CITATION: Karacominakis v Big Country Developments Pty Ltd & Ors Big Country Developments Pty Ltd v Chadlace Pty Ltd & Ors J W Wall Investment Co Pty Ltd & Ors v Big Country Developments Pty Ltd & Ors Hollingsworth & Anor v Big Country Developments Pty Ltd & Ors [2000] NSWCA 313
HEARING DATE(S): 20, 21, 22, 23, 24, 28 March & 21 August 2000
JUDGMENT DATE: 17/11/2000
PARTIES: Nicholas Karacominakis - Appellant in 40696/97, Fourth Respondent in 40702/97, Fifth Respondent in 40877/97 Big Country Developments Pty Ltd - First Respondent in 40696/97, Appellant/First Cross Respondent in 40698/97, First Respondent in 40702/97 & First Respondent in 40877/97 Peter Herman Hesky - Second Cross-Respondent in 40698/97 J W Wall Investment Co Pty Ltd, John William Wall & Cecilia Ellen Wall - Second, Third and Fourth Respondents in 40696/97, First, Second and Third Appellants in 40702/97, Second, Third & Fourth Respondents in 40877/97 Jeffrey Hollingsworth & Gillian Gai Hollingsworth - Fifth and Sixth Respondents in 40696/97, Second and Third Respondents in 40702/97, First and Second Appellants in 40877/97 Chadlace Pty Ltd, Glen Johnston & Karen Schmitz - Seventh, Eighth & Ninth Respondents in 40696/97, First and Second Respondents/Cross Appellants in 40698/97, Fifth, Sixth & Seventh Respondents in 40702/97, Sixth, Seventh & Eighth Respondents in 40877/97
JUDGMENT OF: Handley JA Stein JA Giles JA
LOWER COURT JURISDICTION: Supreme Court
LOWER COURT FILE NUMBER(S): 50306/94
LOWER COURT JUDICIAL OFFICER: Bainton J
COUNSEL: G C Lindsay SC & C A Marlow - Nicholas Karacominakis B A Coles QC & P P Strasser - Big Country Developments Pty Ltd & P H Hesky J C Kelly SC - J W Wall Investment Co Pty Ltd, J W Wall & C E Wall V Stefano - J Hollingsworth and G G Hollingsworth C M Harris - Chadlace Pty Ltd, G Johnston and K Schmitz
SOLICITORS: James Soulos, Ashfield - N Karacominakis Denes Ebner, Sydney - Big Country Developments Pty Ltd & P H Hesky David Hand, Hurstville - J W Wall Investment Co Pty Ltd, J W Wall & C E Wall Shaddock Baker & Paul, Richmond - J Hollingsworth & G G Hollingsworth Matthew Folbigg, Blacktown - Chadlace Pty Ltd, G Johnston & K Schmitz
CATCHWORDS:
LEGISLATION CITED:
DECISION: See paragraph 331.
JUDGMENT:
THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL
CA 40696, 40698, 40702, 40877/97
Com Div 50306/94
HANDLEY JA
STEIN JA
GILES JA
Friday 17 November 2000
KARACOMINAKIS v BIG COUNTRY DEVELOPMENTS PTY LTD & ORS
BIG COUNTRY DEVELOPMENTS PTY LTD v CHADLACE PTY LTD & ORS
J W WALL INVESTMENT CO PTY LTD & ORS v BIG COUNTRY DEVELOPMENTS PTY LTD & ORS
HOLLINGSWORTH & ANOR v BIG COUNTRY DEVELOPMENTS PTY LTD
& ORS
SUMMARY
Big Country Developments Pty Ltd (Big Country), a land developer controlled by Mr Hesky, acquired land near Windsor for the staged development of a shopping centre, by the construction first of a squash centre…
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.
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Details
AGLC
Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313
Case
[2000] NSWCA 313
Decision Date
CaseChat Overview and Summary
The case of *Karacominakis v Big Country Developments Pty Ltd* involved an appeal to the New South Wales Court of Appeal from a decision of Bainton J. The primary dispute concerned the operation and leasing of a squash centre and gymnasium, which was part of a larger land development project by Big Country Developments Pty Ltd. The land was mortgaged to Finance Corporation of Australia Ltd (FCA) and subsequently, one of the mortgages was transferred to Esanda Finance Corporation Ltd. The operation of the squash centre and gymnasium was initially managed by Mr Alan Chiswick, and later, an agreement was reached for Mr John Wall of J W Wall Investment Co Pty Ltd to take over its operation and lease the premises.
