Balatint Pty Ltd v Halidon Holdings Pty Ltd [1990] QSC 422

10 r --~~-~~ l i1E ·i,,··:~ 1 COPl.~S !E'SUE:·· I C ,r.:ri ~C'porting Bureau l 02:•: io/ Iii !lo IN THE SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION No.595 of 1990 BEFORE MR JUSTICE AMBROSE BRISBANE 22 NOVEMBER 1990 BETWEEN: (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter,Court Reporting Bureau.) BALATINT PTY. LTD. -and- HALIDON HOLDINGS PTY. LTD. JUDGMENT Plaintiff Defendant HIS HONOUR: In this matter this is a proper case, in 30 my view, in which to order that the share transfer agreement in issue between the plaintiff and the defendant ought be specifically performed by the defendant. 40 I make an order in terms of the Minutes of Order placed 1 before me upon the argument of the application which I make a schedule to these reasons for judgment. HIS HONOUR: Subject to amending paragraph 5 of the Minutes of Judgment which I have scheduled to my reasons, I publish my reasons. 10 20 30 40 50 50 60 HIS HONOUR: I do grant the parties liberty to apply and I formally order that the defendant pay the plaintiff's costs of and incidental to the action, including the costs of and incidental to this application to be taxed. -Govt. Printer, Qld. 1 ;.., J-rr--?' 6 60 -- 1 of 16 -- IN THE SUPREME COURT OF QUEENSLAND No. 595 of 1990 BETWEEN: BALATINT PTY. LTD. AND: HALIDON HOLDINGS PTY. LTD. REASONS FOR JUDGMENT - B.W. AMBROSE J. Delivered the 22nd day of November, 1990. CATCHWORDS: Counsel: Mr. D. Jackson for Applicant/plaintiff Mr. T.D. North for Respondent/defendant Plaintiff Defendant Solicitors: Steindl Robertson McPherson for Applicant/plaintiff Morris Fletcher & Cross for Respondent/defendant Hearing date: 22nd October, 1990 -- 2 of 16 -- IN THE SUPREME COURT OF QUEENSLAND No. 595 of 1990 BETWEEN: BALATINT PTY. LTD. Plaintiff AND: HALIDON.HOLDINGS PTY. LTD. Defendant REASONS FOR JUDGMENT - B.W. AMBROSE J. Delivered the 22nd day of November, 1990. This is an application by the plaintiff pursuant to 0. 18A for summary judgment against the defendant for specific performance of a contract in writing dated 14th September, 1988 whereunder the defendant agreed to purchase from the plaintiff 500,000 shares in a company called Dinar Pty. Ltd., such shares being fully paid and free of encumbrance for the sum of $500,000.00. A deposit of $25,000.00 was paid upon execution of the agreement and the balance of purchase price was payable upon completion at a date to be fixed. The share sale agreement between the plaintiff and the defendant was a vehicle by which the plaintiff was to transfer to the defendant a liquor licence which at the date of the agreement attached to a building owned by the plaintiff on the corner of Queen Street and Adelaide Street, Brisbane known as the National Hotel. The National Hotel site at that time was in the course of redevelopment for the purpose of an office accommodation building · and the owner had arranged to have the liquor licence "lie -- 3 of 16 -- 2 dormant" pending this construction. It seems to have-been the intention -to sell the licence if possible because it had been decided that the site upon which the National Hotel was constructed was no longe~ a viable-site for licensed premises. The defendant had acquired premises in Queen Street opposite the site of the National Hotel known as Atcherley House and intended to redevelop -this -site and construct upon it a large new building for the purpose of licensed premises. The defendant therefore was interested i_n acquiring the liquor licence attached to the National Hotel. No doubt _it thought having regard to the proximity geographically of the Atcherley House site to the National Hotel site that the prospects of obtaining a transfe~ of the liquor licence were enhanced. The defendant is a company incorporated in the Northern Territory having its principal office in the State of New South Wales. 1It was determined that the method to be used to transfer the licence from the plaintiff to the defendant was that the plaintiff would acquire a shelf company, transfer the licence to it, and then transfer the whole of the shares in that company to the defendant for the sum of $500,000.00. To give effect to this plan the plaintiff acquired Dinar Pty. Ltd. which was .incorporated .in the Northern Territory and had its registered o~fice care of the solicitors for the defendant. U:i;>on .its purchase Dinar Pty. Ltd. was a two share company but extra shares were allotted so that by the time for transfer by the plaintiff of its shares in Dinar Pty. Ltd. to the defendant had arrived the plaintiff held 500,000 fully