FEDERAL COURT OF AUSTRALIA

Craven v Ready Flowers Pty Ltd [2013] FCA 1308

THE COURT ORDERS THAT:

1.    The interlocutory application filed by the applicant on 11 December 2012 is dismissed.

2.    The applicant is ordered to pay the costs of the first respondent of and incidental to the application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Background and introduction

1    These proceedings are concerned with an application by Mr Gordon Craven, the applicant in the principal proceeding before the Federal Magistrates Court of Australia, for leave to appeal from an interlocutory judgment of that Court on a separate question determined at the outset of the trial.

2    Although the Federal Magistrates Court of Australia is now the Federal Circuit Court of Australia, I will continue to describe the judgment, the subject of this application, as a judgment of the former Court (as it is) and, more particularly, as I make references to the primary judge, I will continue to make references to Federal Magistrate Jarrett.

3    The trial proceeded to a concluded hearing (with judgment reserved) having regard to the matters remaining in issue confined as they were by the interlocutory determination of the separate question.

4    Mr Craven is a self-represented applicant and I propose therefore to address in more detail than usual the procedural background and the foundation contentions Mr Craven made in the principal proceeding by force of the further Amended (fresh) Statement of Claim filed on 20 April 2012 and the contentions he made by his reply to the defence of the respondents in which he asserts an estoppel. I will also address in more detail than usual some aspects of the evidence on the estoppel points in respect of which Mr Craven says Federal Magistrate Jarrett fell into appellable error.

5    The procedural background to the present application is this.

6    By his written submissions, Mr Craven says that on 30 January 2009 he wrote a letter of demand to the solicitors for an entity called Ready Flowers Pty Ltd (“RFPL”) giving notice of his intention to take legal action against that company. Mr Craven says that on 13 February 2009, he wrote another such letter and requested information concerning another entity he identified called Ready Flowers Limited (“RFL”). Mr Craven says that on 24 February 2009, he wrote another such letter “requesting urgent information regarding [RFL]” and again giving notice of his intention to take legal action against RFPL (see, para 1 of Mr Craven’s written submissions).

7    Mr Craven says that he received no reply to his letters. He then commenced proceedings on either 10 March or 11 March 2009 in the Federal Magistrates Court “regarding the Ready Flowers business” which he “assumed to be owned and operated by [RFPL]” [emphasis added] (see para 1.1 of Mr Craven’s written submissions). Mr Craven also says that on 31 March 2009 after filing his proceeding he “became aware that [RFPL] was relocating the headquarters of its Ready Flowers Online Business to Hong Kong” [original emphasis] (see para 2 of Mr Craven’s written submissions). Mr Craven also says at para 2 of his submissions that he “assumed [RFPL] was utilising a Hong Kong company by the name of [RFL] as a vehicle or conduit” [emphasis added] for the relocation purpose described above.

8    In the Federal Magistrates Court proceedings, Mr Craven contended that he was a consumer. He contended that RFPL had engaged in conduct in contravention of the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1989 (Qld). By his later amended pleading he also contended that RFPL (and both respondents) had engaged in conduct in contravention of the Competition and Consumer Act 2010 (Cth). The contravening conduct on the part of RFPL was said to be the making of representations to consumers from 2006 to at least the date of the filing of the pleading in the principal action (and continuing thereafter) concerning the conduct and operation by RFPL of an internet retailing business for the online sale of flowers to consumers.

9    The second respondent to the principal proceeding is Mr Gary Owen.

10    Mr Craven contended against him that he had made false and misleading statements on a number of websites.

11    On 29 May 2009, Federal Magistrate Jarrett heard an application filed by the respondents seeking the striking out of Mr Craven’s Amended Statement of Claim filed on 14 May 2009, in its entirety. Having reserved that matter, Federal Magistrate Jarrett made orders on 23 February 2012 striking out Mr Craven’s pleading and gave leave to Mr Craven to file and serve another pleading. Mr Craven filed a document described as the “Fresh Amended Statement of Claim” on 20 April 2012.

12    On 3 May 2012, directions orders were made requiring the respondents to file a defence by 24 May 2012. Dates were also allocated for a trial of the action of not more than nine days commencing on 24 September 2012.

13    By the defence filed on 24 May 2012, the respondents contended that Mr Craven’s assumptions concerning the operation of the online internet business were misplaced because from 1 February 2009 the Ready Flowers internet business had been sold, and the business, from that date, had been operated by RFL, not RFPL.

14    These factual contentions were pleaded at paras 4(c), 4(e), 7(c) and 7(d) of the defence.

15    Mr Craven filed a reply to the defence on 6 June 2012 and contended that RFPL was not entitled as a matter of fact and law to deny the making of the contended representations asserted against it, on the footing that RFPL was estopped from departing from a position consistent with an assumption it had allowed to develop in the minds of reasonable consumers, by its conduct, that the internet business was at all relevant times an “Australian business”, and Mr Craven had relied upon the assumption so engendered by RFPL to his detriment, as had other consumers. Mr Craven also contended that it was not in the public interest to allow RFPL to depart from the assumption it had so engendered in the minds of reasonable consumers.

16    The trial commenced on 24 September 2012. However, at the outset the respondents raised a preliminary question for determination. The contention was that since the internet business had been conducted since 1 February 2009 (or possibly 31 January 2009) by RFL and not RFPL, RFPL could not be responsible for any contended contravening conduct occurring on or after 1 February 2009.

