New South Wales Supreme Court CITATION : Application of Jeffrey Ian Steer [2000] NSWSC 863 FILE NUMBER(S) : SC 11538/00 HEARING DATE(S) : 03/07/00 JUDGMENT DATE : 5 July 2000 PARTIES : Jeffrey Ian Steer - applicant Bernd Rosenberg & Anor - cross-claimants JUDGMENT OF : Bell J at 1 COUNSEL : Terry Buddin SC/A Haesler - applicant R Parsons - cross-claimants SOLICITORS : IV Knight, Crown Solicitor, applicant Norbert Lipton & Co - cross-claimants Disorderly Houses Act 1943 LEGISLATION CITED : Drug Misuse and Trafficking Act 1985 Conveyancing Act 1919 DECISION : Declaration that cross-claimants as lessors under lease dated 11 April 2000 between the cross-claimants as lessors and the cross-defendant as lessee are entitled to re-enter premises known as 9a Roslyn Street Kings cross. Order that the cross-defendant pay cross-claimants' costs of the cross-claim to date upon an indemnity basis. Order that the cross-defendant pay the cross-claimants' costs of these proceedings to date upon an indemnity basis. Note that leave is granted restrospectively for service of the cross-claim to be effected upon the cross-defendant up to and including 3.05 pm on Friday, 30 June 2000. Application No 11538/2000 stood over to Duty Judge's list on Monday, 21 August 2000. Any evidence to be relied upon by the registered proprietors to be filed and served by 5 pm on 10 August 2000. All parties be granted liberty to restore on 3 days' notice. THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION BELL J Wednesday, 5 July, 2000 011538/00 - Jeffrey Ian STEER (APPLICATION OF) v BERND ROSENBERG AND ANOR JUDGMENT 1 HER HONOUR: In these proceedings the applicant seeks an order pursuant to the provisions of s 3(1) of the Disorderly Houses Act 1943 (the Act) declaring premises known as 9A Roslyn Street, Kings Cross, to be a disorderly house. The application is founded upon the provisions of s 3(1)(b) of the Act. 2 It is contended that the applicant, Jeffrey Ian Steer, a Chief Inspector of Police, has reasonable grounds for the suspicion that drugs are being unlawfully sold or supplied on or from the subject premises and that the supply of those drugs is in contravention of the provisions of the Drug Misuse and Trafficking Act 1985. 3 I should note that a cross-claim has been filed in the proceedings by Bernd Rosenberg and Joseph Zangerl, the registered proprietors of the subject premises. The matter was mentioned before me on Monday, 3 July 2000 and on that occasion counsel appeared (on behalf of the cross-defendant) instructed by Jack Rigg, solicitor. There has been no appearance on behalf of the cross-defendant on the hearing of the matter before me today. When the matter was mentioned on Monday counsel for the cross-defendant indicated that those who instructed him had been encountering difficulties in obtaining instructions from their client. It was sought to have the hearing of the matter stood over to Monday, 10 July, 2000. I declined to do that, standing the matter over to this morning. I am informed by Mr Parsons, who appears on behalf of the cross-claimants, that counsel for the cross-defendant had communicated to him that his instructing solicitor had not been able to obtain further instructions in the matter. In those circumstances and without any discourtesy to the court by his non-attendance today, counsel considered himself no longer briefed in the matter. 4 In support of the application the applicant relies on his affidavit sworn on 19 June 2000 together with the affidavit of Natalie Jane Adams also sworn on 19 June 2000. The applicant's reasonable suspicion is in part based upon material appearing in the affidavits of a number of other persons. That material was also read in support of the application and comprises the affidavits of Stewart Anthony Bell, Michael Andrew James Conroy, David Caldwell Darcy, Damien Michael Henry, John Maricic, Adam Michael Purcell and Rodney Peter Spencer. 5 Generally, the evidence discloses that in the period between 18 June 1998 and 18 June 2000 premises at 9A Roslyn Street, Kings Cross, known as Cafe Amsterdam have been associated with the supply of cannabis. I do not propose to recite the evidence in detail. For reasons which will appear, it does not seem to me necessary to do so, but suffice it to say that the evidence discloses that on 18 June 1998 police entered the Cafe Amsterdam, observed two bags of green vegetable matter on a coffee table and arrested a man named Michael Ziric. There were three male customers present in the cafe at the time. There were two large plastic resealable bags, one containing eight smaller plastic bags and a second containing some thirteen plastic resealable bags. All were found to contain cannabis leaf. Mr Ziric was subsequently convicted. There have been continuing observations over the following two years as to the sale of cannabis from those premises. 6 I turn now to the cross-claim. The cross-claimants seek a declaration that, in the light of breaches of the covenants of the lease, they are entitled to re-enter the premises. I am informed by Mr Parsons that it is the cross-claimants' desire to relet the premises to tenants who will conduct it in a more suitable fashion. 7 The attitude of the applicant is that, in the event that such a declaration is granted, he would be content for his application to be adjourned for a period of weeks or months to allow the cross-claimants to relet the premises. This may avoid the necessity for a declaration pursuant to s 3(1) of the Act. 8 In support of the cross-claim Mr Parsons relies on the affidavits of Norbert Lipton, solicitor, both sworn on 30 June 2000, together with the affidavit of service of Attila Szittner sworn on 29 June 2000. The latter is an annexure to the first of Mr Lipton's affidavits. I should note that the cross-claimants also rely on the material in evidence in the case of the applicant concerning the trading in drugs at the subject premises. 