THE HIGH COURT
			1993  No. 2364P
BETWEEN
CONOR CLARKE
		PLAINTIFF
AND
KILTERNAN MOTOR COMPANY LIMITED
		DEFENDANTS

Judgment of McCracken J. delivered the 10th day of December 1996

	These proceedings arise out of an agreement made between the Plaintiff and the Defendants in November 1991, the nature of which I find difficult to categorise.  The parties have at times called it a franchise agreement, which is probably not technically the correct description.  
	The Defendants are the owners of Kilternan Service Station, which is a substantial premises on the Enniskerry Road in Kilternan, Co. Dublin.  In addition to the normal services provided in a filling station, at the time in question a shop had been erected by the Defendants which was intended to be a general convenience store rather than a mere adjunct to a service station.  The Defendants did not wish to run the business themselves, and they advertised for somebody to manage it.  After several interviews, the Plaintiff was offered this position and actually went into occupation of the premises in the first week in 
December 1991.
	Unfortunately the arrangement between the parties was never reduced to writing, at least partly through the fear of the Defendants that any written document might be construed as creating the relationship of landlord and tenant, and thus entitling the Plaintiff to rights under the Landlord and Tenant legislation.  The Plaintiff was anxious to have a written agreement, and shortly after he went into occupation he furnished a draft agreement to the Defendants.  This was never signed by the Defendants, although the Plaintiff alleges that its terms were in effect agreed.  I am satisfied that the basic agreement can be summarised as follows:-

1.	The Defendants would allow the Plaintiff into occupation of the entire premises, fully fitted and furnished and the Plaintiff would pay no rent or fee in respect of his occupation of the premises, nor would he be responsible for the rates.
2.	The Plaintiff would be solely responsible for the business carried on in the shop, without interference from the Defendants, and would be entitled to retain the entire profit of the business carried on therein.
3.	The Plaintiff would manage the forecourt on behalf of the Defendants, although he would not be employed by the Defendants, and he would receive a commission of 50% of the gross profit for the first three months and 40% of the gross profit thereafter.  Out of this sum he had to pay all the day to day expenses of the forecourt business, including the employment of persons working therein, but the actual purchase of petroleum products was done by the Defendants, which had a supply agreement with Texaco.
4.	The Plaintiff paid to the Defendants the sum of £20,000 to be held by them as security for the due performance of the agreement by the Plaintiff, and to be returned when the relationship between the parties ended.
5.	The Defendants were to be responsible for the repair and maintenance of the property, other than the shop fitting elements.
6.	The Plaintiff was to lodge the entire takings of the forecourt to an account of the Defendants on a daily basis, and such lodgments were to be made the day following the receipt of the takings by the Plaintiff.  Initially the Plaintiff was to be paid his commission in respect of the forecourt on a fortnightly basis, although this was later changed to a monthly basis.
7.	The parties did not directly address the question of the duration of the agreement, although it is acknowledged by both that they had hoped it would be a long term agreement, subject to the problems with the Landlord and Tenant Acts.  The question of termination of the agreement was not addressed either.

