions, to retain control for JBL.

In circumstances where so many franchisees were struggling to make ends meet and to pay the franchise fees, the ability to advertise their personal numbers in this way was vital, and yet almost all franchisees were deprived of it. This feature was a part of a business method which rendered JBL powerful and it deprived or affected the franchisee of the ability to create new business for themselves. This breach is to be seen in the context of this case, and is not of general application to other cases.

In my judgment, this refusal was a breach of each of the implied terms, that is to say that it substantially deprived Claimants from obtaining benefits granted to them or undermined the terms of the bargain and a discretion was exercised capriciously or arbitrarily. Further, by refusing the request to have their own numbers, JBL was in breach of the implied term as to trust and confidence. In effect, JBL was saying that it did not trust the franchisees to sell without reasonable cause. That was an approach which undermined trust and confidence.

Related to this breach of contract, I am satisfied that the refusal to allow Ms George and any other franchisees complaining of not being to advertise locally was a breach of contract for the reasons identified in the discussion about her first allegation.

There are two breaches of contract alleged in respect of the COVID pandemic. The first is the insistence by Mr Benson that all franchise fees be paid even though the Claimants were unable to trade whilst JBL took the benefit of government support: see Particulars of Claim para. 10(xvi). The second is a unilateral increase in the term of the franchise agreements: see Particulars of Claim para. 10 (xvii).

In the weeks prior to Covid, the national lockdown being announced on 23 March 2020, franchisees were finding that their ability to teach and income had already been affected seriously due to public concern about Coronavirus and pupils having to cancel due to illness. This was affecting already their ability to pay franchise fees It was therefore incumbent on a franchisor to be sensitive, collaborative and consultative.

On 17 March 2020, Mr Benson responded on Just Benson to concerns among the franchisees about Coronavirus. It is instructive to set out his communication in full:

“A lot of you are asking the office staff so here's my answer.

The question is (mainly) “what is John doing about Corona Virus.” It's a silly question guys; I mean, what am I supposed to do?

The virus is one that we must all deal with one way or the other.

Unfortunately, it seems largely media fuelled in as far as they have this supersedes any previous or are making it both worse or/and sound more severe than it really is. I CAN'T CHANGE THAT!

The main worry seems to be if pupils cancel lessons and, “how am I going to pay my franchise fees”. Well… the weekly fees must still be paid. The company expenses won't disappear because of the virus. We still have to pay wages and the running of this office and promotion/marketing etc.

You all should have sickness insurance or you could all use one or both of your franchise fee weeks. Or you could arrange a period of lesser fees in exchange for a longer period. I am willing to arrange a say 12 week period of lower weekly fees if you agree to add it to the term of the agreement?”

Instead of trying to understand the position of the franchisees, Mr Benson was dismissive of their concerns and regarded any question about it as “silly”. He was only concerned about JBL’s ability to pay its expenses without any or any apparent regard to the concerns of the franchisees. At a vital time to respond to these concerns, the communication of 17 March 2020 was dismissive and high-handed. It did not come in a vacuum but it was a reaction to concerns which was being expressed more and more from early March. By that time, although a week prior to national lockdown on 23 March, the national concerns were intense in that the UK was put on high risk and self-isolation was recommended for vulnerable people.

Mr Benson stated that “a lot” of franchisees were concerned about the impact of Coronavirus on their ability to operate the franchise. It is said on behalf of JBL that this reaction was at an early stage which was difficult for all concerned. It is to be contrasted with his reaction a week later after the first national shutdown had been imposed. Nevertheless, it had the following features, namely:

There was a reference to the franchisee arranging paying lesser fees in exchange for a longer period of the franchise. This would not erase fees, and it replicated locking the franchisee into greater and longer commitments. The other possibility of lesser fees was also not unconditional, but was subject to an agreement to be made.

