Court spares couple $ 650k payout Retrial looms over bakery

A TOWNSVILLE couple ordered to pay more than $ 650,000 after abandoning a Michel’s Patisserie franchise has successfully appealed the decision.

Frederick and Karen Guirguis took the national bakery franchisor and five other respondents to court last year claiming they had failed to disclose that Brisbane- based supplier Dyson’s Bakery was in financial difficulty and unable to meet orders.

The pair said the company had told them there would be regular deliveries from Brisbane to Townsville of snapfrozen product in freezer trucks, which would maintain their quality once thawed.

They attempted to sue for breach of contract and negligent misrepresentation to the tune of $ 634,429.

The respondents filed a counterclaim, saying the couple had abandoned the Townsville franchise premises on July 18, 2013, and never returned, despite the franchise agreement continuing until 2022.

Mr Guirguis signed the franchise agreements on March 28, 2012.

The matter went to trial in Brisbane District Court in May last year and Mr and Mrs Guirguis were ordered to pay $ 650,552 to the respondents Michel’s Patisserie System Pty Ltd, Michel’s Leasing Pty Ltd, RFGA Management Pty Ltd and an employee and APlus Business Brokers Pty Ltd and an employee.

The Court of Appeal overturned the decision on Tuesday, stating Judge Gregory Koppenol had made errors in his decision.

“I consider that the trial miscarried as a result of the methodology adopted by the primary judge,” wrote Justice Hugh Fraser.

Justice Fraser wrote that the judge’s “fundamental error” was not finding what alleged conduct the respondents engaged in and whether the conduct was misleading.

“In these circumstances, the proper conclusion is that the primary judge failed to fulfil the duty of a trial judge to consider and reflect upon the entirety of the evidence viewed as a whole,” he wrote.

“In the result, the question at issue has not been properly tried or determined, and adequate findings about credibility and the essential facts of the dispute have yet to be made.”

Justice Fraser wrote that as Judge Koppenol had not made a number of necessary findings of facts about the evidence, the Court of Appeal could not decide the appeal in favour of Mr and Mrs Guirguis.

The Court of Appeal ordered a retrial be conducted by a different judge.

As the retrial was caused by the judge’s “errors of law”, both parties were awarded an indemnity certificate, entitling them to be reimbursed for the costs of the appeal and new trial.