Fitzpatrick v Twin Towns Services Club Ltd [2003] NSWSC 1242

New South Wales Supreme Court

CITATION : Fitzpatrick v Twin Towns Services Club Ltd [2003] NSWSC 1242 HEARING DATE(S) : 17 December, 2003 JUDGMENT DATE : 19 December 2003 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Judgment for Defendant on Further Amended Statement of Claim.

CATCHWORDS : LIQUOR ACT - LICENCING - TRUST - Lessor of hotel pays licensing fees - lease provides that lessee will pay additional rent calculated in same way as licensing fees - whether lessor holds payments of additional rent upon trust to pay licence fees. - HELD: No trust imputed. - UNJUST ENRICHMENT - additional rent calculated by reference to what lessor pays in licensing fees under Liquor Act - licensing fees declared invalid as excise - whether lessor unjustly enriched by additional rent. - HELD: No unjust enrichment. LEGISLATION CITED : Business Franchise (Tobacco) Act 1987 (NSW) Liquor Act 1982 (NSW) - s.80(1) - Ha v State of New South Wales (1997) 189 CLR 465 CASES CITED : - Henry v Hammond [1913] 2 KB 515, - Walker v Corboy (1990) 19 NLSWLR 382 PARTIES : Elizabeth Mary Dawn Fitzpatrick - Plaintiff Twin Towns Services Club Limited - Defendant FILE NUMBER(S) : SC 4168/01 COUNSEL : C. Wood - Plaintiff M.W. Young - Defendant SOLICITORS : Beazley Singleton - Plaintiff Bolster & Co - Defendant

Introduction

1 On 5 August 1997, the High Court delivered judgment in Ha v State of New South Wales (1997) 189 CLR 465, in which the majority held that licence fees exacted under the Business Franchise (Tobacco) Act 1987 (NSW) were duties of excise within s.90 of the Commonwealth Constitution and were, therefore, invalid. Very shortly afterwards, the New South Wales Government conceded that, by parity of reasoning, licence fees exacted under the Liquor Act 1982 (NSW) were also invalid as duties of excise. 2 On 21 August 1997, the Premier of NSW announced that licence fees paid under the Liquor Act for the licensing year 1997/98 would be proportionately rebated, that proportion attributable to the period immediately following the publication of the High Court's decision in Ha being refunded to those who had paid them. No liquor licence fees were exacted in respect of the 1998/99 licensing year. 3 The Plaintiff was a director of Regalco Pty Ltd ("Regalco"), now in liquidation. In 1995 Regalco entered into a lease with the Defendant whereunder it took a monthly tenancy of a hotel and bottle shop at Tweed Heads owned by the Defendant. Another director of Regalco eventually became the licensee of the hotel and thereby became liable under the Liquor Act to pay the licence fees. However, the Defendant at all times after the lease continued to pay the licence fee in respect of the hotel. 4 Clause 7 of the lease required Regalco to pay to the Defendant each month a sum calculated by reference to the cost of all liquor purchased by Regalco during the preceding month. The Plaintiff says that pursuant to an agreement between Regalco and the Defendant which is not recorded in the lease, the Defendant paid licence fees in respect of the hotel on behalf of Regalco using funds paid to it by Regalco under clause 7 of the lease. The Plaintiff says that the Defendant held the sums collected under clause 7 until the licence fee for the ensuing year became payable to the Liquor Administration Board under the Licensing Act . 5 The Plaintiff alleges that between January and October 1997 Regalco paid to the Defendant as trustee for it a total of $149,043.34 in respect of the licence fee to paid for the hotel in early January 1998 for the 1998/99 licensing year. When, as a result of the High Court's decision in Ha , liquor licence fees were no longer payable in respect of the 1998/99 licensing year, the money held on trust for Regalco by the Defendant for payment of the licence fees for that year became repayable by the Defendant to Regalco. 6 After Regalco went into liquidation the liquidator assigned whatever rights the company had against the Defendant to the Plaintiff. The Plaintiff now claims: