Creak v Ford Motor Company of Australia Ltd

[2023] NSWCA 217

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Creak v Ford Motor Company of Australia Ltd [2023] NSWCA 217

Hearing dates:

10 August 2022

Decision date:

13 September 2023

Before:

Gleeson JA and Kirk JA at [1];
White JA at [32]

Decision:

(1) Appeal allowed in part.

(2) Set aside orders 1, 2, 14, 15 and 16 made in the court below on 10 March 2022.

(3) In lieu of order 1 below, direct entry of judgment for the respondent against the appellant in the sum of $100.

(4) Otherwise dismiss the appeal.

(5) Order that within 21 days, the parties file and serve written submissions of no more than 8 pages on the appropriate orders to be made as to costs of the proceedings below, interest on costs, and costs of the appeal.

(6) Any submissions in reply to be filed and served within 7 days thereafter.

Catchwords:

COMMERCE — Restraint of trade — Deed of settlement of litigation involving allegations of misleading or deceptive conduct, passing off, and unconscionable conduct — Where respondent instituted proceedings to restrain appellant and company controlled by him from “raptorising” its vehicles — Where “raptorisation” connotes affixing materials to respondent’s vehicles — Where appellant undertakes that neither he nor his “Related Entities” will engage in conduct proscribed by deed — Where appellant’s company subsequently engage in conduct proscribed by deed — Whether restraint of trade doctrine applies to deeds of settlement — Whether mandatory and prohibitive injunctive relief appropriate in circumstances of case — Held that undertaking not void as being in restraint of trade — Injunctive relief granted

EVIDENCE — Admissibility of evidence of prior orders of Common Law Division to prove existence of fact in issue — Where fact in issue quantum of respondent’s loss caused by appellant’s breaches of covenant and indemnity — Where no other evidence sought to be adduced to quantify loss — Whether prohibition in s 91(1) of Evidence Act 1995 (NSW) extends to orders — Evidence of prior orders held inadmissible

CONTRACTS — Breach of contract — Remedies — Equitable remedies — Injunctions — Whether undertaking not to engage in proscribed conduct better characterised as undertaking or warranty — Whether classification of term as warranty preclusive of injunctive relief — Held that classification of term irrelevant to grant of injunctive relief

Legislation Cited:

Competition and Consumer Act 2010 (Cth), ss 4L, 45AJ, 51ACB

Evidence Act 1995 (NSW), ss 91, 93

Jurisdiction of Courts (Cross -vesting) Act 1987 (Cth), s 6(1)

Restraints of Trade Act 1976 (NSW), s 4(1)

Trade Marks Act 1995 (Cth), ss 120, 122

Legal Profession Uniform Law (NSW), ss 171, 198

Trade Practice (Industry Codes) Franchising Regulations 1998 (Cth)

Uniform Civil Procedure Rules 2005 (NSW), r 14.27

Cases Cited:

Adlam v Noack [1999] FCA 1606

Allied Express Transport Pty Ltd v Braim [2022] NSWSC 1298

Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; [1973] HCA 40

Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1; [2016] HCA 16

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Noack (2004) 71 NSWLR 212; [2004] NSWSC 347

Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353

Commissioner of Police v Zisopoulos (2020) 299 IR 314; [2020] NSWCA 236

Commissioner of Taxation for New South Wales v Palmer [1907] AC 179

Dalgety Wine Estates Pty Ltd v Rizzon (1979) 141 CLR 552; [1979] HCA 41

Ford Motor Company of Australia Ltd v Tallevine Pty Ltd (as Trustee for the Thornleigh Trading Trust) [2019] NSWSC 1914

Ford Motor Company of Australia Ltd v Tallevine Pty Ltd (in liq) [2021] NSWSC 1192

Isaac v Dargan Financial Services Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163

KA & C Smith Pty Ltd v Ward (1998) 45 NSWLR 702

Label Manufacturers Australia Pty Ltd v Chatzopoulos [2022] NSWSC 1059

Maloney v The Queen (2013) 252 CLR 168; [2013] HCA 28

Man Financial (S) Pte Ltd v Wong Bark Chuan David [2007] SGCA 53; [2008] 1 SLR(R) 663; [2008] 4 LRC 419

Metcash Ltd v Jardim (No 3) [2010] NSWSC 1096; (2010) 273 ALR 407

MZAPC v Minister for Immigration and Border Protection (2021) 273 CLR 506; [2021] HCA 17

Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535

Orleans Investments Pty Ltd v Mindshare Communications Ltd (2009) 254 ALR 81; [2009] NSWCA 40

Panayiotou v Sony Music Entertainment (UK) Ltd [1994] EMLR 229

Peters (WA)v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45

Peters American Delicacy Co Ltd v Patricia’s Chocolates & Candies Pty Ltd (1947) 77 CLR 574; [1947] HCA 62

Price v Spoor (2021) 270 CLR 450; [2021] HCA 20

Properties Northside Pty Ltd t/as Raine & Horne Manly/Freshwater v Pickering [2015] NSWSC 310

Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142

Robins v National Trust Co Ltd [1927] AC 515

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8

World Wide Fund for Nature v World Wrestling Federation Entertainment Inc [2002] EWCA Civ 196; (2002) 54 IPR 145; [2002] FSR 33

Texts Cited:

D W Grieg and J L R Davis, The Law of Contract (Law Book Co, 1987)

J D Heydon, Cross on Evidence (LexisNexis, 13th edition)

J D Heydon, The Restraint of Trade Doctrine (4th ed, 2018, LexisNexis Butterworths)

C R Williams, “Burdens and Standards in Civil Litigation” (2003) 25 Syd Law Review 165

Category:

Principal judgment

Parties:

Ian David Charles Creak (Appellant)
Ford Motor Company of Australia Ltd (Respondent)

Representation:

Counsel:
T Brennan SC with M Darian-Smith (Appellant)
CRC Newlinds SC with R Glasson (Respondent)

Solicitors:
Adrian Holmes Law Services (Appellant)
Lander & Rogers (Respondent)

File Number(s):

2022/65750

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law

Citation:

[2022] NSWSC 83

Date of Decision:

8 February 2022

Before:

Schmidt AJ

File Number(s):

2019/163053

HEADNOTE

[This headnote is not to be read as part of the judgment]

From 2010 to February 2014, the appellant, Mr Ian Creak, through a company of which he was the sole director and shareholder, Tallevine Pty Ltd (“Tallevine”), conducted an authorised Ford dealership pursuant to a Dealership Agreement with the respondent, Ford Motor Company of Australia Ltd (“Ford”). During its time as an authorised Ford dealer, Tallevine advertised, distributed, supplied, and sold a range of Ford vehicles, including those that it had on its own motion “raptorised”. The process of “raptorisation” consisted of the affixation of grilles, accessories, and parts to Ford vehicles in order to mimic the Ford vehicles sold in the United States under Ford’s “Raptor” line. Following termination of the Dealership Agreement by Ford, Mr Creak, through Tallevine, continued not only to represent to prospective purchasers that Tallevine enjoyed a subsisting business relationship with Ford, but also to “raptorise” Ford vehicles sold at Tallevine’s dealership and on the internet.

With a view to compromising proceedings instituted by Ford in the County Court of Victoria for misleading or deceptive conduct and passing off, Mr Creak, Tallevine, and Ford entered into a deed of settlement on 16 September 2015 (“Deed”). The parties also contemplated that the Deed would pre-emptively settle proceedings that Tallevine intended to commence in the Federal Court of Australia, arising from the circumstances in which the Dealership Agreement had been terminated. Clause 2.1 of the Deed envisaged that Ford would institute proceedings in the Supreme Court seeking injunctive relief against Tallevine; that Tallevine would appear in those proceedings; and that the parties would co-operate in proffering consent orders to the Court in the form contained in the minutes attached to the Deed. Those minutes contained positive stipulations obliging Tallevine to deliver up to Ford certain websites and documents, and proscriptions relating to Tallevine’s use of Ford’s intellectual property. While Mr Creak was not anticipated to be a party to the proceedings between Tallevine and Ford, by cl 2.2(a) of the Deed, he undertook that neither he nor any of his ”Related Entities” would engage in the conduct proscribed by the minutes. Clauses 3 and 4 of the Deed respectively provided that the parties were to release one another from certain claims, and that each was not to bring or pursue proceedings in respect of those claims. To this end, cl 5 of the Deed contained covenants for indemnification of any losses caused by a breach of cl 3 or cl 4.

The Deed did not bring an end to the appellant’s raptorisation of Ford’s vehicles, nor to other conduct that the consent orders and minutes sought to restrain. That raptorisation and conduct continued after Tallevine had sold its business to another company controlled by Mr Creak, Fleet Serv Pty Ltd (“Fleet Serv”), in June 2017. Ford thereupon commenced contempt proceedings against Tallevine in 2017, in which Tallevine cross-claimed either that Ford had repudiated the Deed or that Tallevine had validly rescinded the Deed (“2017 Proceedings”). The 2017 Proceedings came to a halt after Tallevine entered liquidation.

In the primary proceedings, brought against Tallevine and Mr Creak, Ford contended that, inter alia, Mr Creak had breached his undertaking in cl 2.2(a) of the Deed by failing to comply with the minutes to the Deed. Ford also contended that Tallevine’s prosecuting its cross-claim in the 2017 Proceedings amounted to a breach of the release provisions contained in cll 3 and 4 of the Deed, such that it and Mr Creak were liable to indemnify Ford for any losses suffered thereby. At trial, Ford did not lead evidence on the quantum of its loss other than reasons for judgment given and orders entered in the Common Law Division quantifying its costs of defending the cross-claim in the sum of $295,000. Conversely, Mr Creak contended, among other things, that his raptorisation of Ford’s vehicles was done in good faith (so as to fall within an exemptive provision in the minutes, cl 10(b)), and that cl 2.2(a) of the Deed was void as being in restraint of trade. Mr Creak asserted in the alternative that cl 2.2(a) was a bare warranty that the facts described therein would be in existence in the future, such that the Court ought not to enjoin him from further breaches thereof by injunction.

The primary judge (Schmidt AJ) entered judgment for Ford on the entirety of its claim. Injunctive relief enjoining further breaches of cl 2.2(a) issued against Mr Creak, alongside a monetary judgment of $145,000 in satisfaction of his obligation to indemnify Ford for any losses caused by Tallevine’s prosecution of its cross-claim. The primary judge quantified the monetary judgment by reference to prior costs orders entered in the 2017 Proceedings by Fagan J, less a sum already paid to Ford as security for its costs therein.

On appeal, the principal issues before the Court were:

1. Whether the primary judge had erred in concluding that the restraint of trade doctrine did not apply to cl 2.2(a) of the Deed, as a term of a deed of settlement, or in concluding that, even if the doctrine were to apply, any such restraint would not be void as being reasonable in the interests of the parties and in the public interest;

2. Whether the primary judge had erred in concluding that the raptorisation of Ford’s vehicles carried out by Mr Creak, Tallevine, and Fleet Serv was not exempted from the minutes to the Deed;

3. Whether the primary judge had erred in issuing injunctive relief against Mr Creak, on the basis either that cl 2.2(a) was in the nature of a bare warranty, or that mandatory orders compelling the performance of actions by Tallevine could not be imposed upon Mr Creak, or that the ambiguity present in the Deed was such as to render injunctive relief inappropriate; and

4. Whether the primary judge had erred in having recourse to the orders entered by Fagan J in quantifying the sum payable by Mr Creak to Ford pursuant to cl 5 of the Deed.

