Riviera Holdings Pty Ltd v Fingal Glen Pty Ltd (in Liq) (No 2) - [2013] SASC 111

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
RIVIERA HOLDINGS PTY LTD v FINGAL GLEN PTY LTD (IN LIQ) (No 2)
[2013] SASC 111
Reasons for Ruling of The Honourable Justice Nicholson
11 July 2013
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PARTIES - JOINDER OF PARTIES
In earlier reasons for judgment it was determined that the defendant cross-claimant (Fingal) was entitled to orders for relief against forfeiture of two leases previously terminated by the plaintiff cross-respondent (Riviera). The orders and any conditions attaching to the relief have not yet been finalised. However, between the date of reservation of judgment and the delivery of the reasons for judgment the liquidator of Fingal purported to assign, for consideration, to a related company, Banchory Nominees Pty Ltd, Fingal's "chose in action in the [present] proceeding". In addition, Banchory was appointed trustee, in lieu of Fingal, of the trust in which capacity the former leases had been held by Fingal. The Court did not become aware of these matters until the day of and after delivery of the reasons for judgment. By interlocutory application, Fingal sought an order pursuant to SCR 6R 75 that Banchory be substituted for Fingal as cross-claimant in the proceedings. Issues considered included the nature of the "property" purportedly assigned and the effect of any such assignment on Fingal's right, as found, to be relieved of the forfeitures.
Held:
(1) The orders for relief against forfeiture yet to be made are still to be made in favour of Fingal not Banchory notwithstanding any change of trustee and notwithstanding any purported assignment.
(2) Banchory is to be added as a party in the capacity of an additional cross-claimant pursuant to SCR 6R 74.
Corporations Act 2001 (SA); Supreme Court Rules 6R 74, 6R 75; Commercial Tenancy Law 3rd ed, Bradbrook, Croft & Hay, LexisNexis Butterworths Australia, 2009; The Assignment of Contractual Rights 2006, Tolhurst, Hart Publishing; Assignment of Choses in Action in Australia JC Starke QC, Butterworths, 1972; Snell’s Equity 32nd ed, Sweet and Maxwell; The Law and Practice of Bankruptcy 19th ed, Williams, Muir and Hunter; Equity, Doctrines and Remedies 4th ed, Meagher, Heydon and Leeming, Butterworths LexisNexis 2002, referred to.
Riviera Holdings Pty Ltd v Fingal Glen Pty Ltd [2013] SASC 77; Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd & Ors [2003] WASCA 11; Howard v Fanshawe [1895] 2 Ch 581; Seear v Lawson 15 Ch D 426; Guy v Churchill 40 Ch D 481; Repatriation Commission v Tsourounakis [2007] FCAFC 29; Redmond v Permanent Trustee Co of NSW (1916) 22 CLR 84; Re Harry Simpson & Co Ltd v Companies Act 1936 (1961) 81 WN Pt 1 (NSW), considered.

RIVIERA HOLDINGS PTY LTD v FINGAL GLEN PTY LTD (IN LIQ) (No 2)
[2013] SASC 111
Civil
NICHOLSON J.
Introduction

Between 6 October 2006 and 4 June 2012 Fingal Glen Pty Ltd, now but not then in liquidation (defendant/cross-claimant – “Fingal”) was the lessee of certain commercial premises in North Terrace, Adelaide pursuant to two written leases. Fingal conducted a motel business from the premises.[1] On 4 June 2012 the landlord, Riviera Holdings Pty Ltd (plaintiff/cross-defendant – “Rivera”) re-entered and the leases were terminated.
[1] One lease concerned the land upon which the motel building was erected and the other lease, in identical terms, was of the adjacent carpark.
On 9 November 2012 Riviera obtained an order for possession. However, by way of counter-claim to Riviera’s claim for possession, Fingal sought relief against forfeiture.[2] Fingal’s counter-claim came before me for trial following which I ruled that Fingal was entitled to an order for relief against the forfeiture of each of the two leases.
[2] On 15 November 2012 this Court made an order staying the judgment earlier given in favour of Riviera on 9 November 2012 for possession, on conditions, and pending the outcome of Fingal’s relief against forfeiture cross-claim. That stay was continued by further orders of this Court on 7 December 2012.
A more detailed background to the matter and the basis upon which I so ruled can be seen from my earlier reasons for decision.[3] The final paragraph of those reasons was in the following terms.
There will be an order for relief against the forfeiture of each lease. I will hear the parties further on:
(i)the form of the orders; and
(ii)the costs of the proceedings.
[3] Riviera Holdings Pty Ltd v Fingal Glen Pty Ltd [2013] SASC 77.
On 8 March 2013 and after I had reserved my judgment, Fingal was ordered to be wound up in insolvency under the provisions of the Corporations Act 2001 with Clyde Peter White, an official liquidator, appointed as the liquidator of the company. The petitioning creditor was the Australian Taxation Office. On 15 April 2013, Riviera succeeded with an application (not opposed by Fingal) to re-open its case so as to tender the relevant orders made by Registrar Luxton of the Federal Court of Australia and dated 8 March 2013.
At all material times, at least until 8 March 2013, Fingal had been the trustee of the Adelaide Riviera Investment Trust. It was in that capacity that it entered into the relevant leases which were terminated following the re-entry by Riviera on 4 June 2012. It was in that capacity that it, thereafter, continued to occupy the relevant premises pending a final determination of its claim for relief against forfeiture. It was in that capacity that it, thereafter, continued to conduct the motel business from the premises. Throughout this period, Fingal owned no assets beneficially.[4] It held the legal title, on behalf of the trust, to the assets acquired in its role of conducting the motel business.
[4] Other than its paid up share capital.
The financial affairs of the trust (which relate solely to the conduct of the motel business) were explored to an extent in my earlier reasons. The motel business had been, for some time, in financial difficulty. Nevertheless, the two leasehold interests had been a very significant trust asset. Each of the two leases, at the time of forfeiture, was part way through a five year term due to expire by effluxion of time on 5 October 2014. However, each lease contained five further rights of renewal each for five years, such that the last term (if all renewals were to be effected) would expire 5 October 2039.
An important feature of Fingal’s case for relief against forfeiture was that, as at the time of forfeiture, it had been possessed of a valuable business whether conducted as a going concern or whether sold. However, the capacity to conduct the business as a going concern and the capacity to achieve its full value (or any significant value) on sale was wholly dependent on a restoration of Fingal’s entitlement to occupy the premises as lessee, potentially, until 2039.
