SPAR Licensing Pty Ltd v MIS QLD Pty Ltd [2014] FCAFC 50

SPAR Licensing Pty Ltd v MIS QLD Pty Ltd [2014] FCAFC 50

The representations made by SPAR regarding withdrawal from the franchise agreement did not constitute misleading or deceptive conduct, because at the time there were reasonable grounds for making them. However, SPAR breached the Franchising Code of Conduct by failing to provide a current disclosure document in compliance with Annexure 1 prior to the execution of the franchise agreement, and the appropriate remedy is to set aside the franchise and special offer agreements prospectively from the date of judgment.

Parties
First Appellant: SPAR Licensing Pty Ltd (ACN 002 965 193); Second Appellant: SPAR Australia Ltd (ACN 102 281 167); First Respondent: MIS QLD Pty Ltd (ACN 132 323 418); Second Respondent: Christopher Martin Sichter; Third Respondent: Sharon Lee Ward; Fourth Respondent: Anthony Paul Aplin
Jurisdiction
Australia
Judgment Date
01 May 2014
Procedural Posture
Appeal / Judgment – Appellate Decision
Outcome
Appeal upheld in part
Legal Topics
Misleading and Deceptive Conduct, Franchising Code of Conduct, Disclosure Obligations, Remedies for Statutory Contraventions
Trade Practices Franchising Contract Law Consumer Law Misleading and Deceptive Conduct Franchising Code of Conduct Disclosure Obligations Remedies for Statutory Contraventions

Case Brief

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Parties

SPAR Licensing Pty Ltd (ACN 002 965 193)

First Appellant

SPAR Australia Ltd (ACN 102 281 167)

Second Appellant

MIS QLD Pty Ltd (ACN 132 323 418)

First Respondent

Christopher Martin Sichter

Second Respondent

Sharon Lee Ward

Third Respondent

Anthony Paul Aplin

Fourth Respondent

Procedural Posture

Appeal / Judgment – Appellate Decision

Legal Issues

  1. 1 Whether franchisor engaged in misleading and deceptive conduct in representations to prospective franchisee
  2. 2 Whether franchisor breached the Franchising Code of Conduct by failing to provide a current disclosure document
  3. 3 Whether franchise agreement should be set aside due to contravention of the Code

Ratio Decidendi

The representations made by SPAR regarding withdrawal from the franchise agreement did not constitute misleading or deceptive conduct, because at the time there were reasonable grounds for making them. However, SPAR breached the Franchising Code of Conduct by failing to provide a current disclosure document in compliance with Annexure 1 prior to the execution of the franchise agreement, and the appropriate remedy is to set aside the franchise and special offer agreements prospectively from the date of judgment.

Court Disposition

Appeal upheld in part

Orders

  • The appeal be upheld in part.
  • Orders 2 and 5 to 12 of the orders made by Griffiths J on 23 November 2012 be set aside.