The Court (per Gleeson and Kirk JJA and White JA), allowing the appeal in part, held:

As to issue (i) per Gleeson and Kirk JJA:

1. Where a restraint of trade is imposed by a deed of settlement compromising litigation not itself concerning an anteriorly imposed restraint of trade, no distinctive approach is warranted in determining whether the restraint of trade doctrine voids the restraint. Where a restraint of trade imposed by a deed of settlement aims to compromise litigation concerned with an anteriorly imposed restraint of trade, the doctrine of restraint of trade is still applicable but with the additional consideration that the covenantee has a legitimate interest in enforcing the deed of settlement with some degree of certainty: [17]-[30].

Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535; Peters American Delicacy Co Ltd v Patricia’s Chocolates & Candies Pty Ltd (1947) 77 CLR 574; [1947] HCA 62; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; [1973] HCA 40; Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45, discussed.

World Wide Fund for Nature v World Wrestling Federation Entertainment Inc (2002) 54 IPR 145; [2002] EWCA Civ 196, doubted.

Panayiotou v Sony Music Entertainment (UK) Ltd [1994] EMLR 229; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Noack (2004) 71 NSWLR 212; [2004] NSWSC 347; Man Financial (S) Pte Ltd v Wong Bark Chuan David [2007] SGCA 53; [2008] 1 SLR(R) 663; Metcash Ltd v Jardim (No 3) (2010) 273 ALR 407; [2010] NSWSC 1096; Properties Northside Pty Ltd t/as Raine & Horne Manly/Freshwater v Pickering [2015] NSWSC 310, disapproved.

1. The primary judge was correct to conclude that the restraint of trade doctrine did not operate to void cl 2.2(a) of the Deed, as the restraints were reasonable as between the parties and not contrary to the public interest taking account of all the circumstances: [31].

As to issue (i) per White JA:

1. The dispute compromised by the deed of settlement did not concern the validity of an anterior restraint of trade. The doctrine of restraint of trade was applicable to cl 2(a), but the primary judge was correct to conclude that the restraint was not invalid as being unreasonable in the interests of the parties and was in the public interest. Where a restraint of trade is imposed by a deed of settlement, entered into with the benefit of legal advice, and represents a genuine and proper compromise of an actual or anticipated dispute between the parties, the evidentiary onus shifts to the covenantee to establish that the impugned restraint is void: [98]-[113], [124].

World Wide Fund for Nature v World Wrestling Federation Entertainment Inc [2002] EWCA Civ 196; [2002] FSR 33, followed.

Panayiotou v Sony Music Entertainment (UK) Ltd [1994] EMLR 229; Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45; Metcash Ltd v Jardim (No 3) [2010] NSWSC 1096; (2010) 273 ALR 407; Properties Northside Pty Ltd t/as Raine & Horne Manly/Freshwater v Pickering [2015] NSWSC 310, considered.

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Noack (2004) 71 NSWLR 212; [2004] NSWSC 347, doubted.

As to issue (ii) per curiam:

1. Although the primary judge erred in limiting the good faith use exception in order 10(b) of the minutes to the preservation of good faith use of trade marks permitted by ss 120 and 122 of the Trade Marks Act 1995 (Cth), the primary judge was correct to conclude that the appellant’s raptorisation of Ford’s vehicles was not within conduct permitted by order 10(b): [1] (Gleeson and Kirk JJA); [84]-[91] (White JA).

As to issue (iii) per curiam:

1. The primary judge did not err in enjoining further breaches by Mr Creak of cl 2.2(a) of the Deed by injunction. Irrespective of its classification as a condition, innominate term, or bare warranty, cl 2.2(a) was clearly worded as an undertaking to refrain, and to cause others to refrain, from the conduct proscribed by the minutes to the Deed. As a negative promise, cl 2.2(a) was enforceable by injunction: [1] (Gleeson and Kirk JJA); [92]-[95] (White JA).

Dalgety Wine Estates Pty Ltd v Rizzon (1979) 141 CLR 552; [1979] HCA 41; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8; Price v Spoor (2021) 270 CLR 450; [2021] HCA 20, applied.

1. The primary judge did not err in issuing mandatory injunctions compelling Mr Creak to carry out actions that Tallevine had been obliged to perform pursuant to the consent orders. Although the minutes to the Deed did not purport to oblige Mr Creak to perform those actions, mandatory injunctive relief to that effect operated to remedy Tallevine’s and Fleet Serv’s breaches of those obligations at Mr Creak’s behest: [1] (Gleeson and Kirk JJA); [129]-[136] (White JA).

2. The primary judge did not err in qualifying some of the injunctive relief ordered by reference to the language of order 10(b) of the minutes to the Deed. Although some ambiguity might have arisen as to the ambit of the term “good faith”, any such ambiguity was capable of being resolved by reference to the Court’s reasons, and was a risk taken on by Mr Creak: [1] (Gleeson and Kirk JJA); [137] (White JA).

Orleans Investments Pty Ltd v Mindshare Communications Ltd (2009) 254 ALR 81; [2009] NSWCA 40, followed.

As to issue (v) per curiam:

1. The primary judge’s recourse to the costs orders entered by Fagan J in the 2017 Proceedings in order to quantify the extent of Mr Creak’s obligation to indemnify Ford was erroneous. Such recourse was inconsistent with the prohibition contained in s 91(1) of the Evidence Act 1995 (NSW) against admitting evidence of a prior decision to prove the existence of a fact that was in issue in prior proceedings: [1] (Gleeson and Kirk JJA); [157]-[166] (White JA).

2. Even if Ford’s cause of action to enforce the indemnity did not merge in the primary judgment, it would be an abuse of process for Ford, having failed to prove the quantum of its claim before the primary judge, to institute new proceedings in which it sought to quantify its claim for indemnity or to seek the assessment of its costs pursuant to s 198 of the Legal Profession Uniform Law (NSW): [1] (Gleeson and Kirk JJA); [167] (White JA).

Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142, followed.

JUDGMENT

1. GLEESON JA and KIRK JA: We agree with the orders proposed by White JA and, subject to what follows, with his Honour’s reasons. The following observations are directed to the issue of restraint of trade, as raised by grounds 4-7 of the amended notice of appeal.

2. The common law restraint of trade doctrine applies if there is a “restraint” in the relevant sense, if it is a restraint of “trade” in the relevant sense, and if the restraint of trade in question is not of a species which falls outside the operation of the common law doctrine: note Peters (WA)Ltdv Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45 at [14]-[19]. If the doctrine does apply then it is necessary to ask both whether the restraint is reasonable as between the parties, in that it is no wider than is reasonably necessary to protect some legitimate interest of the covenantee, and whether the restraint is against the public interest: see eg Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535 at 565; Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353 at 376. At common law the onus of proof for the former issue lies on the covenantee, and for the latter lies on the covenantor: see authority gathered in JD Heydon, The Restraint of Trade Doctrine (4th ed, 2018, LexisNexis Butterworths), 34-35. The burden of persuasion no doubt is allocated the same way (as to the difference between burdens of proof and persuasion, see below at [25]-[27]). Issues of severance may then arise along with, under New South Wales law, the possibility of reading down pursuant to the Restraints of Trade Act 1976 (NSW).

3. Here, based on prior English and Australian first instance authority, the primary judge held that the restraint imposed by cl 2.2(a) of the Deed fell within an exceptional category to which the doctrine did not apply. As White JA indicates at [106] below, it was appropriate that her Honour follow earlier Australian first instance authority out of comity. However, like White JA, we respectfully disagree with aspects of the approach taken in that authority.

1. The relevant proposition can be traced back to the judgment in Panayiotou v Sony Music Entertainment (UK) Ltd [1994] EMLR 229 (the George Michael case). Parker J held there that a contractual restraint entered in settlement of a dispute about another contractual restraint “does not attract the doctrine of restraint of trade” (at 347). Based on authority relating to compromises of other types of dispute, his Lordship said that there “is a clear public interest in upholding genuine and proper compromises” (at 345). He referred to “powerful public policy reasons” against a litigant being able to take advantage of the restraint of trade doctrine to rid themselves of the substituted restraint that they had agreed to in order to resolve the earlier dispute (at 346). He said (ibid):

But the overriding consideration … is that if it be open to a plaintiff to challenge a compromise of a restraint of trade issue by alleging that the compromise is itself in restraint of trade, then it seems to me to follow that a restraint of trade issue could never be compromised by the substitution of a new agreement. Unless the parties are able to compromise the issue in some way which does not involve the substitution of a new agreement, they will have no option but to litigate the issue to judgment, whether they like it or not.

5. There are two overlapping public interest arguments raised here: the desirability of upholding settlements of disputes per se, and the desirability of facilitating settlements of disputes. The former relates to all types of disputes. The latter – to the extent it goes beyond the former – relevantly relates in particular to disputes about restraints of trade, where otherwise it may be difficult to resolve disputes about restraints of trade if any subsequent restraints agreed were themselves fully open to challenge as a restraint.

6. As four members of the High Court noted in Peters (WA)Ltdv Petersville Ltd at [19], the George Michael decision suggests that a “genuine and proper compromise” of a dispute respecting an alleged restraint of trade may fall outside the scope of the restraint of trade doctrine, such that the subsequent restraint does not require justification under that doctrine. It was unnecessary to resolve the point in that case.

7. In 2002 the English Court of Appeal considered a dispute between two entities over use of the acronym “WWF”: World Wide Fund for Nature v World Wrestling Federation Entertainment Inc (2002) 54 IPR 145; [2002] EWCA Civ 196. The parties had been involved in a series of disputes around the world, mainly in the context of applications by the Federation to register trade marks. There had been litigation in Switzerland. In 1994 an agreement was reached which involved restrictions on the Federation’s use of the acronym and the Fund agreeing to withdraw all pending legal actions. The Fund later brought proceedings successfully seeking to enforce restraints in that agreement. The Court rejected the Federation’s argument that the restraints were unenforceable as a restraint of trade.

8. The disputes resolved by the settlement agreement were not about pre-existing covenants in restraints of trade; the parties did not have a pre-existing contractual relationship. Perhaps for that reason the Court did not refer to the George Michael case. White JA quotes the key passages of the Court of Appeal’s judgment below at [112]. The Court said at [48] that as regards restraints arising from “a settlement of a genuine dispute” there is a presumption that the restraints are reasonable as between the parties. It is for the covenantor, seeking to avoid the agreement, to show that there is something justifying application of the restraint doctrine, such as that the original dispute was contrived, or there was no reasonable basis for the rights claimed, or it was “otherwise contrary to the public interest”. This approach thus holds that the restraint of trade doctrine can still apply to settlement agreements, but effectively says that there is a presumption that the restraint is reasonable in the parties’ interests, thus reversing the usual burden. The judgment is not necessarily inconsistent with the George Michael proposition that the restraint doctrine does not apply at all to settlements of disputes about restraints, because the case was not addressing that more specific issue.

9. In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Noack (2004) 71 NSWLR 212; [2004] NSWSC 347 a personal and political dispute had arisen between two trade union officials, which led to litigation, and in turn to a finding of contempt being made against one of those officials, Mr Noack. An internal union disciplinary process was then commenced which was resolved by an agreement recorded in a deed. Part of the agreement was that Mr Noack agreed with the union that he would not thereafter seek any elected office in the union. He later did so in breach of his promise. The union sought to enforce the promise, in response to which Mr Noack submitted that it was unenforceable as a restraint of trade. Nicholas J rejected that contention, holding first that it was not a restraint of trade (at [44]-[47]). Secondly, in reliance on the George Michael case, he held that the promise was of a type to which the restraint doctrine did not apply (at [48]-[57]).

10. In fact, the Noack decision went further than George Michael, as there is nothing to suggest that the first dispute – which had been settled by the deed – involved issues of restraint of trade. It is not apparent that his Honour realised that that was so. It may be relevant in that regard that Mr Noack was not legally represented. Noack also went further than World Wide Fund – which was not cited – in that Nicholas J held that the restraint doctrine did not apply at all to settlement agreements.

