King v Cake It Away Pty Ltd

[2005] NSWCA 102

Reported Decision: (2005) ATPR 42-059

Court of Appeal

CITATION:	King v Cake It Away Pty Ltd [2005] NSWCA 102
HEARING DATE(S):	22 March 2005
JUDGMENT DATE:	22 March 2005
JUDGMENT OF:	Giles JA at 1; Santow J at 18
DECISION:	Application for leave to appeal dismissed with costs.

CATCHWORDS:	Claimant was franchisee of "Cake It Away" operation - operation failed - first to seventh opponents were effectively franchisors - eighth and ninth opponents provided finance - claimant brought proceedings in Industrial Commission - alleged the various arrangements were unfair because of misleading conduct - held no misleading conduct by eighth and ninth opponents - held misleading conduct by first to seventh opponents but nonetheless no unfairness - claimant then brought proceedings in District Court alleging misleading conduct under s 52 Trade Practices Act - proceedings struck out as attempts to relitigate matters decided against claimant - application for leave to appeal - as to eighth and ninth opponents decision correct and no basis for appeal - as to first to seventh defendants arguable error - but was also contended that proceedings brought outside the three years under s 82 - operation terminated more than three years before commencement of proceedings - loss suffered and cause of action accrued no later that that time - leave to appeal refused.
CASES CITED:	Hawkins v Clayton (1988) 164 CLR 539; Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514.
PARTIES:	Gregory John King - Claimant Cake It Away Pty Ltd - Opponent
FILE NUMBER(S):	CA 40419/04
COUNSEL:	Claimant in person S A Levitt - First to Seventh Opponents J Fernon SC - Eighth and Ninth Opponents
SOLICITORS:	Levitt Robinson - First to Seventh Opponents Watson & Watson - Eighth and Ninth Opponents

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC5495/03
LOWER COURT JUDICIAL OFFICER:	Quirk DCJ

CA 40419/04

GILES JA
SANTOW JA

Tuesday 22 March 2005

GREGORY JOHN KING v CAKE IT AWAY PTY LTD & ors

Judgment

1 GILES JA: The claimant seeks leave to appeal from an order of the District Court striking out proceedings he brought claiming damages for misleading conduct in contravention of the Trade Practices Act 1974. The claimant is acting for himself, and the judge correctly did not take a strict view of the manner in which the claim in the District Court was pleaded. The judge struck the proceedings out because she considered that they were simply an attempt to relitigate matters decided against the claimant in proceedings which he had brought in the Industrial Commission.

2 The claimant had brought proceedings claiming relief against unfair contracts, in which proceedings he was unsuccessful, at first instance and in some respects for different reasons on appeal in the Commission. The claimant informs us that he has on foot an appeal to this Court from the decision of the Commission, but as matters stand that decision represents the present state of affairs.

3 It is appropriate to distinguish at this point between the first to seventh opponents and the eighth and ninth opponents. The first to seventh opponents were, broadly speaking, those involved in the franchising to the claimant of a “Cake It Away” operation, which operation ultimately failed. The eighth and ninth opponents, also broadly speaking, provided finance for the venture to the claimant.

4 In the Industrial Commission it was found that there had been no misleading conduct by the eighth and nine opponents. The judge’s decision, so far as it involved that there was an impermissible attempt to relitigate that issue in the District Court proceedings albeit under the guise of proceedings under the Trade Practices Act, was in my opinion quite correct, and there is no prospect of displacing it on appeal. The claimant submitted that the pendency of his appeal from the Commission to this Court made a difference, but I do not think that it does.

5 So far as the eighth and ninth opponents are concerned, in my opinion, no ground for leave to appeal has been shown.

6 The findings in the Commission in relation to the first to seventh opponents were not as for the eighth and ninth opponents. I will not distinguish between them. It is sufficient to say that it was found that there had been misleading conduct on their part, or on the part of some of them, on which the claimant had relied, in entering into the “Cake It Away” venture. The claimant was unsuccessful in the Commission, however because it was thought that for various reasons the concept of unfairness on which the application in that jurisdiction turned had not been fulfilled.

7 The judge appears to have regarded the same principles of re-litigation as founding her decision to strike out the proceedings as regards the first to seventh opponents, but it seems to me that so far as her Honour did so it is quite strongly arguable that she was in error. That, however, does not mean a grant of leave, because in the District Court the first to seventh opponents also submitted that the proceedings as against them should be struck out because the proceedings had not been brought within the three year period provided by s 82 of the Trade Practices Act. That period was extended to six years by an amendment in 2001, but the transitional provisions were such that the extension of the period did not avail the claimant.

8 The judge adverted to this, but did not rest her decision upon it. It is nonetheless a matter of importance on the present question of leave, since there would be no point in granting leave to appeal if there were a complete answer by reason of the running of time under s 82.

9 The claimant’s pleading shows that after taking up the venture he ran it for a period, but it was unsuccessful and he closed it down in April 1998. The proceedings in the District Court were brought more than three years after that occasion. The submission of the first to seventh opponents was that the claimant suffered loss no later than April 1998, whereupon his cause of action under the Trade Practices Act accrued and the three year period began to run.

10 The claimant’s response was that he continued to suffer loss, and he instanced that interest was running under the mortgage which he took out in order to finance the venture, so that he was incurring a further loss of $400 a month in interest to the present time and continuing.

11 That, however, does not seem to me to be an answer to the submission of the first to seventh opponents. The cause of action is described as a cause of action for the misleading conduct, the misleading conduct being that which occurred in relation to the claimant entering into the venture. The cause of action, it seems to me, was complete when loss was first suffered, and there must have been a suffering of loss no later than when the business was closed down.

12 Unfortunately for the claimant, I can see no answer to the proposition that his proceedings under the Trade Practices Act were commenced later than permitted under s 82, and that for that reason they are doomed to fail.

13 The claimant drew our attention to the observations of Gaudron J in Hawkins v Clayton (1988) 164 CLR 539 at 601, where her Honour said that if the interest infringed was an interest in recouping money advanced, it might be appropriate to fix the time of accrual of the cause of action when recoupment became impossible, rather than at the time when the antecedent right to recoup came into existence. Her Honour’s comment included that the actual loss was sustained only when recoupment became impossible. This was cited by Mason CJ, Dawson, Gaudron and McHugh JJ in Wardley Australia Limited v State of Western Australia (1992) 175 CLR 514 at 532-3.

14 The claimant submitted that he had in truth not suffered a loss as at April 1998 because it was only when he failed in his endeavours to recoup any losses he suffered, for example in running the “Cake It Away” venture, that he suffered loss. Thus, he said, when he had brought his proceedings in the Industrial Commission it was not until he failed in those proceedings, whereby he might have recovered his losses, that it could be said that recoupment was impossible and loss was sustained.

15 It does not seem to me that Gaudron J was talking about this situation. Indeed, if the submission were taken to its fullest extent, it would mean that so long as a party was claiming damages to compensate for loss, no loss had been suffered. I do not think that this presents an arguable case that there was not the accrual of the claimant’s cause of action no later than April 1998.

16 In those circumstances, in my opinion, leave to appeal in relation to the first to seventh opponents should be refused.

17 It follows that the application for leave to appeal should be dismissed with costs.

18 SANTOW JA: I agree.

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