KB Productions 2001 Pty Ltd (Deregistered) and Ors v Kurt and Anor

Supreme Court of NSW|2015-09-03|Before: Beech-Jones J, McCallum J

Judgment (revised from ex tempore)

What is currently before me is an application to adjourn the hearing of an application for the continuance or the dissolution of an ex parte injunction. Ordinarily, the reasons that might be given in relation to an adjournment application can be expected to be brief.
However, given that the outcome of the adjournment application seems overwhelmingly likely to determine the outcome of the application for either the dissolution or the continuance of the injunction, and in order to explain the position so that the parties may know where they stand, it is appropriate to provide fuller reasons than are usually given.

Background

The first plaintiff, KB Productions 2001 Pty Limited ("KB"), is the lessee of premises at Lot 34A, 6/24-32 Lexington Drive, Bella Vista, which is used as a café. At all relevant times for the purposes of this application KB has been deregistered. The owners of those premises are the defendants, Aynur Kurt and Osman Kurt.
At some point during the course of the lease another corporate entity, Kangoo Property Holdings Pty Limited ("Kangoo") and possibly George Dimitriou, asserted that they were in occupation of the premises and wished to become the lessee. From a time in early 2015, rent ceased to be paid. This resulted in a number of repeated applications purportedly made by KB, Kangoo and Mr Dimitriou in the New South Wales Civil and Administrative Tribunal ("NCAT") seeking some form of relief in relation to outstanding rent payments and an asserted refusal of Mr and Mrs Kurt to allow the transfer of the lease. All of those applications were unsuccessful.

The ex parte injunction

It also seems to be common ground that on the morning of Sunday 30 August 2015, Mr and Mrs Kurt arranged for the removal of some of the items of property that were used to conduct the café by one or all of KB, Kangoo and Mr Dimitriou.
This led to Mr Dimitriou approaching the common law duty judge on that day. He sought various orders. The course of what occurred on that day was not recorded in a transcript. What is known is that Mr Dimitriou provided the duty judge, McCallum J, with a letter purportedly dated 26 August 2015, which stated as follows: "Dear Aynur & Osman Kurt, Pursuant to the Application made to the Appeals Tribunal 21 August 2015 and the subsequent orders granted dated 24 August 2015 we hereby provide to you payment in the amount of $42,936.58 pursuant to Order 1. Made on 18 August 2015 by Deputy President S Westgarth. With regards to future rent, we require you to immediately provide a Tax Invoice to Kangoo Property Holdings Pty Ltd T/AS Brothers Café and Brasserie / The Lexington Café bearing the ABN: 26 396 278 558. We provide to you this payment and would expect that you abide by the orders of the Tribunal dated 24 August in particular order 2. We request that you refrain from entering the premises and removing or taking any stock plant and equipment or grant illegal access to any third party. You must immediately remove any signage that bears any reference to the orders of 18 August as now Order 2. Is stayed. All subsequent orders shall have no effect. You must prevent from placing any signage that defames the business occupancy. Any signage that is placed by you or a third party will be removed immediately. This letter has been emailed to the NCAT NSW Civil & Administrative Tribunal and to the Appeals Committee. Any re-entry by the landlord is deemed illegal and will be reported to the NSW Police. The tenant is entitled to peaceful occupancy and you cannot interfere with the business operating. Any further loss as a result of your noncompliance with the orders will result in damages brought against you both personally."
There was also provided to the duty judge a photocopy of a cheque made payable to Mr and Mrs Kurt for the amount referred to in order 1 made by NCAT on 26 August 2015, namely, $42,936.58.
After hearing the application McCallum J made the following orders: "1 That the defendants by themselves, their agents and their employees be restrained from entering the premises at Unit A6, 24-32 Lexington Drive, Bella Vista, in the State of New South Wales. 2. That the defendants by themselves, their agents and their employees be restrained from disposing of, damaging or wasting any goods, equipment or other chattels removed by them from the premises on or since 26 August 2015 and return any such goods, equipment and chattels to the premises forthwith."
In doing so, her Honour prepared reasons which recounted the approach by Mr Dimitriou and recited the provision of the letter of 26 August 2015 on the date it bears and the cheque. Her Honour's reasons also included the following: "The premises were due to be open for business today for a function scheduled for lunch time. During the course of this morning, however, a large removal truck was brought to the premises and equipment and furniture was removed, preventing the tenants from opening for business and forcing the cancellation of the function. The tenants wish to be able to re-open for business as soon as possible and are concerned to have their equipment, particularly including a stovetop and coffee machine of some value, returned as soon as possible. Mr Dimitriou attempted to prevent the removal of any equipment but was inhibited from doing so by the presence of a large man accompanying the removalists evidently for security purposes. He contacted police and was informed that no step would be taken to prevent the removal of equipment without an order of the court."
Her Honour then addressed the existence of an arguable case. Not surprisingly, her Honour focused upon the interconnection of the stay order granted by the NCAT appeal panel on 24 August 2015 and the orders dated 18 August 2015. One gains the distinct impression from reading her Honour's judgment that her Honour understood that the café had been operating up until the arrival of the removal truck on the morning of 30 August 2015. In fact, as I have said, it was common ground that the café had ceased operating, at least from the time that Mr and Mrs Kurt re-entered the premises on 21 August 2015.

