Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2006] NSWSC 631

New South Wales Supreme Court

CITATION : Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2006] NSWSC 631

HEARING DATE(S) : 21 June 2006

JUDGMENT DATE : 21 June 2006

JURISDICTION : Equity

JUDGMENT OF : Campbell J

EX TEMPORE JUDGMENT DATE : 06/21/2006

DECISION : Transfer refused

CATCHWORDS : PROCEDURE - transfer of proceedings from District Court to Supreme Court - no novel statement of principle

Conveyancing Act 1919 Civil Procedure Act 2005 District Court Act 1973 LEGISLATION CITED : Retail Leases Act 1994 Ritchies Uniform Civil Procedure NSW Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules 2005

CASES CITED : Sanderson Motors Pty Limited v Kirby [2000] NSWSC 924

Harbourside Catering Pty Limited - First Plaintiff/First Respondent Angelo Nikopolous - Second Plaintiff/Second Respondent PARTIES : Alex Antonopolous - Third Plaintiff/Third Respondent St Hilliers Interiors Pty Ltd - Fourth Respondent TMG Developments Pty Limited - Defendant/Applicant

FILE NUMBER(S) : SC 2075/06

COUNSEL : S T Chrysanthou - Plaintiffs/Respondents C Birch SC - Defendant/Applicant

SOLICITORS : Dibbs Abbott Stillman - Plaintiffs/Respondents Speed and Stracey - Defendant/Applicant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST

CAMPBELL J

WEDNESDAY 21 JUNE 2006

2075/06 HARBOURSIDE CATERING PTY LIMITED & ORS v TMG DEVELOPMENTS PTY LIMITED JUDGMENT – Ex Tempore 1 HIS HONOUR: Harbourside Catering Pty Limited is a company controlled by Mr Nikopoulos and Mr Antonopoulos. It had a sublease, prior to 2000, of some restaurant premises on the Manly Wharf. The lessor to it was TMG Developments Pty Limited. TMG's interest in the land was, in turn, derived from a head lease from the Waterways Authority. 2 In 2000, and going onwards into 2001, TMG developed, it seems, plans for the refurbishment of Manly Wharf. It appears to be common ground that Harbourside surrendered the sublease which it had, and took out a new sublease. 3 The motion now before me is one which TMG brings, seeking orders under section 140(1) of the Civil Procedure Act 2005 that District Court proceedings number 4275 of 2003 be transferred to the Equity Division of the Supreme Court, and an order under Part 28 Rule 5 Uniform Civil Procedure Rules 2005 that the District Court proceedings be heard together with proceedings number 2075 of 2006 in the Supreme Court. TMG also seeks an order that evidence in each proceeding be evidence in the other, or alternatively, an order for the consolidation of the two sets of proceedings. 4 The District Court proceedings are ones which were begun on 15 September 2003 by Harbourside, Mr Nikopoulos, and Mr Antonopoulos. They sued TMG. The Statement of Claim alleges that Mr Nikopoulos and Mr Antonopoulos were partners in a partnership which operated the restaurant business, and that Harbourside provided services for management and operation of the restaurant to that partnership for a service fee. 5 In the District Court proceedings, the plaintiffs allege that TMG was aware of that relationship between the plaintiffs. They also allege that various representations were made about the way in which refurbishment of the Manly Wharf would be carried out. 6 The plaintiffs in the District Court allege that it was these representations which induced Harbourside to surrender the old sublease and enter the new sublease, and also induced the plaintiffs to discontinue marketing the sale of the business of Mr Nikopoulos and Mr Antonopoulos, and to discontinue seeking refinancing of their business. 7 The District Court proceedings allege that there were breaches of various terms of the new sublease, and also conduct contrary to the various representations which had been made, in the manner in which the refurbishment of the wharf was carried out. That refurbishment is alleged to have taken place beginning in February 2002. The allegation of the plaintiffs in the District Court proceedings is that the manner of conduct of the refurbishment, contrary to various covenants in the leases and contrary to various representations, significantly interfered with the business, and caused loss to, in particular, the second and third plaintiffs. 8 The Statement of Claim in the District Court proceedings is not altogether consistent about who it is that has suffered loss, as sometimes it alleges that the plaintiffs collectively have sustained loss and damage. The District Court proceedings allege that a personal duty of care was owed by TMG to Mr Nikopoulos and Mr Antonopoulos, concerning the manner in which the refurbishment was carried out, and that that duty of care was also breached. The manner of conduct of the refurbishment is also alleged to have involved breaches of the Retail Leases Act 1994. 9 The District Court proceedings have reached the stage where the plaintiffs have not quite completed filing their evidence. There is still, it seems, an expert report to be filed. 10 The new lease was, it seems, one which was entered into in June 2004, for three years, with two options to renew, each for three years. 11 In February 2005 Harbourside, Mr Nikopoulos and Mr Antonopoulos sought the consent of TMG to assign that sublease to a purchaser, who was interested in acquiring it. TMG refused to consent to the assignment on or about 21 March 2005. The Supreme Court proceedings are ones which arise from that refusal of consent. 12 The Supreme Court proceedings were started in March 2006. It may be that a motive for starting them was that, by that time, there was another prospective purchaser, concerning whom consent to assignment of the lease either was about to be, or just had been, sought. 13 The Supreme Court proceedings were commenced by the same plaintiffs as began the District Court proceedings, and sued TMG. Even though, as originally commenced, there were three plaintiffs, today Ms Chrysanthou of counsel, for the plaintiffs, informs the Court that Mr Nikopoulos and Mr Antonopoulos will cease to be plaintiffs in the Supreme Court proceedings. 14 The Supreme Court proceedings allege that the refusal of consent to assignment by TMG in March 2005 involved contravention of provisions of the Retail Leases Act 1994, contravention of sections 132 and 133B of the Conveyancing Act 1919, and was for an improper purpose, such that there was a breach of section 51AA of the Trade Practices Act 1974 (Cth). 15 The purchase price of the business in accordance with the contract was said to be $750,000, and that is, the plaintiffs claim, the prima facie measure of one head of claim of their loss. As well, they suffered from consequential damage, in the form of wasted legal expenses connected with the sale which did not proceed, and furthermore, the business now is less valuable than it had been at the time of entering into the contract for sale in February 2005. 16 Section 140 of the Civil Procedure Act 2005 provides: "(1) The Supreme Court may, of its own motion or on application by a party to proceedings before the District Court or a Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the Supreme Court." 17 That section does not seem to be materially different to the former section 145 of the District Court Act 1973. Concerning the old section 145, Bryson J in Sanderson Motors Pty Limited v Kirby [2000] NSWSC 924, at [4] said: "These are reported decisions which refer to this power: I was referred to Ex parte Delporte; Re Thiess Bros Pty Ltd [1965] NSWR 1468 (Asprey J) and Ex parte Dusmanovic; Re Dusmanovic [1967] 2 NSWR 125 (Moffitt J). No limits or restrictions on the discretion are established by authority. When asked to exercise this power the Court should, in my opinion, appraise the facts and circumstances of the case before it and consider whether the applicant has shown something which, within the framework of the purposes for which the power exists, is a sound ground or a good reason why an order ought now to be made. The subject does not admit of more particular exposition."