Adspace v Farkas
[2020] VCC 1039
•17 July 2020
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION Expedited LIST | Revised (Not) Restricted Suitable for Publication |
Case No. CI-19-05991
| ADSPACE PTY LTD (ACN 095 671 702) | Plaintiff |
| v | |
| ANDREW MICHAEL FARKAS AND | First Defendant |
| DIANNE FAY FARKAS | Second Defendant |
--
JUDGE: | HER HONOUR JUDGE MARKS | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5, 27 May 2020; costs submissions filed 9,12 June 2020 | |
DATE OF JUDGMENT: | 17 July 2020 | |
CASE MAY BE CITED AS: | Adspace v Farkas | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 1039 | |
REASONS FOR JUDGMENT
---
PRACTICE AND PROCEDURE – Summary judgment application – Section 61 of the Civil Procedure Act 2010 (Vic) – whether defence and counterclaim had no real prospects of success
CONTRACT – Implied term – Whether obligation of good faith to be implied - Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5, Commonwealth Bank of Australia v Barker [2014] HCA 32, Specialist Diagnostic Services Pty Ltd (Formerly Symbion Pathology Pty Ltd) v Healthscope Ltd [2012] VSCA 175 – application of tests laid down in BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266
COSTS – Calderbank offer – whether genuine offer of compromise – Charan v Nationwide News Pty Ltd (Costs Ruling) [2018] VSC 89
---
APPEARANCES: | Counsel | Solicitors |
For the plaintiff | Robert Peters | Darrer Muir Fleiter |
| For the defendants | Bill Guzzo | F Butera & Co |
Contents
Introduction
Facts
No real prospects of success of defence
Good faith implied term defence
Costs
Time of proceeding the offer was made
Time for consideration of the offer
Extent of the compromise offered
Prospects of success at the time the offer was made
Clarity of the offer
Foreshadowing application for indemnity costs
Order
HER HONOUR:
Introduction
The plaintiff applies for summary judgment against the defendants. It relies on section 61 of the Civil Procedure Act2010 (Vic) and submits that the defendants have no real prospect of success in defending the plaintiff’s claim.
In short, the plaintiff wants to remove a large advertising sign that it installed on the roof of a building, in circumstances where it had sub-leased part of that building from the defendants for years in order to erect the sign. The defendants want the sign to stay, and also say that the plaintiff owes them rent as a continuing sub-lessee.
A number of complex matters were raised in the course of submissions by the parties. In the end the decision came down to the question of whether or not there is a real prospect of success in the defendants’ argument, that a ‘good faith’ term should be implied into the sub-lease the parties entered into in 2004, that would have the effect of stopping the plaintiff from being entitled to remove its sign. I am not satisfied that there is a real prospect of success that the term should be implied.
I am satisfied that the defendants have no real prospects of success in defending the plaintiff’s claim.
This matter was commenced by writ. A defence and a reply were filed. Each party filed written submissions. Affidavits were filed by Stuart Moffatt (Commercial Director for JCDecaux Australia Pty Ltd, of which the plaintiff is a wholly owned subsidiary) and Andrew Farkas (the first defendant).
The matter was first listed to be dealt with on the papers. I then listed it for hearing via Zoom. In the course of that hearing, the defendants sought leave to raise the implied duty of good faith term as a further defence, and I adjourned the matter to allow for a draft pleading and submissions to be filed.
At the end of the adjourned hearing, I said I would give summary judgment on the plaintiff’s claim. I gave oral reasons, and was asked by counsel for the defendants to reduce these to writing, as I now do.
There was also a counterclaim. Although the plaintiff said on the second day of the hearing that it had intended in its application to seek summary judgment on the counterclaim (as well as on its claim), that had not been clear to the defendants or to me. The plaintiff decided not to proceed with its application for summary judgment on the counterclaim in the course of the hearing; instead it was agreed that the counterclaim would go to trial in June.
Subsequently, the parties advised that the counterclaim had been withdrawn, and agreed as to the form of orders, including that an order be made that ‘The defendants pay the plaintiff’s costs of the proceeding and the counterclaim’. Those orders were made on 4 June 2020.
The orders allowed for the parties to file submissions in relation to whether the costs payable by the defendants should be taxed and paid on an indemnity basis or a standard basis, as a result of a Calderbank letter served by the defendant on 24 February 2020.
