ACCC v Kyloe Pty Ltd [2007] FCA 1522

ACCC v Kyloe Pty Ltd [2007] FCA 1522

The ACCC failed to establish that the arrangements between Kyloe or Impact and the Sub-Distributors satisfied Clause 4(1)(b) of the Franchising Code of Conduct. Although Kyloe appointed Sub-Distributors to supply Polar Krush products, and although Kyloe and Impact imposed some limited obligations and restrictions and provided limited training, advice and promotional materials, those matters did not amount to a system or marketing plan substantially determined, controlled or suggested by the alleged franchisor. Impact's Machine Agreements did not grant Sub-Distributors a right to carry on a business, and the overall arrangements bore the hallmarks of distributorship rather than...

Jurisdiction
Australia
Judgment Date
18 October 2007
Procedural Posture
Application Alleging Contraventions of the Trade Practices Act 1975 (cth) and the Franchising Code of Conduct / Final Judgment After Hearing
Outcome
Application dismissed with costs.
Legal Topics
['franchising Code of Conduct' 'franchise Agreement Definition' 'system or Marketing Plan' 'disclosure Documents' 'ancillary Liability']
['trade Practices' 'franchising' 'industry Codes'] ['franchising Code of Conduct' 'franchise Agreement Definition' 'system or Marketing Plan' 'disclosure Documents' 'ancillary Liability']

Case Brief

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Procedural Posture

Application Alleging Contraventions of the Trade Practices Act 1975 (cth) and the Franchising Code of Conduct / Final Judgment After Hearing

Legal Issues

  1. 1 ['Whether Kyloe and/or Impact entered into franchise agreements with the relevant Sub-Distributors within the meaning of Clause 4 of the Franchising Code of Conduct.' 'Whether Kyloe and/or Impact contravened provisions of the Franchising Code of Conduct and thereby breached s 51AD of the Trade Practices Act 1975 (Cth).' 'Whether the directors of Kyloe and/or Impact incurred ancillary liability under s 75B of the Trade Practices Act 1975 (Cth).']

Ratio Decidendi

The ACCC failed to establish that the arrangements between Kyloe or Impact and the Sub-Distributors satisfied Clause 4(1)(b) of the Franchising Code of Conduct. Although Kyloe appointed Sub-Distributors to supply Polar Krush products, and although Kyloe and Impact imposed some limited obligations and restrictions and provided limited training, advice and promotional materials, those matters did not amount to a system or marketing plan substantially determined, controlled or suggested by the alleged franchisor. Impact's Machine Agreements did not grant Sub-Distributors a right to carry on a business, and the overall arrangements bore the hallmarks of distributorship rather than...

Court Disposition

Application dismissed with costs.

Orders

  • ['The application be dismissed with costs.']