LDT O’Brien Property Group Pty Ltd v Trustworthy Nominees Pty Ltd (No 3)

Representation: Counsel:
B Haines (first plaintiff)
M Southwick (second and third defendants)
Solicitors:
Rigby Cooke Lawyers (first plaintiff)
Katherine Moorhouse-Perks (second and third defendants)

File Number(s): 2021/00236010

Publication restriction: Nil

EX TEMPORE JUDGMENT (REVISED)

1. By notice of motion filed in Court before the Duty Judge on 23 April 2025, the plaintiffs seek orders compelling Edward River Hotel Pty Ltd and Mr Keith Blackney to vacate a property in Tabletop, New South Wales, on which a pub, historically known as the “Ettamogah Pub”, has been operated for many years.

2. The property is owned by the first plaintiff, LDT O’Brien Property Group Pty Ltd (LDT).

3. Edward River Hotel is a corporation controlled by Mr Blackney. It was engaged as the manager of the pub by Trustworthy Nominees Pty Ltd, the former mortgagee in possession, pursuant to a Management Agreement dated 25 May 2021.

4. On 18 August 2021, the plaintiffs commenced the proceedings.

5. On 2 December 2021, Rein J made orders including:

5 Pending further Order, [Trustworthy] shall have possession of the [property]

6 Pending further Order, [Edward River Hotel] shall manage The Ettamogah Pub (Pub) located at the Property for an on behalf of [Trustworthy] …

6. While the proceedings have been on foot since 2021, the parties involved have changed over time. Further, the issues in dispute have changed, many of them having been resolved through settlements. The history of the proceedings was helpfully described by Ball J (as his Honour then was) in LDT O’Brien Property Group Pty Ltd v Trustworthy Nominees Pty Ltd [2023] NSWSC 1100 at [2]-[13].

7. On 25 November 2024, I gave an ex tempore judgment, which declared binding a Settlement Agreement between the plaintiffs and Trustworthy: LDT O’Brien Property Group Pty Ltd v Trustworthy Nominees Pty Ltd (No 2) [2024] NSWSC 1688. Pursuant to that Settlement Agreement, the plaintiffs were to pay a sum of money to Trustworthy by 20 December 2024, in return for the dismissal of the proceedings and Trustworthy giving up its mortgage over and possession of the property and not exercising a power of sale. For an argument about Edward River Hotel’s personal property located on the land, Edward River Hotel and Mr Blackney rely upon that judgment at [25], which relevantly reads:

Trustworthy has ostensibly complied with various requirements in the deed following its execution, including issuing a notice to the managing company to vacate the property and terminating the management agreement of May 2021. Pursuant to that agreement, Trustworthy agreed pursuant to cl 13 to sell the listed equipment of the manager at a reasonable price on any sale of the property. However, the management agreement does not deal with any stock or property beyond that listed. It is not apparent why the outgoing manager would not be entitled to remove its own goods …

8. In compliance with the Settlement Agreement, Trustworthy wrote to Edward River Hotel and Mr Blackney, requiring them to vacate multiple times. On 19 November 2024, Trustworthy issued a notice requiring vacation within 60 days. This followed an earlier notice dated 14 November 2024 that gave 30 days’ notice, which Edward River Hotel argued was too short.

9. In the 19 November 2024 notice of termination, reference was made to clause 2.1 of the Management Agreement, which provided:

The duration of this Agreement shall be for a period of 180 days from the date of this Agreement however, the principal shall have the right to terminate the Agreement by providing 60 days written notice. In addition to the Principal’s rights pursuant to clause 5 of Agreement.

10. On 25 November 2024, the solicitor for Edward River Hotel and Mr Blackney, Ms Katherine Moorhouse-Perks, wrote:

… my clients agree to vacate by 20 January 2025 [but contend that] a Court order relieving Edward River Hotel and Keith Blackney from managing the Pub for your client from midnight Monday, 20 January 2025 is required.

11. It appears Ms Moorhouse-Perks considered an order was required to vacate Rein J’s order 6. As at today’s date, Edward River Hotel and Mr Blackney have not vacated the property, nor explained why in any correspondence.

12. On 22 January 2025, Trustworthy’s solicitors again wrote to Ms Moorhouse-Perks requiring Edward River Hotel and Mr Blackney to vacate. Trustworthy sent further correspondence on 29 January 2025, 3 February 2025 and 9 April 2025. Surprisingly, Ms Moorhouse-Perks failed to ever respond. No explanation has been provided to date for that failure; it is difficult to see how protracted non-responsiveness could comply with r 4.1.2 Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW), which requires honest and courteous dealings in legal practice.

13. On 4 February 2025, Pike J made orders including that Trustworthy exercise its power of sale as mortgagee in possession for the sale of the property.

14. However, on 15 April 2025, LDT paid Trustworthy, by way of late performance of the Settlement Agreement. At that time, Trustworthy accepted that it was no longer entitled to possession of the property. It would follow that Edward River Hotel and Mr Blackney were also no longer entitled to possession of the property, even if the notices of termination and demands to vacate were somehow invalid.

