BB Australia Pty Ltd v Danset Pty Ltd [2017] NSWSC 1307

BB Australia Pty Ltd v Danset Pty Ltd [2017] NSWSC 1307

Although Danset breached the franchise agreement and Danset and the Miraldos engaged in misleading or deceptive conduct, BB Australia failed to prove that those wrongs caused compensable loss. The evidence did not establish that BB Australia would have exercised the right of first refusal at the relevant price, or that after exercising the option to purchase it would have operated a corporate store or installed a new franchisee profitably at the O'Brien Street site. The right of first refusal never became exercisable, the option was never exercised, the parties' detailed arm's length contract expressly disavowed fiduciary or similar relationships, and damages would have been an adequate...

Jurisdiction
Australia
Judgment Date
28 September 2017
Procedural Posture
Equity Commercial List Proceedings Concerning a Franchise Agreement / Principal Judgment After Hearing
Outcome
BB Australia's claims failed except that prayers for relief E, F and K concerning enforcement expenses against the first, second and third defendants were reserved for further consideration; the claims against the fourth and fifth defendants were dismissed with costs.
Legal Topics
['franchise Agreement' 'breach of Contract' 'right of First Refusal' 'option to Purchase' 'causation and Loss' 'misleading or Deceptive Conduct' 'inducing Breach of Contract' 'trusts' 'fiduciary Obligations' 'equitable Compensation' 'account of Profits' 'enforcement Expenses' 'costs']
['contract' 'equity' 'consumer Law' 'civil Procedure' 'evidence'] ['franchise Agreement' 'breach of Contract' 'right of First Refusal' 'option to Purchase' 'causation and Loss' 'misleading or Deceptive Conduct' 'inducing Breach of Contract' 'trusts' 'fiduciary Obligations' 'equitable Compensation' 'account of Profits' 'enforcement Expenses' 'costs']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Equity Commercial List Proceedings Concerning a Franchise Agreement / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether Danset and the Miraldos breached the franchise agreement and engaged in misleading or deceptive conduct.' 'Whether BB Australia would have acquired the equipment and inventory of the Bondi store and operated it as a corporate store or found a new franchisee but for the breaches.' 'Whether BB Australia proved loss caused by breach of contract, misleading or deceptive conduct, or inducing breach of contract.' 'Whether BB Australia was entitled to recover enforcement costs and expenses as damages or on an indemnity basis.' "Whether the franchise agreement created a trust over Danset's store assets in favour of BB Australia by reason of the right of first refusal or option to purchase." 'Whether Tresblue and Mr Price induced breaches of contract or would have accessory liability if a trust existed.' 'Whether Tresblue was a bona fide purchaser for value without notice and whether BB Australia failed to mitigate its loss.']

Ratio Decidendi

Although Danset breached the franchise agreement and Danset and the Miraldos engaged in misleading or deceptive conduct, BB Australia failed to prove that those wrongs caused compensable loss. The evidence did not establish that BB Australia would have exercised the right of first refusal at the relevant price, or that after exercising the option to purchase it would have operated a corporate store or installed a new franchisee profitably at the O'Brien Street site. The right of first refusal never became exercisable, the option was never exercised, the parties' detailed arm's length contract expressly disavowed fiduciary or similar relationships, and damages would have been an adequate...

Court Disposition

BB Australia's claims failed except that prayers for relief E, F and K concerning enforcement expenses against the first, second and third defendants were reserved for further consideration; the claims against the fourth and fifth defendants were dismissed with costs.

Orders

  • ['As between the plaintiff and the first, second and third defendants: reserve for further consideration prayers for relief E, F and K in the amended originating process filed on 11 March 2016.' 'As between the plaintiff and the first, second and third defendants: order that otherwise, the amended originating...