BB Australia Pty Ltd v Constanti

BB Australia, the franchisor, brought an action against its franchisees, Constanti, seeking payment of outstanding licence fees under a franchise agreement. The dispute centred on the franchisees' obligation to pay licence fees based on their reported trading. The franchisor produced an invoice detailing the amount due but did not disclose the underlying calculations. The primary legal issue was whether the mere production of the invoice and evidence of non-payment constituted sufficient proof of the claim for unpaid licence fees. Additionally, the case considered the bases for assessing the costs of the proceeding, specifically whether the court could order costs in line with an enforcement clause in the franchise agreement, and whether the franchisor's failure to explicitly plead a special claim for costs under the enforcement clause disqualified the court's discretion to award such costs.

The court held that the production of an invoice and evidence of non-payment was not sufficient to prove the claim for unpaid licence fees without disclosure of the underlying calculations. The court reasoned that the franchisor had the burden to provide a clear and understandable basis for the amount claimed. Regarding costs, the court found that the contractual stipulation about the extent of enforcement costs did not disqualify the court's discretion to order costs in line with the enforcement clause. The court determined that the franchisor's failure to explicitly plead a special claim for costs did not preclude the court from awarding such costs if it was consonant with the enforcement clause.

Ultimately, the court ruled that the franchisor's claim for unpaid licence fees was not substantiated by the evidence provided. Regarding costs, the court exercised its discretion to award costs in line with the enforcement clause of the franchise agreement. The court did not find the failure to explicitly plead a special claim for costs to be a barrier to awarding such costs, as long as they were consonant with the enforcement clause. The court ordered the franchisees to pay the costs of the proceeding in accordance with the enforcement clause, but did not specify the exact amount due to the unresolved issues concerning the underlying calculations of the licence fees.