Chaw v Jenkinson

INTRODUCTION 1 The Applicant, Mr Chi Chaw, seeks leave to appeal a decision of the Federal Circuit of Australia (the Court below) summarily dismissing his application for relief under rule 13.10 of the Federal Circuit Court Rules 2001 (FCC Rules) on the grounds that it was an abuse of process and had no reasonable prospects of success: Chaw v Jenkinson [2016] FCCA 2916. The respondent, Karen Leigh Jenkinson, opposes the grant of leave. 2 The parties filed written submissions. The applicant also relied upon his affidavit dated 24 November 2016 in support of his application while the respondent relied upon the affidavit of Aktuna Oguz, solicitor, affirmed on 19 April 2017. By consent, the application for leave to appeal was determined on the papers. Having considered all of the material, leave to appeal must be refused with costs for the reasons explained below.

RELEVANT PRINCIPLES 3 Leave to appeal from the decision of the Federal Circuit Court is necessary under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) because a decision to dismiss an application summarily is interlocutory in nature: Applicant S1494/2003 v Minister for Immigration and Citizenship [2008] FCA 286; (2008) 166 FCR 474 at [16]-[23] (Reeves J). 4 In deciding whether or not to grant leave to appeal, relevant factors include whether the decision of the Federal Circuit Court: (1) is attended by sufficient doubt to warrant reconsideration; and (2) if the decision is assumed to be wrong, substantial injustice would be suffered by the applicant if leave to appeal were refused. (Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-399.) 5 These considerations are "cumulative" and not satisfied unless both limbs are made out: Rawson Finances Pty Ltd v Commissioner of Taxation [2010] FCAFC 139 at [5] (the Court). 6 In considering the first limb, it must be borne in mind that the power exercised by the Federal Circuit Court in dismissing the application was discretionary. As such, it would be necessary for the applicant to demonstrate that the primary judge made an error of the kind identified in House v R (1936) 55 CLR 499 at 505 in the exercise of discretion, namely, that the primary judge acted upon a wrong principle, was guided by extraneous or irrelevant matters, ignored relevant matters, made a mistake of fact, or that the discretionary decision is unreasonable or plainly unjust. 7 Finally, as I recently stated in Jamal v Secretary, Department of Social Services [2017] FCA 916 with respect to the analogous question of whether to grant an application for an extension of time within which to appeal: 12. As to [the merits of any substantive appeal], it will seldom be in the interests of justice to grant an extension of time where an appeal would have little or no prospects of success, given the additional resources that would impose upon the parties and Court, and impact on other Court users: see by analogy in MZABP v Minister for Immigration and Border Protection [2015] FCA 1391 (MZABP (FCA)) at [62] (Mortimer J) (approved on appeal in MZABP v Minister for Immigration and Border Protection [2016] FCAFC 110 at [38]). In turn, in considering the applicant's prospects of success on an appeal, the Court should not conduct a summary hearing of the appeal but is to "assess the merits in a fairly rough and ready way" (Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 at [9]). In other words, the grounds should be considered on their face and examined at a "reasonably impressionistic level"; the Court should not descend into a fuller consideration of the arguments for and against each ground (see MZABP (FCA) at [62]).

BACKGROUND 8 The background facts were not in issue below or in this Court and can be briefly summarised.

3.1 The initial application for damages in the CTTT 9 In July 2011 the applicant began a cleaning business franchise after payment of a franchise free to Coverall NSW Pty Ltd (Coverall NSW). On 3 September 2012, Mr Chaw obtained a decision in his favour from the Consumer Trader and Tenancy Tribunal (the CTTT) against Coverall NSW for $25,000. The basis for that order was that Coverall NSW had engaged in misleading and deceptive conduct in inducing Mr Chaw to buy into the franchise and pay a franchise fee of $25,000. Mr Chaw alleged that the franchisor had made representations that he would be provided with a sufficient client base to make $5,000 per month. 10 Coverall NSW subsequently went into liquidation and Mr Chaw was unable to recover the amount awarded by the CTTT.

3.2 The Local Court application 11 Mr Chaw commenced proceedings in the Local Court of NSW (the Local Court) against Ms Jenkinson (Proceeding No. 2013/00210881). On 11 October 2013 the amended statement of claim was dismissed under the Uniform Civil Procedure Rule 13.4(1)(b) as it did not clearly set out any apparent cause of action. The reasons for the Local Court so ruling were not in evidence.

