IN THE COUNTY COURT OF VICTORIA
Revised
Not Restricted
Suitable for
Publication
AT MELBOURNE
COMMERCIAL LIST
EXPEDITED CASES DIVISION
Case No. CI-14-04710
APES WITH WINGS PTY LTD & ANOR
Plaintiffs
v.
ST KILDA ARTS AND EVENTS COMPANY
(VIC) PTY LTD & ORS
Defendants
---
JUDGE:
His Honour Judge Anderson
WHERE HELD:
Melbourne
DATE OF HEARING:
24-28 November and 2 & 8 December 2014
DATE OF JUDGMENT:
18 December 2014
CASE MAY BE CITED AS:
Apes With Wings Pty Ltd & Anor v. St Kilda Arts and
Events Company (Vic) Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:
[2014] VCC 2023
REASONS FOR JUDGMENT
--Catchwords:
Sale of land – Auction of commercial property from which a restaurant
and bar operated – Property passed in at auction and sold to highest
bidder following negotiations – Whether the sale required the vendor to
give vacant possession at settlement and included assets of the
restaurant and bar business.
---
APPEARANCES:
Counsel
Solicitors
For the Plaintiff
Mr L.E. P. Magowan
Makin & Kinsey
For the First Defendant
Mr D. Carruthers (by leave)
For the Second Defendant
Mr D. Carruthers in person
County Court of Victoria, 250 William Street, Melbourne
!Und efined Boo km ar k, I
For the Third Defendant
Mr D. Carruthers (by leave)
County Court of Victoria, 250 William Street, Melbourne
!Und efined Boo km ar k, II
HIS HONOUR:
1
The “Dog’s Bar”, at 54 Acland Street, St Kilda, has been a landmark in the district for
many years. Until about July this year, the business was owned and operated by Mr
David Carruthers and companies associated with him, including Dog’s Bar Pty Ltd.
2
The building which accommodated the “Dog’s Bar” also contained eight residential
apartments. Over the years, Mr Carruthers and his wife and companies, including
Victorian Pub Properties Pty Ltd (“Pub Properties”) acquired all the apartments in the
building.
3
In early 2013, the building and the business of the Dog’s Bar were put on the market.
The selling agents were Pride Real Estate Pty Ltd (“Pride Real Estate”) and Gross
Waddell Pty Ltd (“Gross Waddell”) and the vendor’s solicitor was Ms Beverley Jessop
of Komesaroff & Jessop Pty Ltd. The marketing campaign was project managed by
333 Real Estate Pty Ltd (“333”).
4
An auction was conducted on 4 July 2013. The reserve was not achieved and
negotiations ensued between the highest bidders, Mr Silvio Salom and Mrs Mette
Salom, and Mr Carruthers, through the agency of Mr Tony Pride of Pride Real Estate.
5
Agreement was reached and three contracts of sale were entered into. The vendors
were Mr and Mrs Carruthers for the sale of the two apartments owned by them (Lots
7 and 9), and Pub Properties, for the sale of the remaining apartments (Lots 5, 6, 8,
10, 11 and 12) and Lot 1, the portion of the building containing the Dog’s Bar being
the land comprised in Certificate of Title Volume 10064 Folio 017 (“the Dog’s Bar
property”). The purchaser in each contract of sale was “Mette Salom + or nominee”.
6
The primary dispute between the parties is whether the contract of sale of the Dog’s
Bar property also effected a sale of the “business” of the Dog’s Bar and entitled the
purchaser to vacant possession at settlement.
7
Settlement of both contracts of sale took place on 8 July 2014. On 24 June 2014, Mrs
Salom nominated Apes with Wings Pty Ltd (“Apes with Wings”) as the purchaser
under each contract of sale. Settlement was concluded on behalf of the vendors
following the appointment of a receiver by the second mortgagee, Mr Mark Korda.
8
Since about November 2013, Mr Carruthers had asserted that a sale of the Dog’s Bar
business had not been contemplated by the contract of sale of the Dog’s Bar property
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1
on 4 July 2013 and that, at settlement, Apes with Wings was not entitled to vacant
possession of the Dog’s Bar property and the assets of the business included in the
contact for the sale of the property were not required to be transferred to the
purchaser.
9
The defendants relied upon the following matters:
a.
at the time of the contract of sale, the owner of the business was Dog’s Bar
Pty Ltd, which was not a party to the contract of sale. Dog’s Bar Pty Ltd went
into voluntary liquidation on 6 December 2013;
b.
the contract of sale of the Dog’s Bar property was subject to a lease to Dog’s
Bar Pty Ltd. By further agreements, Dog’s Bar Pty Ltd had transferred its
interest in the lease and the assets of the business to a related company;
c.
on 2 December 2013, four days before Dog’s Bar Pty Ltd was placed into
voluntary liquidation, it had entered into an agreement with Pub Properties
cancelling an agreement for the surrender of the lease of the Dog’s Bar
property. The agreement purported to confirm the renewal of the lease for a
further term of 5 years commencing on 11 September 2013;
d.
by a sale of business agreement, which was stated to be effective from 2
December 2013, Dog’s Bar Pty Ltd sold the assets comprising the Dog’s Bar
business to Zarcon Pty Ltd (now St Kilda Arts and Events Company (Vic) Pty
Ltd (“Arts and Events”));
e.
on 2 December 2013, Pub Properties, Dog’s Bar Pty Ltd and Zarcon Pty Ltd
entered into an agreement whereby Dog’s Bar Pty Ltd transferred the lease of
the Dog’s Bar property to Zarcon Pty Ltd.
10
It was also asserted that when the contracts for the sale of the apartments settled,
two apartments were subject to residential tenancy agreements. On 4 July 2014, Pub
Properties entered into separate residential tenancy agreements with Mr Carruthers
in respect of Lot 6, and with Mrs Carruthers in respect of Lot 5, each for a term of 1
year at a rental of $100 per month. This issue was resolved quickly by the purchaser
agreeing to pay a sum of money to Mr and Mrs Carruthers so that they could obtain
alternative accommodation.
11
VCC:CK
On 23 July 2014, after a contested hearing, Arts and Events obtained an interim
2
injunction from Senior Member Farrelly at the Victorian Civil and Administrative
Tribunal (“VCAT”) requiring Apes with Wings to allow Arts and Events to re-enter the
Dog’s Bar property, on condition that it paid rental.
12
On 2 September 2014, Senior Member Farrelly dissolved the interim injunction and
dismissed Arts and Events’ application for further injunctive relief. Apes with Wings
entered into possession of the Dog’s Bar property and took steps to itself commence
operating the business of the Dog’s Bar.
13
The present court proceeding by Apes with Wings was commenced by writ dated 25
September 2014. Apes with Wings sought:
a.
interlocutory injunctions relating to Arts and Events’ use of the name “Dog’s
Bar”;
b.
a declaration that Apes with Wings had acquired the business of the Dog’s
Bar pursuant to the contract of sale dated 4 July 2013;
c.
a declaration that the undated agreement between Dog’s Bar Pty Ltd and Arts
and Events for the sale of the business of the Dog’s Bar was “void and of no
legal effect”;
d.
damages, for alleged breaches of contract, pursuant to the Australian
Consumer Law and for fraudulent representation.
14
Subsequently, the disputes between the parties in relation to the use of the name
“Dog’s Bar” were resolved. These disputes concerned the business name “Dog’s Bar
St Kilda”, the URL for the domain name www.dogsbar.com.au and the username and
password for the Twitter and Facebook accounts for Dog’s Bar. Apes with Wings now
has the control of the use of the name, Dog’s Bar, in each of these mediums.
15
Mette Salom was joined as a plaintiff to the proceeding in order that alleged
representations by the defendants could be relied upon, in accordance with the
principles enunciated in 428 Little Bourke Street Pty Ltd v Lonsdale Street Café Pty
Ltd [2009] VSC 133 and Rise Home Loans Pty Ltd v Dickinson [2010] VSC 29. There
was no real issue at the trial that, if the contracts of sale had been breached or
representations had been made by the defendants, that the defendants’ conduct was
actionable at the suit of the nominee, Apes with Wings.
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3
16
The defendants have counterclaimed for damages, including:
a.
by Pub Properties, for the return, or the value, of certain items of personal
property excluded from those sold by the contracts of sale;
b.
by Arts and Events, for the return, or the value, of certain items of personal
property not transferred as they formed part of the business of the Dog’s Bar;
c.
by the defendants, if the Court were to find that the business of the Dog’s Bar
“was never sold” to Apes with Wings.
17
The issues for determination in the proceeding are:
a.
whether Pub Properties was required to give vacant possession of the Dog’s
Bar property at settlement, and whether certain assets of the business of the
Dog’s Bar were sold by the contract of sale dated 4 July 2013;
b.
whether the undated agreement between Dog’s Bar Pty Ltd and Arts and
Events for the sale of the business of Dog’s Bar and the transfer of lease
dated 2 December 2013 were effective to transfer the business, including the
lease and other assets, to Arts and Events;
c.
whether Apes with Wings suffered loss and damage as a consequence of
breaches by the defendants of the contracts of sale dated 4 July 2013 and/or
the Australian Consumer Law or as a result of fraudulent representations by
the defendants;
d.
in what sum (if any) should the plaintiffs’ damages be quantified, and by whom
and to whom should they be paid;
e.
should the plaintiffs return any, and it so what, items of personal property to
the defendants or pay the value of the items;
f.
should the plaintiffs otherwise pay any, and if so what, damages to the
defendants.
The conduct of the trial
18
VCC:CK
There were various matters which affected the conduct of the trial, as follows:
4
a.
at the time the proceeding commenced on 25 September 2014, the plaintiff
(Apes with Wings) sought interlocutory relief, effectively in the same terms as
its final relief. Accordingly, the Court took steps to manage the proceeding in
order to effect a final determination of the dispute as quickly as possible and
without the need for substantial, and expensive, hearings which would only
have determined matters on an interlocutory basis;
b.
the impecuniosity of Mr and Mrs Carruthers, and their companies, meant that:
i.
for the defendants to be legally represented in the proceeding, the trial of
the proceeding would need to be delayed, with the likelihood that disputes
about appropriate interlocutory relief would be necessary, and with no
guarantee that representation would be forthcoming;
ii.
the uncertainty created by the defendants’ assertions that the Dog’s Bar
business had not been sold and the purchaser was not entitled to vacant
possession of the Dog’s Bar property was preventing Apes with Wings
making long term arrangements for the conduct of the business. In the
circumstances, if Apes with Wings were ultimately successful, it was likely
that its damages would increase as time passed, and that ultimately the
defendants would probably not have the means to meet any judgment
entered against them;
iii. the trial was conducted, on behalf of all defendants, including the
corporate defendants, by Mr Carruthers without objection by the plaintiffs
and with the leave of the Court;
iv. the trial was adjourned, at Mr Carruthers’ request to enable him to
undertake further preparation, including finalising the defendants’
pleadings and serving subpoenas;
c.
as the proceeding had essentially started with an interlocutory application
supported by affidavit material, directions were given so that, at the trial, much
of the evidence of the parties, including most of the relevant documents, had
already been exchanged and the documents were simply tendered as the
evidence-in-chief of the relevant witnesses;
d.
Mr Carruthers issued a number of subpoenas both for witnesses to give
evidence and to produce documents. All witnesses he wished to attend to give
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5
evidence did so and the witnesses cooperated to ensure that their evidence
was heard in an appropriate sequence, whilst some flexibility ensured that the
inconvenience caused to them was minimised;
e.
the trial was conducted, at the plaintiffs’ request, without transcript. In these
reasons, oral evidence of witnesses contained within quotation marks may be
the substance of the evidence taken from my notes rather than the precise
words of the witness;
f.
Mr Carruthers faced many challenges as an unrepresented litigant, with the
additional responsibility of representing the corporate defendants. These
included:
i.
the need to articulate the basis of certain defences he wished to rely upon
based on mistake, fraud and negligence. Ultimately, Mr Carruthers was
unable to demonstrate that there was sufficient factual basis for these
allegations;
ii.
the examination of a number of witnesses who had been the defendants’
advisors in respect of the sale of the properties. Generally, Mr Carruthers
was permitted some latitude in his questioning of the witnesses, in
circumstances which did not justify orders pursuant to s. 38 of the
Evidence Act 2008 (Vic).
19
In regard to the allegations of mistake, fraud and negligence, the first defence dated
27 October 2014 was filed by the defendants’ then solicitors. Paragraph 9 pleaded
that the contract included certain matters “inconsistent” with the assertion that the
contract did not include the Dog’s Bar business, and that they “appeared in the
contract by mistake”. Paragraph 11 pleaded that “the contract, as varied, contained
mistakes”, without further details.
