Juice Station Franchising Pty Ltd (in liq) & Ors v Konidaris & Ors; Nandaway Pty Ltd & Ors v Juice Station Franchising & Ors

[2006] NSWSC 1024

CITATION:	Juice Station Franchising Pty Ltd (in liq) & Ors v Konidaris & Ors; Nandaway Pty Ltd & Ors v Juice Station Franchising & Ors [2006] NSWSC 1024
HEARING DATE(S):	26/09/06
JUDGMENT OF:	Gzell J
EX TEMPORE JUDGMENT DATE:	09/26/2006
DECISION:	Application for stay refused with costs.
CATCHWORDS:	PROCEDURE - Stay of Proceedings - Application for stay of possession pending determination of appeal from Associate Justice - Whether serious question raised - Applicants terminated franchise agreement for alleged repudiation - Whether under the Trade Practices Act 1974 (Cth), s 87(2)(g) they entitled to an order restropectively varying the terminated agreement to allow them to retain possession
LEGISLATION CITED:	Civil Procedure Act Trade Practices Act 1974 (Cth)
PARTIES:	Juice Station Franchising Pty Ltd - 1st Plaintiff The Juice Station Properties Pty Ltd - 2nd Plaintiff Juice Station Australasia Pty Ltd - 3rd Plaintiff Eleftherios Konidaris - 2nd Defendant Nandaway Jp Frozen Foods Pty Ltd - 1st Applicant Christodoulos Papantoniou - 2nd Applicant
FILE NUMBER(S):	SC 5156/05; 3058/06
COUNSEL:	Mr R Gye Ms J Merkel

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

TUESDAY 26 SEPTEMBER 2006

5156/05 JUICE STATION FRANCHISING PTY LTD (IN LIQ) & ORS v ELEFTHERIOS KONIDARIS & ORS
3058/06 NANDAWAY PTY LTD & ORS v JUICE STATION FRANCHISING PTY LTD (IN LIQ) & ORS

EX TEMPORE JUDGMENT

1 I have before me a notice of motion for an order pursuant to s 135(1) of the Civil Procedure Act 2005 that execution of a writ of possession ordered by Macready AsJ be stayed until further order and an order pursuant to s 135(2) that the Sheriff suspend execution of the writ until further order.

2 The application is supported by an affidavit of the solicitor for the second and seventh defendants in which he swears that unless the orders for stay are made, the applicants will be deprived of the opportunity to obtain the relief they seek on the hearing of an appeal from Macready AsJ’s judgment. The applicants seek the stays in order to preserve the status quo until the determination of the appeal.

3 On appeal the applicants intend to argue that his Honour was in error in finding that it was beyond the power of the court to make orders under the Trade Practices Act 1974 (Cth), s 87 with respect to an agreement that had been terminated; that based on undisputed evidence, the plaintiffs had not given effect to the transfer of leases contemplated in their business sale agreement and it was not open to his Honour to make positive findings of such prejudice to a third party that leave to proceed with a claim under s 87 should be summarily rejected; and that leave should be refused because the only conceivable claims of the cross-claimants could be proved in winding up.

4 The Trade Practices Act 1974 (Cth), s 87(2) sets out a number of orders that can be made. Relevant for present purposes is s 87(2)(g) which provides:

“an order, in relation to an instrument creating or transferring an interest in land, directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to execute an instrument that:

(i) varies, or has the effect of varying, the first-mentioned instrument; or
(ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first-mentioned instrument."

5 His Honour assumed that it might be possible, in terms of that provision, for an order to be made retrospectively varying the franchise agreement and the licence agreement in such way as to allow the applicants to retain possession but his Honour went on to say this at [35]:

“The real question is whether there is a serious question to be tried by the Court in the circumstances of the present case. Here I have already held that it was the franchisees who instigated the termination of the agreement. For them now to suggest that the agreement be put back in place in order to be varied seems an enormous step and, in any event, the power of the Court to make varying orders appears to be to make orders with respect to an existing agreement not one which has been terminated."

6 It has been put to me that while a letter alleging repudiation and accepting the termination of the agreement was sent by the applicants, it may have been the situation that those to whom the letter was sent were not in a position to perform in any event.

7 Be that as it may, it seems to me that there is little prospect of success in an application under the Trade Practices Act 1974 (Cth), s 87(2)(g) in the circumstances of this case particularly as, if the orders of the Acting Justice are set aside on appeal, I am of the view that damages are a sufficient remedy.

8 In those circumstances, I am not convinced that a serious question to be tried has been established on the basis of the alleged errors of the Associate Justice in his reasons for judgment.

9 In those circumstances, in the exercise of my discretion, I decline to grant a stay of the writ of possession. The notice of motion is dismissed. I order the applicants to pay the plaintiffs’ costs in matter numbered 5156 of 2005 and the respondents’ costs in matter numbered 3058 of 2006.

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