Alborn & Ors v Stephens & Ors - [2009] QSC 198

SUPREME COURT OF QUEENSLAND

CITATION:

Alborn & Ors v Stephens & Ors [2009] QSC 198

PARTIES:

RICHARD MOLLISON ALBORN

(first plaintiff)

AND

ALBORN FAMILY CORPORATION PTY LTD ACN 080 955 595

(second plaintiff)

AND

SHAYKAR PTY LTD ACN 076 868 552

(third plaintiff)

AND

RAY STEPHENS

(first defendant)

AND

GLENYS MARGARET STEPHENS

(second defendant)

AND

AS&L PTY LTD ACN 087 729 048

(third defendant)

FILE NO/S:

7795/06

DIVISION:

Trial Division

PROCEEDING:

Civil Trial

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

29 July 2009

DELIVERED AT:

Brisbane

HEARING DATE:

14, 15, 16, 17, 20 and 21 April 2009

JUDGE:

Atkinson J

ORDER:

The claim by the first and second plaintiffs is dismissed; the third plaintiff is entitled to payment of the remainder, if any, of the consideration owing as at 10 October 2001 once the value of the third defendant’s payment of the third plaintiff’s liability under its bill of sale to AGC and the third plaintiff’s trade debts is deducted from the agreed price of $100,000 together with interest on any such amount. The counter-claim is consequentially dismissed.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – OTHER MATTERS – where first plaintiff and first and second defendants were family members and directors and shareholders of the third plaintiff company – where parties developed business plan for third plaintiff company to purchase certain subway franchises – where first and second defendant would operate the franchisees as franchisors – where shareholders contributed different amounts to the third plaintiff company in order to fund franchises and where profit would be shared equally – where franchises were not profitable – where parties came to an agreement in relation to the splitting of the operation of the franchised stores – where first and second defendants ceased to be directors of third plaintiff company but continued to be the franchisees of the stores – whether agreement between the parties was binding as between themselves or against third parties – whether defendants owed any contractual or equitable obligations to the plaintiffs as a result of the changes in operation, management and ownership of the franchised stores – whether the first and second defendants were liable to pay damages or equitable compensation – whether the third plaintiff was entitled to any relief at all.

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – OFFER AND ACCEPTANCE – CONTRACT IMPLIED FROM THE CONDUCT OF THE PARTIES – where parties did not enter into written contract expressing the arrangements for splitting the management, operation and ownership of franchise stores – whether a binding agreement was made

Bramble Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 followed
Jones v Dunkel (1959) 101 CLR 298 applied

Masters v Cameron (1954) 91 CLR 353 applied

COUNSEL:

Morris AJ, QC, with Greenwood K A M for plaintiff

Dunning P, SC, with Nevison L J for respondent

SOLICITORS:

Londy Lawyers for the plaintiffs

Gateway Lawyers for the defendants

Introduction

This litigation involved the falling out between the first plaintiff, Richard…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Alborn & Ors v Stephens & Ors

Details

AGLC: Alborn v Stephens [2009] QSC 198
Case: [2009] QSC 198
Decision Date: 29 July 2009

CaseChat Overview and Summary

The case of Alborn & Ors v Stephens & Ors involved family members and business associates who were directors and shareholders of a company involved in the operation of subway franchises. The plaintiffs sought to enforce an agreement concerning the management and operation of the franchises, which had not been reduced to a formal written contract. The defendants argued that the agreement was not binding or, if it was, that they were not liable for the losses incurred by the company. The court had to determine the binding nature of the agreement, whether the defendants had any contractual or equitable obligations to the plaintiffs, and if they were liable for damages or compensation. Additionally, the court considered whether the company was entitled to any relief.

The central legal issue was whether an enforceable agreement existed between the parties, given the lack of a formal written contract. The court examined the conduct of the parties and the context in which the agreement was made, to ascertain if an implied contract could be inferred. The court also had to consider the effect of the defendants' ceasing to be directors while remaining franchisees, and whether this change in status affected the enforceability of the agreement. Furthermore, the court needed to decide if the agreement, if binding, imposed any obligations on the defendants to the plaintiffs concerning the operation and management of the franchises.

