Mitre 10 franchisee wins legal costs dispute against Bunnings
The Federal Court of Australia granted Mitre 10 franchisee David Woodman’s application for protection from having to pay Bunnings’ legal costs if his claim is unsuccessful. The decision allows Woodman to continue the case in which he is seeking to prevent a Bunnings store from opening next to his shop in Jimboomba, Queensland, ABC News Australia reports.
Judge Robert Bromwich ruled in Woodman’s favour. The businessman relies on the Competition and Consumer Act and is seeking to prohibit the opening of a Bunnings Warehouse in Jimboomba. He argues that the arrival of a large competitor’s store next to Mitre 10 could make his business unprofitable in the short or medium term and lead to the shop’s closure.
Protection from legal costs
The order granted by the court is known as a no adverse costs order, or NACO. Usually, a plaintiff in a civil case who loses risks being required to reimburse the other party’s legal costs. NACO provisions began to be applied to business owners in 2019 to make it easier for small companies to litigate against large corporations.
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Woodman’s lawyer Michael Daniel said Bunnings could spend about $6 million on the proceedings, and his client could not risk having to pay such an amount. According to the lawyer, without the costs decision, Woodman would probably not have been able to continue the case. Daniel also believes this is the first time a NACO has been granted in a case involving anti-competitive conduct.
Bunnings’ plans
The Woodman family has worked in the building supplies business for 90 years. In 2018, David Woodman bought a store in Jimboomba with his brother and father under a franchise agreement with Metcash. In 2019, Bunnings bought a neighbouring vacant site and subsequently received permission to build a warehouse store that will be eight times larger than Mitre 10 Jimboomba.
Bunnings, owned by Wesfarmers, said it would respond to the claim through the established legal process. The company believes that opening a store in Jimboomba will expand choice for the local community, strengthen competition and create jobs. Judge Bromwich noted that Woodman’s case is novel in nature and that the plaintiff faces significant difficulties, but the NACO regime is intended to facilitate precisely such proceedings.