17    On 25 September 2012, Federal Magistrate Jarrett determined the preliminary issue in favour of the respondents by making three principal findings. It will be necessary to examine the findings of Federal Magistrate Jarrett in a little detail shortly, but the three principal findings were these. First, the evidence demonstrated that until either 31 January 2009 or 1 February 2009, the Ready Flowers internet supply business had been conducted by RFPL but on and after that date it had been conducted by a new entity, RFL, a Hong Kong registered corporation.

18    Second, no estoppel had been made out.

19    Third, none of the contended contravening conduct on and after 1 February 2009 was attributable to RFPL.

20    It is now necessary to examine the findings of Federal Magistrate Jarrett on the determination of the separate question.

21    There is no dispute between the parties as to Federal Magistrate Jarrett’s description of the nature of the claims made by Mr Craven by his Fresh Amended Statement of Claim filed on 20 April 2012. The controversy, said to give rise to appellable errors on the part of Federal Magistrate Jarrett about which an extension of time is sought for leave to appeal from the interlocutory judgment, concerns the question of the transfer of ownership of the internet business to RFL and whether appellable error arises in relation to the determination of the estoppel question on the evidence.

The elements of the interlocutory decision

22    At [4], the primary judge observed that Mr Craven’s claim against RFPL is one based upon “representations” said to have been made to “an average consumer”. The primary judge notes that by para 1 and its sub-paragraphs of the Amended Statement of Claim, Mr Craven alleges that RFPL made misrepresentations or false representations to consumers in respect of contracts arising between RFPL and consumers in the period from “2006 to current”.

23    At [5], the primary judge notes that the foundation allegation made by Mr Craven at para 1.1(e) is that by reason of RFPL’s substantial number of false representations, an inference arises that RFPL’s false representations form an integral part of its “business model” and each contract entered into between RFPL and a consumer is “tainted with a false representation” [original emphasis].

24    At [7], the primary judge notes that paras 2 to 5 of the Amended Statement of Claim essentially deal with misrepresentations said to have been made to consumers. The allegations in para 2 are said to frame misrepresentations arising out of the description of goods on certain websites. The contention is that the goods delivered to people who order from the website do not conform with the description of those goods on the website. The contention is that in a substantial number of cases the goods delivered to buyers do not conform with the description on the website thus giving rise to a contravention.

25    At [8], the primary judge addresses para 3 of Mr Craven’s Amended Statement of Claim and notes that para 3 deals with representations as to the location of florists. The contention is that RFPL by using possessive phrases such as “our florists” and “our local florist” represents to people dealing with RFPL through its website that the location of the business is “local” in the sense of necessarily being an Australian undertaking. Mr Craven contends that these “representations” about location are false, misleading and deceptive thus giving rise to contraventions of the provisions of the relevant Acts.

26    At [9], the primary judge addresses the contention in para 4 of Mr Craven’s Amended Statement of Claim. By para 4, Mr Craven asserts representations by RFPL about delivery and same day delivery. Mr Craven contends that these representations as to delivery are false thus giving rise to the contraventions in suit.

27    At [10], the primary judge addresses the contention at para 5. By para 5, Mr Craven contends that RFPL made representations concerning a customer satisfaction guarantee which is false.

28    At [11], the primary judge addresses the contention at para 6. By para 6, Mr Craven contends that RFPL made representations to a cohort of individuals and businesses called, in the amended pleading, “supplier florists”, and to consumers, concerning the price charged for the product by the operator of the website to a consumer on the one hand, and the amount paid to the supplier florist by the operator of the website for the supply of flowers to the consumer, on the other hand.

29    At [12], the primary judge observes that Mr Craven contends that RFPL has structured its business arrangements in its dealings with its customers and the suppliers of flowers to customers in such a way that that conduct is conduct misleading and deceptive of either or both suppliers and customers of the website operator.

30    At [13], the primary judge addresses the contention at para 7 of the Amended Statement of Claim. By para 7, Mr Craven contends that RFPL made false representations concerning the description of the proprietor of the internet website. Mr Craven contends that RFPL has represented, either expressly or by implication, that RFPL is an Australian public company when it is not. The primary judge observes that the allegation rests on two foundations. The first is an assertion by Mr Craven, by implication or inference, that relevant websites are conducted by RFPL. The second is an assertion by Mr Craven that RFPL has represented, through the websites, that RFPL is properly called or understood as RFL rather than RFPL.

31    At [14], the primary judge addresses the contention at para 8 which asserts representations made by RFPL in relation to the application of Goods and Services Tax (GST) on orders received by RFPL from Australian citizens and fulfilled in Australia.

32    At [15], the primary judge addresses Mr Craven’s contention at para 9 of the amended pleading concerning the contended publication of false testimonials and the representations conveyed by those false testimonials.

33    At [16], the primary judge addresses Mr Craven’s contention at para 10 of the amended pleading of false representations made by RFPL in February 2012 to Fairfax Media in response to a particular article.

34    At [17], the primary judge observes that Mr Craven’s pleading then addresses claims against the second respondent, Mr Owen, in which it is asserted that conduct on his part should be seen as conduct of RFPL. Other claims are made against Mr Owen in his own right, as principal.

35    As against each and every one of those claims framed in the way in which Mr Craven has formulated the claims, RFPL pleads that it was responsible for the business known as Ready Flowers up until 1 February 2009 but thereafter it was neither the owner nor the operator of the internet business. The new owner assumed, on the evidence, operation of the internet site from 1 February 2009 and it may therefore be that RFPL’s engagement with the operation of the site ended on 31 January 2009. In any event, RFPL contended by its pleading that on and from 1 February 2009 it was neither the owner nor the operator of the internet business. That followed because from 1 February 2009 the business had been sold to an entity registered in Hong Kong called Ready Flowers Limited. These are the matters of fact pleaded at paras 4(c), 4(e), para 7 and in particular paras 7(c) and 7(d) of the defence.