I have considered those submissions, and deal with those costs in this judgment as well.
Facts
The defendants own the property at 300 Macaulay Road, North Melbourne. A planning permit MV/16156/2003 (Permit) was issued by Mooney Valley City Council on 17 June 2004, allowing a large externally illuminated major promotion sign to be constructed on the roof of the building on the property.
By sub-lease dated 5 August 2004 (Sub-Lease), the defendants leased part of the property to the plaintiff in order to accommodate the plaintiff’s advertising sign (and the equipment to illuminate it) for a term that expired on the Expiry Date (as defined in the Sub-Lease).
The plaintiff erected the sign. Displaying it required four components: concrete foundations, a retaining ring, a pole anchored to the concrete foundations via the retaining ring, and the sign itself.
The Sub-Lease termination date was 16 June 2019, which was also the date the Permit expired.
The Sub-Lease gave the plaintiff an option for a further term commencing a day later 17 June 2019 (clauses 2.3(a) and 16.2 of the Sub-Lease and Items 11 and 17 of the Schedule).
The plaintiff gave notice that it intended to exercise that option to enter a new sub-lease, by letter sent on 15 March 2019.
Clause 2.3(a) provided that the new sub-lease was to be for the ‘Option Term’. The ‘Option Term’ was defined in Item 17 of the Schedule as:
A new term commencing on 17 June, 2019 expiring on the extended Expiry Date or the expiry date of the New Permit (as the case may be) in accordance with the provisions of clause 16.1 of this Sub-Lease.
In other words, the term for the new sub-lease depended on the defendants extending the Permit, or obtaining a new permit permitting the sign to continue to be displayed.
Clause 16.2 required the defendants, before the Sub-Lease expiry date, to do such things as are reasonably necessary to either extend the Permit for as long as is reasonably possible, or procure the issue of a new permit. There is no dispute that some efforts were made. But the Permit was not extended, and no new permit was issued.
The plaintiff remained in possession of the premises after the Sub-Lease expired. The parties disagreed as to on what basis that possession continued.
The plaintiff says the defendants allowed it to hold over as tenant under the Sub-Lease, and says that it remained in possession as a six-monthly tenant, pursuant to clause 2.2 of the Sub-Lease. It then sent a letter on 19 September 2019, saying that pursuant to clause 2.2(b) of the Sub-Lease it was terminating the six-monthly tenancy with effect on and from 23 December 2019. In the letter, it said it would remove the pole and sign.
But the defendants refused to allow the pole and sign to be removed. Hence the plaintiff’s claim in this case seeking orders allowing them to remove them.
They defendants say that after the expiry of the Sub-Lease the plaintiff remained in possession as a tenant under a new sub-lease:
which commenced 17 June 2019 for a term of 15 years and continuing indefinitely by reason pursuant to section 6(3)(b) of the Planning and Environment Act 1987 and clause 63 of the Planning Scheme.
By their counterclaim, the defendants sought declarations about the alleged new sub-lease and orders relating to rent arrears.
No real prospects of success of defence
I am satisfied that the defence has no real prospects of success.
Section 61 of the Civil Procedure Act 2010 (Vic) provides:
A plaintiff in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a defendant's defence or part of that defence has no real prospect of success.
The question to be determined is whether or not the defendants have a real, as opposed to a fanciful, chance of success.
I bear in mind that the power to terminate proceedings summarily should be exercised with caution and should not be exercised unless it is clear there is no real question to be tried.
In Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 (applied in Feldman v Frontlink Pty Ltd [2014] VSCA 27 at [24] and Mandie v Memart Nominees Pty Ltd [2016] VSCA 4 at [44]-[48]), the Court of Appeal distilled the test to be applied when determining whether to give summary judgment pursuant to section 63.
At [35], Warren CJ and Nettle JA stated:
Upon the present state of authority:
a)the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
b)the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;
c)it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
d)at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
There was no dispute that the plaintiff owns the pole and sign, and that it has throughout. The plaintiff’s ownership is acknowledged in clause 10.2 of the Sub-Lease:
10.2 Sub-Lessee's Equipment
Save for the concrete foundations and the retaining ring the parties agree that the Sub-Lessee's Equipment does not constitute a permanent improvement to the Premises and at all times remains the property of the Sub-Lessee, its successors and assigns.
