Plaintiff v Defendant

Plaintiff v Defendant - [2011] VSC 278 - VSC 2011 case summary — Zoe

[63]

The Lease is held by Lontav, and Lontav will transfer leases to Jamal whenever the landlord agrees along with the liquor licence.
The Licence is held by Lontav and Jamal can change nominee.
The Nominee is presently Ivan Gigliotti.
Jamal guarantees as from the date that he takes over management of the bar all financial commitments that are made on behalf of Lontav and also guarantees any losses incurred by Lontav as from the date of being appointed General Manager.
Jamal will meet with a representative of Lontav on a weekly basis to reconcile the weekly takings, payroll and expenses, and to report to the owners as from the operation of the business of the bar.
Jamal will be paid a management fee as negotiated with Domenic Tenuta.
Jamal is to ensure that there are sufficient funds in the Lontav account to pay all expenses as they fall due, including but not limited to the rent, purchases, insurance and outgoings.
Jamal acknowledges that there may be business agreements that may incur termination fees, e.g. ATM, Phone system, Foxtel, Nightlife system.
Financials, Business Activity Statements, Work Care, Superannuation and Insurance to be controlled by Tramontana Accountants through Domenic Tenuta or his representative.
Jamal is responsible for hiring and dismissal of staff and all renovations that will be incurred and Lontav will not interfere.
As a management fee Jamal is entitled to any surplus funds or profit after all expenses are paid in full, but always subject to Jamal holding a liquor licence in respect of the bar.
Jamal is appointed as General Manager of Lontav in respect of operation of the Bar, and acknowledges that he is neither owner, partner nor shareholder of the business in any way.
Lontav will not be liable to refund any monies that Jamal spends on any improvements or maintenance on the business.
Jamal is authorized as General Manager to communicate with the landlord as authorized agent of Lontav as from the signing of this agreement.
Unless by agreement Jamal may not be removed as the General Manager of the Bar but always subject to Jamal['s] compliance with the laws and regulations involving liquor licence legislation.
Lontav and Domenic Tenuta must assist and cooperate with Jamal with any legal action [that] Jamal may need to take (Jamal's position as General Manager is to remain) if the landlord refuses to reassign the lease to Jamal before October 2011.
Domenic Tenuta is to authorize Jamal to be a signatory on the cheque book of Lontav and to have the deposit and cheque book available to Jamal and to provide internet banking access for this account only.
As of the date of this agreement all monies deposited into Lontav account through EFTPOS and credit card sales are not to be used by Domenic Tenuta.
Jamal is the sole operator of the Lontav bank account.

[137]

96 The lessor also placed significant weight upon the lessee's breach of cl 17 of the lease, by applying for a transfer of the liquor licence without consent, and thus facilitating the mistaken issue of a licence to MEC. Those breaches are not the subject of the notice to remedy, and a further notice giving 30 days to remedy is required if they are to be relied upon as separate breaches giving rise to a right to terminate the lease if not remedied. It was submitted, however, that these breaches support a finding that the lessee had parted with possession, because the lessee no longer had a right to conduct the business at the premises. I do not accept that submission. For the reasons given above, I find that Mr Tenuta did not intend for the licence to be transferred until consent was first given by the lessor to an assignment to MEC. Taking his evidence as a whole, I find that Mr Mohammad had no real understanding of the technicalities of liquor licensing. Further, for the reasons given above, I find that the lessee has a right to correct the premature, and thus mistaken, approval of a licence transfer and the issue of a liquor licence to MEC. In that regard, Mr Mohammad gave evidence that he had 'no problem' in re-transferring the liquor licence to the lessee if the Court so required. As appears below, I will make it a condition of relief against forfeiture based upon the established financial breaches that the lessee, Mr Mohammad and MEC remedy this situation by applying to the Director to re-transfer the liquor licence to the lessee. Re-transfer will restore the position contemplated by the management agreement. If the condition is not complied with, the forfeiture will simply remain. For the avoidance of doubt, this Court expects that the Director will determine the application promptly and, without binding it to act in a particular way, will pay due regard to these reasons for judgment. If, for reasons which I cannot contemplate, the application is refused, the lessor has its rights under the lease to serve a notice to remedy for breach of cl 17.

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Judgment (178 paragraphs)

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Legislation Cited (16)

Cases Cited (6)