	The Defendants' evidence is that the scheme of the arrangement was that the Plaintiff would make his profit out of the shop, and in return for being provided with the premises, would manage the forecourt, and the commission agreed to be paid to the Plaintiff was calculated on the basis that this would be sufficient to cover his expenses and outgoings, but was not intended to give him a profit.  While the parties certainly did not sit down together and work out the percentage on this basis, I am satisfied that this was the reality of their arrangement.
	There were, as might be expected, some teething problems, the principal problem arising out of the fact that the Plaintiff and the Defendants had accounts at different banks, and therefore there was a delay in clearing the Plaintiff's daily cheques, and also a certain cost involved.  This was ultimately resolved by the Defendants opening an account at the Plaintiff's bank in Ballsbridge.  During 1992 the business appears to have prospered, and in fact expanded at a greater rate than had been anticipated by the parties.  However, there were on occasion problems arising from delays on the part of the Plaintiff in making lodgements, and on two occasions in the latter part of 1992 a cheque drawn by the Plaintiff in favour of the Defendants had been returned by his bank.
	In January 1993 the relationship began to deteriorate seriously.  A meeting was held in the middle of January at which the Defendants stated that the commission on the forecourt sales would be reduced to 30%, and the Plaintiff was notified of this by letter dated 19th January, 1993.  His evidence is that he never agreed to this reduction, while the Defendants' evidence is that he agreed reluctantly, and that it had always been the intention of the parties to review the amount of commission at the end of each year.  The reason given by the Defendants for reducing the commission was that the sales had been considerably greater than anticipated, and therefore the lower commission would adequately cover the Plaintiff's overheads.  While the reduction may have been justified on the basis argued by the Defendants, I do not think that the Plaintiff agreed to it in any real sense of the word, or that there was any sufficient meeting of minds to vary the terms of the original agreement.
	In the last week of February 1993 a series of cheques issued by the Plaintiff were dishonoured.  These represented the takings for 23rd February, 24th February, 
25th February and the weekend up to 28th February, and amounted in all to almost £20,000.  Through the return of these cheques, the Defendants discovered that the Plaintiff had in fact an account at the Cornelscourt branch of the Bank of Ireland, and these cheques were drawn on that account.  This was, of course, totally contrary to the arrangement whereby the Plaintiff and Defendants were to have accounts at the same branch to facilitate the transfer of monies between these accounts.  It transpired in evidence that the Plaintiff opened the account in Cornelscourt in March 1992 without telling the Defendants, and that for some considerable period he had been operating a system whereby he lodged his day's takings, as he was supposed to do, in his own Ballsbridge account, then wrote a cheque for the forecourt takings, not in favour of the Defendants, but in favour of his own account at Cornelscourt.  At the same time he wrote a cheque on his Cornelscourt account and lodged it to the Defendants' account in Ballsbridge.  He was thus availing of several days credit, and the Defendants only became aware of this when it went wrong, and a cheque was presented by the Defendants' bank to the Cornelscourt branch before the monies to meet it had been lodged.  At this stage it is clear the Plaintiff was getting into serious financial difficulties, and although some of these cheques were cleared when they were re-presented, further subsequent cheques were then dishonoured.  In particular, a cheque of 1st March, 1993, representing the forecourt takings for the weekend up to 28th February, 1993, in the sum of £10,207 was returned on 8th March marked "uncleared effects", and on the 10th March the Plaintiff wrote a further cheque for this sum, which was again dishonoured on 16th March.
	When the Defendants discovered the existence of the Cornelscourt account, they insisted that the Plaintiff furnish them with copy lodgment slips by fax immediately after the lodgments were made by cleared funds.  However, the Plaintiff did not comply with this, and on 15th March Mr. Forde, a director of the Defendants, sought to set up a meeting with the Plaintiff.  This meeting was ultimately held on 18th March, the day before Mr. Forde went on holidays.  It is quite clear from the letter setting up this meeting that the Defendants were primarily concerned with the unpaid cheques and with the Plaintiff's relationship with the Cornelscourt branch of the Bank of Ireland.  At the meeting, I am quite satisfied that the primary discussion was in relation to the dishonoured cheques.  The Plaintiff claims that at this meeting the Defendants sought a further £20,000 deposit as further security, and while Mr. Forde does not recollect this being said, I think it must have been mentioned in some form.  However, the primary purpose of the meeting was to enable the Plaintiff to make some proposal as to how he would ensure that no further cheques were dishonoured.  The Plaintiff alleges that the agreement was, in effect, terminated at this meeting, in that he was told that if he could not provide a further £20,000 deposit the agreement would be at an end.  While I do think the question of a further deposit was discussed, I have no doubt that the Defendants' main concern was the dishonouring of the cheques, and I do not think that the Plaintiff was given the sort of ultimatum that he claims.  In any event he claimed in his Statement of Claim that his agreement was wrongfully terminated at a meeting on 23rd March.
	After 18th March the Plaintiff continued to run the business for a few days, but made no payments to the Defendants other than by cheques which were dishonoured, and it is agreed that by 23rd March there was a total of £35,889 which had been collected by the Plaintiff but not paid to the Defendants.  On 23rd March there was a further meeting between the Plaintiff and Mr. Cyril Lynch, another director of the Defendants.  This meeting was sought by the Plaintiff.  Mr. Forde, who was the director who dealt with the financial matters on behalf of the Defendants, was still on holidays, and Mr. Lynch took the precaution of taping the conversation.  I am satisfied, although Mr. Lynch does not recollect it, that the Plaintiff did raise the question of a further deposit early on in this meeting, but I am also satisfied that the Plaintiff sought at this meeting to put an immediate end to the arrangement between the parties, and wished to have a stocktake taken the following day and simply walk away.  He also disclosed to Mr. Lynch that he had retained the takings since 18th March, and this lead to a very heated exchange.  Mr. Lynch in fact complained that the Defendants were  entitled to reasonable notice from the Plaintiff of the termination of the agreement.  In fact the agreement did determine the next day, in that a stocktake was held and the Plaintiff handed over the keys to the Defendants.  The Plaintiff subsequently lodged the sum of £35,889 in a deposit account in the Bank of Ireland and the Defendants continued to hold the Plaintiff's deposit of £20,000.  Ultimately, in April 1994, the Bank of Ireland brought proceedings against the Plaintiff, and the monies in the deposit account were used by him to discharge his liabilities to the bank.
	The Plaintiff's claim in this case is that the arrangement between the parties was wrongfully determined by the Defendants, and that the Plaintiff was entitled to reasonable notice to terminate the agreement, and maintains that six months' notice would be the minimum reasonable notice.  In view of the sudden termination of the agreement, there are of course a number of claims and cross-claims by the parties against each other, many of which are not in dispute, and the main issue undoubtedly is the termination of the agreement.
	There undoubtedly was a legally binding agreement between the parties, which unfortunately was not reduced to writing.  I am satisfied that the agreement did not provide for any specific form of termination, but that it would be implied into the agreement that either party could determine it on reasonable notice.  It is also implied that either party could terminate the agreement without notice if there were a fundamental breach by the other party.
	I am satisfied on the evidence that the agreement was in fact terminated by the Plaintiff.  I think he had got into such financial difficulties that it was impossible for him to continue.  I do not think that the events which took place at the meeting of 18th March constituted a termination of the agreement by the Defendants, either expressly or by necessary implication that if the Plaintiff did not furnish a further deposit the agreement would be at an end.  I think these matters were left open for discussion, and that at the meeting of 23rd March, called at the Plaintiff's request, it was the Plaintiff who stated that he would not continue the agreement, he having firstly, and quite wrongly, retained over £35,000 belonging to the Defendants.  My view is supported by the terms of a letter of 
23rd March, 1993 from the Plaintiff to the Defendants, which appears to me to have been clearly drafted by his legal advisers, and which does not complain that the agreement had been wrongly terminated by the Defendants, but merely states that the Plaintiff understands "that you view our agreement as ended as of today".
	Quite apart from that, it was clearly a fundamental condition of the agreement that the Plaintiff would lodge all monies in relation to the forecourt into the Defendants' account on the day following the receipt of those monies.  His operation of the Cornelscourt account had, of course, the effect of delaying the payment to the Defendants for several days, while the Plaintiff had the use of the money during that time, and was in my view a fundamental breach of the agreement between the parties, which would have justified an immediate termination by the Defendants.  Accordingly, I am not required to consider what I would have found to be reasonable notice in the circumstances of this agreement.
	While that disposes of the main issue in the case, there still remains the question of what amounts to taking an account between the parties.  I propose to consider briefly the various items claimed by each of the parties.