3.3 Proceedings in the NSW Civil and Administrative Tribunal 12 Mr Chaw also sought unsuccessfully to recover his franchise fee from Ms Jenkinson, who was a director of Coverall NSW, in the NSW Civil and Administrative Tribunal (NCAT) (Proceeding No. GEN 13/64141). Coverall Services Pty Ltd, which is an unrelated company that had no dealings with Mr Chaw, was also a respondent to that proceeding. On 20 November 2014, the Tribunal at first instance upheld Mr Chaw's claim under s 236 of the Australian Consumer Law (ACL), Schedule 2, Competition and Consumer Act 2010 (Cth), that Ms Jenkinson was a person involved in the misleading and deceptive conduct of Coverall NSW and had thereby contravened s 18 of the ACL. 13 Ms Jenkinson successfully appealed that decision and the Appeal Panel remitted the matter: Jenkinson v Chaw [2015] NSWCATAP 127. Ms Jenkinson was successful on the rehearing and the application was dismissed (No. GEN 13/64141). In dismissing the application on the remittal on 1 February 2016, Member Cohen characterised the applicant's claim relevantly as either: (1) a cause of action brought against Ms Jenkinson as a former director of Coverall NSW arising by reason of Coverall NSW going into liquidation (the Corporations Act Claim); and/or (2) a contravention of s 236 of the ACL in that the respondent was knowingly involved in Coverall NSW's contravention (the ACL Claim). 14 Member Cohen found that the Tribunal lacked jurisdiction to determine the Corporations Act Claim. With respect to the ACL Claim, the Member relevantly found that it was clear from Ms Jenkinson's unchallenged evidence that she had no dealings with Mr Chaw at any time, and knew nothing of the facts and circumstances by which Mr Chaw dealt with an officer of Coverall NSW and came to an agreement to purchase the franchise. 15 Mr Chaw's appeal against Member Cohen's decision was dismissed on 27 July 2016 by the Appeal Panel: Chaw v Jenkinson and Coverall Services Pty Ltd [2016] NSWCATAP 174. The Appeal Panel found that the Tribunal erred in concluding that Mr Chaw's claim was stayed as a result of the liquidation of Coverall NSW and that his claim against Ms Jenkinson had ceased to exist because it had merged in the judgment against Coverall NSW. Nonetheless, the Appeal Panel dismissed the appeal, finding that: 16. However, these areas do not alter the outcome of the appeal. This is because Mr Chaw has not been able to point to any error in the first ground for rejecting his claim in the Tribunal below, namely, that Mr Chaw had not presented any evidence establishing that the Respondents were involved in any contravention by Coverall NSW within the meaning of s 236 of the ACL.

3.4 The decision of the Federal Circuit Court 16 On 17 August 2016, Mr Chaw filed the application against Ms Jenkinson in the Court below. That application was dismissed on 11 November 2016. The primary judge held that the proceedings constituted an abuse of process and failed to disclose a reasonable cause of action. Specifically, the primary judge held that: 2. Insofar as the applicant wished to bring a claim of misleading conduct against the director of a company now in liquidation, Coverall Services Pty Ltd, that is a claim that the applicant has already pursued unsuccessfully before the New South Wales Civil and Administrative Tribunal ("NCAT"). The applicant is not entitled to bring another claim on the same grounds before this Court in respect of the same alleged misleading conduct. To do so is an obvious abuse of process. 3. It appears that the applicant had a cleaning business franchise which failed to achieve the level of business he expected. The applicant obtained in the Consumer Trader & Tenancy Tribunal a judgment against the franchisor, Coverall NSW Pty Ltd, for $20,000. That company then went into liquidation in May 2013. Thereafter the applicant has attempted to pursue the director on the basis of alleged misleading conduct. That application was initially brought in the NSW Local Court, which dismissed the proceedings on 11 October 2013. 4. An application was then brought before the NCAT and the decision of Senior Member Buckley of 26 June 2014 was overruled by the Appeal Panel on 2 July 2015. The matter went back for further hearing on the merits before Tribunal Member Cohen, who adversely determined the matter to the applicant on 1 February 2016. The applicant sought a review of that decision, which the NCAT Appeal Panel dismissed on 27 July 2016. 5. It is clearly vexatious for the applicant to seek to re-agitate the same claim that the applicant has lost before the NCAT in this Court in respect of alleged misleading conduct by the respondent. Neither the application or affidavit evidence filed by the applicant identify any proper basis upon which it could be said that there was misleading conduct by the respondent. 6. Insofar as the application is one in which the applicant seeks to bring some claim under the Corporations Act 2001 (Cth), the applicant has obtained no consent from the liquidator. The proceedings, on their face, are an abuse of process. 17 Mr Chaw has been self-represented in this Court, in the Court below, and in the other proceedings instituted by him in Local Court and NCAT.

