Bodycorp Repairers Pty Ltd v Maisano
[2017] VSCA 252
•15 September 2017
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2016 0160
| BODYCORP REPAIRERS PTY LTD (ACN 068 589 408) | Applicant |
| V | |
| ANUNIZIATO ENZO MAISANO (also known as Michael Maisano and Michael Mason) & ORS (according to the attached Schedule) | Respondents |
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| JUDGES: | WHELAN, KYROU and HANSEN JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 3 August 2017 |
| DATE OF JUDGMENT: | 15 September 2017 |
| MEDIUM NEUTRAL CITATION: | [2017] VSCA 252 |
| JUDGMENT APPEALED FROM: | [2016] VSC 645 (Riordan J) |
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JUDGMENTS – Principles for setting aside judgment obtained by fraud – Wentworth v Rogers[No 5] (1986) 6 NSWLR 534 considered.
PRACTICE AND PROCEDURE – Summary dismissal of application to set aside judgment allegedly obtained by fraud – Whether principles for setting aside judgment for fraud misstated and misapplied – Whether judge failed to properly consider alleged malpractice of legal advisers – Whether matters relied upon were ‘fresh facts’ – Whether the alleged fraud satisfied the principles for setting aside original judgment – Leave to appeal granted but appeal dismissed.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr J Levine | Templeton Fox Rothschild |
| For the Second and Eighth Respondents | Mr N De Young | Minter Ellison |
| For the Fourth and Fifth Respondents | Mr C Madder | Moray & Agnew |
WHELAN JA
KYROU JA
HANSEN JA:
This proceeding has been instituted by Bodycorp Repairers Pty Ltd (‘Bodycorp’) seeking to set aside a judgment of Elliott J delivered 4 September 2013.[1] On 28 October 2016 Riordan J summarily dismissed the claims made in this proceeding against four of the defendants.[2] Bodycorp seeks leave to appeal that summary dismissal.
[1][2013] VSC 472 (‘Elliott J Reasons’).
[2][2016] VSC 645 (‘Reasons’).
In the late 1990s Bodycorp established a franchise system for motor vehicle panel beaters. It entered into franchise agreements with franchisee panel shops. It also entered into an agreement with the motor vehicle insurer, Australian Associated Motor Insurer (‘AAMI’).
In 1998 one of Bodycorp’s franchisees, Anunziato Maisano,[3] terminated his franchise agreement, and a number of other franchisees also left the franchise network. These circumstances led to a series of disputes and consequent litigation which has continued until now.
[3]After the first reference we will refer to individuals by their surnames only. No disrespect is intended.
Maisano and his then business partner took proceedings against Bodycorp, and its principal, Antonio Murdaca, in the County Court alleging misleading and deceptive conduct in relation to a panel shop at Malvern. They succeeded on that claim, recovering judgment for the sum of $79,083.42 in October 2002. On appeal, the Court of Appeal upheld the judgment on liability but reduced the damages to $58,525.42, to which sum interest was to be added.[4] We will call this the ‘Malvern panel shop proceeding’.
[4][2004] VSCA 123.
Bodycorp began a proceeding in the Federal Court in 2002 which was transferred to the Supreme Court in 2005. This proceeding eventually went to trial before Elliott J in 2013 resulting in the judgment of 4 September 2013, which Bodycorp is now seeking to set aside. We will call this ‘the Bodycorp proceeding’. An appeal against the judgment of Elliott J in the Bodycorp proceeding was dismissed by this Court in April 2015.[5]
[5][2015] VSCA 73.
Reference must also be made to another related proceeding. Maisano recovered an order for costs against Bodycorp in the Bodycorp proceeding, and Murdaca had given an undertaking to meet a significant component of those costs. Maisano’s solicitors in the Bodycorp proceeding were Oakley Thompson & Co Pty Ltd (‘Oakley Thompson’). Relatives of Maisano had given Oakley Thompson security over property which they owned for a sum of $80,000. The costs incurred by Oakley Thompson, and ordered against Bodycorp, greatly exceeded that sum. Oakley Thompson took steps to recover its costs from both Maisano and Bodycorp. One step it took was to institute a proceeding against Maisano and Bodycorp seeking to, in effect, take over the taxation and recovery of the costs ordered in Maisano’s favour against Bodycorp in the Bodycorp proceeding. Elliott J delivered a judgment in relation to that matter on 30 June 2015.[6] Transcript of the evidence given before Elliott J in that proceeding by Maisano and by the solicitor at Oakley Thompson responsible for the matter at the trial of the Bodycorp proceeding, Jeremy Broadbent, was in the material filed and relied upon by Bodycorp before Riordan J and before us. We will call this the ‘Oakley Thompson proceeding’.
[6][2015] VSC 210.
In this proceeding Bodycorp alleges the judgment of Elliott J in the Bodycorp proceeding was obtained by fraud and should be set aside. The relief sought is an order that that judgment is set aside, that there be a new trial, and that there be a stay of all proceedings ‘arising out of the judgment’. In substance, what is pleaded is what can best be termed a conspiracy between AAMI, an employee of AAMI named Barry Martin, the solicitors for AAMI, the solicitors for Maisano, and AAMI’s senior counsel to mislead Elliott J by the deliberate non-disclosure of relevant documents, the deliberate calling of false evidence, and inducement to give false evidence. A claim is made for damages, particularised as costs in excess of those recoverable on taxation. No cause of action supporting the damages claim is pleaded beyond the matters relied upon in support of the allegation that the judgment was obtained by fraud.
The factual basis for the allegations made by Bodycorp in support of its contention that the judgment of Elliott J was obtained by fraud are matters deposed to by Maisano. His principal affidavit was sworn on 17 November 2014 and was sought to be relied upon before this Court on the appeal from Elliott J’s judgment. This Court did not permit Bodycorp to rely on that affidavit. Maisano has sworn an affidavit in this proceeding (sworn 23 July 2016) where he exhibits a copy of his affidavit sworn 17 November 2014. He swore a further affidavit in this proceeding on 5 October 2016. Murdaca has also sworn affidavits in this proceeding deposing to things he says Maisano has told him. Other material was also relied upon before Riordan J, but the matters deposed to by Maisano constitute the substantive factual foundation for the claim that the judgment was obtained by fraud.
The Bodycorp proceeding
Riordan J summarised the claims made in the Bodycorp proceeding and the reasons why they had failed in the judgment from which leave to appeal is now sought.[7] For present purposes it is sufficient to say the following:
(a) The claims made against Maisano were that he breached a franchise agreement between himself and Bodycorp concerning a Moorabbin panel shop by terminating that agreement, and that he had induced four other specified franchisees to breach their franchise agreements with Bodycorp. The claim for breach of the franchise agreement failed because Elliott J found that Maisano had been entitled to terminate his franchise agreement as Bodycorp had wrongfully insisted that it could establish another franchisee within his territory. The claim against Maisano for inducing breach of contract failed because Bodycorp failed to establish that the alleged representations had been made to the four franchisees whom Maisano was said to have induced to breach their agreements, and because the judge considered that such evidence as there was of what Maisano had said (to a franchisee other than the four) could not constitute inducement to breach in any event.
(b) A claim was made against AAMI and Martin for inducing other specified franchisees to breach their franchise agreements with Bodycorp, and a claim was made against AAMI for breach of the agreement between it and Bodycorp. A further claim was made against AAMI for work and labour done. As to the claim for inducing breach of contract, Elliott J accepted the evidence led on behalf of Bodycorp, and rejected the evidence of Martin, as to what Martin had said to the franchisees, but he found that the representations made by Martin, as so found, did not constitute inducing breach of contract. Elliott J found that AAMI had breached the agreement between it and Bodycorp but that the term breached was unenforceable as an unreasonable restraint of trade. Elliott J rejected the claim for work and labour done because Bodycorp failed to establish the quantum of the work performed and the amount outstanding for it. Bodycorp relied solely on certain records of AAMI, referred to as ‘the quoting analyses’, which Elliott J found did not prove the claim. Bodycorp had failed to produce any reconciliation of payments or invoices from its own records.
