Conte v Els WA Pty Ltd

[2011] QDC 53

[2011] QDC 53

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 3077 of 2010

GIACOMO BATISTA GUIDO CONTE and CLAUDETTE EVELYN CONTE	Plaintiffs
and
ELS WA PTY LTD	Defendant

BRISBANE

..DATE 31/03/2011

ORDER

CATCHWORDS

Uniform Civil Procedure Rules r 292

Summary judgement refused - plaintiff sought that original lessee be held liable for obligations of its assignee - plaintiff had taken steps to continue  assignee's business of a child care centre in the premises, paying staff, etc - triable issue whether plaintiff had accepted surrender as abandonment of the lease - costs ordered to be defendant's costs in the cause.

HIS HONOUR:  This is a summary judgment application which in my opinion is doomed to failure, notwithstanding that the plaintiffs' prospects at a trial might be good. 

They were lessors in a lease of premises to the defendant in which a child care centre was conducted.  The lease commenced November 2010 with a 10 year term plus an option for a further 10 years.

The defendant sold its business to a company called Donsee Pty Ltd which came in as lessee not long after the plaintiffs had become the registered owners of the property.  Mr Conte's affidavit indicates that the lease had originally been granted by the company Hedley Leisure and Gaming Property Services Limited as lessor.  The defendant retained a responsibility for the performance of obligations under the lease by Donsee.  It abandoned the premises and the child care venture around the 12th of April 2010 after 18 months or so of operations.

The plaintiffs made the judgment that the only course effectively open to them was to become caretakers of the business.  On the material before the Court, that involved paying a sum in excess of $27,000 to child care centre staff for unpaid wages.  That accounts for nearly half of the claim.  Other components of it are rent, rates, et cetera.

The defence that was pleaded in January this year is that the defendant has been discharged by the plaintiffs' acceptance of what's said to have been the surrender or abandonment of the lease by their entering into possession and indeed taking over the business which, on the evidence, they've been operating in a capacity which is the subject of contention for nearly a year.  One would think that there are requirements to do with the operation of child care centres which would impose important obligations on and involve regulation and surveillance of the plaintiffs.

In social and moral terms, as their counsel, Mr Topp, somewhat passionately submits to the Court, they have done the decent thing by ensuring that there aren't unpaid staff in the child care centre in Tully, that there aren't parents and children there without access to child care.

It's a different question entirely whether the defendant would have to pay for those things.  I accept Mr Radcliff's submission that if there'd been an effective surrender of the lease or an accepted abandonment, then his client is off the hook.  The plaintiffs say that they merely carried out what is in effect a caretaker role; however, it has been going on for well over a year now, and apparently continues.

Mr Topp points to communications that occurred between the parties in the period of May, June and July last year.  Mr Hutchinson appears to have been the representative of the defendant in that period.  There were proposals for the defendant or Mr Hutchinson to take over the child centre, pay rent and wages, et cetera.  There was an inquiry by Mr Hutchinson on the 11th of June 2010 seeking more precision regarding what "settlement" the plaintiffs had in mind "keeping in mind that it should be a full and final settlement with your continuing to operate and in due course sell the centre."  And that document indicated Mr Hutchinson's preparedness to consider a commercial payment resolution to the situation.

Mr Topp points to that course of correspondence as indicating an acceptance by the defendant's representative that the plaintiffs had not resumed possession of the relevant premises.

As I read Mr Hutchinson's communications, they amount to no more than seeking clarification of an offer that the plaintiffs apparently had in mind.

Mr Topp submits that, looking at the correspondence from the other side, it bespeaks a determination in the plaintiffs not to re-occupy the premises.  In my view that places too much, for the purposes of a summary judgment application, on the correspondence.  It's entirely possible that the plaintiffs accepted they might have no claim in the light of steps that they'd taken in May, but nonetheless opted to take a strong line with the defendant in hopes of extracting a contribution from it for the costs that they were taking upon themselves and the rent, et cetera, which there's no hope of extracting from Donsee.

In my opinion, this is far from a case in which the defendant is shown to have no reasonable prospects of defending the claim, and the application ought to be dismissed.

MR RADCLIFF:  Your Honour, I seek costs.

HIS HONOUR:  I’ve thought about costs.  I think the costs should be the defendant's costs in the cause.

MR RADCLIFF:  Your Honour, we did write to them.

HIS HONOUR:  I know.  I know you wrote, and I've noted myself that you said in your defence what the problem was for the plaintiffs but‑‑‑‑‑

MR RADCLIFF:  Mmm.

HIS HONOUR:  ‑‑‑‑‑if they win at the end of the day then‑‑‑‑‑

MR RADCLIFF:  Then they've still lost their‑‑‑‑‑

HIS HONOUR:  I think that's a subsequent indication that your client ought to have conceded now.

MR RADCLIFF:  Mmm.

HIS HONOUR:  I don't think the defendant looks all that strong on a summary judgment application to say, well, look, we think we're going to lose at the trial but we shouldn't lose today.  I presume you think you're going to win at the trial.

MR RADCLIFF:  Well, we don't know what the value of the business is.

HIS HONOUR:  No.

MR RADCLIFF:  That could be $50,000.  It was sold for 350,000‑‑‑‑‑

HIS HONOUR:  Well‑‑‑‑‑

MR RADCLIFF:  ‑‑‑‑‑and if that's the case‑‑‑‑‑

HIS HONOUR:  ‑‑‑‑‑if you'd rather have the costs reserved, I'll reserve them.

MR RADCLIFF:  No.  I'll have them as costs‑‑‑‑‑

HIS HONOUR:  All right.  The costs are your client's costs.  Mr Topp's not going to get the costs.  But you will if you beat him at the trial.

MR RADCLIFF:  I was seeking costs on the basis that‑‑‑‑‑

‑‑‑‑‑we threatened - we requested that they withdrew it.

HIS HONOUR:  I accept that you did that.

MR RADCLIFF:  Mmm.  All right.  As your Honour pleases.

HIS HONOUR:  Thanks, gentlemen.

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