Jacek Gnych v Polish Club Limited [2016] NSWSC 987 | Case summary

Judgment

The Court is presently concerned with a Notice of Motion filed by the second defendant, by which he seeks to be removed as a defendant or alternatively that the proceedings against him be dismissed. Mr M. Evans of Counsel appears for "the Plaintiffs." Ms S.Fendekian of Counsel appears for the second defendant and Ms H. Mann of Counsel appears for the first defendant.
The proceedings have a rather extensive history which I need to relate in order to explain the basis of the Notice of Motion and its disposition.
The first defendant which I shall refer to as "the Club" owns a property in Ashfield out of which it operates a licenced club principally for the benefit of people who were born in or have a connection with Poland. The second defendant is the President and a director of the Club.
The Plaintiffs' restaurant, "Kameraina" specialising in Polish Cuisine was located within the Club's premises and before commencing operations the Plaintiffs, in accordance with the Club's requirements, effected some alterations to the bar area near the location of the seating for patrons of the restaurant. The Plaintiffs operated the restaurant from March 2012 until August 2013, from October 2013 till November 2014 and from July 2015 till April 2016.
From the time the restaurant opened in 2012 until July 2013, according to the Plaintiffs, it operated successfully. When the Club's board changed in composition and the second defendant became the President there was a distinct cooling in relations between the Plaintiffs and the Club and the Plaintiffs were actually expelled as members of the Club on 7 August 2013.
Then or soon after the Club evicted the Plaintiffs from the Club in August 2013 on various grounds.
The Plaintiffs brought proceedings in the Supreme Court in August 2013 seeking to recover possession. Ball J heard the matter and delivered reasons on 5 September 2013. There was, it was agreed between the parties no formal lease, but the Plaintiffs asserted a lease based on the provisions of s.8 and s.16 of the Retail Leases Act 1994 (NSW). In his judgment Gnych v Polish Club Limited [2013] NSWSC 1249 Ball J dealt with the four contentions of the Club as to why no statutory lease existed. One of those contentions was based on the assertion that any lease otherwise created by virtue of s.8 and s.16 of the Retail Leases Act 1994 (NSW) was void by virtue of the Liquor Act 2007 (NSW). In his reasons Ball J rejected all of the defences of the Club and his Honour made various orders including an order in the following terms: "Order that the Defendant, its directors, servants and agents be restrained from interfering with the possession of the Plaintiffs in respect of the leased premises unless and until such time as the lease is rightfully terminated or otherwise comes to an end." Added to the order was the following notation: "To Polish Club Limited and its Directors. If Polish Club limited disobeys paragraphs of this order then Polish Club Limited and its directors will be liable to sequestration of property and said directors to imprisonment."
His Honour also held that the Plaintiffs were entitled to a limited licence of what is known as the Mirror Room. On 30 September his Honour considered the form of orders to be made and whether or not a stay should be granted: see Gnych v Polish Club Limited (No 2) [2013] NSWSC 1452.
The Club brought an appeal from Ball J's decision on the issue of the Liquor Act 2007 (NSW). That appeal was successful Polish Club Limited v Gnych [2014] NSWCA 321; (2014) 86 NSWLR 650.
The Plaintiffs sought special leave to appeal from the NSW Court of Appeal's decision. Leave was granted and the Plaintiffs were successful at the substantive hearing in the High Court: see Gnych v Polish Club Ltd [2015] HCA 23; (2015) 320 ALR 489. The High Court's orders made on 17 June 2015 included the following: "Remit the matter to the Supreme Court of New South Wales for determination of the assessment of damages, if any, pursuant to the undertakings listed in Order 4 of the Orders of the Court of Appeal and the Supreme Court of New South Wales made on 6 November 2014."
The orders of the NSW Court of Appeal of 6 November 2014 are found at p.56 of the affidavit of Mr Gavin Beardsall of 17 May 2016 filed in support of this motion. The relevant orders are 1 and 4 and order 4 required the Club to: "submit to such order, if any, as the Court may consider to be just for the payment of Compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the suspension of order 1 by order 4 hereof."
There is a dispute as to what the consequences are of that "remitter" by the High Court but no dispute that the High Court intended that this Court would assess what losses if any were incurred by the Plaintiffs by reason of the Club not permitting them to conduct their business at the Club between 11 November 2014 and July 2015.
Following the High Court's decision in June 2015 the Plaintiffs re-entered into possession of the restaurant area of the Club's premises from July 2015 to April 2016. There was continuing turmoil leading to the departure of the Plaintiffs from the Club premises in April 2016. The precise legal characterisation of the end of the relationship is not presently of importance- the parties are agreed that the lease has now come to an end.