36    At [18], the primary judge observes that essentially the case put by RFPL at trial was that if it is to be liable for any conduct as alleged by Mr Craven, it ought only be liable for contended contravening conduct up to and including either 31 January 2009 or 1 February 2009 with the result that any conduct, as alleged, established on the facts could only be conduct of RFL and not conduct of RFPL.

37    RFL is not a respondent to the principal proceedings.

38    At [19], the primary judge notes Mr Craven’s reply to the factual matters concerning the change of ownership pleaded by RFPL. The contention made by Mr Craven is that RFPL ought not be allowed to depart from what he says is an assumption properly made, in context, arising from all the facts and circumstances, that RFPL “is responsible” for all of the representations he pleads irrespective of when they were made, and that RFPL should not be allowed to depart from the position that it is the owner and operator of the internet business (whether it is or not) because, by its conduct, it has engendered an assumption in the mind of those dealing with it (consumers) that RFPL is the owner and operator of the Ready Flowers internet business and consumers have changed their position to their detriment in reliance upon the assumption so engendered. Thus, an estoppel is said to arise.

39    At [20], the primary judge notes that Mr Craven contended for two other propositions of fact in answer to the change of ownership defence. The first contention is that no sale as alleged by RFPL actually occurred. The second is that if there was a sale, it was a “sham” and ought to be given no effect. At [20], the primary judge observes that in submissions at the conclusion of the evidence on these two matters, the applicant abandoned both of these two additional grounds. Further, the primary judge observes at [20] that the election to abandon those two additional grounds was properly made “because the evidence clearly establishes that there was a sale and there is, in my view at least, no evidence to suggest that there was a sham.

40    At [21], the primary judge observes that the evidence on the separate question consisted of affidavits relied upon by Mr Craven and tendered documents. A bundle of documents was handed up during the course of argument before the primary judge some of which were controversial although most were not. The non-controversial documents were admitted and marked as exhibits commencing at Exhibit 5. The controversial documents were admitted into evidence provisionally. Five of those documents were electronic copies of documents annexed to Mr Craven’s affidavit evidence. The primary judge rejected those documents as not being relevant to the question in issue.

41    At [25], the primary judge observed that the issue to be decided between the parties was whether an estoppel arose preventing RFPL from denying, on the facts, that it was carrying on the internet business during the pleaded periods set out in the Amended Statement of Claim from 2006 “to present”. At [25], the primary judge set out the observations of Dixon J in Thompson v Palmer (1933) 49 CLR 507 at p 547 concerning the circumstances in which an estoppel in pais arises to prevent an unjust departure by one person from an assumption adopted by another as the basis of an act or omission which, unless the assumption be adhered to, would operate to the other’s detriment. In the quoted section of Sir Owen Dixon’s judgment, the observation is made that whether a departure by a party from the assumption is to be considered unjust or inadmissible depends upon the part taken by him or her in occasioning its adoption by the other party.

42    In the context of those observations, the primary judge at [26] observes that in the proceeding before the Federal Magistrates Court, Mr Craven contended that he acted, and consumers generally would act, upon an assumption that the company with which they were dealing when ordering flowers from the internet website described as Readyflowers.com.au was an Australian company which was RFPL. At [26], the primary judge notes Mr Craven’s contention that an estoppel arises because RFPL carried on the business until at least February 2009 and current websites make it clear that the business conducted under the name Ready Flowers purports to be an Australian business. As to those matters, the primary judge notes three contentions made by Mr Craven and one conclusion arising from those contentions. The first is that websites such as Readyflowerssydney.com.au and Readyflowersperth.com.au indicate, in terms, that the business is 100% Australian owned and operated by a 100% Australian family company. The second is that the Hong Kong entity RFL carries on business in Australia, receives orders from Australians, and makes arrangements for those orders to be filled by Australian florists. The third is that RFL is not registered in Australia as a foreign company for the purposes of the Corporations Act 2001 (Cth) and is thus not entitled to carry on business in Australia.

43    The conclusion is said to be that the business “must be carried on by [RFPL]”.

44    At [27], the primary judge notes one of the central contentions of Mr Craven.

45    Mr Craven contended that RFPL did not publish, nor tell, nor otherwise inform any of its customers or its suppliers that the business had been sold to a Hong Kong based company or to a foreign company. Mr Craven contends that RFPL’s failure to do so would have caused consumers to continue in their assumption that they were dealing with an Australian business and an Australian registered company.

46    Having identified the contentions of Mr Craven framing the claims made before that Court, the primary judge reached these findings and conclusions.

47    At [29], the primary judge said this:

There is … in my view no estoppel by convention. The evidence does not establish that, in terms of Thompson v Palmer, any conventional basis upon which anybody has habitually dealt with [RFPL]. There is nothing from [Mr Craven] which would suggest that he knew that the assumptions, about which he says so much, were made by him. Indeed, his case is that he knows that the assumptions are not true. There is nothing to suggest that consumers generally have dealt with this company on any conventional basis.

                                [emphasis added]

48    At [30], the primary judge found that there is no evidence of any repetition of business in a sense that is required to form a conventional basis of dealing between parties. The primary judge concluded at [30] that there was no basis upon which a finding of estoppel by convention could be made.