20
By order made 6 November 2014, the defendants were required to file and serve an
amended defence with appropriate particulars of the allegation of “mistake” in
paragraph 9.
21
No further particulars were provided in the amended defence filed on 12 November
2014 or the further amended defence dated 17 November 2014. The amended
pleading in paragraph 12A contained the assertion that, “The contracts were
prepared for auction sale which did not occur and the auction contracts were
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6
amended to accommodate private negotiations between the parties immediately after
the auction closed and the amendments made to the contracts were for this purpose.
If the contracts were inconsistent with the matters pleaded, those matters appeared in
the contract by mistake”.
22
Mr Carruthers sought to file a further amended defence dated 26 November 2014. In
this pleading, the closing words of paragraph 12A (now numbered 12) read, “…those
matters appeared in the contract by mutual mistake, inadvertence, negligence and/or
by deliberate and wilful fraud”. Paragraph (b) of the particulars read, “By mistake or
wrongfully and improperly the real estate agents and/or in the alternative the solicitors
failed to accept the instructions of the defendants”.
23
After hearing argument and seeking to have Mr Carruthers identify the relevant
persons whose conduct he complained of and the specific matters relied upon, I
ordered on 26 November 2014 that the defendants could rely upon the matters
pleaded in the further amended defence filed on 17 November 2014, with the
references to mistake in paragraph 12 and the whole of paragraph 12A, deleted.
24
Notwithstanding the narrowing of the pleadings, it was apparent that matters relating
to the conduct of the defendants and their advisers prior to the auction, at the auction,
during the negotiations with Mr and Mrs Salom and in the finalisation of the contracts
of sale, would all have some relevance to critical issues remaining to be determined
in the proceeding.
25
These matters were, as part of the circumstances surrounding the sales, likely to be
relevant to the construction of the contract for the sale of the Dog’s Bar property, and
whether the sale included the business or required the vendor to give vacant
possession of the property at settlement.
26
At various times during the hearing, Mr Carruthers alleged that a number of persons
were involved in a conspiracy to sell the properties for less than their true value to Mr
and Mrs Salom. These persons were said to include:
a.
Ms Jessop, on the basis that she sent an email to Mr Komesaroff, the principal
of her firm, bearing the date 3 July 2013 at 10.07am (i.e. the day before the
auction) which read, “Dear Howard, the Dog’s Bar sold for $6,000,020.00 after
the auction – very difficult. Regards, Beverley”, to which Mr Komasaroff had
responded by email on 4 July at 4:22pm, “Glad it sold. What were the
difficulties”, and Ms Jessop had replied at an unspecified time and date, “Dear
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7
Howard, passed in at 5,425,000.00 – top bidder and 3 other ‘interested’ finally
the top bidder after two hours of negotiations agreed to pay $6,020,000.00
(over 6) and David agreed to accept. Regards, Beverly”;
$6,020,000 was the total purchase price for all the properties. It was said that
this indicated prior knowledge of a pre-agreed sale price with the purchasers.
The firm, Komasaroff & Jessop Pty Ltd, was introduced to Mr Carruthers by
Mr Pride. In about November 2013, the firm (through Mr Komasaroff)
commenced to act for Mr Salom in relation to the leasing of the Dog’s Bar
property;
b.
Mr Tony Pride and Ms Margaret Duncan, directors of Pride Real Estate, were
closely involved in the auction. Mr Pride was the auctioneer. Ms Duncan had
stood in front of Mr Salom at the auction and, according to Mr Carruthers, had
been bidding on behalf of Mr Salom. Mrs Carruthers said she believed Ms
Duncan had made at least one bid on behalf of Mr Salom during the auction.
Mr Salom and his companies owned about 20-30 rental properties in St Kilda
managed by Pride Real Estate;
c.
Mr Steven Wong, the real estate agent from 333 was principally involved with
the management of the auction process. Mr Carruthers said that Mr Wong had
“softened him up” prior to the auction to try to make him agree to the property
being sold for less than its value. 333 was effectively controlled by Mr Korda.
Mr Korda also held a second mortgage over the properties and his solicitors
had served a notice of default on 3 July 2013, the day before the auction. Mr
Wong also was employed in Mr Korda’s other business, Korda Mentha Pty
Ltd, which was managing the recovery of the loan monies owed to Mr Korda
and secured by the second mortgage over the properties. Mr Carruthers
suggested that this involved a “conflict of interest” on the part of Mr Wong;
d.
Mr Korda was not called as a witness and Mr Carruthers later claimed that he
had been denied the opportunity to subpoena him. Mr Korda was described as
a “long-time friend” of Mr Carruthers who had helped him financially. Mr
Carruthers had not wanted Mr Korda to attend the auction because Mr Korda
advised financial institutions in insolvency matters and his presence at the
auction might indicate a forced sale. Mr Korda’s solicitors served the notice of
default shortly prior to the auction and Mr Korda attended the auction. Mr
Carruthers apparently spent much of the time, during the period of
negotiations following the auction, with Mr Korda. Mr Carruthers alleged, at
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8
times, that Mr Korda was involved in the alleged fraud;
Mr Carruthers, towards the end of the hearing, and after it had concluded,
sought to challenge the validity of the transfer document in respect of the
Dog’s Bar property. The transfer had been signed on behalf of the vendor by
Mr Korda pursuant to a power of attorney. Mr Carruthers asserted that no
such power of attorney existed. At my direction, the plaintiffs produced the
Common Provisions forming part of Mr Korda’s mortgage, which appeared to
contain a relevant power of attorney;
e.
Mr Waddell, the principal of one of the agents acting in conjunction for the
auction, also gave evidence at the trial. Mr Carruthers seemed to suggest,
after the evidence, that Mr Waddell was not involved in the alleged
misconduct. However, Mr Carruthers said later that Mr Waddell would have
been aware of what was going on;
f.
the City of Port Phillip, including officers in the building department and a
councillor were said to have engaged in an unwarranted campaign against Mr
Carruthers and his companies involving the service of over 20 statutory
notices. In respect of one such notice, involving fire services and dated 14
May 2013, the plaintiffs sought as damages the cost of compliance. Mr
Carruthers was unclear whether the actions of the municipality were directly
related to the conduct of the other persons involved in the alleged conspiracy
to undersell the property to Mr Salom;
g.
Mr Salom was an existing client of Pride Real Estate. Ms Duncan was said to
have assisted him with bidding at the auction. Mr Salom later sought to obtain
a tenant for the Dog’s Bar property through Pride Real Estate. Mr Salom
concluded the negotiations after the auction for the purchase of the properties
for $6.02 million, which as Mr Carruthers suggested, was the “phonetic
amount” referred to in Ms Jessop’s email bearing the date 3 July 2013.
27
I was not satisfied that Mr Carruthers had articulated any basis which would warrant
the issues to be determined at trial including allegations of “mistake, inadvertence,
negligence and or …deliberate and wilful fraud”. I made orders limiting the pleadings
to exclude such allegations. Accordingly, no determination will be made in this
proceeding in relation to those matters.
VCC:CK
9
The credit of witnesses
28
Mr Carruthers’ evidence was partly contained in his affidavits and partly in his oral
testimony. Generally, his oral evidence was given as a coherent and logical recitation
of the events at the auction on 4 July 2013 and those leading up to, or following, that
day.
29
At times, however, his evidence was selective. He emphasised matters which he no
doubt considered were relevant and were likely to assist the defendants’ case, and he
passed over other matters. Both in his own evidence and in his examination of the
witnesses he had subpoenaed, Mr Carruthers appeared to be seeking to establish
that:
a.
his advisers were pressurising him, both prior to and at the auction, to sell the
properties, regardless of whether the highest price would to be obtained;
b.
this was pursuant to a conspiracy reached prior to the auction to ensure that
Mr Salom was the purchaser, for a predetermined price far below the real
value of the properties.
30
Mr Carruthers gave little emphasis to the following matters:
a.
the fact that he executed the contracts of sale with his advisers available for
consultation, including his business planning advisor, Mr van der Merwe;
b.
his difficult financial position at the time of the auction, that seemed to
necessitate the sale of the whole property at that time;
c.
the absence of any real complaint about the contracts until problems arose
some months later in relation to the disbursement of the deposit monies;
d.
the marketing of the property, and the correspondence leading up to the
auction which suggested that the sale would result in the complete transfer of
all the interest held by Mr and Mrs Carruthers and the companies in the
properties and the assets of the Dog’s Bar business.
31
The agreements drawn up by Mr Conlan in November 2013 and the residential
tenancy agreements dated 4 July 2014 seemed designed to frustrate the rights
acquired by the purchaser under the contracts of sale rather than being the exercise
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10
of rights Mr Carruthers genuinely believed at that time were legitimately open to be
pursued.
32
I am not persuaded that there is any reason to make adverse comments about any
other witness. Accordingly, where there is any significant difference between the
evidence of Mr Carruthers and any other witness, I would generally not accept the
evidence of Mr Carruthers unless there was independent support for his evidence.
Events leading up to the auction on 4 July 2013
33
In about 2008, there had been an unsuccessful auction of the Acland Street property
by other agents. Subsequently, Mr Carruthers had health issues and was subject to
financial pressures. He had preliminary discussions with Mr Pride about the possible
sale of the Acland Street property. In October 2011, Mr and Mrs Carruthers sold their
home in Elwood by auction. This was said to have been at the suggestion of Mr
Korda, and was through the agency of Pride Real Estate.
34
During the first half of 2013, the following arrangements were put in place:
a.
at some stage Mr Carruthers executed a second mortgage over the properties
in favour of Mr Korda. This was apparently required by Mr Korda before he
would provide further finance. The mortgage was not registered until late in
June 2013;
b.
in about April 2013, Mr Carruthers engaged 333 to coordinate the marketing
program for the sale of the properties. Mr Wong was to be involved together
with Mr Hadyn Law;
c.
on 11 May 2013, an auction authority was signed by Mr Carruthers in favour
of Gross Waddell and Pride Real Estate, acting in conjunction, for the sale of
the Dog’s Bar property and the six apartments owned by Pub Properties. The
vendor’s reserve price was amended by hand from $7,250,000 to $8,500,000.
Agents’ Commission was payable at the rate of 1.5% up to $7 million, 5%
between $7 and $7.5 million and 10% of any price in excess of $7.5 million;
d.
an authority was also executed in respect of the two apartments owned by Mr
and Mrs Carruthers;
e.
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in about March 2013, Mr Pride introduced Ms Jessop to Mr Carruthers and
11
she was instructed to act on behalf of the vendors at the proposed auction and
to prepare the necessary contract documents.
35
The evidence of Mr Wong, Mr Pride, Ms Duncan, Mr Waddell and Ms Jessop was
that prior to the auction, the strategy was to sell all the properties together with vacant
possession, on a “walk in-walk out” basis. This was confirmed by the advertising
material, the contemporaneous correspondence and the structure of the auction
contract.
36
From the purchaser’s perspective, both Mr and Mrs Salom stated that they believed
the Bar property and the apartments “were being offered with vacant possession”. Mr
Salom said, “Mr Pride presented me with a flyer in relation to the property. It also
stated that the property was being offered effectively as vacant possession, and the
business of Dog’s Bar was being offered as part of the sale”.
37
38
The flyer included the following statements about the properties’ “features”:
a.
“First time whole building offered”;
b.
“Dog’s Bar restaurant and wine bar on separate title”;
c.
“General liquor licence”;
d.
“Indoor/outdoor seating”;
e.
“Offered with short term lease to January 2014”.
Mr Salom also had “viewed online marketing material”, which he said “also informed
my view that Dog’s Bar business was included in the sale along with the freehold”.
The internet advertising also listed the same “features” of the bar property, as were
included on the flyer.
39
Mr Salom said that, “The investment was clearly presented as eight apartments, a
commercial property and the business of the Dog’s Bar as a going concern, including
all assets and intellectual property, offered as a whole with vacant possession of the
apartments and the Bar property”.
40
Mr Salom said that he “was aware that Mr Carruthers wanted to continue to lease the
Bar property until 20 January 2014. This awareness arose because it was stated in
the marketing material and prior to the auction I had reviewed the contract of sale for
Unit 1 (the Bar property) which contained a Deed of Agreement for Surrender of
Lease, with the lease expiring on 20 January 2014. I was also aware of this because
various parties such as Dog’s Bar staff and Real Estate Agents informed me that Mr
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12
Carruthers had plans to travel overseas and wanted to take advantage of strong
summer trade”.
41
Mr Salom said that because of “rumours” he had heard about Mr Carruthers, “There
was simply no way that I wanted him, or one of his corporate vehicles, as a tenant. I
therefore wanted settlement after he ceased being a tenant (20 January 2014)”.