Notwithstanding the appointment of the liquidator to Fingal during the period between reservation of judgment and delivery of my reasons for judgment, I allowed the application for relief. In my earlier reasons, I made this observation.[5]
Speaking in general terms, the liquidator as agent of Fingal has a responsibility to act prudently in an effort to maximise the return from the winding up for the benefit of all creditors (not just the ATO as petitioning creditor) and its members. In this endeavour, the liquidator would appear to have three broad choices: first, to deal with the assets and liabilities as they presently stand and to wind up the company in the immediate to short term; second, to continue to trade on behalf of the company, perhaps indefinitely, with a view to meeting its outstanding debt obligations and returning the company to solvency; and third, to continue to trade until the company is more suitably placed to sell the motel business which would lead to a restoration of solvency or, if not, a winding up. The liquidator will only be able to attempt the second or third strategies in the event that relief were to be granted and the leasehold interests restored to the company. A cursory glance at the latest balance sheet for Fingal will be enough to show that an immediate winding up of the company’s affairs (the first strategy) is likely to produce, at best, an extremely modest return to creditors.[6]
With respect to the last sentence it is to be noted that, at the time, Fingal was indebted to its bank for a fully drawn loan facility in the order of $1.5M, in addition to its ATO indebtedness. As it happened, the liquidator, prior to the delivery of my reasons in the matter, took steps along the lines, it would appear, of the first of the three strategies just outlined.
[5] [2013] SASC 77 at [37](v).
[6] Subject to the capacity to enforce any director’s guarantees.
On 14 May 2013, the liquidator on behalf of Fingal, a company called Banchory Nominees Pty Ltd (Banchory), Mr Leslie Hammond (a former director of Fingal and a director of Banchory), Mrs Rita Hammond (Mr Hammond’s wife), Mr John Buff (a former director of Fingal and a director of Banchory) and Ms Josephine Buff (Mr Buff’s wife) executed a document headed “Sale of Assets Agreement” (the Sale Agreement).[7] The terms of the Sale Agreement raise issues of construction of some difficulty. Nevertheless, by entering into the Sale Agreement, the liquidator purported to sell to Banchory, Fingal’s right, title and interest in certain “Assets” as therein defined. Furthermore, the Sale Agreement purported to pass the right, title and interest in these assets to Banchory “upon execution” of the Sale Agreement. Clause 1 contains a definition of the Assets for this purpose.
[7]    Exhibit PDP17 to the sixth affidavit of Peter David Pedler sworn 4 June 2013. The various named individuals assumed obligations as guarantors.
Assets means all of the rights, title and interest of the Vendor in the following assets:
(a)    Plant and Equipment;
(b)   Telephone Number;
(c)    The right to the information technology owned by the company subject to clause 17;
(d)   The benefit of all future bookings subject to clause 17;
(e)    The right to carry on the leasehold business known as the Adelaide Riviera Motel subject to clauses 14 and 17;
(f)    The Business Name;
(g)    Stock;
(h)   The Vendor’s chose in action in the Proceeding.
A number of the items referred to in this definition of “Assets” are themselves defined in clause 1.
It can be seen that the assets purportedly sold include “the Vendor’s chose in action in the Proceeding”.[8] The Vendor is identified as “Clyde Peter White … the official liquidator appointed to Fingal Glen Pty Ltd (in liq) … in its own capacity … and as trustee of the Adelaide Riviera Investment Trust, in his capacity as liquidator of the company”.[9] The “Proceeding” is defined[10] and “means the counter-claim issued by [Fingal] in action number SC I 795/2012[11] [the subject proceedings] in the Supreme Court of South Australia between the Vendor and [Rivera].” However, the expression “the Vendor’s chose in action in the Proceeding”, being one of the defined assets the subject of the Sale Agreement, does not appear to be further defined.
[8] See clauses 1(h), 5, 10, 12, 13 and 14 of the Sale Agreement.
[9] Page 1 of the Sale Agreement where the various parties are described.
[10] Clause 1 of the Sale Agreement.
[11] The action number is 795/2012. The inclusion of “I” in “SC I 795/2012” would appear to be a typographical error.
Without further summarising the terms of the Sale Agreement, at this stage, the apparent intention of the parties to it was to enable Banchory to acquire from Fingal the assets necessary to enable it to carry on the motel business including, necessarily, the leasehold interests in the event relief were to be ordered and, as a consequence, the old leases reinstated or new leases entered into. Excluded from the sale were certain defined “Excluded Assets”. To the extent that these assets were to remain in existence they would remain the property of Fingal to be dealt with in the winding up proceedings. The price paid for the assets purportedly transferred to Banchory, including “the Vendor’s chose in action in the Proceeding” was the sum of $300,000. Presumably, this sum when paid will also form part of Fingal’s assets to be dealt with as part of the winding up proceedings.
In addition to their entry into the Sale Agreement, Fingal and Banchory also rely upon an apparently self-executing provision in the Adelaide Riviera Investment Trust Deed[12] to the effect (according to Fingal) that Fingal was deemed to have retired as trustee when it went into liquidation. In addition, Fingal and Banchory rely upon a resolution of the unit holders of the trust, appointing Banchory as the new trustee in place of Fingal, made on 23 April 2013.[13] On 30 May 2013 (after my delivery of reasons on 28 May 2013) a Deed of Appointment of New Trustee was executed[14] pursuant to which Banchory confirmed its acceptance of its appointment as trustee in accordance with the resolution of 23 April 2013.
[12] Clause 27(a)(i), exhibit PDP16 of the sixth Pedler affidavit.
[13] Minutes of Meeting of the voting unit holders, exhibit PDP15 to the sixth Pedler affidavit.
[14] Exhibit PDP16 to the sixth Pedler affidavit.
The evident intention of both Mr Hammond and Mr Buff (the controlling minds of both Fingal[15] and Banchory) was to place Banchory in a position, as new trustee of the Adelaide Riviera Investment Trust, to occupy the premises owned by Riviera and to conduct the motel business from those premises. In order lawfully to do so, Banchory needs to attain the status of lessee of the premises. It is the expectation of Mr Hammond and Mr Buff that the assignment of “the Vendor’s [Fingal’s] chose in action in the Proceeding”, in accordance with the terms of the Sale Agreement, will permit Banchory to enjoy the benefit of the orders for relief against forfeiture of each lease still to be formally made in accordance with my earlier reasons. In other words, it is their expectation and intention that once the form of orders for relief against forfeiture were to be finalised, either a reinstatement of the leases in the name of Banchory (by its terms, an odd notion) or new leases in the name of Banchory as tenant,[16] will be achieved. Riviera is in fundamental disagreement with this analysis.