The legal issues before the Court of Appeal included the validity and enforceability of the lease agreement for the squash centre and gymnasium between Big Country Developments Pty Ltd and J W Wall Investment Co Pty Ltd, particularly in light of the registered mortgages over the land. The court was required to consider the rights and obligations of the parties, including the lessees and mortgagees, and how these were affected by the development and leasing arrangements. The nature of the relationship between FCA and Esanda Finance Corporation Ltd, and the implications of the transfer of one mortgage but not the other, were also relevant considerations.
The court's reasoning focused on the contractual arrangements and the effect of the registered mortgages. It was noted that the lease was intended to run concurrently with a lease for a tavern, and that a formal lease document was prepared by Big Country's solicitors for approval. The court considered the evidence regarding the agreement for the lease and the subsequent steps taken. The principles applied would have involved an examination of property law, contract law, and potentially the law relating to mortgages, to determine the priority of interests and the enforceability of the lease against the mortgagees.
The judgment ultimately determined the outcome of the appeals, with the court making specific orders regarding the matters in dispute. The precise nature of these orders, as detailed in paragraph 331 of the judgment, would have resolved the legal questions concerning the lease and the mortgages.
Orders
Orders of the court
See paragraph 331.
Background
Background to the litigation
GILES JA: The trial before Bainton J occupied eight days, excluding submissions which were then made in writing. The hearing of these appeals from his Honour’s decision occupied seven days. Many matters were raised, and the arguments were wide-ranging. In some respects the focus of the arguments on the appeals was different from that at the trial. It is not necessary for the disposal of the appeals to decide all the matters raised or canvass all the arguments. Outline facts An outline of facts, to be developed and supplemented as appropriate when dealing with the issues necessary to be decided, will assist in understanding these reasons. Big Country Developments Pty Ltd (“Big Country”) was a land developer. It was controlled by Mr Peter Hesky. It acquired land near Windsor in New South Wales for the staged development of a shopping centre, by the construction first of a squash centre and gymnasium, secondly of a tavern and shops, and thirdly of a supermarket and more shops. The squash centre and gymnasium was completed in 1980. The premises were a two storey building with squash courts at ground level and a gymnasium on the first floor. From 1985 the squash centre and gymnasium was operated by Mr Alan Chiswick. Mr Chiswick was a long-time business associate of Mr Hesky. The evidence did not disclose the basis on which he occupied the premises. As might be expected, Big Country had obtained finance by mortgaging the Windsor land. The land was Torrens Title land, being the land in Certificate of Title volume 12079 folio 147. As at 1986 and at all material times thereafter mortgages were registered as dealings T424525 and V747997. Mortgage T424525 had been given to Finance Corporation of Australia Ltd (“FCA”) in January 1983 to secure an advance of $1,750,000, and mortgage V747997 had been given to FCA in April 1985 to secure a further advance of $1,200,000. By a transfer dated 26 June 1987 registered as dealing W962570 FCA transferred mortgage V747997 to Esanda Finance Corporation Ltd (“Esanda”). There was no like transfer of mortgage T424525. There was no explanation of the different treatment of the mortgages. The transfer of mortgage V747997 by FCA to Esanda was expressed to be for a consideration of $1.00. It was executed by the same person as attorney for both FCA and Esanda, the person’s description being that of an officer of Esanda. It is tolerably clear that, at least as at June 1987, there was a relationship of some kind between FCA and Esanda. This was not explored in the evidence. By the end of 1986 the construction of the tavern was planned or in progress, with completion expected in March 1988. By a deed dated 24 December 1986 Big Country agreed to lease the tavern to J W Wall Investment Co Pty Ltd (“Wall Investment”) for a term of ten years from the time it was ready for occupation. Wall Investment came also to take a lease of the squash centre and gymnasium. There was no deed similar to the deed of 24 December 1986. According to Mr Hesky, in November or December 1987 Mr John Wall of Wall Investment asked him about taking over the operation of the squash centre and gymnasium, and he referred Mr Wall to Mr Chiswick. He was later told by Mr Chiswick that Mr Chiswick and Mr Wall had agreed on a sale of the squash centre and gymnasium business (“the business”) and that Mr Wall wanted “a new lease running concurrently with his tavern lease”. According to Mr Wall, Mr Hesky asked if he would be interested in operating the squash centre and gymnasium, and after consideration he said that he would and asked Mr Hesky to submit “the terms on which the premises would be leased”. By a letter dated 12 February 1988 Big Country’s solicitors sent to Wall Investment’s solicitors a lease of the squash centre and gymnasium, in a form appropriate for registration under the Real Property Act 1900 (NSW), for approval and execution. The letter said that the lease was to “run for the same term as the tavern” and that the dates inserted would be advised in due course. The evidence did not amplify the communications or the circumstances in which the lease came about.