11. The Court of Appeal of Singapore considered the issue in 2007 in Man Financial (S) Pte Ltd v Wong Bark Chuan David [2007] SGCA 53; [2008] 1 SLR(R) 663. The discussion was in obiter as the Court held that the agreement containing the impugned restraint was not contained in a settlement agreement in the relevant sense (at [40]-[41]). Nevertheless, the Court concluded that there were “compelling reasons in favour of the approach” adopted in George Michael (at [61]). It held that the public policy in favour of upholding genuine settlement or compromise agreements trumped the public policy manifest in the doctrine of restraint of trade, so long as two conditions were met: (a) the settlement was of a prior dispute over a restraint of trade in an existing contract (as opposed to settlement of disputes generally); and (b) the settlement was not “tainted by one or more vitiating factors” (at [65]). The latter condition seemed to overlap with identification of what constituted a genuine settlement, for that was said to be “a settlement or compromise agreement that is not rendered either void or voidable by vitiating factors” (at [43]).

12. An argument based on George Michael was raised in the Supreme Court of this State in Metcash Limited v Jardim (No 3) (2010) 273 ALR 407; [2010] NSWSC 1096. Ball J held that the principle from that case did not apply, as the first dispute (which had been settled) concerned termination of a contract and not the enforceability of a restraint in the contract. As there had been no compromise reached in relation to the restraint there was no reason why the restraint of trade doctrine should not apply. This decision appears inconsistent with Noack insofar as it limited the relevant proposition to cases where the settled dispute involved controversy relating to restraint of trade.

13. The issue was then raised before Ball J again in a subsequent case, Properties Northside Pty Ltd t/as Raine & Horne Manly/Freshwater v Pickering [2015] NSWSC 310. In that case a real estate agent was subject to post-employment restraints. The agent left the agency, which sought to enforce the restraints, in response to which he argued the restraints were unenforceable. The litigation was settled by a deed which contained somewhat different restraints. The agency subsequently alleged that the agent had breached the settlement deed, including the restraints. The agent argued the restraints in the deed were unenforceable.

14. Ball J held that the deed was a genuine compromise of a dispute about the original restraints and, as such, outside the scope of the restraint of trade doctrine. His Honour referred to George Michael and Noack, and said at [46] that it was appropriate to follow the decision of Noack (in fact, as referred to above, Noack goes beyond George Michael). In any event, Ball J appeared to agree with the George Michael approach, at least insofar as it related to assessment of what was reasonable between the parties, saying as follows:

[48] If the parties to a restraint reach a genuine compromise concerning what is reasonable as between them, it seems to me contrary to the public policy in favour of the finality of litigation to permit the party on whom the restraint is imposed to seek to argue that the compromise involves the imposition of an unreasonable restraint on that party’s liberty. The public policy that underlies the restraint of trade doctrine is largely satisfied by the compromise. On the other hand, the public policy that encourages parties to settle their disputes would be completely undermined if the party the subject of the restraint were free to re-agitate its reasonableness.

[49] The position may be different if it is alleged that the restraint is said to be unreasonable having regard to the interest of the public. However, no allegation of that type is made in this case; and it is difficult to see how such an allegation could be made. The dispute in this case is clearly about the effect of the restraints on Mr Pickering, not the effect of the restraints on the public interest.

15. His Honour’s approach is somewhat similar to that adopted in World Wide Fund, at least insofar as it suggests that a settlement might still be impugned based on being contrary to the public interest. His Honour may adopt a more rigid position as regards reasonableness between the parties, as he appears to view that as conclusively determined by the compromise, whereas the English Court of Appeal spoke in terms of a presumption.

16. In this case White JA adopts an approach similar to that in World Wide Fund insofar as his Honour suggests that in a case where there has been a settlement, by parties legally represented, there is an “evidentiary onus” on the challenger to establish that the restraint is not reasonable as between the parties, although the legal onus remains on the party defending the restraint (at [124]).

17. The approaches taken in these cases to restraints imposed in agreements entered as “genuine and proper compromises” of disputes are thus as follows:

1. the restraint of trade doctrine does not apply at all (Noack);

2. the doctrine does not apply at all at least if the previous dispute involved controversy about restraints of trade (George Michael, Man Financial, note also Metcash);

3. the covenantor is unable to argue that the restraint is unreasonable as between the parties, but may still argue that it is contrary to the public interest (Properties Northside);

4. there is some degree of reversal of the onus of proof on the issue of whether the restraint is unreasonable as between the parties, such that it is borne by the covenantor (World Wide Fund; White JA in this case).

18. For our part, we disagree with approaches (1), (2) and (3). In our view they give insufficient weight to the public interest in limiting restraints of trade. The doctrine gives effect to public policy, doing so in a way which overrides contractual freedom: see eg Peters American Delicacy Co Ltd v Patricia’s Chocolates & Candies Pty Ltd (1947) 77 CLR 574 at 590-591; [1947] HCA 62. The fact that the parties have reached an agreement a second time is not of itself a promising basis for suggesting that the doctrine is excluded, subject to consideration of the strength of the public interest relating to settlements.

19. The public policy against restraints of trade is not only vindicated by asking the secondary question of whether the restraint is contrary to the public interest. The prior question of whether the restraint is reasonable as between the parties, which is most obviously directed towards the preservation of party autonomy, also manifests a concern about the public interest. So much is reflected in the seminal discussion by Lord Macnaghten in Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535 at 565 (emphasis added):

The public have an interest in every person's carrying on his trade freely: so has the individual. All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. That is the general rule.

20. The point was clearly explained by Walsh J in Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; [1973] HCA 40 (at 307, emphasis added, citation omitted):

The requirement of reasonableness with reference to the interests of the parties and that of reasonableness with reference to the interests of the public are to be regarded, in my opinion, as raising distinct questions. That has been laid down in many cases of high authority. But it does not mean, in my opinion, that in dealing with the first of those questions, no element of public policy is involved. It is public policy which lies at the root of the rule that agreements in restraint of trade are, prima facie, unenforceable. … [I]f a restraint is imposed which is more than that which is required (in the judgment of the court) to protect the interests of the parties, that is a matter which is relevant to the considerations of public policy which underlie the whole doctrine, since to that extent the deprivation of a person of his liberty of action is regarded as detrimental to the public interest.

21. The italicised sentence was quoted and approved by four members of the High Court in Peters (WA)v Petersville Ltd at [27]. In that case the High Court rejected an argument that contracts which absorb the capacity of a covenantor, rather than sterilise it, were outside the restraint doctrine: at [34]-[37], [52]. The joint judgment regarded that argument as turning on whether there was some countervailing public policy so significant that it meant that the general rule of striking down restraints of trade unless they can be justified should be overridden.

22. It is “no doubt true that there is a public interest in the resolution of disputes”: Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1; [2016] HCA 16 at [52]. That public interest encompasses both strands identified above at [5], namely favouring the upholding the settlement of disputes and facilitating the resolution of disputes about restraints of trade. But that public interest is not so strong as necessarily and always to override the public policy requiring restraints of trade to be justified. Parties cannot override that public policy by agreement; that is the very point of the doctrine. If they cannot do it in their first agreement, there is no reason they should necessarily be able to do so in a second agreement resolving some dispute about the first. Thus an exclusion of the doctrine altogether – whether for all settlement agreements (the first approach) or even just those involving disputes about restraints (the second approach) – is not justified.

23. Further, to take the third approach – adopted in Properties Northside – of conclusively presuming that the agreement is reasonable as between the parties still insufficiently recognises the public purpose underlying the general rule. Although it would still be open to argue that the restraint was contrary to the public interest, there is force in the view expressed in an eminent text some years ago that often little more than lip service is paid to this requirement once it is established that a restraint is reasonable as between the parties: DW Grieg and JLR Davis, The Law of Contract (Law Book, 1987), 1108. And, as explained, the requirement of being reasonable between the parties itself manifests public policy reaching beyond the concerns of the parties themselves. An unreasonable restraint disadvantages not only the restrained party but also the community insofar as it is denied the competitive benefit of the person being able to carry out their trade.

24. The fourth approach, involving some degree of reversal of the burden of proof or persuasion, is closer to an acceptable balance of the competing considerations, at least in cases where the original dispute was about a restraint of trade. If it was not, then the public interest in resolving disputes simpliciter is no more of a trump than it is for any other relevant interest.

25. In order to address the merits of this approach it is necessary to clarify a distinction between burdens of proof and persuasion. Insofar as the issue is just the onus of proof, whether legal or evidential, it relates to proof of facts: see eg R v S (Stephen Paul) [2006] 2 Cr App R 23; [2006] EWCA Crim 756 at [20] (CA); JD Heydon, Cross on Evidence (LexisNexis, 13^th edition), [7001]; see also, by way of illustration, MZAPC v Minister for Immigration and Border Protection (2021) 273 CLR 506; [2021] HCA 17 at [35], [39], [60]. Thus “onus as a determining factor of the whole case can only arise if the tribunal finds the evidence pro and con so evenly balanced that it can come to no such conclusion”: Robins v National Trust Co Ltd [1927] AC 515 at 520 (PC).

26. The difference between the legal onus of proof and an evidentiary onus (as opposed to a “tactical” one) is that the latter involves an obligation to show that there is sufficient evidence to raise an issue such as to require determination; once that has been done, it falls to the party bearing the legal onus to make out the relevant facts: note eg discussion C R Williams, “Burdens and Standards in Civil Litigation” (2003) 25 Syd Law Review 165 at 166-169; Cross on Evidence at [7005] and [7210]; Commissioner of Police v Zisopoulos (2020) 299 IR 314; [2020] NSWCA 236 at [61]-[62], [74]-[75], [96]-[99].

27. Issues of legal characterisation or evaluation arise for consideration after the facts have been found. For such issues, one side or the other may bear the burden of persuasion in the sense that if the court is not persuaded that some particular conclusion should be reached then the side bearing the burden of persuasion loses on the point: note eg Maloney v The Queen (2013) 252 CLR 168; [2013] HCA 28 at [355]. To speak of an evidentiary onus is suggestive of a focus just on facts. To speak of a presumption one way of the other – as was done in World Wide Fund – is no doubt to cast the burden of both proof and persuasion on the party who must rebut the presumption.

28. In the context at hand, to address only onus of proof does relatively little to move the dial one way or the other, as it merely relates to fact-finding. On the other hand, to shift the persuasive burden to a covenantor as regards what is reasonable between the parties – in other words, to presume that a restraint is reasonable in that sense unless the Court is persuaded to the contrary – may be seen to move the dial too much, undervaluing the important public policy against restraints of trade.

29. A preferable way of approaching the issue is to treat the settlement of a dispute about a restraint of trade as of itself a legitimate interest to which a restraint may be directed. That interest may be additional to any other legitimate interest of the covenantee, the subject of the first restraint of trade. A restraint imposed in such a situation is still subject to the general rule requiring justification, and with the usual principle as to the onus of proof and persuasion applying. However, part of the analysis will then be whether the restraint was reasonable as between the parties, and not contrary to the public interest, taking account of the legitimate interest of the covenantee in being able to resolve disputes with some degree of certainty. Some restraints which might otherwise have been unenforceable might survive scrutiny because it was a reasonable means of resolving the prior dispute. Others may be so excessive, in all the circumstances, that even given that consideration it cannot be justified.

21. We would only apply this approach to settlements of disputes involving controversy about a restraint of trade. If the first agreement did not involve restraints then there is little reason to say that a subsequent agreement which for the first time imposes some restraint should not be subject to conventional legal scrutiny.

22. In this case, at noted by White JA at [110], the prior dispute did not relate to the validity of restraints of trade. That being so, in our view there is no occasion to apply some distinctive approach and the restraints here fall to be justified in the ordinary way. Even so, for the reasons referred to by White JA at [123]-[128], the restraints were reasonable as between the parties and not contrary to the public interest taking account of all the circumstances.