[15] Prior to it going into liquidation.
[16] In either case, subject to such conditions yet to be imposed as part of the exercise of my discretion when entering the orders for relief.
Fingal’s interlocutory application
I delivered my reasons for judgment on 28 May 2013. As I have indicated, the liquidator was appointed on 8 March 2013 shortly after I first reserved judgment in the matter (27 February 2013). The fact of the appointment of the liquidator was drawn to my attention, by correspondence with my chambers, not long after 8 March 2013 but, of course, that information was not at that stage before me by way of evidence in the trial. On 15 April 2013, upon my allowing Riviera’s uncontested application to re-open its case, evidence of the fact of the liquidation came before me. However, I was not advised by either party that a likely consequence of this, as a matter of law, was that Fingal had automatically retired as trustee. Having said that, it is true that the Deed of Trust had been tendered during the trial[17] although neither party had directed the Court’s attention to that deed for this purpose.
[17] Exhibit JPB2 to the first affidavit of John Phillip Buff.
Perhaps more significantly, I was not put on notice of the contractual arrangements entered into, as briefly outlined above, by the liquidator of Fingal and Banchory until the day of but after delivery of my reasons for judgment. After announcing my conclusion (as set out earlier) and publishing my reasons, counsel for Fingal alerted the Court to the fact of Fingal having to retire as trustee, as a consequence of the liquidation, and to the existence of the Sale Agreement entered into between the liquidator and Banchory as the new trustee. At the time counsel advised that the Sale Agreement effected “an absolute assignment of the chose in action, the subject of the counter-claim”. Counsel then, rather disarmingly, indicated:[18]
so it might not complicate things in the end but it is a matter that I need to bring to the attention of the Court because it is relevant to the relief.
[18] Transcript, 28 May 2013, p3.
Counsel advised that his instructions were to file an interlocutory application with affidavit evidence in support seeking an order substituting the new trustee (Banchory) in lieu of the old trustee (Fingal) as defendant and cross-claimant, pursuant to Supreme Court Rule 6R 75.
By interlocutory application filed 4 June 2013 Fingal applied for the following orders.
1.   That Banchory Nominees Pty Ltd (ACN 160 118 187) be substituted as a party in this action in place of Fingal Glen Pty Ltd (ACN 120 827 750) (in liquidation).
2.   That Banchory Nominees be given leave to re-open its case to adduce evidence related to the appointment of Banchory Nominees Pty Ltd as the new trustee of the Adelaide Riviera Investment Trust.
3.   Such further or other order as this Honourable Court deems fit.
4.   …
The application was made pursuant to SCR 6R 75 and the inherent jurisdiction of the Court.
In support of the application, Fingal and Banchory[19] filed and relied upon the sixth affidavit of Peter David Pedler sworn 4 June 2013, the seventh affidavit of Peter David Pedler sworn 6 June 2013 and the seventh affidavit of John Phillip Buff sworn 6 June 2013. In response, Riviera filed and relied upon an affidavit of Shirley Chung affirmed on 6 June 2013. At the hearing of the application I had the benefit of comprehensive written submissions provided on behalf of Fingal and Banchory and provided on behalf of Riviera together with extensive oral submissions by counsel for each party (and the non-party). After I reserved my decision with respect to the interlocutory application, I received (consequent on leave granted) supplementary written submissions on behalf of Fingal and Banchory and supplementary written submissions on behalf of Riviera.
[19] Counsel for Fingal (at the trial) advised that the solicitors and counsel for Fingal who had been instructed prior to it being placed in liquidation, had been instructed by the liquidator to continue to act on behalf of Fingal and had been instructed by Banchory to act for it, for the purposes of this application.
During the hearing and after some quite extended discussion with counsel for Fingal and Banchory, it became clear that order 2 seeking leave to re-open Fingal’s case at trial was not to be pressed. Ultimately, the argument only concerned Fingal’s application that Banchory be substituted as a party to the action in its place. I am satisfied that on any analysis of the arrangements between Fingal and Banchory, as they now stand, Banchory should be added as a party to the proceedings. However, the questions of whether this should be in addition to or in lieu of Fingal and as to basis for making Banchory a party, have given rise to a considerable number of complex and difficult issues of law. It is important that I resolve at least some of those issues so that appropriate final orders consequent on my earlier reasons might be arrived at.
Riviera’s initial submissions – in essence
Riviera signalled its opposition to the application to re-open the trial if pressed. However, this was not pressed by Fingal and does not need to be further considered. Riviera also opposed the application to have Banchory substituted as a party in the action and the bulk of its submissions were directed to this issue.

Initially, Riviera challenged the appointment of Banchory as the new trustee but during oral submissions conceded that it took no issue concerning the validity of Banchory’s appointment as new trustee.
Riviera focussed on the nature of the “Vendor’s chose in action in the Proceeding” and submitted that, irrespective of what might have been achieved by the purported assignment of the chose in action, there had been no present assignment of any rights Fingal might have had under the former leases or which might arise in the future. Riviera submitted that such an assignment was, in any event, not possible to achieve.
A major underlying concern for Riviera is the perceived attempt by Fingal to avoid the effect of clause 9 of the former leases. Clause 9 is a provision, in not atypical form, to the effect that Fingal was prohibited from assigning its leasehold interests without the consent of Riviera which consent was not to be unreasonably withheld. In this respect and generally, Riviera reminded the Court that it was not a party to the Sale Agreement and was not bound by its terms, whatever those terms might achieve insofar as Fingal and Banchory are concerned.
Riviera submitted that the equitable remedy of relief against forfeiture is restorative such that any restoration of the landlord and tenant relationship (whether by way of reinstatement of the original leases or entry into new leases) could only be in favour of Fingal. In the event that relief against forfeiture is granted (and subject to any other conditions imposed by the Court on the grant of relief) it is Fingal that must remain bound by the terms of the leases. The equitable remedy for relief against forfeiture cannot be employed to override the common law to the extent of re-writing the bargain that existed between Riviera and Fingal. The application to substitute Banchory ignores the contractual bargain between Fingal and Riviera.
Riviera submitted that at best Banchory acquired, as a result of the purported assignment, only personal rights against Fingal and not rights in rem against Riviera.
To permit Banchory to benefit from Fingal’s successful claim for relief against forfeiture of its leases would lead to two, quite unsatisfactory, consequences. First, the Court would be re-writing the bargain between Fingal and Riviera by completely ignoring that aspect of the bargain that required any assignment to be subject to the clause 9 processes. Second, there would be a facilitation of an object (a result achieved) that would be contrary to fundamental aspects of the earlier reasons for judgment which resulted in Fingal succeeding with its claim for relief.