[7]The claims are summarised at Reasons [8]. The reasons why they failed are summarised at Reasons [34]–[39].
In order to understand the issues raised before us it is necessary to say something more about AAMI’s position in the relevant market. AAMI had a panel of recommended repairers. Repairers on this panel could erect a sign advising the public that they were AAMI recommended repairers. Repairers perceived being on the panel and having the sign to be valuable. Bodycorp’s arrangements with AAMI were directed at facilitating the inclusion of franchisees on the AAMI panel. The term of the agreement between Bodycorp and AAMI which Elliott J found AAMI had breached, but which he held to be void as an unreasonable restraint of trade, was a term which, in substance, required AAMI to remove Bodycorp’s franchisees who ceased to be franchisees from the recommended panel for six months and to require them to take down their signs. When issues arose which prompted franchisees to consider leaving the Bodycorp franchise network, concerns they would ‘lose their sign’ were prominent.
Parties to this proceeding and to the application before Riordan J
The plaintiff in this proceeding is Bodycorp, which was the plaintiff in the Bodycorp proceeding.
The defendants in this proceeding are, or were:
(c) Maisano is the first defendant.
(d) Oakley Thompson and Broadbent are the second and eighth defendants. As indicated, they were Maisano’s solicitors in the Bodycorp proceeding.
(e) Peter Cawthorn QC was the third defendant. He was senior counsel for AAMI in the Bodycorp proceeding. The proceeding against him was discontinued on the oral application of Bodycorp’s then senior counsel before Riordan J on 29 September 2016. A summons has since been issued seeking to re-join him.
(f) The fourth defendant is AAMI and the fifth defendant is Martin.
(g) The sixth and seventh defendants were Scott Munro and Melton Bodyworks. They were defendants in the Bodycorp proceeding. This proceeding was discontinued against them on 16 September 2016.
The applications for summary dismissal which Riordan J was called on to determine were applications by the second and eighth defendants (Oakley Thompson and Broadbent), and by the fourth and fifth defendants (AAMI and Martin).
The judgment of Riordan J
Riordan J set out the procedural history of the Bodycorp proceeding, the factual background to that proceeding, and a summary of Elliott J’s judgment and the judgment of the Court of Appeal, in greater detail than we have done.[8]
[8]Reasons [6]–[42].
Riordan J then set out the allegations made in Bodycorp’s amended statement of claim in this proceeding, and he recorded a concession made by Bodycorp that some of the matters pleaded could not be relied upon and that it would be necessary for Bodycorp to amend its statement of claim. In substance, many of the documents which had been pleaded to have been ‘not available’ during the trial had been shown to have post-dated the trial, to have been tendered in the trial, to have been in the Court Book at the trial, or to have been subject to legal professional privilege claims.[9]
[9]Reasons [44].
Riordan J permitted Bodycorp to reformulate the basis upon which it contended that Elliott J’s judgment should be set aside and he dealt with the applications on that reformulated basis. Riordan J said that before him Bodycorp relied upon the following matters:
(h) The ‘withholding’ of a statutory declaration signed by Maisano on 1 September 1998, which had been forwarded to his solicitors, Oakley Thompson, by the solicitors for AAMI, Freehill Hollingdale & Page, under cover of a letter of 10 August 1998.
(i) The ‘false evidence’ of Maisano with respect to:
(i) having no conversations with franchisees after terminating his franchise agreement; and
(ii) receiving a letter from AAMI dated 14 August 1998.
(j) The ‘false evidence’ of Martin about the quoting analyses.
(k) The ‘false denials’ of Martin about making representations to franchisees.[10]
[10]Reasons [46].
Riordan J then set out what he said were the relevant principles to be applied on applications to set aside a judgment on the ground of fraud. He quoted a passage from the judgment of Kirby P in Wentworth v Rogers [No 5] (‘Wentworth’).[11]Before us it was accepted that the passage quoted by Riordan J did set out the applicable principles. The passage reads as follows:
[11](1986) 6 NSWLR 534, cited and quoted at Reasons [47].
First, the essence of the action is fraud. As in all actions based on fraud, particulars of the fraud claimed must be exactly given and the allegations must be established by the strict proof which such a charge requires.
Secondly, it must be shown, by the party asserting that a judgment was procured by fraud, that there has been a new discovery of something material, in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for
setting aside the judgment. ...
Thirdly, mere suspicion of fraud, raised by fresh facts later discovered, will not be sufficient to secure relief. The claimant must establish that the new facts are so evidenced and so material that it is reasonably probable that the action will succeed. This rule is founded squarely in the public interest in finality of public litigation and in upholding judgments duly entered at the termination of proceedings in the courts.
Fourthly, although perjury by the successful party or a witness or witnesses may, if later discovered, warrant the setting aside of a judgment on
the ground that it was procured by fraud, and although there may be exceptional cases where such proof of perjury could suffice, without more, to warrant relief of this kind, the mere allegation, or even the proof, of perjury will not normally be sufficient to attract such drastic and exceptional relief as the setting aside of a judgment. The other requirements must be fulfilled. ...
Fifthly, it must be shown by admissible evidence that the successful party was responsible for the fraud which taints the judgment under challenge. The evidence in support of the charge ought to be extrinsic. It is not sufficient to show that an agent of the successful party was convicted of giving perjured evidence in the former proceeding, the result of which it is sought to impeach. It must be shown that the agent, in so acting, was in concert with the party who derived the benefit of the judgment.
Sixthly, the burden of establishing the components necessary to warrant the drastic step of setting aside a judgment, allegedly affected by fraud or other relevant taint, lies on the party impugning the judgment. It is for that party to establish the fraud and to do so clearly. In summary, he or she must establish that the case is based on newly discovered facts; that the facts are material and such as to make it reasonably probable that the case will succeed; that they go beyond mere allegations of perjury on the part of witnesses at the trial; and that the opposing party who took advantage of the judgment is shown, by admissible evidence, to have been responsible for the fraud in such a way as to render it inequitable that such party should take the benefit of the judgment. [12]
[12](1986) 6 NSWLR 534, 538–9 (citations omitted).
After quoting that passage, Riordan J continued:
I summarise the essential elements of the cause of action as follows:
(a)Fresh facts: It must be shown that there are facts (‘the fresh facts’) which were:
(i)not considered by the original trial court; and
(ii)not known to the applicant until after the conclusion of the trial.
(b)Responsibility: It must be established that it was the fraud of the party, who was successful at the original trial (‘the successful party’), that was responsible for the fresh facts not being known by the applicant or considered by the court, such that it would be inequitable for the successful party to retain the benefit of the judgment.
(c)Causation: It must be established that the fresh facts are so material (by themselves or in combination with other facts) that, if proven, the applicant’s case will succeed.[13]
[13]Reasons [48].
Riordan J then reiterated certain matters referred to by Kirby P, and in the context of perjury he said:
Proof of perjury is not sufficient to attract the exceptional relief of the setting aside of a judgment. Each of the elements of the cause of action must be established and in particular it must be proven that, absent the perjured evidence, it is reasonably probable that the applicant will succeed.[14]
[14]Reasons [49].
Riordan J set out the principles applicable on an application for summary judgment.[15] Those principles were not controversial before us. The applicable test is whether the relevant claim has a ‘real’ as opposed to a ‘fanciful’ chance of success.
[15]Reasons [54]–[59].
Riordan J concluded that Bodycorp did not have a real prospect of setting aside the judgment of Elliott J relying upon the circumstances put before him.
In relation to the ‘withheld’ statutory declaration he reached this conclusion because:
(l) Bodycorp’s legal advisors were in possession of a draft of the statutory declaration prior to trial, and its contents were accordingly not ‘fresh facts’.
(m) The statutory declaration was a document which Daly AsJ had held to be the subject of legal professional privilege prior to the trial before Elliott J and Bodycorp was unable to explain how reliance on privilege could constitute a fraud.
(n) An argument put to Riordan J that the statutory declaration would reveal a course of conduct directed at ‘undermining’ the relationship between franchisees and Bodycorp generally, had not been pleaded in the case before Elliott J.
(o) There was no real prospect that admission of the statutory declaration ‘could have resulted or could result’ in Bodycorp succeeding in its claims for inducing breach of contract. Amongst other things, Riordan J reached this conclusion because Bodycorp’s claim failed not because its evidence as to what Martin had said to franchisees was rejected but because Elliott J found, having accepted Bodycorp’s evidence about what Martin had said, that what was said did not amount to inducing franchisees to breach their contractual obligations.[16]
[16]Reasons [63].
In relation to what is said to be the ‘false evidence’ of Maisano about not having conversations with franchisees after he terminated his franchise agreement, Riordan J analysed the affidavits sworn by Maisano on 17 November 2014 and 5 October 2016 and proceeded on the assumption that they were correct.[17] He nevertheless concluded that the evidence in these affidavits ‘could not cause a different result [because that] fresh evidence could no more constitute an inducement to breach contractual obligations than the statements that Elliott J accepted were made to franchisees’.[18]
[17]Reasons [65]–[68].
[18]Reasons [69].
In relation to the ‘false evidence’ of Maisano about receiving a letter from AAMI dated 14 August 1998, Riordan J again analysed Maisano’s affidavit of 17 November 2014 and also referred to evidence given by Maisano in the Oakley Thompson proceeding. Riordan J said that Bodycorp had made no submissions about the significance of the letter of 14 August 1998, or the significance of whether or not Maisano had received it. Riordan J noted that there was no reference to the letter in Elliott J’s judgment.[19]
[19]Reasons [70]–[74].
In relation to Elliott J’s rejection of the claim for work and labour done, Riordan J analysed Maisano’s affidavits of 17 November 2014 and 5 October 2016 and concluded that they did not contain any evidence of fraud or perjury in this context. He also concluded that there was no real prospect that the evidence ‘could have resulted or could result’ in Bodycorp succeeding on its work and labour done claim because, amongst other things, what Maisano now swore to was not inconsistent with Martin’s relevant evidence about the quoting analyses, namely that that analyses did not represent repair costs of work actually done, and because there was no evidence of facts that ‘could be established on a retrial, which could satisfy a court that the quoting analyses would provide a proper basis for establishing Bodycorp’s claim … ’[20]
[20]Reasons [80].
In relation to Martin’s ‘false denials’ of representations to franchisees, Riordan J referred to Maisano’s affidavit of 17 November 2014 and in particular to a passage where he swore that Martin had encouraged him to terminate. Riordan J concluded that he did not consider that the admission of this evidence ‘could make it reasonably probable that Bodycorp’s case would succeed’ because Elliott J had found that Maisano had been entitled to terminate, because the statements by Martin to Maisano were no different to the statements Elliott J had found that Martin had made to other franchisees and which he had held did not constitute an inducement to breach the franchise agreements, and because the impact of the evidence on Martin’s credit ‘would have been negligible’ as Elliott J had accepted the evidence led by Bodycorp and had rejected Martin’s denials.[21]
[21]Reasons [84].
Riordan J accordingly concluded that Bodycorp’s claim to have the judgment set aside had no real prospect of success.[22]
[22]Reasons [85].
Riordan J considered whether he ought to exercise the Court’s residual discretion under s 64 of the Civil Procedure Act 2010. He declined to do so. He said that he took into account the overarching purposes of the Act, and the following additional matters: that Bodycorp’s claim principally relied on the recollections of a single witness, that the principal events relied upon were conversations that took place approximately 18 years ago, and, that the original claim which Bodycorp seeks to re-litigate was filed over 14 years ago with a judgment given over three years ago.[23]
[23]Reasons [86].
Applicant’s proposed grounds of appeal and contentions
The applicant’s proposed grounds of appeal are:
[1]The Trial Judge denied the Applicant natural justice by intervening in the conduct of the hearing by holding that the statutory declaration was not fresh evidence, on the basis of the unreported version of the decision of Wentworth v Rogers (No 5) (1986) 6 NSWLR 534.
[2]The Trial Judge misapplied the law by requiring that the fresh evidence to set aside a judgment for fraud be so material that, if proven, the Applicant’s case will succeed at a trial, as distinct from being such as to make it reasonably probable that the Applicant’s case will succeed at trial.
[3]The Trial Judge misapplied the law by requiring that the fresh evidence to set aside a judgment for fraud was so material that the Applicant would have succeeded at the hearing of the original trial, as distinct from the fresh evidence being such as to make it reasonably probable that the Applicant’s case will succeed at a retrial.
[4]The Trial Judge erroneously placed undue emphasis upon the judgment in the original trial on the following issues:
(a)Did the Respondents have the intention to induce the Applicant’s franchisees to terminate their franchise relationship with the Applicant?
(b)Did the Applicant establish that AAMI owed money for work performed by their franchisees?
[5]The Trial Judge erred in failing to consider whether the conduct of the former legal practitioners for the Respondents constituted a basis upon which the judgment should have been set aside.
[6]The Trial Judge erred in holding that there was no evidence that AAMI’s conduct in carrying out an investigation induced any franchisee to breach their contractual relationship with the Applicant.
[7]The Trial Judge failed to provide proper written reasons for his decision:
(a)[that] the Respondents did not induce the Applicant’s [franchisees] to breach their franchise agreement[s] with the Applicant.
(b)[that] the quoting analysis did not provide a proper basis for establishing the Applicant’s claim for work and labour done.
(c)[and] [f]or failing to consider the Applicant’s submissions and evidence on the malpractice of the former legal practitioners.
[8]The Trial Judge erred in failing to take into account the conduct of the legal practitioners in the summary judgment application.
[9]The Trial Judge erred in placing undue influence on the following factors in relation to determining that the matters did not need to be investigated pursuant to s 64 of the Civil Procedure Act (Vic) 2010:
(a)that the Plaintiff’s claim principally relies upon the recollections of a single witness;
(b)the principal events relied upon are conversations that occurred approximately 18 years ago;
(c)the original claim was filed over 14 years ago, and judgment was given over 3 years ago.
[10]The Trial Judge erred in failing to hold that a judgment in certain circumstances could be set aside solely on the basis that a party committed or was privy to a fraud.
[11]The Trial Judge failed to take into account the following evidence that was being relied upon by the Plaintiff:
(a) the affidavit of Michael Maisano dated 23 July 2016;
(b) submissions of Michael Maisano;
(c) the affidavit of Joe Anthony dated 13 November 2014;
(d) the affidavit of James Edward Miller dated 4 August 2016;
(e) the affidavit of Antonio Murdaca dated 4 August 2016;
(f) the affidavit of Antonio Murdaca dated 12 September 2016
(g)the affidavits of Niren Raj dated 22 and 23 September 2016
(h)the affidavit of Antonio Murdaca dated 6 October 2016.
In oral submissions, without abandoning any of the proposed grounds, the matters which counsel for the applicant emphasised were these:
(p) Riordan J had misstated and misapplied the principles set out in Wentworth. In summarising the essential elements of the cause of action he had said that it was incumbent upon the applicant to establish that the fresh facts were so material that his case ‘will succeed’. The correct principle is that the new facts must be such as to render it ‘reasonably probable that the action will succeed’.
(q) Riordan J had overlooked the significance of the fact that, since Elliott J’s judgment, a signed copy of the statutory declaration had been obtained. Previously, Bodycorp’s solicitors were only aware of the existence of the unsigned document. The signed statutory declaration was ‘fresh’.
