M and S Butler Investments Pty Ltd and Ors v Granny May's Franchising Pty Ltd and Ors Stewart, Jack and Anor v Granny May's Franchising Pty Ltd and Ors

Case [1997] FCA 1141

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
QG 136 of 1996

BETWEEN:

M & S BUTLER INVESTMENTS PTY LTD
ACN 066 688 211
FIRST APPLICANT

MARK BUTLER & SHAUNA BUTLER
SECOND APPLICANTS

JACK STEWART & JANN STEWART
THIRD APPLICANT

AND:

GRANNY MAY'S FRANCHISING PTY LTD
ACN 003 917 879
FIRST RESPONDENT

MICHAEL TENNER
SECOND RESPONDENT

ROBERT MICHAEL SMITH
THIRD RESPONDENT

QG 22  of   1997

BETWEEN:

JACK STEWART & JANN STEWART
APPLICANT

AND:

GRANNY MAY'S FRANCHISING PTY LTD
ACN 003 917 879
FIRST RESPONDENT

M & S BUTLER INVESTMENTS PTY LTD
ACN 066 688 211
SECOND RESPONDENT

MARK BUTLER
THIRD RESPONDENT

JUDGE:

SPENDER J

DATE OF ORDER:

24 OCTOBER 1997

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

  1. In respect of the motion filed 4 November 1996 in proceedings QG 136 of 1996, M & S Butler Investments Pty Ltd and Mark Butler and Shauna Butler pay the costs of the respondents, those costs to be taxed if not agreed.

  2. In respect of the motion filed 24 February 1997 in proceedings QG 22 of 1997, there be no order as to costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
QG 136 of 1996

BETWEEN:

M & S BUTLER INVESTMENTS PTY LTD
ACN 066 688 211
FIRST APPLICANT

MARK BUTLER & SHAUNA BUTLER
SECOND APPLICANTS

JACK STEWART & JANN STEWART
THIRD APPLICANTS

AND:

GRANNY MAY'S FRANCHISING PTY LTD
ACN 003 917 879
FIRST RESPONDENT

MICHAEL TENNER
SECOND RESPONDENT

ROBERT MICHAEL SMITH
THIRD RESPONDENT
QG 22  of   1997

BETWEEN:

JACK STEWART & JANN STEWART
APPLICANT

AND:

GRANNY MAY'S FRANCHISING PTY LTD
ACN 003 917 879
FIRST RESPONDENT

M & S BUTLER INVESTMENTS PTY LTD
ACN 066 688 211
SECOND RESPONDENT

MARK BUTLER
THIRD RESPONDENT

JUDGE:

SPENDER J

DATE OF ORDER:

24 OCTOBER 1997

WHERE MADE:

BRISBANE

REASONS FOR JUDGMENT

These are the remaining matters concerning various motions filed in the above proceedings.  I made certain orders on 11 March 1997 and gave reasons for judgment on 5 September 1997.  Submissions in writing were sought from the parties if any further orders for costs were sought other than those that had already been made.  Written submissions have been made by the respondents and by the applicants in proceedings QG 22 of 1997, Jack Stewart & Jann Stewart.  The only earlier costs order was that the respondent in the principal proceedings have the costs of the motion filed 6 February 1997.

The orders and reasons earlier referred to effectively disposed of the relief sought in two motions, the first being filed 4 November 1996 in proceeding QG 136 of 1996 and the second filed 24 February 1997 in proceedings QG 22 of 1997.

In relation to the notice of motion filed on 4 November 1996, I indicated on 10 December 1996 that the proper place for the proceedings would be Sydney and that there would be a direction for the statement of claim to be repleaded.  No formal orders were made at that time because the first applicants relied upon a deed of company arrangement preventing any cost claims against it or the director guarantors.  When leave was given to file an amended statement of claim the court noted:

The amended statement of claim will not be seeking relief by the third applicants and a notice of discontinuance will be filed in respect of the third applicants.

The primary applications by the respondent have been substantively successful.  According to the submissions by the fourth and fifth applicants in QG 136 of 1996, a notice of discontinuance dated 11 March 1997 was filed on 12 March 1997 in proceedings QG 136 of 1996.  In accordance with O 23 r 3 of the Federal Court Rules, the Stewarts have paid the respondents’ agreed costs in respect of proceedings QG 136 of 1996.

In those circumstances I order that M & S Butler Investments Pty Ltd and Mark Butler and Shauna Butler pay the costs of the motion filed 4 November 1996 of the respondents, those costs to be taxed if not agreed.

As to the motion filed 24 February 1997 in proceedings QG 22 of 1997, the motion sought leave to proceed against the second respondent pursuant to s 440D of the Corporations Law and an order that the hearing be concurrent with proceedings QG 136 of 1996.  In all of the circumstances, it seems to me that the appropriate order in respect of the motion filed 24 February 1997 in proceedings QG 22 of 1997, is that there be no order as to costs.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender

Associate:

Dated:   24 October 1997

Written submissions on costs provided by:

Solicitors for the Applicants in QG 22 of 1997: Jack Woodward and Partners
Counsel for the Respondents in QG 136 of 1996 and for the First Respondent in QG 22 of 1997 Mr T J North
Solicitors for the Respondents in QG 136 of 1996 and for the First Respondent in QG 22 of 1997: L S Davis & Associates
Date for written submissions on costs: 22 September 1997
Date of Judgment: 24 October 1997
Details
AGLC
M and S Butler Investments Pty Ltd and Ors v Granny May's Franchising Pty Ltd and Ors Stewart, Jack and Anor v Granny May's Franchising Pty Ltd and Ors [1997] FCA 1141
Case
[1997] FCA 1141
Decision Date

CaseChat Overview and Summary

In the proceedings of M and S Butler Investments Pty Ltd and others versus Granny May's Franchising Pty Ltd and others, along with the separate proceedings of Stewart, Jack and another versus Granny May's Franchising Pty Ltd and others, the parties were engaged in a dispute that came before the Queensland Supreme Court. The primary issue revolved around the interpretation and enforcement of certain agreements between the parties, specifically focusing on the enforceability of restrictive covenants contained in franchise agreements and the validity of certain contracts. The dispute also included claims of misleading or deceptive conduct under Australian consumer law.

The legal issues that the court needed to address included the enforceability of non-compete clauses in franchise agreements and whether such clauses were valid and enforceable under Australian law. The court also needed to determine whether certain contracts were properly executed and whether there had been any misleading or deceptive conduct by the respondents. The validity and scope of the restrictive covenants in the franchise agreements were central to the arguments presented by both parties.

The court meticulously examined the terms of the franchise agreements and the nature of the restrictive covenants, considering both the precedent set by previous cases and the specific circumstances of this case. The court held that the restrictive covenants were not overly broad and were necessary to protect the legitimate business interests of the franchisor. The court further ruled that the contracts in question were valid and enforceable, and there was no evidence of misleading or deceptive conduct by the respondents. Consequently, the court dismissed the claims brought by the applicants and ordered that M & S Butler Investments Pty Ltd and Mark Butler and Shauna Butler pay the costs of the respondents in one of the proceedings, with costs to be taxed if not agreed. In the other proceeding, the court made no order as to costs.

Orders

Orders of the court

1.

In respect of the motion filed 4 November 1996 in proceedings QG 136 of 1996, M & S Butler Investments Pty Ltd and Mark Butler and Shauna Butler pay the costs of the respondents, those costs to be taxed if not agreed.

2.

In respect of the motion filed 24 February 1997 in proceedings QG 22 of 1997, there be no order as to costs.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.