23. WHITE JA: This is an appeal from orders of the Common Law Division (Schmidt AJ) in proceedings brought by the respondent, Ford Motor Company of Australia Ltd (“Ford”) against a company, Tallevine Pty Ltd (“Tallevine”) and its sole director and shareholder, Mr Ian Creak (Ford Motor Company of Australia Ltd v Tallevine Pty Ltd (as trustee for Thornleigh Trading Trust) (in liq) [2022] NSWSC 83).

24. From late 2010 until 19 February 2014, Tallevine was an authorised Ford dealer for the marketing, sale and service of Ford vehicles, and parts and accessories, marketed in Australia under the trademarks or business names registered or owned by Ford or any of its related bodies corporate. It was so appointed under a Dealer Agreement, which is undated but commenced in 2010.

25. Tallevine operated its business from premises located on Pennant Hills Road, Thornleigh.

26. On 20 May 2014, Ford commenced proceedings in the County Court of Victoria against Tallevine. Ford alleged that the Dealer Agreement had been terminated on 19 February 2014 pursuant to a confidential settlement agreement between the parties entered into on 21 October 2013. Ford alleged that the termination of the Dealer Agreement constituted a revocation of Tallevine’s approval by Ford to use any “Trade Mark” (as defined in the Dealer Agreement). It sought an order for specific performance of Tallevine’s obligations under certain clauses of the Dealer Agreement. It alleged that, within 14 days after termination of the Dealer Agreement, Tallevine had been required to remove from its premises all signs indicating that it was an authorised Ford dealer for any Ford Marketed Product (as defined) and including the name Ford, and bearing or including any of the Trade Marks (as defined). It also sought to enforce other provisions of the Dealer Agreement applicable from termination of the Dealer Agreement, including a term requiring Tallevine to discontinue advertising itself as an authorised Ford dealer and discontinuing the use of any Trade Marks. Ford sought an injunction restraining Tallevine from displaying signage and using Trade Marks, one of which was the name Ford in a device as depicted below:

36. The other was the following Trade Mark:

37. By its Defence, Tallevine admitted to having entered into a settlement agreement on 21 October 2013 but denied that it was binding. This was on the grounds that Ford had breached that agreement in unreasonably failing to extend the sale period provided in that agreement and had engaged in unconscionable conduct. It also alleged that the settlement agreement had been entered into under economic duress. It brought a counter-claim which fleshed out the allegations of economic duress. Its counter-claim asserted that, by letter dated 9 September 2013, Ford purported to give notice of its intention to terminate the Dealer Agreement, alleging certain breaches by Tallevine and Mr Creak unless those breaches were remedied. It alleged that Ford required Tallevine to have certain convictions that had been recorded against Mr Creak and Tallevine in the Local Court of New South Wales on 28 August 2013 overturned or quashed on appeal, or finally dismissed, within 30 days (that is by 9 October 2013).

38. Mr Creak pleaded that neither Tallevine nor he was in breach of the Dealer Agreement and that the findings of the Local Court were demonstrably erroneous and appellable. He pleaded that Ford agreed to extend the period for having the findings overturned until 21 October 2013 which deadline was practicably impossible to meet. He pleaded that the convictions were overturned in the District Court in or about November 2014.

39. Prior to a mediation of those claims, Mr Creak served a draft Statement of Claim proposed to be filed in the Federal Court that asserted breaches by Ford of the Trade Practice (Industry Codes) Franchising Regulations 1998 (Cth) in withholding its consent to the transfer of Tallevine’s business to Maximotion Pty Ltd (which later changed its name to Fleet Serv Pty Ltd (“Fleet Serv”) (J [10(4)])).

40. The claims and counter-claims in the Victorian County Court proceedings were settled by a deed of settlement made on 16 September 2015. The construction of that agreement and the validity of its restraint provisions are the central issues in this appeal. It is convenient to set out the relevant terms at the outset.

41. The parties to the deed were Tallevine, Mr Creak, and Ford.

42. Clause 2.1(a) provided:

“2.1 Consent Orders

(a)    Ford will within 7 business days of the execution of this Deed file and serve on Tallevine a statement of claim in the Supreme Court of Victoria or the Supreme Court of New South Wales (Supreme Court) that is substantively identical to the amended statement of claim dated 6 March 2015 filed in the [County Court] Proceeding (Supreme Court Proceeding).”

43. Clause 2.1(b) and (c) provided that Tallevine would file an appearance and the parties would submit final orders to be made by consent by the Supreme Court in the form of attached Minutes and would cooperate with each other in requesting the Supreme Court to make the consent orders.

44. Clause 2.2(a) provided:

“2.2 Creak’s undertakings

(a)    Creak hereby undertakes to Ford that he and any Related Entity of him will not engage in any of the conduct the subject of the attached Minutes.”

“Related Entity” was defined widely.

45. Ford undertook to consider any application made to it by a person to be appointed as an authorised Ford dealer at the Pennant Hills premises. It undertook to pay Tallevine $100,000 if it had not appointed a person to be an authorised Ford dealer at the premises by 31 January 2016 (cl 2.3).

46. The deed provided for mutual releases. Clauses 3.1, 4.1 and 5.1 provided:

“3.1 Release by Tallevine and Creak

Tallevine and Creak hereby release Ford and each of Ford's Related Entities from any Claim arising from or connected with:

(a)    the Dispute or any part of it; and

(b)    the circumstances or allegations giving rise to or referred to in the Dispute or any part of it; and

(c)    all Claims in respect of amounts alleged to be owing by Ford to Tallevine under or in connection with the Dealer Agreement; and

(d)    any other Claim which is or could reasonably have been known to a party as at the date of this Deed, whether or not the Claim is known to a party, and whether or not the Claim arises from or is connected with the Dealer Agreement.

…

4.1 Covenant by Tallevine

Tallevine and Creak will not bring or pursue, or procure that a third party bring or pursue, a Claim against Ford or any of Ford's Related Entities in respect of any matter which is the subject of a release under clause 3.1.

…

5.1 Indemnity from Tallevine and Creak

Tallevine and Creak must indemnify Ford and each of Ford's Related Entities against any loss or liability arising from or connected with:

(a)    a breach by Tallevine or Creak of clause 4.1; and

(b)    a Claim brought by a Related Entity of Tallevine or Creak against Ford or one of Ford's Related Entities in respect of any matter which is the subject of a release under clause 3.1.”

47. The “Dispute” was defined as the dispute between Ford and Tallevine the subject of the County Court proceeding including Tallevine’s counter-claim in that proceeding.

48. Clause 9 provided:

“9 Entire Agreement

This Deed contains the entire agreement between the parties with respect to its subject matter. It sets out the only conduct, representations, warranties, covenants, conditions, agreements or understandings (collectively Conduct) relied on by the parties and supersedes all earlier Conduct by or between the parties in connection with its subject matter. Neither party has relied on nor is relying on any other Conduct in entering into this Deed and completing the transactions contemplated by it.”

49. The deed was governed by the laws of Victoria (cl 15).

50. The Minute of Consent Orders attached to the deed are set out as an appendix to these reasons. Appendix A (6289441, pdf) The reference in those orders to the defendant is to Tallevine. The reference to the plaintiff is to Ford.

51. The orders required Tallevine to take positive steps as specified in orders 1, 2 and 3 and restrained Tallevine from engaging in the conduct specified in orders 4, 5, 6, 7, 8, 9, 11 and 12. Mr Creak relies on order 10. It is convenient to quote orders 4, 6, 7, 8, and 10 at this point.

“4.    The defendant is immediately restrained from advertising, distributing, supplying, offering for sale and selling motor vehicles, motor vehicle parts or accessories or any other goods or services under or by reference to the following signs (Ford Signs), or any sign which is substantially identical to or deceptively similar to any of the Ford Signs, or authorising or procuring or inducing any person to do so:

(a) the word FORD (subject to paragraph 10 below);

(b) the following word and device:

(c) the word RANGER (subject to paragraph 10 below);

(d) the words MYFORD FINANCE;

(e) the words GO FURTHER.

…

6.   The defendant is immediately restrained from applying to register any business name, company name, domain name or trade mark which contains any of the Ford Signs or Ford Raptor Signs or any sign which is substantially identical to or deceptively similar to any of the Ford Signs or Ford Raptor Signs, including the name PENNANT HILLS FORD and PENNANT HILLS RAPTOR, or authorising or procuring or inducing any person to do so.

7.   The defendant is immediately restrained from advertising, distributing, supplying, offering for sale or selling:

(a)   motor vehicle parts or accessories bearing any of the Ford Signs or Ford Raptor Signs that are not manufactured by or with the authority of the plaintiff or its related bodies corporate; or

(b)   motor vehicles fitted with any motor vehicle parts or accessories referred to in sub­paragraph (a) above.

8.   From 17 September 2016, the defendant is restrained from advertising, distributing, supplying, offering for sale and selling motor vehicles, motor vehicle parts or accessories or any other goods or services under or by reference to the following signs (Ford Raptor Signs), or any sign which is substantially identical to or deceptively similar to any of the Ford Raptor Signs, or authorising or procuring or inducing any person to do so:

(a)   the word RAPTOR (subject to paragraph 10 below);

(b)   the following word and device:

…

10.    Nothing in these orders prevents the defendant from:

(a)    describing its business as "Pennant Hills Auto Traders" with the description "Specialising in importing Raptor and F Series vehicles from the United States", provided that the words RAPTOR and F SERIES are in the same size and style of font as the rest of the description;

(b)   using the words FORD, RANGER and RAPTOR in good faith to describe the vehicles that the defendant is offering for sale.”

52. The proceeding contemplated by the deed was commenced in the Supreme Court of New South Wales. Orders in accordance with the Minutes attached to the deed were made on 28 October 2015.

53. On 10 March 2017, Ford filed a Summons in fresh proceedings charging Tallevine with being in contempt of the orders of 28 October 2015. On 7 August 2017, Tallevine filed a cross-claim in those proceedings by which it alleged that Ford had repudiated the deed of settlement of 16 September 2015, or that it had validly rescinded that deed for misrepresentation by Ford or for mistake. It contended that, by reason of the termination or avoidance of the deed, the consent orders entered pursuant to the deed should be set aside. It also reagitated allegations in connection with the first settlement agreement of 21 October 2013 and claimed that Ford had repudiated and unlawfully withheld from it the benefit of the Dealer Agreement.

54. Tallevine was ordered to provide $150,000 as security for costs of its cross-claim. It provided the security on 12 January 2018. On 29 September 2020, Ford’s application for Mr Creak to be joined to those proceedings was refused (Ford Motor Company of Australia Ltd v Tallevine Pty Ltd (as Trustee for the Thornleigh Trading Trust) [2019] NSWSC 1914 at [125]). On 12 April 2021, Tallevine went into members’ voluntary liquidation. On 31 May 2021, its cross-claim was dismissed. On 20 September 2021, Fagan J assessed the costs of the cross-claim at $295,000. His Honour ordered payment of the $150,000 Tallevine had given as security for costs to Ford (Ford Motor Company of Australia Ltd v Tallevine Pty Ltd (in liq) [2021] NSWSC 1192 at [7], [9]). Ford did not pursue its contempt proceeding against Tallevine after it was wound up.