(r) Riordan J had failed to address the significance of the misconduct and malpractice of the legal practitioners. In that respect counsel relied upon the High Court decision in Commonwealth Bank of Australia v Quade (‘Quade’),[24] and upon the decision of Hargrave AJ in Players Pty Ltd (in liq) (rec apptd) v Clone Pty Ltd (‘Players’).[25]
[24](1991) 178 CLR 134.
[25][2015] SASC 133.
(s) Maisano’s affidavit sworn 17 November 2014 revealed that evidence given before Elliott J, being the evidence set out in the summary for the Court of Appeal[26] at paragraph 13, had been false and that those circumstances rendered it reasonably probable that Bodycorp’s action on a retrial would succeed.
[26]The summary was not agreed by the parties to these proceedings before the Court of Appeal and was included in the Application Book in a draft form.
(t) Whilst Maisano’s affidavit sworn 17 November 2014 was the ‘key’ affidavit, the other affidavits relied upon, as referred to in proposed ground 11, also added relevant material. Riordan J had not addressed all the material relied upon.
(u) It was not inappropriate for Riordan J to have had regard to Elliott J’s judgment in determining what the significance was of the matters relied upon, but Riordan J had over emphasised the significance of Elliott J’s judgment.
(v) The new evidence constituted by Maisano’s affidavits introduced relevant conduct by AAMI officers other than Martin.
In order to understand and assess the matters relied upon by the applicant, it is necessary to review some aspects of the Bodycorp proceeding both before and after Elliott J’s judgment and to place the material now relied upon by the applicant in seeking to have that judgment set aside into that context.
Review of aspects of the Bodycorp proceeding
The unsigned statutory declaration, the signed version of which is said to have been ‘withheld’, and other documents related to it, were the subject of an interlocutory application before the trial in the Bodycorp proceeding. The unsigned draft statutory declaration had been inadvertently produced to Bodycorp’s solicitors in the course of discovery, notwithstanding that it was claimed to be subject to legal professional privilege. They had copied it and then formally sought production and inspection of the document and related documents. AAMI claimed legal professional privilege. In a ruling of 9 May 2013, Daly AsJ dismissed Bodycorp’s application to inspect the relevant documents on the ground that they were the subject of legal professional privilege, and that that privilege had not been lost.[27] There was no appeal from that determination.
[27]A copy of the ruling is exhibit ‘AMA19’ to the affidavit of Murdaca sworn 10 October 2016: Application Book C667.
The relevant allegations pleaded against Maisano, as at the date of Elliott J’s judgment, were contained in a further amended statement of claim, amended pursuant to leave granted by Elliott J on 24 May 2013.[28] The allegations were as follows:
[28]The further amended statement of claim is exhibit ‘AXC–1’ to the affidavit of Alexi Costa sworn 23 August 2016. The exhibits to that affidavit were not in the Application Book but were delivered to the Court in a separate folder before the hearing.
15In the period March 1998 — July 1998, the first respondent (‘Maisano’) and the eighth respondent (‘Munro’) stated to each of the category A franchisees words to the effect (‘the statement’) that —
(a)it would be in the best interests of the franchisee for it to terminate its franchise agreement with BCR [Bodycorp]; and
(b)if it did so, the franchisee would continue to be recognised by AAMI as a recommended repairer, but would no longer have to pay an 8% management fee to BCR.
Particulars
The particulars are set out in Schedule A.
16.In making the statement to each of the category A franchisees, each of Maisano and Munro —
(a)was aware of the existence of a franchise agreement between that franchisee and BCR; and
(b)intended that the franchisee should decide to terminate its franchise agreement with BCR and, in so doing, breach that agreement.
17.Induced by the statement, each of the category A franchisees terminated its franchise agreement with BCR before the end of the fixed term of the agreement, thereby breaching that agreement.
Particulars
Franchisee
Termination Date
Nunawading
April 1998
Geelong
July 1998
Caulfield
August 1998
Clayton
September 1998
Schedule A identified the individuals to whom the representations were allegedly made, stated that the relevant substance of what was said to each was what was alleged in paragraph 15, and stated that the conversations had taken place in the period preceding termination as specified in paragraph 17.
The pleaded allegations as to the statements made by AAMI were in exactly the same terms, although the period over which the ‘AAMI statement’ (as defined) was allegedly made was different, being February 1998 to December 1999. The particulars in relation to the allegations against AAMI asserted, in relation to different franchisees called category B franchisees, that in each case the statements were made by Martin, and in one case they were also made by Peter Camilleri and Linda Spanon.
In the trial Bodycorp sought to adduce evidence from five Bodycorp franchisees as to statements made to them at the relevant time. None of these franchisees were category A franchisees or category B franchisees. The only one of these franchisees who gave evidence of having had a conversation with Maisano was Rocco Crea, a franchisee at Tottenham. The judge heard the evidence from these franchisees on a voir dire and then heard argument on admissibility. Bodycorp sought to rely on this evidence pursuant to s 98(1) of the Evidence Act 2008, the coincidence rule. In a ruling delivered on 17 May 2013 Elliott J upheld Bodycorp’s position and ruled that the evidence was admissible. He directed that the evidence heard on the voir dire be evidence in the trial.[29] Eventually, in his judgment he accepted the evidence of all these franchisees with the exception of Crea.[30]
[29]Bodycorp Repairers Pty Ltd v Maisano [No 6] [2013] VSC 265 [49].
[30]Elliott J Reasons [227], [231], [239], [246], [253], [298].
Relevantly, Elliott J found that these franchisees had been told two things. First, Martin had said that they would not ‘lose their sign’ if they ceased to be a Bodycorp franchisee (Ciancio and Mellor).[31] Secondly, Martin had questioned whether being a Bodycorp franchisee was worth the 8% fee payable to Bodycorp. He did this by asking whether the franchisee was ‘happy’ to pay the fee or ‘needed’ to pay it (Lantieri),[32] and by saying that if the franchisee ceased to be a franchisee it would ‘save’ the fee (Ciancio)[33] or improve its profitability (Corso).[34]
[31]Ibid [231], [246].
[32]Ibid [227].
[33]Ibid [231].
[34]Ibid [239].
Maisano gave evidence in the trial. Counsel for Bodycorp submitted to us that the evidence he gave which is now said to be false is that set out in paragraph 13 of the summary for the Court of Appeal. Paragraph 13 reads as follows:
(a)‘Did you enquire about Mr. Martin about what would happen to the AAMI sign? I asked him, yes, I asked him. I asked him if I was to leave Bodycorp would that in any way infringe on my relationship with AAMI.
What did he say? He basically told me that he couldn’t answer that and that he was no legal expert and for me to go and speak to my lawyer’ (TR 1252: 19–25).
(b)‘Did Mr. Martin say anything to induce you to terminate your franchise agreement with Bodycorp? No, No, he told me that I should seek legal advice (TR 1253: 28–30).
(c)‘… Once I terminated Bodycorp [which occurred in July 1998], I hadn’t spoken to anybody else. No one came and visited. So the answer is: I never spoken to any other franchisee after that’ (TR 1254–1255).
(d)‘Do you remember getting a letter like this? I know this one is not addressed to you but do you remember getting a letter like this at about this time?
Yes’ (TR 1260: 9–11).
(e)‘Even though a letter had been written to the effect that you would cease to be a recommended repairer, that was withdrawn wasn’t it?
That’s correct.
That was because your lawyer agitated about that and argued it should not happen, isn’t that right? That’s correct (TR 1260: 12–16).
Reference must be made to one other aspect of Maisano’s evidence in the Bodycorp trial. Notwithstanding the answer which he gave, as set out in sub-paragraph (c) of paragraph 13 of the summary, Maisano also gave evidence, both before and after that statement at paragraph (c), that he had attended a meeting with other franchisees on 27 July 1998. His own franchise terminated on 6 July 1998. He gave evidence about that meeting in evidence in chief,[35] in cross-examination by Cawthorn very shortly after he made the statement set out at 13(c),[36] and in cross-examination by counsel for Bodycorp the following day.[37]
[35]Transcript of Proceedings, Bodycorp Repairers Pty Ltd v Maisano [No 8] (Supreme Court of Victoria, S CI 2005 09071, Elliott J, 20 May 2013) 1231.
