Bruness Pty Ltd v Automasters Australia Pty Ltd
[2000] WASCA 157
•9 JUNE 2000
BRUNESS PTY LTD & ANOR -v- AUTOMASTERS AUSTRALIA PTY LTD [2000] WASCA 157
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASCA 157 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:115/1999 | 10 MAY 2000 | |
| Coram: | ANDERSON J WHEELER J | 9/06/00 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| PDF Version |
| Parties: | BRUNESS PTY LTD (ACN 078 687 484) DAVID IAN COOMBES AUTOMASTERS AUSTRALIA PTY LTD (ACN 066 676 239) |
Catchwords: | Interlocutory injunctions Application to discharge injunction Principles Contracts Termination Franchise agreement |
Legislation: | Nil |
Case References: | Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 Bruness Pty Ltd v Automasters Australia Pty Ltd [2000] WASCA 104 Christmas Island Resort Pty Ltd v Casinos Australia International (Christmas Island) Pty Ltd, unreported; FCt SCt of WA; Library No 960641; 8 October 1996 Western Australia v Bond Corporation Holdings Pty Ltd (1991) 5 WAR 40 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : BRUNESS PTY LTD & ANOR -v- AUTOMASTERS AUSTRALIA PTY LTD [2000] WASCA 157 CORAM : ANDERSON J
- WHEELER J
- First Appellant (First Defendant)
DAVID IAN COOMBES
Second Appellant (Second Defendant)
AND
AUTOMASTERS AUSTRALIA PTY LTD (ACN 066 676 239)
Respondent (Plaintiff)
Catchwords:
Interlocutory injunctions - Application to discharge injunction - Principles
Contracts - Termination - Franchise agreement
Legislation:
Nil
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Result:
Appeal dismissed
Representation:
Counsel:
First Appellant (First Defendant) : Mr B E S Lauri
Second Appellant (Second Defendant) : Mr B E S Lauri
Respondent (Plaintiff) : Mr M H Zilko
Solicitors:
First Appellant (First Defendant) : Clairs Keeley
Second Appellant (Second Defendant) : Clairs Keeley
Respondent (Plaintiff) : Deacons Graham & James
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Bruness Pty Ltd v Automasters Australia Pty Ltd [2000] WASCA 104
Christmas Island Resort Pty Ltd v Casinos Australia International (Christmas Island) Pty Ltd, unreported; FCt SCt of WA; Library No 960641; 8 October 1996
Case(s) also cited:
Western Australia v Bond Corporation Holdings Pty Ltd (1991) 5 WAR 40
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1 ANDERSON J: I have had the advantage of reading in draft the judgment of Wheeler J. I agree that the appeal must be dismissed for the reasons given by her Honour. There is nothing I wish to add.
2 WHEELER J: This is an application for leave to appeal from a decision of McKechnie J, delivered 26 July 1999, dismissing the first and second appellants' application that an injunction granted by his Honour on 21 May 1999 be discharged.
3 The grant of the injunction has itself been the subject of an appeal which was determined by a court consisting of Anderson J and myself on 20 April 2000: see Bruness Pty Ltd v Automasters Australia Pty Ltd [2000] WASCA 104. Rather than repeat the history of the matter here, I refer to the reasons which I then delivered for a description of the underlying dispute between the parties. It is sufficient for present purposes to note that at its heart lay a purported termination of a franchise agreement for what the respondent alleged to have been breaches by the appellant franchisees of certain of its conditions.
4 At the original hearing before McKechnie J, there was affidavit evidence from Mr Canham, the general manager of the respondent, to the effect that certain breaches had been the subject of a notice of default sent to the appellant and not remedied. The first notice described by Mr Canham had been sent by one of his employees, Ms Lane, under his supervision. He also deposed that he had himself observed certain breaches during the conduct of an audit and that those breaches had not been remedied by the expiry of the default notice. The breaches fell very broadly into two categories, one being concerned with a failure to return to the respondent's office the "yellow" copies of invoices created by the appellant in respect of work done at the franchise; those documents were also referred to at times as the "hard copy" of the invoice. The second group of breaches was alleged to concern a failure to either enter or complete on a computer screen, which was linked to the respondent's head office computer, certain data concerning work done at the appellants' franchise. The system required both the hard copy and the computer entries to be completed, for a variety of reasons which I canvassed in my earlier reasons for decision.
5 On 11 June, certain further affidavit material was placed before his Honour by the appellants. His Honour noted that the application before him was not a rehearing of the original application and that different principles applied to an application to dissolve an injunction from those which applied in respect of its initial grant. His Honour formulated the
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essential question for him in that case as being "whether justice requires the continuation of the injunction in light of the new material".
