Industrial Relations Commission of New South Wales in Court Session CITATION : Gregory John King v Cake It Away Pty Limited [2004] NSWIRComm 377 APPELLANT: Gregory John King FIRST RESPONDENT: Cake It Away Pty Ltd (ACN 056 725 243) SECOND RESPONDENT: Cake It Away Franchising Pty Ltd (ACN 069 752 316) THIRD RESPONDENT: Paul Tartak FOURTH RESPONDENT: Michael Tartak PARTIES : FIFTH RESPONDENT: Tony Tartak SIXTH RESPONDENT: Mary Tartak SEVENTH RESPONDENT: Pauline Tartak EIGHTH RESPONDENT: St George Bank Ltd (ACN 055 513 070) NINTH RESPONDENT: Advance Leasing Limited (ACN 063 369 488) FILE NUMBER: IRC 4374 of 2002 CORAM: Walton J Vice-President; Boland J; Staunton J CATCHWORDS : Notice of Motion of the appellant seeking the re-opening of the appeal proceedings - appellant places emphasis on the provisions of the Trade Practices Act 1974 (Cth) and fresh reliance on the Credit Act 1984 (NSW) principles applicable to re-opening - appellant brings nothing relevantly new to his application such as to establish the limited circumstances that would warrant re-opening of appeal proceedings - no relevance in law to the provisions of the Credit Act having regard to the facts and circumstances of the matter - no factors identified by the appellant as would warrant the re-opening of the case in the interests of justice - appellant's Notice of Motion to re-open the appeal proceedings dismissed - orders made with respect to the first to seventh respondents and the eighth and ninth respondents respectively as to costs. Credit Act 1984 LEGISLATION CITED : Industrial Relations Act 1996 Trade Practices Act 1974 (Cth) Mitchforce v Starkey (No 2) (2003) 130 IR 378 CASES CITED : Vasile Nan v Andreas Van den Berg and ors (2004) NSWIRComm 361 Westfield Holdings v Adams (2001) 114 IR 241 HEARING DATES: 11/23/2004 DATE OF JUDGMENT: 12/09/2004 APPELLANT: Mr Gregory John King in person FIRST TO SEVENTH RESPONDENTS: Mr S A Levitt of counsel SOLICITORS: LEGAL REPRESENTATIVES: Selby Levitt Solicitors and Attorneys EIGHTH AND NINTH RESPONDENTS: Mr J J E Fernon SC SOLICITORS: Watson & Watson JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM : Walton J, Vice President Boland J Staunton J DATE: 9 December 2004 Matter No IRC 4374 of 2002 GREGORY JOHN KING v CAKE IT AWAY PTY LIMITED Application by Gregory John King for leave to appeal and appeal against the decision of Marks J given on 12 July 2002 in Matter No IRC 6142 of 1998 Supplementary judgment re Notice of Motion and Costs JUDGMENT [2004] NSWIRComm 377 1 On 21 November 2003 last, we handed down our judgment in relation to the hearing of the substantive issues in this matter, they being the application for leave to appeal and appeal. In that judgment, we made the following orders and statement: · Leave to appeal is refused with respect to the eighth and ninth respondents; · Leave to appeal is granted with respect to the first to seventh respondents; · The appeal is dismissed. In the event that any party wishes to seek costs in these proceedings in the light of our judgment, they should make an application for the same, in writing, within seven days. If such an application is made, we shall fix a date for hearing any issue as to costs. 2 Following the handing down of our judgment, a number of initiating processes issued. Those are the matters that are the genesis of this judgment. Those initiating processes can be identified as follows: (i) A Notice of Motion filed by the appellant on 20 February 2004 which, amongst other things, seeks to reopen the appeal proceedings. (ii) A Notice of Motion filed on 28 November 2003 on behalf of the first to seventh respondents going to the question of costs in two respects: The first respect is to costs against the appellant save for issues going to the Notice of Contention and, as against the appellant, the costs of the appeal. Secondly, costs were sought as against the eighth and ninth respondents in relation to the Notice of Contention. (iii) An application was made on behalf of the eighth and ninth respondents in submissions filed on 27 November 2003 seeking costs of the appeal against the appellant. 3 Prior to the hearing of these matters, the Court was advised that the application for costs in relation to the Notice of Contention as between the first to seventh respondents and the eighth to ninth respondents was not pressed. As a consequence, the respondent parties sought, by consent, that that issue be dismissed with each party to pay its own costs. 4 Given the issues before us, we propose to deal first with the Notice of Motion of the appellant seeking the re-opening of the appeal proper. Before we do so, we feel it necessary to briefly recap the nub of the substantive appeal proceedings earlier determined by us. On that issue, we refer to our earlier judgment which identified the nature of the proceedings at first instance, the issues raised on appeal and the core of our decision leading to the orders we ultimately made. On those issues, we refer to the following paragraphs of our judgment, as follows: [3] The originating summons for relief filed by the appellant at first instance sought an order declaring a franchise agreement made between the appellant and the second respondent, Cake It Away (Franchising) Pty Ltd, to be declared void