P Green Pty Ltd v Barrett
[2005] VSC 301
•27 June 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 6166 of 2005
| P. GREEN PTY LTD C. REGAN PTY LTD and THE ASPEN GROUP OF COMPANIES PTY LTD | Plaintiffs |
| v | |
| JUDITH BARRETT and MORNING STAR ESTATE PTY LTD | Defendants |
---
JUDGE: | CUMMINS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21 June 2005 | |
DATE OF JUDGMENT: | 27 June 2005 | |
CASE MAY BE CITED AS: | P. Green Pty Ltd v Barrett & Anor | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 301 | |
---
PRACTICE COURT – Return of ex parte injunction – Injunction discharged.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr S. Stuckey | GPZ Legal |
| For the Defendants | Mr A. Kirby | Rigby Cooke |
HIS HONOUR:
By a summons filed 24 May 2005, the plaintiffs seek that the defendants be restrained from taking any step to exclude the plaintiffs from occupation of the premises presently occupied by them at Morning Star Estate, Sunnyside Road, Mount Eliza, or from terminating the licence dated 1 October 2004, save in accordance with its terms, and consequential relief.
The history of the matter, curially speaking, commenced on 20 May 2005, when, ex parte, Hollingworth J ordered that the defendants be restrained until 25 May 2005 or further order from taking any step to exclude the plaintiffs from occupation of the premises I have stated or from terminating the licence I have stated, save in accordance with its terms. Mr Stuckey of counsel appeared for the plaintiffs before Her Honour and on behalf of the plaintiffs gave the usual undertakings.
On 23 May 2005, a proceeding was filed in this Court by the plaintiffs with a generally endorsed writ setting forth the allegations upon which the plaintiffs’ claim is predicated. On 25 May 2005, a notice of appearance was filed on behalf of the defendants. Also on that day, Coldrey J ordered, with Mr Stuckey appearing for the plaintiffs and Mr Wyatt for the defendants, that the injunction of Hollingworth J be extended to 15 June for further hearing. On 15 June, before Smith J, the matter was again adjourned over until 21 June, when the matter came on before me.
The factual history of the matter is set forth in a number of affidavits filed before me. On behalf of the plaintiffs the principal affidavit was sworn on 20 May 2005 by Mr G.L. Crockett, managing director of the third plaintiff, to which there are three exhibits. Mr Crockett deposed that he was authorised by all the plaintiffs to make the affidavit. He swore a further affidavit, being in part an answering affidavit, on 14 June 2005, also with three exhibits. On behalf of the defendants an affidavit was sworn 7 June 2005, with 15 exhibits, by Ms Deidre Sleeth, daughter of the first defendant and general manager of the second defendant.
It is convenient to refer to the affidavit of Ms Sleeth for background material. Ms Sleeth deposed that the first defendant, her mother, is the registered proprietor of land known as the Morning Star Estate, Sunnyside Road, Mount Eliza. The second defendant, Morning Star, was appointed by Ms Sleeth’s mother to manage the Estate and the business enterprises of the Estate on her behalf. The Estate was purchased by the first defendant in 1992 and has since been developed into a landmark hospitality venue and vineyard. Since 1995 Morning Star has marketed and operated it as a wedding and functions venue, which is its core business. In 1999 Morning Star opened an 80-seat vineyard restaurant with a cellar door, and in 2001 opened a 20-room boutique hotel. The vineyard covers approximately 30 acres. Up until 2002, all of the business on the Estate was operated by Morning Star. On 1 October 2002, Morning Star leased the restaurant and function centre, referred to as the food and beverage operations on the Estate, to a business operating under the name of Table Matters. The food and beverage operations included all wedding and other functions. The other businesses continued to be operated by Morning Star. Table Matters was the registered business name of P. Green Pty Ltd (the first plaintiff) and a company known as J. Cincotta Pty Ltd. The principal of P. Green Pty Ltd is Mr Peter Green. The principal of J. Cincotta Pty Ltd is Mr John Cincotta.
Ms Sleeth further deposed that in dealing with Table Matters in relation to the Estate in 2002, she understood that the business had three principals – Green, Cincotta and Mr Craig Regan. Regan was the principal of C. Regan Pty Ltd, the second plaintiff in the proceeding. On 1 October 2002, Mr Green and Mr Regan, operating through Table Matters, ran the restaurant and function centre pursuant to a document entitled “Heads of Agreement”. Mr Cincotta only had a minimal involvement in the operations. In December 2003, discussions commenced between Ms Sleeth on behalf of her mother and the second defendant Morning Star and Mr Green for Table Matters to take control of all the food and beverage and hospitality operations on the Estate. From December 2003 to May 2004 the negotiations were principally between Mr Green and Ms Sleeth. In March 2004 the defendants obtained advice from Mr T. Kelly of Rigby Cooke solicitors as to the manner in which the relationship between Morning Star and Table Matters ought be documented. A licence agreement was initially proposed between the defendants and Mr Green, Mr Regan and Mr Cincotta and their companies, and in June 2004 a draft agreement was prepared by Mr Kelly and forwarded to Ms Sleeth and Table Matters, which included those parties. Several drafts of the licence agreement were prepared over subsequent months and were the subject of progressive modification and discussion. Table Matters received advice from GPZ Legal, a firm of solicitors on their behalf. Lawyers were not involved in all of the negotiations but were significant in the essential negotiations.
The first mention of Mr Crockett in Ms Sleeth’s affidavit is that some time in or around June 2004 Mr Crockett became involved in the negotiations concerning the new licence agreement on behalf of Table Matters. Ms Sleeth deposed that at around that time she was informed by Mr Green and Mr Crockett that Mr Crockett operated a hospitality consulting business known as Elwood Hospitality and that he was going to be Table Matters’ representative in negotiations over the new agreement. Around that time Mr Green also told Ms Sleeth that Table Matters’ off-site catering business, which was based in Hawthorn and provided catering to functions at different sites including private homes, was seeking to enter into a business arrangement with Mr Crockett and Elwood Hospitality in relation to an engagement at the Shell Building at 1 Spring Street, Melbourne. Ms Sleeth deposed that she was told that the arrangement would be in the name of the Aspen Group.
Ms Sleeth further deposed that Mr Green told her that Mr Cincotta would not be involved in the new arrangement. She deposed that she said that was fine, as the relationship in respect of the food and beverage operations at the Estate which had been built up was between the defendants and Mr Green and Mr Regan, and the defendants were happy to continue to operate with Mr Green and Mr Regan.
Ms Sleeth further deposed that, in a meeting held on 18 August 2004, Mr Crockett proposed that the Aspen Group be noted as a party in the licence agreement. She made a decision not to change the licence arrangement to include or incorporate the Aspen Group. The directors of the Aspen Group were Mr Crockett, Mr Green and Julie Regan, Mr Regan’s wife. The shareholders of the Aspen Group were Mr Crockett, Ms Julie Regan and Burline Pty Ltd. Ms Sleeth further deposed that during the negotiations over the new licence agreement it was always essential to Morning Star that the individual principals of the licensee would continue to be Mr Green and Mr Regan. She deposed that it was with those two individuals, not with Mr Crockett or Julie Regan, that the defendants had built up a working relationship with respect to the food and beverage operations on the Estate while the Heads of Agreement was in place. She deposed that at no time during the negotiations, and including up to the execution of the written licence agreement on 16 September 2004, did the defendants agree to include the Aspen Group and Mr Crockett as licensees or principals of the licensee. She deposed that this requirement was made explicit in an e-mail dated 7 September 2004 sent by her (Exhibit DS4 to her affidavit) to Mr Crockett, Mr Green and also Table Matters’ lawyers, GPZ Legal. The e-mail stated as follows:
“Please find final draft for your consideration. E-mail also forwarded to your solicitor for reference. Please note that contractually MSE/JB wishes to enter this agreement with reference to Table Matters, that being Peter Green, Craig Regan. The arrangement with MSE has no reference to Aspen, being PG, Graham Crockett and Julie Regan. All amendments as detailed in correspondence ‘Licence Amendments’ 30 August 2004 have been changed as per instructions. I shall await your response. Please note that the window of opportunity for closure of agreement must be prior to Thursday, 16 September ‘04.”
On 10 September 2004, Ms Sleeth sent an e-mail to Mr Green and Table Matters’ solicitor, which stated in part:
“In aim of expediting the finalisation of the agreement could you, Graham or Nick get back to me with issues (if any) asap.”