This application

I was the duty judge in the Common Law Division of this Court from Monday 31 August 2015 onwards. I fixed a return date for the orders made by McCallum J on 30 August 2015 for 10am on Wednesday 2 September 2015. On that date Mr and Mrs Kurt appeared and were represented by Mr Zipser of counsel.
Mr Dimitriou attended and purported to conduct the proceedings on behalf of KB and Kangoo. It appears that he is a director of Kangoo but his capacity to conduct proceedings on behalf of KB was questioned. It has not to date been substantiated. Mr Dimitriou also made it clear that he had made a considered decision to proceed without legal representation. He did not at any stage assert that legal representation could not be afforded. Any such assertion would be inconsistent with his repeated assertion that sufficient funds were available to make the rental payments.
The matter proceeded on Wednesday 2 September 2015 on the basis that Mr and Mrs Kurt were seeking the immediate dissolution of the injunction granted by McCallum J while Mr Dimitriou was seeking its extension. Substantial affidavits were sworn from Mr and Mrs Kurt. I have referred to some of the non-contentious aspects of these affidavits already. As I will explain, oral evidence was given by Mr Dimitriou on oath.
When the matter was first called on I drew to Mr Zipser's attention the letter of 26 August 2015 and the photocopy of the cheque that was provided to McCallum J. Mr Zipser obtained some instructions. He returned and announced that it was his client's case that the letter of 26 August 2015 was a fabrication.
As I have said, Mr Dimitriou gave oral evidence. In evidence his attention was directed to the allegation that the letter of 26 August 2015 was a fabrication. It was put to him that no such letter was provided on that day or at any time. In his oral evidence, Mr Dimitriou was adamant that the letter was not a fabrication. He was clear that it was handed over to Mr Kurt at the premises on a Wednesday but sought clarification that Wednesday was in fact 26 August 2015, which it was. He provided a detailed description of the events surrounding the circumstances in which he said he provided the letter and cheque to Mr Kurt. He also said that Mrs Kurt was present.
It was expressly put to him that his evidence was false. A number of points were raised by Mr Zipser in that regard, including that the letter itself was plainly inconsistent with the email traffic that occurred between the parties in the days subsequent, that at least Mr Kurt did not attend the premises at all on 26 August 2015 and that, if the letter was genuine, it would be expected that Mr Dimitriou would have called the police in the subsequent days when Mr and Mrs Kurt did not vacate. Instead the police were only called on 30 August 2015 after an order of this Court was obtained.
At the conclusion of the hearing on 2 September 2015, Mr Zipser made a call for the email that was referred to in the second-last paragraph of the letter, namely, the email copying the letter to NCAT. It was explained to Mr Dimitriou what his obligations were when the matter was scheduled to resume at 2 o'clock today in respect of that call. He said that he would obtain the email. In the meantime, arrangements were made this morning for Mr Dimitriou to attend at the premises with Mr and Mrs Kurt and the solicitor to determine whether Mr and Mrs Kurt had returned all of the property that was taken in compliance with the order of McCallum J.
As I have said, the proceedings were supposed to resume at 2pm today. Just prior to then, Mr Dimitriou's assistant contacted my chambers and sought to have the proceedings commence at 3 o'clock. She was advised that the matter would be proceeding. Ultimately, I stood the matter down to 2.40.
At 2.40 pm Mr Elliott of counsel appeared, at least for Mr Dimitriou. Mr Elliott stated that his client sought an adjournment to obtain proper legal advice in respect of the application. One matter I raised with him was that the price of any such adjournment may be a dissolution of the injunction that had been granted. The matter was stood down to allow him to obtain instructions.
When the matter resumed, Mr Elliott pursued his application for an adjournment but also submitted that the injunction should continue. He submitted that the café business had just resumed business following the making of the orders by McCallum J and the return of what, on any view, is most of the property to the café.
Counsel for Mr and Mrs Kurt, Mr Zipser, took the opposite position. He opposed the grant of any adjournment. He submitted that the proceedings had gone on long enough and that his clients simply could not afford the cost that would be incurred by a further adjournment.