42
Regular coordination meetings were held prior to the auction attended by Mr
Carruthers, Mr Wong, Mr Pride, Ms Duncan, Mr Waddell and on one occasion by Ms
Jessop. The meeting minutes recorded the advertising and other marketing
undertaken and the responses from prospective purchasers who were listed.
43
Leading up to the auction, the correspondence between the parties included the
following:
a.
in a letter dated 12 April 2013 to Mr Wong, Mr Pride stated his belief that
“buyers would pay a premium to have the freehold vacant possession for
flexibility and to potentially capitalise on a major renovation and
improvement…buyers I have spoken to are much keener to purchase a clean
asset and I believe they will pay a premium and factor the ‘vacant possession’
as part into this offer”. Mr Pride recommended the carrying out of limited “paint
and clean” works at a cost of $25-30,000. Mr Pride, on the basis of the
“interest” received from potential buyers, estimated a total sale price “as is” of
$6,020,000, and with the “minor improvements – no lease” of $7,290,000;
b.
email dated 3 May 2013 to Mr Carruthers, in which Mr Wong stated, “Further
to our meeting this morning, I confirm that the following is agreed:
c.
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
The property (apartments and Dog’s Bar) is to be sold with vacant
possession;

DC [David Carruthers] will consider to what extent he would like to
offer his ongoing management services on a short term lease to the
new owner;

We will proceed with a formal market campaign (auction) with Gross
Waddell and Pride Real Estate being conjunctionally appointed;

333 Real Estate will manage the whole transaction process while
David and Deb concentrate on improving and boosting the Dog’s Bar
trade between now and the date of the auction”;
email dated 30 June 2013 to Mr Waddell, Mr Pride and Ms Duncan, copied to
13
Mr Wong and Ms Jessop, in which Mr Carruthers sets out matters of which
potential purchasers should be informed, including, “We have a short term
lease in place because all our advice has been to provide a completely
unencumbered building especially the ground floor. The lease until 20th
January enables you to work out what you’re doing with the building. You can
put a lift where you want, change the layout downstairs and have no issues
with the bar lease downstairs when you want to develop. If you want the
current operator to stay while you sort out planning permits he’s prepared to
do that. This is the most flexible package for you as a purchaser. We’re doing
it to generate the best price as a sale of the whole”.
Under the heading “cashflow”, it was noted that, “The bar has rental income
immediately until Jan 20th or longer by agreement with the current operator.
You can then operate yourself or lease out immediately, with strong cashflow
either way”;
d.
email dated 30 June 2013 from Ms Jessop to Ms Miranda Groves at Pride
Real Estate, copied to Mr Pride, Ms Duncan, Mr Carruthers and Mr Wong, in
which she stated that her “instructions for the sale” included, “Lot One – sold
as going concern subject to the current Lease but – at the Purchaser’s option
the Lease can be cancelled – the suggested date has been until now the 20th
January, 2014 – a Deed of Cancellation is held by me which would be handed
to the Purchaser on settlement date if he takes this option – see Special
Condition C in the Sale Contract – other options are available – but will need
to be the subject of direct negotiation either on the day or earlier – the fixtures
and fittings sold with Lot One are those listed in the Contract only – there is a
separate list of fixtures and fittings not for sale at this point”;
e.
email dated 30 June 2013 from Mr Wong to Mr Carruthers, Mr Waddell, Mr
Pride and Ms Duncan, copied to Ms Jessop and Mr Law. Mr Wong noted, “Lot
1 (Dog’s Bar)…David please confirm by 10am if you disagree. As previously
discussed with all, it is cleaner (in terms of the sale process) for the bar to be
sold with everything (light fittings excepted). The price will be adjusted
accordingly…Finally, Bev can you please confirm that Special Condition C
over-rides the lease annexed to the contract i.e the SC formally and legally
adjusts the rental amount from $190Kpa to $155Kpa. Is there any reason why
the Deed of Cancellation cannot be included in the Vendor’s Statement? This
should be provided to purchasers to give them comfort of the ability to end the
lease in January 2014. I think the agents need some clarity as to how this
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14
short term lease works in practice so it can be easily explained”;
f.
email dated 1 July 2013 from Ms Jessop to Mr Wong, copied to Mr Carruthers,
in which she stated, “I will bring the Deed of Cancellation with me tomorrow – I
would suggest you leave the documents as they stand – this makes the “going
concern” quite clear and it is only at the Purchaser’s option that the Lease will
be cancelled in January, 2014. If the Purchaser wants the business to
continue as Lessee David may be able to be persuaded to stay on – with
terms and conditions to be negotiated”.
44
Mr Carruthers said that a meeting was called by Mr Korda on 28 June 2013, at which
Mr Carruthers, Mr Korda, Mr Law, Mr Wong, and Mr Mark Pallott, a finance broker
who arranged loans for Mr Carruthers with NAB, were present. Mr Carruthers said
that, “Korda tried to move the price expectation down. Wong had a spreadsheet with
$6 to $6.1 million to cover all creditors and Korda was saying that $6 million was
about ‘it then’. We said we were looking at a lot more than that and whilst we would
be prepared to accept a reserve of $6.5 million anything below that should mean we
break the asset down and sell the apartments off individually”.
45
Following the meeting, Mr Carruthers wrote an email to Ms Jessop on 30 June 2013,
stating, “Deb and I met with Mark Korda on Friday. We were being ‘conditioned’. He’s
not going to try and convince us to sell at any price (we believe) but he’s clearly
aiming for closer to $6 million than we are comfortable with. We’re probably looking
more like $7 million”.
46
On 2 July 2013, an auction campaign meeting was held with the agents. After the
meeting, Mr Carruthers reported by email to Mr Korda that it was a “good meeting”
with reports of “new interests…and re-visits”. Mr Carruthers asked Mr Korda not to
attend the auction as he would “prefer your presence doesn’t spook the bidders”. On
4 July, Mr Korda did attend the auction.
The auction on 4 July 2013
47
The auction was listed for 1pm. Mr Pride conducted the auction. There were about
60-70 people present. These included persons who had previously expressed interest
in purchasing the property, including Mr and Mrs Salom, Mr Sebastian Catalfamo, Mr
Matthew Smith and Mr Vincent Zimbardi.
48
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Prior to the auction, Mr Joe Roth, the landlord of adjacent premises leased by the
15
Dog’s Bar business and used in conjunction with the business, had been putting
pressure on Mr Carruthers to catch up with rent which was owing. On the day before
the auction, he threatened to turn up at the auction and put an eviction notice on the
premises. Shortly prior to the commencement of the auction, Mr Roth attempted to
affix a notice to vacate at the front of the Dog’s Bar property. He was dissuaded from
doing so by Mr Pride.
49
Before the auction commenced, Mr and Mrs Carruthers met with Mr Korda, Mr Wong,
Mr Law and Mr van der Merwe. The agents were outside. Mr Carruthers said that,
“Korda wanted to control the conversation about reserve. I said we would not accept
less than $6.5 million. If it came in less than that we were going to sell the apartments
individually”.
50
After further discussion about the reserve and what was to happen if the bidding
“stopped just above $6 million”, and whether “it would be sensible to let it run”, Mr
Law went to communicate Mr Carruthers’ instructions about the reserve to the
agents. When Mr Law returned, he told Mr Carruthers that he had informed Ms
Duncan that the reserve was $6 million. Mr Law stated, “He thought that’s what we
agreed”. At Mr Carruthers’ direction, Mr Law went back and told the agents that the
reserve was $6.5 million.
51
Mr Carruthers said in evidence that certain matters relating to the conduct of the
auction had been discussed and agreed at the coordination meeting on 2 July 2013.
These included what Mr Pride would say before the auction commenced and the
sequence of bidding if the opening bid was low.
52
Mr Carruthers said that Mr Pride’s introductory remarks at the auction largely ignored
his suggestions. It was, however, not clear, except in a very general sense, what Mr
Pride in fact said. In his evidence, Mr Pride referred to the potential buyers as
experienced commercial purchasers who were well acquainted with the details of the
property.
53
During the auction, Mr Carruthers said that he stood next to his wife, at the side. The
crowd was on the road. “Pride started the introduction and immediately my heart
sank. He did not start with the benefits we had agreed. In fact he avoided talking
about anything positive other than what had happened there 25 years ago. I told my
wife straight away that he was setting us up”.
54
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The opening bid of $5 million was apparently made by Mr Catalfamo (from Tasman
16
Meats). Mr Carruthers said that he then expected that, because of the low opening
bid, Mr Pride would ask for a substantial second bid or take a vendor’s bid as had
been discussed at the 2 July meeting.
55
Mr Carruthers said in evidence, “I was waiting for the next bid of $5.1 million or a
vendor bid from Mr Pride to bring it to $5.5 million. Mr Pride said he would ‘take
$25,000’. This confirmed to me that Pride was making sure that the price would
come in low. All the bids that followed were for $25,000. I knew that something was
wrong and Pride was doing exactly the opposite of what he had been instructed to do.
I was quite shocked. The bidding reached $5.4 million or $5.5 million, all in $25,000
bids.” Mr Carruthers said, “Again I said to my wife, he was setting us up”.
56
Mr Carruthers said that, “Mr Salom was not bidding himself. This was a concern I
raised with my wife. Margaret Duncan’s arm was going up in the air. She and Mr
Salom were standing in the centre of the crowd. There were just Salom and the man
from Tasman Meats bidding…Margaret Duncan was standing in front of the man I
had only seen from a distance, Silvio Salom and she was bidding for him. Her hand
was rising into the air, time after time. All $25k bids”.
57
When the bidding reached about $5.4 million. Mr Pride paused the auction and
consulted inside the building with Mr Carruthers and the others advising him. The
auction resumed and apparently reached $5.65 million (although Ms Jessop in an
email to Mr Komesaroff, probably that day, said the highest bid was $5.425 million)
before the properties were passed in, with Mr Salom as the highest bidder. If each bid
was $25,000, as Mr Carruthers said was the case, there may have been a total of 27
bids at the auction, including the opening bid of $5m.
58
Mr Carruthers said that, at about $5.4 million, when Mr Pride paused the auction and
came inside “he jumped up and down and said to me, ‘What do you want to do?’ I
asked him why he had not read the introduction and why he had taken $25,000 bids.
He said he was an experienced auctioneer. I asked why the bidding was in the fives
and not the sixes or sevens. All the agents said was, ‘That’s where the market is’.
However, none of the people who had been mentioned at the marketing meeting as
potential bidders were at the auction”.
59
Mr Carruthers said, “I remained inside. The others went outside and the auction
continued. I knew we were being set up and the price would go nowhere where it
should be. The auction continued but stopped at about $5.6 million. There was
discussion as to what to do. I was told that we must talk to the highest bidder and I
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17
didn’t know how we would get to $6.5 million”.
60
Mr Carruthers said that, as the auction progressed, he expressed his anxiety to his
wife that the agents seemed content simply to be selling the property rather than
obtaining the best price. The veracity of this evidence is doubtful. I consider that Mr
Carruthers appreciated at the time of the auction that the best price would be
obtained if the properties were sold with vacant possession of the Dog’s Bar property,
to be given to the purchaser in January 2014. There was no credible evidence that
the auction was not conducted as a genuine auction.
61
It is possible that Mr Pride’s introductory remarks were not in the terms discussed at
the meeting on 2 July or that the points raised by Mr Carruthers at the meeting and in
his email dated 30 June were given the emphasis he wanted. It is possible that the
sequence of bidding was not as Mr Carruthers anticipated and it is possible that Ms
Duncan assisted Mr Salon with making bids. On the evidence, none of these matters
are uncommon at auctions conducted by competent and reputable estate agents. It is
likely, in view of the later negotiations and the execution of the contracts of sale, that
Mr Carruthers’ dissatisfaction arose primarily because the price ultimately obtained
fell short of his hopes and expectations.
Negotiations immediately following the auction
62
After the property was passed in, negotiations then ensued with Mr Salom. Mr Pride
moved between Mr Carruthers and Mr Salom as the negotiations progressed. Mr
Waddell and Mr Pride confirmed that the second highest bidder, and other interested
parties, waited in the vicinity as the negotiations proceeded with Mr Salom.
63
Mr Carruthers said in evidence that, “Mr Pride took Mr and Mrs Salom into the Dog’s
Bar area with Ms Duncan. Pride came back and forth to us and the price edged up. I
was not really engaged in the conversation. The price got to the late fives. Mr Wong
was trying to get Pride to $6.1 million. I said ‘Why $6.1 million? I want $6.5 million or
otherwise I will split the apartments up’”.