Mr Green responded by e-mail as follows:
“We are obviously eager to settle asap. We would like the solicitors to refine the document so that it is legally valid, ie with any opportunity for variation. In order to move forward, I am advised that you will need your counsel to review the document.”
On 10 September 2004, the second defendant received a fax from GPZ Legal, lawyers for Table Matters, which I shall not recite but is Exhibit DS6 to Ms Sleeth’s affidavit. Ms Sleeth further deposed that during negotiations Table Matters’ representative, Mr Crockett, from time to time Mr Green and occasionally Mr Regan were advised of Table Matters’ obligations to provide an insurance history, marketing budget and percentage of revenue before entering the licence agreement.
Ms Sleeth was going overseas on 16 September 2004 and her affidavit set forth the time pressures in relation to the documents being signed as she was leaving for overseas at 4 p.m. An amended copy of the licence agreement was received by her by e-mail from her solicitor at 2.57 p.m. There were some gaps in the document, but at approximately 4 p.m. Mr Crockett entered her office and informed her that Mr Green and Mr Regan were prepared to sign the agreement as presented. Mr Crockett asked her to take a highlighter to the agreement to mark specific clauses that Table Matters wanted to discuss further, and that was done. She also wrote, near the signing clause for Morning Star, “Clauses in yellow highlight to be discussed upon Deidre Sleeth’s return 25/10/04”.
Ms Sleeth further deposed that, on the basis that Mr Crockett had told her that Green and Regan were happy with the document, the licence agreement was then given to her mother to sign and she left in a car to go overseas. She understood that her mother signed the agreement and it was then given to Crockett, who presented it to Green and Regan for execution. The appropriate documentation is exhibited to the affidavit.
On 16 September, at 5.52 p.m., after her mother had signed the licence agreement, a facsimile was sent by GPZ Legal to the defendants’ solicitors with comments about the agreement. Ms Sleeth was not aware of this letter at the time she left to go overseas. She returned from overseas on 24 October 2004. After several attempts to arrange a meeting, a meeting was held on 16 November 2004, in which various operational issues were discussed. The subsequent history of negotiations is set forth in her affidavit and I shall not rehearse it. Relevantly, however, she deposed that after the licence agreement had been signed, and after she had returned from overseas, she became aware that the e-mail address for Green and other staff members had changed to “The Aspen Group”. She deposed that she then became aware that employees at the Estate were employed by the Aspen Group and the trade accounts for the food and beverage operations at the Estate were in the name of the Aspen Group. She obtained a copy of a letter dated 5 October 2004, stating that “All staff at the Morning Star Estate and Table Matters are now employed by the Aspen Group”. The day to day management and control of the food and beverage operations at the Estate seemed to her, upon further enquiry, to have been relinquished to the Aspen Group, without any prior knowledge or consent of the defendants as required under the licence agreement. She there exhibited, as DS11, “Wedding and Functions Information Sheet” to the like effect. Although in the initial affidavit of Mr Crockett it was alleged that the defendants were aware before the agreement was executed that the Aspen Group would be operating the business at the Estate, she deposed that that was not true and the defendants’ position is clear from her e-mail of 7 September 2004, which I have previously referred to (Exhibit DS4 to her affidavit).
She further deposed that Mr Crockett relies upon a letter, GC2, being a second exhibit to his first affidavit, sent to Morning Star’s suppliers on or about 29 September 2004. Ms Sleeth, however, deposed that she drafted that letter before she went overseas on 16 September 2004. The draft of the letter that she drew did not contain any reference to the Aspen Group, which now appears in the letter, which is Exhibit GC2. Upon enquiry, she has revealed from her computer records that the letter that she drafted was modified on 29 September 2004 whilst she was overseas. As Exhibit DS14, she exhibited the copy of the initial draft of her letter and the computer record showing that the document was modified whilst she was overseas, on 24 June 2004. She has noted that similar letters have been initialled “AW”. AW is Amanda Woolcott. Amanda Woolcott used to work for Morning Star, the second defendant, but now is conference coordinator at the Aspen Group, the third plaintiff. Ms Sleeth deposed that Ms Woolcott was not authorised by the defendants to send out the letters in the form that they were sent.
