Stevenson v Regents Park Sporting & Community Club Ltd [2012] NSWSC 424

Supreme Court New South Wales

Medium Neutral Citation: Stevenson v Regents Park Sporting & Community Club Ltd [2012] NSWSC 424 Hearing dates: 26-27/03/2012 Decision date: 04 May 2012 Before: Fullerton J Decision: 1. Verdict for the defendant. 2. The question of costs is reserved. Catchwords: CONTRACT - company in voluntary administration - termination of contract by voluntary administrator - whether contractual right to terminate justified - repudiation - reasonable standard in delivery of services Cases Cited: Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 Category: Principal judgment Parties: Garry Stevenson (Plaintiff) Regents Park Sporting & Community Club Ltd (Defendant) Representation: Counsel: R de Meyrick (Plaintiff) C Harris SC (Defendant) Solicitors: Paris J Carr & Associates (Plaintiff) Colin Biggers & Paisley (Defendant) File Number(s): 2010/348324 Publication restriction: No

Judgment 1HER HONOUR: Between March 2009 and October 2010 the plaintiff operated a bistro from a licensed club at Regent's Park operated by the defendant company ("the Club"). The plaintiff operated the Bistro pursuant to a written contract entitled "Independent Contractor Agreement" ("the agreement") under which he was obliged to work in conjunction with the Club's trading hours and to "order, prepare and cook in the Club's Bistro". The contract was executed on 30 May 2009 for a term of three years. 2In April 2010 Gregory Russell of Russell Corporate Advisory was appointed as the voluntary administrator of the defendant company and in May 2010 he assumed control of the Club's business under a Deed of Company Arrangement. 3The Club continued to trade while Mr Russell attempted to obtain a better financial outcome for the company's creditors than that which might have been obtained by liquidation. He gave evidence that one of the key elements to operating a successful club is the availability of dining and catering facilities to a given standard during trading hours, not as an independent source of revenue but in to retain existing patrons and attract new patrons in a competitive industry. 4By letter dated 21 October 2010 Mr Russell notified the plaintiff that the agreement was terminated effective from that date. A number of bases were nominated as grounding the exercise of the company's right to terminate referable both to breaches of the plaintiff's obligations under the agreement to deliver the dining services in accordance with specified standards and to previous correspondence where the same or similar breaches were identified as requiring rectification and which the plaintiff is said to have persistently failed to address. 5The plaintiff sues for breach of contract and damages. He submitted that the agreement was terminated without proper cause and even if he was in breach of the agreement, which he refuted, he was entitled to a reasonable notice which was denied him. 6The quantum of the claim falls well short of the jurisdictional limit of this Court being on the final analysis, and on the best view of the evidence, a sum not exceeding $75,000. The fact that the proceedings were properly commenced in this Court by summons when the plaintiff sought, unsuccessfully, to enjoin the defendant from terminating his right to remain on the Club premises, does not adequately explain why the claim in contract was not thereafter transferred to the District Court. Were the plaintiff to have made out a case on liability, any costs order in his favour would need to account for the attitude of the parties to the question of transfer which was raised with the Registrar when the matter was listed for hearing. Since the plaintiff's claim fails and the defendant is entitled to an order for the costs of the proceedings the issue does not arise. 7A number of affidavits were relied upon by the plaintiff at the hearing, large parts of which proved to be either largely irrelevant or repetitious or both. Only the plaintiff was cross-examined. The defendant relied upon an affidavit from Mr Russell in his capacity as Deed Administrator and an affidavit from Mr Willcocks, a consultant engaged by Russell Corporate Advisory involved in the operational management of the Club from April 2010. 8The single issue in the proceedings was whether the defendant company's contractual right to terminate under Clause 8.1.3 was justified. The resolution of that question is determinative of the plaintiff's case on liability.