In April this year the Plaintiffs filed in these proceedings a Statement of Claim in which both the Club and the second defendant are named as defendants. By the Statement of Claim the Plaintiffs advance a case against the Club for damages for breach of contract, for all periods from July 2013 till April 2016 but they also advance a case of breach of s.20 of the Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law) ("ACL") alleging unconscionable conduct on the part of the Club and the second defendant. Orders were made by consent as between the Plaintiff and the Club prior to that date requiring the Club to notify the Plaintiffs as to whether or not it consented to the proposed Statement of Claim.
On 24 March 2016 solicitors acting for both the Club and the second defendant (Strathfield Law), wrote to the Plaintiffs' solicitors advising that both the Club and the second defendant, for whom those solicitors were at the time also acting, consented to the filing of the Statement of Claim: see Exhibit A. Subsequently the Club filed its defence. The second defendant has not filed a defence and has taken no steps since providing his consent through his solicitors.
The last iteration of the Summons in 2013 found on the Court file is headed Further Amended Summons with the word "Second" before "Further" deleted. That Summons was filed on 12 September 2013. It has in addition to the Court seal and "Filed 12 September 2013" stamp an endorsement "BY LEAVE GRANT [sic] BY ORDER 29.08.13" on its front page. It contains a further handwritten notation "23/9 Ball J. mention." It has what is obviously a new paragraph of relief "1B- Damages" as the paragraph and content are underlined. On 29 August 2013 leave was given to the Plaintiffs to file in Court an Amended Summons and also leave was given to the Plaintiffs to file a "Further Amended Summons." There is also on the file a Further Amended Summons filed on 30 August 2013.
In neither of his reasons for judgment on 29 August 2013 did Ball J address the question of damages. The Court of Appeal had no cause to deal with any question of damages other than by reason of the suspension of its orders that the Plaintiffs be permitted to re-enter the premises pending the High Court's determination of the Special Leave application. I note however that in dealing with costs at [55] of his first judgment Ball J said: "the Club should pay Mr and Mrs Gnych's costs of the proceedings to date." which rather suggests that his Honour was aware that the matter had not been finally concluded.
Ms Fendekian's argument can be summarised thus: 1. Ball J's judgment was a final judgment. His Honour did not reserve any question of damages for later determination. 2. The matter having gone to the High Court from the Court of Appeal, the remitter from the High Court determines precisely what this Court is to do and nothing beyond the confines of the remitter (ie determining what compensation should be paid, if any, for the period 11 November 2014 to 15 July 2015) is permitted to be done by this Court. 3. To permit the Plaintiffs to join the second defendant and to promote claims which were not ventilated before Ball J involves a breach of the remit and is an abuse of process.
Her further argument that the second defendant had never consented to joinder was abandoned when Exhibit A was drawn to her attention.
Ms Fendekian did make it clear, particularly at T59.6-22, that her argument that the joinder of the second defendant (and the expansion of the case more generally) was improper hinged on her contention that the Court could not go beyond the terms of the remitter, and hence that joinder of her client was "improper" and an abuse of process: see also 1.9 of her written submissions.
Ms Fendekian relied on Peacock v DM Osborne & Co [1907] HCA 42; (1907) 4 CLR 1564 and submitted that that case, which involved the Supreme Court of Victoria in what was described by the High Court as 'thwarting' the remitter of the High Court was analogous to what the Plaintiffs were seeking to do here. She also referred to Investments WA Ltd v City of Swan [2012] WASC 278 (16 November 2012) in which at [37] Pritchard J explains the different types of remitter, and the need to "ascertain precisely what was remitted by the Appeal Court."
Ms Fendekian accepts that some of the relief sought by the Statement of Claim as against the Club is relief covered by the remitter from the High Court- that is compensation for the period 11 November 2014 to July 2015, and she took no point that there is any difference between a claim for damages for that period and a claim for compensation.
I accept that this Court is required to act on the terms of the remit from the High Court: see Peacock. S.37 of the Judiciary Act 1903 (Cth) is in the following terms: 37 Form of judgment on appeal The High Court in the exercise of its appellate jurisdiction may affirm reverse or modify the judgment appealed from, and may give such judgment as ought to have been given in the first instance, and if the cause is not pending in the High Court may in its discretion award execution from the High Court or remit the cause to the Court from which the appeal was brought for the execution of the judgment of the High Court; and in the latter case it shall be the duty of that Court to execute the judgment of the High Court in the same manner as if it were its own judgment.