Riviera referred to a number of aspects of my earlier reasons for judgment which focussed on the character of Fingal and the financial circumstances of Fingal (present and historical) found to be relevant to Fingal’s claim for and ultimate entitlement to relief. In short, Riviera submits that the position of the proposed substituted plaintiff by counter claim is materially different from that of the original plaintiff (Fingal); material in the sense of bearing on the reasons why the discretion was exercised in the first instance to grant Fingal relief against forfeiture.
Ultimately, Riviera submitted that if orders for relief against forfeiture are to be made (and entered) they should be made in favour of Fingal in accordance with the reasons for judgment delivered. It would then be a matter for the parties to go through the processes mandated by clause 9 of the new leases if Fingal wished to assign the benefit of a then existing lease or leases to Banchory. In this respect, any rights arising under the Sale Agreement, insofar as Fingal and Banchory are concerned, would remain a matter for them.
It was (perhaps faintly) submitted that it was open to the Court simply to decline to make orders giving effect to the earlier reasons, no final judgment having been entered, on the basis that Fingal had “sullied its hands beyond repair”. As a consequence, Riviera invited the Court to dismiss the application for substitution. However, Riviera opposed the foreshadowed application by Fingal and did not itself apply, for the trial to be reopened. In these circumstances, it is difficult to see any basis on which I might consider amending my reasons and conclusion which were based on the evidence adduced during the trial.
Fingal’s and Banchory’s initial submissions – in brief
Fingal and Banchory provided a detailed summary of the events, involving the liquidator, Fingal and Banchory that occurred between the delivery of the earlier reasons for judgment and the making of the interlocutory application. It also summarised the terms of the various documents that had been brought into existence, including the Deed of Appointment of New Trustee and the Sale Agreement.
Fingal and Banchory submitted that the evident commercial purpose of the Sale Agreement was for Banchory, as new trustee, to take the benefit of the leases on behalf of the beneficiaries of the trust in the event that the counterclaim for relief against forfeiture were to be successful. They submitted that upon execution of the Sale Agreement, Banchory took the benefit of the “Assets” which included the “chose in action the subject of the counter-claim for relief against forfeiture”. All right, title and interest in the “Assets” passed to Banchory upon execution of the Sale Agreement.
According to Fingal and Banchory, by the terms of the Sale Agreement, Banchory now has the sole responsibility to obtain orders for new leases “including without limitation satisfying any orders of the Court imposed as a condition for the grant of the new leases”.[20] Banchory acknowledged and agreed that it has the sole responsibility to pay Riviera any moneys on account of rent and outgoings which would have been payable under the former leases and/or which are payable pursuant to orders of the Court in the proceeding.[21] Consistent with these “binding contractual obligations” Banchory has executed an undertaking to that effect.[22]
[20] Clause 14.2 of the Sale Agreement.
[21] Clause 14.4 of the Sale Agreement.
[22] Exhibit JPB59 to the seventh Buff affidavit.
Fingal and Banchory submitted that Rule 75 was satisfied because the interest in the chose in action, the subject matter of these proceedings, had passed from Fingal to Banchory who now holds it on behalf of the beneficiaries of the trust. In addition, relevant liabilities have passed to Banchory, including the liability to indemnify and to keep indemnified Fingal and the liability to pay rent and outgoings and otherwise satisfy any conditions with respect to the relief against forfeiture, as imposed.
By way of conclusion (with respect to the question of substitution) Fingal and Banchory submitted that Banchory had been validly appointed as the new trustee, that Banchory holds “the chose in action the subject of the counter-claim” as trustee of the trust on behalf of the beneficiaries and that these circumstances satisfy the requirements of Rule 75(1) which provides as follows.
If an interest or liability of a party to an action passes from the party to another person by assignment, transmission, devolution or in some other way, the court may –
(a) substitute the other person as a party in place of the party from whom the interest or liability has passed; or
(b) add the other person as an additional party to the action.
Fingal and Banchory submitted that Rule 75(1) is satisfied because Fingal’s interest in the chose in action (together with its associated liabilities) has “passed” to Banchory by reason of a conveyance (the sale by the liquidator pursuant to the Sale Agreement) or, alternatively, a vesting of trust property or an assignment. As a consequence, Banchory’s presence as a party is necessary for the proper determination of the proceedings, Banchory being the proper party now to seek relief and to seek relief in its favour.
Supplementary written submissions
Both Riviera and Fingal and Banchory, also provided supplementary written submissions directed at a number of quite difficult issues of law concerning the juridical nature of the chose in action purportedly assigned pursuant to the Sale Agreement. Without intending any disrespect to either counsel who prepared these helpful submissions, but given the approach I have decided to take concerning the disposition of Fingal’s interlocutory application, I do not propose to set out or summarise these submissions to any great extent.
General discussion
In my view, the ultimate question before the Court on Fingal’s interlocutory application is a little simpler than it first appeared during the hearing. It is important to focus upon the nature of the chose in action possessed by Fingal, at the time that the Sale Agreement was entered into. This was a time when Fingal still only had an entitlement to seek relief against forfeiture but before I had completed and published my reasons indicating that orders for relief against forfeiture would be made, subject to the form of those orders (and any conditions to be imposed) still to be considered.
It is helpful to distinguish the nature of any relevant chose in action held by Fingal at the time of the execution of the Sale Agreement from other related property. Had relevant leases been on foot with Fingal as lessee at that time, Fingal would have been possessed of a chose in action, being a right to take action to enforce its contractual and proprietary interests under the leases. Such a chose in action can be assigned. Ordinarily, a legal assignment of a leasehold interest will be binding on the lessor as a result of the doctrine of privity of estate and notwithstanding a lack of contractual privity arising from the fact that the lessor will not be a party to any such purported assignment.[23] However, in the event that there is a contractual restriction on the right to or mode of assignment, any assignment in breach of such a contractual restriction will give rise to a breach of the lease and will entitle the landlord to forfeit the lease.[24]
[23] In the absence of a novation.
[24] See generally Bradbrook, Croft & Hay Commercial Tenancy Law 3^rd edition, LexisNexis Butterworths Australia, 2009 at [15.1].
In Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd & Ors[25] there had been an assignment of the lease in question but without the original lessee (assignor) obtaining the required consent of the landlord. In time, the lease was forfeited by the landlord as a result of the original lessee (assignor) being placed in liquidation. The assignee brought proceedings for, inter alia, relief against forfeiture of the lease. McLure J (with whom Murray and Parker JJ agreed) said this.[26]
The logical first issue is the appellant’s standing to seek relief from forfeiture. At common law, an assignment of a lease in breach of a condition against assignment does not make the assignment nugatory but merely exposes the lease to forfeiture: Massart v Blight; Old Grovebury Manor Farm Ltd v W Seymour Plant Sales & Hire Ltd (No 2). It follows that after a legal assignment of the leasehold estate, the proper plaintiff to seek relief from forfeiture is the assignee: Picton Warlock v Allendale Holdings Pty Ltd, Old Grovebury Mann Farm Ltd; Ladies Sanctuary Pty Ltd v Parramatta Property Investment Ltd. …
As an equitable assignment does not alter the privity of estate (or contract) between lessor and lessee, the lessee (assignor) would be a necessary party to a claim for relief from forfeiture… .
The parties conducted this case on the basis that the legal title in the trust property including the Lease had been assigned to the appellant. On that basis, the appellant was the proper applicant for relief from forfeiture. Accordingly, it is necessary to consider the other grounds of appeal.
[25] [2003] WASCA 11.
[26] At [119]-[121] citations omitted.
In short, had the leases still been in place (or reinstated as a consequence of orders for relief against forfeiture having been perfected with Fingal as lessee) at the time of the execution of the Sale Agreement, Fingal if it wished to assign its leasehold interests to Banchory would have been contractually obliged to satisfactorily undertake the clause 9 (consent to assignment) process. In the absence of taking these steps to a satisfactory conclusion, Fingal would expose itself (and Banchory, had an assignment been effected) to a forfeiture of the leases by Riviera.
I turn to the situation where an order for relief against forfeiture of the leases had been made or indicated but not yet perfected as at the date of execution of the Sale Agreement. There are a number of alternative permutations here. A permutation might be that reasons had been delivered indicating that orders for relief against forfeiture will be made but no final orders or conditions attaching to the grant of relief yet identified. This appears to have been the position at the time I published my earlier reasons in this matter. Another permutation might be that final orders and conditions attaching to the grant of relief have been settled and “made” in open Court but not yet entered in the Court record. A further permutation might be that such orders have been made and entered such that Fingal had obtained or was entitled to obtain a sealed Court order. This last permutation (depending on the form of orders and the nature of any conditions that might still need to be complied with) may not be materially different from the first case dealt with above, that is, where there are, in effect, existing leases with Fingal as lessee. To my mind, had this second situation occurred the questions as to the nature of any chose in action possessed by Fingal and whether it was capable of assignment would involve issues of varying complexity and difficulty according to which of the three permutations applied. However, this is not the position that pertained at the time of execution of the Sale Agreement and so I do not need to address these issues.
A third situation is that which does apply to the facts of the present case. Immediately prior to the delivery of my earlier reasons, and at the time of execution of the Sale Agreement, Fingal had no more and no less than an entitlement to bring and to prosecute to finality proceedings seeking an order, in its favour, for relief against forfeiture of the former leases. It is not easy to give sensible content to this “entitlement”.
However, I agree with the submission of Riviera that, at this point in time, Fingal did not have a right to relief against forfeiture in the sense of an entitlement to be so relieved. Relief against forfeiture is a remedy that a Court may grant in the exercise of its equitable discretion upon being satisfied of certain matters and in accordance with such conditions that the Court might impose, in a sense, as the “price” for obtaining the relief. Whatever might be the right or entitlement in Fingal that arose or followed from my earlier reasons for judgment once delivered, Fingal did not have a right, in the sense of an entitlement, to be relieved against the forfeiture of the leases at the time of the execution of the Sale Agreement. At best, Fingal enjoyed an entitlement to prosecute the case for an order for equitable relief.
There are strong arguments in favour of the proposition that any right or entitlement that arises following a favourable exercise of the discretion to grant relief should be seen as peculiar or personal to Fingal, the re-instated lessee. This is not like the assignment of a simple debt where the identity of the ultimate recipient of the repayment (typically) is of no concern to the debtor. All that a debtor usually wants is a good discharge. The right to relief against forfeiture (once a Court has favourably exercised the discretion) has all the hallmarks of a chose in action that might be regarded as personal to the holder of that right, insofar as the landlord is concerned. Nevertheless, a leasehold interest is assignable (subject to any contractual qualifications, as earlier discussed) and it may be that a right to relief against forfeiture (once granted) should be treated in the same way.[27]
[27] Arguably, the right to relief, once granted will have the effect of restoring all of the terms of the lease, including those regulating any assignment which would then bear on the original lessee’s contractual entitlement to assign the right to relief against forfeiture.
In the present case it is to be accepted that Riviera, when it entered into the former leases, wished to deal at that time only with Fingal, presumably on the basis that Fingal was perceived to have those characteristics which Riviera required in a tenant who was to enjoy leases with multiple rights of renewal, potentially taking its possession of the premises out to 2039. This is underscored by the presence of clause 9 in the leases which provided Riviera with a contractual right to withhold its consent to an assignment of the leases provided such withholding was not unreasonable. As I have indicated, the effect of clause 9 would be to render any unauthorised assignment of the lease a breach following which the landlord would be entitled to forfeit the leases even as assigned.
In addition, it is clear from my reasons (and the conceptual basis underpinning the inquiry into the claim for relief against forfeiture) that the character of Fingal and its financial circumstances (past, present and future insofar as might be ascertained) were important aspects of the reasoning leading to the decision that relief would be granted. In its written outline Riviera drew attention to some 18 paragraphs in the earlier reasons which might be thought to have been rendered, to some degree or another, otiose in the event that Fingal were not to be the party afforded relief. In addition, Riviera drew attention to a number of changes in circumstances (in the event Banchory were to be substituted for Fingal so as to become the lessee through that route) which, had those circumstances been part of the evidentiary basis at trial, would serve to damage the integrity of the earlier reasons for judgment as delivered.
I accept the force of these arguments and the consequent submission put on behalf of Riviera, that an adoption of the Fingal and Banchory analysis of the chose in action of which Fingal was possessed at the time of execution of the Sale Agreement, would result in Banchory being entitled to enjoy the benefits of any orders for relief against forfeiture, so as to become Riviera’s new tenant, at the expense of Riviera’s contractual entitlements.