[36]Ibid 1256–7.
[37]Transcript of Proceedings, Bodycorp Repairers Pty Ltd v Maisano [No 8] (Supreme Court of Victoria, S CI 2005 09071, Elliott J, 21 May 2013) 1315-16.
Maisano’s affidavit sworn 17 November 2014
After Elliott J’s judgment and before the hearing of Bodycorp’s appeal from that judgment, Maisano swore an affidavit, prepared by Bodycorp’s then solicitors. This is the affidavit sworn on 17 November 2014, which is the principal foundation for Bodycorp’s fraud claim.
In his affidavit sworn 17 November 2014 Maisano deposed that he felt compelled to prepare the affidavit ‘in order to clarify the truth’ in relation to both the Malvern panel shop proceeding, which had been in the County Court in 2002, and the Bodycorp proceeding. He set out the background to his involvement with Bodycorp. He swore that he had known Murdaca ‘from my school days’ and he set out in some detail how he came to be involved (paragraphs 1 to 6). He then referred to the dispute between himself and Bodycorp which was the subject of the Malvern panel shop proceeding. He swore that that was the matter that caused him to become upset with Bodycorp. He then deposed (paragraph 9) as follows:
I spoke to Barry Martin about it. I told him I was upset at BodyCorp and AAMI because of what had happened at Malvern and now there is a new shop in Cheltenham. I asked him if I left BodyCorp what would happen to my sign[.] He didn’t think it would be a problem for me to leave. Furthermore he advised that it would be financially better for me as I wouldn’t have to pay the 8% commission to BodyCorp. He also told me that the Melton franchise had also left BodyCorp Sunbury and so did the Abbotsford shop. It was with head office to be determined. Based on what Barry Martin told me I wrote to BodyCorp giving them notice that I was terminating the Franchise agreement with them.
It is necessary to observe at this point the very close similarity between what Maisano swears Martin said to him and what Elliott J found had been said to the other franchisees. What Maisano swears Martin said in this affidavit is inconsistent with the evidence he gave in the trial (sub-paragraphs 13(a) and (b) of the summary). But it is entirely consistent with, and goes no further than, Elliott J’s findings as to what Martin was saying to franchisees.
In his 17 November 2014 affidavit Maisano then deposed to events later in July 1998. He says that he initially received a letter from AAMI saying that he was to be terminated as a recommended repairer, but that after threatening to sue AAMI and after a meeting between his then solicitor at Oakley Thompson and the solicitor for AAMI he did not lose his recommended repairer status (paragraphs 11–15). In that context he raises the statutory declaration (paragraphs 15–16). He swears: ‘I did however have to sign the statutory declaration prepared by AAMI’s solicitors in order to retain my work’.
Maisano then produces the correspondence whereby the statutory declaration was forwarded to him and deposes that it was signed by him on 1 September 1998. He corrects one matter in the statutory declaration, which is not of any present significance, and then says that one part of the statutory declaration was untrue. This is a part of the statutory declaration where it is asserted that Murdaca had talked to franchisees about officers of AAMI in such a way as to suggest they were people over whom Murdaca had considerable influence. Mr Maisano swears in his affidavit (paragraph 16):
The comments about AAMI offices [sic] in the Statutory Declaration which I was hesitant to comment about when asked by Ken Adams [solicitor for AAMI] he told me that I just have to corroborate with it as other BodyCorp franchisees have made similar comments in particular the statutory declaration made by Steve Morrish so I went along with it even though I did not hear those comments from anybody at BodyCorp or Tony Murdaca.
In the 17 November 2014 affidavit Maisano then returns to the matters that were the subject of the Malvern panel shop proceeding (paragraphs 17–21).
The affidavit then addresses the Bodycorp proceeding and the issue of AAMI’s letter dated 14 August 1998 (paragraph 25). He swears, in substance, that Cawthorn and Broadbent encouraged, or prevailed upon, him to say that he had received a similar letter. Maisano then swears:
Based on the representation by Mr Cawthorn and Mr Broadbent I testified that I had received a similar letter. During Cross examination Mr Goldblatt [counsel for Bodycorp] challenged that I had not receive [sic] the letter and he referred to a list of recipients to that letter. I was not on the list of recipients. After Cross examination at a break I informed Mr Broadbent that I was not on the list and did not remember receiving the letter but testified that I did due to being told that I had received it and he told me not to worry about it[.]
Maisano does not indicate what the letter was about, or why it was, or might be, significant.
Dealing with the issue of the quoting analyses (paragraph 26), Maisano swears that whilst Martin was giving evidence he told Broadbent that some of that evidence was ‘untrue and if I get asked the same questions I would have to answer differently’. He went on:
I also explained to Mr Broadbent about the quoting sheet statistics that they were not representative of a full months work and were not representative of any supplementary figures. Also any job that wasn’t repaired during that month or didn’t arrive on the booking date we were given further opportunities to secure additional work.
Martin gave evidence after Maisano. Maisano does not suggest any evidence he had given about the quoting analyses had been false.
In relation to Cawthorn’s influence over the evidence which he gave, Maisano’s affidavit says the following (paragraph 27):
Prior to me taking the stand Mr Cawthorn was having a discussion with Mr Broadbent in my presence. Mr Cawthorn, said Barry Martin would be saying that he did not induce any BodyCorp repairers to leave and I was then instructed to do the same. I was told by Cawthorn that if I was asked in the witness stand if I had any contact with any franchisees after I left BodyCorp that I should say No. My reply was I can’t say that because I did in fact meet with ex and other BodyCorp repairers and that I had in fact had meetings with them. Broadbents reply to that was if you say that you will go down for inducing other franchisees and that is the claim against you do you understand this. He also advised that I could go down for a Million dollars worth of damages. Cawthorn backed it up by saying your evidence Mr Maison [sic] must corroborate with Martins evidence that you did not induce franchisees to leave BodyCorp. So simply say you didn’t have any meetings with BodyCorp repairers. I was worried as Cawthorn and Broadbent were telling me to tell untruths to the court. I wanted to get out of there.
The affidavit then sets out complaints Maisano makes concerning what he saw as unwarranted interference by his solicitors in his attempts to settle the Bodycorp proceeding. He also refers to a meeting at the Keg in Albert Park with other repairers at which he says he told them of the circumstances of his termination including his threat to issue proceedings and the involvement of his solicitor (paragraphs 29–35).
The statutory declaration, now said to have been ‘withheld’, is produced by Maisano as an exhibit to the affidavit. It predominantly deals with the circumstances of the Malvern panel shop proceeding (paragraphs 6–16). There are then three paragraphs (paragraphs 17–19) which deal with statements said to have been made by Murdaca giving the impression that he had influence over AAMI officers. This is the section of the statutory declaration which Maisano in his affidavit of 17 November 2014 says was untrue but which he says he ‘went along with’ at the urging of the solicitor for AAMI.
The judgment of the Court of Appeal
As indicated earlier, Bodycorp attempted to rely upon Maisano’s affidavit sworn 17 November 2014 in its appeal against the judgment of Elliott J but it was not permitted to do so. Bodycorp’s appeal on other grounds was dismissed. It is accordingly incumbent upon us to proceed on the basis that Elliott J’s findings and conclusions based on the evidence before him were correct. In particular, there was no error in his conclusion that the term of the agreement between Bodycorp and AAMI (requiring the removal of exiting franchisees as recommended repairers for 6 months) which AAMI had breached was void as an unreasonable restraint of trade,[38] and there was no error in his conclusion that Martin’s statements, which Bodycorp did prove, did not amount to conduct which constituted inducement to breach of contract in the relevant sense, namely, the wrongful and intentional procurement of breach of a subsisting contractual obligation.[39]
[38][2015] VSCA 73 [33], [34], [44].
