BB Australia v Danset (No 2) [2018] NSWSC 1745

BB Australia v Danset (No 2) [2018] NSWSC 1745

Clause 8.6 of the franchise agreement, read with cl 8.7 and in the context of cl 20.13, was an indemnity for costs and expenses incurred in claims against BBA arising from specified conduct, not an indemnity for BBA's costs of unsuccessful proceedings against Danset and the Miraldos. Clause 20.14 applied where BBA engaged legal counsel in relation to a dispute but neither litigation nor arbitration ensued, so it had no application once judicial proceedings occurred. Clause 8 of the deed of guarantee and indemnity did not apply because BBA had not enforced any right under the guarantee; its claim failed and enforcement does not include unsuccessful attempts to enforce. Accordingly BBA was...

Jurisdiction
Australia
Judgment Date
14 November 2018
Procedural Posture
Equity Commercial List; Costs Claim for Contractual Indemnity for Enforcement Expenses / Determination on the Papers of Unresolved Enforcement Expense Issue After Trial Judgment and Dismissal of Appeal and Cross Appeal
Outcome
BB Australia Pty Ltd's claim for indemnity for enforcement expenses was dismissed, and it was ordered to pay the first, second and third defendants' costs of the proceedings.
Legal Topics
['construction of Franchise Agreement' 'construction of Deed of Guarantee and Indemnity' 'indemnity for Enforcement Expenses' 'costs of Unsuccessful Proceedings']
['contract' 'costs' 'franchising' 'guarantee and Indemnity'] ['construction of Franchise Agreement' 'construction of Deed of Guarantee and Indemnity' 'indemnity for Enforcement Expenses' 'costs of Unsuccessful Proceedings']

Case Brief

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Procedural Posture

Equity Commercial List; Costs Claim for Contractual Indemnity for Enforcement Expenses / Determination on the Papers of Unresolved Enforcement Expense Issue After Trial Judgment and Dismissal of Appeal and Cross Appeal

Legal Issues

  1. 1 ['Whether cls 8.6 and 20.14 of the franchise agreement entitled BB Australia Pty Ltd to be indemnified for costs incurred in investigating and litigating its claims against Danset Pty Ltd and the Miraldos.' 'Whether cl 8 of the deed of guarantee and indemnity required the guarantors to pay expenses incurred by BB Australia Pty Ltd in connection with enforcement of rights under the guarantee.' 'Whether the relevant clauses applied where BB Australia Pty Ltd commenced proceedings that were ultimately unsuccessful.']

Ratio Decidendi

Clause 8.6 of the franchise agreement, read with cl 8.7 and in the context of cl 20.13, was an indemnity for costs and expenses incurred in claims against BBA arising from specified conduct, not an indemnity for BBA's costs of unsuccessful proceedings against Danset and the Miraldos. Clause 20.14 applied where BBA engaged legal counsel in relation to a dispute but neither litigation nor arbitration ensued, so it had no application once judicial proceedings occurred. Clause 8 of the deed of guarantee and indemnity did not apply because BBA had not enforced any right under the guarantee; its claim failed and enforcement does not include unsuccessful attempts to enforce. Accordingly BBA was...

Court Disposition

BB Australia Pty Ltd's claim for indemnity for enforcement expenses was dismissed, and it was ordered to pay the first, second and third defendants' costs of the proceedings.

Orders

  • ['Order that prayers for relief E, F and K in the further amended originating process filed on 11 March 2016 be dismissed.' "Order the plaintiff to pay the first, second and third defendants' costs of the proceedings, including of the reserved prayers for relief."]