Schedule A of the Sub-Lease defines the ‘Sub-Lessee's Equipment' to mean:
the Sign and all things, fittings, plant and equipment, signs and items in the nature of trade or tenant's property and chattels owned or installed by the Sub-Lessee or its employees and agents in or about the Premises.
And the Sub-Lease set out that the plaintiffs were entitled to remove the pole and sign during the Sub-Lease term, and must do so afterwards.
Under clause 6.1 of the Sub-Lease the defendants were obliged to give the plaintiff access so that the plaintiff could remove the sign during the term of the Sub-Lease:
6.1 Installing and Maintaining Equipment
The Sub-Lessor must as and from the date of this Sub-Lease and throughout the Term allow the Sub-Lessee and its employees, contractors and agents reasonable access over the land with vehicles, machinery and equipment for the purpose of installing, testing, operating, maintaining and removing the Sub-Lessee's Equipment.
Clause 11.1 of the Sub-Lease provides that the plaintiff may remove its equipment at any time, and clause 11.2 stipulates that it must remove its equipment at the end of the Sub-Lease:
11.1 Sub-Lessee Entitled to Remove
The Sub-Lessee may remove the Sub-Lessee's Equipment during the Term of this Sub-Lease, during any· extension of the Term, during holding over after the expiration of this Sub-Lease, and during the term of a new lease granted to the Sub-Lessee, notwithstanding the surrender of this Sub-Lease, subject to this clause.
11.2 Sub-Lessee Obligated to Remove
The Sub-Lessee (or the Sub-Lessee's successors or assigns) must remove the Sub-Lessee's Equipment (except for the concrete foundations and retaining ring) within 30 days after the expiry or earlier determination of this Sub-Lease. Notwithstanding anything else herein contained, the Sub-Lessee is not obliged to remove the concrete foundations or the retaining ring.
It was not suggested in argument before me that it was too late to remove the sign. As stated by the plaintiff:
Of course, the "prevention principle” precludes the landlords from now saying that Adspace did not remove the Pole and the Sign in the time permitted by clause 11 because it was the Landlords' breach of clause 6.1 of the Sub-Lease that prevented removal in time.
[citation omitted]
Good faith implied term defence
Clause 11.1 had not been mentioned in either side’s initial written submissions. I raised it at the first hearing before me. Counsel for the defendants then said that the defendants sought to raise by way of defence that there was an implied term of the Sub-Lease that the plaintiff must exercise its contractual rights in good faith, and sought leave to amend its defence.
Leave was granted, and the amended defence was filed. It provided:
8. They further say that the Sub-Lease is subject to an implied term
that Adspace must exercise its contractual rights, including clause
11.1 of the Sub-Lease in good faith, and in such a way so as to
not cause the Landlord avoidable loss and damage.PARTICULARS
The term of good faith is implied by law or in fact from the nature of the Sub-Lease.
The defendants submitted that in seeking to remove the sign the plaintiff was not exercising its contractual rights in good faith. They said the removal of the sign would cause them unnecessary commercial damage and loss. They say that they have tried hard to negotiate a commercial settlement, they have endeavoured to negotiate the purchase of the sign from the plaintiff and there is no reason the plaintiff should not let them buy it. They say it will cause them financial disadvantage if the sign is removed. In their affidavit material, they detail that they have tried to obtain an extension of the Permit and were unable to, not for want of trying. They say that there is no need as a matter of law for a permit to be granted for the sign to remain.
Law – when will obligation of good faith be implied?
The parties disagreed as to law that applies in Victoria in relation to whether an implied obligation to act in good faith should be incorporated into commercial contracts.
The High Court has observed that it has not had the occasion to decide the issues regarding the existence and scope of a general good faith and fair dealing doctrine in the performance of contracts or the exercise of contractual rights and powers: Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5 at [40] and [156]. In Commonwealth Bank of Australia v Barker [2014] HCA 32 at [107] it referred to Royal Botanic Gardens and said that the question of whether a standard of good faith should be applied generally to contracts has not been resolved in Australia.
Counsel for the defendants argue that there is wide support by Australian Courts for the implication of a duty of good faith in commercial contracts, citing various cases, mostly decisions of the New South Wales Supreme Court and the Federal Court. One of the cases cited was the Court of Appeal of the Victorian Supreme Court decision of Specialist Diagnostic Services (Formerly Symbion Pathology Pty Ltd) v Healthscope Ltd [2012] VSCA 175.