or, in the alternative, varying it on the basis that it was unfair within s106 of the Act. The primary contention of the appellant at first instance was based on alleged misrepresentation by certain of the respondents that induced him to enter into the franchise agreement and led to the unfairness that he says arose. [4] The first respondent is the owner of the Cake It Away business system and associated trademarks and the licensor of that system. The second respondent is said to have acquired the right to franchise the Cake It Away business system. The third to seventh respondents are all members of the Tartak family associated with the first and second respondents as directors or other office holders or ultimate beneficial shareholders, save for the fifth respondent who was a consultant to the first and second respondents. [5] The eighth and ninth respondents were joined in the summons on the basis that the eighth respondent ("the Bank") and its leasing arm, the ninth respondent, had financed the appellant to enable him to enter into the franchise agreement. 5 The application for relief against the eighth and ninth respondents was dismissed by Marks J at first instance. In relation to the first to seventh respondents, his Honour determined that, while there was a 'prima facie' misrepresentation relevant to the first to seventh respondents, there were certain factual findings made by his Honour adverse to Mr King that ultimately persuaded his Honour not to exercise the discretion available to him under s106 of the Industrial Relations Act 1996 (the Act). 6 In determining the appeal and considering all of the factual matters referred to, we said relevantly as follows: [63] We consider his Honour erred, firstly by not coming to a firm and concluded view at first instance as to whether or not, on the evidence before him, a misrepresentation did occur and, secondly, by not making a finding in that respect. .... [70] Having had the opportunity at this point to not only consider his Honour's judgment in full but also to review relevant factual matters that were before him, we are of the view that the exercise of the Court's discretion at first instance did not ultimately miscarry. Hence, we consider that whilst error has been demonstrated as to his Honour's approach to the finding of unfairness with respect to the first to seventh respondents, there was no relevant error in his Honour's concluding, in the exercise of his discretion, to dismiss the application. 7 It should also be said that at [57] of our judgment, we indicated that: There was nothing to which we were taken in the hearing before us that, in our view, would enliven any appellate intervention concerning the findings made by Marks J in relation to the conduct of the eighth and ninth respondents. His Honour's consideration of the evidence on behalf of the Bank and its leasing arm and the conclusions that he reached on that evidence were factual conclusions properly open to him and nothing that we were taken to in the proceedings before us invites a contrary conclusion. 8 Against that background, the appellant's Notice of Motion requires to be considered. As in the prior appeal proceedings, the appellant appeared in person. 9 The Notice of Motion seeks orders in the following terms: [1] The judgment dated 21 November 2003 be re-opened and made to be consistent with Australian and New South Wales law. [2] The first to ninth respondents be made jointly and severally liable for the misrepresentations made in respect of the turnover, the profitability of Cake It Away franchises. [3] The appellant be compensated to the full extent of the losses made as a consequence of the misrepresentations. 10 It is clear in the written and oral submissions made by the appellant that he is unhappy with the appeal decision made and wishes to re-litigate it before us. This time he wishes to do so with different emphasis on the provisions of the Trade Practices Act 1974 (Cth) and fresh reliance on the Credit Act 1984 (NSW). In short, the appellant claims that in relation to the Trade Practices Act and in particular, he says, having regard to the provisions of ss82 and 87 of that Act - '...it says that a person who suffers loss or damage by the conduct of another person that was done in contravention of a provision of Part 45, may recover the amount of loss or damage from that other person or any other person involved in the contravention. That is simply saying I can take action to recover my losses. Then Clause 87, which is the discretionary clause says there cannot actually be a discretion as far as the application. In effect, a judge does not have the discretionary right to limit the responsibility of the offending party.' and further: 'I am saying, in a sense, it (the Trade Practices Act ) is binding in that the Commission is not really entitled to contravene the Trade Practices Act . Not that you have to consider as though I am bringing a case under the Trade Practices Act , but rather it is an authority or, it is an overriding factor. Really, the Commission has to do what is in the best interest of the public and I would contend it is not in the best interest of the public to have two laws which oppose each other. Where there is opposition, the important thing is to reconcile what may appear to be different.' 