Watt v Shepherd (No 3) [2021] FCA 1670

Watt v Shepherd (No 3) [2021] FCA 1670

The applicants established that the relevant pharmacy proprietors suffered compensable loss caused by the respondents' misleading or deceptive or unconscionable conduct. Compensation was to be assessed for each proprietor individually, not collectively, by refunding the net extra franchise and marketing fees paid during the franchise period while allowing for unpaid fees and relevant savings. The respondents' aggregate analysis of alleged benefits, sales, assets and profits did not provide a coherent basis to reduce the compensation. The assignment of Mazzawattie's SMSUT trade receivables was induced by the respondents' contravening conduct and was to be undone on condition that the...

Jurisdiction
Australia
Judgment Date
13 December 2021
Procedural Posture
Application for Compensation Order Under Ss 237 and 243 of the Australian Consumer Law / Relief and Damages Following Orders Striking Out the Respondents' Defence, Dismissing Their Cross Claim, and Declaring Franchise Agreements Void on and From 30 June 2018
Outcome
Application for compensation and restorative relief granted; assignment or agreement to assign trade receivables declared void ab initio; respondents ordered to pay compensation, interest and costs.
Legal Topics
['misleading or Deceptive Conduct' 'unconscionable Conduct' 'compensation Orders Under the Australian Consumer Law' 'avoidance of Franchise Agreements' 'assignment of Trade Receivables' 'assessment of Damages']
['consumer Law' 'competition and Consumer Protection' 'franchising'] ['misleading or Deceptive Conduct' 'unconscionable Conduct' 'compensation Orders Under the Australian Consumer Law' 'avoidance of Franchise Agreements' 'assignment of Trade Receivables' 'assessment of Damages']

Case Brief

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Procedural Posture

Application for Compensation Order Under Ss 237 and 243 of the Australian Consumer Law / Relief and Damages Following Orders Striking Out the Respondents' Defence, Dismissing Their Cross Claim, and Declaring Franchise Agreements Void on and From 30 June 2018

Legal Issues

  1. 1 ['Whether compensation under ss 237 and 243 of the Australian Consumer Law should be assessed by refunding net extra franchise and marketing fees paid by each relevant pharmacy proprietor after allowing for savings and unpaid fees.' 'Whether the respondents should receive credit for alleged benefits, including claimed increases in sales, net assets or profits during the franchise period.' 'Whether the assignment or agreement to assign SMSUT trade receivables to RX Holdings or SPG should be declared void or undone.' "Whether compensation should be assessed for each pharmacy proprietor individually rather than by treating the applicants' pharmacy businesses collectively."]

Ratio Decidendi

The applicants established that the relevant pharmacy proprietors suffered compensable loss caused by the respondents' misleading or deceptive or unconscionable conduct. Compensation was to be assessed for each proprietor individually, not collectively, by refunding the net extra franchise and marketing fees paid during the franchise period while allowing for unpaid fees and relevant savings. The respondents' aggregate analysis of alleged benefits, sales, assets and profits did not provide a coherent basis to reduce the compensation. The assignment of Mazzawattie's SMSUT trade receivables was induced by the respondents' contravening conduct and was to be undone on condition that the...

Court Disposition

Application for compensation and restorative relief granted; assignment or agreement to assign trade receivables declared void ab initio; respondents ordered to pay compensation, interest and costs.

Orders

  • ['It be declared that any assignment or agreement to assign to the third respondent and or the fourth respondent the debts due (as trade receivables) to the second applicant as trustee of the Snowy Mountains Services Unit Trust owing as at 30 June 2016 or at any other date or dates is void ab initio.' 'The...