Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd

Hoy Mobile Pty Ltd (Hoy Mobile) and Allphones Retail Pty Ltd (Allphones) were the parties in proceedings before the High Court of Australia concerning a dispute over the interpretation of a franchise agreement. The core of the disagreement related to the calculation of royalties payable by Hoy Mobile to Allphones under the terms of their franchise agreement.

The High Court was required to determine whether the trial judge had erred in their construction of clause 10.2 of the franchise agreement, specifically concerning the method of calculating the gross revenue upon which royalties were to be paid. The central legal issue was whether certain payments received by Hoy Mobile, which were passed on to third-party suppliers and did not represent revenue for Hoy Mobile's own benefit, should be included in the calculation of gross revenue for royalty purposes.

The High Court, in a joint judgment delivered by French CJ and Gummow J, found that the trial judge's interpretation of clause 10.2 was correct. Their Honours reasoned that the plain language of the clause indicated that "gross revenue" referred to the revenue actually received by Hoy Mobile in its own right, not amounts collected as an agent or conduit for third parties. The court emphasised the importance of construing the contract according to its natural and ordinary meaning, considering the context of the entire agreement. The appeal was dismissed.