In short, the concerns of the franchisees were treated dismissively. The interests of JBL were elevated above the interests of the franchisees. Any solution would be not to share the pain, but to create benefits for JBL. It was at this point that Janine Rusted, who appears to have enjoyed a particularly good business relationship with Mr Benson, responded on Facebook. She said, “I saw the other instructor companies, I’ve researched, they are allfreezing the contracts because we can’t work.” The response of Mr Benson was: “Why you bringing this up on Facebook?This should be a one-to-one conversation.” Her approach was that this affected all of the franchisees. Her evidence is that from this point, Mr Benson did not engage with Ms Rusted, and his answer was said to be “quite short, abrupt and rude.” Heblocked her from Just Benson so that she could not see announcements for JBL or updates aboutcompany policies: see her witness statement at paras. 16-18. She says that this affected her business thereafter.

There was also a private exchange of messages between Ms Rusted and Mr Benson in which Ms Rusted wrote about the number of pupils who were cancelling due to illness and expressed her concerns about the inability to pay and the effect on her mental health. The responses of Mr Benson were about the effect on the business as a whole, and he appears to have little concern to the effect on Ms Rusted relative to that on the business. There came a point in time when Ms Rusted agreed to make payments, but then the next day on reflection felt that she was unable to do so.

This conduct was of importance not only in respect of the agreement between Ms Rusted and JBL. It also was important as regards the other franchisees. It is a part of how JBL reacted generally to the pleas for help and consideration during the week prior to lockdown.

As noted above, Ms Rusted sought to intervene publicly and privately for herself, but Mr Benson barely engaged, and expressed primary concern for himself and JBL and limited, if any, concern for the franchisees.

There was also the following correspondence between Ms Summers and Mr Benson. Ms Summers wrote to Mr Benson at 21.06 on 17 March 2020 that due to Coronavirus and the government’s advice, and having a high risk person in her household who is her partner with liver health complications, she would only be working on a 1-1 basis and therefore not be attending the group training situations. She referred to two trainees who were high risk themselves or in high risk households. The response on the next morning at 06.33 was that he was not accepting the loss: he was at risk too, but he was travelling to central London for a court hearing. Ms Summers maintained her position.

On 19 March 2020 at 09.23, Mr Benson wrote in the following terms to Ms Summers. He said that learner drivers had become more important to her than training. “Coronavirus seems to be the latest excuse or reason.” Franchisees are relying on it, and the desire to self-isolate is not reason for him or JBL to take a loss. “Arrears (of franchise fees and training) will not “disappear” due to illness. Coronavirus is not a product [of] me or this company. And we will not suffer financially for it.”

At 16.32 on the same day, Ms Summers referred to how all her family members were in isolation since all of them had members at high risk. When she was out of isolation, she would then redirect her thoughts to building the business. She found it hard to swallow being told that she put the trainees second to the learners.

I am satisfied both that this was a breach of the implied term as to trust and confidence in that it showed a fundamental disrespect to the franchisees generally on 17 March 2020 and to Ms Summers in the subsequent correspondence and that it was commercially unacceptable conduct. It was a demonstration of someone who was putting himself before the franchisees at a critical time and despite the numerous concerns expressed by franchisees and government advice prior to lockdown about self-isolation and the UK being at high risk. This lack of understanding and compassion provided a context which reinforces the finding of breach as regards the purported extension of the franchise agreements.

This provided the context for Ms Rusted stepping forward to assist. She did not step forward lightly. She knew that Mr Benson did not take opposition or constructive criticism lightly, but she felt a responsibility to the franchisees to act at such a precarious time. She also had the confidence, misplaced as it turned out, that her hitherto good relationship with him would ensure the benefit of the franchisees. The communications which followed amounted have been summarised above I am satisfied that this amounted to a breach of the implied term of trust and confidence in the same way as the original communication of 17 March 2020. It showed that that communication was not an isolated error to be seen in a vacuum, but represented a trenchant approach of Mr Benson, elevating his interests at the expense of the franchisees.

