FEDERAL COURT OF AUSTRALIA FWR Enterprises Pty Limited v Hawkins [2005] FCA 579 FWR ENTERPRISES PTY LIMITED v GEOFF HAWKINS AND ORS NSD 317 of 2005 ALLSOP J 9 MAY 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 317 of 2005 BETWEEN: FWR ENTERPRISES PTY LIMITED APPLICANT AND: GEOFF HAWKINS FIRST RESPONDENT CAROL HEALEY SECOND RESPONDENT MOSSY ENTERPRISES PTY LTD THIRD RESPONDENT JUDGE: ALLSOP J DATE OF ORDER: 6 MAY 2005 WHERE MADE: SYDNEY THE COURT ORDER THAT: 1. Leave be granted to the applicant to serve a notice to produce no later than 4 pm on Monday, 9 May 2005 to be returnable on Friday, 13 May before a Registrar for the production to the Court of such documents as have been kept in relation to the accounting as dealt with by the order of 4 March, though the terms of the order for production may be drafted in such terms as the applicant is so advised. 2. The notice of motion filed on 4 May 2005 is adjourned to Tuesday, 17 May before the docket judge Tamberlin J. 3. The applicant pay the first and second respondents' costs of today. 4. On or before Wednesday, 11 May 2005, the first and second respondents file and serve all affidavits in answer to the affidavit of Mr Durman. 5. On or before 10 am, Monday, 16 May 2005, the applicant file and serve any affidavits in reply. 6. Subject to any order of the docket judge may wish to make to the contrary, no party issue or serve a notice to produce without the prior leave of the docket judge. 7. THE COURT DIRECTS the parties to bring order 6 to the attention of the docket judge at the earliest opportunity. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 317 of 2005 BETWEEN: FWR ENTERPRISES PTY LIMITED APPLICANT AND: GEOFF HAWKINS FIRST RESPONDENT CAROL HEALEY SECOND RESPONDENT MOSSY ENTERPRISES PTY LTD THIRD RESPONDENT JUDGE: ALLSOP J DATE: 6 MAY 2005 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In this matter, which is in Tamberlin J's docket, the applicant filed on 4 May in the Registry a notice of motion together with an affidavit in support seeking interlocutory relief. Some background to that event of that filing needs to be given. 2 This matter commenced by way of application early this year in the first week of March, in which an application was filed supported by various affidavits and interlocutory relief was sought. Short service was given and the matter came before Stone J as duty judge on 4 March 2005. 3 The case involves a dispute between the parties as to the rights of the first and second respondents concerning their ability or otherwise to carry on business in an area around the central coast of New South Wales. That business is a dog washing and grooming service, which proceeds under the name, "Hydrodog". The applicant has been referred today as the master franchisor. It took over the head franchise from previous parties. Those previous parties had granted a franchise to the first and second respondents. 4 The debate in this Court is as to whether there has been a breach of the relevant franchise arrangements now in existence between the applicant and the first and second respondents. The applicant says that the first and second respondents only had that entitlement pursuant to the written documentation to undertake the franchise in a given area. I will refer to that as the written agreement area. 5 It is common ground that the first and second respondents had been operating not only within the written agreement area but outside that area, in an area to which I will refer to as the "oral agreement area". I refer to it as the "oral agreement area" because the first and second respondents say that the antecedent parties, who were the franchisors before the applicant, under an oral agreement permitted the first and second respondents to trade in that wider "oral agreement area" using the name, "Hydrodog". 6 The applicant itself has not entered into a separate agreement in writing with the first and second respondents, but has by conversation and conduct acceded, it is said, to the entitlements of the antecedent franchisors against the first and second respondents. In support of its claim that the first and second respondents did not have any entitlement to trade outside the written agreement area using the "Hydrodog" name, the applicant points to the terms of the previous written agreement and the entire agreement clause within that written agreement thereby, no doubt, seeking to assert the proposition that such oral arrangements as are said to have been made outside the written agreement cannot be proved or are inadmissible by reason of the parol evidence rule, as inconsistent with writing of the parties. 7 As is plain from a number of cases, and for the assistance of the parties I refer to my judgment in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 , the question of whether or not the contract was intended to be embodied in one piece of writing or whether there were, in fact, two contracts in a question antecedent to the application of the parol evidence rule. Difficult questions may arise and do arise where equitable or other estoppels are raised in answer to the terms of an agreement with an entire agreement clause. However, in this case it appears that there has been no pleading of an estoppel, equitable or otherwise, in an answer to the claim based on the written agreement with the entire agreement clause. These kinds of issues, one would have thought, were ripe for tolerably early determination of the hearing and the resolution in a sensible and reasonable way of the interim position to be held pursuant to orders or agreements or undertakings. 