49    At [30], the primary judge also said this of the evidence:

The evidence does not permit of a finding that [RFPL] has made any representations expressly that it carries on the business in Australia. The evidence, particularly that of Mr Hegarty, demonstrates that when the business was sold in February, 2009 the things that go to make up for business – the assets, the intellectual property, the trademarks; all of those matters which comprise a business – were sold to the Hong Kong company, and since that time the Hong Kong company has carried on the business.

                                [emphasis added]

50    At [31], the primary judge notes that Mr Peter Hegarty, a director of RFPL, is one of the two directors of Carlington Pty Ltd, a shareholder (and perhaps the only shareholder) in RFPL.

51    At [32], the primary judge makes reference to an entity called Carlingford which seems, plainly enough, to be another reference (although a different name) to the share owning entity in RFPL. In any event, it seems that the entity holding the shares in RFPL held those shares in trust for the Hegarty Family Trust. At [33], the primary judge notes the evidence relating to the establishment of RFL. The primary judge notes that Mr Hegarty took advice from his accountant about setting up the Hong Kong company. At [33], the primary judge observes that the volume of business offshore was thought to justify the move offshore for a range of purposes not the least of which was taxation advantages by doing so. Mr Hegarty was a director of RFL, the founder of it and the main (if not only) shareholder.

52    The primary judge accepted that in 2012, Mr Hegarty sold his shareholding in RFL and ceased to be a director of it.

53    Mr Hegarty’s son is now a director of RFL and owns all the shares in RFL. At [35], the primary judge notes Mr Craven’s contention that the underlying ownership of RFL rests with the Hegarty family. At [36], the primary judge observes that the proposition that the Hegarty family might beneficially own the assets and undertaking of RFL does not carry with it the conclusion that the Hegarty family are carrying on the internet business or that it is RFPL which is carrying on the business. At [36], the primary judge observes that there is a distinction between the entity that carries on the business undertaking and the individuals that engage in the day-to-day activities enabling of the entity’s undertaking.

54    At [38], the primary judge said this:

In my view, no estoppel can be made out. There is no representation by [RFPL] that it is carrying on the business; any representations that exist on the websites at the moment are representations made by the Hong Kong company.

                                [emphasis added]

55    At [39], the primary judge observes that to the extent that it might be suggested that Mr and Mrs Hegarty might in some way have tacitly approved representations made by RFL, by taking no action to prevent those representations, it might be that complaint could be made against them but no step has been taken to join them in the proceedings or frame claims against them. At [40], the primary judge notes Mr Craven’s assertion that RFL could not have been joined in the proceedings. The primary judge rejects that proposition.

56    As to the question of detriment, the primary judge said this at [41]:

… even if it is the case that there is something that has been done by [RFPL] either expressly or by implication, which makes it somehow responsible for the suggested assumption drawn by either the applicant or consumers generally, there is nothing to suggest, at least in my view, detriment on the part of [Mr Craven] in the sense necessary and spoken of by Dixon J in Thompson v Palmer.

                                [emphasis added]

57    In the result, the primary judge concluded that the pleas made in paras 4(c), 4(e) and 7 of the defence were made out with the result that any representations or conduct relied upon as against RFPL occurring on and from 1 February 2009 is not conduct for which RFPL is responsible.

58    Federal Magistrate Jarrett pronounced ex tempore reasons for judgment in support of the conclusions reached. The ex tempore reasons were revised from the transcript.

The events subsequent to pronouncement of the ex tempore judgment

59    Mr Craven says the following things in his affidavit sworn 10 December 2012 concerning access to the reasons for judgment given on 25 September 2012.

60    Although Mr Craven received the reasons orally on the day, he was not able to take competent notes as he says he is “physically and mentally incapable” of making appropriate notes as he is “unable to listen and write at the same time” (para 5). Mr Craven says that he was reliant on a facility provided by Auscript so as to be able to retrieve an online recording of the events that took place. Mr Craven says that he relied upon statements appearing on the Auscript website about access to online recordings of Court hearings through an online portal of Court hearings. The statements on the Auscript website talk about Auscript working with the Federal Magistrates Court in 2009 to build an online portal for such purposes. In 2011, the application was redesigned and rebuilt to take advantage of improvements in technology. Mr Craven says that as he was a party in the proceeding he could see no reason why he would not be an authorised person able to access an online recording. Mr Craven says that although he made an application to Auscript on 1 October 2012 for access, he was told that access was only available to parties that had legal representation and not to litigants in person (para 12). Mr Craven exhibits a letter from Mr Wyatt the “Court Record Solutions Operations Manager” for Auscript which says that Auscript is currently only authorised to provide “Court.fm access in Australia to legal professionals with a current Practising Certificate”.

61    Mr Craven also says that his inability to secure online access resulted in “an aggravation of my medically diagnosed severe depression which further resulted in my disinterest in formulating appeal grounds” (para 17). Mr Craven exhibits to his affidavit a single page (page 7 of 8) Medical Certificate dated 15 October 2012 from a “Centrelink Treating Doctor” (Dr Rebecca Conroy) which says that Mr Craven has been the author’s patient since 2 March 2010 and in the author’s opinion “this person is temporarily unfit for work/study” and “cannot currently do their usual work/study or any other work for 8 hours or more per week”.

62    Mr Craven says that on 28 November 2012 he received an email from the Judge’s Chambers attaching the reasons for judgment settled from the transcript.

63    On 11 December 2012, Mr Craven filed an application for extension of time for leave to appeal.

64    For present purposes, I propose to focus upon the grounds of appeal Mr Craven would wish to agitate should an extension of time be granted and should leave to appeal be granted. I will return to the question of Mr Craven’s explanation for the delay in filing the application, later in these reasons.

