VM Solicitors goes to the High Court

Last Friday, von Muenster Solicitors brought a Special Leave Application in the High Court of Australia for our workplace safety client who ran an online, subscription-based service. The firm was represented by Stephen von Muenster and Natalie Zwar.

The VM team at the High Court of Australia sitting in Sydney

The question on appeal was whether the Supreme Court (sitting in Equity) and the Court of Appeal had correctly found that our client’s distributorship business was in fact a franchise falling under the Franchising Code of Conduct, a mandatory marketing industry code that applies to the parties to a franchise agreement (see Competition and Consumer (Industry Codes — Franchising) Regulation 2014 (Cth)).

The special leave questions turned primarily on whether the definition of ‘franchise agreement’ in clause 4(1)(b) of the Code can be satisfied when, at the time an distributorship agreement is entered into, a system or marketing plan does not yet exist, but is to be worked out by the putative franchisee with the approval of the alleged franchisor.

Ultimately, Chief Justice French and Justice Gageler refused to grant Special Leave to Appeal to the full High Court, and the question as to the extent to which commercial arrangements such as distributorships or licensing agreements may in actual fact be characterised as franchise agreements when no system or marketing plan exists at the time of contract, therefore falling under the Franchising Code, remains to be clarified by further lower court decisions.