11 The appellant's submission in relation to his reliance on the Credit Act 1984 (NSW) as the basis for re-opening may be summarised by his reliance on an extract drawn from the text Law of Contract in Australia: Allan D. E. and Hiscock M. E. at p269 as follows: The Act provides that, where a buyer who has entered into a 'tied loan contract' or a 'tied continuing credit contract' with a 'linked credit provider' of a 'supplier' claims damages for misrepresentation or breach of contract or recovery of a sum of money on a total failure of consideration, the supplier and linked credit provider are jointly and severally liable to the buyer. 12 Reliance on the above extract by the appellant is relevant insofar as his submissions pressed a finding as against the eighth and ninth respondents on a joint and several basis with the first to seventh respondents. 13 At the conclusion of the appellant's submissions, we indicated to both respondents that we did not wish to hear from them as to the appellant's Notice of Motion to re-open and wished only to be addressed in relation to the respective applications for costs. 14 Before setting out our reasons for refusing the appellant's Notice of Motion to re-open the appeal proceedings, we propose to refer briefly to the principles applicable to re-opening a case. Those principles were recently reviewed in the decision of the Full Bench of the Court in Vasile Nan v Andreas Van den Berg and ors [2004] NSWIRComm 361 and particularly at [29] and following. In concurring with those principles as expressed, we refer particularly to the following paragraphs as relevant to our considerations here: [29] The law and applicable principles related to a court's power to re-open a case becomes a matter at issue before us. There is no inherent power in a court (including the Supreme Court of NSW) to deal with a further matter or appeal which has already been dismissed by formal order and where the order was entered before an application to vary it was made. In Bailey v Marinoff (1971) 125 CLR 529, Barwick CJ stated at (530): Once an order disposing of a proceeding has been perfected by being drawn up as the record of the Court, that proceeding, apart from any specific and relevant statutory provision, is at an end in that the Court and is in its substance, in my opinion, beyond recall by that Court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a Court to have a power to reinstate a proceeding of which it has finally disposed. [30] The principles referred to in Bailey were later considered by the High Court in FAI General Insurance Co Ltd v Southern Cross Exploration NL (1987-1988) 165 CLR 268. In that case the court was dealing with rules of the court and seemed to confine the decision in Bailey to the inherent jurisdiction of the court, and in some of the judgments restricted it to judgments of the Court of Appeal. However, Gaudron J noted that the statements of Barwick CJ and other members of the Court were in broad and general terms of principle. In the absence of a specific statutory provision or rule permitting the re-opening of the case, the court is usually regarded as functus officio and the matter is incapable of being revived. [31] In Wentworth v Wentworth [1999] NSWSC 638, Santow J dealt with the issue of re-opening a judgment that had been entered and considered both the principle of re-opening and what constituted a judgment which had been entered. In relation to these matters his Honour stated: 3. The jurisdiction to re-open is, as I explain, an exceptional jurisdiction. It is to be exercised only where warranted. Otherwise, public policy in favour of finality of litigation will be jeopardised. The question here is whether its invocation is indeed justified. It is clearly important that Courts in the interests of justice do not fail to recognise when those exceptional circumstances are made out. No less important is that unjustified applications are discouraged. ... 15. The discretion to re-open or vary judgment is thus significantly qualified. As is so often said, the power should 'be exercised with great caution'; Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684 ... [32] Santow J went on to consider cases where the power to re-open had been exercised and where it had been refused as giving a guide to the circumstances in which re-opening will be available. His Honour noted that in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 30, the discretion was not exercised because the parties had been sufficiently heard on the impugned issue. The judgment in Autodesk Inc applies the principle of functus officio yet admits of a discretion to re-open in very limited circumstances. In Fairfax Publications Pty Ltd v Abernathy [1999] NSWSC 820, Adams J stated: It is the essence of the notion of 'functus officio' that the relevant function or office has been discharged or performed 'the purpose for which its creation has been fulfilled' (Leung v Minister for Immigration (1997) 79 FCR 400 per Finkelstein J at 410; Jayasinghe v Minister for Immigration and Ethnic Affairs and anor, unreported, Federal Court of Australia, Goldberg J, 25 June 1997; Winters v Cross (1976) 1 NSWLR 616 per Samuels AJ at 624). [33] In Metwally