Alborn v Stephens (No 2) - [2012] QCA 267

SUPREME COURT OF QUEENSLAND

CITATION:

Alborn & Ors v Stephens & Ors [No 2] [2012] QCA 267

PARTIES:

RICHARD MOLLISON ALBORN
(first appellant)
ALBORN FAMILY CORPORATION PTY LTD
ACN 080 955 595
(second appellant)
SHAYKAR PTY LTD
ACN 076 868 552
(third appellant)
v
RAY STEPHENS
(first respondent)
GLENYS MARGARET STEPHENS
(second respondent)
AS & L PTY LTD
ACN 087 729 048
(third respondent)

FILE NO/S:

Appeal No 11669 of 2011
SC No 7795 of 2006

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

28 September 2012

DELIVERED AT:

Brisbane

HEARING DATE:

Heard on the papers

JUDGES:

Holmes and Fraser JJA and Philippides J
Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

1.      The appeal is allowed.

2.      The judgment of Atkinson J delivered on 18 November 2011 and the orders of Atkinson J made on 6 December 2011 are set aside.

3.      It is declared that the third appellant is and remains the beneficial owner of the following businesses and the franchises associated therewith (referred to in this order as “the franchise businesses”); namely –

(a)     the Clontarf Subway business and associated franchise (referred to in this order as the “Clontarf Subway Store”); and

(b)     the Clontarf Baskin Robbins business and associated franchise (referred to in this order as the “Clontarf Baskin Robbins Store”).

4.      The respondents shall do all things necessary to make over, convey and transfer to the third appellant or its nominee, all of the right to, title and interest in, and the benefit of the franchise businesses.

5.      Without limiting the scope of their obligations under paragraph 4 of these orders, the respondents shall, in the performance of paragraph 4 of these orders:

(a)     Do all things and sign all documents as the third appellant may reasonably request, to enable the third appellant to obtain and enjoy the full benefit of the franchise businesses including, without limitation, enabling the nominee of the third appellant to become:

(i)    the franchisee in respect of each of the franchise businesses;

(ii)   the tenant of the respective premises at which each of the franchise businesses is located;

(iii) the employer of the employees at each of the franchise businesses;

(iv) the lessee of any leased chattels (including all fixtures, fittings and equipment) at each of the franchise businesses; and

(v)   the vendor of the businesses conducted at each of the franchise businesses, if the appellants decide to sell them or any of them to third parties rather than continuing to operate them;

(b)     For those purposes, within fourteen days of the date hereof, furnish the third appellant with the following documents for each of the franchise businesses:

(i)    the latest franchise agreement in respect of each of the franchise businesses;

(ii)   copies of all correspondence between the respondents and the franchisor relating to the subsistence, continuation and operation of the franchise, including but not limited to the latest reports issued by…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Alborn v Stephens (No 2)

Details

AGLC: Alborn & Ors v Stephens & Ors [No 2] [2012] QCA 267
Case: [2012] QCA 267
Decision Date: 28 September 2012

CaseChat Overview and Summary

In the case of Alborn v Stephens (No 2), the Court of Appeal addressed a dispute between the appellants, the Alborn siblings, and the respondents, Mark Stephens and his wife, regarding the ownership and management of certain franchise businesses. The case originated in the District Court of Queensland where Atkinson J found in favour of the respondents, determining that the respondents were the beneficial owners of the businesses. The appellants sought to appeal this decision. The Court of Appeal found in favour of the appellants, setting aside the earlier judgment and orders, and declaring that the third appellant is the beneficial owner of the businesses in question. The respondents were ordered to transfer their rights and interests in the businesses to the third appellant, including the provision of necessary documents and the delivery of possession of the businesses. The respondents were also required to indemnify the appellants for liabilities incurred before and after the transfer of possession. An account of the profits received by the respondents from the businesses was ordered, with Paul Vincent appointed as special referee to take the account. Additionally, a deduction of $100,000 was made from the amount due to the third appellant upon the taking of the account. The first appellant was ordered to pay $100,000 to the third appellant. The claim and counter-claim were otherwise dismissed, and the respondents were ordered to pay half of the appellants’ costs of the appeal. The costs of the proceedings at first instance were to be remitted to the primary judge for determination after the taking of the account of profits was complete. The parties were granted liberty to apply to the primary judge regarding any matters arising out of or incidental to the orders or the report of the special referee.