paid -- 4 of 16 -- 3 unencumbered shares .in. that company, so tll.at at least upon settlement of the contract.it would be able to transfer 500,000 fully paid unencumpered shares to the defendant in exchange for payment of the balance~of purchase price being $475,000.00. Clause 4 of the share transfer agreement provides - "4. It is a condition subsequent of .this agreement that prior to the expiration of the approval period the Licensing Court shall remove the licence from the premises to which the licence currently attaches to such other premises as shall be nominated by the purchaser conditionally upon the applicant for such removal doing within the time fixed by the Licensing Commission all acts and things to satisfy the requirements of the Commission determined in respect of the accommodation services and other matters considered by the Commission to be necessary at the premises to which the Licensing Court proposes to remove the license." Clause 5 of the agreement provides the "approval period" referred to in cl. 4, shall be 12 months and gives the defendant certain rights should the Licensing Court not conditionally remove the licence as contemplated under cl. 4. Under cl. 7(a) of the agreement it is provided that it shall be completed on the day which is 21 days after the day in which the condition subsequent referred to cl. 4 of the agreement has been satisfied or waived as the case may be. Under cl. 13 of the agreement the plaintiff and defendant each acknowledge that the application for removal of the license from the National Hotel site to the Atcherley House site must be a joint application by Dinar as licensee and the plaintiff as owner. The plaintiff acknowledges that the defendant should have the carriage of that application and the plaintiff agrees t? appoint the directors of the defendant for the time being as its attorneys for all ·purposes relating to that application. The -- 5 of 16 -- 4 defendant agrees to carry ~forward the application and to indemnify both Dinar. Pty. Ltd. and the plaintiff in respect of any costs and charges which may be incurred or payable in respect of that application for transfer of licence. On 13th September, 1988 formal steps were taken for the allotment of the necessary shares in Dinar Pty. Ltd. to the plaintiff to enable the contract between the plaintiff and the defendant to be completed. A great deal of material was advanced upon the application for summary judgment. It appears that the defendant complained of some delay on the part of the plaintiff in the early stages after the agreement was executed in effecting a transfer of the licence attached to the National Hotel site to Dinar Pty. Ltd. however this was effected it seems on 27th June, 1989. On 12th February, 1990 the Licensing Court made a conditional order for removal of the licence from the National Hotel site to the Atcherley House site pursuant to s. 49A(5) of the Liquor Act 1912-1989. To understand the effect of the order and because the defendant places so much reliance upon it in opposing the order for specific performance sought by the plaintiff I will refer briefly to what seem to be important parts of that section. Section 49A(2) provides. inter alia that when considering an application for a transfer of a liquor licence - "If the Licensing Court is satisfied that .a licence should be removed pursuant to this section the Commission shall determined the accommodation services and other matters co.nsidered by it to be necessary at the site :to .which it proposes to remove the licence and shall prepare specifications thereof and the following subsections of this section shall apply with respect to the removal of the licence." -- 6 of 16 -- 5 Section 49A(4)D theQ PfOyide~ inter alia - " ( 4) D The Licensing Court shall not det.ermine to remove a licensed victualler's licence under this section - (a) (b) (c) Until it is satisfied that .( i) The premises to which it proposes to remove the licence and the accommodation and essential services to be provided in connection therewith are complete and in good order and condition. (ii) Upon removal of the licence to those premises the licensee will be able to commence forthwith to carry on therein his business of a licensed victualler in a manner calculated to meet the needs of the neighbourhood and of the public there.in. Section 49A(5) of the Act then provides - " ( 5) Notwithstanding the provisions of para. ( c) of subs. ( 4B) the Licensing Court subject to the other provisions of this Act applicable to a removal of licence under this section may determine that it will remove the licence conditionally on the applicant doing within the time fixed by the Commission all acts and things to satisfy the requirements of the Commission determined pursuant to subs. (2) of this section. Such a determination shall not be effectual to remove the licence but upon the· applicant satisfying the requirements of the Commission as aforesaid within the time fixed by the Commission.· or within any extension of that time allowed by the Commission the Licensing Court shall ·remove the licence." Under. s. 49 (A) ( 1) of the Act upon being satisfied of certain matters it is provided that - !!The Licensing Court may upon the application of the licensee and the owner of the premises remove the lipence to such other site as will, in the opinion of the Licensing Court adequately meet the needs of the -- 7 of 16 -- 6 public in th€ viciniby of the site to which it is .Propq~ed to move the licence." There was placed in evidence an undated application in the name of the plaintiff and Dinar Pty. Ltd. for a transfer of the liquor licence attached to the National Hotel site to the Atcherley House site at 505 Queen Street, Brisbane. Pursuant to s. 49(A)(1) the Licensing Court on 11th September, 1989 determined that for the reasons stated the National Hotel site was no longer a suitable site to have attached to it a liquor licence and then referred the application to the Licensing Commission to proceed pursuant to subss. (2) and (3) of s. 49(A) of the Act. Presumably the Commission performed its obligations under the Act upon that reference because an order of the Licensing Court made on 12th February, 1990 reads - "And upon being of the opinion that the proposed site being 505 Queen Street, Brisbane in the State of Queensland ('the proposed site') adequately meets the needs of the public in the vicinity of the proposed site; And upon being satisfied that all the requirements of s. 49(A) · of the Liquor Act 1912-1989 and all the requirements of the Licensing Commission have been 'complied with; I will order that the licensed victualler's licencelocated . at the National Hotel, Corner Queen and Adelaide Streets, Brisbane in the State of Queensland be removed to the proposed site being 505 Queen Street, Brisbane in the State of Queensland."· In form the order made on 12th February, 1990 is a determination. of f.he sort contemplated by s. 49 (A) (5) .of the Liquor Act 1912-1989. · It is :fnt:.eresting to note that both· orders made upon the application for transfer tinder s. 49(A) of the Liquor Act record -- 8 of 16 -- 7 no appearance on behalf of the plainti:f_f as owner of the National Hotel site. On the first order made on 11th September, 1989 there is recorded an appearance on behalf of Dinar Pty. Ltd., Brisbane City Council and of somebody representing the Licensing Commission but no reference to any person representing the owner.' Again on the order made on 12th February, 1990 appearances are recorded in the order only on behalf of the applicant Dinar Pty. Ltd. and on behalf of the Commission. It is by no means clear in my view having regard to the terms of s. 49(A) whether it was incumbent upon the owner of licensed premises to do anything other than join in making the formal application. There seems to have been no requirement that the owner appear upon the application. One of the matters raised by the defendant as justifying refusal to complete the contract is the fact that the plaintiff has recently sold the National Hotel site upon which there has been completed and at least partly occupied an office building. It is argued that the new owner of the site does not appear to have agreed to. continue to support the . application which the plaintiff made to the Licensing Commission for transfer of the licence and.because it has not done so may now as owner of the land withdraw the application irrespective of the wishes of Dinar Pty. Ltd., the prese.nt license.e under the liquor license not yet been finally removed from the National Hotel site. Apparently it was in ab0.ut July 1990 that the plaintiff sold the redeveloped National Hotel site. It is fair to say that,:c prior to the time· of s.uch sale the plaintiff had made unsuccessful efforts to have the defendant -- 9 of 16 -- 8 complete the contract. There is·a great deal of correspondence placed bef6re me·concernirtg the disinclination of the defendant to settle thecontract. I am not persuaded that any good reason emerges justifying the failur·e to settle. However once the sale of the plaintiff's redeveloped National Hotel site came to the attention of the defendant it seems that a further reason was added for itd disinclination to settle the contract. It is fair to observe that although the defendant has constantly asserted that it is willing and able to settle the contract it has simply failed to do so and on the hearing of the applicat:ion for summary judgment for specific performance really the only grotlnd oi any substance raised ih opposition was that having disposed of the site to which the liquor licence still attaches - in spite of the conditional order made by the Licensing Court upon the application of the defendant using the name of the plaintiff and Dinar Pty·. Ltd. - the plaintiff has really put it out of its capacits,·,·andDinar Pty. Ltd. has no longer the capacity, to do all things necessary to ensure that there is a completed and unconditional transfer of the liquor licence to the defendant's s.ite upon which is still constructed Atcherley House. Nothing ha~ been done - perhaps due to a change in the economic climate - to demolish the building 6n Atcherley House site or to commence to construct the hotel ~remises which the defendant presumably satisfied the L.icensirig·corninission would meet its requirements upon the redevelopment of the Atcherley House site. ·rn my view provided the·· defendant redevelops its Atcherley House site at 505 Queen Street :i..ri such a way as to satisfy the requirements of the Licensing Commission under s. 49(A) (2) of the -- 10 of 16 -- 9 Liquor Act within the. time f.ixed or extended by. the ~ommission the Licensing Court is obliged to finally remoye the licence from the National Hotel site tQ the defendant's site - irrespective of what may be the wishes of the .. owner for the time being of the National Hotel site. In my view provided Dinar Pty. Ltd. whether as wholly owned and controlled subsidiary of the plaintiff or of the defendant is prepared to do what is necessary to assist and facilitate the final transfer of the liquor licence to the defendant's Atcherley House site there can be no obstacle in the way of the defendant obtaining an unconditional t.ransfer provided it satisfies· the requirements of the Licensi~g Commission of which upon the evidence I assume it is fully aware. The only reason why the transfer is not and at the moment cannot be effected unconditionally is that for re.asons 1::>est .known z . to itself and not explained in the material filed on its behalf the defendant has taken no steps to redevelop the Atcherley. Hous.e site in Queen Street and presumably no steps whatever to meet the requirements of the Licensing Commission with respect ' to the redevelopment of that site to a stage which will enable · the conditional transfer of the liquor licence from the National Hotel site to the Atcherley House site to become unconditional. I reject the contention that the plaintiff is. not entitled. to demand completion of the share transfer agreement until it suits the defendant to do what is necessary to make unconditional the conditional transfer of licence which constituted performance of the condition under cl. 4 o~ the agreement. -- 11 of 16 -- 10 In my view the·~vidence demonstrates that the plaitiff is ready, w·illing and able to ·perform all its relevant contractual obligations under the share transfei agreement in issue and is presently entitled to have the terms of that-agreement performed by the defendant. I- am unpersuaded that there is any issue or question in dispute between the plaintiff ·and the defendant concerning completion of the transfer agreement which ought be tried or that there is any other reason why matters in issue between them ought be tried by action. In my view this is a proper case in which to order that the share transfer agreement in issue between the plaintiff and the defendant ought be specifically performed by the defendant. I make an order in terms of the minutes of order placed before me upon the argument of the application which I make a schedule to these reasons for judgment. -- 12 of 16 -- MINUTES OF JUDGMENT 1 . I DECLARE THAT the contract between the Plaintiff. and the Defendant, dated . 14th September, . 1988, of which a copy. is exhibited to the.Affidavit of Robert Sung sworn and filed herein ought be specifically performed and carried into execution. 2. I ORDER THAT on the 5th December, 1990 the Plaintiff deliver to the Defendant duly executed transfers of shares numbered 1 to 500,000 (inclusive), each paid fully to. $1.00, in the issued share capital of Dinar Pty. Ltd. in a form to comply with the Articles of Association of Dinar Pty. Ltd. together with. the respective scrip certificates for such shares free from all encumbrances. 