NEWCASTLE BOWLING CLUB v NEWCASTLE CITY BOWLING CLUB [2002] NSWSC 44

New South Wales Supreme Court

CITATION : NEWCASTLE BOWLING CLUB v NEWCASTLE CITY BOWLING CLUB [2002] NSWSC 44 FILE NUMBER(S) : SC 3583/01 HEARING DATE(S) : 6 February 2002 JUDGMENT DATE : 6 February 2002

PARTIES : Plaintiff: Newcastle Bowling Club (in Liquidation) Defendant: Newcastle Bowling Club Limited JUDGMENT OF : Brownie AJ at 1

COUNSEL : Plaintiff: D Allen Defendant: JR Connors SOLICITORS : Plaintiff: Catalyst Partners Defendant: Patey & Murphy CATCHWORDS : Question as to identification of lessee, choosing between two similarly named companies - no question of principle DECISION : See paragraphs 15, 16 & 26

- 8 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BROWNIE AJ Wednesday, 6 February 2002 3583/01 NEWCASTLE BOWLING CLUB (IN LIQUIDATION) v NEWCASTLE CITY BOWLING CLUB LIMITED JUDGMENT 1 HIS HONOUR: The only question to be decided in this case is whether the plaintiff or the defendant is the holder of a perpetual lease of certain land near Newcastle. 2 There is an obvious state of confusion arising, it seems, mainly from the similarity in names of the two entities. The uncertainty is, to some extent, increased by apparent inaccuracies contained in a certificate issued by the Australian Securities and Investments Commission and is added to by the lack of documentation generally. Nevertheless, it seems to me the position is reasonably clear. 3 There is a certificate of title issued under the Real Property Act, exhibit K to the affidavit of Mr Tolcher, which shows that a perpetual lease, described as "special lease 1964/46 Newcastle" was issued to an entity called "the Newcastle City Bowling Club." Annexure C to the affidavit of Mr Murphy is a copy of a letter written by the Under Secretary of the Department of Lands on a date which is not clear but which was a letter written in reply to another letter dated 5 October 1960. When one reads that letter, together with Annexure D to Mr Murphy's affidavit, copy of Memorandum of Association of "Newcastle City Bowling Club", and the balance of the evidence it seems to me to be reasonably clear that prior to 1964, there was an unincorporated club known as the "Newcastle City Bowling Club." That club or its predecessors had, it seems, occupied the land in question since 1887 or thereabouts. The letter from the Department of Lands suggested to the solicitors who apparently then acted for the plaintiff, or its predecessor, that a special lease be obtained. 4 I infer from the evidence, and particularly Annexure D to Mr Murphy's affidavit, read together with the certificate from the Australian Securities and Investments Commission in relation to the plaintiff, that in consequence of the letter from the Department of Lands of about 1960, the plaintiff was incorporated, it seems on 17 August 1964. 5 The certificate from ASIC that I have mentioned records that a company now known as Newcastle Bowling Club was incorporated on 17 August 1964. It was a company bound by a constitution and it was licensed to omit the word "Limited" from its name. That seems to link up with the copy of the Memorandum of Association, Annexure D to the affidavit of Mr Murphy. The name is identical, the dates appear to coincide and the Memorandum of Association refers to a company limited by guarantee. The ASIC certificate goes on to show that the company, that is to say the plaintiff company, changed its name on a number of occasions. From 1964 to a date described as "unknown" it was called "Newcastle City Bowling Club" and was described not as a company limited by guarantee, as it was at all other times so far as the certificate shows, but rather a company "limited by shares." On an unknown date the name was changed, according to the certificate, from "Newcastle City Bowling Club" to "Newcastle City and RSL Bowling Club." In 1998 it changed its name again to "Newcastle Masonic and City Bowling Club." The name appears to have remained unchanged until November 1994 when the company adopted its present name. 6 The certificate goes on to record that certain records held as paper or microfiche records were not available electronically but, generally speaking, it does not record very much of what occurred prior to 1990, although I notice that it does record that one previous director, Mr Beanland, and a previous auditor, Mr Thomas, were appointed in 1988. 7 The plaintiff emphasises that according to another certificate from ASIC, the defendant company was incorporated, but only in 1990. It seems to have been called "Newcastle City Bowling Club Limited" ever since its incorporation. There is a similar note in the ASIC certificate concerning the defendant, regarding the absence of electronic access to paper records or microfiche records prior to 1990 but so far as one can tell from reading the certificate, nothing happened before the registration date of 10 July 1990. 8 The defendant takes comfort from the circumstance that the ASIC certificate concerning the plaintiff records it as a company limited by shares at one time. In the absence of other evidence, this is somewhat puzzling but I am inclined to think that it is more likely than not that the evidence discloses some error by someone. The error may have pre-dated 1990 and has simply been repeated unthinkingly ever since. 9 The defendant also points to the Memorandum of Association, Annexure D to the affidavit of Mr Murphy. I am inclined to think on the evidence that that relates to the plaintiff and not to the defendant. 10 Next, the defendant takes comfort from the terms of cl 17 of a contract dated 12 October 1999, made between the plaintiff and the defendant collectively, there called "the Bowling Club" and another company there called "The Caterer." Clause 17 commences with these words:- "The Newcastle Bowling Club being the trading entity of the Newcastle City Bowling Club, both being companies ... The clubs being parties to this agreement clearly and unreservedly acknowledge the individual sovereignty and commercial independence of The Caterer ..." and the clause goes on to give The Caterer various rights and to record an undertaking by the "Club" and those associated with the "Club" not to impede the rights of The Caterer and a promise to indemnify The Caterer against certain losses. 