Schwob's Swiss (Franchising) Pty Ltd v Van Hoof

[2000] VSC 202

SUPREME COURT OF VICTORIA
PRACTICE COURT	Not Restricted

No. 5267 of 2000

SCHWOB'S SWISS (FRANCHISING) PTY. LTD. AND ANOTHER	Plaintiffs
v.
ANTON VAN HOOF AND ANOTHER	Defendants

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JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	15 MAY 2000
DATE OF JUDGMENT:	15 MAY 2000
CASE MAY BE CITED AS:	SCHWOB'S SWISS (FRANCHISING) v. VAN HOOF
MEDIUM NEUTRAL CITATION:	[2000] VSC 202

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CATCHWORDS:      Practice and Procedure – Application for interlocutory injunction – Balance of convenience not such as to justify grant of relief – Damages adequate remedy.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr. P.A. Norris	Russo Pellicano Carlei
For the Defendants	Mr. A.A. Nolan	Kliger Partners

HIS HONOUR:

1. This is the return of a summons filed in the court on behalf of the plaintiffs Schwob's Swiss Franchising Pty Ltd and Schwob's Swiss Pty Ltd whereby the plaintiffs seek the following orders against the defendants, Anton Van Hoof and Crown Ambassador Holdings Pty Ltd:

1.That proceeding number M02338364 in the Magistrates' Court of Victoria at Melbourne be transferred to this court and consolidated with this proceeding;

2.        That the defendants be restrained from:

(a)selling, advertising for sale, offering for sale or distributing any sandwiches or catering services using the Schwob's Swiss mark or name;

(b)representing that the second-named defendant or any business operated by the defendants is associated or affiliated with the plaintiffs;

(c)representing that any product or service supplied or offered for sale by the second-named defendants or any business operated by either of the defendants is associated with or sponsored or endorsed by the plaintiffs, and

(d)opening any other sandwich bar or similar bar within the territory as defined in the Franchise Agreement referred to in the statement of claim. 

3.That the defendants be restrained from using the Australian registered trademarks numbers A554654 and A554655 or any substantially identical or deceptively similar mark in the course of trade or in relation to:

(a)       goods in respect of classes 30 and 42 (the registered goods);

(b)      goods of the same description as the registered goods, or

(c)       services that are closely related to the  registered goods. 

4.That the defendants vacate the premises at 15 Hardware  Street, Melbourne and deliver up to the plaintiffs  possession of the franchised operation, and

5.That the defendants do everything within their power  to assign all their interest in the lease of the  premises at 15 Hardware Street, Melbourne to the  first-named plaintiff.

1. Having considered the material filed in the court by the parties, it is clear that there are serious issues to be tried in the proceeding.  However, there are a number of reasons why I consider it is inappropriate to grant the injunctive relief sought by the plaintiffs.

1. In the first place, I consider that the delay which has occurred since the dispute between the parties first surfaced is of itself sufficient to cause the plaintiffs to lose their right to injunctive relief.  This dispute first arose at the latest in October 1999, and probably many, many months earlier when the defendants ceased paying the franchise fees they were required to to the plaintiffs and ceased paying for goods supplied to them by the plaintiffs.  That first occurred in April of 1999.  However, the plaintiffs did not take any action against the defendants in relation to their failure in that regard until they issued the proceeding they did in the Magistrates' Court at Melbourne, which is proceeding number M02338364.

1. The defendants have now filed a defence and counterclaim to that proceeding.  By their defence and counterclaim the defendants have raised a number of matters which, if established at trial, could well entitle them to an award of damages in excess of the amount presently alleged by the plaintiffs to be outstanding to them.

1. It is a very well established principle of law that injunctive relief will not be granted where there has been for a considerable time a violation by both a plaintiff and a defendant of the agreement in respect of which relief is sought.  In the second place, I am not persuaded that the plaintiffs' prospects of recovering an award of damages in excess of any award which might be made to the defendants on their counterclaim is such as to justify the grant of interlocutory relief.

1. In my opinion, it is strongly arguable that the first-named plaintiff in particular has been guilty of a breach of the assurances it gave to the defendants and other franchisees concerning the establishment of further Schwob's outlets thereby causing the defendants significant financial loss.  I refer in particular in that connection to the opening of the new outlet at 461 Bourke Street, Melbourne.  It follows from those facts that I do not have the confidence that the plaintiffs will be successful in the proceeding such as to justify the grant of interlocutory mandatory injunctive relief.

1. Thirdly, the hardship which would be caused to the defendants and their employees if the injunctive relief were granted would, in my opinion, for outweigh any hardship caused to the plaintiffs by a refusal of their application.  That much is clear from paragraph 14 and following of the affidavit of the first-named defendant sworn 12 May 2000.

1. Finally, if the plaintiffs are ultimately successful in the proceeding in the sense that the award of damages they recover is in excess of any award of damages recovered by the defendants, in my opinion the plaintiffs would be adequately compensated by such an award of damages.

1. As to the application to transfer the Magistrates' Court proceeding to this court, I simply say that in my opinion there is no justification for adopting such a course.  The County Court has ample jurisdiction to hear and determine the dispute between the parties.

1. Accordingly, the plaintiffs' summons filed in the court on 4 May 2000 will be dismissed with costs to be taxed and paid by the plaintiffs.

(Discussion ensued.)

1. I reserve liberty to the parties to apply.

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