Top restaurants at war

One by one, staff members from Newcastle fine dining restaurant Bacchus were called into the NSW Supreme Court to give evidence.

The case began as a simple business dispute - an argument about a relatively small amount of money - after the partnership running Bacchus turned sour.

But it soon extended into a marathon hearing that has cost plenty in legal fees and has stunned a local restaurant industry that is fast garnering national acclaim.

At the centre of the case is the restaurant's founder, former barrister and current solicitor Anthony Ventura, who was found by the court to have breached his fiduciary duty to Bacchus due to his involvement with a competing function business at Longworth House.

In 2008, Mr Ventura sold the majority interest in Bacchus for $1 million to Matthew Higgins, a business partner of Nathan Tinkler on the Middlemount coal deal that made them both fortunes.

Mr Higgins was very much the silent member of the partnership. He remained relatively silent until September 15, 2009, when he sacked Mr Ventura as general manager and changed the locks of the old Mission Theatre building in King Street, alleging a breach of the partnership deed.

That same day, Mr Higgins gathered Bacchus staff members together. They told him, as they would later tell the court, that Mr Ventura had instructed them to redirect function inquiries to Longworth House.

Heather Moore, the functions co-ordinator who later became the restaurant's general manager, told the court she had previously been told by Mr Ventura not to mention Longworth House to Mr Higgins.

"It's really important that you don't tell anyone because Matthew Higgins isn't involved in it . . . I don't want Matthew to get jealous," was how Ms Moore recalled the conversation. Mr Ventura denied this: "That conversation never occurred," he said when cross-examined.

Employees from Bacchus, including acclaimed chef Tim Montgomery, were instructed by Mr Ventura to prepare canapes for a function at Longworth House, the court heard. Beer, wine, glassware and other supplies were ordered by Mr Ventura for the new venue through Bacchus's supplier accounts. Payments were later reimbursed.

The court heard, too, about teething problems once the function venue opened.

One unhappy customer gave evidence about a function at Longworth House where her partner "attempted to put the chef in the deep fryer".

Ask either Mr Higgins or Mr Ventura about the dispute and their accounts vary wildly. The only common thread is a bitterness so strong it would ruin one of Bacchus's refined signature dishes.

The men appear almost polar opposites - certainly unlikely business partners.

Mr Ventura told the court his concept for Bacchus was to establish in Newcastle "a top-end restaurant servicing the demographic I considered myself to be a part of". His is a familiar face at some of the city's flash charity soirees.

Mr Higgins, who is notoriously private, has repeatedly declined interview requests despite being hounded on matters related to his former partnership with Mr Tinkler.

"You guys know I'm a private person," Mr Higgins said. When asked if he would be photographed for this article, he replied: "You've already got one. It's the black silhouette you use all the time."

Mr Higgins was cross-examined in detail about running jokes in private email conversations with accountant Paul Siderovski.

Mr Ventura launched the legal action after disputing Mr Siderovski's valuation of the business, and the activation of a clause that reduced his share of a "goodwill" payment.

Mr Higgins countersued and claimed Bacchus had lost income, including from functions that had been redirected. The court ruled Mr Higgins was required to buy out Mr Ventura's stake in the restaurant and that Bacchus was entitled to compensation and damages for income lost to Longworth House.

Mr Ventura was ultimately paid what he described as "a very modest amount of money" - about $21,000 and less than the disputed initial valuation of $39,500 - in the wash up. Both parties estimate court costs ran to multiple million dollars. Cataloguing those will be the court's next challenge.

Justice Ashley Black's principal judgment said he raised concern during the hearing, which lasted more than 30 days, about "the possibility that the range and complexity of issues raised in the proceedings was disproportionate to the amount of the likely recovery by either party".

Mr Ventura cast himself as David fighting a well-resourced Goliath.

"[Mr Higgins] has extraordinary wealth but refused to pay the modest debt owed to the plaintiffs," Mr Ventura said. "Higgins utilised his considerable resources to conduct litigation. The process is unduly costly and favours those with deep pockets.

"Whilst it would have been easier to walk away without monetary compensation for our share of the business, my professional experience put me in a unique position to take on the fight and prosecute my claim as a matter of principle."

Mr Higgins said it was Mr Ventura who instigated the legal action and that he was lucky to be in a financial position to fight the case.

"Anthony Ventura was well aware of my wealth when he demanded in excess of 10 times the valuation of the restaurant and refused to accept the $39,000 valuation of his share," he said.

"I'm willing to comment on this case because my decision to defend the claim brought by Anthony Ventura was not [made] lightly and did come at a cost, both financial and the angst experienced by my friends and family and the restaurant staff.

"And for them, as much as for me, I would like it known that Anthony Ventura was found by the Supreme Court of NSW to have breached the fiduciary duties - his responsibility to act in the best interests of his business partner and the restaurant - and he has not appealed this finding."

Mr Ventura described the breach found by the court as a technicality.

"The Bacchus restaurant was the result of painstaking restoration of a derelict building, and its redevelopment, by us personally over a considerable period of time," Mr Ventura said.

"My association with a second restoration and redevelopment venue [Longworth House] has continued undeterred by this terrible experience."

Mr Higgins, who admitted in evidence he "did not know the first thing about running a restaurant", said the continued success at Bacchus was owing to the talents of chef Tim Montgomery, regardless of who paid the bills.

"Bacchus has never been about me, or Ventura, or whoever owns it. Tim and the staff make Bacchus the success it is," he said.

Source: The Newcastle Herald, 31 May 2013