The Horticulture Code of Conduct

The Horticulture Code of Conduct is a mandatory code which regulates the conduct of participants in the horticulture industry in Australia.

Established in legislation under the Competition and Consumer Act by the Australian Government, the Code provides rules that govern the relationship between franchisors and franchisees.

Good Faith Conduct

Parties involved in a dispute governed by the Horticulture Code of Conduct are under an over-riding obligation to act in good faith in relation to their dealings with each other.

The ACCC explains that “good faith requires parties to an agreement to exercise their powers reasonably and not arbitrarily or for some irrelevant purpose. Certain conduct may lack good faith if one party acts dishonestly, or fails to have regard to the legitimate interests of the other party.”

Australian courts have found business dealings to be not in good faith when they involve one party acting for some ulterior motive, or in a way that undermines or denies the other party the benefits of a contractual relationship.

Resolving Horticulture Disputes

Part 5 of the Code sets out the dispute resolution procedures:

(1)  Growers and traders may use any dispute resolution procedures they choose to resolve horticulture disputes that arise between them.

(2)  If a grower or trader (the complainant) begins the procedure set out in clause 40 to resolve a horticulture dispute with another person (the respondent), the respondent and the complainant must participate in the dispute resolution and mediation procedures as set out in this Part.

Clause 40 Specifies the procedure for dispute resolution for horticulture disputes:

(1) The complainant must give notice in writing to the respondent of the dispute and specify that the complainant is using this procedure to resolve the dispute.

(2) The notice must specify:
(a) the nature of the dispute; and
(b) what action the complainant thinks will settle the dispute; and
(c) what outcome the complainant wants.

(3) The complainant and the respondent (the parties) must then try to resolve the dispute.

(4) If the parties cannot resolve the dispute within 3 weeks after the notice being given, either party may request that a mediator be appointed to assist with the resolution of the dispute.