v University of Wollongong (1985) 60 ALR 68, application was made to the High Court to vary an earlier order made by the Court and hear further argument. In this application the Court stated (at 70-71): It may be assumed, without deciding, that the Court had power to vacate its order of 22 November 1994, notwithstanding that it has been perfected. If such power exists, it must be exercised with great caution, after weighing what might otherwise be irremediable injustice against the public interest in maintaining the finality of litigation: see State Rail Authority of New South Wales v Codelfa Construction Pty Ltd (1982) 42 IELR 289; 150 CLR 29 at 38. The present is not a case in which an order was made by mistake or as a result of fraud, or a case in which by some accident an order had been made against a party who was not heard. Mr Metwally was represented - and competently represented - in the argument before this Court ... . It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so. [34] The power to re-open, if it exists in a case where judgment is perfected, must be exercised with great caution. The jurisdiction should only be exercised when exceptional circumstances are made out. The authorities refer to a circumstance such as fraud, mistake or a party to the litigation not being heard as a circumstance which may be considered so exceptional as to attract a decision to re-open a perfected order of the court. A policy of finality of litigation underpins our system of law. 15 Having regard to the above principles and those matters raised by the appellant as the basis for re-opening, there is nothing, in our view, that warrants a re-opening of our decision. There is certainly no circumstance such as fraud or mistake or that the appellant was not fully heard in the appeal proceedings before us that would warrant a re-opening. 16 We acknowledge that at all times, from first instance to the present, the appellant has represented himself. We acknowledge that that task has required the appellant to acquaint himself with the legal principles relevant to the conduct of the litigation that he has undertaken. Certainly, the appellant has vigorously pursued his grievance at first instance and on appeal. He has been fully and liberally heard on all of those matters that he has seen fit to place before the Court including, in the appeal proceedings before us, his reliance on the provisions of the Trade Practices Act. In the appeal proceedings, the appellant was heard as to the implications of the Trade Practices Act. He now wishes to argue, if the matter is re-opened, that that Act mandates that he be granted the relief sought by him (although he acknowledges that this case is not brought under the Trade Practices Act). On that point, quite apart from jurisdictional issues relevant to direct reliance on the Trade Practices Act in proceedings before this Court, it is clear that the appellant misunderstands or chooses to ignore the exercise of judicial discretion fundamentally inherent in the exercise of a grant of relief under s106 of the Act (see Westfield Holdings v Adams (2001) 114 IR 241 at [103]-[130] and [161]). The appellant brings nothing relevantly new to his application such as to establish the limited circumstances that would warrant re-opening. 17 Further, the appellant now seeks to draw comfort from the provisions of the Credit Act 1984 concerning his desire to have the eighth and ninth respondents made jointly and severally liable. It must be emphasised that at first instance and on appeal, no adverse finding was made as against the eighth and ninth respondents. There was, in our view, no relevant misrepresentation by them. That the matter is raised again within the context of the provisions of the Credit Act 1984 is simply a decision on the part of the appellant to re-agitate his grievance against the eighth and ninth respondents. In any event, we see no relevance in law to the provisions of the Credit Act having regard to the facts and circumstances of this matter. 18 Further, there has been not a factor identified by the appellant as would warrant the re-opening of the case in the interests of justice (see Mitchforce v Starkey (No 2) (2003) 130 IR 378 at [13] and [14]). 19 The appellant's Notice of Motion is dismissed. 20 On the question of costs, we have two applications to consider. Before we turn to them, it is necessary, in our view, to note the order made by Marks J at first instance on the question of costs. That order was Order 3 as part of his Honour's judgment delivered on 12 July 2002 in the following terms: · The costs of the eighth and ninth respondents as against the applicant and as against the first to seventh respondents are reserved. 21 In a judgment on costs delivered on 3 January 2003, Marks J dealt with the issue of costs as against the appellant in relation to the first to seventh respondents. In considering that matter, his Honour concluded as follows: Accordingly, I order that the applicant pay the costs of the first to seventh respondents of the proceedings to be assessed in default of agreement. I note the undertaking of the first to seventh respondents given through their solicitor that they would not seek to pursue the payment of costs whilst the applicant's proceedings have not been finalised. 