In Specialist Diagnostic Services at [86] Buchanan, Mandie and Osborn JJA said that they did not accept that an obligation of good faith should be implied indiscriminately into all commercial contracts. They said, ‘in the case of a detailed written lease entered into between commercial entities of equivalent bargaining power, such a condition will ordinarily arise only if it meets the tests laid down in BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings’.
Counsel for the defendants encouraged me not to follow the approach to this issue taken by the Court of Appeal of the Victorian Supreme Court but instead to follow the approach taken by the New South Wales Supreme Court and the Federal Court.
I am satisfied that I should follow the approach that has been taken by the Victorian Court of Appeal. I agree with the submissions that were made on behalf of the plaintiff about this issue:
4. …the Court of Appeal has determined principles which bind this
Court.
5. An obligation of good faith is not to be “implied indiscriminately into all
commercial contracts”. In the case of a contract like the Sub-Leasewhich was made between commercial entities of equivalent bargaining
power, a duty of good faith will ordinarily be implied only if the
conditions in BP Refinery are satisfied (and they may be applied
collectively).
6. The following are the conditions stated in BP Refinery about the term:
6.1 it must be reasonable and equitable;
6.2 it must be necessary to give business efficacy to the contract, so
that no term will be implied if the contract is effective without it;
6.3 it must be so obvious that “it goes without saying”;
6.4 it must be capable of clear expression; and
6.5 it must not contradict any express term of the contract.
7. The Court of Appeal has stressed that a term is not implied merely
because it might be thought that the proposed implied term is
“reasonable”.
8. Whether a power conferred upon a party is fettered by a duty of good
faith depends upon the terms in which the power is expressed.
Where the power conferred is for the benefit of one party and where
there is no state of satisfaction of which the donee must be satisfied
before exercising the power, but as in the Sub-Lease the power to
remove is quite unqualified, no obligation of good faith will ordinarily
arise – the donee may exercise the power in its own interests and the
donee is the sole judge of where its interests lie and may exercise
the power as it sees fit. The content of the duty in respect of
contractual rights and powers does not require the donee to comply
with an overriding standard of reasonableness where the pre-
conditions to the exercise of the power or right are otherwise met.
9. As for the “capable of clear expression” requirement from BP
Refinery, the Court of Appeal has noted that one of the problems with
the duty of good faith is the difficulty in articulating its content in
respect of a given contract.
10. The Court of Appeal has said that for the purposes of the “non-
contradiction” requirement from BP Refinery, where the express termindicates that the parties (objectively viewed) turned their mind to the
relevant subject matter, but did not impose the asserted duty, there is
no room for implication.
[citations omitted]
There is no real prospect of success of the proposed implied term being held to be incorporated into the Sub-Lease. It fails each of the BP Refinery tests.
It is not reasonable. The terms of the Sub-Lease are quite clear. The parties agreed that the pole and sign are the property of the plaintiff and that it may remove them when it wants to. The parties have clearly turned their mind to the issue of removing the sign. There is a distinction between when the plaintiff may remove the sign and when it must remove it; and it is made clear that it can only remove the pole and sign and not other parts of the infrastructure holding the sign up.
It is not necessary to give business efficacy to the Sub-Lease. In fact, it is contrary to what is specifically stipulated in the Sub-Lease.
It is not so obvious it goes without saying. On the contrary it is, as I have said, the opposite of what the clear words of the Sub-Lease are.
The proposed implied term is not capable of clear expression. That is shown in the fact that although what is pleaded as to the term is that the plaintiff must exercise its contractual rights in good faith, and in such a way as not to cause the defendants avoidable loss or damage, in fact, what seems to be being sought is to force the plaintiff to sell the sign on certain terms, to the defendants.
There is not, in this case, the sort of complexity or argument about a question of construction that would lead me to think it is appropriate to have a hearing on the merits under section 64 of the Civil Procedure Act.
Costs
I turn now to the issue of costs.
The defendants were ordered on 4 June 2020 to pay the plaintiff’s costs of the proceeding and the counterclaim.
The plaintiff seeks to have the defendant pay its indemnity costs to 23 February 2020, as a result of the non acceptance of a Calderbank offer it sent on 24 February 2020. In that offer, it set out lengthy reasons as to why the plaintiff’s summary judgment claim was likely to be successful, and offered settle the matter on the basis that the defendants allow access onto the property so that the plaintiff, its employees and agents could remove the pole and sign within 30 days of the making of the offer, the counterclaim be dismissed, and there be no order as to costs.