Fingal has put to the Court an argument, to the effect, that at the end of the day Riviera should be regarded as being no worse off. Banchory, like Fingal, operates only as a trustee for the Adelaide Riviera Investment Trust, like Fingal it has minimal paid up capital, like Fingal it has essentially the same shareholding and directorate, like Fingal its sole purpose is to conduct the motel business on behalf of the beneficiaries of the trust and like Fingal it is in possession of suitable fixed assets and the leases (provided Banchory were to succeed as lessee) to enable it to conduct the business in the same manner as did Fingal. Therefore, ultimately, Banchory is in no worse position than would be Fingal in terms of its capacity to pay the rent and outgoings in a timely manner in accordance with the terms of the leases and to otherwise comply with the obligations under the leases.
Such a factual comparison between the positions of Fingal and Banchory is not entirely accurate. Some of the assets used by Fingal in its conduct of the business (the “Excluded Assets”) were not transferred under the Sale Agreement. For example, one of the assets not transferred was the liquor licence that attached to the premises. There is no doubt that the position of Fingal (for good or ill) as to its capacity to conduct the motel business (and therefore return income so as to be in a position to pay rent and outgoings in the future) was a matter relevant to the discretion to grant relief against forfeiture. It may be that I do not have sufficient information before me and would need to hear further evidence and submissions in order to embark upon a determination of whether or not Banchory is truly in a position identical to that Fingal was in with respect to the conduct of the motel business. However, I do not need to determine this. I see the question before the Court as one of principle.

Fingal’s and Banchory’s case is that the arrangements entered into by them, principally in accordance with the Sale Agreement, have a certain effect in law which circumnavigates clause 9 of the former leases and my earlier reasons for judgment insofar as they rely or depend on the character (and circumstances) of Fingal as the entity seeking relief against forfeiture. If this were so, it would not matter who was the proposed assignee. As I put to counsel for Fingal, the Sale Agreement could have been entered into between Fingal and a local chimneysweep. I meant no disrespect to chimneysweeps. The simple point I was making is that if Fingal’s argument were to be upheld, there would have been nothing to stop it forcing on Riviera any new tenant no matter how unsuitable that tenant might be for the role of running a motel successfully and no matter how unacceptable it might be to Riviera to have such a tenant run a motel on its premises for a period that may extend to 2039.
I return to the nature of the chose in action held by Fingal at the date of execution of the Sale Agreement. In my view, it was no more than a right to move the Court (and to prosecute a claim to finality) for relief against forfeiture of the former leases, bearing in mind that the only party entitled to enjoy a restored lease or a new lease should the discretion be favourably exercised, was Fingal. It is that which is the content of the “right” as it existed at the time. If I am wrong in this respect, and the chose in action at that time comprised an entitlement to succeed to any relief to be granted, any purported assignment of this would have to be construed in the sense, not of an attempt to assign presently existing property but as a purported assignment of future property. The future property is a right, yet to come into existence, that is, the entitlement to relief, if and when granted.
Notwithstanding the comprehensive submissions put by both parties and the apparently significant research effort put into those submissions, my attention has not been drawn to any authority which directly assists with the nature of the chose in action held by Fingal as at the date of execution of the Sale Agreement and the question of whether it is capable of assignment and if so the effect of any such assignment. A starting point is Howard v Fanshawe.[28]
[28] [1895] 2 Ch 581.
The case, essentially, involved a discussion of the circumstances in which relief against forfeiture of a lease ordinarily will be granted. It was decided within the statutory context then in place in England. The tenant had deposited its interests under two leases as security for an advance intended to be used by the tenant to build cottages on the two properties. The tenant entered bankruptcy and the trustee in bankruptcy, for consideration, assigned to the mortgagee all of the trustee’s interest in the properties the subject of the leases. The mortgagee, as plaintiff, then brought an action claiming possession of the two properties at the rents and subject to the lessee’s covenants in the leases. It also claimed relief from any forfeiture by the landlord (defendant) of the leases. In addition to his primary submissions about whether or not relief against forfeiture should be available in the circumstances of the case, counsel for the defendant landlord submitted that even if there were to be a right to relief at all “it is personal to the lessee and not assignable; and relief cannot be demanded by a plaintiff who is not the original lessee.”[29]
Stirling J allowed the plaintiff mortgagee’s claim. His Honour concluded with these observations.[30]
I think, then, that if the lease had remained vested in [the original lessee] or his trustee in bankruptcy, he or his trustee would have been entitled to relief. It was said, however, that the right was personal to the lessee, and that relief could not be given to his mortgagee. …; but in the present case the [original lessee] mortgagor has become bankrupt, and the mortgagee has obtained from the trustee in bankruptcy and assignment of the equity of redemption in consideration of… . Now, by s44 of the Bankruptcy Act, 1883, all property of the bankrupt vests in the trustee; and by s168 “Property” includes things in action. The right of the bankrupt to be relieved of a forfeiture appears to me to be a thing in action and to have become vested in the trustee in the bankruptcy; and the trustee was entitled to sell the right and assign it to a purchaser… .[31] I think, therefore, that the plaintiff [mortgagee assignee] is entitled to bring the action.
[29] At 585.
[30] At 589.
[31] The two cases cited by Stirling J in support of this proposition Seear v Lawson 15 Ch D 426 and Guy v Churchill 40 Ch D 481, were not cases dealing with relief against forfeiture. They stand for the general proposition that certain property (including choses in action) will vest in a trustee in bankruptcy upon his or her appointment and is properly capable of sale and an assignment by the trustee.
I am not aware of any case in which Howard v Fanshawe has been directly applied. However, it has been referred, to occasionally,[32] in textbooks as standing for the proposition that a right to relief against forfeiture is a chose in action capable of assignment.[33]
[32] Howard v Fanshawe is routinely referred to during discussions of the circumstances in which relief against forfeiture for non-payment of rent typically will be granted.
[33] For example, Professor Tolhurst has observed in a footnote, “it has been held that a right to relief against forfeiture of a lease is a chose in action which will vest in a trustee in bankruptcy and is assignable by the trustee: see Howard v Fanshawe [1895] 2 Ch 581”, The Assignment of Contractual Rights 2006, Hart Publishing, p124, fn 22. In Williams, Muir and Hunter, The Law and Practice of Bankruptcy (19th ed) at 292 the authors state that the right of a lessee to be relieved from a forfeiture vests in a trustee who can sell such right and assign it to a purchaser and cite Howard v Fanshawe in support. Other textbook treatments do not go so far. In Assignment of Choses in Action in Australia by JC Starke QC, Butterworths 1972, Mr Starke, as he then was, included in his list of “rights enforceable by action (a sub-set of choses in action) a lessee’s right to be relieved against a forfeiture of the lease and cites Howard v Fanshawe. However, Mr Starke does not go on, in his seminal work, to discuss the notion of the assignment of such a chose in action and whether or not in this respect Howard v Fanshawe was correctly decided. The authors of Snell’s Equity 32nd ed, Sweet and Maxwell state that an equitable chose in action includes a right to relief against forfeiture for the lease for non-payment of rent and cite in support Howard v Fanshawe.
