22Compensation

#### 22 Compensation (1) Where a party to a franchise agreement suffers loss or damage by reason of the other party to the agreement contravening a provision of this Act or of the regulations, that other party is liable to compensate the first‑mentioned party for the loss or damage. (2) Where a franchisee avoids the franchise agreement under subsection 9(4) or 15(5), the franchisor is liable to pay to the franchisee such amount of compensation as is necessary to put the franchisee in the same position as the franchisee would have been in if the agreement had not been entered into. (3) Where: (a) the marketing premises to which a franchise agreement relates are held by the franchisor (in this subsection referred to as the original franchisor) under a lease (in this subsection referred to as the head lease); (b) the head lease is terminated in such circumstances that the franchisee: (i) continues to have the same right to possess, occupy or use the premises as the franchisee had before the termination of the head lease; or (ii) obtains, or is entitled to seek, that right by way of relief against the termination of the head lease; (c) that right is or will be held, as the case may be, from a person who is neither the original franchisor nor a corporation related to the original franchisor; and (d) by reason of the operation of paragraph 6(1)(a) or subparagraph 6(1)(b)(ii), this Act (other than this section) does not, or will not, as the case may be, apply in relation to any agreement under or by virtue of which that right is or will be held; then, if the franchisee surrenders that right, or the entitlement to seek that right, as the case may be, together with all other rights held in respect of the premises under or by virtue of any franchise agreement, the original franchisor is liable to pay to the franchisee such amount of compensation as is necessary to put the franchisee in the same position as the franchisee would have been in if the head lease had not been terminated. (4) Without limiting the generality of subsections (2) and (3), where: (a) compensation is payable to a franchisee under either of those subsections; (b) after 3 days’ notice in writing served on the franchisor, the franchisee leaves on the marketing premises, and abandons his rights to, any motor fuel or other goods sold to the franchisee by the franchisor; and (c) the motor fuel or other goods are unadulterated and undamaged; the compensation payable to the franchisee includes an amount equal to the sum of all amounts paid by the franchisee to the franchisor in respect of the motor fuel or other goods (including any amount so paid at a time when this Act did not apply in relation to the franchise agreement or at a time before the commencement of that agreement). (5) Without limiting the generality of subsections (1) and (3), in assessing any compensation payable to the franchisee, regard shall be had to any goodwill in respect of the marketing premises attributable to the franchisee. (6) Where, in accordance with subsection (3), a corporation is liable to pay compensation, then, if the corporation is related to one or more other corporations, both, or all, as the case may be, of those corporations are jointly and severally liable to pay the compensation and, where one of those corporations has paid any of the compensation, it may recover, by way of contribution and as a debt, from the other corporation or any of the other corporations, as the case may be, such part of the amount paid as the court considers just and equitable. (7) A corporation is not liable to pay compensation to a franchisee by virtue of subsection (6) unless it is the franchisor in relation to a franchise agreement under or by virtue of which rights have been surrendered by the franchisee under subsection (3). (8) Compensation may be recovered under this section by action in a court, commenced at any time within 6 years after the day on which the liability to pay the compensation arose.