The court concluded that the parties had indeed reached an agreement, which was binding in nature, despite the absence of a formal written contract. This agreement was implied from the conduct of the parties and their shared understanding of the business plan and the division of roles and responsibilities. The court found that the defendants were liable for damages or equitable compensation due to their breach of the agreement. However, the court determined that the company was entitled to only a limited form of relief, specifically the payment of the outstanding consideration for the franchises, less certain deductions.

The court ordered that the claims by the first and second plaintiffs be dismissed, while the third plaintiff was entitled to payment of the remaining consideration, if any, owing as at 10 October 2001, after deducting the value of certain payments made by the third defendant from the agreed price of $100,000, along with interest on any such amount. The counter-claim was dismissed as a result.

Orders

Orders of the court

The claim by the first and second plaintiffs is dismissed; the third plaintiff is entitled to payment of the remainder, if any, of the consideration owing as at 10 October 2001 once the value of the third defendant’s payment of the third plaintiff’s liability under its bill of sale to AGC and the third plaintiff’s trade debts is deducted from the agreed price of $100,000 together with interest on any such amount. The counter-claim is consequentially dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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CITATION:	Alborn & Ors v Stephens & Ors [2009] QSC 198
PARTIES:	RICHARD MOLLISON ALBORN (first plaintiff) AND ALBORN FAMILY CORPORATION PTY LTD ACN 080 955 595 (second plaintiff) AND SHAYKAR PTY LTD ACN 076 868 552 (third plaintiff) AND RAY STEPHENS (first defendant) AND GLENYS MARGARET STEPHENS (second defendant) AND AS&L PTY LTD ACN 087 729 048 (third defendant)
FILE NO/S:	7795/06
DIVISION:	Trial Division
PROCEEDING:	Civil Trial
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	29 July 2009
DELIVERED AT:	Brisbane
HEARING DATE:	14, 15, 16, 17, 20 and 21 April 2009
JUDGE:	Atkinson J
ORDER:	The claim by the first and second plaintiffs is dismissed; the third plaintiff is entitled to payment of the remainder, if any, of the consideration owing as at 10 October 2001 once the value of the third defendant’s payment of the third plaintiff’s liability under its bill of sale to AGC and the third plaintiff’s trade debts is deducted from the agreed price of $100,000 together with interest on any such amount. The counter-claim is consequentially dismissed.
CATCHWORDS:	CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – OTHER MATTERS – where first plaintiff and first and second defendants were family members and directors and shareholders of the third plaintiff company – where parties developed business plan for third plaintiff company to purchase certain subway franchises – where first and second defendant would operate the franchisees as franchisors – where shareholders contributed different amounts to the third plaintiff company in order to fund franchises and where profit would be shared equally – where franchises were not profitable – where parties came to an agreement in relation to the splitting of the operation of the franchised stores – where first and second defendants ceased to be directors of third plaintiff company but continued to be the franchisees of the stores – whether agreement between the parties was binding as between themselves or against third parties – whether defendants owed any contractual or equitable obligations to the plaintiffs as a result of the changes in operation, management and ownership of the franchised stores – whether the first and second defendants were liable to pay damages or equitable compensation – whether the third plaintiff was entitled to any relief at all. CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – OFFER AND ACCEPTANCE – CONTRACT IMPLIED FROM THE CONDUCT OF THE PARTIES – where parties did not enter into written contract expressing the arrangements for splitting the management, operation and ownership of franchise stores – whether a binding agreement was made Bramble Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 followed Jones v Dunkel (1959) 101 CLR 298 applied Masters v Cameron (1954) 91 CLR 353 applied
COUNSEL:	Morris AJ, QC, with Greenwood K A M for plaintiff Dunning P, SC, with Nevison L J for respondent
SOLICITORS:	Londy Lawyers for the plaintiffs Gateway Lawyers for the defendants