[39]Ibid [48], [54], [60].
Other relevant material relied upon by Bodycorp
Maisano’s affidavit sworn 23 July 2016, exhibited the affidavit he had sworn on 17 November 2014, but otherwise that affidavit did not relevantly add to the material. Maisano’s affidavit sworn 5 October 2016 repeated some of the matters deposed to in his 17 November 2014 affidavit and contained a passage in which he set out what he had told franchisees after he left the Bodycorp franchise. The affidavit reads:
I told these repairers I left for my own personal reasons and I would still support the sublet repairers but I told them to contact Don Casbolt and I knew that if they made out they were going to sue AAMI, but not actually really sue them, they would be able to leave the Bodycorp franchise and keep their work. This was supported by Barry Martin, where he was telling repairers they would keep their sign once an investigation started.
Murdaca swore an affidavit on 12 September 2016. He produced as an exhibit to that affidavit extracts of the transcript of evidence given before Elliott J in May 2015 in the Oakley Thompson proceeding.
Maisano appeared for himself in the hearing before Elliott J in the Oakley Thompson proceeding and he gave evidence. It is clear from the transcript and from Elliott J’s judgment in that proceeding that Maisano was in dispute with Oakley Thompson in relation to their costs. Amongst other things, he maintained that Oakley Thompson had agreed that their costs would be capped at $80,000, that they had not had authority to engage counsel, that they had not made the cost disclosures required by the Legal Profession Act 2004, and they had not provided a bill in accordance with that Act. Elliott J rejected all of those contentions.
When Maisano gave evidence before Elliott J, counsel for Oakley Thompson put to him that he had lied on oath in the past. Maisano denied that.[40] The following interchange then occurred:
[40]Transcript of Proceedings, Oakley Thompson and Co Pty Ltd v Maisano [No 2] (Supreme Court of Victoria, S CI 2014 05814, Elliott J, 12 May 2015) 253–4.
What about in relation to the evidence you gave before His Honour in May 2013, you lied on your oath then, didn’t you? – – – No.
…
No, listen to the question, Mr Maisano. Did you lie on your oath in giving evidence? – – – No. Evidence?
Yes? – – – In the Bodycorp trial?
Yes? – – – No.
You are sure about that? – – – I don’t know what you are referring to.
Are you sure? – – – I am sure I didn’t lie under oath.[41]
[41]Ibid 254.
Later, Maisano denied that he had lied about receiving the AAMI letter of 14 August 1998 in the earlier trial before Elliott J, and denied that he had lied in the statutory declaration of 1 September 1998.[42]
[42]Ibid 257–60.
Broadbent also gave evidence before Elliott J in the Oakley Thompson proceeding. In substance, the allegations that he had prevailed upon Maisano to give false evidence were emphatically denied. When cross-examined by counsel for Bodycorp, Broadbent was asked about the statutory declaration. The way in which counsel for Bodycorp characterised the statutory declaration was as follows:
The statutory declaration deals with a previous proceeding. What involvement did you have in relation to that previous proceeding, Mr Broadbent? – – – Well, I am not sure what previous — previous proceeding you mean.
The previous proceeding was in relation to a County Court claim by Mr Maisano and Mr Attard against Bodycorp Repairers? – – – I don’t believe I had any. …[43]
This characterisation of the statutory declaration as being about the Malvern panel shop proceeding was accurate.
[43]Transcript of Proceedings, Oakley Thompson and Co Pty Ltd v Maisano [No 2] (Supreme Court of Victoria, S CI 2014 05814, Elliott J, 14 May 2015) 468–9.
When Maisano cross-examined Broadbent the following interchange occurred:
Do you remember me telling you that I wasn’t the one that was telling people to leave Bodycorp and, in fact, I told you who it was? – – – Sorry, can you repeat that?
Do you remember me telling you when we were talking about the inducements and looking at those sheets for the turnover of Bodycorp that I wasn’t responsible for inducing any franchisees to leave? Do you remember who I told you it was? – – – I recall you saying that you never induced anyone to leave Bodycorp.
Do you recall who I said did? – – – No, I don’t recall.
I put it to you that I told you it was Barry Martin? – – – I don’t recall that.[44]
[44]Ibid 490.
Murdaca had sworn an earlier affidavit on 4 August 2016 in which he set out a number of conversations which he says he has had with Maisano. He swears that the relevant substance of the conversations concerning the evidence given before Elliott J in the Bodycorp proceeding was as follows:
The First Defendant [Maisano] and Barry Martin gave false evidence in the proceeding. The First Defendant falsely testified that he had not induced the Plaintiff’s franchisees to leave, that he had received a letter dated 14 August 1998 and that the statistics in the quoting sheets did not reflect a franchisee’s income. Barry Martin had falsely testified that he had not induced the First Defendant and other franchisees to leave, and that the statistics in the quoting sheets did not reflect a franchisee’s income.
Murdaca sets out bitter complaints Maisano made to him concerning Oakley Thompson relating to the recovery of their fees. In relation to the letter of 14 August 1998, and whether he had received it, Murdaca says that Maisano said to him:
I felt terrible in that witness box, when your counsel said I was not on the mailing list. The judge had a go at me. Cawthorne [sic] and Broadbent would not look at me. I was like a stuffed turkey, those dogs, put me in that position.
In relation to his own activities Murdaca reports Maisano as having said:
I was getting calls from the franchisees, I was meeting the franchisees. Barry Martin has put it out, that I know how to get out of Bodycorp. I said to Kevin Oldham (Bodycorp Geelong) that you just have to make out that you are suing AAMI, but don’t actually do so, just make the threat. He (Oldham) said I will do what I have to do to keep my sign. I saw him at the meeting at AAMI, where the statutory declarations where [sic] provided … I told Stan Hugh (Bodycorp Nunawading) that you just have to make out that you are suing AAMI, but don’t actually do so, just make the threat, that will start the investigation and you will keep your sign. … I said the same thing to Joe Anthony (Bodycorp Caulfield). … .
That affidavit concludes with Murdaca reporting further complaints by Maisano concerning Oakley Thompson and the recovery actions they were taking in relation to their fees.
We turn then to the proposed grounds of appeal, and to the matters emphasised by counsel on behalf of Bodycorp before us.
Misstatement and misapplication of the principles in Wentworth — proposed grounds 2 and 3
Counsel on behalf of Bodycorp submitted that Riordan J had identified the correct principles as being those set out in the passage in Wentworth which he quoted but that he had then misstated those principles when he said:
It must be established that the fresh facts are so material (by themselves or in combination with other facts) that, if proven, the applicant’s case will succeed.[45]
[45]Reasons [48].
It was also submitted that Riordan J had misapplied the principles in that he had addressed the question of whether Bodycorp’s claim would have succeeded if the fresh facts had been led at trial rather than whether it was probable that it would succeed given the fresh facts, that is on a re-trial.
The part of Riordan J’s summary which is relied upon did not reproduce what is said in the relevant passage in Wentworth. The applicable principle is that the new facts must be ‘so evidenced and so material that it is reasonably probable that the action will succeed’. Riordan J’s summary suggested the fresh facts must be so material ‘that, if proven, the applicant’s case will succeed’. The qualification ‘if proven’ is not in Wentworth. Wentworth indicates that the issue is whether the fresh material is so evidenced and so material that success is ‘reasonably probable’. However, whilst Riordan J’s summary was inaccurate in this respect, it is clear that he applied the correct principle. This is so in relation to each of the matters upon which Bodycorp relied. Riordan J made this clear when he addressed:
·The position in relation to perjury, where he says that proof of perjury in itself is not sufficient, that all of the elements of the cause of action set out in Wentworth must be established, and that in particular it must be proven that ‘it is reasonably probable that the applicant will succeed’.[46]
·The position as to the statutory declaration, where he concludes that there is no real prospect that admission of the statutory declaration into evidence ‘could have resulted or could result in Bodycorp succeeding’.[47]
·The allegedly false evidence of Maisano in relation to other contacts with franchisees, where he finds this ‘could not cause a different result’.[48]
·The allegedly false evidence of Maisano in relation to the letter of 14 August 1998, where he finds that there is no basis upon which any significance can be attached to that letter.[49]
·The evidence concerning the quoting analyses, where he finds that there is no real prospect that Maisano’s evidence about that ‘could have resulted or could result in Bodycorp succeeding’.[50]
·Martin’s allegedly false denials, where he concludes that he did not consider that the admission of that evidence ‘could make it reasonably probable that Bodycorp’s case would succeed’.[51]
[46]Reasons [49].
