FEDERAL COURT OF AUSTRALIA Dybner v Stay In Bed Milk and Bread Pty Ltd (ABN 39 115 116 982) (t/as Aussie Farmers Direct) [2010] FCA 200 Citation: Dybner v Stay In Bed Milk and Bread Pty Ltd (t/as Aussie Farmers Direct) [2010] FCA 200 Parties: MARAT DYBNER and DINA DYBNER v STAY IN BED MILK AND BREAD PTY LTD (ABN 39 115 116 982) (TRADING AS AUSSIE FARMERS DIRECT) File number(s): VID 145 of 2010 Judge: RYAN J Date of judgment: 9 March 2010 Date of hearing: 9 March 2010 Place: Melbourne Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 7 Solicitor for the Applicants: Kelly Hazell Quill Counsel for the Applicants: Mr M J Rivette Solicitor for the Respondent: HWL Ebsworth, Lawyers Counsel for the Respondent: Mr R D Keen IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 145 of 2010 BETWEEN: MARAT DYBNER First Applicant DINA DYBNER Second Applicant AND: STAY IN BED MILK AND BREAD PTY LTD (ABN 39 115 116 982) (TRADING AS AUSSIE FARMERS DIRECT) Respondent JUDGE: RYAN J DATE OF ORDER: 9 MARCH 2010 WHERE MADE: MELBOURNE UPON THE RESPONDENT BY ITS COUNSEL UNDERTAKING UNTIL THE HEARING AND DETERMINATION OF THIS APPLICATION OR FURTHER ORDER THAT: (i) It will itself, by its employed driver, make deliveries to customers within "run 17" and not offer or sell "run 17" to any prospective franchisee; (ii) It will offer employment on his present terms and conditions to the driver currently employed by the applications on "run 17" to drive the delivery van for "run 17"; (iii) It will keep full records of all sales made to it by customers in "run 17" which may be necessary to quantify the income which would have been derived by the applicants had they continued to operate "run 17" between now and judgment in the application; THE COURT ORDERS THAT: 1. The application for an interlocutory injunction be refused. 2. There be a speedy trial of the application. 3. There be a directions hearing on a date to be fixed being not later than 18 March 2010. 4. The costs of all parties of the application for interlocutory relief, including the costs of this day, be reserved. 5. Liberty be reserved to any party to apply on not less that 48 hours' notice in writing to the other party. Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 145 of 2010 BETWEEN: MARAT DYBNER First Applicant DINA DYBNER Second Applicant AND: STAY IN BED MILK AND BREAD PTY LTD (ABN 39 115 116 982) (TRADING AS AUSSIE FARMERS DIRECT) Respondent JUDGE: RYAN J DATE: 9 MARCH 2010 PLACE: MELBOURNE REASONS FOR JUDGMENT (Revised From Transcript) 1 There is before the Court an application for an interlocutory injunction restraining the respondent until further order from acting upon, or in any way giving effect to, the notices of termination seeking the terminate the following agreements between the applicants and the respondent: (a) a franchise agreement dated 15 February 2007; and (b) a marketing and licensing agreement dated 15 February 2007. I shall hereafter refer collectively to those documents as "the Franchise Agreement." 2 The respondent claims to have terminated the Franchise Agreement by notice dated 11 September 2009, which was expressed to expire on next Friday, 12 March 2010. I am satisfied that the application raises several serious questions to be tried, including whether the respondent was entitled to terminate the Franchise Agreement on the six months' notice which it purported to give, and whether the respondent has, in contravention of s 51AC of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act"), engaged in conduct in relation to the franchise agreement that is, in all the circumstances, unconscionable. There are also related questions as to whether the respondent has complied with various provisions of the Trade Practices (Industry Codes – Franchising) Regulations 1998 (Cth), which have been made under s 51AE of the Trade Practices Act. 3 Many of the issues between the parties will call for the exercise of a Court's discretion, involving the balancing of factors emerging from the terms of the Franchise Agreement, the nature of the business conducted pursuant to it, the conduct of the parties, and the likelihood of a successful business relationship between them continuing into the future, if the Court decides that it should be resurrected. 4 The evidence discloses that the business conducted pursuant to the Franchise Agreement has been the supply of milk, eggs, orange juice, bread and other food products in an area covering some bayside suburbs of Melbourne. That area has been designated in the Franchise Agreement as "run 17". Orders for the goods have been taken by the respondent which packs each order and makes a pallet of orders available each night to a driver employed by the applicants for delivery to customers at residences within run 17. 5 A commission has been paid fortnightly to the applicants by the respondent. That commission is calculated as a percentage of the price charged to customers for goods delivered to them in the preceding fortnight. The costs which the applicants had to meet in order to earn the commissions include the provision and maintenance of a refrigerated van and the payment of wages to a driver. As well, they have paid to the respondent capital sums approaching $100,000 by way of an initial franchise fee, and what has been called a "top-up fee" for an increase in the number of customers included in run 17. In the circumstances, I am persuaded that damages will provide an adequate remedy for any loss which the applicants will suffer as a result of being excluded from conduct of the business between now and trial, assuming that they ultimately obtain discretionary relief which requires the maintenance of a relationship of franchisee and franchisor between them and the respondent. 6 I am reinforced in this conclusion by the reflection that an order for a speedy trial will minimise the period during which the applicants will be denied receipt of commissions, if they ultimately succeed in having run 17 restored to them. As well, I consider it appropriate to extract from the respondent an undertaking by its counsel that, first, until trial or further order, it will itself, by an employed driver, make deliveries to customers within run 17 and not offer that run to any other prospective franchisee and, secondly, that it will offer employment, on his present terms and conditions, to the driver currently employed by the applicants on run 17. Thirdly, I shall require the respondent, until trial or further order, to keep full records of all sales made by it to customers within run 17, which may be necessary to quantify the income which would have been derived by the applicants had they continued to operate run 17 between now and judgment in the action. 7 For these reasons, the application for an interlocutory injunction is refused. The orders of the court will be subject to the three undertakings that I have mentioned, expressed to enure until the hearing and determination of the application or further order. Upon the giving of those undertakings, the orders of the Court will be; (1) The application for an interlocutory injunction be refused. (2) There be a speedy trial of the application. (3) There be a directions hearing on a date to be fixed, being not later than 18 March 2010. (4) The costs of all parties of the application for interlocutory relief, including the costs of this day, be reserved. (5) Liberty be reserved to any party to apply on not less than 48 hours' notice in writing to the other party. I certify that the preceding seven (7) numbered paragraph are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate: Dated: 11 March 2010