6 On one view of the authorities, which was urged upon us by the respondent, this view may have been one which was unduly generous to the appellants (see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177, 180, and Christmas Island Resort Pty Ltd v Casinos Australia International (Christmas Island) Pty Ltd, unreported; FCt SCt of WA; Library No 960641; 8 October 1996). However, there is no notice of contention from the respondent in respect of the test adopted by his Honour and it seems to me appropriate to apply it to the materials placed before him.
7 His Honour had taken the view at the initial hearing that the injunction was one which would effectively bring the action to an end and that it was therefore necessary for the respondent to persuade him to "a high degree of assurance" that it was likely to succeed at trial. I note that the grant of an injunction has not in fact brought the action to an end and that, 12 months after his Honour initially granted the injunction, the appellants consider it worthwhile to attempt to persuade this Court to discharge it, but in this respect also, I think it is appropriate to proceed on the view which his Honour took. A question for his Honour on the appellants' further application, then, was whether that high degree of assurance could persist, in the light of the new material.
The Yellow Copies
8 At the earlier hearing before his Honour, he had found some ambiguity in an affidavit in which Mrs Coombes, who generally oversaw the appellants' record-keeping, deposed that the yellow copies of certain invoices had been sent to the respondent's head office. His Honour commented that Mrs Coombes did not in terms depose that such forwarding had been effected prior to the date of purported termination. In a fresh affidavit of 4 June 1999 placed before his Honour, Mrs Coombes deposed that none of the yellow copy invoices to which she referred had been forwarded after the date of purported termination. Mr Coombes deposed that on a particular date subsequent to the purported determination, he gave Ms Lane the yellow copies of invoices rendered in the previous week; he did not in terms depose that he had given her no other documents. Ms Lane then deposed that she received certain yellow copy invoices, including the majority of those the subject of Mrs Coombes' affidavit, only on 17 March 1999 (subsequent to the
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- purported transaction) when she said that they were handed to her by Mr Coombes.
9 His Honour took the view that Mrs Coombes' evidence was really, when analysed, evidence that the normal course of business of the appellant would have involved the forwarding of the yellow copies on the dates specified by Mrs Coombes. His Honour noted that Mr Coombes did not directly deal with that issue. At what his Honour correctly described as "the present limited stage of the proceedings" he preferred the evidence of Ms Lane, because it was direct evidence rather than an inference derived from normal business operations. Having analysed the competing affidavits, that appears to me to be a view which was open to his Honour.
10 Yellow copies of other invoices appear to have been conceded by Mrs Coombes not to have been provided to the respondent, but were explained by her as not having been provided either because they represented work in progress, because they were awaiting costing or because they "may require additional work". These categories accounted for 17 invoices in total. His Honour was, having regard to the general nature of the business and the requirements of the franchisee's manual, not persuaded that these represented genuine causes for failure to forward the yellow copies. His Honour had made a similar finding on the occasion of his initially granting the injunction, and nothing in the new materials placed before him had any bearing on these categories of invoice. In respect of those categories of invoice, I found in my earlier reasons (pp 7-8) that it was open to his Honour to consider Mrs Coombes' explanations to be implausible. It follows that there is no reason now to revisit those categories of invoice.
11 Five invoices, it appears, simply cannot be located at all; that is, Mrs Coombes appears to concede that no hard copy of them can be found by the appellants, so as to demonstrate that they were ever created and completed and that no record of those invoice numbers can be located on the computer database. While it may be, as the appellants' counsel suggested to us, that there is an innocent explanation for the failure to locate any record of these documents, the failure to forward them would prima facie appear to be a breach of the franchise agreement.
12 It appears to me that in respect of the yellow copy of the invoices, there were a total of some 38 invoices in respect of which it was open to his Honour to take the view that it was likely that the respondent could establish a default which had not been remedied prior to the expiry of the notice of termination, they being: 19 (his Honour has erroneously I think
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- recorded 22) yellow copy invoices which Ms Lane deposed she received only on 17 March; 8 "work in progress"; 4 "awaiting costing"; 5 "may require additional work"; and 5 which are simply unaccounted for.
Failure to Enter or Complete Database
13 The schedule of alleged defaults contains a list of 54 invoices in respect of which the respondent asserts there was default. I have mentioned 38 of those. A further five were described by Mrs Coombes as "cancelled". It is not clear to me at present whether there is any dispute between the parties in relation to these invoices, so I leave them aside. It follows that there were a further 11 invoices in respect of which the only default alleged appears to have been a failure either to enter or complete the relevant data on the computer. In addition, allegations of failure to enter or complete were also made in respect of a number of invoices for which it was also alleged no yellow copy had been forwarded to the respondent. It was in relation to the issue of invoices alleged to have not been entered or completed that the most substantial portion of Mrs Coombes' later affidavits were concerned.
