Joshan v Pizza Pan Group Pty Ltd

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Court of Appeal


Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: Joshan v Pizza Pan Group Pty Ltd [2021] NSWCA 219
Hearing dates: 25 August 2021
Date of orders: 14 September 2021
Decision date: 14 September 2021
Before: Bell P at [1];
Gleeson JA at [117];
McCallum JA at [118]
Decision:

1.        Appeal allowed.

2.        Set aside the orders of Weber SC DCJ of 19 February 2021.

3.        Direct that the solicitors for the Applicants serve a copy of these reasons by email on the solicitors for all cross-defendants who have entered an appearance in proceedings 2020/00230657 on or before 15 September 2021.

4.        Direct that any cross-defendant who or which has entered an appearance file any written submission and evidence in the event that he, she or it opposes a stay of proceedings on or before 29 September 2021.

5.        In the event that no such submissions are made, order that the proceedings 2020/00230657 be stayed and the Respondent pay the Applicants’ costs of the appeal and the stay application before the primary judge.

6.        In the event that any of the cross-defendants oppose a stay of proceedings, the Applicants are to file and serve any submissions in response by 5 October 2021 with the issue of whether or not the proceedings 2020/00230657 are to be stayed and any outstanding question of costs to be determined on the papers.

Catchwords:

CIVIL PROCEDURE – stay of proceedings – under the Service and Execution of Process Act 1992 (Cth) – where District Court of New South Wales was court of issue – whether South Australian court was “the appropriate court” to determine all the matters in dispute between the parties – where the identification of all the matters in issue between the parties is a prerequisite to resolving the question of what is “the appropriate court”

CONSUMER LAW – industry codes – Franchising Code of Conduct – what constitutes a “franchise agreement” – whether a deed of guarantee is a “franchise agreement” as defined in cl 5 of the Code – where the guarantors assumed certain obligations of the franchisee and covenanted to be personally bound by the terms and conditions of the Franchise Agreement pursuant to the deed of guarantee – where the deed of guarantee conferred no right to carry on the business of offering, supplying or distributing goods or services as a franchisee

CONSUMER LAW – industry codes – Franchising Code of Conduct, cl 21(2)(a) – where franchise agreement must not contain a clause that requires a party to the agreement to bring an action or proceedings in relation to a dispute under the agreement in any State or Territory outside that in which the franchised business is based – whether franchise agreement may contain a non-exclusive jurisdiction clause – where the prohibition refers to a clause that “requires” the parties to litigate in a particular forum

EVIDENCE – standard of proof – civil cases – application for stay of proceedings under the Service and Execution…

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Details
Case
[2021] NSWCA 219
Decision Date

CaseChat Overview and Summary

This case concerned an appeal from an order of the District Court of New South Wales refusing to grant a stay of proceedings. The applicants, Joshan and others, sought to stay proceedings commenced against them in New South Wales by Pizza Pan Group Pty Ltd, arguing that South Australia was the appropriate forum. The dispute involved allegations of breaches of a franchise agreement and a deed of guarantee.

The primary legal issues before the Court of Appeal were whether a deed of guarantee constituted a "franchise agreement" under the Franchising Code of Conduct, whether the franchise agreement contained a clause prohibited by clause 21(2)(a) of the Code, and the correct standard of proof and onus for an application for a stay of proceedings under the *Service and Execution of Process Act 1992* (Cth). The court also considered the weight to be given to a non-exclusive jurisdiction clause in favour of New South Wales when determining the appropriate forum.

The Court of Appeal found that the deed of guarantee, by which the guarantors assumed obligations of the franchisee and covenanted to be bound by the franchise agreement, did not confer a right to carry on the business as a franchisee and therefore was not a "franchise agreement" in itself. However, it was closely linked to the franchise agreement. The court also determined that the standard of proof for a stay application under the *Service and Execution of Process Act 1992* (Cth) is on the balance of probabilities, and the applicant bears the onus of proof, disagreeing with the primary judge's application of a "clear and compelling basis" standard. The court held that the identification of all matters in dispute was a prerequisite to determining the "appropriate court" for the purposes of the Act.

The appeal was allowed, and the orders of the primary judge were set aside. The court directed that further submissions be made regarding the stay of proceedings, with a potential order for a stay and costs in favour of the applicants if no opposition was filed. If opposition occurred, the issue of the stay and costs would be determined on the papers.

Orders

Orders of the court

1. Appeal allowed.

2. Set aside the orders of Weber SC DCJ of 19 February 2021.

3. Direct that the solicitors for the Applicants serve a copy of these reasons by email on the solicitors for all cross-defendants who have entered an appearance in proceedings 2020/00230657 on or before 15 September 2021.

4. Direct that any cross-defendant who or which has entered an appearance file any written submission and evidence in the event that he, she or it opposes a stay of proceedings on or before 29 September 2021.

5. In the event that no such submissions are made, order that the proceedings 2020/00230657 be stayed and the Respondent pay the Applicants’ costs of the appeal and the stay application before the primary judge.

6. In the event that any of the cross-defendants oppose a stay of proceedings, the Applicants are to file and serve any submissions in response by 5 October 2021 with the issue of whether or not the proceedings 2020/00230657 are to be stayed and any outstanding question of costs to be determined on the papers.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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