15. By submissions and an affidavit of Mr Blackney, each of which was provided to my Associate late and in breach of the Court’s orders without explanation, Mr Blackney and Edward River Hotel accept that they must vacate the property, conceding that they have no right against LDT to occupy. They are prepared to vacate within 14 days. However, I consider that time period is too long for the following reasons.

16. I do not accept that Edward River Hotel and Mr Blackney were entitled to remain in occupation of the property in circumstances where Trustworthy had validly terminated the Management Agreement. Not only had Edward River Hotel and Mr Blackney never challenged the validity of the notices of termination, they had positively represented through Ms Moorhouse-Perks that they would vacate by 20 January 2025. Such a representation together with the failure to respond to any correspondence is inconsistent with challenging the notices to terminate.

17. Further, it would appear contrary to the proper construction of clause 2.1 of the Management Agreement to suggest that the notices were somehow invalid in circumstances where the notice on 19 November 2024 provided for termination on 60 days’ notice. As noted, since then, Trustworthy has continued to assert that Edward River Hotel had no entitlement to remain in the property and was met with silence.

18. Mr Blackney asserted that the notices of termination “disregarded” Trustworthy’s “obligation under clause 13 of the Management Agreement, to sell the property and to facilitate payment of” the “manager’s equipment” listed in Schedule B to the agreement. That clause provides:

[Trustworthy] acknowledges and agrees that the Manager has purchased and installed the equipment listed in Schedule B.

When the property is sold by [Trustworthy] as Mortgagee in Possession it shall arrange for the purchaser to purchase the said equipment for reasonable market value taking into account the purchase price of such items by the Manager.

19. Mr Blackney’s assertion, which was repeated in submissions, is misconceived. There is no positive obligation in the Management Agreement on Trustworthy to sell the property. The obligation in clause 13 is triggered “when the property is sold”. Further, if Trustworthy had breached clause 13, it does not follow as a matter of construction that it would prevent the termination of the Management Agreement.

20. I reject Mr Southwick’s submission that the Management Agreement could only be terminated if the property was sold by Trustworthy, or the mortgagor redeemed and Edward River Hotel was notified by Trustworthy. Such a construction flies in the face of the clear language of clauses 2.1, 5 and 13.

21. Even if Edward River Hotel had a claim for damages against Trustworthy for breach of clause 13 for the value of personal property within the property, whether pursuant to the Management Agreement or otherwise, that did not provide a legal basis to remain in possession of the property. I note that Edward River Hotel has not commenced proceedings for damages for breach of the Management Agreement to date.

22. Further, merely because Trustworthy acknowledged and agreed in clause 13 that Edward River Hotel owned certain personal property in the property does not bind LDT.

23. I do not consider that paragraph [25] of my previous 2024 judgment assists Edward River Hotel. It does not suggest that Edward River Hotel is entitled to remove the equipment in Schedule B. It merely indicates that there was no argument put on that day by Mr O’Brien as to why Edward River Hotel would not be entitled to remove its own goods, beyond those in Schedule B. I do not consider Mr Blackney has identified any such goods in any event.

24. If there is to be a dispute about the personal property within the property, that can occur without Edward River Hotel remaining in possession. I do not accept that Edward River Hotel and Mr Blackney, effectively now being trespassers on LDT’s commercial premises, have a right to remain. Instead, they must vacate.

25. Further, I do not accept that the fact the plaintiffs may not currently hold liquor licences is a reason why Mr Blackney and Edward River Hotel ought be allowed to remain for 14 days.

26. Further, Mr Blackney provides bald assertions that he requires 14 days from today to notify employees and residents at the property that their contracts are terminated. However, he does not provide any evidence of the terms, upon which the employees are engaged, nor their rights, nor why they could not simply be paid out their notice period. That assertion appears inconsistent with Ms Moorhouse-Perks’ representation that her clients would vacate by 20 January 2025.

27. As the registered proprietor of the property, LDT is not obliged to allow Trustworthy, Edward River Hotel or Mr Blackney to remain on the land. Mr Southwick acknowledged that Edward River Hotel and Mr Blackney had notice of LDT’s rights, at the latest by 23 April 2025. Even accepting that, and even accepting a reasonable time ought to be given for them to vacate, I consider that would expire by 3 pm tomorrow, 1 May 2025.

28. I accept LDT’s submissions concerning costs in light of the facts found above.

Orders

29. The Court orders:

30. The second and third defendants vacate 561 Burma Road, Tabletop, New South Wales, formerly lot 6 in DP 774596 and lot 7 in DP 774596, and now lot 11 in DP 1211450 (Land) by 3pm 1 May 2025.

31. If the second and third defendants have not vacated the land by 3pm 1 May 2025, the first plaintiff has leave to issue a writ for possession without further order.

32. The second and third defendants are forthwith to pay the first plaintiff’s costs on an indemnity basis, as agreed or assessed.

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