55. Prior to this, on 24 May 2019, Ford had commenced new proceedings against Tallevine and Mr Creak. After Tallevine was wound up, the proceeding continued against Mr Creak alone. It is the judgment in those proceedings that is the subject of this appeal. In those proceedings, it was alleged and admitted that, on or about 30 June 2017, Tallevine sold its business to Fleet Serv. It was alleged and admitted that, from the sale date, Fleet Serv had been under the exclusive control and direction of Mr Creak and had carried on, and was continuing to carry on, Tallevine’s business from the Pennant Hills premises. It was alleged that Fleet Serv was using domain names and websites including “ and “ After pleading the terms of the deed of 17 September 2015, Ford alleged that any conduct engaged in by Tallevine in breach of the consent orders attached to the deed and made by the Court on 28 October 2015 was also a breach of the deed by Mr Creak, and any conduct engaged in by Fleet Serv after 10 October 2016, which the orders restrained Tallevine from doing, was a breach of the deed by Mr Creak.

56. The defendants denied that that was the effect of the deed, but said in the alternative:

“17…

(c) in the alternative say that, if the Deed has the effect alleged in paragraph 17(b) of the SOC:

i. it is in restraint of trade within the meaning of s. 4(1) of the Restraints of Trade Act 1976 (NSW);and

ii. Further that Ford Australia manifestly failed to attempt to make that restraint of trade reasonable within the meaning of s. 4(3) of the Restraints of Trade Act 1976 (NSW) when it procured and executed the Deed.”

57. The issues in the appeal primarily concern the proper construction and validity of the deed of 16 September 2015. There are also issues concerning the asserted liability of Mr Creak for costs ordered against Tallevine in respect of its cross-claim in the 2017 proceedings which was not pursued after Tallevine was wound up.

58. On about 31 January 2016, Ford paid the sum of $100,000 to Tallevine pursuant to cl 2.3(b) of the deed.

59. As recorded by the primary judge (at J [20]), Mr Creak admitted the following facts:

“Businesses of Tallevine and Fleet Serv

16. Tallevine carried on business as a motor dealer from premises located at 242 and 252 Pennant Hills Road, Thornleigh NSW 2120 up to a date no earlier than on or about 30 June 2017.

17. Tallevine has the following registered business names:

(a) RAPTOR SVT - from 17 February 2015;

(b) RAPTOR 4x4 - from 4 March 2014;

(c) Pennant Hills Auto Traders - for the period 16 December 2015 to 28 July 2017.

18. Tallevine carried on business using the domain names and websites ‘ and ‘ up to on or about 30 June 2017.

19. Fleet Serv carries on business as a motor dealer from premises located at 242 and 252 Pennant Hills Road, Thornleigh NSW 2120.

20. Fleet Serv has the following registered business names:

(a) C.A.R.S AUTOHAUS - from 30 June 2017;

(b) PENNANT HILLS AUTO TRADERS - from 30 June 2017;

(c) Fleet Serv - from 15 October 2015.

21. Fleet Serv carried on business using the domain name and website ‘ from on or about 30 June 2017 to no earlier than 11 May 2019.

22. Fleet Serv has, since on or about 30 June 2017, carried on and is continuing to carry on business using the domain name and website ‘ Fleet Serv is carrying on business using the domain name and website ‘ names

24. Tallevine and Mr Creak did not instruct their IT service provider, Printwell, to transfer the domain names ‘phford.com.au’, ‘pennanthillsford.com.au’, ‘raptor4x4.com.au’, ‘rangerraptor.com.au’ and ‘raptorsvt.com.au’ to Ford until April 2017.

25. The domain names were not transferred to Ford until 11 December 2017.

26. On or about 28 June 2017, Mr Creak procured the registration of the domain name raptor4wd.com in the name of Gavin Cox.

27. Gavin Cox has at all material times been an employee of AdTorque Edge.

28. AdTorque Edge has at all material times been the IT Service provider for Tallevine and Fleet Serv.

Trade Mark application no. 1719737

29. On 6 April 2017, Trade Mark application no. 1719737 lapsed.

30. On 17 January 2018, Tallevine and Mr Creak procured the lodgement of an application with IP Australia to extend time in respect of, and thereby revive, Trade Mark application no. 1719737.

31. On 27 April 2018, Tallevine and Mr Creak procured the lodgement of a further application with IP Australia to extend time in respect of, and thereby revive, Trade Mark application no. 1719737.

32. The applications lodged on 17 January 2018 and 27 April 2018 were a step in the application to register Trade Mark application no. 1719737.

Vehicles advertised for sale and sold by Tallevine and Fleet Serv

33. From 28 October 2015 to 30 June 2017, Tallevine offered for sale or sold motor vehicles under or by reference to the word FORD and using brochures created by Ford, via the website ‘ From 28 October 2015 to on or about 9 January 2017, Tallevine used the Blue Oval Device to advertise its 'Fleet and Government Sales' via the website ‘ From 28 October 2015, to on or about 30 June 2017, Tallevine advertised, offered for sale and/or sold motor vehicles with grilles bearing Ford Signs or Ford Raptor Signs that were not manufactured by or with the authority of Ford or its related bodies corporate, including being the motor vehicles particularised in paragraph [37] of the SOC.

36. From 17 September 2016 to on or about 30 June 2017, Tallevine advertised and offered for sale motor vehicles under or by reference to the Ford Raptor Signs, including via the websites ‘ and ‘ Since on or about 30 June 2017, Fleet Serv has advertised, offered for sale and/or sold motor vehicles with grilles bearing Ford Signs or Ford Raptor Signs that were not manufactured by or with the authority of Ford or its related bodies corporate, including being the motor vehicles particularised in paragraph [52] of the SOC.

38. Since on or about 30 June 2017, Fleet Serv has advertised and offered for sale motor vehicles under or by reference to the Ford Raptor Signs, including via the ‘ and ‘ content

39. From 17 September 2016 to 30 June 2017, the domain name ‘raptor.4x4.com.au’ contained the word ‘RAPTOR’.

40. From 17 September 2016 to 30 June 2017, the website ‘ contained:

(a) the word ‘RAPTOR’ in the URL;

(b) the statement ‘Raptor is the special vehicle division of Pennant Hill Auto Traders’.

41. From 17 September 2016 to on or about 9 January 2017, the website ‘ contained the name ‘Pennant Hills Raptor’ and a logo which incorporated the word ‘Raptor’.

42. Between 28 October 2015 and 30 June 2017, the website ‘ did not contain either of the statements in Order 1(e)(i) and (ii).

43. From 28 October 2015 to 30 June 2017, the website ‘ contained the statements pleaded in paragraphs [24] and [43] of the SOC.

44. From on or about 30 June 2017 to at least 11 May 2019, the website ‘ contained the statements pleaded in paragraphs [58], [60] and [62] of the SOC.

45. From on or about August 2020, the website ‘ has contained the statements pleaded in paragraphs [58], [60] and [62] of the SOC, or statements to similar effect.

46. Fleet Serv is publishing the statements pleaded in paragraphs [58], [60] and [62] of the SOC on the website ‘ start="60">

Paragraphs 24, 37, 43, 52, 58, 60 and 62 of the Statement of Claim (referred to at [35], [37], [43] and [44]-[46] quoted at [59] above) alleged:

“24.   In breach of Order 1(e)(iii), Order 12(a) and Order 12(d), in the period from 28 October 2015 to 30 June 2017, Tallevine published the following statements:

a.   ‘We are now part of a specialty vehicle manufacturer group (SVM) authorized to enhance F series trucks, Ranger, Hilux, Navara and Amrok we exceed most manufacturers standards on enhancement quality’ [sic];

b.    ‘Our Ford Rangers and Ford F Series can be serviced throughout the Ford dealer network';

c.   ‘The vehicles produced by Raptor can only be retailed to the public through the exclusive dealership base ... Ford Ranger and F Series vehicles are serviceable and warrantable through any of the corresponding dealers in the Australia’ [sic].

Particulars

The statements appeared on Tallevine's website home page at and the ‘About Us’ page of Tallevine's website at    In breach of Order 7(b), from 28 October 2015 to 30 June 2017, Tallevine offered for sale and/or sold motor vehicles fitted with motor vehicle parts or accessories bearing Ford Signs or Ford Raptor Signs that were not manufactured by or with the authority of Ford Australia or its related bodies corporate.

Particulars

The motor vehicles identified by Ford Australia as being has offered [sic] for sale or sold by Tallevine include but are not limited to the following.

i.    Tallevine offered for sale, at its principal place of business, a motor vehicle described as a PX Ranger Dual Cab P/UP XLS 4x4 (PX Ranger XLS) which was fitted with a grille bearing the word ‘Ford’.

ii.    Tallevine offered for sale, via    a motor vehicle described as a ‘2015 Ford Ranger PX Mkll XLT 3.2 (4x4) Cool White 6 Speed Manual Cab Utility’, fitted with a grille bearing the word ‘Ford’.

B.    a motor vehicle described as a ‘2015 Ford Ranger PX XLT 3.2 Hi-Rider (4x2) Black 6 Speed Automatic Super Cab Pick-up’, fitted with a grille bearing the word ‘Ford’.

iii.    Tallevine offered for sale, via    a motor vehicle described as a ‘Ford Ranger Raptor Trophy Truck’;

B.    a motor vehicle described as a ‘Ford Ranger XLT Raptor’; and

C.    a motor vehicle described as a ‘Ford Ranger Raptor’.

iv.    Tallevine offered for sale, via    a motor vehicle described as a ‘2015 Ford Ranger XLT 3.2 Hi-Rider 4x2’; and

B.    a motor vehicle described as a ‘2016 Ford Ranger PX MKll’.

v.    Each of the vehicles identified above has grilles fitted to them that were not manufactured by or with the authority of Ford Australia or its related bodies corporate.

Further particulars will be provided following the issuing of Notices to Produce, Subpoenas, the completion of discovery or service of evidence.

…

43. In breach of:

a.    Order 11(a), from 28 October 2015 to 30 June 2017 Tallevine made a representation which suggested that it had a Raptor franchise granted by Ford Australia;

Particulars

Tallevine's website at ‘ referred to a ‘Franchise showroom’ and displayed an icon with the word ‘RAPTOR’.

b.    Order 11(b), from 28 October 2015 to 30 June 2017 Tallevine made the following representations:

i.   ‘Our F Series trucks are ordered direct from the factory in the US for customization and conversion ...’; and

ii.   ‘Additionally, Raptor can also receive Australian delivered vehicles directly from the dealer network’,

which suggested that Tallevine or its business was sponsored by, approved by or affiliated with Ford Australia or its related companies;

Particulars

i.    11(c), from 28 October 2015 to 30 June 2017 Tallevine represented that it offers ‘... Ford Trained Master technicians for peace of mind trouble free maintenance’, which suggested that Tallevine's services were those of, or are approved by, Ford Australia or its related companies.

Particulars

i.            Order 11, Tallevine's website at 28 October 2015 to 30 June 2017 contained the word RAPTOR which appeared in the content of the website including:

A.   two prominent uses of the name ‘Pennant Hills Raptor’;

B.   the statement ‘Raptor is the special vehicle division of Pennant Hill Auto Traders’, on the ‘About Us’ page of Tallevine's website at from 28 October 2015 until on or about 9 January 2017, a logo at the top of the page headed ‘Pennant Hills Raptor’ which incorporated one of the Ford Raptor Signs.

…

52. Since on or about the Sale Date, Fleet Serv has and is continuing to offer for sale or is selling motor vehicles fitted with motor vehicle parts or accessories bearing Ford Signs or Ford Raptor Signs that are not manufactured by or with the authority of Ford Australia or its related bodies corporate;

Particulars

The motor vehicles identified by Ford Australia as being offered for sale or sold by Fleet Serv include but are not limited to the following:

i. A motor vehicle described as a ‘Brand New’ Ranger Raptor MY18 3.2L Turbo Diesel Automatic.

ii. A motor vehicle described as a ‘new’ 2017 Ford Ranger Raptor XLS.

iii. A motor vehicle described as a ‘new’ 2016 Ford Ranger XL SPX Mkll Auto 4x4 Double Cab.

