Narellan Franchise Pty Ltd v RBME Pty Ltd (No 2) [2022] NSWSC 1590

Narellan Franchise Pty Ltd v RBME Pty Ltd (No 2) [2022] NSWSC 1590

The post-contractual competition restraints in the franchise agreements and deed polls, insofar as they apply generally to the conduct of a similar business for the future or to the solicitation of customers with uncompleted contracts, are invalid and unenforceable as unreasonable restraints of trade; any such restraint cannot be enforced by the second plaintiff (supplier), and no injunction should be granted in aid of such restraints.

Parties
First Plaintiff: Narellan Franchise Pty Limited; Second Plaintiff: Narellan Pools Pty Limited; First Defendant: RBME Pty Limited; Second Defendant: Tim Ranieri; Third Defendant: Matthew John Ranieri; Fourth Defendant: T&M Pools Pty Limited
Jurisdiction
Australia
Judgment Date
22 November 2022
Procedural Posture
Civil (equity, Restraint of Trade, Franchise) / Final Determination of Claim for Injunctive Relief Following Interlocutory Stage; Other Monetary and Confidentiality Claims Adjourned
Outcome
Injunctions and relief sought as to restraint of trade refused and claims of the second plaintiff (supplier) dismissed; proceedings adjourned for directions as to residual claims.
Legal Topics
Franchise Agreements, Restraint of Trade, Business Competition, Confidential Information, Goodwill
Equity Contract Restraint of Trade Franchise Agreements Business Competition Confidential Information Goodwill

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 16 Party arguments 2
Sign in to unlock

Parties

Narellan Franchise Pty Limited

First Plaintiff

Narellan Pools Pty Limited

Second Plaintiff

RBME Pty Limited

First Defendant

Tim Ranieri

Second Defendant

Matthew John Ranieri

Third Defendant

T&M Pools Pty Limited

Fourth Defendant

Procedural Posture

Civil (equity, Restraint of Trade, Franchise) / Final Determination of Claim for Injunctive Relief Following Interlocutory Stage; Other Monetary and Confidentiality Claims Adjourned

Legal Issues

  1. 1 Whether post-contractual restraint covenants in franchise agreement and deed poll are enforceable
  2. 2 Whether franchisor entitled to enforce restraint in interest of incoming franchisee
  3. 3 Whether franchisor entitled to benefit from franchisee's accumulated skill and experience

Ratio Decidendi

The post-contractual competition restraints in the franchise agreements and deed polls, insofar as they apply generally to the conduct of a similar business for the future or to the solicitation of customers with uncompleted contracts, are invalid and unenforceable as unreasonable restraints of trade; any such restraint cannot be enforced by the second plaintiff (supplier), and no injunction should be granted in aid of such restraints.

Court Disposition

Injunctions and relief sought as to restraint of trade refused and claims of the second plaintiff (supplier) dismissed; proceedings adjourned for directions as to residual claims.

Orders

  • Declaration regarding commencement of the restraint period under the Sydney City franchise agreement reflecting that it began on 1 June 2022.
  • Dismissal of claim for injunctions against each defendant; interlocutory orders discharged.