64
“Pride said that I had to make a decision. Mr Pride said that Mrs Salom would smoke
one cigarette and then she would leave. Pride brought a huge amount of pressure to
bear on me to accept $6.02 million on a 12 month settlement. My wife suggested I
get out so that my health could improve. I was struggling to understand the 12 month
settlement. I needed to improve my cash flow to improve my health”.
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18
65
“I could see Matthew Smith and others hanging around, hoping to negotiate. We
were told a number of persons on the sales list were present. I said, ‘Why aren’t you
talking to them?’ Pride said, ‘Silvio will make the best landlord. You don’t want to deal
with the others.’ I knew that Salom was an investor”.
66
“In my mind, I understood that my wife and I would stay and run the business. Mr
Korda said he would guarantee the NAB so that settlement could be extended.
Everyone around me was saying ‘why wouldn’t you’ accept the money? I thought
that although it was lower than $7 million or $8 million, I would continue carrying on
the business. I would run the business for 12 months and develop cash flow issues”.
67
Mr Salom said in evidence that, “During the negotiations following the auction,
although the initial terms of the contracts called for settlement in 30 to 60 days…as
the price crept upwards we increased the terms to six-month settlement” and later, as
the price exceeded $6 million, “from six to 12 months”. After the sale price of $6.02
million was arrived at, Mr Salom indicated that he would only agree to pay that price if
settlement was to occur after 12 months. Mr Carruthers agreed to these terms.
68
Mrs Salom confirmed her husband’s evidence about these matters. Mr and Mrs
Salom said that after agreement was reached on the price and the settlement date,
Mr Salom left. Mrs Salom finalised the execution of the contracts on behalf of the
purchaser.
69
Mrs Salom stated in her affidavit sworn 24 October 2014 that, “Ms Jessop informed
me that there was a lease in place up to 20 January 2014 for the bar but as the
period of settlement had now been extended beyond that date, the property would be
vacant possession upon settlement. She informed me that since the lease was no
longer relevant, that is being terminated prior to the settlement, the two Special
Condition clauses ‘C’ and ‘C’ were no longer needed. Mr Jessop crossed them out
and asked me to initial the changes, which I did”.
70
“With this in place I was told by Ms Jessop and ensured [assured] that the Dog’s Bar
would be vacant upon settlement just like the eight flats above. Ms Jessop and the
real estate people present at the signing specifically kept saying that vacant
possession of all units (including unit 1) was the best position to be in. It was my clear
understanding that everyone present was of the opinion that crossing out both
Special Conditions marked C would ensure that Lot 1 was provided with vacant
possession”.
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19
71
Mrs Salom said further in her affidavit that, “Before signing the contracts, I told Bev
Jessop, the solicitor for the vendors, and Tony Pride, the agent for the vendors, that
the first plaintiff [Apes with Wings] would be the purchaser”. Ms Jessop did not agree
that Mrs Salom had told her the name of the intended nominee as purchaser.
Finalisation of the contracts and their execution
72
After agreement had been reached, Ms Jessop discussed with Mr van der Merwe,
how the total purchase price would be split between the properties, together with the
appropriate deposit payments. This was a matter of calculation apparently derived
from a formulae available from the Titles Office. Ms Jessop was then assisted by Ms
Duncan who, at Ms Jessop’s direction, completed the handwritten amendments on
the copies of the contracts.
73
There was a discrepancy in the evidence as to the precise sequence in which the
contracts were signed, whether separately or together. Mrs Salom said that she did
not have a lawyer present on the day of the auction. She had, however, “read each of
the contracts”, prior to signing them. She said she had “relied upon the marketing
flyer, website listing, my inspections of the premises and the draft contracts before
entering into those contracts”. Following the signing of the contracts, Mrs Salom
photographed “the Assets that came with the sale of the Dog’s Bar business”.
74
At the auction, whilst the negotiations were taking place, Mr Carruthers said, “Korda
took me upstairs and I let the others sort out the contracts. I had earlier raised
concerns with 333 about Pride’s reputation. Law said that Waddell would keep an eye
on Pride. I thought that in the negotiation of the contracts 333 would take the lead,
however, they took us upstairs and left the negotiations with Pride, Duncan, Jessop
and Mrs Salom to sort out the contracts. I was told that Mr Salom had left Mrs Salom
to sign the contracts. Korda said, ‘Let’s have lunch’. Korda, Wong, Law and my wife
and I went to lunch”.
75
“Jessop came in with the contract for Lot 1. She said she needed me to sign it. I went
over and sat with Jessop. She opened the contract. I was talking about the price
being low. She said, ‘Silvio will be a better landlord’. She crossed out Special
Condition C. I checked with her that the Surrender of Lease was essentially
cancelled. I signed the contract. She said, ‘We will have to hurry along, I will get the
next contract’”.
76
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“I went back to lunch. She came back with the apartments contract, together with
20
Pride and Duncan. I started asking questions about a special condition that involved
Pride taking over the management of the apartments in the settlement period. My
wife overheard us and came over. She would have had to sign the contracts anyway.
I was in shock. Deborah took over asking, ‘Why can’t we take over’. Duncan was
upset and angry. Pride was pacing up and down. Deborah and Duncan were talking. I
said, ‘We don’t need it. We’re not putting it in’. Pride said, ‘Forget it, don’t worry’.
Jessop crossed out the special condition”. In an email dated 30 June, copied to Mr
Carruthers, Ms Jessop had referred to “a possible Special Condition for the
Purchaser to get tenants in early – not in the Contract but may be ‘available’”.
77
The contracts were executed by Mr Carruthers on behalf of the vendors and by Mrs
Carruthers in relation to the contract in which she was a vendor. There was, in my
view, no credible evidence that prior to execution of the contracts, Mr or Mrs
Carruthers queried whether the sale of the Dog’s Bar property affected the assets
critical to the continuation of the business by Dog’s Bar Pty Ltd and whether Dog’s
Bar Pty Ltd would continue to be in possession of the Dog’s Bar property beyond the
extended settlement date.
Post-auction evidence
78
The first payment of ten per cent was made by the purchaser to Pride Real Estate at
the auction. It took some months to account for the deposit due to the competing
demands of those parties with a financial interest.
79
The parties who had a financial interest in the outcome of the sale, apart from the
vendors, included:
a.
National Australia Bank which held a first mortgage in respect of the Dog’s Bar
property;
b.
Bank of Queensland which held a first mortgage in respect of the titles to the
apartments. The mortgage was in default;
c.
Mr Korda who held a second mortgage over the Dog’s Bar property and the
titles to the apartments and had served a default notice on 3 July 2013. This
also affected Mr and Mrs Carruthers as guarantors;
d.
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City of Port Phillip who were owed two or three years municipal rates;
21
e.
State Revenue Office (Victoria) which had a charge over the Dog’s Bar
property in respect of unpaid land tax;
80
Ms Jessop said, “the business was virtually worthless, it was heavily in debt and
assets were included in the sale”.
81
The remaining five per cent deposit payment was made direct to Ms Jessop on about
4 August 2013.
82
It is apparent that by November 2013, Mr Carruthers was concerned about his
financial position. When Komasaroff and Jessop Pty Ltd accounted to Mr Carruthers
for the disbursement of the first deposit payment, Mr Carruthers queried the amount
deducted by the solicitors for legal costs.
83
Mr Carruthers said in evidence, “In October/November, I received a bill for $35,000
for legal services. I went to a different solicitor as I believed there had been collusion
between Jessop and the purchaser, although I was not able to prove it. On 10
December 2013, I told Jessop not to do more work”.
84
“In the last week in November 2013, I went to see Mr Conlan. It was untenable to
carry on trading the Dog’s Bar as the contracts had not settled. The accountant said
to sell the Dog’s Bar business to a new entity and to put Dog’s Bar Pty Ltd into
voluntary liquidation. Conlan prepared the documents for the transfer of business
involving a deed and assignment of lease and a transfer”.
85
“On 2 December, there was an application to transfer the liquor licence. On 6
December, I went to Grant Thornton. Earlier I had changed the name Dog’s Bar Pty
Ltd to the ACN Number to protect the name. The agreements were created with
transparency. I carried on with the day to day business of running the Dog’s Bar”.
86
Mr Carruthers consulted Mr Gerard Conlan at Law 554 about the steps he might take
to protect his position. As a consequence, Mr Conlan prepared a number of
documents in relation to the Dog’s Bar business. This appears to have been designed
also to effect a “change in ownership” of the assets of Dog’s Bar Pty Ltd, as a prelude
to the company being placed into voluntary liquidation.
87
On 3 January 2014, Arts and Events had registered the business name, “Dog’s Bar
St Kilda”. The liquor licence for the Dog’s Bar was held by Dog’s Bar Pty Ltd until it
was transferred to Arts and Events on 22 April 2014.
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22
88
Mr Conlan of Law 554 on 17 February 2014 wrote to the purchaser’s solicitors putting
them on notice of Mr Carruthers’ instructions that “the ‘Dog’s Bar’ restaurant business
was not sold with the freehold and that this was known and intended by the parties at
the point of sale”.
Settlement of the contracts – July 2014
89
As the date for settlement of the contracts on 4 July 2014 approached, the
purchaser’s solicitors sought to make arrangements for settlement, The notice of
nomination of Apes with Wings as the purchaser dated 13 June 2014 was provided
by letter from the purchaser’s solicitors dated 24 June 2014.
90
On 8 July 2014, Mr Korda appointed a receiver in respect of the interests of Pub
Properties and of Mr and Mrs Carruthers in the properties. This enabled the
settlement of the three contracts to occur on 9 July. Mr Carruthers said that he was
not aware that the contracts had settled until the following day. On 4 July 2014, Mr
and Mrs Carruthers had executed residential tenancy agreements with Pub
Properties in respect of Lots 5 and 6.
91
Mr Salom took steps to gain possession of the properties, engaging security
personnel to physically ensure that vacant possession was obtained. This resulted in
confrontations with Mr and Mrs Carruthers, and which involved their children.
Difficulties were encountered over the following days as Mr and Mrs Carruthers tried
to recover their personal possessions and the items excluded from the sale in the
contract for the Dog’s Bar property.
92
On 23 July 2014, after the VCAT interim orders, Arts and Events through Mr
Carruthers, retook possession of the business of the Dog’s Bar and conducted the
business until the VCAT orders were dissolved on 2 September 2014.
Contracts of Sale dated 4 July 2013
93
The three contracts of sale for the Dog’s Bar property and the apartments were
drafted by Ms Jessop on behalf of Pub Properties and Mr and Mrs Carruthers. Mr
Carruthers gave Ms Jessop the necessary instructions.
94
The contracts of sale left the date of settlement blank. However, Mr Carruthers and
those advising him anticipated that the properties would be sold with settlement to
occur within 30 or 60 days. The purchaser negotiated a longer settlement period, to 4
VCC:CK
23
July 2014. The extension of the period for settlement necessitated further changes to
the contract of sale. The draft of the Dog’s Bar property contract had allowed the
business of the Dog’s Bar to continue to be operated until 20 January 2014, which
would have been beyond the anticipated 30 or 60 day settlement period.
95
The provision in the draft contract, for the vendor to continue to operate the Dog’s Bar
business until 20 January 2014, had two purposes:
a.
it allowed Mr Carruthers to take advantage of the “Christmas holiday” trade;
b.
it meant that the Dog’s Bar business conducted on the property was sold as a
“going concern”, which had significant GST consequences.
96
The draft auction contract for the Dog’s Bar property contained special conditions, as
follows:
“B.
VENDOR AND PURCHASER AGREE THAT UPON ACCEPTANCE OF TITLE AND
RELEASE OF THE DEPOSIT TO THE VENDOR AND AT THE SOLE COST OF THE
PURCHASER THE PURCHASER MAY MAKE TOWN PLANNING APPLICATIONS AND TAKE
MEASUREMENTS AND TAKE ALL OTHER STEPS INCLUDING OBTAINING QUOTATIONS
AND ATTENDANCES UPON SITE BY ARRANGEMENT BY THE SERVANTS AND AGENTS
OF THE PURCHASER AS SHALL ENABLE THE PURCHASER TO OBTAIN ALL RELEVANT
CONSENTS AND PERMITS FOR ANY FUTURE DEVELOPMENT OF THE BUILDING. THE
PURCHASER SHALL PROVIDE EVIDENCE THAT ITS SERVANTS AND AGENTS ARE
INSURED BEFORE THEY GO ONSITE.
C.
THE PURCHASER ACKNOWLEDGES THAT THE PURCHASE IS SUBJECT TO
THE LEASE ANNEXED HERETO. THE VENDOR AGREES TO PROCURE A DEED OF
CANCELLATION OF THE LEASE EXECUTED BY THE VENDOR AS LANDLORD AND THE
DOG’S BAR PTY. LTD. AS LESSEE SUCH CANCELLATION TO TAKE EFFECT ON THE
20TH JANUARY, 2014. THE PURCHASER TO HOLD THE DEED OF CANCELLATION IN
ESCROW FROM SETTLEMENT TO THE 20TH JANUARY, 2014.