Mr Crockett, on behalf of the plaintiffs, as I say managing director of the third plaintiff, in his initial affidavit of 20 May, set out a full history, a substantial amount of which is reflected above and which I shall not rehearse. Importantly in paragraph 6 of his affidavit, which is also echoed in paragraph 4 of his second affidavit sworn on 4 June 2005, he deposed that:
“It was explained to Ms Sleeth that Peter and Craig and I had formed the third plaintiff [Aspen Group of Companies Ltd] and wanted it to carry on the business. She aid that she didn’t mind how we functioned, provided that we had Peter and Craig as guarantors guaranteeing performance of the licence.”
This expression was repudiated by Ms Sleeth in her affidavit and its like counterpart in paragraph 4.
It was first put on behalf of the defendants that the ex parte injunction of Hollingworth J, on 20 May 2005 was obtained without full and proper disclosure of the relevant material, as is required by the principles under which ex parte applications properly are to be obtained.
I do not consider that there was any non-disclosure of any relevant sort on behalf of the plaintiffs in obtaining the initial 20 May 2005 ex parte injunction. I fully accept what Mr Stuckey has said to me from the Bar table, that Her Honour was taken with care through the relevant material on the ex parte application, both as to the e-mail of 7 September 2004 and as to the statement in the affidavit of Mr Crockett of 20 May 2004 paragraph 14 that the defendants had threatened to lock the gates and instruct security guards to exclude the plaintiffs, as distinct from the Aspen Group. I consider that there has been no misleading of the Judge on 20 May 2005. Accordingly, the first point on behalf of the defendants has not been made out.
However, I consider that the defendants have clearly made out the second and primary point in favour of discharging the injunction. I consider that the defendants on the material before me have clearly made out that the Aspen Group of Companies is not and was never a party to the licence agreement with respect to the Morning Star Estate, and that the nature of the agreement and its terms were personal, as is consonant with the nature of the business being conducted in relation to the interests of the two defendants. Of course, in this proceeding I do not determine, nor would I purport to do so, matters properly for trial upon evidence called at trial and tested at trial. However, I consider the defendants have demonstrably made out their case at the level applicable to this interlocutory stage. The personal nature of the licence and the importance to the defendants of the identity of the licensees is clear at all times in the agreement, GC1. The recitals in Clauses C, D, E and F provide (“GR” is Regan Pty Ltd):
“C.GR desire to operate a business on the Estate and to do so under the registered business name ‘Table Matters, Registration Number B1648575U’.
D.GR are experienced food, beverage and hospitality operators who warrant that they will bring high quality food operations and service to the Estate.
E.Barrett and Morning Star are agreeable to entering into this Licence Agreement with GR based on the representations, warranties and terms and the guarantee and indemnity as set out in this Licence Agreement.
F.Regan included as a party to the Licence Agreement on the basis that Regan is in partnership with GR in the business operated as Table Matters notwithstanding that the business name is solely owned by Green and J. Cincotta Pty Ltd.”
Having had the setting of the agreement stated in those recitals, in particular relevant to this application C, D, E and F, Clause 2 of the agreement, headed “Appointment of GR”, provides:
“Pursuant to its authority as referred to, Morning Star hereby appoints GR as the food, beverage and hospitality manager for the Estate on the terms and conditions as set out in this Licence Agreement, which appointment GR hereby accept.”
Clause 3.1, headed “Licence”, provides:
“The parties acknowledge and agree that the rights given pursuant to this Licence Agreement are by way of licence given to GR and be based solely in contract as set out in this Licence Agreement. The Licence Agreement is not transferable by GR save with the express consent of Morning Star and Barrett which consent may be withheld in the absolute discretion of Morning Star and Barrett. Morning Star and Barrett shall have a right to transfer their interest in this Licence Agreement to any Purchaser of the freehold of the Morning Star Estate property.”
Clause 22, headed “Default Provisions”, provides in relevant part:
“All parties to this Licence Agreement acknowledge that the following shall be events of default: …
22.4 If without Morning Star’s prior consent there is a different person in effective control of more than one of the companies GR as a result in changes in the directorship or shareholding of such company or beneficial ownership of the shares in a company or beneficial ownership of the business or assets of a company. …
22.8 If P Green Pty Ltd as trustee of the Green Family Trust and/or C Regan Pty Ltd as trustee of the Regan Family Trust are removed as trustees of the respective trust or if a co-trustee is appointed to either of the respective Trusts.”
