King v Cake It Away Pty Ltd

The claimant, a franchisee of the "Cake It Away" operation, brought proceedings against the first to seventh respondents (effectively the franchisors) and the eighth and ninth respondents (who provided finance). The claimant alleged that the franchise arrangements were unfair due to misleading conduct. Initially, proceedings were brought in the Industrial Commission, where it was held that there was no misleading conduct by the eighth and ninth respondents, and while there was misleading conduct by the first to seventh respondents, it did not render the arrangements unfair. The claimant subsequently commenced proceedings in the District Court, alleging misleading conduct under section 52 of the Trade Practices Act 1974 (Cth). These proceedings were struck out by the District Court on the basis that they were an attempt to relitigate matters already decided against the claimant. The claimant then sought leave to appeal this decision to the Court of Appeal.

The Court of Appeal was required to determine whether the District Court erred in striking out the proceedings as an abuse of process, and in relation to the first to seventh respondents, whether there was an arguable error in the District Court's decision, notwithstanding the strike-out. A further issue arose concerning the first to seventh respondents, namely whether the proceedings were brought outside the three-year limitation period prescribed by section 82 of the Trade Practices Act 1974 (Cth), given that the operation terminated and the cause of action accrued more than three years prior to the commencement of the District Court proceedings.

Giles JA and Santow J held that the District Court's decision was correct in relation to the eighth and ninth respondents, and there was no basis for an appeal concerning them. Regarding the first to seventh respondents, while there might have been an arguable error in the District Court's decision, the Court found that the proceedings were indeed brought outside the statutory limitation period. The termination of the operation and the accrual of the cause of action occurred more than three years before the commencement of the District Court proceedings, meaning the claim was time-barred.

Consequently, the application for leave to appeal was dismissed with costs.