Stramit Corporation Pty Ltd v Stone Homes Pty Ltd [2014] NSWSC 370

Stramit Corporation Pty Ltd v Stone Homes Pty Ltd [2014] NSWSC 370

Best Sheds' business system was not sufficiently similar to FBHS's 'Concept' as defined in the Distributor Agreement. The similarities between the two were merely superficial and did not amount to a breach of the restraint clause. The restraint provisions, as properly construed, did not prohibit the defendants from selling sheds in competition with FBHS unless they operated a system substantially similar to FBHS's Concept, which they did not. The restraint clauses are valid and reasonable, and the cross-claim alleging a collateral contract and misleading conduct failed due to lack of evidence supporting the alleged representation.

Jurisdiction
Australia
Judgment Date
01 April 2014
Procedural Posture
Principal Judgment / Final Hearing/decision
Outcome
Amended Statement of Claim and Cross-Claims dismissed
Legal Topics
['restraint of Trade' 'distributor Agreement' 'proper Construction' 'validity and Reasonableness' 'oral Collateral Contract' 'misleading or Deceptive Conduct' 'amendment to Pleadings']
['equity' 'contract Law' 'trade Practices' 'practice and Procedure'] ['restraint of Trade' 'distributor Agreement' 'proper Construction' 'validity and Reasonableness' 'oral Collateral Contract' 'misleading or Deceptive Conduct' 'amendment to Pleadings']

Case Brief

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Procedural Posture

Principal Judgment / Final Hearing/decision

Legal Issues

  1. 1 ['Whether defendants breached restraint in distributor agreement' 'Proper construction of restraint' "Whether business of fourth defendant is 'similar' to that of second plaintiff" 'Validity and reasonableness of restraint' 'Whether oral collateral contract established' 'Whether oral representation established' 'Whether amendment to pleadings should be allowed']

Ratio Decidendi

Best Sheds' business system was not sufficiently similar to FBHS's 'Concept' as defined in the Distributor Agreement. The similarities between the two were merely superficial and did not amount to a breach of the restraint clause. The restraint provisions, as properly construed, did not prohibit the defendants from selling sheds in competition with FBHS unless they operated a system substantially similar to FBHS's Concept, which they did not. The restraint clauses are valid and reasonable, and the cross-claim alleging a collateral contract and misleading conduct failed due to lack of evidence supporting the alleged representation.

Court Disposition

Amended Statement of Claim and Cross-Claims dismissed

Orders

  • ['Amended Statement of Claim dismissed' 'First Cross-Claim dismissed' 'Second Cross-Claim dismissed']