Harrington & Anor v Harrington Services Pty Ltd (In liq) & Ors [2002] NSWSC 859

Reported Decision : (2002) 55 NSWLR 618

New South Wales Supreme Court

CITATION : Harrington & Anor v Harrington Services Pty Ltd (In liq) & Ors [2002] NSWSC 859 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1261/02 HEARING DATE(S) : 5 to 7 August, 2002 JUDGMENT DATE : 20 September 2002

Kenneth Harrington - First Plaintiff PARTIES : Jacqueline Dorothy Harrington - Second Plaintiff Harrington Services Pty Ltd (In liq) - First Defendant Robert William Whitton and David John Frank Lombe - Second Defendants JUDGMENT OF : Palmer J

COUNSEL : B. Monotti - Plaintiffs J.S. Wheelhouse - Defendants SOLICITORS : Tress Cocks & Maddox - Plaintiffs Coudert Bros - Defendants CATCHWORDS : LEASE - GOODWILL - ACCRETION - Lease of nursing home premises and nursing home business - subsidies payable under National Health Act - whether part of goodwill of leased business - different subsidy rights under Aged Care Act - whether part of goodwill of leased business - principles discussed - analogy with doctrine of accretion in leases of corporeal and incorporeal hereditaments. HELD: Subsidy rights under Aged Care Act part of goodwill of leased business which must be surrendered to lessors at expiry of lease. Aged Care Act, 1997 (Cth) Aged Care (Consequential Provisions) Act 1997 (Cth) - s.7 LEGISLATION CITED : National Health Act, 1953 (Cth) - s.4(1), s.40AA, s.47(1) Nursing Homes Act, 1988 (NSW) Private Hospitals Act, 1908 (NSW) - BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 - Chauntler v Robinson (1849) 4 Exch 163 [154 ER 1166] - Churton v Douglas (1859) Johns 174 [70 ER 385] - Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 - Cooper v Metropolitan Board of Works (1883) 25 Ch D 472 - Cumberland Consolidated Holdings Ltd v Ireland [1946] 1 KB 264 - Federal Commissioner of Taxation v Murry (1998) 193 CLR 605 - Geraghty v Minter (1979) 142 CLR 177 - Gordon v Harper (1796) 7 TR 9 (101 ER 828) - Halsbury's Laws of England, 9th Ed (Reissue) Vol.27(1) para.17 fn.11. - Henderson v Squire (1869) LR 4 QB 170 - Hepples v Federal Commissioner of Taxation (1992) 173 CLR 492 - Horn v Thornborough (1849) 3 Exch 846 [154 ER 1087] CASES CITED : - Howells v Nagrad Nominees Pty Ltd (1982) 43 ALR 283 - Hughes v Sutherland (1881) 7 QB 160 - Jenkins v Cooke 1 Ad & E 372 (110 ER 1248). - Jones v Commissioner of Inland Revenue [1895] 1 QB 484 - Kingsmill v Millard (1855) 11 Exch 313 [156 ER 849] - Liverpool City Council v Irwin [1977] AC 239 - Lord Lisburne v Davies (1866) LR 1 CP 259 - McIlwraith McEacharn Ltd v Shell Co of Australia Ltd (1945) 70 CLR 175 - Millar; Burns v ES&A Bank Ltd, Re (1952) 16 ABC 49 - Nagrad Nominees v Howells (1981) 38 ALR 145 - North Adelaide Nursing Home Pty Ltd v Seely [2000] SASC 455 - Perrott (J.F.) & Co Ltd v Cohen [1951] 1 KB 705 - Punnett; in Re Kitchin, Ex parte (1880) 16 Ch D 226 - The Sheffield Wagon Company Limited v Stratton (1878) 40 LT(NS) 86 - Spencer's Case (1583) 5 Co. Rep. 16a DECISION : Plaintiffs entitled to declarations and orders accordingly.