…

58. Since on or about the Sale Date, Fleet Serv has made, and continues to make, representations which suggest that it or its business is sponsored by, approved by or affiliated with Ford Australia or its related companies, as follows:

a. ‘Our F series trucks are ordered direct from the factory in the USA for customisation and conversation ...’; and

b. ‘The venture as a new dealer with Ford has proved our ability to provide high volume sales with unmatched customer service retention.’

Particulars

The statements appear on the ‘About Us’ pages of Fleet Serv's websites at [sic] and particulars may be provided following the issuing of Notices to Produce, Subpoenas, the completion of discovery or service of evidence.

…

60. Since on or about the Sale Date, Fleet Serv has made, and continues to make, representations which suggest that Fleet Serv's goods or services are those of, or are approved by, Ford Australia or its related companies, as follows:

a. ‘Our Ford Rangers and Ford F Series can be serviced throughout the Ford dealer network’;

b. ‘Ford Ranger ... vehicles are of course serviceable and warrantable through any of the corresponding dealers in the Australia’ [sic]; and

c. ‘ ... with Ford F Series and Ford Ranger at Thornleigh we offer Ford Trained Master technicians for peace of mind trouble free maintenance’.

Particulars

The statements appear on the ‘About Us’ page of Fleet Serv's website at http:llwww.rapotor4wd [sic].

Further particulars may be provided following the issuing of Notices to Produce, Subpoenas, the completion of discovery or service of evidence.

…

62. Since on or about the Sale Date, Fleet Serv has been publishing the following statements:

a. ‘Our Ford Rangers and Ford F Series can be serviced throughout the Ford dealer network’;

b. ‘Ford Ranger ... vehicles are of course serviceable and warrantable through any of the corresponding dealers in the Australia’ [sic].”

61. The primary judge found the following facts:

“[10] In summary, I am satisfied that the evidence established that:

(1) It was without Ford’s authority that Tallevine first began manufacturing and selling a range of “Raptor” branded accessories and parts for Ford vehicles in 2012, while it was an authorised Ford dealer. It then also began offering for sale Ford vehicles which it had fitted with “Raptor” enhancements. Those vehicles bore the trademarked Ford name and badge and in the case of Ranger vehicles, the trademarked Ranger name, as well as the Raptor name which Tallevine affixed. That name was styled in a way which Ford complained was deceptively similar to the name affixed to Ford Raptor vehicles on manufacture by its related companies overseas.

(2) Much of the parties’ resulting dispute concerned Tallevine’s continued “raptorising” of both Ford F series trucks, which Ford did not import into Australia, and of Ford Ranger vehicles, which it did. That continued even after the termination of Tallevine’s dealership, the parties’ 2015 settlement and the eventual sale of the business to Fleet Serv Pty Ltd.

(3) Ford terminated Tallevine’s dealership agreement after Mr Creak was convicted in the NSW Local Court of offences under the Motor Dealers Act 1974 (NSW) (repealed), The Australian Consumer Law (Schedule 2 to the Competition and Consumer Act2010 (Cth)), the Fair Trading Act 1987 (NSW), and the Crimes Act1900 (NSW), which included odometer tampering. Some of those convictions were later overturned and the other charges were then withdrawn.

(4) Despite this, Ford was not prepared to enter another dealership agreement with Tallevine or with other companies with which Mr Creak was involved, including Maximotion Pty Ltd, now known as Fleet Serv Pty Ltd. The result was a dispute which was resolved without litigation in October 2013, when Ford and Tallevine entered their first settlement agreement. This was how Tallevine ceased being an authorised Ford dealer.

(5) The first agreement did not resolve the ongoing dispute about Tallevine continuing to “raptorise” Ford vehicles, accessories and parts. The result was the County Court proceedings which Ford brought. They were settled in mediation in 2015 by a second settlement agreement, reflected in the deed and the consent orders later made by this Court, breach of which are in issue in these proceedings.

(6) Ford was still then not prepared to enter into another dealership agreement with Tallevine, or with other companies in which Mr Creak was involved.

(7) The background to the 2015 settlement and Ford’s attitude included that:

(a) Ford did not manufacture vehicles in Australia but imported those manufactured by Ford Motor Company (USA) and other Ford companies overseas, which it sold by wholesale to its authorised dealers.

(b) Ford had dealership agreements of the kind it once had with Tallevine with those dealers. They sold those new vehicles by retail under that agreement. They and other dealers, including Tallevine could also sell used Fords, as well as Ford vehicles imported by third party importers.

(c) That was because Ford did not import all Ford vehicles manufactured overseas, including Raptor versions of Ford F series trucks. Such trucks were then, however, imported by third party importers and sold here by various Australian dealers, including Tallevine.

(d) At that time no Raptor versions of Ford Rangers were being manufactured, but Ford did import Ranger vehicles which its dealers sold.

(e) On Mr Creak’s evidence there was a market for Raptor Ford vehicles here. Raptor Fords were advertised in magazines and on websites which he described monitoring in order to observe this market and to ascertain what price and style of vehicles were being offered for sale by other dealers.

(f) On Mr Creak’s evidence the Raptor version of the F series trucks attracted a luxury car tax on import, with the result that Tallevine did not tend to purchase them from third party importers. Instead, it bought F series trucks from those dealers which it then “raptorised” itself and offered for sale. It also “raptorised” Ford Ranger vehicles which, after the termination of its dealership agreement, it had to purchase from other Ford authorised dealers, rather than direct from Ford. It then sold such vehicles as new despite Ford’s objections, with the result that it took steps under its dealership agreements, to stop other dealers providing Rangers to Tallevine to sell as new.

(g) Despite Ford’s objections, even after the termination of its dealership agreement, Tallevine continued to suggest in various ways that it had a continuing connection with Ford and to sell “raptorised” parts, accessories and Ford F series trucks, and Rangers.

(8) The 2015 settlement ought to have settled the parties’ dispute over what Tallevine was so doing, because it agreed to cease. But even afterwards it and later Fleet Serv not only continued to suggest a connection with Ford, but also to sell “raptorised” Ford F series trucks, Rangers, parts and accessories, in breach of the terms of the deed and the orders and despite Ford’s ongoing objections. At the relevant times Mr Creak was the sole director and shareholder of both companies and bound by the deed, which should have precluded this.

(9) Underlying Ford’s ongoing objections was that when manufactured all Ford vehicles, including Ford Raptor vehicles, bear both the trademarked “Ford” name and blue oval device containing that name, which Mr Creak called its “badge” and which was also referred to as a “rondelle”. When manufactured Ford Rangers also bear the trademarked “Ranger” name and Ford Raptors, the trademarked “Raptor” name. Those names are each styled in a particular way.

(10) Ford’s objections to Tallevine’s use of the trademarked names and badge rested in part on provisions of the Trade Marks Act 1995 (Cth) which regulated use of trade marks, as well as use by an "authorised user”, which Tallevine claimed to be: s 8. Section 26 permits authorised users to use trade marks and bring proceedings for their infringement. Tallevine had no such rights, as the 2015 deed acknowledged.

(11) Ford USA and Ford Canada, another subsidiary, owned the various marks and the Ford badge in issue, but Tallevine was only ever authorised to use them under the dealership agreement. A third party, a Japanese company Hino then held the Raptor SVT trademark in Australia. Other vehicle manufacturers also produced Raptor vehicles.

(12) It was in 2015 that Ford USA lodged an application for Australian registration of the marks “Ford Ranger Raptor” and “Ranger Raptor”. Tallevine also lodged an application for registration of the “RAPTOR” name just before the 2015 settlement, but it was not obtained. Tallevine had earlier sought authorisation to use the Raptor name from Hino, but that had also not been obtained. Tallevine allowed its 2015 trademark application to lapse after the settlement. It later unsuccessfully sought to pursue its application, that being opposed by Ford and Hino.

(13) In 2018 Ford announced that it was going to import a range of Ford Ranger Raptor trucks, which Ford USA had commenced producing. In these proceedings Mr Creak complained that thereby Ford had sought to sell the very product he had developed.

(14) Ford did license other third parties, under an established protocol, to produce accessories and other products for Ford vehicles, including grills [sic] which bore Ford trademarks, but neither Tallevine, Mr Creak nor Fleet Serv were so licensed. Mr Creak’s only conceivable authority to use the marks arose under the deed, which envisaged limited use by Fleet Serv.

(15) Ford considered that accessories and grills [sic] which used Ford trademarks, including the Raptor mark, which were not manufactured by agreement under its protocol to be counterfeit and took steps to protect its brand against such misuse. They included the proceedings Ford brought against Tallevine in the County Court, for contempt in this Court and these proceedings.

(16) In the County Court, Ford had pursued its objection to Tallevine’s use of Ford trademarks; of its continuing use of the “Ford” and “Raptor” names after the dealership was terminated to suggest an ongoing connection with Ford; as well as to it offering the Ford vehicles it had “raptorised” for sale as new. It considered that Tallevine was not only misusing intellectual property, but involved in passing off and breach of the dealership agreement, relevant terms of which survived its termination, as well as breach of various statutes.

(17) The 2015 settlement accepted that Ford had a basis for its objections to what Tallevine had been doing, which Tallevine and Mr Creak agreed would cease. Despite this, after the settlement Tallevine and later Fleet Serv, after it acquired Tallevine’s business in 2017, continued the “raptorising” which Ford considered breached both the orders in Tallevine’s case and the deed in Mr Creak’s. It was in 2017 that Ford thus brought contempt proceedings in this Court against Tallevine and in 2019, these proceedings against Mr Creak.”

62. The appellant submitted that the primary judge erred in finding [at 10(1)] that there was any dispute concerning “raptorisation” of vehicles prior to entry into the settlement deed. (“Raptorisation” refers to the fitting of accessories including grilles, wheels and decals to present a lower performance standard vehicle as a higher performance vehicle sold under Ford’s ‘Raptor’ line.) Tallevine commenced manufacturing and selling its range of “Raptor” branded accessories and parts for Ford vehicles when it was still an authorised Ford dealer. It says there was no complaint from Ford about that at the time. Ford Motor Company (USA) (“Ford USA”) manufactured its own range of Ford Raptor F Series trucks but these were not imported or distributed in Australia by Ford. At the time, Raptor models of Ford Ranger trucks were not in production. On 29 May 2013, a Mr Geoff Atkinson, Dealer Sales and Development Manager for the “Eastern Region” of Ford, advised Mr Creak regarding “…the Raptor name plate which you are using for your dressed up Ranger”. Mr Atkinson said that:

“…it is great you have taken the initiative on doing this, but I want you to be aware that the Raptor name is a registered trade mark by Hino Motors Ltd. We would suggest that you review using this name and look at using an alternative, if necessary take advice from your own legal counsel regarding this matter. I just want to ensure that your endeavours to promote the vehicle will not have any unforseen impact on your business.”

63. The appellant submitted that the primary judge erred in finding that the Victorian County Court proceedings resulted from any ongoing dispute about Tallevine’s continuing to raptorise Ford vehicles, with counterfeit accessories and parts, or that those proceedings were brought to prevent the use of the Raptor mark in the fitting of accessories and grilles which were not manufactured by agreement under the Ford Group’s protocol. They submitted that those proceedings had “…everything to do with the branding of Tallevine’s business and nothing to do with Tallevine raptorising any vehicles or the branding of vehicles for sale”. But this is of limited significance as cl 9 of the deed of settlement precludes regard being had in the construction of the deed to any conduct of the parties prior to entry into the deed that is not set out in the deed. Conduct set out in the deed includes Ford’s allegation that Tallevine had engaged in passing off and misleading and deceptive conduct by using the words FORD, RANGER, and RAPTOR, and the logos referred to above “in connection with the sale of motor vehicles”.

