Susu Pty Ltd v M. Marinos Pty Ltd
[2008] SASC 227
•19 August 2008
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Permission to Appeal in Private)
SUSU PTY LTD v M. MARINOS PTY LTD & ANOR
[2008] SASC 227
Reasons for Decision of The Full Court
(The Honourable Justice Duggan, The Honourable Justice Vanstone and The Honourable Justice David)
19 August 2008
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - WHEN APPEAL LIES - BY LEAVE OF COURT - GENERALLY
Application for permission to appeal in private - permission to appeal refused.
SUSU PTY LTD v M. MARINOS PTY LTD & ANOR
[2008] SASC 227Full Court: Duggan, Vanstone and David JJ
THE COURT: This is an application for permission to appeal to the Full Court against a decision of Debelle J whereby he allowed an appeal against the decision of a master to strike out portions of the statement of claim in this action.
The applicants for permission to appeal are the defendants in an action arising out of a franchise agreement.
Susu Pty Ltd, the plaintiff, carried on a business as franchisee of the Trinity Gardens Cheesecake Shop from September 1997.
M. Marinos Pty Ltd, the first defendant, has been the Master Franchisee of the Cheesecake Shop in South Australia and the Northern Territory since April 2002.
Suffolke Parke Pty Ltd (“Suffolke”) was the Master Franchisee up until April 2002 when, pursuant to a Deed of Assignment, it assigned its interest as Master Franchisee to M. Marinos Pty Ltd.
Baranco Pty Ltd (“Baranco”) was the original franchisee of the Trinity Gardens Cheesecake Shop. It operated the business from June 1996 to September 1997. Baranco’s rights under the franchise were assigned to the plaintiff when the business was sold to the plaintiff.
In September 1997 the plaintiff was assigned the right to operate the franchise at the Trinity Gardens shop for the balance of Baranco’s term with an option for a further five year term. On 10 April 2002 the plaintiff entered into a new franchise agreement with Suffolke which was to expire on 30 March 2006. The agreement did not provide for a right of renewal.
However, it is the plaintiff’s claim that the franchise agreement to which it was a party did not expire until April 2007 and that, although not referred to in the written agreement, it had a right to a further extension of its franchise. For its part, the first defendant denies that the plaintiff had a right to extend and it attempted to evict the plaintiff from the shop in April 2005. Apart from asserting that it is entitled to the extension referred to, the plaintiff claims damages and equitable compensation.
Pleadings arguments have occurred over a period of time and these have now been narrowed down to the issue which is the subject of the present application for permission to appeal.
In effect the plaintiff asserts that, between July and September 1997, it was informed orally by Suffolke, the then Master Franchisee, that, if certain conditions were fulfilled, the plaintiff would be entitled to extend the franchise agreement in five year terms. This is referred to in the pleadings as “the Extension Policy”.
It is pleaded that the first defendant, who took over from Suffolke as Master Franchisee, became aware of the Extension Policy when it acquired Suffolke’s rights as Master Franchisee in April 2002.
The objection to the pleadings taken by the first defendant is that the statement of claim does not disclose any material facts capable of giving rise to a reasonably arguable cause of action that the first defendant was aware of the terms on which extensions of franchises would be granted in accordance with the Extension Policy alleged by the plaintiff.
It is pleaded in para 25 of the statement of claim that the defendants were aware of the Extension Policy by reason of the matters alleged in paras 19, 21, 21A, 22 and 23. There have been amendments to the statement of claim since the decision of the master and it is convenient to use the paragraph numbers and pleadings in the amended statement of claim dated 8 April 2008.
The master struck out a number of paragraphs from the statement of claim but the most important paragraph for present purposes is para 19. The master gave his reasons for striking this paragraph out on 19 November 2007.
Prior to considering the appeal against the master’s orders, Debelle J permitted the amendments to the statement of claim to which I have referred. Paragraphs 19 and 25 were amended. Paragraph 25 asserts that the defendants were aware of the Extension Policy. The wording of para 25 is slightly different from the unamended version dealt with by the master, but the effect remains the same. Paragraph 19 was amended so as to remove some of the sub-paragraphs. These amendments do not make any difference to the resolution of the matter in issue.
As we have said, the defendants claim that the pleadings do not disclose any material facts capable of giving rise to a reasonably arguable cause of action that the plaintiff was aware of “the terms on which extensions would be granted”.
Debelle J did not give separate reasons for allowing the appeal and setting aside the orders of the master. His reasoning is to be gleaned from the transcript of argument. We draw attention to pp 5 – 14 of the transcript and, in particular, to Debelle J’s reference to paras 21 and 22 of the statement of claim. The plaintiff relies on an inference from the facts pleaded in these paragraphs to support the assertion that the defendants were aware of the Extension Policy.
It was Debelle J’s view that the terms of the Extension Policy and the facts relied upon to establish that the defendants were aware of it were pleaded adequately. We think that this is a fair view of the matter. Knowledge by another party of the existence of a particular set of circumstances is frequently established by inference from proved facts. The primary facts relied upon in this matter are set out in the statement of claim. Furthermore, the content of the Extension Policy relied upon by the plaintiff is adequately identified.
Permission to appeal is refused.
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