It is said that this was short term and came to an end by the communication of 24 March 2020 after the inception of lockdown. It might have been different if Mr Benson had admitted that he had acted in uncompassionate way and had recognised in some way the suffering of the franchisees. He did not do that. Insofar as the communication of 24 March 2020 is said to be the answer, it is not because (a) it did not affect what occurred prior 24 March, and (b) it purported unilaterally to effect an increase in the length of the franchise agreements, which were already perceived as unduly long, uncertain in duration and oppressive. This judgment now turns to consider that.

One of the allegations of breach of contract in the particulars of claim is of a unilateral increase in the terms of the franchise agreements: see para. 10(xvii).

On 24 March 2020, the day following the announcement of lockdown, Mr Benson wrote as follows:

“Due to the government “lock-down” and instructors unable to work (save for teaching key workers and some motorcycle courses) from Monday 30 March 2020 all franchise agreements will be suspended (so that no weekly franchise fee will be payable) for a period of six weeks. This will be reviewed before the 6 week period expires…

This will be a period of “Frozen-Franchise” in as far as whatever fee you maybe currently paying or period of your franchise that you are currently at will remain and recommends once we can return to some form of normality again.

So as to avoid any reason for doubt, the franchise agreements are suspended for an initial period of six weeks. The suspension will start on 30th March 2020. The period in which the agreement is suspended (currently six weeks but under review) will be added to the end of your minimum term (i.e. the Agreement will last six weeks longer than it would have if there was no suspension).

…

“This supersedes any previous/recent offer made. We will consider any holiday/franchise free periods as it falls due.”

On 15 June 2020, Mr Benson gave a “Corona Virus” update in the following terms:

“Due to the governmental lockdown and driving instructors unable to work (save for teaching key workers) from Monday 30th March 2020 we temporarily suspended all franchise agreements (and no weekly franchise fee was payable) for a period of 6 weeks. That period ended Monday 4th May 2020. We then extended it by a further 4 weeks commencing 11th May 2020. That 4 weeks expired 1st June 2020. More recently we [extended] it by two further weeks that expires today 15th June 2020.

This company was given notice that the DVSA will permit driving instructors returning to work Monday 15th June 2020 however, this was changed and the restart date is now currently set for 22nd June 2020.

Therefore, and again, this company is further extending the temporary period by a further two weeks.

…

So as to avoid any reason for doubt, the franchise agreements are suspended for the period of two weeks. The suspension will start on 22nd June 2020. The period in which the agreement is suspended (currently 2 weeks but under review) will be added at the end of your minimum term (i.e.the agreement will last 2 weeks longer than it would have, if there was no suspension) (plus the first period of 6 weeks and a period of 4 weeks plus the earlier period of 2 weeks).”

There were many communications from franchisees expressing their concerns. In a letter from Aquabridge Law on behalf of the first nine Claimants dated 5 October 2020, they stated among other things: “(xiv) your client has purported to unilaterally extend the term of our clients’ respective contractual agreements without their consent.”

The Defence at para. 10(xvii) is that a typical agreement provided the duration of the agreement comprising three franchise periods of which the second period included “any period during which the agreement is suspended”. None of the Claimants or any other franchisees objected to the suspension and any franchisee who objected and preferred to continue paying franchise fees would have been free to do so. Reliance was also placed on a message of Ms Rusted dated 20 March 2020 asking if it would be possible to freeze payments and then add them to the end of her agreement. It is not clear that this meant extending the agreement period: without more, it was not a contractual offer, but in context, this was desperate talk by a desperate franchisee at a desperate time.

JBL considered the allegation about a unilateral increase of terms in written closing submissions at paras. 87 - 96. It accepts that there was no express power to suspend the franchise agreements, and the only reference to suspension was the automatic suspension which follows repeated failure of the Part 2 or Part 3 tests. The references to suspension in the typical clause 1(c)(2) must be a reference to this automatic suspension. It is not contended that there was an implied right to suspend.