8 That is, in fact, what occurred on 4 March 2005 when before Stone J, the matter was compromised in an interlocutory sense by the giving of undertakings and the terms recorded in the short minutes of order that resolved the matter on that date. Attached to those orders were maps which illuminated and made clear the arrangements for the resolution of the position on an interim basis. 9 The substance if not the detail of that arrangement was that the first and second respondents agreed that they would not, without admission, trade using the word, "Hydrodog", outside the written agreement area. Within the written agreement area, in effect, there was no undertaking to cease trading in that regard but that matter would be resolved in due course on the final resolution of the hearing. Thus, the first and second respondents left to the undertakings as to damages the question of such damages they might be able to prove by not being able to trade outside the written agreement area should the applicant ultimately fail in its claim against the first and second respondents. 10 Another aspect of the resolution of the interlocutory proceeding was that accounts would be kept by the first and second respondent in respect of all their trading carried on thereafter. There was also a provision embodied within the orders and undertakings which help resolve the matter, which required some handover between the parties of customers if it became evident that the applicant had been able to create or grant to third parties franchises in the area outside the written agreement area. It is not said that that has been breached but it is said that there is or has been difficulty in compliance and a certain lack of co-operation on the part of the first and second respondents in the working out of that aspect of the orders of 4 March 2005. Thus, part of the orders sought in the notice of motion deal with that issue. 11 The notice of motion, however, seeks further wider relief. It is, in effect, a second bite at the interlocutory relief prior to hearing. The substance of it and the most important aspect of it is that, in effect, it seeks interlocutory orders under the resolution of this matter which would prevent the first and second respondents carrying on or conducting any business under the name, "Hydrodog", or the name, "Hydrodog" (Umina) or any similar name anywhere in a certain area bounded by the East Coast of New South Wales, westward from Patonga in the south along the Hawkesbury River to the Yango National Park, thence westward to Dunedoo, thence westward to a point midway between Gilgandra and Dubbo, and thereafter there are further geographical identifications of the area. 12 From the material before me, and from what has been said by counsel before me, I take it that this is, in effect, an application to extend the interlocutory relief to restrain the first and second respondents, using the name "Hydrodog" in this business in not only the written agreement area but outside that area. This was a relief which was not sought originally and not the subject of the orders on 4 March. Also it is sought that the first and second respondents provide security for any damages that the applicant may be able to recover at the final hearing. 13 The second order to the notice of motion seeks a release by the applicant from its undertaking given in paragraph 4 of the orders on 4 March in effect to continue to provide references to persons to the first and second respondent for the written agreement area, that is, an interim continuation of the one important aspect of the operation of the original agreement. 14 The fourth order seeks an order that affidavits be served exhibiting the accounts which have been recorded pursuant to paragraphs 2 and 3 of the undertaking provided to the Court on 4 March. No provision for that affidavit substantiation of the accounting was provided for in the orders of 4 March. 15 The fifth order is that the first and second respondents permit the applicant to conduct an audit of the first and second respondents' business. This is supported as, in effect, the kind of order or entitlement that would have existed under the original agreement which the first and second respondents say is still on foot, but which the applicant says has terminated, thus it is said that if the interlocutory regime is to go forward, the applicant should have the right to audit the affairs of the first and second respondent as if the original agreement was on foot. 16 That is a brief and perhaps, at times, imprecise exposition of what is sought by way of a notice of motion. I am not the docket judge. Tamberlin J is. He has not been able to deal with the matter today because of commitments. The notice of motion and affidavit were filed on 4 May. Mr Smallbone, counsel appearing for the applicant, says that he or his solicitor attempted for some time to get a hearing date or a return date for this notice of motion and it was very difficult getting one from the Court. 17 Eventually, he apparently got a return date from the associate to Gyles J for 9.30 am this morning, 6 May. Thereupon the Registry accepted for filing the notice of motion with that return date. The Registry and perhaps the associate to his Honour might have been forgiven for thinking that the respondents were aware that the notice of motion and supporting affidavit was being sought to be filed, the Registry may have assumed that Tamberlin J, or some other Judge had given an abridgment of time. No such abridgment had been given; none had been sought. 18 Gyles J's associate might have been forgiven for thinking, as she would be entitled to think, that communications with Judge's chambers from one of the parties was being conducted with the knowledge of the other party. Unfortunately, if she had that view, she would have been mistaken also. These communications were being made to obtain a return date for a notice of motion in the absence of the knowledge of the other party to the litigation. No application was made to the duty judge for an abridgment of time for service on the basis of it being urgent, unsurprisingly, one would have thought, because it is not urgent. 19 Upon obtaining a return date of 6 May 2005, the applicant then served on the solicitor for the first and second respondents, being a sole practitioner, on the afternoon of Wednesday, 4 May 2005, the motion and the affidavit. A volume of exhibits to the same affidavit was then served or provided on the morning of Thursday, 5 May 2005. The allegations in the affidavit are made not only by reference to the contents of the affidavit, but by reference to the contents of the primary evidence filed in the proceedings. 20 The affidavit in support of the notice of motion is some 16 pages in length with a number of annexures and with the body of exhibits. It sets out a number of complaints about the conduct of the first and second respondents since not only 4 March but beforehand. It deals with the underlying issues and with complaints about the conduct of the business and the difficulties that the first and second respondents have caused allegedly since 4 March. It plainly, if it is to be used in any application, is an affidavit of a kind, which the first and second respondents are entitled to have a reasonable period of time to respond to, unless the circumstances and exigencies of the case are such that it is clearly pressing that the matter must proceed without that reasonable time. 21 I have looked at some of the correspondence that has passed between the parties and it is regrettable in some respects. I do not wish to say any more, however, the practitioners should understand that if their responsibility involves keeping costs to a minimum by not engaging in correspondence which is in other than civilised and restrained terms. I should add also that the matter listed for mediation on Monday, 16 May 2005. The matter is also listed for hearing before the docket judge on 17 May to deal with the first and second respondents' application for security for costs. 22 One final background matter in the conduct of the proceedings, which should be understood, is that the applicant has filed all the evidence it wishes to for the hearing of the matter on a final basis. The previous timetables required the first and second respondents to file their evidence by Friday, 29 April 2005. That was not done and the first and second respondents were in breach. The matter was before the docket judge this morning and an extension of that timetable was granted. There is no material that has been propounded before me today which leads me to conclude that the first and second respondents have had adequate time to meet the matters in the affidavit of Mr Durman. That, I think, should have been plain to those conducting the proceeding. 23 When the matter was called on before me today, Mr Faulkner, counsel appearing on behalf of the first and second respondents, sought an adjournment of the motion. That was opposed and when it was plain that there had not been an abridgment of time for the filing and service of a notice of motion, such an abridgment of time was sought nunc pro tunc and it was sought to proceed with the motion. 24 I think it would be unfair on the first and second respondents to proceed on the motion in circumstances where they were not served with the material until Wednesday afternoon and Thursday morning. If the applicant was genuinely interested in the urgent hearing of this matter as soon as possible one way of dealing with the matter, in particular if it was apparently difficult to obtain a hearing date from either the Registry or the docket judge's associate, was to ensure that the first and second respondents had maximum time to deal with the motion and the affidavit. They could have been served before a date was obtained giving the first and second respondents clear notice that these orders were being sought on the basis of this evidence and as soon as a date was obtained the applicant would seek from the docket judge or the duty Judge orders on the return of the notice of motion. That sensible course was not adopted, with the consequence that the first and second respondents were given one working day, in effect, to prepare a notice of motion in circumstances where there was no basis for an abridgment of time. 25 My view, looking at the material, is that the first and second respondents should have a reasonable time to deal with the motion. Three matters in particular were put by Mr Smallbone on behalf of the applicant as to why there should be no adjournment. First, he said a party seeking an adjournment would ordinarily offer to behave itself in the meantime. That is partly a matter involved in the dispute in the evidence to which the first and second respondents have not had an adequate opportunity to meet. He says that correspondence indicates a truculent approach. That may be regrettable and it is something which should not occur. However, I do not see that it is an answer to the first and second respondents not having had an adequate opportunity to deal with the preparation of this notice of motion. 26 Secondly, he said, that the evidence which one would expect to be read for a triable issue would have been filed by now. No explanation is before the Court and the Court is entitled to an explanation. This, I presume, was dealt with by the docket judge this morning and it may be that the first and second respondents should have filed its evidence by now but I am not going to entertain debates which properly should be ventilated before the docket judge and no doubt were this morning as to the timetabling of this matter. 