Biman International Pty Ltd v Amalgamated Security Services Pty Ltd [2002] FCA 919

Biman International Pty Ltd v Amalgamated Security Services Pty Ltd [2002] FCA 919

Even assuming cl 26 was enforceable as a negative covenant, the Court refused to stay the proceedings for mediation at that time because discretionary factors made a stay inappropriate: the respondents delayed raising the clause until about two months after proceedings commenced, some costs had been incurred, the applicant had made a bona fide pre-proceeding attempt to discuss resolution, the relief sought included rescission or avoidance of the agreement, meaningful settlement was unlikely without disclosure about franchising matters, and the dispute was not then shown to be ripe for useful mediation. The motion was dismissed insofar as it sought mediation orders, while the clause...

Jurisdiction
Australia
Judgment Date
20 December 2002
Procedural Posture
Civil Proceeding Concerning a Franchise Arrangement; Notice of Motion Seeking a Stay Pending Contractual Dispute Resolution and Security for Costs / Interlocutory Motion
Outcome
The notice of motion was dismissed insofar as it sought a stay for mediation; costs on that aspect were costs in the cause, and further conditional and procedural orders were made concerning security for costs, dissolution of the stay against the fourth respondent, defence filing and liberty to apply.
Legal Topics
['stay of Proceedings' 'mediation Clause' 'dispute Resolution Clause' 'negative Covenant' 'security for Costs' 'franchising Disclosure' 'rescission or Avoidance of Agreement']
['civil Procedure' 'alternative Dispute Resolution' 'contract Law' 'franchising'] ['stay of Proceedings' 'mediation Clause' 'dispute Resolution Clause' 'negative Covenant' 'security for Costs' 'franchising Disclosure' 'rescission or Avoidance of Agreement']

Case Brief

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Procedural Posture

Civil Proceeding Concerning a Franchise Arrangement; Notice of Motion Seeking a Stay Pending Contractual Dispute Resolution and Security for Costs / Interlocutory Motion

Legal Issues

  1. 1 ['Whether the proceedings should be stayed pending compliance with cl 26 of the Deed of Master Licence Agreement requiring negotiation and mediation before court proceedings.' 'Whether cl 26 should be treated as an enforceable negative covenant restraining proceedings until the contractual dispute resolution process was followed.' 'Whether discretionary considerations, including delay, prior attempts to negotiate, the presence of the fourth respondent, the need for disclosure and the ripeness of the dispute for mediation, justified refusing a stay at that time.' 'Whether a mediation clause survives where the applicant seeks to avoid or rescind the agreement containing the clause.']

Ratio Decidendi

Even assuming cl 26 was enforceable as a negative covenant, the Court refused to stay the proceedings for mediation at that time because discretionary factors made a stay inappropriate: the respondents delayed raising the clause until about two months after proceedings commenced, some costs had been incurred, the applicant had made a bona fide pre-proceeding attempt to discuss resolution, the relief sought included rescission or avoidance of the agreement, meaningful settlement was unlikely without disclosure about franchising matters, and the dispute was not then shown to be ripe for useful mediation. The motion was dismissed insofar as it sought mediation orders, while the clause...

Court Disposition

The notice of motion was dismissed insofar as it sought a stay for mediation; costs on that aspect were costs in the cause, and further conditional and procedural orders were made concerning security for costs, dissolution of the stay against the fourth respondent, defence filing and liberty to apply.

Orders

  • ['The notice of motion filed by the first, second and third respondents on 26 November 2002 in relation to mediation be dismissed.' 'Costs of the motion, to the extent it deals with the orders about mediation, of the applicant to the proceedings/respondent to the motion be costs in the cause.' 'On the condition that...