[47]Reasons [63].
[48]Reasons [69].
[49]Reasons [73]–[74].
[50]Reasons [80].
[51]Reasons [84].
In relation to each of the matters relied upon by the applicant, Riordan J has addressed his relevant conclusion by reference to whether that circumstance ‘could’ result in a different outcome. He stated the correct principle when he quoted Wentworth. He applied the correct principle in relation to each matter relied upon. His summary of the principle was inaccurate.
Significance of the signed statutory declaration
There is no proposed ground of appeal which clearly reflects the submission made by counsel for Bodycorp that, whilst the unsigned statutory declaration might not have been ‘fresh’, the signed statutory declaration was.
In our view the contention that Riordan J made an error by failing to distinguish between the unsigned statutory declaration and the signed one must be rejected. There are two reasons for this conclusion.
First, the relevance of the statutory declaration to the issues raised in the Bodycorp proceeding is marginal, to say the least. The statutory declaration concerns the Malvern panel shop proceeding, as counsel for Bodycorp himself said in the Oakley Thompson proceeding. Before us, its only significance in the context of the Bodycorp proceeding was said to be that its mere existence is an indication of a desire on the part of AAMI to undermine Bodycorp’s franchise system, not by representations made to franchisees but in some more general way. As Riordan J pointed out, that was not the case pleaded in the Bodycorp proceeding.
The second reason is that unless, and until, it was used in a manner which caused its contents to cease to be confidential, the signed statutory declaration would have been subject to legal professional privilege in exactly the same way as the unsigned one was. Counsel for Bodycorp could not explain before Riordan J, or before us, how it could be maintained that a fraud had been committed because a document, whose existence and contents were known, was not part of the evidence in the trial because a successful claim for legal professional privilege had been made.
Bodycorp’s contentions in relation to the statutory declaration are manifestly untenable.
Misconduct and malpractice by the legal advisers – proposed grounds 5 and 8
It was submitted on behalf of Bodycorp that Riordan J had failed to take into account the allegations of misconduct and malpractice by the legal advisers. It is of course wrong to suggest that he had failed to take that matter into account, what Bodycorp means is that he had not given it the significance that it ought to have been given.
Before us, in this context reliance was placed upon Quade and Players. The matter had not been put on that basis to Riordan J. Those cases had not been cited or relied upon before him. After the oral hearing before us had concluded, Bodycorp drew our attention to the decision of the Full Court of the Supreme Court of South Australia in Clone Pty Ltd v Players Pty Ltd (in liq) (rec apptd) (‘Clone’)[52] which upheld Hargrave AJ’s decision in Players.
[52](2016) 127 SASR 1.
The principles set out in Quade and Players do not apply here. The principles which apply here are those set out in Wentworth, as was the accepted position before Riordan J. Quade and Players deal with the position where documents which ought to have been discovered or produced are not produced at trial. That is not what has occurred here. The only document now said to have been ‘withheld’ is the statutory declaration, which we have already addressed. In Clone, the majority held that malpractice on the part of a lawyer for a party in the form of misleading statements to the primary judge at trial — which is separate from and in addition to malpractice by the party in the form of a failure to discover a document — could satisfy the principles for setting aside a judgment. That case is distinguishable from the present case because, leaving aside the statutory declaration, the malpractice which is alleged against Cawthorn and Broadbent relates exclusively to, and does not extend beyond, Maisano’s alleged false evidence. For the reasons discussed below, the false evidence of Maisano that the alleged malpractice of Cawthorn and Broadbent is said to have induced does not satisfy the principles for setting aside Elliott J’s judgment. The alleged malpractice of Cawthorn and Broadbent, whether considered in combination with or independently of Maisano’s evidence, is also incapable of satisfying those principles. That is so even if one adopts the test of whether there was a real possibility that, but for the alleged malpractice, the outcome of the trial would have been different — which was considered in Quade and by the majority in Clone — rather than the ‘reasonably probable’ test applied in Wentworth.
Maisano’s evidence
Riordan J proceeded on the basis that what Maisano had sworn to in his affidavits, particularly the affidavit of 17 November 2014, was correct. This assumption was a most favourable one to Bodycorp in the circumstances. As Wentworth makes clear, in order to set a judgment aside for fraud the fresh facts must be both ‘so evidenced’ and ‘so material’ that it is reasonably probable that the action will succeed.
The conduct complained of by Maisano’s legal advisors was put to Broadbent in the Oakley Thompson proceeding and he denied it emphatically. Maisano’s evidence in the same case was to the effect that he had not given any false evidence in the Bodycorp proceeding before Elliott J in 2013. What Maisano then put to Broadbent as to who was trying to persuade franchisees to leave (Martin) was consistent with the evidence he had given in the Bodycorp proceeding, and consistent with Elliott J’s findings against Martin in that proceeding. This is all quite inconsistent with the affidavits Maisano has sworn upon which Bodycorp relies. Nevertheless, Riordan J, no doubt mindful of the fact that what was sought was summary dismissal, proceeded on the basis that what Maisano has sworn to, principally in his affidavit of 17 November 2014, was correct.
It is necessary to be clear as to how what Maisano has sworn to in his affidavit of 17 November 2014 and his affidavit of 5 October 2016 differs from what is said to be the false evidence which he gave in the trial, as set out in paragraph 13 of the summary.
Sub-paragraphs (a) and (b) of paragraph 13 quote the evidence which Maisano gave in the trial to the effect that when he asked Martin what would happen to his sign if he left he was told to get legal advice. As indicated earlier, Maisano now swears that Martin said to him that he did not think it would be a problem if he was to leave and that he would be financially better off as he would not have to pay the 8 per cent commission. As observed earlier, what Maisano now says is very close, if not identical, to what Elliott J found Martin had said to other franchisees. Statements to that effect were held by Elliott J not to constitute inducements to breach the franchise agreements in the relevant sense. The Court of Appeal upheld that finding. What Maisano now says Martin said to him could not alter that. It would only reinforce the findings Elliott J made. As to Maisano’s own position, what Martin said has even less significance because Maisano was contractually entitled to terminate because of breaches by Bodycorp, and Elliott J so held.
In relation to the evidence quoted at sub-paragraph 13(c) which was to the effect that Maisano did not speak to other franchisees after he had terminated his own franchise, the first matter to be noted is that that was not the only evidence he gave on that issue at the trial. Notwithstanding the breadth of the answer set out at sub-paragraph 13(c) he also gave evidence both before and after he gave that answer to the effect that he did meet other franchisees later in July 1998. What Maisano now swears that he told franchisees after he terminated is confined to one issue. He sets out what he told them in his affidavit of 5 October 2016. Murdaca gives hearsay evidence about it in his affidavit of 4 August 2016. What is deposed to is that Maisano told franchisees that he had left and had not ‘lost his sign’ because he had threatened AAMI with legal proceedings and he suggested to them that they could do the same.
Maisano’s affidavit of 17 November 2014 confirms that what Maisano now swears he told the franchisees about how he kept his sign was true. That is how he kept his sign. Maisano sets it out in his affidavit of 17 November 2014 at paragraphs 11 to 15. As a matter of fact AAMI did not remove exiting franchisees from their recommended panel. Elliott J found that that was a breach of AAMI’s agreement with Bodycorp but that the relevant term was void as an unreasonable restraint of trade. Elliott J found as a fact (despite Martin’s denials) that Martin had told franchisees they would not ‘lose their sign’. Maisano’s discussions with franchisees (assuming they occurred) which relevantly are to the same effect, could not alter the outcome.