Orders

Orders of the court

1. The appeal is allowed.

2. The judgment of Atkinson J delivered on 18 November 2011 and the orders of Atkinson J made on 6 December 2011 are set aside.

3. It is declared that the third appellant is and remains the beneficial owner of the following businesses and the franchises associated therewith (referred to in this order as “the franchise businesses”); namely –

(a) the Clontarf Subway business and associated franchise (referred to in this order as the “Clontarf Subway Store”); and

(b) the Clontarf Baskin Robbins business and associated franchise (referred to in this order as the “Clontarf Baskin Robbins Store”).

4. The respondents shall do all things necessary to make over, convey and transfer to the third appellant or its nominee, all of the right to, title and interest in, and the benefit of the franchise businesses.

5. Without limiting the scope of their obligations under paragraph 4 of these orders, the respondents shall, in the performance of paragraph 4 of these orders:

(a) Do all things and sign all documents as the third appellant may reasonably request, to enable the third appellant to obtain and enjoy the full benefit of the franchise businesses including, without limitation, enabling the nominee of the third appellant to become:

(i) the franchisee in respect of each of the franchise businesses;

(ii) the tenant of the respective premises at which each of the franchise businesses is located;

(iii) the employer of the employees at each of the franchise businesses;

(iv) the lessee of any leased chattels (including all fixtures, fittings and equipment) at each of the franchise businesses; and

(v) the vendor of the businesses conducted at each of the franchise businesses, if the appellants decide to sell them or any of them to third parties rather than continuing to operate them;

(b) For those purposes, within fourteen days of the date hereof, furnish the third appellant with the following documents for each of the franchise businesses:

(i) the latest franchise agreement in respect of each of the franchise businesses;

(ii) copies of all correspondence between the respondents and the franchisor relating to the subsistence, continuation and operation of the franchise, including but not limited to the latest reports issued by the franchisors in relation to performance of the stores, which, in the case of the Clontarf Subway Store is known as a “Combo Report”;

(iii) the lease agreement in respect of the premises from which each of the franchise businesses is conducted;

(iv) copies of all correspondence between the respondents and the lessor relating to the subsistence, continuation and operation of the lease of the premises from which each of the franchise businesses is conducted;

(v) the lease agreement in respect of any leased chattels (including all fixtures, fittings and equipment) at each of the franchise businesses; and

(vi) copies of all correspondence between the respondents and the lessors relating to the subsistence, continuation and operation of such lease agreements; and

(c) On a date and at a time to be nominated by the third appellant, upon not less than fourteen days’ notice to the solicitors for the respondents, deliver up to the third appellant possession of the franchise businesses, including the business premises at which the franchise businesses are conducted.

6. Until delivery of possession of the franchise businesses, the respondents:

(a) shall continue to manage the franchise businesses in a proper and reasonable manner, and in compliance with the respective franchise agreements, leases and other agreements; and

(b) shall pay any ongoing expenses incurred in respect of the franchise businesses including, without limitation, franchise fees, rent, lease payments, trade creditors and utilities.

7. Upon delivery of possession of the franchise businesses, the third appellant will pay to the respondents the value of any stock on hand at a price to be agreed or in the absence of agreement, determined by the Special Referee referred to in paragraph 11 of this order.

8. The respondents (and each of them) shall indemnify and hold harmless the third appellant in respect of all liabilities incurred by, through or in connection with the franchise businesses prior to delivery of possession.

9. The appellants (and each of them) shall indemnify and hold harmless the respondents (and each of them) in respect of all liabilities incurred by, through or in connection with the franchise businesses subsequent to delivery of possession.

10. The third appellant is entitled, in accordance with the succeeding provisions of this order, to an account of the profits received by the respondents (or any of them), directly or indirectly from the franchise businesses, from 14 August 2000 to the earlier of:

(a) the date on which the respondents deliver up to the appellants possession of the franchise businesses in accordance with subparagraph 5(c) of this order; or

(b) the date on which the account is finalised.

11. Paul Vincent (referred to in this order as “the Special Referee”) is appointed as special referee to take the said account in accordance with sub-rule 501(1)(a) of the Uniform Civil Procedure Rules 1999 (Qld).

12. In accordance with sub-rules 502(1) and (3) of the Uniform Civil Procedure Rules 1999 (Qld), the special referee shall:

(a) not hold a trial; but

(b) make such inquiries as he thinks fit to decide the questions in issue.

13. Without limiting the generality of sub-paragraph 12(b) of this order, or of the Uniform Civil Procedure Rules 1999 (Qld), the special referee:

(a) may require the parties, or any of them, to furnish to him such documents and information as he thinks fit;

(b) may receive written submissions from the parties, in such manner as he thinks fit;

(d) shall make such allowance for unpaid personal exertions, skill and enterprise of the first and second respondents as he thinks fit, provided that the allowance for such personal exertions shall be consistent with the primary judge’s reasons for judgment published on 18 November 2011; and

(e) shall not be bound by any books of account and records to the extent that he considers them to be erroneous or unreliable.

14. In accordance with rule 506 of the Uniform Civil Procedure Rules 1999 (Qld), the remuneration of the special referee shall be:

(a) on such basis as the parties may agree with the special referee in writing; or

(b) in default of such agreement, on such basis as may be fixed by the Registrar of this court.

15. The sum of $100,000 shall be deducted from any amount determined to be due to the third appellant upon the taking of the account.

16. The first appellant shall pay to the third appellant the sum of $100,000.

17. The claim is otherwise dismissed.

18. The counter-claim is otherwise dismissed.

19. The respondents shall pay one half of the appellants’ costs of and incidental to the appeal on the standard basis.

20. The costs of the proceedings at first instance shall be remitted to the primary judge for determination once the taking of the account of profits is complete.

21. Upon the giving of reasonable notice, the parties shall have liberty to apply to the primary judge with respect to any matter arising out of or incidental to:

(a) these orders; or

(b) the report of the special referee.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Alborn & Ors v Stephens & Ors [No 2] [2012] QCA 267
PARTIES:	RICHARD MOLLISON ALBORN (first appellant) ALBORN FAMILY CORPORATION PTY LTD ACN 080 955 595 (second appellant) SHAYKAR PTY LTD ACN 076 868 552 (third appellant) v RAY STEPHENS (first respondent) GLENYS MARGARET STEPHENS (second respondent) AS & L PTY LTD ACN 087 729 048 (third respondent)
FILE NO/S:	Appeal No 11669 of 2011 SC No 7795 of 2006
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	28 September 2012
DELIVERED AT:	Brisbane
HEARING DATE:	Heard on the papers
JUDGES:	Holmes and Fraser JJA and Philippides J Separate reasons for judgment of each member of the Court, each concurring as to the orders made
ORDERS:	1. The appeal is allowed. 2. The judgment of Atkinson J delivered on 18 November 2011 and the orders of Atkinson J made on 6 December 2011 are set aside. 3. It is declared that the third appellant is and remains the beneficial owner of the following businesses and the franchises associated therewith (referred to in this order as “the franchise businesses”); namely – (a) the Clontarf Subway business and associated franchise (referred to in this order as the “Clontarf Subway Store”); and (b) the Clontarf Baskin Robbins business and associated franchise (referred to in this order as the “Clontarf Baskin Robbins Store”). 4. The respondents shall do all things necessary to make over, convey and transfer to the third appellant or its nominee, all of the right to, title and interest in, and the benefit of the franchise businesses. 5. Without limiting the scope of their obligations under paragraph 4 of these orders, the respondents shall, in the performance of paragraph 4 of these orders: (a) Do all things and sign all documents as the third appellant may reasonably request, to enable the third appellant to obtain and enjoy the full benefit of the franchise businesses including, without limitation, enabling the nominee of the third appellant to become: (i) the franchisee in respect of each of the franchise businesses; (ii) the tenant of the respective premises at which each of the franchise businesses is located; (iii) the employer of the employees at each of the franchise businesses; (iv) the lessee of any leased chattels (including all fixtures, fittings and equipment) at each of the franchise businesses; and (v) the vendor of the businesses conducted at each of the franchise businesses, if the appellants decide to sell them or any of them to third parties rather than continuing to operate them; (b) For those purposes, within fourteen days of the date hereof, furnish the third appellant with the following documents for each of the franchise businesses: (i) the latest franchise agreement in respect of each of the franchise businesses; (ii) copies of all correspondence between the respondents and the franchisor relating to the subsistence, continuation and operation of the franchise, including but not limited to the latest reports issued by…