Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2)

The case of Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) involved a dispute between Hoy Mobile and Allphones Retail over the terms of a franchise agreement. The primary issues in the case were the determination of the territory granted to Hoy Mobile, the obligations of Allphones under the franchise agreement, and the consequences of Hoy Mobile's fraudulent conduct. The case was heard in the Supreme Court of New South Wales.

The key legal issues before the court included whether Allphones was entitled to terminate the franchise agreement due to Hoy Mobile's fraudulent conduct, and if so, whether Allphones could rely on that fraud to effect the termination. The court also had to determine the extent of Hoy Mobile's fraudulent activities and whether Allphones had breached the franchise agreement by not paying commissions as required. Additionally, the court needed to assess whether Allphones' failure to disclose certain information in its disclosure documents constituted a breach of the Franchising Code of Conduct.

The court found that the territory granted to Hoy Mobile was limited to the suburb of Eastgardens. It concluded that Allphones was obliged to pay Hoy Mobile commissions on all sums received from carriers in respect of sales and activations of plans effected by Hoy Mobile. The court also determined that Allphones' failure to comply with certain provisions of the Franchising Code of Conduct before entering into the franchise agreement did not render the agreement void. However, the court found that Hoy Mobile had engaged in fraudulent conduct in connection with the operation of the franchise business. Despite this, the court held that Allphones was not entitled to terminate the franchise agreement because it had not been ready and willing to perform due to its own breaches and dishonest conduct. The court further found that Allphones had not established that a certain charge it imposed on Hoy Mobile was reasonable.

The court ordered that Allphones must pay Hoy Mobile for its breaches of the franchise agreement. In the event that the parties could not agree on the formulation of the final orders, each party was required to prepare its own draft of the orders. The court scheduled a re-listing of the matter to allow for further argument on the final orders. The parties were directed to serve their respective draft orders and written submissions on costs by specific dates, with the final orders to be argued on a specified date.