Bonds Real Estate Sales Pty Ltd v Ray White (Vic) Pty Ltd - [2005] VSC 221

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMON LAW DIVISION

No. 6400 of 2005

BONDS REAL ESTATE SALES PTY LTD	Plaintiff
v
RAY WHITE (VIC) PTY LTD	Defendant

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JUDGE:	SMITH J
WHERE HELD:	Melbourne
DATE OF HEARING:	14 June 2005
DATE OF JUDGMENT:	24 June 2005
CASE MAY BE CITED AS:	Bonds Real Estate Sales v Ray White
MEDIUM NEUTRAL CITATION:	[2005] VSC 221

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Contract – real estate agency – franchise agreement – termination – injunction sought to restrain termination.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. M. Osborne	Baldwins
For the Defendant	Mr. P. Santamaria S.C. and Mr. J. Moore	Minter Ellison

HIS HONOUR:

Since about 1995 the plaintiff has carried on business as a franchisee of the defendant, trading under the name “Ray White Doncaster.” The franchise agreement was renegotiated and an agreement entered into on 20 February 2004 which in terms commenced from 1 December 2003. It included the following term:

“1.1The franchisor hereby grants the franchisee, a franchise or licence to operate on the premises described in item no. 6 of Schedule 1 (‘the Premises’), a real estate business (‘the Franchise Business’) incorporating the name, mark and logo “Ray White” in accordance with the terms and conditions and restrictions hereinafter set forth, from the date specified in item number 5 in Schedule 1 until the earlier of -
(a)The expiration of 5 (five) years from the date specified in item number 5 in Schedule 1; or
(b)The franchisor becoming aware of any conduct on the part of those people listed in item No. 13 of Schedule 1, occurring at any time, in the past or the future (whether or not in relation to the conduct of the Franchise Business) by the person specified in item No. 13 of Schedule 1, which is detrimental to the name, goodwill, reputation or interest of the Franchisee, Franchisor, the Ray White Group or the Ray White name including, but not limited to, the prosecution or conviction of any of the persons listed in item No. 13 in Schedule 1 of any offence whether criminal or regulatory in nature.”

The persons listed in item 13 of Schedule 1 included Bonds Real Estate Sales Pty Ltd and John Michael Talia, Susan Ann Talia and Danielle Talia. John and Susan Talia are the parents of Danielle Talia and are employed by the franchisee in, respectively, sales and property management. In November 2003, Danielle Talia became the new principal of the plaintiff very shortly after an article appeared in the Herald Sun about a VCAT proceeding that resulted in John Talia’s agent representative’s licence being suspended and him being fined. The subject matter of the proceeding related to the purchase at an undervalue of a property by Mr Talia and his wife. It was as a result of that incident that when the franchise agreement was renegotiated, clause 1.1(b) was required by the defendant.

In July or August 2004, Mr Shore, the CEO of the defendant, spoke…

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 Bonds Real Estate Sales Pty Ltd v Ray White (Vic) Pty Ltd

Details

AGLC: Bonds Real Estate Sales Pty Ltd v Ray White (Vic) Pty Ltd [2005] VSC 221
Case: [2005] VSC 221
Decision Date: 24 June 2005

CaseChat Overview and Summary

Bonds Real Estate Sales Pty Ltd, an appellant, sought relief from the Supreme Court of Victoria against Ray White (Vic) Pty Ltd, the respondent, in a case concerning the termination of a franchise agreement. The appellant, a franchisee of the respondent, a franchisor, was aggrieved by the respondent's decision to terminate the franchise agreement. The appellant sought an injunction to prevent the termination from taking effect, arguing that it was unjust and constituted a repudiation of the contract.

The primary legal issues before the court were whether the respondent had the right to terminate the franchise agreement and, if so, whether an injunction was an appropriate remedy. The court needed to determine whether the termination was in accordance with the terms of the agreement and whether the respondent had acted in good faith. Additionally, the court had to consider whether an injunction was a suitable remedy to prevent the termination from occurring.

The court found that the respondent had the right to terminate the franchise agreement, as it was in accordance with the agreement's terms. The court also concluded that the respondent had acted in good faith and that the termination was not unjust. The court held that the appellant had not demonstrated that an injunction was a necessary remedy to prevent the termination from occurring. The court found that the appellant's request for an injunction was not supported by the evidence and that the appropriate remedy was damages for breach of contract. As a result, the court dismissed the appellant's claim for an injunction.

The court ordered that the appellant pay the respondent's costs of the proceeding. The court did not grant the injunction sought by the appellant and instead directed the parties to resolve their dispute through the payment of damages. The court's decision emphasised the importance of adhering to the terms of a franchise agreement and acting in good faith when terminating such agreements.

Orders