Diab Pty Ltd v YUM! Restaurants Australia Pty Ltd [2016] FCA 43

FEDERAL COURT OF AUSTRALIA

Diab Pty Ltd v YUM! Restaurants Australia Pty Ltd [2016] FCA 43 File number(s): NSD 832 of 2014

Judge(s): BENNETT J

Date of judgment: 5 February 2016

Catchwords: CONTRACTS – representative action – respondent franchisor implemented a strategy setting maximum prices and product ranges for franchisees – whether, on the proper construction of the franchise agreement, the franchisor was in breach by reducing the prices on its ranges of pizzas – whether implementation of strategy would breach implied terms, including an implied term of good faith, of the franchise agreement – categories of damages: income/trading loss, capital loss CONSUMER LAW – whether implementation of the strategy would involve unconscionable conduct by the respondent under s 21 of the Competition and Consumer Act 2010 (Cth) sch 2 NEGLIGENCE – whether the franchisor owes a duty of care to each franchisee in relation to any conduct or decision it makes and in the exercise of its powers under the franchisee agreement

Legislation: Competition and Consumer Act 2010 (Cth) Sch 2 Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (Cth) Federal Court of Australia Act 1976 (Cth) ss 33H(1)(c), 33R, 33Z and 33ZF Federal Court Rules 2011 (Cth) r 30.41 Trade Practices (Industry Codes – Franchising) Regulations 1998 (Cth) reg 23A

Cases cited: A & A (Sydney) Pty Ltd v YUM! Restaurants Australia Pty Ltd [2014] FCA 678 Abu Dhabi National Tanker Co v Product Star Shipping Ltd (No 2) [1933] 1 Lloyd's Rep 397 Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 Astley v Austrust Ltd (1999) 197 CLR 1 Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 Baltic Shipping Co v Dillon (1993) 176 CLR 344 Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd (The Good Luck) [1992] 1 AC 233 Banque Commerciale SA (In Liq) v Akhil Holdings Ltd (1990) 169 CLR 279 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Braganza v BP Shipping Ltd [2015] 1 WLR 1661 at 1669 Burger King Corp v Hungry Jack's Pty Ltd (2001) 69 NSWLR 558 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1 International Air Transport Association v Ansett Australia Holdings Limited (2008) 234 CLR 151 John McGrath Motors (Canberra) Pty Ltd v Applebee (1964) 110 CLR 656 Jones v Dunkel (1959) 101 CLR 298 Krakowski v Eurolynx Properties Limited (1995) 183 CLR 563 McCann v Switzerland Insurance Australia Limited (2000) 203 CLR 579 McCartney v Orica Investments Pty Ltd [2011] NSWCA 337 Mackay v Dick (1881) 6 App Cas 251 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 Merck Sharp & Dohme (Australia) Pty Ltd v Peterson [2009] FCAFC 26 Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [2015] FCA 825 Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 325 ALR 188 Paciocco v ANZ Banking Group (2015) 321 ALR 584 Royal Brunei Airlines Sdn. Bhd v Philip Tan Kok Ming [1995] 3 All ER 97 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 Stratton Finance Pty Ltd v Webb (2014) 314 ALR 166 Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165 Tomlin v Ford Credit Australia Ltd [2005] NSWSC 540 Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15