9 Additionally, in the case of the cross-claimants some short oral evidence was led from the witness Natalie Jane Adams. Ms Adams is a solicitor who lives in St Neot Avenue, Potts Point. She regularly passes the subject premises on her return from work in the evenings. I might summarise her evidence by observing that over the past week she has observed that the subject premises were not open for trading. I should note there is further evidence touching on this issue in the affidavit of Adam Michael Purcell. He deposes to the circumstance that on Monday 19 June 2000 he walked passed Cafe Amsterdam and saw that it was shut. He saw a sign on the door reading, "To all our dear customers, sorry, we are closed, but we will see you on 1 August. Have a nice day, management". Photographs are annexed to the affidavit of Mr Purcell, including a photograph of that notice. 10 The lease entered into between the cross-claimants and the cross-defendant is an annexure to an affidavit of Ms Adams sworn on 20 June 2000. 11 Section 129(1) of the Conveyancing Act 1919 provides that a right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant, condition or agreement express or implied in the lease shall not be enforceable by action or otherwise unless and until the lessor serves on the lessee a notice specifying the matters set out therein. The form of that notice is provided for in Schedule 6 to that Act. Mr Parsons submitted that, in the circumstances of this case the cross-claimants were not subject to a requirement pursuant to s 129(1) to serve notices, but that nonetheless notices had been served. Attila Szittner annexes two notices dated 27 June 2000 in each case to his affidavit and he deposes to having delivered the same to the subject premises at 3.35 pm on Tuesday, 27 June 2000. The premises were locked at that time. Mr Szittner observed the notice addressed to "our valued customers" to which I have already made reference. It was affixed to the door of the premises. 12 The notice, Annexure A to Mr Szittner's affidavit, is in conformity with requirements of Schedule 6 and recites a breach of clause 4J of the lease. It states notice that the lessees are required to remedy the breach by immediately ceasing to engage in or permit the illegal sale of drugs on the premises. The notice, Annexure B to Mr Szittner's affidavit, recites a breach of covenant clause 4S of the lease. It states that the lessees must remedy the breach by immediately recommencing opening the premises for trading during normal business hours. 13 The lease provides in clause 7B(2) that it is expressly agreed between the parties that if the lessee commits or permits to occur any breach or default in the due and punctual observance and performance of any of the covenants contained in the lease, the lessor at any time or times thereafter and without notice or demand shall have the right to re-enter the premises and thereby determine the estate of and interest of the lessee therein. 14 Turning now to the covenants provided under the lease, the lessee covenants with the lessor pursuant to clause 4J not to do or permit to be done any illegal act on the premises. Pursuant to clause 4S, the lessee covenants (subject to any restriction imposed by law) as a minimum, to keep the premises open for trade during normal business hours. 15 Mr Parsons submits that the cross-claimants are entitled to the relief they seek in the first prayer of the cross-claim by reference to the evidence that for a period from 19 June 2000 and continuing throughout the last week, the premises have not been open for trading during normal business hours. A notice was served on 27 June 2000 requiring that trading immediately recommence. There have been at least four clear days since the service of that notice and the evidence establishes that trading has not recommenced. Additionally, he submits that I should view the application against the background of the requirements of clause 4J and the evidence read in the applicant's case with respect to the breach of that covenant. There is, of course, no evidence of the failure to comply with the requirements of the notice served on 27 June 2000 for the reason that the premises have not been trading. 16 In the light of the evidence led on behalf of the cross-claimants and having regard to the material in the case of the applicant upon which the cross-claimants rely, I propose granting the relief sought in prayer 1. 17 Additionally, Mr Parsons invited me to make what he described as a pre-emptive declaration, namely a declaration that the cross-defendant is not entitled to any order granting relief from forfeiture of the lease. Mr Parsons submitted, having regard to the conduct of the cross-defendant in relation to these proceedings I should make an order which would have the effect of shutting the cross-defendant out of any claim pursuant to s 129(2) of the Conveyancing Act. It does not seem to me appropriate to grant relief of that character. If the cross-defendant is minded to seek relief from forfeiture pursuant to s 129(2) then that matter can be determined upon its merits. I say that without being thought to indicate any view upon that topic. 18 Accordingly, I make a declaration that the cross-claimants, as lessors under a lease dated 11 April 2000, between themselves and the cross-defendant as lessee are entitled to re-enter premises known as 9A Roslyn Street, Kings Cross. 19 Leave is granted retrospectively for service of the cross-claim to be effected upon the cross-defendant up to and including 3.05 pm on Friday, 30 June 2000. 20 I order that the cross-defendant pay the cross-claimants' costs of the cross-claim to date upon an indemnity basis. I order that the cross-defendant pay the cross-claimants' costs of the proceedings to date upon an indemnity basis. I order that application number 11538/00 be stood over until 21 August 2000. I order that any evidence to be relied upon by the registered proprietors be filed and served by 5 pm on 10 August 2000. I order that all parties be granted liberty to restore upon three days' notice. ********** Last Modified: 10/03/2000 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.