The Plaintiff's Claim
1.	Deposit.  This is not in issue. 	£20,000
2.	Stocktake value.  I will allow the Plaintiff the entire
	of the stocktake value and I propose to allow the 
	Defendants the payments actually made by them.	£20,175

3.	Commission.  I think there was no agreement to reduce
	the commission to 30%.	£ 5,870

4.	Customer accounts.  The Plaintiff can only recover so
	much of these accounts as were paid to the Defendants.
	The balance remains due from the customer to the 
	Plaintiff.	£ 3,942

5.	Sponsorship.  I do not think the Plaintiff was at any 
	loss. 	      nil

6.	Plaintiff's property.  I accept that there was some property
	left which it is very difficult to value.	£    600

7.	Bank interest.  The Defendants were entitled to hold the 
	deposit while the £35,000 was outstanding.  I will
	deal with interest on the balance on the account later.	       nil

8.	Loss of earnings.  The Plaintiff was not entitled to notice.                       nil

9.	Shop takings.  This is agreed.	£  2,232

10.	Credit card payments.	£  3,981

11.	Credits from suppliers  There is no evidence of any 
	credits.		       nil  

		Total	£56,800

DEFENDANTS' CLAIM
1.	Monies withheld by Plaintiff.  This is agreed. 	£35,889
2.	Payment for stock to BWG Foods Limited.  	£11,053
3.	Payments for wine to Greenhills Wines & Spirits.	£  2,460
4.	Payments to Irish Press Limited.	£     359
5.	Payments to National Lottery.	£     542
6.	Payments to Easons.	£     500
7.	Payments to Telecom Eireann.	£     344
8.	Work done on premises.  I am not satisfied that this is a 
	liability of the Plaintiff.	£      nil 
		Total	 £51,147

	This leaves a balance of £5,653 due from the Defendants to the Plaintiff.  I propose to grant a decree for this sum together with interest thereon pursuant to the Courts Act from 31st March, 1993.  I will hear arguments from Counsel as to any form of declarations that may be sought, and as to costs.