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Re Java 452 Pty Ltd (Admin Appted);

Re Java 452 Pty Ltd (Admin Appted);

Case [1999] VSC 252 9 July 1999

Corporate Law & Governance

Commercial Law

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SUPREME COURT OF VICTORIA

CORPORATIONS LIST Do not Send for Reporting

Not Restricted

No. 5793 of 99

In the Matter of Java 452 Pty Ltd (Administrators Appointed)
ACN 083 525 464

PERMANENT TRUSTEE AUSTRALIA LTD (As Trustee of Advance Property Fund)	Applicant
V
KENNETH JOHN STOUT & ROBERT MICHAEL SCALES (In their capacity as joint administrators of Java 452 Pty Ltd ACN 083 525 464) and Java 452 Pty Ltd (Administrators Appointed) ACN 083 525 464)	Respondents

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JUDGE:	Byrne J
WHERE HELD:	Melbourne
DATE OF HEARING:	17, 25, 30 June, 5 July 1999
DATE OF JUDGMENT:	9 July 1999
CASE MAY BE CITED AS:	Re Java 452 Pty Ltd (Admin Appted); ex parte Permanent Trustee Australia Ltd
MEDIA NEUTRAL CITATION:	[1999] VSC 252	(Cover Page revised 14 July 1999)

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Corporations – External administration – Lease determined after beginning of administration – Whether s.440C application is equivalent to re-entry – Leave to take possession – Whether leave should be granted.

Corporations Law ss.440C, 441F

Landlord and Tenant – Lease – Termination of lease – Re-entry – Whether s.440C application is equivalent to re-entry – Re-entry by demand for possession

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr D. Denton	Freehill Hollingdale & Page
For the Respondents	Mr A.A. Nolan and Mr D.Farrands	Ernst & Young Law

HIS HONOUR:

The applicant, Permanent Trustee Australia Ltd (“Permanent Trustee”), seeks an order pursuant to s.440C of the Corporations Law that it have leave to take possession of the premises situate at and known as Ground Floor, 452-470 Flinders Street, Melbourne, alternatively a declaration that it is entitled to recover possession of the premises pursuant to s.441F. On these premises the thirdnamed respondent, Java 452 Pty Ltd (“the Company”), conducts the business of a café under the name “Java Express”. It has held the premises as assignee of a lease granted in 1995 by the then owner. Following its purchase of the freehold in 1998 Permanent Trustee is now registered as the proprietor of the premises. The transfer of lease to the Company is dated 4 January 1999 although it is expressed to have been effective from 7 October 1998. In the normal course, the term of the lease would expire in July 2005 with two five year options.

The factual background

On 26 March 1999 the solicitors for Permanent Trustee gave notice of default under the lease asserting non-payment of rental due for December 1998, January, February, and March 1999 totalling $51,458.38. The notice warned that if the breach be not remedied within 14 days, Permanent Trustee would re-enter the premises. The notice expired on 9 April 1999.

On 31 March 1999 the solicitors for Permanent Trustee gave a further notice of breach which was expressed to have been given under s.146 of the Property Law Act 1958. The breaches of the lease alleged are a failure to pay $1,948.03 interest arrears and $3,100 legal costs and a failure to provide a $41,343.75 bank guarantee. The notice warns the tenant that unless…

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.

Continue reading Re Java 452 Pty Ltd (Admin Appted);

Details

AGLC: Re Java 452 Pty Ltd (Admin Appted); [1999] VSC 252
Case: [1999] VSC 252
Decision Date: 9 July 1999

CaseChat Overview and Summary

In this case, Re Java 452 Pty Ltd (Admin Appted), the respondent, the administrator of the company, sought leave to apply to the court under section 440C of the Corporations Law. The company, Java 452 Pty Ltd, was in external administration, and the respondent sought to determine a lease that had commenced before the administration began. The primary dispute was whether the application under section 440C was equivalent to a demand for possession by the landlord, and if so, whether leave should be granted for the respondent to take possession.

The central legal issue before the court was whether an application made under section 440C of the Corporations Law, seeking to determine a lease, constituted a re-entry by the landlord. Additionally, the court needed to decide if, in the context of a lease that was active before the commencement of the external administration, the respondent was entitled to leave to take possession under section 441F of the Corporations Law. The court's interpretation of these provisions would significantly impact the rights of the landlord and the administrator of the company in the context of the lease.

The court held that the application under section 440C was not equivalent to a demand for possession by the landlord. The court reasoned that section 440C dealt with the determination of certain leases, and it did not constitute a demand for possession as defined in the relevant property legislation. The court emphasised that a demand for possession required the landlord to assert their right to immediate possession, whereas the application under section 440C sought a determination of the lease, which was a different legal process. Consequently, the court found that the respondent was not entitled to leave to take possession under section 441F because the application under section 440C did not meet the criteria for re-entry. The application was dismissed, and the respondent was not granted leave to take possession of the premises.

The final orders of the court were that the application by the respondent to determine the lease under section 440C was not equivalent to a demand for possession by the landlord, and leave to take possession under section 441F was not granted. The lease remained in effect, and the respondent was not entitled to take possession of the premises as a result of the application under section 440C.

Orders