3. AND I FURTHER ORDER that the Plaintiff, on that day, procure a meeting of directors of Dinar Pty. Ltd. for the purpose of resolving to approve the transfer, from the Plaintiff to the Defendant, of those shares. 4. AND I FURTHER ORDER that upon the Plaintiff notifying the defendant to the effect that the board of directors of Dinar Pty. Ltd. has that day so approved the transfer to the Defendant from the Plaintiff of shares numbers 1 to 500,000 in the issued share capital of Dinar Pty. Ltd., the Defendant pay to the Plaintiff the sum of $475,000.00, being the balance of the purchase price for the said shares. 5. AND I FURTHER ORDER that the Defendant pay to the Plaintiff interest upon the sum of $500,000.00 from the 2nd April, 1990 to the 5th December, 1990 in the sum of$ 6. AND I FURTHER ORDER that upon payment by the Defendant to the Plaintiff of the said sum of $475,000.00 together with interest as aforesaid, the Defendant procure appointment of two -- 13 of 16 -- nominees of the Defendant to the board of Directors of Dinar Pty. Ltd. and thereafter·procure the resignation of all the present directors of Dinar Pty. Ltd. 7. AND I FURTHER ORDER that upon payment by the Defendant to the Plaintiff of the said sum of $475,000.00 together with interest as aforesaid, the Plaintiff procure delivery to the Defendant, or as it directs, Licensed Victuallers Licence Number 2237, together with the books of account of Dinar Pty. Ltd, balance sheets, copies of income tax returns, the Common Seal of that company, registry of shares, registry of mortgages and charges, minute books and all other documents, papers and records whatsoever relating to the property and business of Dinar ·Pty. Ltd. AND I GRANT LIBERTY TO APPLY AND I ORDER that the Defendant pay the Plaintiff's costs of and. incidental to the action, including those costs of and incidental to this application. -- 14 of 16 -- AMENDED MINUTES OF JUDGMENT 1. I DECLARE THAT the Contract between the Plaintiff and the Defendant, dated 14th September 1988, of which a copy is exhibited to the Affidavit of Robert Sung sworn and filed herein ought to be specifically performed and carried into execution. 2. I ORDER THAT on 5th December, 1990 the Plaintiff delivered to the Defendant at Brisbane duly executed Transfers of Shares number 1 to 500,000 (inclusive) each fully paid to one dollar ($1.00), in the issued share capital of Dinar Pty Ltd in a form to comply with the Articles of Association of Dinar Pty Ltd together with the respective scrip certificates for such Shares free from all encumbrances. 3. AND I FURTHER ORDER that the Plaintiff, on that day procure ·a meeting of Directors of Dinar Pty Ltd for the purpose of resolving to approve the transfer, from the Plaintiff to the Defendant, of those shares. 4. AND I FURTHER ORDER that upon the Plaintiff notifying the Defendant to the effect that the Board of Directors of Dinar Pty Ltd has that day so approved the transfer to the Defendant from the Plaintiff of Shares numbers 1 to 500,000 in the issued share capital of Dinar Pty Ltd, the Defendant pay to the Plaintiff at Brisbane the sum of $475,000.00, being the balance of the purchase price for the said Shares. 5. AND I FURTHER Plaintiff at Brisbane from 2nd April, 1990 $54,314.02. ORDER that the Defendant interest upon the sum of to 5th December, 1990 in pay to the $500,000.00 the sum of 6. AND I FURTHER ORDER that upon payment by the Defendant to the Plaintiff of the said sum of $475,000.00 together with interest as aforesaid, the Defendant procure appointment of -- _j -- 15 of 16 -- -2- two (2) nominees of the Defendant to the Board of Directors of Dinar Pty Ltd and thereafter procure the resignation of all the present Directors of Dinar Pty Ltd. 7. AND I FURTHER ORDER that upon payment by the Defendant to the Plaintiff of the said sum of $475,000.00 together with interest as Brisbane to Victuallers aforesaid,· the Plaintiff procure delivery at the Defendant, or Licence No. 2237, as it directs, Licensed together with the books of account of Dinar Pty Ltd, balance sheets, cppies of income tax returns, the Common Seal of that company, Registry of Shares, Registry of Mortgages and Charges, Minute Books and all. other documents, papers and records whatsoever relating to the property and business of Dinar Pty Ltd. AND I GRANT LIBERTY TO APPLY AND I ORDER that the Defendant pay the Plaintiff's costs of and incidental to the action, including those costs of and incidental to the applications heard the 9th August 1990, the 22nd October 1990 and 28th November 1990 including reserved costs, if any, to be taxed. -- 16 of 16 --