116. There was no error in this reasoning.

117. In any event, the submission did not even have technical merit. On appeal, Mr Creak conceded that the Restraints of Trade Act did not apply because the proper law of the deed of settlement was the law of Victoria (see KA & C Smith Pty Ltd v Ward (1998) 45 NSWLR 702 at 720). It is unnecessary to decide whether the concession was rightly made, noting that in converse circumstances to that case a different view has been tentatively expressed by Parker J in Label Manufacturers Australia Pty Ltd v Chatzopoulos [2022] NSWSC 1059 at [150]-[153] (and see also Allied Express Transport Pty Ltd v Braim [2022] NSWSC 1298 at [273] (Williams J)). The Defence did not plead that cl 2.2(a) was void because it was in restraint of trade. It pleaded that if the clause had the effect for which Ford contended then it was a restraint of trade within the meaning of s 4(1) of the Restraints of Trade Act. Section 4(1) provides:

“4 Extent to which restraint of trade valid

(1)    A restraint of trade is valid to the extent to which it is not against public policy, whether it is in severable terms or not.”

118. There are first instance authorities referred to in Isaac v Dargan Financial Services Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163 which have held that s 4(1) does not change the position at common law that the onus of establishing that a covenant in restraint of trade is reasonable as between the parties lies on the party seeking to enforce the contract. Gleeson JA, with whom the other members of the Court agreed, said at [78] that without deciding the question, that view is attractive.

119. The Restraints of Trade Act modifies, but does not displace, the common law principles. If Mr Creak were to have been held strictly to his pleading, his defence could have been rejected for failing to plead that if cl 2.2(a) had the effect contended for by Ford, it was void. This is especially so as para 17(c)(ii) was withdrawn, leaving only an allegation that the clause was valid to the extent to which it was not against public policy, and no allegation that it was void, without which the common law rules about onus were not invoked.

120. Accordingly, the primary judge did not err (as contended in Ground 6 of the Notice of Appeal) in admitting evidence relevant to the existence of interests of the respondent in supporting the reasonableness of the restraints.

121. Nor did the primary judge err in finding that Ford had an interest in the brand reputation in the Raptor name and Ford Raptor vehicles including F Series trucks. Mr Creak contended (Ground 7) that any interest of that kind was held only by other entities within the Ford group of companies.

122. In the County Court proceedings, Ford had alleged that the word FORD and the blue Ford Rondelle were registered in the name of Ford Canada and that the Australian registered mark for the word RANGER and the United States registered mark for the word RAPTOR were registered in the name of Ford USA.

123. It may be accepted that Ford did not have a proprietary interest in the marks. That does not mean that it did not have a legitimate interest to protect. By cl 14.1 of the Dealer Agreement, Tallevine acknowledged that Ford had the right to give and to revoke approval to Tallevine for the use of any Trade Mark, including any Trade Mark owned either by Ford or by any of its related bodies corporate. Ford had a legitimate interest in enforcing these terms of the Dealer Agreement.

124. Although the legal onus of establishing that the restraint is reasonable as between the parties lies on the party seeking to enforce the covenant, where, as here, the restraint is reached as the result of the settlement of a genuine dispute in which both parties were legally represented and there was no overreach of one of the parties, the evidentiary onus shifts. As the primary judge said:

“[263] It is in that context that the submission that the deed having been negotiated and agreed by Tallevine cannot be given any weight, may not be accepted. That is supported by Brereton [JA]’s observation in Belflora (Belflora Pty Ltd v Vinflora Pty Ltd (2021) 106 NSWLR 67; [2021] NSWCA 178) at [52] that ‘courts have not been favourably disposed to permitting a trader, who has voluntarily entered into a restrictive arrangement with other traders, to escape from the obligation by pleading that it has imposed an unreasonable burden on itself, adopting the view that the parties themselves are the best judges of what is reasonable in their own interest’.”

125. On this issue, the primary judge concluded:

“[275] The evidence established the restraints so agreed were reasonable, given not only Ford’s accepted legitimate interests, but also what it was agreed would not be affected by those restraints. Namely, Tallevine’s right to continue selling Ford vehicles and describing them as such, including Ford Raptors and Rangers, as cl 10 of the minutes permitted. The practical position on the evidence was that because it was no longer an authorised dealer, Tallevine could not sell new Fords. But cl 10 recognised that it could sell used Fords, as well as Ford vehicles which Ford did not import, but which were available to it to purchase from third party importers. Thus, it acknowledged Tallevine’s right, when advertising Ford vehicles it was entitled to offer for sale, to use the words FORD, RANGER and RAPTOR to describe those vehicles, in the ways specified.

[276] But as I have explained cl 10 did not to permit Tallevine to continue ‘raptorising’ Ford vehicles, accessories and parts, that being precluded by the other agreed restraints which recognised that Ford was legitimately entitled to protect its interests in respect of what Tallevine was not entitled so to do.

[277] Also I have explained, while ‘good faith’ was not defined, given all that was agreed by these parties in the deed, Tallevine using the specified words when it offered for sale Ford vehicles which it had itself ‘raptorised’, was not a good faith use of those words, nor permitted by cl 10. Rather, that involved a breach of the agreed restraints.”

126. I agree.

127. The primary judge also held that the restraints in cl 2.2(a) were not contrary to the public interest (J [283]-[290]). Her Honour said:

“[288] It is relevant that what was so settled was both the actual litigation which Ford was pursuing over the gap in the market which Mr Creak perceived, his right and that of Tallevine to do so there being in issue, as well as the other litigation which the parties had each also foreshadowed. The deed thus dealt with how these commercial parties would each conduct themselves in future in relation to a range of matters, which rested on their respective rights to use the marks in issue, as well as the terms of the dealer’s agreement.

[289] Accordingly, there were positive steps Ford and Tallevine agreed they would each take, as well as restraints accepted by Tallevine and Mr Creak, in his case also in respect of his related entities’ future use of those marks. It should also not be overlooked that what was so agreed included Ford making a payment of $100,000 to Tallevine in the event that an agreement with a third party in relation to operating a Ford dealership out of Tallevine’s business premises, was not entered.

[290]…Contrary to his case, the evidence does establish that Ford’s interests were affected by the conduct from which Tallevine and Mr Creak refused to desist until the settlement was arrived at. The deed itself evidenced that interest. What was so agreed to settle the resulting and foreshadowed litigation, was accordingly not contrary to the public interest.”

128. I agree. The onus of establishing that the restraints were contrary to the public interest lay on Mr Creak. The restraints he accepted were part of the quid pro quo he offered to settle the County Court proceedings and his foreshadowed Federal Court proceedings. There was a public interest in finalising the first and pre-empting the second. The primary judge observed at [99] that as no complaint was made of the consent orders that bound Tallevine there is no reason that the obligations that bound Mr Creak should be in any different position. The primary judge was correct in upholding the validity of cl 2.2(a).

Width of the injunctive relief ordered

129. The only challenge to the width of the injunctive relief ordered were in grounds 11 and 12 in the Notice of Appeal that were as follows:

“11.    The primary judge erred at J [390] in reasoning that it was appropriate to make injunctions which operated by reference to the current paragraph 10 of the Schedule to the Deed.

12.    The primary judge erred in ordering mandatory injunctions at orders 3 and 4 when the only contractual stipulation binding upon the Appellant was negative in effect.”

130. Orders 3 and 4 were:

“3.   The Second Defendant, by himself or by procuring Fleet Serv Pty Ltd to do so, do all things necessary to immediately transfer to the Plaintiff the domain name raptor4wd.com and any other internet domain name registered in his name or in the name of any related entity that contains the word RAPTOR.

4.    The Second Defendant, by himself or by procuring Fleet Serv Pty Ltd to do so, immediately amend the content of the website now shown at and as follows:

a.   to include a prominent statement that the business is not an authorised Ford dealer;

b.   to include a statement that there is no warranty provided by Ford Australia or Ford US for Raptor and F Series vehicles in Australia;

c.   to remove all statements to the effect of:

i.   Our F series trucks are ordered direct from the factory in the USA for customisation and conversation [sic];

ii.   The venture as a new dealer with Ford has proved our ability to provide high volume sales with unmatched customer service retention;

iii.   Our Ford Rangers and Ford F Series can be serviced throughout the Ford dealer network;

iv.    Ford Ranger vehicles are of course serviceable and warrantable through any of the corresponding dealers in Australia;

v.   with Ford F Series and Ford Ranger at Thornleigh we offer Ford Trained Master technicians for peace of mind trouble free maintenance.”

131. Order 3 reflected order 3(d) attached to the deed of settlement that bound Tallevine.

132. Order 4(a) and (b) reflected order 1(e)(i) and (ii) attached to the deed of settlement that bound Tallevine.

133. Order 4(c) reflected order 1(e)(iii) attached to the deed of settlement that required Tallevine to amend its website “to remove all statements to the effect of paragraph 12 below”. “Paragraph 12 below” provided that:

“12.   The defendant is immediately restrained from publishing any of the following statements or statements to the same or similar effect:

(a)   the defendant is "authorised to enhance" F series trucks and Ranger vehicles;

(b)   the defendant exceeds Ford manufacturer standards on enhancement quality;

(c)   Raptor vehicles and enhancements sold or performed by the defendant can be financed by the defendant through My Ford Finance; and

(d)   F Series and Raptor vehicles are serviceable and warrantable through Ford Australia or any authorised Ford dealers in Australia.”

134. Order 11 attached to the deed of settlement provided:

“11.   The defendant is immediately restrained from making any representation that:

(a)    there is a connection by way of trade between the defendant or its business and the plaintiff or any of its related companies;

(b)    the defendant or its business is sponsored, approved by, or affiliated with the plaintiff or any of its related companies; and

(c)    the defendant's goods or services are those of the plaintiff or any of its related companies or are approved or endorsed by the plaintiff or any of its related companies,

including, without limitation, by:

(i)    advertising Ford branded vehicles as ‘New’ motor vehicles where the vehicle has previously been registered;

(ii)    offering finance services under the name myFord Finance;

(iii)    using or displaying photographs of the Premises when it was an authorised Ford dealership in any manner in connection with the supply and service of motor vehicles and parts and accessories for motor vehicles; or

(iv)    describing the defendant as a ‘Ford car dealer’.”

135. Order 4 made by the primary judge is a mandatory injunction addressed to Mr Creak that is justified to remedy his breach of his negative covenant ([95] above) undertaking that Tallevine and Fleet Serv would not breach the restraints in orders 11 and 12.

136. Order 3 is justified on the same basis. Tallevine was bound to transfer to Ford the domain names there referred to. Mr Creak did not undertake that he would ensure that Tallevine or any Related Entity that succeeded to its business would perform Tallevine’s positive obligations. Tallevine had already registered the domain name raptor4x4.com.au. It was an agreed fact that, on or about 28 June 2017, Mr Creak procured the registration of domain name raptor4wd.com in the name of Gavin Cox. The domain name raptor4wd.com was used by Fleet Serv from on or about 30 June 2017. This was a breach by Mr Creak of cl 2.2(a) of the deed of settlement when applied with reference to order 6 of the attached Minutes. Order 3 made by the primary judge was justified to remedy that breach.

137. The primary judge did not err in qualifying some of the injunctive relief ordered by reference to the language of order 10(b) in the Minutes attached to the deed. As the primary judge held, any asserted ambiguity in the orders could be resolved by reference to the judge’s reasons, and from the date of publication of the reasons of this Court, by reference to this Court’s reasons. In any event, the asserted ambiguity arises from the terms of the parties’ agreement. As Giles JA (with the concurrence of Spigelman CJ and Allsop P) said in Orleans Investments Pty Ltd v Mindshare Communications Ltd (2009) 254 ALR 81; [2009] NSWCA 40 at [105]-[106], injunctions are practical tools in the administration of justice, but there are limits to the precision and clarity which can be attained. It is not possible to predict all possible future cases. That does not mean that Mr Creak should not be bound by injunction to what he promised.