C.
FROM THE DATE OF SETTLEMENT TO THE 20TH JANUARY, 2014 THE RENTAL
UNDER THE LOT ONE LEASE SHALL BE $14,208.33 PER CALENDAR MONTH WHICH IS
CALCULATED UPON A PER ANNUM RENTAL OF $155,000 PLUS GST. IN ADDITION THE
LESSEE SHALL BE RESPONSIBLE FOR OUTGOINGS.
D.
AT THE OPTION OF THE PURCHASER, TO BE ADVISED TO THE VENDOR 14
DAYS PRIOR TO THE SETTLEMENT DATE, ON THE 20TH JANUARY, 2014 THE VENDOR
WILL PROCURE THAT THE LESSEE WILL CHANGE ITS CORPORATE NAME “DOG’S BAR
PTY. LTD.” SO THAT THE PURCHASER MAY DIRECT THAT THE NAME MAY BE
REGISTERED BY ANOTHER ENTITY. THE PURCHASER SHALL BE RESPONSIBLE AT ITS
SOLE COST FOR ALL OF THE REQUIREMENTS OF THE LIQUOR LICENSING
COMMISSION IN RELATION TO ANY TRANSFER OF THE CURRENT LIQUOR LICENCE
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24
AND ANY OTHER REGISTRATION AND LICENSING TRANSFER REQUIREMENTS FOR
THE NEW ENTITY. THE VENDOR FURTHER WARRANTS THAT IT WILL PROCURE THE
CO-OPERATION OF THE CURRENT LESSEE IN ALL RESPECTS WITH THE TRANSFER
OF THE CURRENT LIQUOR LICENCE AND ALL OTHER INTELLECTUAL PROPERTY
SUCH AS WEB SITE, TWITTER AND FACEBOOK NECESSARY FOR THE OPERATION OF
THE BUSINESS OF THE “DOG’S BAR” FROM THE CURRENT LICENCE HOLDER TO THE
PURCHASER’S DESIGNATED ENTITY AT THE SOLE COST OF THE PURCHASER.
F.
THESE SPECIAL CONDITIONS SHALL CONTINUE AFTER SETTLEMENT AND
ENURE FOR BOTH VENDOR AND PURCHASER”.
97
Following the post-auction negotiations, amendments were made by Ms Jessop to
the typed Special Conditions in the contract of sale for the Dog’s Bar property, as
follows:
a.
in Special Condition C (where first appearing), by crossing out, and each party
initialling, the whole of the paragraph, or (perhaps on one copy) the whole of
the paragraph except for the first sentence, which reads: “The purchaser
acknowledges that the purchase is subject to the lease annexed hereto”. It
does not seem, however, that this discrepancy between the copies of the
contract has any significance;
b.
in Special Condition C (where second appearing), by crossing out the words
“on the 20th January, 2014” and substituting the words, “4th July, 2014”, and
each party initialling the amendment;
c.
in Special Condition D, by amending the date from “20th January, 2014” to
“4/7/2014”.
98
The contract of sale of the Dog’s Bar property signed by both parties on 4 July 2013,
contained the following features:
a.
the subject of the sale was described as “the property [Lot 1, 54 Acland Street,
St Kilda 3182], being the land and the goods”;
b.
the purchase price was $1,998,640;
c.
the sale was defined as “a sale of a…going concern”. This definition was
relevant for the purposes of General Condition 13, relating to the responsibility
of the parties for GST;
d.
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settlement was due on 4 July 2014;
25
e.
the property was described as “subject to lease”, the lease being defined as “5
year lease as per the copy lease in the section 32 statement”, being a “lease
for a term ending on 10/9/2013 with 4 options to renew, each of 5 years”;
f.
the document then immediately referred to, “Deed of Surrender dated from
20th January 2014”;
g.
there was a “schedule of fixtures included with the lot one sale”, and four
items which were “excluded”;
h.
Special Conditions A to F with the amendments previously referred to;
i.
an undated executed “Deed of Agreement” for surrender of lease between
Pub Properties and Dog’s Bar Pty Ltd, with the handwritten notation,
“surrender referred to in special condition C of the contract of sale”;
j.
General Condition 13 related to “GST” and the respective obligations of the
vendor and purchaser. To a significant degree, the obligations of the parties
depended on whether any business conducted at the property was a “going
concern”. GC 13.5 provided as follows:
“If the particulars of sale specify that the supply made under this contract is a
‘going concern’:
(a) the parties agree that this contract is for the supply of a going concern;
and
(b) the purchaser warrants that the purchaser is, or prior to settlement will be,
registered for GST; and
(c) the vendor warrants that the vendor will carry on the going concern until
the date of the supply.”;
k.
the “vendors statement…pursuant to section 32 of the Sale of Land Act 1962”
included a copy of the lease of the Dog’s Bar Property from Pub Properties to
Dog’s Bar Pty Ltd commencing 11 September 2008 for a 5 year term with the
option of “four further terms each of 5 years”, at a rental of “$190,000 per
annum plus GST”.
Agreements executed by Dog’s Bar Pty Ltd on about 2 December 2013
99
VCC:CK
The agreements executed by Mr Carruthers on about 2 December 2013 on behalf of
26
his companies, Pub Properties, Dog’s Bar Pty Ltd and Zarcon Pty Ltd (Arts and
Events) are challenged on the basis that they were entered into:
a.
within 4 days of Mr Carruthers putting Dog’s Bar Pty Ltd into voluntary
liquidation;
b.
in breach of the obligations of Pub Properties pursuant to the Dog’s Bar
property contract of sale;
c.
by the corporate defendants, through Mr Carruthers, in breach of the
provisions of the Australian Consumer Law.
100
The ASIC searches reveal the following details of Mr Carruthers’ companies:
a.
Pub Properties, at all relevant times since registration in October 2001, had Mr
Carruthers as its sole director and shareholder;
b.
Arts and Events was until 4 December 2013 known as Zarcon Pty Ltd. Since
29 November 2013 its sole director and shareholder has been Mr Carruthers;
c.
Dog’s Bar Pty Ltd was registered in October 2001. The company changed its
name on 25 November 2013 to its ACN number. The sole director and
shareholder was Mr Carruthers. On 6 December 2013, there was a creditors
voluntary winding up.
101
The summary of the assets of Dog’s Bar Pty Ltd prepared by Mr Carruthers on 6
December 2013 listed the total assets of the company at $57,621, as follows:
102
a.
stock as detailed in inventory
$7,081;
b.
work in progress as detailed in inventory
$18,700;
c.
other assets
$31,840.
No further details of these sums were provided. Unsecured creditors totalling
$591,284 were listed together with the handwritten addition of “Deborah Carruthers”
at $625,000.
Representations
103
The plaintiffs allege that representations were made to Mr and Mrs Salom which
induced the plaintiffs to enter into the contracts of sale. The representations were to
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27
the effect that:
a.
the purchaser would obtain vacant possession of the Dog’s Bar property and
the business at settlement;
b.
there was no notice affecting the property of which the vendor was aware that
had not been disclosed to the purchaser.
104
The plaintiffs alleged that the representations arose by reason of the terms of the
contracts of sale. It was said that the subsequent actions of the defendants, in
addition to breaching the contracts of sale:
a.
constituted misleading and deceptive conduct in breach of the Australian
Consumer Law;
b.
in the case of the failure to disclose the building notice dated 14 May 2013,
constituted fraud.
105
The actions of the defendants relied upon were those of Mr Carruthers, as the
controlling mind of the corporate defendants and Dog’s Bar Pty Ltd. The actions
included the fact that the defendants, with knowledge that the contract for the sale of
the Dog’s Bar property required vacant possession of the property to be given to the
purchaser at settlement and the agreement had effected a sale of certain critical
assets of the Dog’s Bar business. Mr Carruthers,
a.
remained in occupation of the Dog’s Bar property and the apartments
following settlement of the contracts of sale;
b.
on about 2 December 2013, purported to sell the Dog’s Bar business and to
transfer the lease to a related company and to cancel the surrender of the
lease of the Dog’s Bar property;
c.
failed to procure the transfer to the purchaser of the liquor licence, the use of
the name “Dog’s Bar” and the transfer of related intellectual property;
d.
on 3 January 2014, registered Arts and Events as the owner of the business
name, “Dog’s Bar St Kilda”.
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28
Construction of the contract of sale – whether the business was included?
106
The issues to be determined by the construction of the contract of sale of the Dog’s
Bar property are as follows:
a.
apart from the real property, what assets relating to the Dog’s Bar business, if
any, were transferred by the sale; and
b.
what did the parties intend would occur in relation to the Dog’s Bar business
and the occupation of the Dog’s Bar property, following settlement of the
contract of sale?
107
The applicable principles of construction of a commercial contract were reaffirmed by
the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165. At
paragraph 40, the Court stated that, “What matters is what each party by words and
conduct would have a reasonable person in the position of the other party to believe.
References to the common intention of the parties to a contract are to be understood
as referring to what a reasonable person would understand by the language in which
the parties have expressed their agreement. The meaning of the terms of a
contractual document is to be determined by what a reasonable person would have
understood them to mean. That normally requires consideration not only of the text
but also of the surrounding circumstances known to the parties and the purpose and
object of the transaction”.
108
Three contracts of sale were executed on 4 July 2013; two related to the apartments
and one to Lot 1, from which the Dog’s Bar business was conducted (although part of
the business had expanded into the adjoining property).
109
It is relevant to examine the various element of the business of the Dog’s Bar,
including:
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a.
the operator;
b.
the lease arrangements;
c.
the fixtures, fittings and chattels on the business premises and those used in
the business;
d.
the operating stock in trade;
e.
the business name and any associated intellectual property;
f.
the goodwill of the business.
29
110
At the time of the contract of sale of Lot 1:
a.
the business of the Dog’s Bar was being conducted by Dog’s Bar Pty Ltd, a
company of which Mr Carruthers was the sole director and shareholder. The
company may have been acting as the trustee of a family trust.
b.
Dog’s Bar Pty Ltd was the lessee pursuant to the lease with Pub Properties
dated 11 September 2008 for a period of 5 years with the option of four further
terms each of 5 years at a rental of $190,000 per annum plus GST to be
adjusted each year for CPI changes and with a “market review” in 2018 and
2028;
c.
Dog’s Bar Pty Ltd had by letter to Pub Properties dated 1 July 2013 exercised
its option to renew the lease for a further term of 5 years to 2018. The letter
was included with the lease in the contract of sale;
d.
Dog’s Bar Pty Ltd and Pub Properties had in about May or June 2013
executed a Deed of agreement for surrender of lease “as and from 20 January
2014”. A copy of the deed was included in the contract of sale with the
handwritten notation, “surrender referred to in special condition C of the
contract of sale”;
e.
part of the adjacent property was rented from Mr Joe Roth and used as a
dining room;
f.
the business of Dog’s Bar was operating at the date of the auction. This
involved the use of certain fixtures, fittings and chattels, stock in trade
comprising beverages and food, and the use of the name Dog’s Bar and
associated intellectual property.
111
The contract of sale for the Dog’s Bar contract, as originally prepared by Ms Jessop
for the auction:
a.
anticipated that the business conducted on the Dog’s Bar property would be
sold as a “going concern”, in the sense that “the vendor will carry on” the
business until settlement. If the business had not been sold as a “going
concern”, the sale price would have attracted GST;
b.
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noted that the property was “subject to lease” and that therefore the purchaser
30
would not, ordinarily, be “entitled to vacant possession of the property”, and
bought the property subject to the lease from the vendor to Dog’s Bar Pty Ltd.
However, the particulars of sale immediately thereafter referred to the
surrender of lease;
c.
Special Condition C anticipated that, the lease would continue, beyond the
date of settlement of the contract of sale (presumably 30 or 60 days from the
auction) to 20 January 2014;
d.
from the date of settlement until 20 January 2014, the lessee (Dog’s Bar Pty
Ltd ) would pay an agreed rent of $155,000 plus GST and outgoings to the
purchaser;
e.
on 20 January 2014, the deed of surrender would operate so that from that
date the purchaser would be entitled to vacant possession of the Dog’s Bar
property;
f.
apart from four items specifically “excluded” (three light fittings, computers, the
point of sale system and the coffee machine), there was a list of 27 items of
“fixtures and fittings included with the Lot one sale”;
g.
