Narellan Franchise Pty Ltd v RBME Pty Ltd [2022] NSWSC 988

Narellan Franchise Pty Ltd v RBME Pty Ltd [2022] NSWSC 988

There is a serious question to be tried that the post-contract restraint in clause 12.5(b) of the franchise agreements protects legitimate business interests of the franchisor, specifically goodwill and customer relationships; the restraint is reasonable in area (franchise territory) and term (12 months) and balance of convenience favours granting interlocutory relief against the first, second and third defendants with carve out for pre-existing customer contracts.

Jurisdiction
Australia
Judgment Date
25 July 2022
Procedural Posture
Principal Judgment / Interlocutory Application for Injunction
Outcome
Interlocutory injunction granted against first, second and third defendants, with exclusion for performance of outstanding customer contracts; parties to bring short minutes of order as to form of relief.
Legal Topics
['restraint of Trade' 'franchise Agreements' 'interlocutory Relief' 'goodwill Protection']
['equity' 'commercial Law'] ['restraint of Trade' 'franchise Agreements' 'interlocutory Relief' 'goodwill Protection']

Case Brief

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Procedural Posture

Principal Judgment / Interlocutory Application for Injunction

Legal Issues

  1. 1 ['Is the post-contract restraint in the franchise agreements enforceable against the defendants?' 'Does the balance of convenience favour granting interlocutory relief?' 'Does the restraint protect legitimate business interests of the franchisor?']

Ratio Decidendi

There is a serious question to be tried that the post-contract restraint in clause 12.5(b) of the franchise agreements protects legitimate business interests of the franchisor, specifically goodwill and customer relationships; the restraint is reasonable in area (franchise territory) and term (12 months) and balance of convenience favours granting interlocutory relief against the first, second and third defendants with carve out for pre-existing customer contracts.

Court Disposition

Interlocutory injunction granted against first, second and third defendants, with exclusion for performance of outstanding customer contracts; parties to bring short minutes of order as to form of relief.

Orders

  • ['Direct parties to bring in short minutes of order to implement these reasons.' 'List proceedings for further directions.' 'Refer matter to Expedition List for directions.' 'Grant liberty to apply.']