Mr Whippy Pty Ltd v Oceanwalk Pty Ltd - [2008] NSWCA 8

New South Wales

Court of Appeal

CITATION: Mr Whippy Pty Ltd v Oceanwalk Pty Ltd [2008] NSWCA 8

HEARING DATE(S): 4 December 2007

JUDGMENT DATE:
19 February 2008

JUDGMENT OF: Giles JA at 1; Handley AJA at 90; Howie J at 91

DECISION: Appeal dismissed with costs.

CATCHWORDS: Contract - master franchise agreement - option for renewal - if and only if master franchisee had been and was in full compliance with the agreement for its term - whether breach of obligation to use best endeavours to locate retail outlets - or of obligation to furnish written reports on conduct of retail outlets - agreement novated to new master franchisor - consideration of what was the relevant term - and of what was required by way of best endeavours and for timely reporting - on facts, no breaches.

CATEGORY: Principal judgment

CASES CITED: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 3000;
Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139;
Bell v Thompson (1934) 34 SR 431;
B S Stillwell & Co Pty Ltd v Budget Rent-a-car System Pty Ltd (1990) VR 576;
Fightvision Pty Ltd v Onisforou [1999] NSWCA 323; (1999) 47 NSWLR 473;
Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1959) 59 SR 122;
Hospital Products Ltd v United Surgical Corporation (1984) 156 CLR 41;
Olsson v Dyson (1969) 120 CLR 365;
Toikan International Insurance Broking Pty Ltd v Plasteel Windows Australia Pty Ltd (1989) 15 NSWLR 641;
Vickery v Woods (1952) 85 CLR 36;
Waverley Municipal Council v Swain [2003] NSWCA 61; (2003) Aust Torts Rep 81-694.

PARTIES: Mr Whippy Pty Ltd - Appellant
Oceanwalk Pty Ltd - Respondent

FILE NUMBER(S): CA 40164/07

COUNSEL: A Herskope - Appellant
P J Woods - Respondent

SOLICITORS: Cara Marasco and Company, Brookvale - Appellant
O'Keefe Mahoney Bennett, Southport, Queensland - Respondent

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 3185/05

LOWER COURT JUDICIAL OFFICER: Sorby DCJ

LOWER COURT DATE OF DECISION: 12 December 2006

CA 40164/07
DC 3185/05

GILES JA
HANDLEY AJA
HOWIE J
Tuesday 19 February 2008

MR WHIPPY PTY LTD v OCEANWALK PTY LTD

Judgment

1 GILES JA: The appellant franchised the retailing in Australia of soft serve ice cream and related products. The respondent was the master franchisee for a territory in south-eastern Queensland. The master franchise expired on 20 May 2003, subject to the exercise of an option to renew it for a further 10 years. The respondent claimed to have exercised the option, but the appellant refused to recognise the renewal.

2 In proceedings in the District Court the respondent recovered $991.09 for royalty share payable prior to the expiry of the master franchise and $143,654.25 as damages for breach of contract in refusing to renew it, together with interest. The appellant appealed against the award of damages. It contended that the option had not been validly exercised because the respondent had been and was in breach of…

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 Mr Whippy Pty Ltd v Oceanwalk Pty Ltd

Details

AGLC: Mr Whippy Pty Ltd v Oceanwalk Pty Ltd [2008] NSWCA 8
Case: [2008] NSWCA 8
Decision Date: 19 February 2008

CaseChat Overview and Summary

Mr Whippy Pty Ltd (the appellant) appealed to the Court of Appeal of New South Wales against a decision concerning a master franchise agreement with Oceanwalk Pty Ltd (the respondent). The dispute centred on whether the appellant was entitled to exercise an option for renewal of the agreement, which was conditional upon the master franchisee having been and remaining in full compliance with the agreement for its term.

The Court of Appeal was required to determine whether the appellant had breached its obligations under the agreement, specifically the duty to use best endeavours to locate retail outlets and the duty to furnish written reports on the conduct of those outlets. The court also considered whether the agreement had been novated to a new master franchisor and, if so, what constituted the relevant term for assessing compliance. Further issues included the interpretation of "best endeavours" and the requirements for timely reporting.

The Court of Appeal found that, on the facts before it, the appellant had not breached its obligations. The judges considered the meaning of "best endeavours" in the context of the agreement and concluded that the reporting requirements had been met. Consequently, the condition for exercising the option for renewal was satisfied.

The appeal was dismissed, and the appellant was ordered to pay the costs of the appeal.

Orders

Orders of the court

Appeal dismissed with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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CITATION:	Mr Whippy Pty Ltd v Oceanwalk Pty Ltd [2008] NSWCA 8
HEARING DATE(S):	4 December 2007
JUDGMENT DATE:	19 February 2008
JUDGMENT OF:	Giles JA at 1; Handley AJA at 90; Howie J at 91
DECISION:	Appeal dismissed with costs.
CATCHWORDS:	Contract - master franchise agreement - option for renewal - if and only if master franchisee had been and was in full compliance with the agreement for its term - whether breach of obligation to use best endeavours to locate retail outlets - or of obligation to furnish written reports on conduct of retail outlets - agreement novated to new master franchisor - consideration of what was the relevant term - and of what was required by way of best endeavours and for timely reporting - on facts, no breaches.
CATEGORY:	Principal judgment
CASES CITED:	Autodesk Inc v Dyason (No 2) (1993) 176 CLR 3000; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139; Bell v Thompson (1934) 34 SR 431; B S Stillwell & Co Pty Ltd v Budget Rent-a-car System Pty Ltd (1990) VR 576; Fightvision Pty Ltd v Onisforou [1999] NSWCA 323; (1999) 47 NSWLR 473; Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1959) 59 SR 122; Hospital Products Ltd v United Surgical Corporation (1984) 156 CLR 41; Olsson v Dyson (1969) 120 CLR 365; Toikan International Insurance Broking Pty Ltd v Plasteel Windows Australia Pty Ltd (1989) 15 NSWLR 641; Vickery v Woods (1952) 85 CLR 36; Waverley Municipal Council v Swain [2003] NSWCA 61; (2003) Aust Torts Rep 81-694.
PARTIES:	Mr Whippy Pty Ltd - Appellant Oceanwalk Pty Ltd - Respondent
FILE NUMBER(S):	CA 40164/07
COUNSEL:	A Herskope - Appellant P J Woods - Respondent
SOLICITORS:	Cara Marasco and Company, Brookvale - Appellant O'Keefe Mahoney Bennett, Southport, Queensland - Respondent
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 3185/05
LOWER COURT JUDICIAL OFFICER:	Sorby DCJ
LOWER COURT DATE OF DECISION:	12 December 2006