65    Mr Craven filed an affidavit on 13 February 2013 annexing a copy of the proposed notice of appeal he would wish to file should an extension of time be granted and leave to appeal be granted. In the draft notice of appeal, Mr Craven identifies nine proposed grounds of appeal. Mr Craven filed a further affidavit, however, on 18 March 2013 to which he attaches an amended notice of appeal which identifies six grounds of appeal he would seek to agitate.

The grounds of appeal Mr Craven would seek to agitate

66    The grounds are these:

1.    His Honour erred, in failing to apply the following legal rules to the facts that were before him:

(a)    estoppel by representation;

(b)    estoppel by acquiescence;

(i)    or laches;

(c)    silence amounting to a representation;

Where the first respondent took over 3 years after proceedings commenced (11 March 2009 to 24 May 2012) to bring awareness of its defence strategy, being a change of ownership on 31 Jan 2009.

(d)    potential abuse of process by the silence.

2.    AT paragraphs 29 and 30 of the Reasons for Judgment;

in concluding:

•    “the evidence does not establish … any conventional basis upon which anybody has habitually dealt with the first respondent.”

•    “no evidence of any repetition of business in the sense that is required to form a conventional basis of dealing between parties.”

His Honour erred in failing to properly apply the rule of estoppel by convention to the facts that were before him.

3.    AT paragraph 38 of the Reasons for Judgment;

His Honour erred in finding that, “there is no representation by the first respondent that it is carrying on any business.”

4.    AT paragraph 41 of the Reasons for Judgment:

(a)    His Honour erred in finding that the applicant had suffered no detriment;

(b)    His Honour erred in not finding that consumers had suffered detriment;

5.    AT paragraphs 29 and 42 of the Reasons for Judgment;

His Honour erred in finding that the applicant knew the assumption was not true and was false.

6.    Supplementary evidence in the applicant’s Supplementary Affidavit dated 18 March 2013.

67    The orders Mr Craven would seek on appeal should leave be given are these:

1.    The applicant’s pleading of estoppel is made out.

2.    A finding that [RFPL] has engaged in an abuse of process.

3.    Further orders as the Court seems appropriate.

The nub of Mr Craven’s contentions

68    The nub of Mr Craven’s complaint as to error on the part of the primary judge concerning the treatment of the evidence is this.

69    Prior to 31 January 2009, RFPL conducted an internet business of supplying flowers to consumers. By a confidential Business Sale Agreement, RFPL (called by Mr Craven, Company A) sold that business, effective 31 January 2009, to RFL (called by Mr Craven, Company B) and licensed RFL to use RFPL’s intellectual property to continue to operate the Ready Flowers website (paras 16 and 17 of Mr Craven’s written submissions). Mr Peter Hegarty was a foundation director of RFL with Mr Thomas Hegarty as a director of RFL (para 3 of Mr Craven’s submissions). Mr Peter Hegarty and Mr Thomas Hegarty were also directors of RFPL. Mr Craven says that RFL (Company B) then represents to consumers, by the Ready Flowers website, that RFPL (Company A) is the owner of the Ready Flowers internet business (para 18 of Mr Craven’s submissions, asterisk 2). RFPL’s directors are then said to have allowed RFL to “make the representation” just described (para 18, asterisk 3). RFPL by Mr Thomas Hegarty is said to represent to consumers through newspaper articles that RFPL is “the owner/operator of the business” (para 18, asterisk 4). Mr Peter Hegarty for RFPL, it is said, “implies or represents” by a “Google review” that RFPL is the “owner/operator of the business” (para 18, asterisk 5). Mr Craven says that neither the “sale” nor the “real ownership” is disclosed to consumers by RFPL or RFL (para 18, asterisk 6). Mr Craven contends (para 18, asterisk 7) that the directors of RFPL (being the directors of RFL):

… allow Company B [RFL] (via the Ready Flowers Website) to represent that it is [RFL], while failing to disclose that registration is not in Australia, but in Hong Kong.

        [original emphasis as to bold text and emphasis added as to italics]

70    It follows for Mr Craven from these propositions of fact which he asserts properly reflect the evidence on the preliminary issue before the primary judge, that a consumer “can adopt a range of assumptions” [emphasis added] including that the internet business is conducted by RFPL; RFPL’s headquarters were transferred to Hong Kong; consumers deal with an Australian company; and RFL is an Australian public company (para 19 of Mr Craven’s submissions).

71    Mr Craven asserts that there is no evidence to show that consumers were “informed of the sale or transfer of ownership” (para 20 of Mr Craven’s submissions) and thus it follows for Mr Craven that consumers were “likely to make an incorrect assumption by the fact that the Ready Flowers Website published ‘Ready Flowers Limited’ on it and not declaring that it was registered in Hong King” [emphasis added].

72    Mr Craven says (at para 13 of his submissions) that he “first became aware” of the Business Sale Agreement for the sale of the internet business to RFL, and the effective sale and transfer date of 31 January 2009, on 24 May 2012, three years after commencing his proceeding in March 2009. Mr Craven says RFPL had a duty to disclose the sale to him and other consumers dealing with the website, as a failure to do so would amount to allowing consumers to persevere under an implicit incorrect assumption that the owner and operator prior to the sale continued to be the owner and operator after the sale.

The documents Mr Craven says support his central contentions on the estoppel points

73    Mr Craven relies upon a number of documents that he says support the notion of conduct on the part of RFPL (in some cases amounting to representations) giving rise to the assumptions in the minds of reasonable consumers he asserts. Mr Craven contends that the primary judge failed to have proper regard to these documents.

