Novamaze Pty Ltd & Ors v Cut Price Deli Pty Ltd & Ors [1995] FCA 42

Novamaze Pty Ltd & Ors v Cut Price Deli Pty Ltd & Ors [1995] FCA 42

The applicants established an arguable case that clause 13.3, the only provision relied on by the first respondent to take over the business, was void and unenforceable as contrary to public policy because it was capable of operating as a powerful disincentive to the franchisee taking proceedings against the franchisor and therefore as an ouster of the court's jurisdiction. Because the balance of convenience strongly favoured the applicants, who faced loss of their livelihood and business disruption while the first respondent showed little compensable loss, interlocutory injunctions were granted.

Jurisdiction
Australia
Judgment Date
06 February 1995
Procedural Posture
Contract and Trade Practices Act Proceeding Concerning a Franchise Agreement / Interlocutory Motion for Injunction Until Trial
Outcome
Interlocutory injunction granted; costs reserved.
Legal Topics
['interlocutory Injunction' 'ouster of Jurisdiction' 'franchise Agreement' 'misleading or Deceptive Conduct' 'equitable Set Off' 'balance of Convenience']
['contract' 'trade Practices' 'franchising' 'civil Procedure'] ['interlocutory Injunction' 'ouster of Jurisdiction' 'franchise Agreement' 'misleading or Deceptive Conduct' 'equitable Set Off' 'balance of Convenience']

Case Brief

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Procedural Posture

Contract and Trade Practices Act Proceeding Concerning a Franchise Agreement / Interlocutory Motion for Injunction Until Trial

Legal Issues

  1. 1 ['Whether clause 13.3 of the deed of franchise was arguably void and unenforceable as contrary to public policy because it operated as an ouster of the jurisdiction of the court or a substantial disincentive to commence legal proceedings.' 'Whether the applicants had shown a serious question to be tried sufficient to justify interlocutory relief.' "Whether the balance of convenience favoured restraining the first respondent from taking possession and management of the applicants' Cut Price Deli business pending trial." 'Whether the first respondent could rely on clause 13.3 after the applicants commenced proceedings alleging breaches of s. 52 of the Trade Practices Act 1974.']

Ratio Decidendi

The applicants established an arguable case that clause 13.3, the only provision relied on by the first respondent to take over the business, was void and unenforceable as contrary to public policy because it was capable of operating as a powerful disincentive to the franchisee taking proceedings against the franchisor and therefore as an ouster of the court's jurisdiction. Because the balance of convenience strongly favoured the applicants, who faced loss of their livelihood and business disruption while the first respondent showed little compensable loss, interlocutory injunctions were granted.

Court Disposition

Interlocutory injunction granted; costs reserved.

Orders

  • ["Upon each of the applicants giving the usual undertaking as to damages, the first respondent, whether by itself or its servants or agents or any of them or otherwise, be restrained until the trial of this action, or earlier order, from entering into possession of the applicants' business operated from the Cut...