Damages and Indemnity

138. Orders 1 and 2 made by the primary judge were as follows:

“1.    Judgment be entered for the Plaintiff against the Second Defendant in the amount of $145,000.

2.    The Second Defendant is to indemnify the Plaintiff for its losses and liabilities arising from the First Defendant's cross claim against the Plaintiff in proceedings no. 2017/75192.”

139. Ford pleaded that it suffered damage by reason of Tallevine’s breach of the orders made on 28 October 2015, being costs which it incurred in proceedings 2017/75192 in which it sought relief against Tallevine for contempt. It also alleged that Tallevine’s filing of its cross-claim in those proceedings against Ford was a breach by Tallevine and Mr Creak of cl 4.1 of the deed of settlement. It also claimed an entitlement under cl 5.1 of the deed of settlement to have Mr Creak indemnify it against the costs it incurred in bringing the contempt proceedings against Tallevine and defending Tallevine’s cross-claim pursuant to cl 5.1 of the deed.

140. By cl 4.1 of the deed, Tallevine and Mr Creak covenanted not to bring or pursue a Claim (as defined) against Ford in respect of any matter which was the subject of a release under cl 3.1. By cl 3.1, Tallevine released Ford from any Claim arising from or connected with the Dispute (as defined) or any part of it, the allegations giving rise to or referred to in the Dispute or any part of it, and any other Claim which was known, or could have reasonably been known, to Tallevine as at the date of the deed.

141. “Claim” was defined to include costs (whether or not the subject of a court order). The “Dispute” meant the dispute the subject of the County Court proceedings including Tallevine’s counter-claim in those proceedings.

142. Ford sought both damages and an order that Mr Creak indemnify it for its loss and liability arising from Tallevine’s cross-claim against it in proceeding 2017/75192.

143. The primary judge found that Ford was entitled to damages to recover the costs it incurred in bringing the contempt proceedings against Tallevine but had failed to prove the quantum of those costs (J [318], [324], [325], [329], [334]-[335], [341]-[343]).

144. There is no cross-appeal against this finding.

145. The primary judge had earlier explained that Ford had served an affidavit which referred to a confidential exhibit of memoranda of fees and disbursements in the contempt proceedings which were not served. Mr Creak sought an unredacted copy of the memoranda, some of which were only provided in the week before the hearing commenced. When advised that there were objections to the affidavit of Ford’s solicitor, who was required for cross-examination, Ford advised that the solicitor would not be called. It nonetheless sought to rely on the memoranda of fees. The tender was rejected. Ford does not challenge that ruling. A late application by Ford for leave to call the solicitor was refused and, again, that ruling is not the subject of challenge (J [62]-[79]).

146. Notwithstanding these rulings, the primary judge gave judgment for Ford against Mr Creak in the sum of $145,000 for costs incurred by Ford in defending the cross-claim Tallevine brought in the 2017 proceedings. Given her Honour’s rulings on evidence, there was no evidence from Ford as to the costs that it had incurred in defending the cross-claim. The primary judge held that the judgment of Fagan J assessing Ford’s costs of defending the cross-claim in the sum of $295,000 provided a foundation for assessing the costs in that sum. As Ford had recovered $150,000 by recourse to the security Tallevine had provided for its costs of the cross-claim, her Honour entered judgment for the balance of $145,000 in respect of those costs. In so reasoning, her Honour held that “Fagan J’s judgment was not inadmissible under s 91 of the Evidence Act, to prove those costs, they not finally having been in issue in those proceedings: s 91(1)” (at J [331]).

147. Additionally, the primary judge ordered that Mr Creak indemnify Ford for its losses and liabilities arising from Tallevine’s cross-claim against Ford in proceeding 2017/75192.

148. The first issue is whether Tallevine’s filing of its cross-claim was a breach of its covenant not to sue in cl 4.1 of the deed of settlement. By cl 4.1, Tallevine covenanted not to bring a Claim against Ford in respect of any matter which was the subject of a release under cl 3.1. The release under cl 3.1 is quoted at [46] above.

149. By its cross-claim, Tallevine asserted that, under the Dealer Agreement, as amended by the “First settlement agreement” of 21 October 2013, and the Franchising Code and s 51ACB of the Competition and Consumer Act, Ford was obliged as of 18 February 2014 to consent to the sale of Tallevine’s franchise business to Fleet Serv, to consent to the extension of the sale period, and to recognise Fleet Serv as an authorised Ford dealer at the location of Tallevine’s franchise business. Tallevine alleged that Ford was not entitled to terminate the Dealer Agreement. It alleged that Ford’s conduct in terminating the Dealer Agreement was unconscionable. It alleged that the first settlement agreement, to the extent it provided for termination of the Dealer Agreement in default of completion of a sale of the business by 18 February 2013 was void or voidable. It alleged that Tallevine was entitled to relief against forfeiture of the Dealer Agreement.

150. All these claims fell squarely within the Dispute which was the subject of Tallevine’s release in cl 3.1. Tallevine also alleged that the settlement deed had been repudiated by Ford, which had accepted that repudiation or, alternatively, that Tallevine had rescinded the settlement deed for misrepresentation or mistake. It sought the setting aside of the consent orders made on 6 October 2015 and related relief.

139. Tallevine’s challenge to the validity of the deed of settlement did not fall within any of the subparagraphs of cl 3.1, but it fell within the chapeau to that clause as being connected with the Dispute. If the challenge had succeeded, then the release would have been discharged. But, as it did not succeed, all of the cross-claim was brought in breach of Tallevine’s covenant in cl 4.1.

140. Mr Creak was in breach of his covenant in cl 4.1 in that he caused Tallevine to bring a Claim against Ford in respect of matters which were the subject of the release under cl 3.1. Although it was Tallevine that brought the claim, it was Mr Creak who caused it to do so.

141. Mr Creak submitted that, on the Friday evening prior to the commencement of the trial on the Monday, Ford had served written submissions in reply in which it accepted that the costs incurred in defending the most substantial claim in the cross-claim could not be the subject of the indemnity. In those submissions, counsel appearing at trial for Ford accepted that, to the extent the costs of the cross-claim related to the attempt to set aside the deed by reason of alleged representations made during the mediation, that could not be the subject of the indemnity. Mr Creak submitted that the case was conducted on the basis of that concession.

142. The concession was withdrawn on the third day of the hearing. Although counsel for Mr Creak submitted that he had run the trial on the basis of what had been contained in Ford’s written submissions in reply, he did not submit that he had suffered any prejudice or would have acted differently had the concession not been made in the written submission served very shortly before the hearing. No complaint was made at trial about the withdrawal of the concession. No attempt was made to demonstrate how the trial might have proceeded differently had the concession not been made. The issue is one of construction of cl 3.1 of the settlement deed. Until the submission had been served on the Friday before the commencement of the trial on the following Monday, Ford’s position had been that it was entitled to be indemnified by Mr Creak in respect of all of its costs of defending Tallevine’s cross-claim in the 2017 proceedings. Any evidence that might have been relevant to the question, and it is hard to think what evidence might have been relevant, having regard in particular to cl 9 of the deed of settlement, could and should have been adduced. Mr Creak did not point to any evidence that might have been adduced to address the question.

143. Mr Creak submitted that, had the trial judge asked, but for Mr Creak’s breach of cl 2.2(a), would Tallevine have brought its cross-claim, the answer would necessarily have been that it may well have.

144. I do not understand the relevant breach to have been a breach by Mr Creak of cl 2.2(a) because the bringing of the cross-claim was not the subject of the attached minutes of consent orders. In any event, there is no factual basis for the submission. Mr Creak controlled Tallevine.

145. The primary judge rightly held that the incurring of costs in defending proceedings brought by Tallevine in breach of its and Mr Creak’s covenant in cl 4.1 would have been within the reasonable contemplation of the parties when the deed was entered into as the probable result of the breach. The costs also naturally arose from the breach. The damages claimed were not too remote.

146. The real issue was whether the quantum of damages could be proved from the reasons and orders of Fagan J of 20 September 2021. Section 91(1) of the Evidence Act 1995 (NSW) provides:

“91 Exclusion of evidence of judgments and convictions

(1) Evidence of the decision, or of a finding of fact, in an Australian or overseas proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding.”

159. Ford submitted that the order of Fagan J was admissible as to the fact that the order was made and that s 91 did not apply to court orders (as distinct from reasons).

160. But s 91(1) excludes evidence of both the decision and a finding of fact to prove the existence of a fact that was in issue in the proceeding.

161. Section 91 does not affect the operation of a judgment in rem or the law relating to res judicata or issue estoppel (s 93), but the costs order made against Tallevine was not a judgment in rem and Ford did not contend that the judgment bound Mr Creak as a privy to Tallevine.

162. Mr Creak had notice of Ford’s application and appeared through his solicitor at the hearing before Fagan J to advise that he had no submissions to make on the application. He did not thereby become bound by the order.

163. Tallevine’s liquidator did not oppose the order sought by Ford, apparently on the basis that the costs ordered would not be provable in the liquidation of Tallevine (J [330]).

164. The primary judge held that the costs the subject of Fagan J’s judgment had not “…finally been in issue in those proceedings” (J [331]). I take it that this was because the liquidator of Tallevine had not ultimately contested the quantum of the costs claimed.

165. That fact did not mean that the costs were not “in issue” in the proceeding before Fagan J. Rather, the quantum of costs was the very issue to be decided. The fact that Tallevine, through its liquidator, did not ultimately contest the issue did not mean that the quantum of costs was not in issue. Orders were not made by consent. The quantum of costs sought by Ford was not awarded. Neither the findings of fact made by Fagan J, nor his Honour’s orders, were admissible to prove the quantum of costs of the cross-claim which Mr Creak was liable to pay under his indemnity. The judgment for $145,000 entered for Ford against Mr Creak, should be set aside. Ford is entitled to nominal damages for Mr Creak’s breach of the deed.

166. Ford sought to quantify its claim for indemnity under cl 5.1 of the deed in the amount for which it sought judgment. Its cause of action to enforce the indemnity in cl 5.1 merged in the judgment, just as it would have been, had judgment been given for Mr Creak, and just as it will be on the entry of judgment for nominal damages.

167. Even if there were no merger of the cause of action to enforce the indemnity in cl 5.1 in the judgment, it would be an abuse of process if Ford, having failed to prove the quantum of its claim before the primary judge, instituted new proceedings to enforce the indemnity and there sought to adduce the evidence of the quantum of its costs that it failed to adduce before the primary judge. Such a course would lead to conflicting judgments (Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142 at [15], [19]-[23], [36]). The same objection could be taken if Ford’s solicitors sought to have the costs assessed pursuant to s 198 of the Legal Profession Uniform Law (NSW) against Mr Creak as a non-associated third party payer.

168. Accordingly, each of order 1 and order 2 made by the primary judge should also be set aside.

169. Because Mr Creak has had some success in his appeal, the parties should provide written submissions on the question of costs of the proceedings below and of the appeal, including any submissions on interest on costs. Orders 14, 15 and 16 made below (dealing with interest on the sum awarded, costs of the proceedings below, and interest on costs) should be set aside.

170. For these reasons, I propose the following orders:

1. Appeal allowed in part.

2. Set aside orders 1, 2, 14, 15 and 16 made in the court below on 10 March 2022.

3. In lieu of order 1 below, direct entry of judgment for the respondent against the appellant in the sum of $100.

4. Otherwise dismiss the appeal.

5. Order that within 21 days, the parties file and serve written submissions of no more than 8 pages on the appropriate orders to be made as to costs of the proceedings below, interest on costs, and costs of the appeal.

6. Any submissions in reply to be filed and served within 7 days thereafter.

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Decision last updated: 13 September 2023