27 Thirdly, it is said that if I propose to adjourn I should not adjourn paragraphs four and five of the notice of motion dealing with the records of account and an entitlement to an audit. Both those matters may be matters for which interlocutory relief the first and second respondents should submit to. However there is no ground, in my view, for these matters being dealt with on an urgent basis today rather than together with the whole of the notice of motion being heard at a time when the first and second respondents have an opportunity to be heard and prepare for it. I am not convinced on the material that I have seen, that the first and second respondents would not be prejudiced in dealing with those interlocutory matters if they do not have an opportunity to deal with the affidavit in due course. 28 Thus, none of the matters put to me by Mr Smallbone is a matter which persuades me that there should be any abridgment of time in order for the filing and service of the application and affidavit. As I said earlier the matter is being mediated in the week after next. It is before Tamberlin J on 17 May 2005 in relation to a security for costs application. This notice of motion can be listed before his Honour on that day subject to his Honour's convenience. 29 It should also be noted that it is said that the applicant requires some of the documents covered by paragraphs four and five for the applications on 17 May. There is no reason why the applicant cannot give a notice to produce to the first and second respondents for such documents as they have hitherto maintained in pursuance of the relevant undertakings or orders made on 4 March. To the extent that those documents may be needed before 17 May I grant leave to the applicant to serve a notice to produce no later than 4 pm on Monday, 9 May to be returnable on Friday, 13 May before a Registrar for the production, that is the production to the Court, of such documents as have been kept in relation to the accounting as dealt with by the order of 4 March, though the terms of the order for production may be drafted in such terms as the applicant is so advised. 30 The notice of motion filed on 4 May 2005 is adjourned to Tuesday, 17 May before the docket judge, Tamberlin J. 31 As to costs of today I considered in reading some of the material that I should let Tamberlin J deal with the costs of today, however I think that would be unfair on the first and second respondents. I want to say the following matters in relation to costs. The operation of the docket system requires the sensible and reasonable cooperation and conduct of parties, their solicitors and counsel. It has led, in my experience, to far too many occasions where parties ignore, or are ignorant of the rules and simply use the telephone to contact judges' associates to obtain matters for which they need judicial leave. This is usually based on overlooking the fact, for instance here, that leave or abridgment of time was required. 32 The docket system allows the parties to contact judges' associates. That should always, except in exceptional circumstances of urgent need be with the knowledge of the other side to the litigation. The Court cannot countenance parties having private access to judges' chambers without the knowledge of the other side. It is, one would have thought, a fundamental and basic matter that all solicitors and barristers would understand. However, it is very often more observed in the breach than in its observance. 33 One of the matters raised before me this morning was that it seemed that because Gyles J's associate had given this morning's date that made it unnecessary somehow to seek an abridgment of time. The matter has to be only stated to be understood to be rejected and as I said earlier, Gyles J's associate could be forgiven for believing that the other party to the litigation was being and had been apprised of what was happening. 34 This matter should plainly have been adjourned today when it became apparent that the first and second respondents wished for an adjournment having only been given one working days' notice of the hearing of the motion today. If an adjournment had been consented to, it may well have been able to be sorted out some time next week. However, given we have now spent over an hour and a half on this matter, I think the most appropriate course is that which I have identified, in particular, since I see no basis for any urgency other than bringing the matter on on 17 March. 35 Notwithstanding my initial views, the applicant should pay the first and second respondents' costs of today and I so order. 36 I set aside the notice to produce sought to be filed in court today and with due respect to the docket judge and subject to any order his Honour may wish to make to the contrary, I order that no party issue or serve a notice to produce without the prior leave of the docket judge. I direct the parties to bring this order to the attention of the docket judge at the earliest opportunity. 37 I order that the first and second respondents file and serve all affidavits in answer to the affidavit of Mr Durman on or before Wednesday, 11 May 2005 and I order that the applicant file and serve any affidavits in reply on or before 10 am, Monday, 16 May 2005. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. Associate: Dated: 18 May 2005 Counsel for the Applicant: Mr D A Smallbone Solicitor for the Applicant: Central Coast Business Lawyers Counsel for the Respondent: Mr T M Faulkner Solicitor for the Respondent: David Roe Date of Hearing: 6 May 2005 Date of Judgment: 6 May 2005