S. 44 of the Judiciary Act 1903 (Cth) is in the following terms: 44 Remittal of matters by High Court to other courts (1) Any matter other than a matter to which subsection (2) applies that is at any time pending in the High Court, whether originally commenced in the High Court or not, or any part of such a matter, may, upon the application of a party or of the High Court's own motion, be remitted by the High Court to any federal court, court of a State or court of a Territory that has jurisdiction with respect to the subject matter and the parties, and, subject to any directions of the High Court, further proceedings in the matter or in that part of the matter, as the case may be, shall be as directed by the court to which it is remitted. (2) Where a matter referred to in paragraph 38(a), (b), (c) or (d) is at any time pending in the High Court, the High Court may, upon the application of a party or of the High Court's own motion, remit the matter, or any part of the matter, to the Federal Court of Australia or any court of a State or Territory. (2A) Where a matter in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party is at any time pending in the High Court, the High Court may, upon the application of a party or of the High Court's own motion, remit the matter, or any part of the matter, to the Federal Court of Australia. (3) Where the High Court remits a matter, or any part of a matter, under subsection (2) or (2A) to a court: (a) that court has jurisdiction in the matter, or in that part of the matter, as the case may be; and (b) subject to any directions of the High Court, further proceedings in the matter, or in that part of the matter, as the case may be, shall be as directed by that court. (4) The High Court may remit a matter, or any part of a matter, under this section without an oral hearing.
Mr Evans relied on s44(1) and (2) of the Judiciary Act. S.44(2) is clearly not relevant. I am inclined to the view that as Ms Fendekian submitted s.44 is not dealing with appeals but I do not need to decide that point and will proceed on the basis advanced by Ms Fendekian that s.37 is the only relevant section of the Judiciary Act.
S.37 requires the Court to execute the judgment of the High Court in the same manner as if it were its own judgment.
There may well be issues about whether the Court should embark on matters extraneous to the issue remitted by the Court in the same way that such issue may arise if there had never been an appeal to the Court of Appeal and then to the High Court but what I am unable to accept is that the Court by virtue solely of the terms of the remitter is not free to deal with such issues, if any, as remain or could properly be maintained, even if there had been no appeal.
If this Court makes the assessment required by the remitter it will have followed the requirements of the remitter and I do not accept that the Court is constrained to do only what the High Court has required and nothing more. If the question of damages has been left open by what has occurred before the appeal it could not be said that the result of success on the appeal ended any right to have damages determined. In my view this Court is free to deal with such matters as remain to be dealt with in the proceedings. That is not in any way "inconsistent with," or a 'thwarting' of the High Court's remitter. Griffith CJ in Peacock expressed it thus (at p1568): "To put it shortly, the judgment of this Court, when the case was remitted to the Supreme Court is to be regarded on the same footing as a judgment of the Supreme Court from which no appeal can be brought." A determination that the Club and or second defendant is liable for damages for the period prior to November 2014 or after June 2015 does not "contradict" a finding of the appropriate compensation for the period between November 2014 and June 2015.
Given that Ms Fendekian built her case around the inability of this Court to deal now with anything but the matter remitted from the High Court, an argument which I have rejected, it is not strictly necessary to deal with her contentions that a Court cannot after judgment add a new party. I shall however address the issue.
Ms Fendekian drew attention to what is said in Ritchie's Uniform Civil Procedure NSW (2005 Lexis Nexis) in a note at [6.24.10]: "The criterion of necessary joinder permits an ample discretion. But it does not authorise the reconstruction of proceedings by the substitution of a new plaintiff, with a new cause of action, for an old plaintiff whose cause of action is no longer maintainable [Knight v McCann- Erickson BC 9101623]. Nor can parties be joined after entry of judgment," and said that she could find no authority for the proposition that a party cannot be added after judgment. She also said she could find nothing dealing with the effect of consent.
Whilst these are usually powerful reasons not to permit an attempt to recast a case after judgment has been given and a fortiori to refuse an attempt to add a new party at that point the only relevant question at the moment is whether the Court has power to permit such a course. There is, in fact, an authority that it is not open to a Court, to add a new party after judgment: see State Bank of New South Wales Limited v N A Macdonald Sup Ct 17 January 1992 BC 9202104 per Cole J, in which his Honour said: "The question remains, however, whether a second defendant can be joined after judgment against the sole defendant. I was not referred to any authority directly touching that matter, or indeed any authority at all, and I know of none. However, consistent with the decisions in Bailey v Marinoff 1971 125 CLR 529 and Gamser v The Nominal Defendant 136 CLR 145, I am of the view that after judgment is entered affecting all existing parties to an action, the Court has no statutory or inherent power to add additional parties. In terms, Pt42 R12 is sufficiently wide to encompass an order for joinder of a further party; however, I think the better view is that it is to be construed as relating to the judgment entered, not to matters additional to that judgment. It follows that the order joining the second defendant should not have been made"
The present case is quite different because the question of damages has been left hanging from the Summons which means that the proceedings, at least on one view are not over but also because here there has been consent to joinder within the existing proceedings.
I accept there is ample authority that where jurisdiction is lacking in a Court or tribunal consent will not bestow jurisdiction: see Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150 p.163.