74    The first document is a posting by Mr Thomas Hegarty on 20 March 2009 to the ReadyFlowers.com.au website of a “personal message”. The personal message expresses Mr Hegarty’s pride in the development of the internet business he had developed over “a few short years”. It is true that by 20 March 2009, the owner and operator of the business had become RFL. However, the personal message is nothing more than a personal message from the individual who founded the business. It simply rises no higher than that.

75    The second document is a document described as a “Google review” dated 23 March 2012 posted by Mr Peter Hegarty in which he says under the descriptor “eross57” that the Ready Flowers service is “a great service when you are out of town” among other things. The testimonial goes on to extoll the virtue, especially from overseas, of using the online service to send flowers to someone in Australia. The posting is nothing more than a contrived posting to promote or “puff” the services offered by the business regardless of whatever entity might be conducting the business whether as owner or operator or otherwise.

76    The third group of documents consist of five business articles published in newspaper publications. They are these: articles in Business NAV (undated); WA Business News (26 February 2009); Australian Financial Review (24 November 2009); WAtoday (22 February 2010); and the Sydney Morning Herald (17 February 2012).

77    The first article, in Business NAV, is an article quoting or published under the name of Thomas Hegarty, the Managing Director of Ready Flowers. In that article, Ready Flowers is described as:

… a fast growing technology company that provides an on-line based flower arranging service into over 90 countries, with a forecast turnover in excess of $8,000,000 for 2010. The company started from scratch in October 2005 in Perth, Western Australia, moving to Hong Kong in 2009.

… The company had a desire to corporatize its operations and ensure its positioning for any exit options.

                                [emphasis added]

78    The remainder of the article describes some of the financial imperatives confronting the business. The article is not dated but speaks about the move to Hong Kong in 2009 and the forecast turnover for 2010 which suggests that the article was probably published sometime between 1 July 2009 and 30 June 2010.

79    The second article Mr Craven emphasises is the article published in WAtoday dated 22 February 2010. That article also depicts Mr Thomas Hegarty. The article describes the business as having been established in 92 countries using more than 2,000 florists worldwide. It describes the business as a “relay florist” or “virtual flower seller” taking orders from customers and filling them using “local florists”. The article describes the features of the internet business. It also says this:

[Ready Flowers] has also opened an office in Hong Kong, to service the Asian market. Mr Hegarty has been in the Chinese colony for about five months overseeing the expansion. “The kind of approach we took was that while it would be nice to be the biggest in the market … you can spend a lot of money (to do so)” [quoting Mr Thomas Hegarty]. “The best way for us to expand was to expand through the (Perth) timezone. All of these different Asian markets you can manage locally from Perth”. [quoting Mr Hegarty] The company has a round-the-clock call centre in its offices at Bentley Technology Park, where it employs about 20 people. Most orders are filled automatically so overheads are low.

80    The article then goes on to describe criticisms made by Mr Craven about Ready Flowers.

81    The third article Mr Craven emphasises is the article published in the Western Australian Business News on 26 February 2009 under the heading “Strong Model Helps Business to Blossom”. In that article, the journalist describes Mr Thomas Hegarty as the owner of ReadyFlowers.com. In that article, the journalist makes these observations:

Almost four years on, ReadyFlowers.com has become a global business facing new challenges such as local language support and foreign currency management. Over the past year the company has focused its efforts on a wider audience throughout Asia. Since October 2006 it has been trading in New Zealand and late 2007 it opened in Hong Kong and Singapore. “Today we are sending flowers to 17 countries around the world and have taken orders from people wanting to send their special messages from all over the globe”, Mr Hegarty said.

82    The next article relied upon by Mr Craven is the Australian Financial Review article of 24 November 2009 under the heading “Sweet Smell of Success”. The article begins by saying:

A Perth-based online florist has opened an office in Hong Kong, signalling the start of a push into Asia and the Middle East.

83    The article describes the Hong Kong office as largely a development office. The focus is said to be upon the Asian region mainly because it falls within the Perth time zone and “Hong Kong is a good launching pad for this region” which is a remark attributed to Mr Thomas Hegarty. The article goes on to talk about the business model.

84    Mr Craven also relies upon statements contained in a website entry under the heading “Is Interflora Ready for a Challenge?” The commentary under that heading suggests that online retailers would learn a lot “from this Australian Online Florist – Ready Flowers”. The entry talks about a network of selected florists, primarily throughout the Asia-Pacific region and the United Kingdom, and describes Hong Kong as the latest country to join the Ready Flowers network. The date of the download from the website is 10 April 2011.

85    Mr Craven also relies upon an archival extract of a website entry from 29 December 2010 retrieved through the use of an archival electronic search facility called the “Wayback machine” which recites that “Ready Flowers is an Australian florist service that delivers the best fresh flowers Australia wide”. It talks about “our many Australian florists making same day local deliveries”. The entry contains other references to “our local Australian florist” making sure deliveries of flowers ordered online arrive on time.

86    There is another website extract in the same terms from 14 July 2012.

87    Another Ready Flowers website extract from 14 July 2012 is also relied upon by Mr Craven which talks about “Ready Flowers Australian florists” offering “fresh flowers delivered Australia wide” with references to links to every Australian city.