In relation to the evidence at sub-paragraph 13(d) of the summary concerning the letter of 14 August 1998, the first matter to be noted is that what Maisano now swears to, and what Murdaca deposes that he told him, is that he was angered and embarrassed when it was revealed in the course of his evidence that he was not on the list of recipients of that letter after he had been persuaded to give evidence that he had received it. Maisano complains that as a result Cawthorn and Broadbent would not look at him and the judge ‘had a go’ at him. Thus, it seems the ‘true’ position as to the receipt of the letter was exposed during his evidence. More importantly, no submission was made to Riordan J or to us as to what the significance of this letter is said to be. It is not referred to in Elliott J’s judgment.
Bodycorp relies upon Maisano’s affidavits in support of a submission that Martin had given ‘false denials’ of his representations to franchisees. As Riordan J pointed out, Elliott J rejected Martin’s evidence on that issue and accepted the evidence led by Bodycorp. Bodycorp’s claims failed, not because Martin’s evidence was accepted but for other reasons. Evidence of Maisano which might further fortify the rejection of Martin’s denials on this issue could not alter the outcome.
As to the claim for work and labour done and the quoting analyses, Martin’s evidence was that the quoting analyses was not a record of work actually done and repair costs actually incurred. Whilst Maisano says he disagreed with Martin about some aspects of this evidence he swears in the affidavit Bodycorp relies upon that the quoting analyses were ‘not representative of a full month’s work and were not representative of any supplementary figures’. He deposes that work that was not done would be addressed by giving franchisees ‘further opportunities to secure additional work’. Maisano does not say any evidence he had given about the quoting analyses was false. As Riordan J found, the shortcomings in proof which resulted in the failure of Bodycorp’s work and labour done claim before Elliott J are unaddressed by the asserted ‘fresh facts’ deposed to by Maisano.
Failure to consider all of the material relied upon by the applicant — proposed ground 11
Riordan J did consider all of the relevant material relied upon by the applicant. The most important affidavit was Maisano’s affidavit sworn 17 November 2014. The judge expressly referred to that affidavit and quoted extensively from it at several points in his judgment.[53] He also expressly referred to Maisano’s affidavit of 5 October 2016 and quoted from that affidavit as well.[54] The judge expressly referred to Murdaca’s affidavits sworn 4 August 2016 and 12 September 2016.[55] He referred to material produced as exhibits to the affidavits of Niren Raj sworn 22 and 23 September 2016.[56] The judge did not refer to the affidavits of Joe Anthony sworn 13 November 2014, James Miller sworn 4 August 2016 or Murdaca sworn 3 October 2016. Those affidavits add nothing of significance to the material in the affidavits to which the judge did refer.
[53]Reasons [30], [61], [65], [71], [76], [86].
[54]Reasons [32], [66], [78].
[55]Reasons [67], [70], [72].
[56]Reasons [70], [72].
Inappropriate reliance on Elliott J’s judgment — proposed ground 4
Riordan J’s treatment of Elliott J’s judgment was entirely appropriate. It was necessary for Riordan J to give detailed attention to why Bodycorp’s claims had failed before Elliott J, in order to determine whether what were asserted to be the fresh facts were such as to make it reasonably probable that the claims would succeed if the fresh facts were admitted. Further, critical aspects of Elliott J’s analyses had been upheld in the Court of Appeal and were not affected by any of the asserted fresh facts.
Introduction of new relevant AAMI personnel
Again, there is no proposed ground of appeal specifically reflecting the submission made by counsel for Bodycorp that Maisano’s evidence was significant because it introduced ‘new’ AAMI personnel. There is no basis for a conclusion this could change the outcome on the relevant issues.
Other proposed grounds
It is necessary to briefly address the proposed grounds not already dealt with.
Proposed ground 1, which complains of Riordan J’s reliance upon an unreported section of the decision in Wentworth, is without merit. The judge was entitled to rely on an unreported decision, or an unreported section of a reported decision.
Proposed ground 6 suggests that the trial judge erred in holding that there was no evidence that AAMI’s conduct in carrying out an investigation induced any franchisees to breach their contractual relationship with Bodycorp. The reference to an ‘investigation’ is a reference to an investigation concerning the statements said to have been made by Murdaca suggesting he had influence over AAMI personnel. The statutory declaration was related to, or a part of, that investigation. The submission made in support of this ground is that there was an inference as to Martin’s intention which was open to be drawn in the circumstances. What Riordan J said on the issue was the following:
There is no real prospect that the admission of the statutory declaration into evidence could have resulted or could result in Bodycorp succeeding on its inducing breach of contract claim for the following reasons:
(i)Bodycorp’s submission that the contents of the statutory declaration and the inquiry carried out by AAMI would have been relevant in establishing Martin’s intention to induce the franchisees to breach their franchise agreements is at best tenuous. There was no evidence that AAMI’s inquiry was other than a legitimate investigation into allegations and that the result of the investigation was to exonerate the Bodycorp directors of any wrongdoing.
(ii)Whether or not the statutory declaration would have influenced the trial judge to find an intention on behalf of AAMI and/or Martin to induce a breach of contract, does not deal with the fact that Bodycorp’s claim failed critically on the basis that the established conduct of Martin, despite his denials, did not amount to an inducement to the franchisees to breach their contractual obligations.
(iii)There was no evidence referred to by the trial judge, nor any evidence adduced on this application, that AAMI’s conduct in carrying out the investigation induced any franchisee to breach their contractual obligations.[57]
[57]Reasons [63].
The judge did not ignore the submission put concerning Martin’s intentions, but he characterised it as ‘tenuous’ because of the absence of any evidence that the investigation was not legitimate, and because the result of the investigation was to exonerate Bodycorp’s directors. His final observation that there was no evidence the investigation induced any franchisee to breach was correct in itself, and, insofar as it is asserted the judge had overlooked the inference said to be open, the earlier statements reveal that is not so.
Proposed ground 7 suggests that the judge had failed to provide proper written reasons. There is no merit whatsoever in this proposed ground. The judge’s reasons deal with all the substantive matters that were argued before him and his path of reasoning is clear.
Proposed ground 9 is that the judge erred by giving ‘undue influence’ to the factors to which he specifically referred when considering his discretion under s 64 of the Civil Procedure Act. The factors to which he referred were relevant. It was appropriate for him to take them into account.
Proposed ground 10 is that the trial judge erred in failing to hold that a judgment in certain circumstances could be set aside solely on the basis that a party committed or was privy to a fraud. The relevant principles were accepted to be those set out by Kirby P in Wentworth. They are the principles Riordan J applied.
Conclusion
In conclusion we will grant leave to appeal on proposed ground 2. We will grant leave because the judge’s summary of one of the applicable principles drawn from Wentworth was not accurate. As the judge clearly applied the correct principle, we will dismiss the appeal.
Otherwise, we refuse leave to appeal on all of the proposed grounds.
SCHEDULE OF PARTIES
BODYCORP REPAIRERS PTY LTD (ACN 068 589 408) Applicant
AND
ANUNIZIATO ENZO MAISANO First Respondent
(also known as Michael Maisano and Michael Mason)
OAKLEY THOMPSON & CO PTY LTD (ACN 092 053 239) Second Respondent
PETER CAWTHORN QC Third Respondent
AUSTRALIAN ASSOCIATED MOTOR INSURER Fourth Respondent
(ACN 004 791 744), trading as “AAMI”
BARRY MARTIN Fifth Respondent
SCOTT MUNRO Sixth Respondent
MELTON BODYWORKS (ACN 006 317 219) Seventh Respondent
JEREMY BROADBENT Eighth Respondent
5
8
0