Special Condition D anticipated that, if requested by the purchaser, there
would be a procuring by the vendor of a transfer of the use of the name “Dog’s
Bar” and associated intellectual property, including:
i.
a change by Dog’s Bar Pty Ltd of its corporate name, “so that the
purchaser may direct the name may be registered by another entity”;
ii.
the “transfer of the current liquor licence and any other registration and
licensing transfer requirements for the new entity”;
iii. the transfer of “all other intellectual property such as web site, twitter and
Facebook necessary for the operation of the business of the ‘Dog’s Bar’”;
h.
no provision was made for the transfer of stock in trade or of the goodwill of
the business. The latter is not surprising as the vendor of the property and the
operator of the business were related companies under the effective control of
Mr Carruthers.
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31
112
Mr Carruthers said in his affidavit material that, “It is clear from all documentation that
the Tenant was Dog’s Bar Pty Ltd on 4th July 2013. The Landlord selling the Property
was Victorian Pub Properties Pty Ltd. The Purchaser possibly made a mistake. The
alternative is that potentially negligent or even improper conduct has taken place in
the sales process and sales transaction”.
113
In her evidence, Ms Jessop suggested that the deletion of special condition C may
have cancelled the deed of surrender although, she said, “the contract was silent on
that point”.
114
Mr Carruthers submitted that special condition D could not operate without special
condition C, and with the deletion of both special conditions C, special condition D
had been left in the contract by mistake. Mr Carruthers submitted that the amended
contract of sale of the Dog’s Bar property foreshadowed that:
a.
the lease held by Dog’s Bar Pty Ltd would continue past settlement;
b.
the surrender of lease would have no effect;
c.
Dog’s Bar Pty Ltd, or any other entity to which the lease and business was
transferred, would continue to operate the business.
115
The negotiations between the parties following the auction essentially concerned the
following matters:
a.
the determination of the overall price of $6.02m, and the corresponding
purchase price for each of the three contracts;
b.
the extension of the settlement date from an anticipated 30 or 60 days to a
period of 12 months;
c.
the increase in the deposit from 10 per cent to 15 per cent of the purchase
price, payable in two instalments;
d.
the specific inclusion, in addition to General Condition 18, of the description of
the purchaser, “Mette Salom and + or nominee”, as including “a substitute or
additional purchaser”.
116
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By letter dated 6 February 2014 to Law 554, the purchaser’s solicitors gave notice:
32
a.
that, “Our client will require Dog’s Bar Pty Ltd to change its name ahead of
settlement”;
b.
“confirmation that the other aspects of Special Condition D will be complied
with at settlement”;
c.
that “the liquor licence will be transferred” to the purchaser “at settlement as
required by the contract”.
117
Mr Conlan of Law 554 Solicitors had drafted agreements, apparently executed by Mr
Carruthers on behalf of his companies, on about 2 December 2013. The agreements
were:
a.
a deed dated 2 December 2013 between Dog’s Bar Pty Ltd and Pub
Properties which:
i.
confirmed the renewal of the lease dated 11 September 2008 for a further
term of 5 years;
ii.
cancelled the undated surrender of lease, effective from 2 December
2013;
b.
a transfer of lease between Dog’s Bar Pty Ltd, as the “old tenant”, Zarcon Pty
Ltd (later Arts and Events) as the “new tenant” and Pub Properties as the
“landlord”, as from 2 December 2013;
c.
a sale of business contract between Dog’s Bar Pty Ltd as vendor and Zarcon
Pty Ltd as purchaser in respect of the business of the “bar at 54 Acland Street
St Kilda Vic 3182”, on the following terms:
i.
a price of $40,000;
ii.
the price allocated as follows:
“1. plant and equipment
$8,160.00
2. goodwill
$29,340.00
3. vendor’s intellectual property
$2,500.00”
iii. with the transfer to the purchaser of “the vendor’s rights pursuant to the
lease if any” of the lease dated 11 September 2008;
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33
iv. with “all the plant and equipment at the premises with the exception of the
plant and equipment in the attached list”, being the items listed as being
sold pursuant to the contract of sale of the Dog’s Bar property;
v.
with the transfer of the “Dog’s Bar” business name;
vi. with “licences, permits, approvals and registration necessary for the
business”, including specifically, “liquor licence”;
vii. with “all intellectual property used in or in connection with the business as
conducted by the vendor”;
viii. with stock at valuation.
Conclusions – Construction of the Contract of Sale
118
In my view, the effect of the deletion of the relevant parts of both special conditions
marked “C” was that:
a.
the deed of surrender of lease included in the contract of sale took effect from
20 January 2014;
b.
the lease dated 11 September 2008 with Dog’s Bar Pty Ltd had no operation
thereafter; and
c.
Pub Properties was obliged to give vacant possession of the Dog’s Bar
property when the contract of sale settled on 4 July 2014.
119
Accordingly, I am satisfied that, at settlement, the purchaser Apes with Wings was
entitled pursuant to the contract of sale of the Dog’s Bar property to:
a.
the fixtures and fittings and chattels listed in the contract of sale;
b.
vacant possession of the Dog’s Bar property;
c.
upon giving the requisite notice, to have the vendor procure the transfer of the
liquor licence, the name “Dog’s Bar” and associated intellectual property;
d.
no entitlement to the stock in trade, or any remaining goodwill of the business.
Stock in trade is almost invariably a component of a sale of business that
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34
depends upon provision being made for valuing the stock at the date of
handover.
120
I do not accept Mr Carruthers contention that the deletion of both special conditions C
required the deletion of special condition D and that therefore special condition D had
remained in the contract “by mistake”.
121
Such an argument was necessary to support Mr Carruthers evidence that, as he had
not achieved a sufficient price at the auction, he was retaining the business to
augment his cashflow. This evidence is improbable in view of the sequence of events
at the auction and its aftermath.
122
There were inconsistencies in Mr Carruthers’ account of the events on auction day
which make his evidence unreliable. These matters included:
a.
Mr Carruthers stated that, at the auction, there were only a limited number of
persons present of those foreshadowed by the agents at the pre-auction
marketing meetings as potential bidders. Mr Carruthers said, however, that
potential bidders at the auction would have been intimidated by the presence
of a particular individual whom he named who stood at the front of the crowd
at the auction. Later, when negotiations were proceeding with Mr Salom, Mr
Carruthers was frustrated that the other potential bidders and interested
parties were not spoken to by the agents, although these persons had waited
around for some time after the auction concluded;
b.
Mr Carruthers said that he was told about the presence of the person whom
he considered may have intimidated bidders at the auction, about 3 months
later. If that person had stood at the front of the crowd, as part of a prearranged plan to dissuade bids, it is surprising that Mr and Mrs Carruthers did
not see him there. No witness at the trial gave evidence that they had seen
the person present at the auction although it was apparent that the person
would have most likely been recognised if he had been present;
c.
this scenario would have necessitated the involvement of a bidder (or bidders)
apart from Mr Salom being part of the conspiracy. Half the bids were made by
someone other than Mr Salom, and presumably the presence of other persons
at the auction did not intimidate those other bidders;
d.
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at various points during the auction, including following Mr Pride’s introductory
35
remarks and the conduct of the bidding by taking $25,000 bids, Mr Carruthers
said he told his wife that they were “being set up”. If he really believed he was
being undersold, he could have withdrawn the properties from sale and sold
them separately, as he said he had on one or two occasions threatened to do
that day.
e.
Mr Carruthers said that he asked Ms Jessop specifically about the effect of the
deletion of special condition C and whether it meant the surrender of lease
had no effect. He also submitted that the deletion of special condition C also
required the deletion of special condition D. However, Mr Carruthers initialled
special condition D to acknowledge the change of date in that clause from
“20th January, 2014” to “4/7/2014”.
123
The omission of special condition C creates some uncertainty as to the effectiveness
of the deed of surrender and whether it operated on 20 January 2014, or only took
effect at settlement. I consider that the better view is that, in the circumstances of the
negotiations between the parties, the effect was that the deed of surrender would not
operate as between the vendor and purchaser until the settlement of the contract of
sale.
124
From the purchaser’s perspective, the draft contract anticipated that vacant
possession of the Dog’s Bar property was not to be given until the purchaser paid the
balance of the purchase price and settlement had occurred.
125
From the vendor’s perspective, the vendor, Pubs Properties, and Dog’s Bar Pty Ltd
(the lessee) were both companies controlled by Mr Carruthers. Pub Properties and
Dog’s Bar Pty Ltd had executed the surrender of lease. The property had been
marketed on a particular basis. Mr Carruthers acknowledged, including in pre-auction
correspondence, that vacant possession would be given after a short extended period
of trading.
126
It is clear from the evidence that, as negotiations increased the purchase price, the
settlement date was extended. However, there is no credible evidence that Mr
Carruthers requested a change in the arrangements to allow Dog’s Bar Pty Ltd (or
some other entity of Mr Carruthers’) to continue to operate the business at the
property after settlement.
127
Although special condition C was deleted, the “particulars of sale” included a
reference under “lease” to the “deed of surrender dated from the 20th January, 2014”
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36
and a copy of the surrender was contained as part of the contract.
128
In addition, special condition D was retained with the sole amendment of the date.
This reflected the fact that settlement would occur later than the end of the short
extended trading period that had been foreshadowed in order for Mr Carruthers to
take advantage of the summer trade, and (probably more significantly) so that the
transaction would not attract GST.
129
Additionally, special condition D provided a mechanism to effect a transfer of the
Dog’s Bar liquor licence, the name “Dog’s Bar” itself and an extensive list of
equipment and other chattels used in the business. It is difficult to imagine in these
circumstances that Mr Carruthers seriously intended that the business would continue
to be operated by Dog’s Bar Pty Ltd, or someone else associated with the vendor,
after settlement.
130
It is clear, in my view, that this was the “common intention” of the parties. If this does
not appear from the plain “text” of the contract of sale, it is obvious from “the
surrounding circumstances known to the parties and the purpose and object of the
transaction”.
131
It appears from the evidence that it was anticipated by the vendor and those advising
Mr Carruthers that the sale of the property as a whole, on a “walk-in walk-out” basis,
would achieve the best price. The property was extensively marketed, it attracted a
number of potential bidders to the auction, and significant and extended bidding at
the auction.
132
Mr Carruthers may have been disappointed with the negotiated outcome. However,
he faced significant pressures both in terms of his health problems and the financial
circumstances of his companies and himself personally. This was apparent from not
only the borrowings on the property (about $6 million) and the alleged default under
the second mortgage, but also the unpaid rates and land tax and the rent that was
owing to the adjoining landowner.
133
Any such disappointment did not, however, result in the basis of the sale being reconsidered in the negotiations, by the withdrawal of the apartments from sale so that
they could be sold separately or the retention of the business so that it could be
conducted by Mr Carruthers’ interests beyond the date for settlement. Instead, in the
presence of Mr van der Merwe, who appears to have been his critical financial
adviser, Mr Carruthers executed the contracts of sale.
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37
134
In the circumstances, I consider that the failure by Pub Properties at settlement in
July 2014 to provide vacant possession of the Dog’s Bar property and to procure the
transfer of the liquor licence, the name “Dog’s Bar” and the associated intellectual
property, constituted a breach of the contract of sale, entitling the plaintiff to
damages.
135
Further, and alternatively, it was alleged that there were representations made by the
vendor, and on its behalf with the concurrence of Mr Carruthers, in the marketing
material and in the draft contract of sale. I consider that the later conduct, at and
following settlement, constituted misleading and deceptive conduct in breach of the
Australian Consumer Law entitled the plaintiffs to damages and, if necessary and
appropriate, other relief.
136
The actions of Mr Carruthers in later executing the documents drafted by Mr Conlan
in early December 2014, would not affect these conclusions. Mr Carruthers was
advised at this time by Mr van der Merwe that Dog’s Bar Pty Ltd “should not continue
to trade” because it “would be trading whilst insolvent” and that Mr Carruthers “should
arrange the transfer of the assets of Dog’s Bar Pty Ltd to a new company”.
137
These were not bona fide transactions. Mr Carruthers executed the documents with a
view to avoiding the responsibilities of the vendor under the contract of sale of the
Dog’s Bar property to provide vacant possession and, otherwise at settlement, to
procure the transfer of the business assets referred to in the contract of sale.
138
Similarly, in July 2014, Mr and Mrs Carruthers executed a residential tenancy
agreement in respect of two of the apartments solely to avoid the responsibilities of
the vendor in relation to the contract of sale of the apartments. In these
circumstances, declaratory relief should be granted, including pursuant to the
Australian Consumer Law, to make it clear that these agreements have no effect.
