Stewart v Gymboree P/L - [2000] QSC 313

SUPREME COURT OF QUEENSLAND

CITATION: Stewart & Anor v Gymboree P/L & Anor [2000] QSC 313

PARTIES: RUSSELL WILTON STEWART and ANNE-MAREE STEWART
(applicants)
v
GYMBOREE PTY LTD ACN 010 535 485
(first respondent)
ANDREA MARGARET GRAHAM
(second respondent)

FILE NO/S: SC No 5023 of 2000

DIVISION: Trial Division

DELIVERED ON: 12 September 2000

DELIVERED AT: Brisbane

HEARING DATE: 11 September 2000

JUDGE: Chief Justice

COUNSEL: TD Martin SC, with MJ Burns, for the applicants
SL Doyle SC, with DD Bates, for the respondents

SOLICITORS: Sparke Helmore for the applicants
Tucker & Cowen for the respondents

de JERSEY CJ: The exigencies of the case require a ruling now. What follows is brief, but I believe covers the essential points.

The applicants are franchisees of the Gymboree play program. Their territory is in the Mt Gravatt area. Gymboree Pty Ltd is the franchisor. I infer from the evidence that Mrs Andrea Graham is an active director of the company. She also, in her personal capacity, has franchise agreements with her company, covering respectively the territories of Indooroopilly, and McDowall/Everton Park. The company claims to have terminated the applicants’ agreement: the validity of that claim is being litigated.

On 2 July 1999 Byrne J restrained the company from, as relevant, “within the territory assigned to (the applicants) … promoting or advertising the Gymboree Program by local newspapers … in the Territory of the (company’s) business”. He separately restrained the company from informing any person to the effect that the applicants’ franchise agreement had been terminated, or that the applicants were not entitled to carry on the business of a Gymboree franchise (other than in response to unsolicited enquiries).

Mrs Graham subsequently caused advertisements to be included in newspapers distributed within the applicants’ Mt Gravatt area (on 6 April and 3 and 4 May 2000), promoting the Gymboree Program, albeit with reference to Indooroopilly and McDowall/Everton Park. She claims to have done that in her personal capacity, advertising her own franchise businesses. The applicants contend that she should be seen as having done so for the company of which she is an active director, thereby aiding and abetting its breach of the restraining order. In fact a franchisee is contractually obliged to refrain from advertising in another franchisee’s territory. But there is currently no injunction restraining Mrs Graham personally.

Ms Biram gave evidence that on 26 August 1999, by telephone, Mrs Graham informed her that the applicant, Mrs Stewart “did not have a franchise with Gymboree, that it had been terminated in the courts, (that) she had no right to take any advertisement out whatsoever containing the name of Gymboree”. If accepted, and if to be inferred that Mrs Graham was then speaking on behalf of the company, then that would be evidence of contravention of the second part of Byrne J’s order of 2 July 1999.

The applicants have brought an application against the company and Mrs Graham alleging the company has been guilty of contempt of court, and likewise Mrs Graham,…

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.

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Details

Case: [2000] QSC 313
Decision Date: 12 September 2000

CaseChat Overview and Summary

In the matter of Stewart v Gymboree P/L, the applicants, Mr and Mrs Stewart, sought a declaration of contempt against Gymboree P/L and one of its directors, Ms Biram. The applicants alleged that Gymboree P/L and Ms Biram had contravened an order made by Byrne J by informing a third party, Raelene Kay Biram, that the applicants’ franchise agreement had been terminated and that they were not entitled to operate a Gymboree franchise. The applicants argued that this constituted a breach of the court’s order, which prohibited such communication. The respondents denied the allegations, asserting that the comments were not made with the requisite intent and that the conversation was not unsolicited.

The court was tasked with determining whether the respondents had indeed committed contempt of court by contravening the order made by Byrne J. The legal issues included whether the comments made by the second respondent to Raelene Kay Biram constituted a contravention of the court order, whether the comments were unsolicited, and whether they were made with the necessary wilful intent. Additionally, the court needed to ascertain whether the second respondent was acting in her capacity as a franchisee or as a director of the franchisor company when she made the comments. The reliability of the witnesses’ accounts of the conversation was also a critical factor in the court's decision.

The court found that the respondents had committed contempt of court. It determined that the comments made by the second respondent to Raelene Kay Biram were indeed a contravention of the court order. The court accepted that the conversation was not unsolicited and that the second respondent made the comments with the necessary wilful intent. Furthermore, the court concluded that the second respondent was acting in her capacity as a director of Gymboree P/L when she made the comments. Consequently, the court held both respondents guilty of contempt of court.

The court ordered that each respondent was guilty of contempt of court, as they had informed Raelene Kay Biram that the applicants' franchise agreement had been terminated and that they were not entitled to operate a Gymboree franchise, thereby contravening the order of Byrne J. The matter was adjourned to a later date to hear submissions regarding the penalty and costs.

Orders

Orders of the court

1. Each respondent is guilty of contempt of court in that, on or about 26 August 1999, the first respondent through its agent the second respondent, and the second respondent thereby aiding the first respondent, informed Raelene Kay Biram to the effect that the applicants’ franchise agreement with the first respondent had been terminated, and that the applicants were not entitled to carry on the business of a Gymboree franchise;

thereby contravening the order of the Honourable Justice Byrne made on 2 July 1999.

2. Matter adjourned to a date to be fixed for the purpose of hearing submissions as to penalty and 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:	Stewart & Anor v Gymboree P/L & Anor [2000] QSC 313
PARTIES:	RUSSELL WILTON STEWART and ANNE-MAREE STEWART (applicants) v GYMBOREE PTY LTD ACN 010 535 485 (first respondent) ANDREA MARGARET GRAHAM (second respondent)
FILE NO/S:	SC No 5023 of 2000
DIVISION:	Trial Division
DELIVERED ON:	12 September 2000
DELIVERED AT:	Brisbane
HEARING DATE:	11 September 2000
JUDGE:	Chief Justice
COUNSEL:	TD Martin SC, with MJ Burns, for the applicants SL Doyle SC, with DD Bates, for the respondents
SOLICITORS:	Sparke Helmore for the applicants Tucker & Cowen for the respondents