In John Alexander Clubs v White City [2010] HCA 19; (2010) 241 CLR 1 the High Court (French CJ, Gummow, Hayne, Heydon and Kiefel JJ) held that the Court of Appeal had erred in not permitting a third party affected by the Court of Appeal's determination to be joined as a third respondent to the appeal: see [35] and [131]. The High Court drew attention to s.63 of the Supreme Court Act 1970 (NSW) which provides: 63 Final Determination The Court shall grant, either absolutely or on terms, all such remedies as any party may appear to be entitled to in respect of any legal or equitable claim brought forward in the proceedings so that, as far as possible, all matters in controversy between the parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of those matters avoided. And said: "The question is not whether any problem arising in the original proceedings could be resolved in separate proceedings, but, as explained above, whether that problem should have been resolved in the original proceedings without the need for separate proceedings."
Alexander establishes that the Court does have the power to add a party, even after judgment, a fortiori there must be a power to permit an expansion of the case against an existing defendant after judgment (no doubt scarcely exercised). The High Court's approach to s.63 in Alexander was foreshadowed in a sense by the NSW Court of Appeal in Qantas Airways v Little Pty Ltd (1981) 2 NSWLR 34 at p.38-39 per Glass JA with whom Samuels JA concurred. Glass JA commented that the Supreme Court Act 1970 (NSW) and rules made thereunder "were designed to overcome technical restrictions and I do not think they should be reinstated by judicial decision."
As both Ms Fendekian and Mr Evans pointed out the Court is required, in considering whether to exercise a discretion pursuant to the rules, to take into account the matters identified in s.56-59 of the Civil Procedure Act 2005 (NSW) namely the facilitation of the just quick and cheap resolution of the real issues in the proceedings s.56(1) and the dictates of justice s.58(1). The importance of finality of judgments remains an important consideration as part of the dictates of justice to both parties too, but as is emphasised by s.63 of the Supreme Court Act 1970 (NSW) multiplicity of litigation needs whenever possible to be avoided.
In my view the following factors are relevant to whether or not, if the Court were now being asked as a matter of discretion to remove the second defendant from the proceedings and to constrain the Plaintiffs to the cause of action which they advanced in 2013: 1. Damages for breach of contract were part of the relief sought by the Club in 2013 and before judgment was delivered by Ball J, or at least that is how matters presently appear without the benefit of any evidence from anyone concerning precisely what was said to Ball J or said between the solicitors and Counsel concerning para 1B of the relief sought by the Summons. 2. The Club and the second defendant consented to the issue of the Statement of Claim which obviously contains claims not only against the Club but also the second defendant. 3. If the question of damages or compensation is to be determined: 1. as against the Club for the period November 2014 to July 2015 (pursuant to the remit), 2. as against the Club and the second defendant for the period after July 2015 till April 2016, there is nothing to be gained in forcing the Plaintiffs to commence fresh proceedings to deal with damages for the period between August 2013 and September 2013 and the period between September 2013 and November 2014. 1. If the Plaintiffs are entitled to have heard their claims as against the Club in the current proceedings but forced to bring fresh proceedings against the second defendant there is, as Mr Evans pointed out, every likelihood that the two sets of proceedings will need to be heard together. I asked Ms Fendekian about the utility of her position at the outset of Monday's hearing and she was not able to point to any advantage or benefit: see T7.1-9.8. 2. If there was any conduct of the Club both before and after the decision of the High Court which involved the Club in a breach of the orders made by Ball J in September 2013 (which orders were reinstated upon the decision of the High Court in June 2015), the second defendant may be personally liable for such breaches (as his Honour warned in the notation to which I have referred). 3. The Club does not dispute the appropriateness of the form of the Statement of Claim- it takes no point that the Plaintiffs have added a new cause of action against it and included claims for damages that extend beyond the remitter. 4. It was not suggested by Ms Fendekian that the fact of joinder to the existing proceedings precludes the second defendant from asserting a defence that he would or might have had if fresh proceedings were launched against him. A plea of issue estoppel, for example, can be pleaded within existing proceedings: see Polo v Pinctada [2016] NSWSC 717. 5. The practicalities are that the Plaintiffs' wishes to claim against the Club and the second defendant for their conduct in excluding them from operating and or obstructing them from quiet enjoyment of the lease to which it has been held they were entitled. It would be more efficient use of the Court resources and time if the Plaintiffs are able to have adjudicated in these proceedings their damages claim for all the periods August, September 2013 and the period November 2014 to July 2015, and for evidence relevant to both the Club and the second defendant heard and considered in the same proceedings.
In my view these factors all support the continuation of the proceedings as advanced by the Plaintiffs in the current form.
Accordingly the second defendants' motion is dismissed. I will hear the parties on the issue of costs.

Jacek Gnych v Polish Club Limited [2016] NSWSC 987 | Case summary | Zoe

Jacek Gnych v Polish Club Limited

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