88    Another extract downloaded by Mr Craven on 3 April 2012 from the Ready Flowers website describes the online retailing of flowers throughout South East Asia and describes Ready Flowers as having had its “genesis” in Perth, Western Australia in 2005 and growing to local market leader by December 2008, with expansion into South East Asia occurring in 2007. The entry says: “We move[d] our headquarters to Hong Kong in late 2008”. Mr Craven also relies upon a similar website entry downloaded by him on 31 May 2012. There are more examples in the same vein addressed by Mr Craven in making submissions in support of Ground 1 of the appeal concerning the primary judge’s findings on the question of “estoppel by representation” (see pp 8-31 of Mr Craven’s written submissions).

The conclusions Mr Craven asserts arising out of these earlier matters

89    Put simply, the ultimate point Mr Craven seeks to make of all of these many references is to demonstrate, whether by website descriptions of the business, or descriptions of the business method or the expansion of the business to Asia and then relocation of the head office to Hong Kong; or by articles by journalists directly quoting Mr Hegarty or reporting upon things he is said to have said to them, that nowhere is there a clear statement, after 1 February 2009, that the internet business understood as Ready Flowers is owned and operated by a Hong Kong company called Ready Flowers Limited.

90    So it follows for Mr Craven that RFPL has not disabused consumers of the assumptions they were encouraged to hold about the Australian ownership and operation of the Ready Flowers “business”, being assumptions created in their minds by RFPL’s conduct prior to the sale to RPL effective on and from at least 1 February 2009. It also follows for Mr Craven that, first, since RFPL has not taken any step to dispel those assumptions in the post 1 February 2009 business environment (nor tell Mr Craven expressly of the sale until the fact was pleaded in the defence on 24 May 2012) and, second, RFPL has allowed RFL to conduct itself, in operating the website business, as if it were an Australian entity operating the website, RFPL cannot now deny that it was carrying on the Ready Flowers business during the entire period of the making of the pleaded representations.

91    Mr Craven contends by Grounds 1 and 2 that Jarrett FM erred by failing to apply to the facts the rules of estoppel by representation, estoppel by acquiescence (or laches), estoppel by silence “amounting to a representation” (particularised by failing to tell Mr Craven for over three years of the change in ownership on 31 January 2009 or 1 February 2009) and estoppel by convention. Mr Craven also contends that RFPL engaged in an abuse of process by failing to tell him until 24 May 2012 of the change in ownership.

Further considerations

92    Mr Craven recognises in his written submissions at para 46, by citing authority, that there is now “but one doctrine of estoppel” rationalised in a reductionist way by seeking out the common unifying foundation for all earlier categories of estoppel. The unifying doctrinal foundation for estoppel is simply that Courts exercising jurisdiction at common law or in equity will do what is necessary, but no more, to prevent a person from suffering detriment in reliance upon an assumption as to a present, past or future state of affairs which the party estopped has induced that person to hold. Thus, the Court focuses upon the conduct of a party and frames remedial protection against the detriment a person would suffer from a change in position should the assumption that led to that change be abandoned.

93    There is thus one overarching doctrine of estoppel rather than a series of independent fractured rules of the kind that Mr Craven says Jarrett FM failed to apply to the facts in evidence before him: Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 447-453 per Mason CJ; Foran v White (1989) 168 CLR 385 at 411-413; Commonwealth v Verwayen (1990) 170 CLR 394 at 410 per Mason CJ; but see, Giumelli v Giumelli (1999) 169 CLR 101 at 112-113; Wykes v Samalk Pty Ltd (1990) Aust Contract Rep 90-097 at 91,008 – 91,013.

94    So, it follows that if RFPL is shown to have made a statement or representation or otherwise to have engaged in conduct fostering an assumption about a certain state of affairs; and a person relies upon the statement or representation made, or the assumption fostered or engendered, to that person’s detriment; and RFPL proposes to act inconsistently with the statement or representation or the assumption so fostered about that state of affairs, in circumstances where it would be unconscionable to do so, the Court will seek to frame remedial relief that addresses and removes the identified detriment arising from the change in position in reliance upon the statement, representation or assumptions.

95    Applying these propositions of law, Mr Craven contends, in effect, that RFPL cannot now rely on the fact of the sale of the Ready Flowers internet business to RFL as at 1 February 2009 as an answer to the factual proposition that whatever representations or statements were made on the Ready Flowers website on or after 1 February 2009 (then operated by RFL), they were not statements or representations of RFPL. This estoppel by conduct operating against RFPL is said to arise fundamentally on three footings.

96    First, RFPL failed to tell consumers of the transfer on 1 February 2009 of ownership of the business to RFL.

97    Second, any consumer dealing with the Ready Flowers internet site on or after 1 February 2009 would, incorrectly assume, that Ready Flowers internet business continued to be owned by RFPL because although the website published the name Ready Flowers Limited on the site, the site did not declare that RFL was a registered Hong Kong company.

98    Third, RFPL attracts an estoppel by acquiescence by conduct, by failing to disclose to Mr Craven until 24 May 2012 that RFPL had sold the business to RFL. Although this particular contention is not put in the following way, Mr Craven essentially contends that it was unconscionable in all the circumstances for RFPL not to disclose to him until 24 May 2012 the change of ownership once the principal proceeding had been commenced in March 2009.

99    Mr Craven says that by these three steps, RFPL engendered or induced a false assumption in him and other consumers of Australian ownership of the business which was after 1 February 2009 actually owned by a foreign corporation. These contentions also go to the locational representations Mr Craven relies upon.

100    I have set out in considerable detail Mr Craven’s contentions and the factual matters he relies upon in seeking to demonstrate appellable error on the part of Jarrett FM in part because Mr Craven is self-represented and in part because the propositions he advances suffer from a fundamental flaw.