By recognising the fact that the written franchise agreements did not contain a unilateral power to suspend, JBL has recognised that its pleaded case at para 10 (xvii) of the Amended Defence insofar as it relied on the duration of the franchise by reference to a period during which the agreement was suspended did not assist JBL. The Amended Defence also referred to the absence of objection to the suspension and that franchisees would have been free to continue paying franchise fees. The Amended Defence did not plead expressly that the communication of 24 March 2020 was an offer and that the subsequent conduct of the franchisees amounted to an acceptance.

Whilst it has been recognised that the communication of 24 March 2020 was “expressed in peremptory terms”, it has been submitted on behalf of JBL that this and subsequent similar communications “should properly be analysed as offers”. The offer of 24 March 2020 was open to be accepted or rejected, and they were accepted by thanking JBL or ceasing payments or both. It is recognised that “it might have been better” if JBL had used the language of contractual variation.

In any event, it was submitted that even if there was no variation, it would not have been a breach of contract but an attempt by a contracting party to alter terms in a way that it was not entitled to do. That action would simply be contractually ineffective and a nullity.

The Reply at para 12 did not deal with the new case which is now advanced about an offer of variation and an acceptance. It interpreted the reduction of the fee as being an agreement on the part of the franchise or to accept a reduced fee under clause 7(c) of the Franchise Agreement. Such an agreement or concession did not suspend the terms of the franchise agreements and did not entitle JBL to extend the termination date: see the Reply at para. 13.

The new analysis of the pleaded variation is a surprising one. It would be expected that a variation of this kind, potentially extending the duration of the agreements by months, would be the subject of a formal agreement. It would not take place by way of that which has accurately been described as ‘peremptory’ correspondence. What occurred was sought to be imposed on the franchisees in a peremptory manner. There was no intention to offer a variation and find out if it would be accepted by the franchisees. Where a guarantor is involved, as is the case in respect of many of the franchise agreements, one would expect that the variation would be offered to the guarantor as well as to the franchisee.

Another indication that a variation of the franchise agreement was not intended is the contrast between the communication of 24 March 2020 and the communication to franchisees dated 28 January 2020, only a few weeks earlier. The 28 January communication to the franchisees was entitled “variation to the franchise agreement,” It offered to remove the requirement that driving tuition was only at such fees as were prescribed by the franchisor. It stated expressly that a variation was being proposed. It informed the franchisee what it had to do in the event that they did not accept it.

Likewise, a few days later, on 7 April 2020, offers were made to various employees of JBL to vary their contracts so as to become eligible for furlough leave. The precise nature of the variations was specified, and the employees concerned were asked to sign and return the letter to confirm agreement to the variation.

JBL now submits that the difference in March 2020 was that an urgent response was required to the franchisees’ communications regarding franchise fees during COVID. That does not explain why the e-mail went beyond not taking fees and requiring the franchisee to agree to an extension of the terms of the existing franchise agreements.

JBL also makes the point that it could have done nothing and insisted on the continuation of franchise fees without any requirement that the franchise agreement be extended. In short, JBL was doing a favour to franchisees, and in effect there was nothing wrong with the quid pro quo of an extension. This ignores the following, namely:

I have reached the following conclusions:

JBL has submitted that if there was no variation, then there was no breach of contract because the purported variation was ineffective and therefore a nullity. It may have been ineffective, but in my judgment, it was a breach of the duty of good faith to purport to alter the terms of the agreement by extending the same in a way that was not permitted by the agreement. This was not a minor matter, but it purported to add months to the contract. It is reflected in the Counterclaim where JBL purports to add thousands of pounds of revenue which would have been earned during the period of the extended contract.

This was not an academic matter. At a point in time when the Claimant franchisees were dissatisfied with the attitude of JBL and were vulnerable due to COVID and its impact on them as regards their obligations under the franchise agreement, the relationship was undermined by the wrongful insistence that the agreements would have to be extended. To use the language of the implied terms which are the manifestation of the obligation of good faith, the purported unilateral variation was conduct in this context which would be regarded as commercially unacceptable by reasonable and honest people. Alternatively, JBL conducted itself, without reasonable and proper cause, in a manner likely to cause serious danger to the relationship of trust and confidence. This was not an isolated error in a letter written in haste. It was a considered email. Its substance was maintained by the communication in similar terms of 15 June 2020.

