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The Browns ran photo shops in WhakatÄne and HÄwera under a
Langwoods franchise. Unhappy with how Langwoods was spending its 2.5% national marketing levy, they referred the matter to arbitration, where the arbitrator ruled that Langwoods were in breach of the franchise agreement, and ordered them to
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The court ruled that
Langwoods claim for the franchise fees was not barred by section 8(3)(a), as the fees in question had already accrued by the time of the cancellation of the franchise agreement, and accordingly refused to strike out the Langwood counterclaim.
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The Brown sought to speed up the process by having the
Langwood counterclaim struck out, and were unsuccessful in the High Court, and then appealed to the Court of Appeal.
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Langwoods countersued for the unpaid franchise fees of $ 21,433.55, which Browns refused to pay claiming it was barred under section 8(3)(a).
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The Browns subsequently cancelled their franchises, and sued
Langwoods for $ 21,668.77 for the unpaid arbitrators award (including interest).
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1 NZLR 173 is a cited case in New
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James Owen Brown and Linda
Margaret Brown v Langwoods Photo Stores Limited
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Chetwin, Maree; Graw, Stephen; Tiong, Raymond (2006).
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An introduction to the Law of
Contract in New Zealand
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157:(4th ed.). Thomson Brookers. p. .
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