HAZARAN v DOYLE [2001] NSWSC 643

New South Wales Supreme Court

CITATION : HAZARAN v DOYLE [2001] NSWSC 643 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 2154/01 HEARING DATE(S) : 26/07/01 JUDGMENT DATE : 26 July 2001

PARTIES : HAZARAN PTY LTD v PETER DOYLE WINE CENTRES PTY LTD - TRADING AS PETER DOYLE CELLARS JUDGMENT OF : Master Macready at 1

COUNSEL : Mr L.J. Aitken for plaintiff Mr J.S. Drummond for defendant SOLICITORS : Horowitz & Bilinsky for plaintiff Hewitts Commercial Lawyers for defendant CATCHWORDS : Corporations Law. - Application to set aside statutory demand. - Demand set aside. - Liquor Law. Section 154A of Liquor Act 1992. Circumstances in which liability arises considered. DECISION : Paragraph 21

- 1 -

1 MASTER: This is an application to set aside a statutory demand dated 22 March 2001 claiming payment of $49,477.20 for liquor sold by the defendant. There is a dispute as to whether the amount is payable by the plaintiff or Great Northern Hotel (Newcastle) Pty Ltd. 2 The defendant is a liquor supply company who supplied liquor to the business carried on at the Great Northern Hotel Pty Ltd in Scott Street Newcastle. 3 The evidence includes licensing records in respect of that hotel which show that the business owner was Great Northern Hotel (Newcastle) Pty Ltd from 17 December 1999 to 23 November 2000, and that the plaintiff was a business owner from 23 November 2000 to date. It is clear from the other evidence in the case that there was an application for transfer of the licence to the plaintiff which was approved and led to the notice of change of the business owner. 4 The plaintiff was in fact the lessee of the premises. It had a 6 year lease commencing on 22 November 1996. Under that lease there were substantial payments that the plaintiff had to make for rental and outgoings. 5 There is evidence from Miss Battese, who is a director and shareholder of both the plaintiff and Great Northern Hotel (Newcastle) Pty Ltd. She swore in her affidavit of 10 April that at all relevant times the owner of the business was Great Northern Hotel (Newcastle) Pty Ltd. She denied the ownership of the business changed on 23 November 2000, and indicated that it was that company which carried on the business notwithstanding there had been a change in the licensing arrangements. It may be that the change in the licensing arrangements was some requirement that was imposed by the licensing authorities. 6 It is clear that the plaintiff company does not have bank accounts, and it is also clear that the Great Northern Hotel (Newcastle) Pty Ltd meets the rental payable by the plaintiff under the lease and licence fees which the plaintiff has to pay in respect of the poker machines which it owns and operates on the premises. It has been apparently trading under that name. 7 When one looks at the defendant's evidence it seems that the defendant agrees that this is the situation. The defendant read an affidavit of Peter William Doyle which was in fact an affidavit verifying a statutory demand in another matter, namely, an application to set aside a demand served on Great Northern Hotel (Newcastle) Pty Ltd. 8 However, that might be that evidence is before me, and it was plain that the defendant thought it was contracting with that company. Certainly the defendant, when it issued its invoices, simply addressed them to the business name "Great Northern Hotel". It is therefore plain that the plaintiff is not involved in the contracts for the purchase of the liquor which are the relevant ones which underpin the statutory demand. 9 The way that the defendant says that there is a separate liability, which attaches as against the plaintiff, is by reason of the provisions of section 154A of the Liquor Act 1992. Those sections are in the following form: "(1) A contract made with a licensee to sell liquor in accordance with this Act to the licensee shall be deemed, for the purposes only of subsection (2), to be a contract made jointly and severally with the licensee and the persons directly or indirectly interested in the profits of the business carried on pursuant to the licence. (2) If liquor is sold to a licensee under a contract referred to in subsection (1) and the licensee defaults in payment for the liquor, civil proceedings may be taken by the vendor of the liquor against all or any of the persons so referred to for recovery of the unpaid amount."