Elite Promotion and Management Pty Ltd v 5A Investments Pty Ltd

[2010] NSWSC 1098

CITATION:	Elite Promotion & Management Pty Ltd v 5A Investments Pty Ltd; Application of Kingsway Group Ltd [2010] NSWSC 1098
HEARING DATE(S):	10 September 2010
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	10 September 2010
DECISION:	Order that Kingsway Group Limited ACN 089265127 be added as third defendant in the proceedings
CATCHWORDS:	PROCEDURE – Supreme Court procedure – New South Wales – Procedure under Uniform Civil Procedure Rules and other rules of court – Parties – Joinder and addition of parties
CATEGORY:	Procedural and other rulings
PARTIES:	Kingsway Group Limited (applicant) Elite Promotion & Management Pty Ltd (plaintiff) 5A Investments Pty Ltd (first defendant) Alex Georgeski (second defendant)
FILE NUMBER(S):	SC 09/289211
COUNSEL:	Mr G Burton SC (applicant) Mr R Goodridge (plaintiff) Mr S Barry (sol) (second defendant)
SOLICITORS:	Willis & Bowring (applicant) Simpson Freed (plaintiff) CKB Partners (second defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Friday, 10 September 2010

2009/289211 Elite Promotion and Management Pty Ltd v 5A Investments Pty Ltd

JUDGMENT (ex tempore)

1 HIS HONOUR: These proceedings are listed before me for hearing for three days commencing on Wednesday 22 September 2010. Very belatedly, by motion filed on 6 August 2010, the mortgagee of the premises, the lease of which is at the core of these proceedings, between the lessee plaintiff who seeks against the lessor defendant declarations that it is entitled to an amount by way of credit in relation to rent and an order charging the property with that amount, seeks to be joined as a defendant.

2 The mortgagee has entered into possession of the premises and is in receipt of the rents. The lessee, while contending that it does not “in the present proceedings” assert that the charge for which it contends would have priority over the mortgagee's interest, does not eschew the possibility that it would at some later stage advance such a contention. As the mortgagee is in possession and in receipt of the rents, a finding that the lessee was entitled to credit in respect of rent payable under the lease might well impact directly on the mortgagee. In any event, the quantum of any such credit could impact on the mortgagee if, in due course, it were held that the charge contended for by the lessee took priority over the mortgagee's interest.

3 In those circumstances, and as the lessee would not accept that the question of the quantum of any such credit would remain available for re-litigation between the lessee and the mortgagee, it seems to me abundantly clear that the mortgagee has an interest which is liable to be affected by the relief sought by the lessee in these proceedings, and is therefore a necessary party to the proceedings and must be joined.

4 In ordering the joinder of the mortgagee at this late stage, however, I do not intend to permit the issues in the present proceedings to be enlarged beyond those which could be managed within the scope of the three day hearing currently appointed. The mortgagee will obviously be entitled to be heard on the issues presently raised by the statement of claim. The mortgagee has foreshadowed that it wishes also to be heard on the question of whether it is bound by any such variation of the lease or estoppel for which the lessee contends. It is unclear to me at this stage whether that issue can justly be accommodated at the imminent hearing. I will proceed on the basis that it can, but if it turns out at the commencement of the hearing that the parties have been unable to position themselves to deal with that issue at the hearing, then I will reconsider the position.

5 I order that Kingsway Group Limited ACN 089265127 be added as third defendant in the proceedings.

6 I direct that by 15 September 2010 the third defendant file and serve its defence and any cross-claim.

7 I note that the third defendant's evidence-in-chief is complete, being the affidavit of Lou Polito sworn 27 August 2010.

8 I direct that by 13 September the plaintiff serve on the third defendant a copy of each pleading filed or served in the proceedings, and of each affidavit, including annexures or exhibits thereto, served in the proceedings, to the extent that such documents have not already been furnished to the third defendant. I note the undertaking of the third defendant to the court to pay the plaintiff's reasonable photocopying costs of compliance with the foregoing order.

9 I order that the third defendant have leave to inspect any documents discovered in the proceedings by the plaintiff or by the first and second defendants, and that the plaintiff and the first and second defendants produce such documents for inspection by the third defendant on 48 hours' notice given for and on behalf of the third defendant.

10 I direct that any defence to the third defendant's cross-claim be filed and served by 20 September 2010.

11 I direct that any affidavit evidence in reply to the third defendant's affidavit evidence, on those issues to be dealt with at the present hearing, be served by 20 September 2010.

12 I reserve liberty to apply by arrangement with my associate on 24 hours' notice in the meantime.

13 I order that the third defendant give discovery with verification in relation to all issues in the proceedings by 17 September 2010. I order that the third defendant produce for inspection by the other parties by 15 September 2010 all documents to be discovered by it in the proceedings.

14 I direct that each party lodge with my associate and serve on the others outlines of submissions, notices of objections and lists of authorities, as to the plaintiff by 17 September 2010 and as to the defendants by 20 September 2010.

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