Thirty Sixth Penny Pty Ltd v Davine Fitzpatrick (a firm) & Anor

[2008] VSC 54

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 2004  of  2006

THIRTY SIXTH PENNY PTY LTD	Plaintiff
v
DAVINE FITZPATRICK (A FIRM) AND LATROBE REGIONAL HOSPITAL	Defendants

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JUDGE:	OSBORN J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	27 FEBRUARY 2008
DATE OF RULING:	29 FEBRUARY 2008
CASE MAY BE CITED AS:	THIRTY SIXTH PENNY v DIVINE FITZPATRICK & ANOR
MEDIUM NEUTRAL CITATION:	[2008] VSC 54

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Joinder of Supreme Court & VCAT proceedings – application  for trial of preliminary issue – questions proposed not potentially determinative of proceeding and too wide – application refused – directions.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Robinson of Counsel for the Plaintiff	Best Hooper
For the 1st Defendants	Mr H. Obst, Solicitor for the First Defendant	Obst Legal
For the 2nd Defendants	Mr R. Hay of Counsel for the Second Defendant	DLA Phillips Fox
For Attorney General of Victoria	Mrs J. Tooher	The Victorian Government Solicitors Office

HIS HONOUR:

1. In 2006, the plaintiff issued proceedings in this Court with respect to the purported sublease made to the second defendant in 2000 and 2002 of consulting room premises situated at the LaTrobe Regional Hospital.

1. The plaintiff claims against the first defendant as the solicitors retained by the plaintiff with respect to the sublease transactions. It is alleged that, negligently and/or in breach of terms of the retainer, the first defendant failed to protect the plaintiff’s interests by ensuring its compliance with s.137AD of the Land Act 1958.

1. By reason of that section, it is alleged that the plaintiff was not permitted to transfer, assign or sublet its interest in the premises, without first obtaining the written consent of the Minister of Health of the State of Victoria.

1. Such consent was not obtained.

1. In turn, it is alleged that the plaintiff has suffered and will suffer loss and damage because the section was not complied with, and the purported subleases are invalid.

1. As against the second defendant, the plaintiff alleges that it entered into the subleases in issue from the plaintiff.  Further, the second defendant has stated that it is not bound by the subleases it entered in to and evinced an intention not to be bound by them.

1. In the alternative to its claim against the first defendant, the plaintiff contends that ministerial consent was not required pursuant to s.137AD because the subleases in issue were sub-sub-subleases, not falling within the relevant words of the section.

1. Further, the plaintiff contends that at the request of the second defendant it agreed to an assignment of the second named defendants’ interests as a sub-sub-sublessee to a third party in January 2002.  It is said that the second defendant is estopped, or otherwise barred in equity from denying that it is bound by the subleases it entered into with the plaintiff. 

1. Further and alternatively, it is said that the second defendant acted negligently in failing to advise the plaintiff that ministerial consent had not been obtained for the subleases. 

1. By its defence, the first defendant contends in part that s.137AD did not require the Minister’s consent for the sub-sub-subleases, and denies any breach of retainer or negligence.

1. Conversely, the second defendant contends that such consent was necessary to the validity of the subleases.

1. The second defendant has also raised the question of whether the Supreme Court has jurisdiction to determine disputes arising out of the sub-sub-subleases if they are properly characterised as “retail leases” within the meaning of the Retail Leases Act 2003, or its predecessor.

1. In turn, the plaintiff has issued proceedings before the Victorian Civil and Administrative Tribunal to resolve this issue. 

1. By order of 7 August 2007, the Acting President of the Tribunal ordered that a Judge of this Court who is a member of the panel of judges available for acting appointments under s.29 of the Victorian Civil and Administrative Tribunal Act 1998 be appointed to hear and determine the Victorian Civil and Administrative Tribunal proceeding.

1. I have been so appointed as a member of the relevant panel of judges by Instrument of Appointment of the Acting President of the Tribunal dated 14 February 2008, and by Instrument of Appointment of the Chief Justice of the Supreme Court dated 11 February 2008.

1. I propose to hear both the Supreme Court and Tribunal proceedings together and convened a directions hearing in both proceedings before me on 27 February 2008.

1. At that hearing, application was made by the solicitor for the plaintiff for directions that there be a determination of preliminary questions, including the question whether it is entitled to a declaration that the sub-sub-subleases are enforceable by the plaintiff against the second defendant.

1. Mr Robinson submitted on behalf of the plaintiff that the question of construction raised by the pleadings with respect to s.137AD was a discrete one, and that its resolution would facilitate negotiations between the parties and confine the issues on any further hearing of the matter.

1. Mr Obst submitted on behalf of the first defendant, that the question of entitlement to the declaration sought may raise issues going beyond the question of statutory construction identified by Mr Robinson.

1. Mr Hay submitted on behalf of the second defendant, that the entitlement to declaratory relief would involve resolution of the estoppel question raised against his client.

1. Ms Tooher indicated on behalf of the Attorney, that the Attorney wished to appear by counsel to assist the Court with respect to the question of statutory construction. 

1. In my view, although it is apparent that the question of statutory construction is logically severable from the balance of the case, it will not be determinative of the case having regard to the pleadings as a whole.

1. Further, it would in my view, be inappropriate to go beyond such question of construction by way of a preliminary hearing and the declaratory relief sought by the plaintiff will necessarily require the Court to do so.

1. The better course is to fix a relatively expeditious date for trial of the proceedings as a whole, towards which the parties can work, and to support such fixture with appropriate directions. 

1. Accordingly, I propose to order:

(1)Subject to further order of the trial Judge, proceeding No. 2004 of 2006 in the Supreme Court of Victoria be heard and determined together with proceeding R76 of 2007 in the Victorian Civil and Administrative Tribunal, Civil Division, Retail Tenancies List.

(2)The evidence given in each such proceeding be treated as evidence in the other.

(3)Dispensation be granted pursuant to ss.98(1)(b) and (d) and 126(2)(b) of the Victorian Civil and Administrative Tribunal Act 1998 and s.91(1)(e) Retail Leases Act 2003, from compliance with the requirements of s.87(1) Retail Leases Act 2003, on the grounds that the dispute between the parties has already been the subject of a mediation that occurred on 5 March 2007.

(4)The plaintiff file and serve, within 28 days, affidavits of evidence of each witness upon whose evidence the plaintiff intends to rely at the trial of this proceeding, and setting out the evidence to be adduced from such witness.

(5)The defendants file and serve, within 28 days thereafter, affidavits of evidence of each witness upon whose evidence each defendant intends to rely at the trial of this proceeding, and setting out the evidence to be adduced from such witness.

(6)Any affidavits in reply be filed and served by the plaintiff within 28 days thereafter.

(8)The matter be fixed for trial on 12 August 2008, on an estimate of eight days.

(9)Liberty to seek leave to intervene be reserved to the Attorney-General of the State of Victoria upon seven days’ notice to the other parties.

(10)Liberty to apply is generally reserved to the parties.

(11)The costs of the directions hearing be reserved.

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