139
There may be rights of the liquidator of Dog’s Bar Pty Ltd which may be affected by
the contracts of sale which offered the properties for sale with a surrender of lease
and with a promise to procure the transfer of assets of the business apparently
conducted by Dog’s Bar Pty Ltd. However, the evidence suggests that the liquidator
of Dog’s Bar Pty Ltd is fully cognisant of the transaction and has chosen not to
interfere. I do not consider that it is necessary to further take account of the
liquidation of Dog’s Bar Pty Ltd in this regard. The liquidator’s position, however, may
be relevant to the defendants’ counter claim, particularly in relation to the stock in
trade of the business and the equipment and chattels of the business which were not
VCC:CK
38
specifically referred to in the list contained in the contract of sale of the Dog’s Bar
property.
Plaintiffs’ claim for damages
140
By their amended statement of claim, the plaintiffs claim the total sum of $191,388.87
as damages as a consequence of the defendants’ alleged conduct and breaches.
141
The sum of $191,388.87 is made up as follows:
Legal fees
$70,751.55
Preliminary make good works
$37,705.00
Security and locksmiths
$18,113.48
Buildings notice rectification
$34,518.00
Loss of rent and outgoings
$30,300.84
$191,388.87
142
The detail of these claims and the relevant supporting documents are referred to in
an affidavit of Mr Salom sworn 23 October 2014.
Plaintiffs’ damages – legal fees - $70,751.55
143
The legal fees claimed as damages are as follows:
Makin & Kinsey solicitors
$52,798.09
Hunt & Hunt Lawyers
$11,140.25
Counsel
$11,682.50
$75,620.84
less provision for conveyance
-$4,869.29
$70,751.55
144
Makin & Kinsey acted as the plaintiffs’ solicitors in respect of the conveyance and all
associated legal work relating to the VCAT hearing. This included incurring the sum
of $11,682.50 for counsel’s fees.
145
The firm issued two invoices totalling $52,798.09 “with respect to the work they
performed”, additional to “the actual cost of the conveyance which would have always
had to be paid” by Apes with Wings. The anticipated conveyancing costs were
professional fees of $988.90 (including GST) for each of the three contracts, a total of
$2,966.70, together with disbursements of $1,920.59, which were said to be
“attributable to the ordinary costs of conveyancing”.
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39
146
Mr David Archer, special counsel of Hunt & Hunt Lawyers, and a “specialist property
solicitor with over 30 years’ experience”, apparently provided “specialist advice” about
Mr Carruthers’ attempts to “stall settlement and ultimately get out of the contracts to
purchase the Dog’s Bar and the Apartments”. The charge for Mr Archer’s advice was
$11,140.25.
147
Mr Salom has paid or intends to pay each of these sums, being $52,798.09 to Makin
& Kinsey, $11,140.25 to Hunt & Hunt and $11,682.50 for counsel’s fees.
148
The solicitors’ accounts paid by Mr Salom were not “itemised bills”, or in a form that
might be reviewed by the Costs Court under the Legal Profession Act 2004 (Vic).
During the trial there was no attempt to examine the detail of the charges made for
legal services.
149
Whilst it is appropriate that the defendants should be required to pay damages to the
plaintiffs in respect of legal costs, the defendants should have the same opportunity
that is open under the Legal Profession Act to any person who “is under a legal
obligation to pay all or any part of the legal costs for legal services provided [to] a
client of a law practice” (s. 3.4.2A).
150
In the circumstances, it is appropriate that, unless the defendants, by a date to be
specified take steps pursuant to the Legal Profession Act 2004 (Vic) to have the costs
comprised in the accounts of Makin & Kinsey, Hunt & Hunt and for counsel and the
cost of the conveyancing work which would ordinarily have been performed,
assessed by the Costs Court on an indemnity or solicitor/own client basis as
appropriate, the sum of $70,751.55 shall form part of the plaintiffs’ damages in the
proceeding. Otherwise, the damages shall include the net sum assessed by the
Costs Court.
Plaintiffs’ damages – preliminary make good works - $37,705
151
The plaintiffs’ claim for $35,705 comprises work performed by:
a.
Allsop Property Services, at a cost of $46,985;
b.
Metrafix Constructions, at a cost of $30,720.
These sums have been paid by the plaintiffs, or Mr Salom intends to pay them.
152
General Condition 24.2 of the contracts of sale provided that the vendor must “deliver
the property to the purchaser at settlement in the same condition as it was in on the
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40
day of sale, except for fair wear and tear”.
153
Mr Salom’s evidence was that when he inspected the properties prior to entering into
the contracts of sale he noted that they “were in relatively good condition”. Mrs Salom
said that “the apartments were in great condition”. This is generally confirmed by the
pre-sale photographs taken by Pride Real Estate and used “as part of the marketing
material”.
154
Following settlement, and an inspection by Mrs Salom, Mr Rod Allsop of Allsop
Property Services was engaged to investigate and document the condition of the
properties. Mr Allsop’s investigations disclosed that the apartments had damage to
the walls and floors, leaking plumbing, water damage caused by the leaking of roof
membrane, broken glass and excessive rubbish throughout.
155
Mr Allsop engaged a specialist to determine the source of the water damage to the
walls. A quotation from Shower Care and Repairs for $48,900 to repair the roof
membrane was obtained, although this sum has not been claimed in the proceeding.
156
The Dog’s Bar property was inspected by the City of Port Phillip on 17 September
2014. Works were required to be undertaken before bar trading could commence.
Metrofix Construction undertook rectification including the removal of rubbish at a
cost of $30,720. Mr Salom has paid the account of Metrofix and the account of Allsop
Property Services for $6,985.
157
There was little dispute as to the condition of the properties on 4 July 2013 and at
settlement on 8 July 2014. In the circumstances, it is appropriate that the sum of
$37,705 be allowed as part of the plaintiffs’ damages.
Plaintiffs’ damages – security and locksmiths - $18,113.48
158
159
The plaintiffs claim damages of $18,113.48 comprising:
a.
an account from PSG Security, for $10,508.85;
b.
an account from St Kilda Locksmiths, for $7,604.63.
At settlement, on 8 July 2014, keys were not provided for either the Dog’s Bar
property or the apartments. On 9 July, Apes with Wings engaged a security firm, PSG
Security, to manage the taking of possession. Security guards were at the property
from 9-13 July, and later on 22 and 23 July 2014 when possession was taken of the
bar property.
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41
160
A locksmith, St Kilda Locksmiths, was engaged to change the locks and provide keys.
The plaintiffs have paid or intend to pay the accounts of the security firm and the
locksmith. In the circumstances, the sum of $18,113.48 shall form part of the
plaintiffs’ damages.
Plaintiffs’ damages – buildings notice rectification - $31,438
161
162
The plaintiffs claim damages of $34,518 comprised as follows:
a.
Code Compliance
$3,080;
b.
Metrofix Constructions
$31,438.
On 14 May 2013, the City of Port Phillip served a building notice on Mr Carruthers.
The notice followed inspections by a specialist fire services consultant, Mr Shane
Gore on behalf of the municipality.
163
The building notice was not disclosed in the s. 32 statement, or in any other way by
the vendor to the purchaser, prior to the auction. Mr Salom said that he only became
aware of the notice on 22 July 2014. If he had known of the requirements of the
notice, Mr Salom said he would have taken the cost of compliance into account in his
negotiations at the auction.
164
When Mr Salom became aware of the notice, he obtained a report from Code
Compliance, specialist building surveyors, “with respect to what works and other
tasks that would need to be undertaken in order to comply with the building notice”.
Metrofix Constructions provided an estimate of $31,438 to rectify the items on the
building notice. A permit was obtained and works have commenced.
165
There is evidence that, in certain circumstances the municipality may not require all
the works to be completed but that lesser works might be neogitatied. I consider in
these circumstances only two – thirds of the quotation by Metrofix Constructions
should be allowed, namely $20,959.
166
In the circumstances, it is appropriate that the sum of $24,139 be allowed as part of
the plaintiffs’ damages.
Plaintiffs’ damages – outgoings and loss of rent - $30,300.84
167
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The plaintiffs claim damages of $30,300.84 made up as follows:
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168
a.
loss of rent and outgoings
$66,300.84;
b.
less rent paid pursuant to VCAT order
$36,000.00
$30,300.84
The plaintiffs were unable to conduct the Dog’s Bar business from the date of
settlement on 8 July 2014 to 2 October 2014, a total of 86 days. The Dog’s Bar
business reopened on 3 October 2014, after a liquor licence was issued to Apes with
Wings on 1 October 2014.
169
170
In respect of the period of 86 days, the plaintiffs claim:
a.
$62,202.94 rental at $723.29 per day ($264,000 per annum);
b.
$1,947.90 municipal rates at $22.65 per day ($8,267.70 per annum);
c.
$173.72 water service charges ($139.72 from 16 July to 30 September 2014,
or $1.82 per day) and waterways and drainage annual charges of $173.72 or
$0.20 per day ($75.72 from 16 July to 30 September 2014);
d.
$1,976.28 insurance at $22.98 per day ($16,776.58 per annum).
The plaintiffs claim 86 days at an annual rental of $264,000 (inclusive of GST). This is
the rental agreed to be paid by Ciccioliona Australia Pty Ltd in about December 2013.
The uncertainty concerning the plaintiffs’ capacity to transfer the business to the
proposed lessee (specifically the liquor licence) caused the ultimate failure by the
plaintiffs to execute a lease with Ciccioliona.
171
There is a dispute in relation to the market rental of the property. Mr Carruthers
referred to the rental of $190.000 per annum in the lease from Pub Properties to
Dog’s Bar Pty Ltd included in the s. 32 statement and also to the sworn valuation of
Charter Keck Cramer dated 1 July 2014, which included a statement that, in the
valuer’s opinion, market rental of the business was $131,405 per annum.
172
I consider that the total sum for outgoings of $4,097.90 is appropriate. As for the
rental, I consider that there is some evidence that the sum of $264,000 per annum
reflects the most compelling indication of the market rental. However, because of the
significant disparity between this rental (for a lease that was not proceeded with) and
the figure in the sworn valuation dated 1 July 2014, I will discount the higher figure by
10%. I am limiting the reduction because it appears that the rental in the lease
between Pub Properties and Dog’s Bar Pty Ltd, if adjusted in accordance with the
terms of the lease, would provide for a rental very close to the proposed rental in the
Ciccioliona lease.
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173
Deducting 10% leaves an annual rental of $237,600, or $650.96 per day. 86 days at
$650.96 is $55,982.56. Deducting the rental paid by Mr Carruthers pursuant to the
VCAT order of $36,000, it is appropriate that this part of the plaintiffs’ damages
should be fixed at $19,982.56.
Defendants’ counterclaim
174
Paragraph 65 of the defendants’ counterclaim, insofar as it is based upon the premise
that the contract of sale of the Dog’s Bar property did not include significant assets of
the business or require the vendor to give vacant possession at settlement, must fail
because of the earlier findings I have made.
175
Further, paragraph 64 of the counterclaim based on an alleged entitlement to remain
in possession by reason of the residential tenancy agreements entered into between
Pub Properties and Mr and Mrs Carruthers on 4 July 2014, must also fail.
176
No proper basis for the claim by Mr Carruthers, in paragraph 63 for nominal
damages, was articulated. This counterclaim must also fail.
177
The counterclaim includes two further claims:
a.
in paragraphs 20-23 for the return of items “specifically excluded from the
contract of sale fixtures and fittings list”;
b.
in paragraphs 24 – 62 claims for the value of “items left on site and owned by
St Kilda Arts and Events”.
178
In relation to items 20 and 21, Apes with Wings, in its defence to counterclaim,
claimed that, “excluding screens and connections and any computers already
returned”, it would “make the computers available for collection and the lights
available for removal by a certified electrician outside business hours and upon
reasonable notice being provided”. Apes with Wings also claimed that “the items
listed in paragraphs 22 and 23 have previously been provided to the defendants”.
179
In fact, the position with these items was as follows:
a.
the light fittings (item 20) are still installed at the premises. In final
submissions, plaintiffs’ counsel Mr Magowan repeated the offer made in the
defence to counterclaim;
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b.
the position regarding the computers, screens and connections (item 21) is
unclear. The plaintiffs say that all computers and associated equipment were
placed in boxes and made available for collection. Some boxes were
collected. It is not clear whether any remain to be collected by the defendants.
Mr Carruthers said that the computer equipment was old and would be worth
a few hundred dollars;
c.
it was agreed that the point of sale system (item 22) has been returned by the
plaintiffs to the defendants;
d.
the coffee machine (item 23) has not been collected by the defendants. It has
been available for collection for some time. I made directions during the
hearing that the parties make arrangements for its collection. This was not
done at that time and the defendants had taken no steps by the conclusion of
the trial to collect the machine.