When the letters were written prior to termination, the complaint was made about unilateral variation, and there was no attempt to resile from the position of JBL. When proceedings were issued, the counterclaims were served seeking to counterclaim on the basis that the franchisees were responsible for an additional 14 week Coronavirus period which had a consequence of thousands of pounds per franchisee.

An example of the effect of the foregoing on individual franchisees is as follows. In the evidence of Ms Thornton, she said that a problem was that they did not know when the contract would finish because they were never given a date when it would finally end. It felt like the date kept on moving. She said that when the contracts were being extended even further, she could not believe it. She could not carry on.

Mr Ellis said that Mr Benson was very slow to offer a reduction due to the effect of COVID. When he did give an indication, he said that the last thing he wanted at that stage was be longer in a contract with JBL. That was the result of his not trusting Mr Benson.

The finding that this was a breach of the implied term as to trust and confidence is reinforced by the surrounding circumstances and/or the context of related breaches of the same implied term. The immediate context was the communication referred to above of 17 March 2020 quoted above and the tenor of the communications to Ms Rusted and Ms Summers. Not only were they breaches of the implied term of trust and confidence, but the unilateral increase is to be seen in that context which informs as to the character of communications of 24 March 2020 and 15 June 2020. The context informs as to the character of the breach as regards the purported extension of the franchise agreements.

An argument of JBL in this case is that the real problem was not Mr Benson, but Covid. A business which had operated satisfactorily for years was rendered very difficult due to Covid. The agreements did not provide release for them, but Mr Benson had been prepared to assist them voluntarily by his suspension of the agreements. Covid was a problem, but it was a problem which was not suitably addressed by JBL. At first, it was treated dismissively by the communications of 17 March 2020 and thereafter. After the inception of lockdown, it was treated opportunistically by seeking to impose on the franchisees an extension of the franchise agreements totalling more than three months. At a time when there was a need for particular sensitivity and understanding, these were in short supply as JBL sought to drive home at the expense of the franchisees another business advantage from a time of national crisis.

There are other features about context. JBL says that the length of the contracts to date were agreed by the franchisees, and at least as regards the original contracts, there was no cause of action pleaded of a remedy for imposing or inducing such lengthy terms. Further, JBL submits that most of the franchisees were in a good financial position, and there was nothing wrong about the JBL model that had caused or contributed to their performance under the agreements.

The first point is correct to the effect that there are not causes of action to rescind the original agreements. However, long contractual terms had been agreed in circumstances without any obvious reason for such long initial periods and causing a very substantial burden to franchisees absent early termination provisions. In circumstances of hard sell to enter into the agreements, almost all franchisees not being legally represented and being unsophisticated people without business experience, it might be expected that particular care would be taken that before any yet further extension was agreed and that it was very clearly signalled to the franchisees and the franchisees advised to take independent specialist advice before agreeing to the same. The case of JBL that the Court should infer that there was an offer or an acceptance on the facts of this case in the above context must fail.

The second point about the franchisees being well served and having sufficient business to enable them to enter into a longer agreement must also be treated with caution. Many of the franchisees who are Claimants in this case had before COVID found it difficult or not possible to service the fixed franchise fees. There had been discussions in the evidence about this. For those who have had longer franchise agreements to replace their initial agreement or agreements, this was in order to have franchise fees which they could afford. The consequence however was to be tied to JBL for even longer periods with the consequence that in the event of default, they exposed themselves to the size of counterclaims referred to above.

This is the context in which seeking to impose a longer term over and above the already long terms of the franchise agreements in the manner done was a breach of a duty of good faith. In the context of what had already occurred, it behoved JBL not to seek such an extension. If an extension could be sought at all, pre-conditions were (a) a very clear offer, (b) the advice that independent legal advice ought to be sought, (c) a very clear acceptance. In fact, none of those things occurred, but there is real doubt, which need not be resolved, as to whether these franchisees ought even to have been invited to have considered an extension.