Joshan v Pizza Pan Group Pty Ltd

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.