101    The uncontradicted evidence before Jarrett FM was that the Ready Flowers internet business was sold, effective 1 February 2009, to RFL and from that date RFL owned and operated the website and everything put upon it. The individuals who assumed positions of governance in RFL had a connection with RFPL and included some of the same people. Nevertheless, the ownership of the business actually changed to a new entity called RFL and the new entity assumed the ownership and conduct of the website from that date. There is no evidence that the commercial transaction was a “trick” or a “sham”. At para 7 of the pleading, Mr Craven pleads that references to RFPL were deleted from the Australian website pages and the name “Ready Flowers Limited” was published in place of the RFPL name. Mr Craven makes that factual point in the context of asserting that RFPL engaged in that replacement conduct but the foundation fact is that RFPL was deleted from each of the Australian Ready Flowers websites and in its place those sites published to Australian consumers the name Ready Flowers Limited.

102    From 1 February 2009 upon the change of ownership, RFL said things on its Ready Flowers website. No doubt Mr Hegarty said things to the press which may or may not have been reported correctly. However, the evidence before Jarrett FM does not show or establish a statement or representation made by RFPL or conduct (apart from silence which I will address in these reasons shortly such as letters on the letterhead of RFPL or press releases under the name RFPL or other express attributions to RFPL) by RFPL on or after 1 February 2009 fostering an assumption in consumers (including Mr Craven) that the Ready Flowers business is owned and operated by an Australian corporation.

103    Put simply, there is no probative evidence of conduct by the entity against which the estoppel is asserted.

104    Mr Craven says that by convention consumers (including him) assumed that the company they dealt with when engaging with the Ready Flowers website prior to 1 February 2009 was an Australian company, RFPL, and also generally assumed, wrongly, that they were continuing to deal with that company when engaging after 1 February 2009 with the Ready Flowers website.

105    The difficulty with this notion is the uncontested evidence before Jarrett FM that Ready Flowers Limited was published on the website. Federal Magistrate Jarrett found at [29] and [20] that there was no evidence of a habitual course of dealing with RFPL on the footing of the assumption contended for by Mr Craven.

106    There is no demonstrated error in that finding.

107    Mr Craven says there was a duty in RFPL to disclose the sale to consumers and, in the circumstances of his proceeding, a duty to disclose to him the transfer of ownership well prior to 24 May 2012. I am not satisfied that any duty arose in RFPL to tell consumers or the world of the change in ownership of the business from RFPL to RFL especially once it is accepted, as Mr Craven pleads, that the name of the new owner and operator of the website business appeared on the website and especially all of the Australian websites on and after February 2009. Nor was there any general duty to tell Mr Craven of the sale or the elements of the commercial transaction between those parties or provide Mr Craven with a copy of the transaction instruments.

108    In the context of the action, however, RFPL was required to plead any material facts upon which it would wish to rely in answering the pleaded claims against it and to the extent that RFPL intended to rely upon the transfer of ownership to RFL on 1 February 2009 as an answer to those claims in respect of conduct after that date, an obligation arose in RFPL to plead the material facts of the sale. No duty arose otherwise. Importantly however, the lateness of the disclosure of the transfer of ownership by the pleading of the defence on 24 May 2012 is entirely explained by the strikeout orders of the earlier Amended Statement of Claim (to which it would be inappropriate to plead) and the fresh re-pleading of the claims by Mr Craven on 20 April 2012. The pleading of the material fact concerning the transfer of ownership occurred on 24 May 2012 about one month after the filing and serving of the Fresh Amended Statement of Claim. There is no material delay in terms of the disclosure of the material fact by the pleading which was responsive to the pleading filed on 20 April 2012. There is no abuse of process.

109    For all these reasons, I am not satisfied that any arguable error has been demonstrated on the part of Federal Magistrate Jarrett as to Grounds 1, 2 and 3 of the proposed grounds of appeal.

110    At [29] and [42], Jarrett FM found that Mr Craven knew to be untrue the assumption he says was fostered by the conduct of RFPL either for a “considerable part of this action” or “from the very beginning”. Mr Craven says that he did not know the assumption he asserts “to be untrue” until the pleading on 24 May 2012. Nevertheless, the pleading makes clear that the websites systematically introduced the name Ready Flowers Limited putting consumers on notice of that entity.

111    At para 71 of his written submissions, Mr Craven says that the detriment to the applicant at the trial is set out at para 55 of the submissions. At para 55, Mr Craven says that there is “no excuse for the conduct of [RFPL]” as set out in his submissions. Mr Craven says that “the whole thing was an intentional plot to hamper and confuse the applicant (litigant in person) in the lead up to the trial and during the trial causing the applicant to make incorrect assumptions”.

112    This is not a proper notion of detriment and there is no basis in the evidence in support of the proposition of an “intentional plot”.

113    No detriment to consumers generally is identified, assuming for the moment that the other elements of an estoppel subsist.

114    The other detriment identified by Mr Craven is that he is not able to take proceedings against the Hong Kong entity RFL in this jurisdiction and suing RFL over the matters Mr Craven puts in issue in these proceedings is described by him as a “long call” for a consumer to make.

115    The truth of the matter is that the evidence does not demonstrate any detriment in the sense contemplated by the authorities. There is no arguable appellable error on the part of Jarrett FM in relation to his findings and conclusions on this issue.

116    I do not propose to deal with the delay point because I am entirely satisfied that Mr Craven has no prospect of success in the appeal on any of the grounds he would seek to agitate in such an appeal should leave be given.

117    The application for an extension of time for leave to appeal must be dismissed with costs.

Associate:

Dated:    5 December 2013