11 The defendant submits that in these circumstances the plaintiff has not discharged the relevant onus of proof. It seems to me that the plaintiff has done that. If, in truth, it was the defendant which was the lessee of the land, then it seems to me that the defendant has at least some evidentiary onus to demonstrate that it existed in 1964. 12 As things stand at the moment, the evidence points to the fact that the defendant was not called into existence before 1990. It would have been odd, indeed, if between 1964 or thereabouts, and 1990 when the defendant did not exist, that there was a lease in its favour. One wonders, rhetorically, who occupied the land in that period of 25 years and who paid the rent if the defendant did not exist. 13 Mr Murphy's affidavit sworn 3 August 2001 seems to have been drawn in the terms in which it exists in order to found an argument on some interlocutory occasion at about that time. Mr Murphy spoke, it seems to me quite wisely, of the then need of the defendant to investigate the matter further and to look for further evidence supporting its claim. In the absence of other evidence, I am inclined to think that the proper inference to be drawn now is that he has looked and not found anything. If, in fact, the defendant did exist, that is to say the defendant existed as a corporation and the ASIC certificate concerning the defendant contains an error as to the date of its incorporation or registration, it is odd that there is no evidence of that fact. Instead, the defendant is now left to, it seems to me, grasp at straws. 14 No doubt the similarity of the names of the parties has been the subject of confusion in the past, and no doubt those who control the two companies have been puzzled and perhaps confused but on what evidence there is, it seems to me that the plaintiff has made out its case and has, indeed, done so quite comfortably. 15 I make a declaration in terms of para 1 of the Summons and a further declaration that the first defendant has no entitlement to occupy the buildings erected on the property mentioned in para 1 of the summons. 16 I order the defendant to pay the plaintiff's costs. 17 (Mr Allen asked to be heard on costs and sought an order for indemnity costs as the plaintiff had been put to further expense, time and frustration in bringing this matter before the Court today, when the matter could have been dealt with in August 2001 quite quickly. 18 Mr Connors opposed the application for indemnity costs.) 19 HIS HONOUR: The plaintiff seeks an order for indemnity costs. The defendant opposes it. In a general way, it seems to me that the defendant acted quite reasonably in resisting the matter in the first place. 20 The affidavit of Mr Murphy that I have referred to earlier seems to me to show that as solicitor for the defendant he thought, upon reasonable grounds, that the defendant might have a case. That affidavit was sworn on 3 August 2001. The matter has been back before the Court since then on 7 August, 4 September, 22 October, 2 November, 16 November, 23 November and 30 November last year. 21 As I said earlier, I thought that Mr Murphy was acting quite reasonably in wanting to make further inquiries but this morning, Mr Connors has been reduced to looking for such scraps as he can find to cobble together an argument. 22 The plaintiff is said to have breached some provision of the Liquor Act relating to having the appointment of Mr Tolcher as a liquidator properly recorded in the Licensing Court. That seems to me to be substantially irrelevant to any question as to which of the two companies, the plaintiff or the defendant, was the lessee of the land. It might have had some commercial consequences and it might have had consequences to those people who were office bearers in one or both of the two companies, the plaintiff and the defendant, who had other interests, but I do not think it can be put higher than that. 23 There was then an application made pursuant to s 237 of the Corporations Law, giving Mr Harvey leave to intervene. In November 2001, by consent, an order was made adding him as second plaintiff. A document annexed to the affidavit in support of that motion in its original form contained an undertaking by Mr Harvey to pay personally any costs ordered against the plaintiff in the event that the action was unsuccessful. That paragraph was crossed out before the affidavit was sworn. The effect of the order adding him as a second plaintiff was to make him liable to pay costs if the action was unsuccessful and if an order was made against him. I am told that that was done as a result of negotiations between counsel who then appeared but it seems to me to be a pretty small matter in the circumstances. 24 The plaintiff's point is that the matter was urgent in the middle of last year , for reasons explained in the affidavit of Mr Tolcher, whilst the defendant was then entitled, it seems to me, to investigate the matter. What has happened since about last September seems to be in the nature of point-taking without real merit, perhaps as a result of some animosity between the people of the two companies. 25 It seems to me that the plaintiff needed a day in Court in order to obtain the declarations which it has obtained and it would not be right to make an order for indemnity costs in respect of the commencement of the proceedings, or in respect to the hearing, a hearing either today or some other day, no matter what the defendant did. 26 On the other hand, it does seem to me that on the evidence, the defendant has not acted as it should have done. Rather arbitrarily, it seems to me that the appropriate course is to order that the plaintiff have its costs and that those costs be assessed on an indemnity basis for the period between 1 October 2001 and 31 December 2001. I make an order in those terms.