22 Given the outcome of the appeal proceedings going against the appellant, the first to seventh respondents now seek an order for costs against the appellant for the 'whole of the appeal'. 23 In relation to the eighth and ninth respondents, they seek an order for costs against the appellant in relation to the whole of the appeal in that the appellant was wholly unsuccessful against the eighth and ninth respondents. 24 In relation to the application for costs sought by both sets of respondents, there is one common feature. That is, as we understand it, costs in relation to the 'whole of the appeal' includes the costs going to the Notice of Contention. That Notice of Contention had been filed by the eighth and ninth respondents as against the first to seventh respondents at first instance. Given the findings made by his Honour at first instance, he did not need to consider the Notice of Contention and it was not a matter that ultimately required our attention on appeal. 25 Any costs as between the two sets of respondents relevant to the Notice of Contention has been resolved between them in the terms as already indicated in this judgment. The question arises as to whether, in the exercise of our discretion on the question of the costs, we should, in making any orders against the appellant for the 'whole of the appeal' include in that the costs of the Notice of Contention. We are not inclined to do so. The Notice of Contention was never a matter that his Honour at first instance was required to determine. It was a matter, strictly speaking, as between the two sets of respondents notwithstanding, it was submitted, that it was precipitated by the actions of the appellant at first instance in joining the eighth and ninth respondents. In all the circumstances, we believe that in the proper exercise of our discretion, the costs in respect of the Notice of Contention should not form part of any costs order we ultimately make against the appellant. In other words, it is our view that the outcome as to the costs of the Notice of Contention incurred by the first to seventh respondents as well as the eighth and ninth respondents in relation to the appeal should be that each party pay its own costs in that matter. 26 We now turn to the costs of the appeal proper separated from the Notice of Contention. We accept the general rule that costs should follow the event. There is, of course, a discretion inherent in our power to award costs. Nevertheless, in relation to the eighth and ninth respondents, we know of no reason to preclude us in adopting that general rule. The eighth and ninth respondents were wholly successful on appeal. Accordingly, we propose to order that the appellant pay the costs of the eighth and ninth respondents in relation to the costs of the appeal, excluding costs involved with respect to the Notice of Contention. 27 In relation to the first to seventh respondents, we also take the view that the appellant should not pay any costs incurred by the first to seventh respondents in relation to the Notice of Contention. In relation to the remaining costs of the appeal, we are mindful that in the decision we reached, Mr King was successful in one aspect of his appeal, at least as to the issue on appeal. In our view, that fact is relevant in our decision as to whether that should result in the first to seventh respondents receiving costs at all or the whole of its costs in the circumstances. In our view, there should be a significant discount for that fact. Secondly, in presenting its submissions on appeal, the Court was put to considerable additional time at the behest of the first to seventh respondents, in that it was necessary for the matter to be adjourned early on the first day on which this matter was listed in order to assist the legal representatives of the first to seventh respondents in garnering those matters that they wished to ventilate in this appeal. That fact in itself should further reduce the costs that the first to seventh respondents are entitled to recover. 28 We are of the view that the fair exercise of our discretion on the question of costs in relation to the first to seventh respondents is that the appellant should pay forty per cent of the costs of the first to seventh respondents in relation to the appeal, excluding the whole of the costs in relation to the Notice of Contention. 29 Having regard to the matters determined, we order as follows: 1. The Notice of Motion to re-open is dismissed. 2. The appellant is to pay the costs of the appeal of the eighth and ninth respondents but excluding those costs going to the Notice of Contention. 3. The appellant is to pay forty per cent of the costs of the first to seventh respondents in relation to the appeal but excluding those costs going to the Notice of Contention. 4. The appellant is to pay the costs of the current proceedings giving rise to this judgment of the first to seventh respondents and the eighth and ninth respondents respectively. 5. The application for costs as between the first to seventh respondents and the eighth and ninth respondents in relation to the Notice of Contention is, by consent, dismissed with each party to pay its own costs. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.