There have been some guarded comments concerning the status of Stirling J’s decision in Howard v Fanshawe insofar as this question of assignment is concerned. Professor Tolhurst in the footnote from his work, The Assignment of Contractual Rights referred to in the last footnote, went on to observe.
Quaere whether the extent to which such an order [that is the order granting relief against forfeiture] is discretionary may dictate that all the assignor really has is a right to approach a court for an order granting relief against forfeiture; see F Newbolt v Bingham (1895) 72 LT 852; Gill v Lewis [1956] 2 QB 1.
In Repatriation Commission v Tsourounakis[34] Dowsett and Edmonds JJ (with whose reasons, apart from with respect to one topic unrelated to the present issue, Spender J agreed) said this.
In Williams, Muir and Hunter The Law and Practice in Bankruptcy (19^th ed) at 292, the learned authors assert:
The right of a lessee to be relieved from a forfeiture vests in the trustee, who can sell such right and assign it to a purchaser…
The authority for this is said to be the decision in Howard v Fanshawe [1895] 2 Ch 581. However the decision seems to assume the proposition rather than establish it.
[34] [2007] FCAFC 29 at [141]-[142].
With respect, I do not find Howard v Fanshawe of particular assistance in the present matter. It does seem that Stirling J assumed the point in issue rather than decided it. At least, there is no reasoning in the judgment directed to the question of whether or not a right to seek relief against forfeiture (as opposed to the right itself once granted) is properly capable of being assigned or, to the extent that it is, the precise effect of any such assignment. I remain of the view that Professor Tolhurst’s suggestion is more in accord with principle. The only “right” available to Fingal as at the date of execution of the Sale Agreement was a right to approach the Court for an order granting relief against forfeiture.
I turn to the question of what it is that the Sale Agreement purports to effect an assignment of. In this respect and generally, the parties submissions, aided and abetted by questions and foreshadowed difficulties raised by me during the hearing, ranged far and wide. They addressed a number of legal issues involving the construction of the Sale Agreement and the nature of the relationships between the various parties following the events which took place during the period after I reserved my judgment and before I delivered the earlier reasons. On further reflection, it seems to me that it is not necessary for me to address all of the issues raised. Once I determine whether or not there has been an effective assignment, and if so, the nature of that assignment, its effect on Fingal’s entitlement to be relieved of the forfeitures and whether or not Banchory is entitled to be substituted or added as a party, the full extent or nature of the relationship between Banchory and Fingal now existing in accordance with the Sale Agreement and other related documentation is essentially a matter for them.
I agree with the submission put on behalf of Riviera to the effect that it is difficult to ascertain from the terms of the Sale Agreement exactly what has purportedly been assigned. The property purportedly assigned is described as “[Fingal’s] chose in action in the Proceeding”. The Proceeding is defined to mean “the counter-claim issued by Fingal in the present action.” I also agree with the submission put on behalf of Riviera that whilst Fingal claims to be “entitled” to relief against forfeiture for non-payment of rent on the grounds set out in the second counter-claim[35] Fingal did not at that stage nor at the time of execution of the Sale Agreement, have any such entitlement or right. The only “property” capable of being assigned at the time of the Sale Agreement was the right to apply for relief against forfeiture. It was not possible, at this stage, for Fingal to have assigned any rights or entitlements yet to come into existence on the assumption that orders for relief against forfeiture with a consequential re-instatement of the leases were to be granted.
[35] Paragraph 27 of the second counter-claim.
Clauses 5, 9, 12 and 14 of the Sale Agreement provide as follows.
5      SALE AND PURCHASE OF ASSETS
(a)     The Vendor as legal owner agrees to sell the Assets to the Purchaser and the Purchaser agrees to buy the Assets from the Vendor for the Purchase Price on execution of this Agreement.
(b)     The sale and purchase under this Agreement does not include the Excluded Assets.
9      PARTIES OBLIGATIONS ON EXECUTION
9.1    Upon execution of this Agreement the Vendor must deliver to the Purchaser:
(a)All Assets, title to which passes by delivery, at the places where they are located;
(b)All documents of title relating to the Assets (where available), by leaving them at the Property;
(c)Duly executed transfers of the Business Names (in registrable form if required to record a change of ownership);
(d)Duly executed forms or documents required for the Purchaser to transfer the Telephone Number to it; and
(e)Duly executed release of the ANZ Charge.
12    THE PROCEEDING
12.1 Following the execution of this agreement the Vendor will use all reasonable endeavours to assign to the maximum extent permitted by law and equity the benefit of its chose in action in the Proceeding.
12.2 From the date of this Agreement the Purchaser will indemnify the Liquidator against any and all Liability that the Liquidator may incur in the Proceeding, including but not limited to an order to pay the costs of any other party to the Proceeding.
12.3 The Purchaser acknowledges and agrees to the Vendor that the Vendor does not in any way guarantee, warrant or represent that the benefit of the chose in action is able to be assigned to the Purchaser and the Purchaser agrees that it will make no Claim for loss, damage, or for compensation in the event of the Vendor being unable for any reason whatsoever to assign the benefit of the chose in action in the Proceeding to the Purchaser.
12.4 In the event of the Purchaser being unable to obtain the benefit of the chose in action of the Proceeding the Vendor reserves its right to disclaim the Property Leases if such disclaimer is so required.
12.5 The Vendor makes no guarantee, representation or warranty as to the outcome of the Proceeding.
14    THE PROPERTY LEASES
14.1 The Purchaser agrees and acknowledges that the Property Leases were forfeited with effect from 4 June 2012.
14.2 In the event that the Counterclaim is successful, it is the sole responsibility of the Purchaser to obtain orders of the Court imposed as a condition for the grant of the new leases provided that the Vendor shall provide at the cost of the Purchaser any assistance reasonably required by the Purchaser.
14.3 The Purchaser indemnifies the Vendor for any costs it incurs in connection with complying with clause 14.2.
14.4 The Purchaser acknowledges and agrees that it is the Purchaser’s sole responsibility to pay to the Landlord any moneys on account of rent and outgoings which would have been payable under the Property Leases, had they not been forfeited, and/or are payable pursuant to the orders of the Court in the Proceeding.