Clause 39, headed “Representatives”, provides in relevant part:
“Morning Star and GR agree that the following people shall be representatives for the respective parties until one party notifies the other party as to a change in the representatives: …
39.2 GR
39.2.1Peter Green – operations, accounts
39.2.2Sally Warburton – administration
39.2.3Ben Sawtell – restaurant manager
39.2.4Mark Regan – caretaker
If any of the above parties should no longer hold the position with the business referred to then immediate notice will be given by one party to the other party as to the replacement representative. Until such notification each party shall be entitled to deal with the named party with respect to that party’s listed area of operation provided no party as listed has the authority to agree to any action which conflicts with the terms of this Licence Agreement.
40. Change in Directors/Shareholders
All parties acknowledge that this Licence Agreement has been entered into on the basis of the relationship between the parties as to the commencement date of this Licence Agreement and in particular with respect to the parties and expertise of GR. It is agreed that if either of the following parties at any time are no longer involved with the business carried on the Estate then Morning Star shall have the right to terminate the Licence Agreement.
40.1 Nominated Parties
40.1.1 Peter Green
40.1.2 Craig Regan.”
Further, which I shall not recite because it is lengthy with nine paragraphs, Schedule 1, “Food and Beverage Operations”, sets forth the rights and responsibilities of the parties to that end.
All of those matters, in my view, clearly indicate and establish the personal nature of the business and of its operation, which personal nature is self-evident in any event. They underscore paragraph 13 of the Sleeth affidavit as to that matter. Further, the agreement was signed by the parties and all parties rely upon the terms of that agreement, and, consonant with authority, if any authority were needed, Equuscorp Pty Ltd v Glengallon Investments Pty Ltd[1] states it: the parties are bound by the agreement. Further, no issue as to the supposed omission of Aspen Group from the licence agreement was raised by the plaintiff’s lawyers, GPZ Legal, through the various e-mails and letters, DS5, DS6 and DS8. And, as I have previously recited, the personal intention of the agreement is evident from DS4, the e-mail of 7 September 2004.
[1](2004) 211 ALR 101.
Thus, I conclude, bearing in mind that this is merely an interlocutory application and not a final matter – I have not heard the proofs elicited or tested in the usual way as at trial – the personal nature of the arrangements is self-evident.
Further, on the material before me I consider it is established that there has been a creeping take-over in this case, as is evident from the matters set forth in the Sleeth affidavit which I have recited. The subterranean change which has occurred without the knowledge or consent of the defendants is demonstrated by that material and, indeed, by the affidavit on behalf of the plaintiffs itself. Paragraph 10 of the affidavit of Mr Crockett of 20 May 2005 asserts that the Aspen Group is carrying on the business in accordance with the terms of the licence agreement, which I consider is demonstrably wrong; likewise paragraph 15; and, as I have said, likewise paragraph 4 of the second Crockett affidavit. The matters which I have recited, which only came to Ms Sleeth’s knowledge after diligent enquiry progressively by her after her return from overseas, likewise tend to the same end.
Accordingly, I consider the defendants, appropriate for this level of proceeding, have made out that there is no serious question to be tried in this case in relation to the Aspen Group of Companies being a party to the licence agreement.
Finally, I consider no estoppel arises in this case in favour of the plaintiffs. The history of the matter as set forth in the Sleeth affidavit in my view demonstrates no estoppel arises. The correspondence is afflicted by the fact that only progressively has Ms Sleeth determined what in reality has occurred.
For those reasons, I consider that the standard required for an ex parte injunction now being made permanent until the hearing of the matter has not been made out.
I repeat, I fully accept what Mr Stuckey has said to me, that Her Honour was taken properly through the relevant material as is appropriate for an ex parte injunction, and the first argument of the defendants, that the injunction was obtained without proper data being placed before the Court, fails. However, the main submission of the defendants that there is no serious question to be tried in my view has been made out.
Finally, I consider that the balance of convenience in any event favours the defendants. The personal nature of the matters as I have recited lies in their favour as well.
Accordingly, I propose to discharge the injunction made and I refuse the injunction sought on behalf of the plaintiffs.
0
1
0