180
In the circumstances, I consider that it is appropriate to simply order that items 20 and
23, and the items of computers and associated equipment, not already collected by
Pub Properties, must be made available for collection by the plaintiffs from the Dog’s
Bar property at a reasonable time after giving at least 48 hours written notice to the
plaintiffs’ solicitors of Pub Properties’ intention to collect the items. Item 20 can only
be collected if a certified electrician is in attendance to remove the fittings and the
removal must be carried out at the cost of Pub Properties.
181
In relation to items 24 to 62, the plaintiffs, in the defence to this part of the
counterclaim, relied upon the following matters:
a.
In so far as the items were at the Dog’s Bar property, and were used in the
business, they were alleged to have been sold to Apes with Wings “as part of
the Bar sale”;
b.
Alternatively, Arts and Events has no standing to sue as it was not the owner
of the property. Dog’s Bar Pty Ltd, as the entity which conducted the business
prior to its liquidation, and now its liquidator, are entitled to the property, if the
items had not, as the plaintiffs contended, been transferred to Apes with
Wings pursuant to the Contract of Sale of the Dog’s Bar property;
c.
In so far as the items at the Dog’s Bar property comprised items such as
“business records and the like”, the plaintiffs had been entitled to treat the
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items as “rubbish”, as they were left at the Dog’s Bar property following
settlement;
d.
By reason of Mr Carruthers representing and warranting that “those items
would be sold as part of the Bar contract (being a going concern) and that the
vendor was in a position to sell those items”, the defendants should be
“estopped” from asserting that the items “are [not] in fact owned by Pub
Properties and did not form part of the Bar contract,” as otherwise it would be
“unconscionable”.
182
Items 24 and 25 are beverage and food stock that apparently comprised the stock in
trade of the business being conducted at the Dog’s Bar property. The claim is made
by Arts and Events, presumably as the purported purchaser under the sale of
business agreement from Dog’s Bar Pty Ltd on about 2 December 2013. That is not
the construction that I consider should be given to that document.
183
By the agreement, stock was to be transferred “at valuation”. It is probable that this
was not done as the summary prepared by Mr Carruthers for the liquidation on 6
December 2013 records “stock as detailed in inventory” at $7,081, and “work in
progress as detailed in inventory” at $18,700.
184
From 6 December 2013 until 9 July 2014, and between 23 July and 1 September
2014, Mr Carruthers operated the business of the Dog’s Bar. It is likely that he used
the stock owned by Dog’s Bar Pty Ltd, no doubt considering (incorrectly in my view)
that all aspects of the business (apart from the equipment and chattels specifically
listed in the Dog’s Bar property contract) had been transferred to Arts and Events on
2 December 2013.
185
It is probable that the stock on hand in July 2014, and on 1 September 2014, had
been purchased by Mr Carruthers on behalf of Arts and Events. If this was intended, I
do not consider that the undated sale of business agreement should be treated as
having been effective in this regard. Apes with Wings has submitted that the stock
was purchased as part of the business sold by the contract of sale of the Dog’s Bar
property. I do not agree that this was the effect of the contract.
186
Mr Carruthers said that the value of the stock was about $25,000 and included food
delivered just prior to the purchaser taking over. Mrs Salom said in evidence that the
purchaser was required to clean out perished food from the refrigerators and storage
before the business could reopen. It is clear that a quantity of beverages, and
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probably food, was used by Apes with Wings.
187
I consider that it was to be expected that both parties would have been able to give
an accurate indication of the value of the stock at handover. Mr Carruthers, from his
experience of running the business, should have been able to be more precise than
the rough estimate of $25,000 that he offered. The purchaser, with the prospect of
litigation, and the likelihood of there being a dispute over the value of the stock taken
over, should have carried out a stocktake.
188
In the absence of reliable evidence, I will do the best I can. I will allow the sum of
$10,000, being 40% of Mr Carruthers’ estimate of $25,000, as the reasonable value
of the stock taken over by Apes with Wings. This sum shall be set off against the
plaintiffs’ damages.
189
In relation to items 26 – 62, the plaintiffs make similar submission as for items 24 and
25. Further, Mr Pride gave evidence that the intention of Mr Carruthers was to sell the
property on a “walk-in walk-out” basis. His instructions to Mr Carruthers were to
prepare a list of the major items of fixtures and fittings. This was the usual practice,
with the intention that, apart from any listed exclusions, all of the assets of the
business conducted on the property would be transferred.
190
There is, in the list of “fixtures and fittings”, a degree of ambiguity as to the breadth of
the items. For example, would item “I Glassware”, include item “38. Bar 4 x wine
decanters”?
191
In my view, it is difficult when a comparison is made of the two lists (in the contract of
sale and in the counterclaim) to conclude that the “schedule of fixtures and fitting
included with the Lot 1 sale” would include items 26 to 62 listed in the Counterclaim.
192
It is alleged, however, that items 24 to 62 were “owned by St Kilda Arts & Events (Vic)
Pty Ltd” In this regard, reliance was placed on the sale of business agreement
entered into between Dog’s Bar Pty Ltd and Zarcon Pty Ltd apparently on 2
December 2013.
193
The agreement was entered into only four days before Dog’s Bar Pty Ltd was placed
into voluntary liquidation. This was at the suggestion of Mr Carruthers’ Business
Planning Advisor, Mr van der Merwe. Mr Carruthers said that he was advised to
“transfer the assets” of Dog’s Bar Pty Ltd to a new entity before the company was
liquidated.
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194
Pursuant to the Corporations Act 2001 (Cth), it is likely that, this and other
agreements entered into by Dog’s Bar Pty Ltd on about 2 December 2013 would
constitute “voidable transactions”. In view of the company’s financial position, it is
understandable that the liquidator of Dog’s Bar Pty Ltd has not taken any action in
this regard, apart from indicating to the plaintiff’s solicitors that he has no concern
about the settlement of the Dog’s Bar property contract.
195
The plaintiffs have an alternative claim pursuant to the Australian Consumer Law in
respect of the representations allegedly made by Mr Carruthers on behalf of Pub
Properties and a defence of estoppel based on conduct which is alleged to be
“unconscionable”. I consider that it is appropriate to make a declaration in relation to
the effect of the agreements entered into by Mr Carruthers on about 2 December
2013, as it relates to the contract of sale involving the sale of the Dog’s Bar property
and certain assets of the business conducted on the property.
196
In the circumstances, I do not propose to allow the counterclaim in relation to items
26 – 62. That part of the counterclaim will be dismissed. The declaration I propose
would not affect the position of the liquidator and any rights he may have in respect of
his administration of the company’s affairs. To ensure that the liquidator is fully
informed, I intend to direct that a copy of these reasons for decision be sent to him as
soon as is reasonably practicable.
Whether GST payable in respect of the Dog’s Bar contract of sale
197
If the Dog’s Bar contract of sale, as executed by the parties, did not involve the sale
of a “going concern”, it is possible that the contract may attract GST. It is not
appropriate that I express a view on that matter. I do consider, however, that I should,
following the making of final orders, direct that a copy of these reasons for judgment
and the final orders be forwarded to the Australian Taxation Office.
Orders
198
Accordingly, the following orders seem appropriate:
1.
Judgment for the first plaintiff against the first and second defendants for:
a.
a declaration that at settlement of the contract of sale dated 4 July
2013 in respect of Lot 1, 54 Acland Street, St Kilda, being the whole of
the land contained in Certificate of Title Volume 10064, Folio 017 (“the
property”), the third defendant was obliged:
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i.
to provide vacant possession to the first plaintiff of the
property;
ii.
to procure the transfer to the first plaintiff of the right to use the
name “Dog’s Bar” and all licenses, permits, approvals and
registration necessary for the business of the Dog’s Bar
conducted at the property, including the liquor licence, and all
intellectual property used in or in connection with the business;
b.
a declaration that the following purported agreements had no effect
upon the rights, as between the defendants and the plaintiffs pursuant
to the contracts of sale dated 4 July 2013 of the properties at 54
Acland Street St Kilda, namely:
i.
a deed dated 2 December 2013 between Dog’s Bar Pty Ltd
and the third defendant;
ii.
a transfer of lease, effective from 2 December 2013 between
Dog’s Bar Pty Ltd, Zarcon Pty Ltd (later the first defendant) and
the third defendant;
iii.
an undated sale of business agreement between Dog’s Bar Pty
Ltd and Zarcon Pty Ltd in respect of the business of the “bar at
54 Acland Street, St Kilda Vic 3182”;
iv.
residential tenancy agreements dated 4 July 2014 between the
third defendant, the second defendant and Mrs Deborah
Carruthers in respect of apartments 5 and 6 at 54 Acland
Street, St Kilda.
2.
Judgment for the first plaintiff against the first and second defendants, that the
first and second defendants pay to the first plaintiff damages of:
a.
$97,940.04;
b.
the further sum of $70,751.55, or if the procedures set out in
paragraph 3 are followed, the further sum, if any, as assessed by the
Costs Court.
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3.
Declare that part of the damages the first and second defendants must pay
the first plaintiff shall include the first plaintiff’s legal costs on a solicitor / own
client or indemnity basis (whichever in the circumstances is more appropriate
to the nature of the legal services provided) for the legal services provided to
the plaintiffs of and incidental to the following:
a.
the conveyancing work associating with the contracts of sale in
respect of the purchase of 54 Acland Street, St Kilda from the second
defendant, the third defendant and Mrs Carruthers;
b.
the legal work associated with obtaining possession of the property,
including VCAT proceeding reference number BP82 / 2014;
c.
the legal work associated with obtaining the liquor licence and the use
of the name “Dog’s Bar” and all associated intellectual property,
performed by Makin & Kinsey Lawyers and counsel briefed by the firm
and by Hunt & Hunt Lawyers;
but excluding:
i.
the legal costs and disbursements that might reasonably have
been anticipated to have been incurred in performing the work
described in paragraph (a) above;
ii.
4.
the costs of this proceeding.
The legal costs referred to in paragraph 3 are fixed in the total sum of
$70,751.55, unless the defendants shall on or before 4pm on ___ January
2015 make an application for a review of the legal costs referred to in
paragraph 3.
5.
If the defendants take the steps required by paragraph 4, the part of the first
plaintiff’s damages applicable to legal costs shall be the amount determined
by the Costs Court for the legal work performed by Makin & Kinsey Lawyers,
including counsel briefed by the firm and Hunt & Hunt Lawyers, but excluding
the legal costs and disbursements that might reasonably have been
anticipated to have been incurred in performing the work described in
paragraph 3(a) above.
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6.
On the defendant’s counterclaim:
a.
items 20 and 23, and the computers and associated equipment not
already collected by the third defendant (item 21), must be made
available for collection by the third defendant from the Dog’s Bar
property at a reasonable time after the giving of at least 48 hours
written notice to the plaintiffs’ solicitors of the third defendant’s
intention to collect the items. Item 20 can only be collected if a certified
electrician is in attendance to remove the fittings and the removal is
carried out at the cost of the third defendant. Otherwise the counterclaim in respect of items 20 to 23 is dismissed, with a right of
reinstatement upon application by the third defendant to the Court with
at least 48 hours prior written notice to the plaintiffs.
b.
items 24 and 25; judgment for the second defendant against the
plaintiffs that the plaintiffs pay to the second defendant the sum of
$10,000. Such sum is to be set off against the damages payable by
the first and second defendants to the first plaintiff, and is not to be
otherwise payable;
c.
5.
items 26 to 62; the counterclaim is dismissed.
A copy of this order and the reasons for decision delivered 18 December 2014
must, as soon as is reasonably practicable be sent by pre-paid mail by the
plaintiffs’ solicitors to:
a.
the Deputy Commissioner of Taxation at Collins Square, 747 Collins
Street, Docklands, Vic, 3008, together with a letter explaining that the
documents are being sent pursuant to an order of Judge Anderson of
the County Court of Victoria made on ____ 2015 and that the attention
of the Deputy Commissioner is specifically drawn to paragraphs 195 of
the reasons for the decision.
b.
Mr Andrew Hewitt of Grant Thornton Australia Limited of GPO Box
4736 Melbourne Vic 3001, the liquidator of ACN 098 394 908 Pty Ltd
(formerly Dog’s Bar Pty Ltd), together with a letter explaining that the
documents are being sent pursuant to an order of Judge Anderson of
the County Court of Victoria made on ____ 2015 and that the attention
of the Mr Hewitt is specifically drawn to paragraphs 137 and 192-4 of
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51
the reasons for the decision.
199
I will discuss further with the parties the form of the orders proposed and other
outstanding issues including interest and costs.
--Certificate
I certify that these 52 pages are a true copy of the reasons for decision of His Honour Judge
Anderson delivered on 18 December 2014.
Dated: 18 December 2014
Olivia Bramwell
Associate to His Honour Judge Anderson
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52