News

Ultra Tune Appeal Decision

According to the ACCC’s media release of 23 September 2019, the Full Federal Court has “confirmed important franchisor obligations”, including upholding the Federal Court’s previous findings that Ultra Tune had breached the Franchising Code of Conduct. Despite reducing the total penalties imposed against Ultra Tune and ordering the ACCC to pay 60% of Ultra Tune’s costs of the appeal, the judgement has in the main vindicated the ACCC’s initial action against Ultra Tune and affirmed that franchisors must take great care to comply with their obligations under the Code.

Can A Company Provide Financial Assistance To A Person To Acquire Shares In The Company?

The High Court of Australia in Connective Services Pty Ltd v Slea Pty Ltd [2019] HCA 33 was concerned with two shareholders who used their combined voting power to initiate proceedings in the name of a group of companies against a third shareholder who proposed to sell his interest, in contravention of a pre-emptive rights provision of the companies’ constitution. In upholding the Court of Appeal’s decision to dismiss the proceeding against the third shareholder, the High Court illustrated the circumstances in which financial assistance by a company to a shareholder will be prohibited by section 260A of the Corporations Act 2001 (Cth).

Victoria Airs Laws To Chase “Dodgy Builders” For Cladding Issues

Victoria has announced new laws allowing the state government to chase builders for the cost of cladding rectification, prompting the main industry body, the Victorian Building Authority, to fume that it is being singled out for a problem caused by many players, including the government.

Landlords Unreasonably Withholding Consent to Sub-Lease: Masters Home Improvement v Aventus

Most franchise systems that have franchisees operating a retail site will be subject to State based retail shop leases legislation. Masters Home Improvement Australia Pty Ltd v Aventus Cranbourne Thompson Road Pty Ltd [2019] VSC 428 is a recent Victorian Supreme Court decision regarding a landlord withholding consent to grant a sublease over part of an empty retail space subject to the retail shop leases legislation in Victoria. Justice Croft found in favour of the tenant, Masters, and held that the commercial interests claimed by the landlord, Aventus Cranbourne, to justify the refusal to consent to the sublease were unreasonable.