Jim's Group Pty Ltd v Quindar Pty Ltd - [2014] NSWSC 647

Supreme Court

New South Wales

Medium Neutral Citation: Jim's Group Pty Ltd v Quindar Pty Ltd [2014] NSWSC 647
Hearing dates: 21 May 2014
Decision date: 21 May 2014
Jurisdiction: Common Law
Before: Beech-Jones J
Decision:
(1) The appeal be allowed.
(2) The orders made by the Local Court on 19 June 2013 in proceedings number 108660/12 be set aside.
(3) The matter be remitted to the Local Court to be determined in accordance with these reasons.
(4) The defendant pay the plaintiff's costs of the proceedings in the Supreme Court.

Catchwords: APPEAL FROM LOCAL COURT - franchise agreements - master franchise - business consists of right to sell franchises - right to compensation on termination of master franchise - whether amount of compensation includes sale proceeds of three franchises - set-off - whether Local Court can set-off judgment debt determined in separate proceedings against amount owing on claim it determines - notice of contention - relevance to appeal from Local Court restricted to question of law - scope of remittal.
Legislation Cited: - Civil Procedure Act 2005 (NSW), s 3(1), s 21
- Contracts Review Act 1980 (NSW)
- Law Reform (Law and Equity) Act 1972 (NSW), s 6
- Local Court Act 2007 (NSW), s 39 to s 41
- Primary Legislation (Statutes of Set-Off) (1729) 2 Geo II, c 22; (1735) 8 Geo II, c 24.
Cases Cited: - Grant v Easton (1883) 13 QBD 302
- Ken Wolf Real Estate Pty Ltd v O'Halloran [2012] NSWSC 993
- Lahoud v Lahoud [2012] NSWSC 284
Texts Cited: - Rory Derham, Derham on the Law of Set-Off (Oxford University Press, 4th ed, 2010)
Category: Principal judgment
Parties: Jim's Group Pty Ltd (Plaintiff/Appellant)
Quindar Pty Ltd (Defendant/Respondent)
Representation: Counsel:
N.A. Cotman SC, J.K. Meredith (Plaintiff/ Appellant)
P.M. Barham (Defendant/Respondent)
Solicitors:
Harpreet Hayer (in house counsel for Plaintiff/Appellant)
Somerville Legal (Defendant/Respondent)

File Number(s): 2013/216313

EX tempore Judgment

This is an appeal from a judgment of the Local Court upholding a claim by the plaintiff, Quindar Pty Ltd ("Quindar"), against Jim's Group Pty Ltd ("Jim's Group").

In the Local Court Quindar sought recovery of various amounts consequent upon the termination of its master franchise agreement with Jim's Group. The Presiding Magistrate awarded Quindar $119,182.06, which included interest. His Honour also ordered Jim's Group to pay Quindar's costs up to 17 August 2012, on an ordinary basis and on an indemnity basis thereafter.

Jim's Group now appeals from his Honour's judgment. An appeal to this court from the Local Court is governed by s 39 to s 41 of the Local Court Act 2007 (NSW) which relevantly provide:

39 Appeals as of right

(1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law.

...

40 Appeals requiring leave

(1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NSWSC 647
Decision Date: 21 May 2014

CaseChat Overview and Summary

The case before the court involved Jim's Group Pty Ltd, the appellant, and Quindar Pty Ltd, the respondent. The dispute centred on the interpretation of franchise agreements between the parties, specifically whether Jim's Group was entitled to compensation upon the termination of a master franchise agreement and, if so, whether the compensation included the sale proceeds of three franchises. The matter was appealed from the Local Court to the higher court.

The legal issues before the court were twofold. Firstly, it needed to determine the extent of the compensation Jim's Group was entitled to receive upon termination of the master franchise agreement. Specifically, the court had to decide if the compensation included the sale proceeds of three franchises that Jim's Group had sold after the termination. Secondly, the court had to consider whether the Local Court was correct in setting off a judgment debt determined in separate proceedings against the amount owing on the claim it had determined. This issue raised questions about the appropriate scope of remittal to the Local Court.

The court found that the Local Court had correctly interpreted the franchise agreements and the compensation provisions. It held that the amount of compensation did not include the sale proceeds of the three franchises. Regarding the set-off, the court held that the Local Court could not set off a judgment debt determined in separate proceedings against the amount owing on the claim it determined. However, the court noted that the scope of remittal to the Local Court was limited to questions of law, and the notice of contention did not confine the remittal to such questions. The court, therefore, remitted the matter to the Local Court for reconsideration, limiting the scope of the remittal to questions of law.

The court did not make any final orders in the appeal but instead directed the Local Court to reconsider the matter within the specified remittal scope. This decision ensured that the Local Court could address the legal issues properly and provide a more accurate determination of the compensation owed to Jim's Group.

Orders