Gentry-Wells & Anor (t/a Ringmer Cab Company) v Cooley & Anor (t/a Becks Taxis)

Where a business-sale agreement includes employment at a specified premises, the obligation to keep those premises open may be an express or implied term of the agreement. Permanent closure may amount to repudiatory breach where the location is fundamental to the bargain. An agreement to pay a fixed sum over a specified period, conditional on continuing employment, may also imply a term preventing dismissal without just cause during that period. Appellate reasons need not address every evidential detail, but must explain the conclusions reached with sufficient transparency. In assessing loss caused by repudiation, the court may treat liabilities relating to a retained asset in the same way as liabilities relating to transferred assets where the claimant’s inability to meet them resulted from the defendant’s repudiation.

The claimants sold their taxi business to the defendants under an oral agreement. The business, its assets and liabilities were transferred, and the claimants were to be employed at the Ringmer office. The defendants were also to pay £5,000 by instalments over one year while the claimants remained employed.

Three days after completion, the defendants permanently closed the Ringmer office and absorbed the business into their own operation. The claimants treated this as repudiation and claimed damages, including employment losses, the £5,000 instalments and liabilities arising from car repossessions. His Honour Judge Anthony found for the claimants. The defendants appealed, challenging the contractual findings, repudiation, damages and adequacy of the judge’s reasons.

1. Appeal dismissed. The agreement was a single composite transaction. The term that the claimants would be employed at the Ringmer office necessarily carried with it an obligation that the office remain open, whether analysed as part of the express term or as an implied term.
2. The permanent closure was a breach of that term. Given the importance of the Ringmer location to the bargain, the judge was entitled to find that the breach was fundamental and repudiatory, and that it had been accepted by Mr Gentry-Wells.
3. The agreement to pay £5,000 over one year, so long as the claimants remained employed, supported an implied term that the defendants could not dismiss them during that period without just cause. Otherwise, the defendants could prevent performance of the condition on which their payment obligation depended. The awards for lost remuneration and the £5,000 were therefore recoverable.
4. Although the judge had not separately addressed every aspect of the causation argument concerning the retained “P” registration car, he was aware of the relevant fact and had allowed credit for the claimant’s earnings from it. He was entitled to conclude that the defendants’ repudiation had left the claimants unable to meet the lease instalments and to make no distinction between that car and the others.
5. The judge’s reasons were sufficiently clear and transparent. The principle in Frank Flannery and Ann Flannery v Halifax Estate Agency Ltd [1999] BLR 107 required the judge to explain why he had reached his decision, but did not require an exhaustive account of every evidential detail. A retrial was unnecessary. The appeal was dismissed with costs.

• Court of Appeal (Civil Division): dismissed the defendants’ appeal from the judgment of His Honour Judge Anthony in the Lewes County Court. The order was made with costs.