14.5 The parties agree that nothing in this Agreement places any obligation on the Vendor or the Liquidator to procure an assignment of the Property Lease to the Purchaser.
14.6 The Vendor makes no warranty that an assignment of the Property Lease can be effected.
Read in isolation, clause 5(a) might be seen as ambiguous with respect to the question of whether the agreement to buy and sell is to take effect in the sense of “arise” on execution of the Sale Agreement or whether the agreement to buy and sell and the completion of the sale are both to take effect on execution. The latter is more likely to have been intended given that any agreement to buy and sell usually will arise, in any event, upon execution of the agreement, that being the whole point of executing an agreement. However, any ambiguity is removed when reference is made to clause 9. It is the parties’ intention that title to the transferred “Assets” was to pass upon execution.
Clause 12.1 is in curious terms. It seems to anticipate that even after the execution of the agreement and therefore even after the transfer of title to all of the Assets, as at the date of execution of the agreement, there still will be a need to use reasonable endeavours to assign “the benefit” of the chose in action in the Proceeding. Furthermore, clause 14.2 imposes an obligation on Banchory as a purchaser, in the event that the counter claim were to be successful, to obtain orders for new leases in substitution for the former leases and to satisfy any orders of the Court imposed as a condition for the grant of new leases. Clause 14.2 also provides that Fingal, as vendor, is obliged to provide (at Banchory’s cost) any assistance reasonably required by Banchory.
The first thing to note is that these provisions (as with all of the provisions of the Sale Agreement) are not binding on Riviera. They are provisions which identify the respective rights and obligations of the parties to the Sale Agreement, that is, Banchory and Fingal. However, it seems to be contemplated that there may be future steps to be taken, in the event that the counter-claim were to be successful and the discretion exercised in favour of relief against forfeiture, before substituted leases will be brought into effect with Banchory as lessee.
Furthermore, by clause 14.6 Fingal expressly gives no warranty that an assignment of the “Property Lease” can be effected. The term “Property Lease” as used in clause 14 is defined in clause 1 to mean the original registered leases for the motel premises and the carpark that were forfeited and brought to an end on 4 June 2012. On the one hand, Fingal gives no warranty that an assignment of these leases can be effected (which would seem to be not unreasonable given that they no longer exist) but, on the other hand, Fingal purports to sell something which it expects will entitle Banchory in due course to obtain new leases with Banchory as lessee in identical terms by way of substitution for the original leases.
I agree with the submission put at paragraph 14 of Riviera’s supplementary written submissions.
… the assignment in question is not, and cannot be, an assignment of obligations that would otherwise exist under the leases. What is left to assign while arguably “property” within the meaning of s474(1)(a) of the Corporations Act is of very limited content – so limited, in fact, that it is only, at best, the right to be named as plaintiff. The relief that might be granted is still the reinstatement of the leases to Fingal Glen. If that occurs, then Fingal will also have the obligation as outgoing trustee to transfer legal title in the leases to Banchory (which… may be what is contemplated by clause 12.1). … there is no attempt in the Sale of Assets Agreement to assign the former leases, quite the contrary: clause 14.
I agree with counsel for Riviera, that any other conclusion would operate as a mechanism to avoid the principle that an equitable assignee takes the property subject to the equities and infirmities of the assignor’s title.[36] Ordinarily an assignee can be in no better position than that in which the assignor was in prior to the assignment.[37]
[36] Redmond v Permanent Trustee Co of NSW (1916) 22 CLR 84 at 91.
[37] Re Harry Simpson & Co Ltd v Companies Act 1936 (1961) 81 WN Pt 1 (NSW) 207 at 209 and see Meagher Heydon and Leeming, Equity, Doctrines and Remedies 4^th ed, Butterworths LexisNexis 2002 at [6-490].
At all material times the extent of Fingal’s claim has been for relief which if granted would permit the restoration of the forfeited leases or the grant of new leases on terms identical to those in the forfeited leases. In either case clause 9 or its replica in fresh leases would remain available to Riviera as regulating the manner by which and the circumstances in which the leases might be assigned by Fingal to Banchory. Banchory should not be placed in a position any better than it would have been in had the terms of the original leases applied.
It may be that once orders for relief against forfeiture were to be granted in favour of Fingal, Banchory would have contractual rights against Fingal to have Fingal use all reasonable endeavours to assign to the maximum extent permitted by law and equity the benefit of the “chose in action in the Proceeding”, that benefit being the leases in Fingal’s name either as restored or as granted anew. It may be that once Fingal is restored as lessee, it would be found to hold the leases on some form of trust for Banchory. Whatever rights Banchory has in these respects will turn on, inter alia, a full consideration of the terms of the Sale Agreement and the circumstances leading to the retirement of Fingal as trustee and its replacement by Banchory as trustee of the Adelaide Riviera Investment Trust. The extent of and the working out of any such rights are essentially matters for Fingal and Banchory and are not matters that I need to address in these reasons.

It follows in my view, that it would not be appropriate to substitute Banchory for Fingal as the sole cross-claimant in these proceedings. However, there is little doubt in my mind that Banchory has an interest in the subject matter of the proceedings or in a question of law or fact involved in the action.[38] As such, it is appropriate that Banchory be added as a second cross-claimant at least pursuant to Rule 6R 74. The addition of Banchory as a cross-claimant should be backdated to the date it was ostensibly appointed as trustee on 23 April 2013. The position I have reached is consistent with the alternative position advocated by counsel for Fingal and Banchory in the event that I were to reach the view (as I have done) that there has been no effective assumption by Banchory (by assignment or otherwise) of a right vis a vis Riviera to have the leases re-instated with Banchory as the lessee.
[38] See Rule 6R 74(a). It may be that 6R 74(d) and (e) also are engaged.
Accordingly, it is my intention to finalise orders for relief against forfeiture in favour of Fingal. It will be a matter for Fingal, Banchory and Riviera as to what takes place thereafter. I have received written and oral submissions from the two parties and the non-party as to the form these orders (with conditions) should take and on the question of costs generally. However, I indicated at the end of the last hearing that I would give the parties a further opportunity to be heard on these outstanding matters including the costs of this application after delivering my ruling on Fingal’s interlocutory application.
I make the following orders:
(i)that Banchory Nominees Pty Ltd be added to the proceedings as a second cross‑claimant from 23 April 2013;
(ii)that Fingal’s interlocutory application filed 4 June 2013 otherwise be dismissed.