Civic Video Pty Ltd v Garfell Nominees Pty Ltd [2008] NSWDC 3

Civic Video Pty Ltd v Garfell Nominees Pty Ltd [2008] NSWDC 3

The failure of the plaintiff to obtain a written statement from defendants confirming receipt and understanding of the disclosure document and Code before renewal or extension of the franchise agreements constituted a breach of Clause 11(1) of the Franchising Code of Conduct and s 51AD of the Trade Practices Act. Consequently, the agreement pleaded was illegal and unenforceable.

Parties
Plaintiff: Civic Video Pty Ltd; 1st Defendant: Garfell Nominees Pty Ltd; 2nd Defendants: John & Joe Vumbaca
Jurisdiction
Australia
Judgment Date
05 February 2008
Procedural Posture
Civil / Determination of Separate Issue (illegality) Following Amended Pleadings; Judgment
Outcome
Verdict and Judgment for the Defendants. Agreement pleaded declared void ab initio. Exhibits to be returned to parties.
Legal Topics
Franchise Agreements, Renewal or Extension, Application of Franchising Code of Conduct, Breach, Illegality, Consequences
Franchising Trade Practices Contract Law Franchise Agreements Renewal or Extension Application of Franchising Code of Conduct Breach Illegality +1 more

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Parties

Civic Video Pty Ltd

Plaintiff

Garfell Nominees Pty Ltd

1st Defendant

John & Joe Vumbaca

2nd Defendants

Procedural Posture

Civil / Determination of Separate Issue (illegality) Following Amended Pleadings; Judgment

Legal Issues

  1. 1 Whether franchise agreement was renewed or extended in breach of Franchising Code of Conduct and Trade Practices Act
  2. 2 Whether failure to comply with disclosure requirements rendered agreement illegal and unenforceable

Ratio Decidendi

The failure of the plaintiff to obtain a written statement from defendants confirming receipt and understanding of the disclosure document and Code before renewal or extension of the franchise agreements constituted a breach of Clause 11(1) of the Franchising Code of Conduct and s 51AD of the Trade Practices Act. Consequently, the agreement pleaded was illegal and unenforceable.

Court Disposition

Verdict and Judgment for the Defendants. Agreement pleaded declared void ab initio. Exhibits to be returned to parties.

Orders

  • On the Statement of Claim, Verdict and Judgment for the Defendants.
  • On the Amended Cross-Claim, declare the whole of the agreement pleaded in paragraph 30(i) of the Statement of Claim void ab initio pursuant to s 87(2)(a) Trade Practices Act 1974 (Cth).