TFAC Limited v David HC Auckland CIV-2006-404-3984

[2007] NZHC 1853

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2006-404-3984

BETWEEN  TFAC LIMITED & ORS Plaintiffs

ANDSUSAN ELIZABETH DAVID & ORS Defendants

Counsel:         D M Connor for Plaintiffs

C T Walker and P A Paterson for Defendants

Judgment:      15 June 2007

RULING OF BARAGWANATH J

Solicitors:

Walters Law, Auckland for Plaintiffs
Gilbert Walker, Auckland for Defendants

Counsel:

D M Connor, Auckland

TFAC LIMITED & ORS V DAVID & ORS HC AK CIV-2006-404-3984  15 June 2007

[1]      By agreement dated 23 December 2005 the first defendant UAR as national master franchisee of James Homes Services contracted with the first plaintiff TFAC as regional master franchisee that TFAC would receive a regional master franchise of a business known as James’ Home Services. It related to the eastern suburbs of Auckland  and  was  for  a  period  of  ten years  at  an  initial  fee  of  $180,000  plus continuing franchise fees.

[2]      The franchise authorised TFAC to sell sub-franchises.  By clause 8.1 of the agreement  UAR  assumed  responsibility for  providing  training  to  TFAC  and  its director,  Mr Grisdale  who  with  his  wife  sue  as  second  plaintiffs  UAR  and  its director, Mrs David, as defendants.    They allege breach of the Fair Trading Act and the Contractual Remedies Act.

[3]      In Mr Grisdale’s written brief he described undergoing claiming in Australia and said:

108… I was informed that I had passed.  Interestingly that one of the judging panel (a [regional master franchisee] in Queensland) advised me at the time that you can expect your first 10-15 presentations to be a flop and to view them more as a practice session until you get more polished.  I remember thinking how does this tie in with the targeted sales in my cash flows which [Mrs David] had encouraged me to insert into [a] cash flow.

[4]      Mr Walker  objected  to  the  emphasised  passage  as  being  inadmissible hearsay.  He submitted that the judging panel was not an employee or agent of UAR but that he had been provided by the Australian franchisor of UAR as national master franchisee.   It is unclear whether that franchisor is Rushlyn Pty Ltd or Opuswich   Pty   Ltd,   each   of   which   as   proprietor   of   trademarks   contracted concurrently with TFAC to permit it to use certain trademarks, or the sole director of those two companies, Robert Mark James, who appears to be the founder of the James Homes Services business.

[5]      The law permits an admission by one party to a common venture in respect of the subject matter of that venture to be admitted in evidence against the other parties. In R v Hardwicke (1809) 11 East 578, 585 Lord Ellenborough CJ stated:

Evidence of an admission made by one of several defendants in trespass will not, it is true, establish the others to be co-trespassers.   But  if  they be established to be co-trespassers by other competent evidence, the declaration of the one, as to the motives and circumstances of the trespass will be evidence against  all  who are proved to  have  combined together  for  the common object.

[6]      In Tripoti v R (1961) 104 CLR 1 at 7 the High Court of Australia said:

…the basal reason for admitting the evidence of the acts or words of one against the other is that the combination or preconcert to commit the crime is considered as implying an authority to each to act or speak in furtherance of the common purpose on behalf of the others.

[7]      That principle was adopted by the Court of Appeal in R v Tauhore [1996]

2 NZLR 641 where evidence of a conversation between co-offenders in the appellant’s absence, in which the appellant’s role in the robbery was described, was held to be admissible on a charge of being party to a crime of robbery.

[8]      The principle is familiar in relation to co-conspirators: R v Buckton [1985]

2 NZLR 257 (CA) but the principle goes further. As stated in Tauhore at 643 “it is the fact of common design that is critical”.

[9]      Here the training in Australia for which UAR was contractually responsible to TFAC was performed under the auspices of the Australian licensor at the apex of the common venture of expanding the overall business of the James franchise. I am satisfied that the common design test is met.

[10]     The same answer follows from an application of the simple principle qui per alium facit per seipsum facere videtur (Co. Litt. 258A) – He who does an act through another is deemed in law to do it himself (Brooms Legal Maxims 10th ed page 558). It was the obligation of UAR to train Mr Grisdale of TFAC.  That task was deputed by UAR to the head franchisor which set up as part of the training process the judging panel.   The statement by the member of the judging panel was squarely

within the scope of the deputed responsibility as was the provision of guidance such as the advice to which challenge is made.

[11]     The objection fails.

W D Baragwanath J