SHOULD LEAVE TO APPEAL BE GRANTED 18 The substantive grounds identified in the application for leave to appeal are as follows: 1. The honor judge applied an incorrect principle of law. 2. The honor judge made a finding of fact or facts on an important issue which could not be supported by the evidence. 3. The honor judge did not consider federal court case [Australian Competition and Consumer Commission v South East Melbourne Cleaning Pty Ltd (in liq) (formerly known as Coverall Cleaning Concepts South East Melbourne Pty Ltd) [2015] FCA 25 and Australian Competition and Consumer Commission v South East Melbourne Cleaning Pty Ltd (in liq) (formerly known as Coverall Cleaning Concepts South East Melbourne Pty Ltd) (No 2) [2015] FCA 257.] 4. The honor judge erred that (a) Federal Court Case [2015] FCA 25 [2015] FCA 257 has no reasonable prospect of successfully (b) Federal Court Case [2015] FCA 25 [2015] FCA 257 is frivolous or vexatious; (c) Federal Court Case [2015] FCA 25 [2015] FCA 257 is an abuse of the process of the Court (errors in the original) 19 Applying the principles referred to above, I do not consider that any appeal would have any reasonable prospect of success and that no substantial injustice would be suffered if leave to appeal is refused. Leave to appeal should therefore be refused. 20 First, all of the grounds merely assert, without identifying, any error by the Court below. The grounds are expressed at such a high degree of generality as to be meaningless and therefore insufficient: Nyoni v Chee Koon Hee (No 2) [2014] FCA 83 at [32] (McKerracher J). Nor do the written submissions identify any error of law or fact. Rather, in his submissions, the applicant refers to the "franchise dispute", the failure by Ms Jenkinson to pay him "the right refund $21084", asserts that Ms Jenkinson should know that she breached s 236 of the ACL, and expresses his frustration at the non-payment of the "refund" and the expenditure of costs by him in legal fees, court fees and the like. The applicant also refers to a passage allegedly from an unidentified Full Court decision as to the circumstances in which a director a company may be personally liable under a State Fair Trading Act or under the (repealed) Trade Practices Act 1974 (Cth) without any explanation as to how that demonstrates error on the part of the primary judge. 21 Secondly, I can see no error in the manner in which the primary judge approached the exercise of his discretion in summarily dismissing the application. As the respondent submits, the primary judge appropriately approached the exercise of his discretion with caution and having regard to the principles espoused in Spencer v Commonwealth (2010) 241 CLR 118: reasons below at [9]. 22 Thirdly, the conclusion reached by the primary judge at [5] that Mr Chaw was seeking to re-agitate the same claim that he lost before NCAT is plainly correct. Nor did the applicant challenge the most recent decision of the Appeal Panel by way of judicial review. It is also apparent that neither the application nor the affidavit evidence filed by the applicant below identified any proper basis upon which it could be said that there was misleading conduct by the respondent as opposed to Coverall NSW, as the primary judge held at [5]. In these circumstances, no error is apparent in the primary judge's conclusion that the proceeding was properly characterised as an abuse of process and vexatious. That being so, it was open to the primary judge summarily to dismiss the application on those grounds in the exercise of discretion, quite apart from the question of whether the applicant lacked standing for any Corporations Act Claim because the liquidator had not given his consent. 23 Finally, the decisions referred to by the applicant in ground 4 of his application for leave to appeal concern different parties and have no relevance to the proceeding.

CONCLUSION 24 The application for leave to appeal is dismissed with costs. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry.