Great Union Pty Ltd v Sportsgirl Pty Ltd (No 2)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2020 04534

GREAT UNION PTY LTD (ACN 053 452 387) AS TRUSTEE OF THE CENTREPOINT MELBOURNE TRUST	Plaintiff/ Defendant by Counterclaim
and
SPORTSGIRL PTY LTD (ACN 090 049 415)	Defendant/ Plaintiff by Counterclaim

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JUDGE:	RIORDAN J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers, written submissions filed 11 August 2021
DATE OF JUDGMENT:	1 September 2021
CASE MAY BE CITED AS:	Great Union Pty Ltd v Sportsgirl Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2021] VSC 542

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PRACTICE – Application for additional order after authentication – Plaintiff’s summons sought inter alia to strike out part of defence and counterclaim – Authenticated order did not refer to refusal to strike out – Whether jurisdiction to make further order.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/ Defendant by Counterclaim	Mr P J Bick QC with Mr J P Tomlinson	SBA Law
For the Defendant/ Plaintiff by Counterclaim	Mr P J Jopling AM QC with Ms J Collins	Arnold Bloch Leibler

HIS HONOUR:

Background

By writ filed 9 December 2020, the plaintiff (‘Great Union’) claims the sum of $2,307,409.09 plus interest for unpaid rent owing by the defendant (‘Sportsgirl’) under a Deed of Renewal of Lease dated 12 December 2016 (‘the Lease’) between Great Union and Sportsgirl.
By defence and counterclaim filed 29 January 2021, Sportsgirl denied that it failed to pay rent in breach of the Lease and sought the following relief by way of set-off and counterclaim:
(a)Damages for unconscionable conduct in contravention of section 22 of the Australian Consumer Law[1] and breach of an implied term of good faith under the Lease on the following bases:
(i)Great Union refused to negotiate in good faith with Sportsgirl for an appropriate temporary leasing arrangement during the COVID-19 pandemic; and
(ii)Great Union showed no regard for the National Cabinet’s Mandatory Code of Conduct ‘SME Commercial Leasing Principles during COVID-19’.
(b)Damages for breach of Great Union’s obligation under the Lease to provide quiet enjoyment (‘the Quiet Enjoyment Claim’).
(c)A declaration that the Lease was terminated by frustration arising from government regulations consequent to the COVID-19 pandemic.
(d)A stay of the proceeding pending determination of its claim for rental abatement (‘the Rent Abatement Claim’) pursuant to clause 37 of the Lease, as pleaded in paragraph 4B.[2]
[1]Competition and Consumer Act 2010 (Cth) sch 2.
[2]Following the determination of each party’s summons described in the paragraphs below, Sportsgirl filed an amended defence and counterclaim on 22 June 2021, removing the Quiet Enjoyment Claim and extending the period for which it claims an entitlement to rental abatement.
In March 2021, Great Union and Sportsgirl each made applications by way of summons (collectively ‘the Summonses’).
By summons filed 5 March 2021, Great Union applied for summary judgment in respect of certain claims, or alternatively, striking out of parts of Sportsgirl’s defence and counterclaim. Great Union sought the following orders:
1.An order under rule 22.16 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) and section 62 of the Civil Procedure Act 2010 (Vic) that summary judgment be given for the defendant by counterclaim in respect of:
(a)the claim made by paragraph 13 of the defence and counterclaim dated 29 January 2021; and
(b)the claim the subject of paragraph C. of the prayer for relief to the defence and counterclaim dated 29 January 2021.
2.Alternatively, an order under rule 23.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) that paragraphs 4B and 13 of the defence and counterclaim dated 29 January 2021 be struck out.
By summons filed 25 March 2021, Sportsgirl applied for:
(a)the Rent Abatement Claim to be referred to arbitration; and
(b)this proceeding to be stayed, pursuant to section 8 of the Commercial Arbitration Act 2011 (Vic), pending the determination of the Rent Abatement Claim.
The hearing of the Summonses proceeded before me on 27 April 2021.
On 24 May 2021, I published my reasons in respect of the Summonses,[3] in which I identified and answered the following questions arising from the Summonses as follows:
(a)Whether the Rent Abatement Claim is ‘a matter which is the subject of an arbitration agreement’ and must be referred to arbitration pursuant to s 8(1) of the Commercial Arbitration Act 2011 (Vic).
– Answer: Yes.[4]
(b)If yes to question (a), whether the balance of the claims in this proceeding should be stayed pending the determination of the Rent Abatement Claim.
– Answer: No.[5]
(c)Whether summary judgment should be granted in favour of Great Union with respect to the Quiet Enjoyment Claim, or alternatively, whether the Quiet Enjoyment Claim or the Rent Abatement Claim should be struck out.
–Answer: The Quiet Enjoyment Claim should be struck out with leave to replead;[6] and the Rent Abatement Claim should not be struck out.[7]
[3]Great Union Pty Ltd v Sportsgirl Pty Ltd [2021] VSC 277 (‘Reasons’).
[4]Ibid [16], [20].
[5]Ibid [24]-[25].
[6]Ibid [32], [33(b)].
[7]Ibid [28].
In the Reasons, I stated that I would hear the parties on the form of orders and costs.[8]
[8]Ibid [34].
On 9 June 2021, two days prior to the resumption of the hearing for final orders, each party respectively proposed orders in relation to the Summonses.
(a)Great Union proposed the following relevant orders:
1The claim of the defendant/plaintiff by counterclaim contained in paragraph 4B of the defence and counterclaim is referred to arbitration pursuant to section 8(1) of the Commercial Arbitration Act 2011 (Vic).
2 Paragraph 13 of the counterclaim is struck out.
3The defendant/plaintiff by counterclaim has leave to replead paragraph 13 of the counterclaim, and otherwise file and serve an amended defence and counterclaim substantially in the form provided to the Court and dated 22 April 2021, but including allegations relevant to any government restrictions relating to COVID-19 outbreaks in 2021, by 4:00pm on 22 June 2021.
…
5The costs of the application of the plaintiff/defendant by counterclaim made on 5 March 2020 and of the application of the defendant/plaintiff by counterclaim made on 25 March 2021 be costs in the proceeding.
(b)Sportsgirl proposed the following relevant orders:
1The claim of the defendant/plaintiff by counterclaim (Sportsgirl) contained in paragraph 4B of the defence and counterclaim (Rent Abatement Claim) is referred to arbitration pursuant to section 8(1) of the Commercial Arbitration Act 2011 (Vic).
2 Paragraph 13 of the counterclaim is struck out.
3Sportsgirl otherwise has leave to file and serve by 21 June 2021 an amended defence and counterclaim:
(a)substantially in the form provided to the Court and dated 22 April 2021; and
(b)with further amendments to make reference to the further restrictions associated with the further outbreaks of COVID-19 in Victoria this year.
4The plaintiff/defendant by counterclaim (Great Union) pay Sportsgirl’s costs of its application by summons filed 25 March 2021 on a standard basis.
5No order as to costs in relation to the summons filed by Great Union dated 5 March 2020.
On 11 June 2021, I made the following relevant orders with respect to the Summonses (‘the Order’):
1.Pursuant to s 8(1) of the Commercial Arbitration Act 2011 (Vic) the defendant’s claim contained in paragraph 4B of the defence and counterclaim filed 29 January 2021 is referred to arbitration.
2. Paragraph 13 of the defendant’s counterclaim is struck out.
3.Until 4:00 pm on 22 June 2021, the defendant has leave to re-plead paragraph 13 of its counterclaim, and otherwise file and serve an amended defence and counterclaim substantially in the form provided to the Court by email of 26 April 2021 and dated 22 April 2021, but including allegations relevant to any government restrictions relating to COVID-19 outbreaks in 2021.
4.        By 4:00 pm on 13 July 2021, the plaintiff file and serve:
a.        any reply to the amended defence; and
b.        its defence to the amended counterclaim.
…
12.Costs are reserved, including the costs of the plaintiff’s summons filed 5 March 2021 and the defendant’s summons filed 25 March 2021.
By application for leave to appeal filed 2 July 2021, Great Union seeks leave to appeal from paragraph 1 of the Order, being the reference of the Rent Abatement Claim to arbitration, and the Court’s refusal to strike out paragraph 4B of Sportsgirl’s defence and counterclaim.
Application for variation of the Order
By email of 9 August 2021, pursuant to liberty to apply, Sportsgirl applied for a variation of the Order to insert the following new paragraph:
4.The plaintiff’s application by summons dated 5 March 2021 is otherwise dismissed.
In support of its application, Sportsgirl submitted as follows:
(a)The omission to make the order dismissing the application to strike out paragraph 4B does not reflect the Reasons, particularly paragraph 28 of the Reasons.
(b)In particular, the Court determined the strike out application and found that, contrary to Great Union’s submissions, the issue raised by paragraph 4B and its particulars gave fair notice to Great Union about the case it must meet.
(c)The slip is capable of correction under rule 36.07 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘the Rules’) and/or the Court’s inherent jurisdiction.
In opposition to the application, Great Union submitted as follows:
(a)The Reasons did not deal with the application to strike out paragraph 4B of the defence and counterclaim because the Court considered it ‘moot’.
(b)The findings in the Reasons that:
(i)the point was moot; and
(ii)it would be inappropriate for the Court to examine, on a summary basis, whether the Rent Abatement Claim is so weak that it does not constitute a sustainable argument,
are consistent with a decision not to determine the strike out application. Accordingly, the absence of the proposed order addressing the strike out application was not ‘a clerical mistake in a judgment or an order or an error arising … from any accidental slip or omission’, as referred to in rule 36.07 of the Rules.
(c)Although the Court dealt, in paragraph 28 of the Reasons, with the adequacy of the particulars in paragraph 4B of the defence and counterclaim, it did not deal with Great Union’s submission that the strike out was warranted having regard to what Great Union contended was a proper construction of the Lease in paragraphs 18 to 27 of its submissions filed 24 March 2021.
Principles
As a general rule, there is no inherent power to set aside a judgment which has been regularly made and authenticated, by reason of changed circumstances.[9] However, the rule is not inflexible and there are a number of exceptions to it, both in the exercise of the Court’s inherent jurisdiction and under rule 36.07 of the Rules, which provides:
The Court may at any time correct a clerical mistake in a judgment or an order or an error arising in a judgment or an order from any accidental slip or omission.
[9]Lollis v Loulatzis (No 3) [2008] VSC 231, [12] (Kaye J); Perton v Walters (2018) 56 VR 306, 328-9 [75] (Derham AsJ).
In the Court’s inherent jurisdiction, the exceptions include:
(a)circumstances which involve clarification of the recorded judgment;
(b)making minor alterations to a judgment which do not affect the operative and substantive part of the judgment; and
(c)circumstances (such as fraud and breach of natural justice) which impeach the obtaining of the judgment or order.[10]
[10]Ibid.
The power to correct the record to reflect what the Court intended to pronounce in its order is to be distinguished from the rule granting relief to a party to reopen its case. As the High Court said in Burrell v The Queen:
The power to correct the record so that it truly does represent what the court pronounced or intended to pronounce as its order provides no substantial qualification to that rule. The power to correct an error arising from accidental slip or omission, whether under a specific rule of court or otherwise, directs attention to what the court whose record is to be corrected did or intended to do. It does not permit reconsideration, let alone alteration, of the substance of the result that was reached and recorded.[11]
[11](2008) 238 CLR 218, 224-5 [21] (Gummow ACJ, Hayne, Heydon, Crennan and Kiefel JJ).
Conclusion
As set out above, by summons filed 5 March 2021, Great Union sought orders, among others, that, under rule 23.02 of the Rules, paragraphs 4B and 13 of the defence and counterclaim dated 29 January 2021 be struck out.
Paragraph 2 of the Order stated that: ‘Paragraph 13 of the defendant’s counterclaim is struck out’. However, no order was made with respect to Great Union’s application to strike out paragraph 4B.
In my opinion, it is plain from the Reasons that I was proposing to refuse Great Union’s application for paragraph 4B to be struck out, for the following reasons:
(a)I found that paragraph 4B and its particulars gave fair notice to Great Union about the case it had to meet.[12]
(b)I rejected Great Union’s submission that the arbitration agreement did not relate to the Entitlement Issue because, as a matter of construction, ‘[c]lause 37.3(b) is predicated on there already being an accepted entitlement to reduced rent under cl 37.3(a)’.[13]
[12]Reasons [28].
[13]See Reasons [10] for a summary of Great Union’s submission. See Reasons [16] for my finding.
Accordingly, I consider that the order sought by Sportsgirl should be made to reflect the Court’s intention that, save for the orders granted in response to Great Union’s summons, Great Union’s summons should be otherwise dismissed.
Accordingly, I will order that paragraph 2 of the Order be amended to read as follows:
Paragraph 13 of the defendant’s counterclaim is struck out and the plaintiff’s application by summons dated 5 March 2021 is otherwise dismissed.

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[2021] VSC 542

1 September 2021