14 Mrs Coombes deposed that with the assistance of a computer programmer, she had been able to go behind the records on the franchisee's computer to which she had previously had access, and had been able to print out from the computer screens a record which revealed whether invoices had been completed and, if they had, the date on which they had been completed on the database. She annexed copies of those printouts to her affidavit. There remained, even after considering those printouts, a small number of invoices alleged by the respondent not to have been entered or completed but which Mrs Coombes alleged had been entered and completed in respect of which there was no printouts. It is not clear whether there were no printouts in respect of them or whether there was some oversight in preparation of the affidavit. There were a further seven invoices in respect of which Mrs Coombes deposed that they had been entered and completed on the database, but that no record of them could now be located on the database, although in respect of those seven, the yellow copies had, it was apparently common ground, been forwarded to the respondent. However, the thrust of Mrs Coombes' evidence, which was supported by the printouts, was that entry and completion of data had taken place in respect of the majority of those invoices alleged by the respondent to have been not entered and/or not completed.
15 There is some ambiguity and some difficulty with Mrs Coombes' affidavits in relation to the computer printouts and in relation to the dates
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- of entry and completion. It is not clear from any of Mrs Coombes' affidavits how she ascertained the date of entry of those invoices which she alleges were completed. It appears from the relevant printout that the "job date" may, where an invoice is not completed on the computer, represent the date of initial entry. Alternatively, the date of entry may be ascertained, in theory, by comparison with the copy of the invoice which is retained by the franchisee. However, whether Mrs Coombes obtained her information from either or both of those sources is a matter not deposed to in her affidavits.
16 So far as the date of completion is concerned, she deposed that where a printout records an invoice as completed, the "job date" on the printout refers to the date of completion. It is not clear how she arrived at this conclusion, particularly since her evidence was that she required the assistance of a computer programmer in order to be able to obtain access to the screens which are printed out.
17 However, notwithstanding this lack of precision in some respects, it is fair to say that the printouts produced and annexed to Mrs Coombes' affidavit do strongly suggest that there was completion of a substantial number of those invoices which the respondent alleged had not been completed on the database. The issue of the date of completion is perhaps more problematic but it is again, I think, fair to characterise that evidence as certainly being some evidence which, in respect of those particular invoices, might lead the court to reassess the question of whether it felt the "high degree of assurance" that the respondent would ultimately succeed in respect of those invoices which his Honour reached at the initial hearing.
Effect of New Material
18 I have noted that as far as the yellow copy invoices were concerned, either nothing was placed before his Honour which would in any way have affected his earlier finding that it was likely that the respondent would succeed in establishing default in respect of those invoices or, alternatively, that in respect of the new material placed before his Honour concerning some of them, his Honour was entitled to consider that in the light of the further affidavit of Ms Lane, he remained of the view that the respondent was likely to succeed at trial.
19 The question which appears to arise on this appeal is twofold. First, there is a question as to whether the additional material casting doubt on the respondent's evidence in respect of those invoices said not to have
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- been entered or completed on the database, should also have affected the view which his Honour took of the reliability of the respondent's evidence overall, so as to lead to the conclusion that a high degree of assurance could be felt in respect of any of the alleged defaults. Second, if not all of the defaults alleged by the respondent appear likely to be established at trial, an issue may arise in relation to the alleged unreasonableness or unconscionability of the respondent's termination based solely upon the reduced number of invoices in respect of which a high degree of assurance can be felt.
20 So far as the first question is concerned, the difficulty which the appellants face is that the evidence falls into a number of discrete categories. It does not appear to me that, assuming the respondent to have been inaccurate in its evidence as to what was, or was not, contained in a computer database at a particular time, it follows either necessarily or at all that Ms Lane may have been inaccurate in her evidence relating to the receipt of particular invoices on a particular day, or that any additional plausibility is thereby created in the appellants' explanation of some missing invoices as having to do with uncompleted work or outstanding costings or the like. It appears to me to be entirely possible that the respondent may have misread or misunderstood, or in some other way erred in respect of a database, without any suspicion being cast on Ms Lane's direct evidence and without any conclusions following about the plausibility of those explanations advanced by the appellants. This is particularly so, having regard to the fact that there are a number of invoices - albeit a small number - for which the appellant is still, notwithstanding Mrs Coombes' further evidence, unable to account at all.
21 In relation to the second question, I have set out in my earlier reasons the significance to the respondent's business of the system of keeping records by means of yellow copies of invoices and by means of the computer database. The failure to forward some 38 invoices does not appear to me to be a matter of such minor significance as to suggest that the respondent must have been acting unreasonably or unconscionably, even if the termination were to be based solely upon those invoices.
22 As I noted in my earlier reasons, it may be that it was open to his Honour at the initial hearing to have arrived at a different conclusion, particularly as to the balance of convenience. However, given that his Honour's earlier decision was an exercise of discretion in a manner which was open to him, it does not appear to me that the effect of the new materials placed before his Honour was such as to suggest that it should
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- no longer to be considered to be in the interests of justice to continue the injunction which his Honour had granted.
23I would therefore dismiss the appeal.
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