Decision

In considering an adjournment, I am mindful that if the adjournment was to be granted and the injunction dissolved then that would probably determine the outcome of the application in that the prospect of Mr Dimitriou obtaining a further injunction allowing the café to resume business would seem remote.
One relevant matter in that regard is to outline the issues relevant to the ultimate application made on behalf of Mr Dimitriou seeking a continuation of the injunction preventing Mr and Mrs Kurt from re-entering. The basis upon which McCallum J granted the injunction is the basis which Mr Dimitriou has relied on in the proceedings before me. He, in effect, contends that a stay of the possession order granted by NCAT was granted by the appeal panel, that he has complied with that order by making the payment referred to in the letter of 26 August 2015 and that the further continuation of the café business warrants the grant of a stay.
As events have transpired, there are at least four matters that potentially undermine that case. The first is the very serious allegation that I referred to earlier, namely, that the letter of 26 August 2015, with the assertion of a payment accompanying it, is a complete fabrication.
The second is that, in the light of the fact that possession was in fact delivered up on 21 August 2015, order 2 made on 18 August 2015 has now been spent, so that there is nothing that order 1 made by the appeal panel can operate upon. The appeal panel did not purport to make an order which required Mr and Mrs Kurt to re-deliver possession back to KB, Kangoo or Mr Dimitriou.
The third matter is a point that was adverted to by McCallum J, namely, that there was no stay granted of order 4 which had the effect of terminating the lease.
Fourthly, there is the still unresolved position of KB. As best as can be ascertained on the material currently available, the only lessee of the premises is KB. The status of Kangoo and Mr Dimitriou is still completely unclear. It may be that the only party who can take action to seek the relief that was granted by McCallum J is KB, yet it is a deregistered company.
The point of raising these matters is to identify that there are a number of questions that fall to be considered in relation to the application and, even leaving aside any question of fabrication, it cannot be said that there is an overwhelming, or indeed, very strong, case favouring Mr Dimitriou and his interests at this point.
I return then to the question of whether to grant an adjournment. Mr Zipser opposed the adjournment for the reasons I have indicated. He also submitted that Mr Dimitriou's actions in seeking an adjournment were entirely disingenuous because they only arose after an attempt was made to contact my chambers to have the matter stood down.
The difficulty with all this is that, as the events have transpired, an extremely serious accusation has been made against Mr Dimitriou in relation to his conduct on 30 August 2015. The allegation that a person fabricated a letter in order to obtain an ex parte injunction from the Supreme Court and then compounded that by perjuring themselves is an extremely serious matter. If that allegation is demonstrated even to the civil standard, then there are a number of consequences that will flow for Mr Dimitriou personally. It has an obvious and real potential to raise serious issues warranting steps beyond these proceedings.
In circumstances where that allegation has occurred, it seems to me that the interests of justice require that Mr Dimitriou at least have the opportunity, even though belatedly, to obtain legal representation.
However, there then remains the position of the injunction. One basis for dissolving the injunction would be if I was to conclude that the letter was fabricated or that there was otherwise fraud or misstatement or a material omission in the information provided to McCallum J. At this stage of the proceedings I am not able to embark upon any consideration of those matters.
Nevertheless, the position remains that Mr and Mrs Kurt have been confronted with an injunction obtained ex parte. Notwithstanding the circumstances in which it was obtained, they complied with that injunction and then applied very expeditiously for its dissolution.
In the end result, the party that obtained the injunction now seeks an adjournment in circumstances where he has yet to even file a summons, as he was requested or required to do by McCallum J.
Further, this has occurred in circumstances where, for the reasons I have indicated, there are a number of contestable matters to be determined in deciding whether or not a claim for an injunction is well founded.
Also this has occurred in circumstances where, except for the interaction between Mr Dimitriou and Mr and Mrs Kurt over the last week, there was a sustained period of many months, if not longer, in which no rent was paid. It is also occurring in circumstances where the lessee of the premises is a deregistered company.
In my view, in those circumstances litigants in Mr and Mrs Kurt's position who are now faced with a belated adjournment application by the plaintiff should not have to wear the burden of the injunction.
The price of the adjournment that is to be granted must be the dissolution of the injunction granted by McCallum J on 30 August 2015.
Accordingly I order that: 1. The orders of McCallum J made on 30.08.15 be set aside. 2. The matter is stood over to 08.09.15 at 9.30am before Beech-Jones J. 3. Order these orders to be entered forthwith.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 September 2015

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