The principles relevant to a Calderbank offer are summarised by the Court of Appeal in Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141 at [234]:
In Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority [No 2], the Court of Appeal held that the rejection of a Calderbank offer is a matter to which the court should have regard when considering whether to order indemnity costs. The Court said that the critical question is whether the rejection of the offer was unreasonable in the circumstances. The Court emphasised that the discretion with respect to costs must be exercised taking into account all relevant considerations and that, in deciding whether the rejection of a Calderbank offer was unreasonable, the court should ordinarily have regard at least to the following matters:
(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d)the offeree’s prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed;
(f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree’s rejecting it.
[citations omitted]
Time of proceeding the offer was made
No issue is raised by the defendants in relation to when the offer was made (which was two days after the close of pleadings).
Time for consideration of the offer
No issue is raised by the defendants in relation to the week given for consideration of the offer.
Extent of the compromise offered
The crux of the dispute about the efficacy of the offer is the extent of the compromise offered.
The defendants argue that a Calderbank offer must contain some element of genuine compromise (Ryde City Council v Tourtouras [No. 2] [2007] NSWCA 262 at [4] (Santow, McColl and Basten JJA). Compromise, as Giles J explained in Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 368 ordinarily entails giving something away:
Compromise connotes that a party gives something away. A plaintiff with a strong case, or a plaintiff with a firm belief in the strength of its case, is perfectly entitled to discount its claim by only a dollar, but it does not in any real sense give anything away, and I do not think that it can claim to have placed itself in a more favourable position in relation to costs unless it does so.
The defendants submit that the plaintiff’s offer was nothing more than an offer for the defendants to capitulate, and not a genuine compromise.
The defendants refer to the comments of Rogers CJ Comm D in Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353 at 355, where His Honour said that the genuineness of an offer of compromise depends upon:
… whether, in the totality of the circumstances, the offer by the plaintiff represented any element of compromise or whether it was merely, yet another, formally stated demand for payment designed simply to trigger the entitlement to payment of costs on an indemnity basis.
However, that case is irrelevant. The plaintiff’s case here was not a ‘demand for payment’ and the Calderbank offer was not a demand for payment by the plaintiff. By its case, the plaintiff sought to remove its own sign, and to defend a claim for rent amongst other things, based on a sub-lease it said did not exist.
As the defendants say, where an offer does not involve a genuine compromise but is in fact either an invitation to capitulate or a derisory or nominal offer, it would not be unreasonable for the losing party to have rejected it: Charan v Nationwide News Pty Ltd (Costs Ruling) [2018] VSC 89 at [17] per J Forrest J.
In Charan at [18], J Forrest J said:
These decisions do not mean that an offer to capitulate or to walk away will necessarily fail because of its terms. Rather, the reasonableness of the offer turns on the circumstances which surround it, and particularly whether it was truly designed to settle what may be a hopeless case. This is consistent with what was said by the New South Wales Court of Appeal in Leichardt Municipal Council v Green:
It is clear that an offer with no real element of compromise in it, which is designed merely to trigger the costs sanctions, will not be treated as a genuine offer of compromise.
And then:
Accepting that such an offer as was made is capable of being a genuine offer of compromise, the next step is to consider whether the particular offer in the circumstances represented a genuine attempt to reach a negotiated settlement, rather than merely to trigger any costs sanctions.
[citations omitted]
The defendants say that the offer made in this case amounted to the plaintiff obtaining its claim in full, and the defendants giving up on their counterclaim.
The plaintiff acknowledges its claim could not be compromised and says that the defendants’ claim could not be readily compromised by money. It argues that by accepting the offer, costs liability could have been avoided, and says:
9.What needs to be borne in mind is the nature of the claims made were:
(a) the Plaintiff wanted the return of its property. That claim, unlike a money claim, could not be compromised;
(b) the Defendants sought an injunction preventing the Plaintiff
from entering the Premises and a declaration that a 15 year
lease existed, together with damages for non-payment. That
claim could not be readily compromised by the payment of
money either;
(c) the matter that was readily capable of compromise was costs,
and that is what the Plaintiff offered.
I consider that although the compromise offered was relatively small, it was not derisory or nominal. The plaintiff offered to give up its costs incurred to the date of the offer, which was (at least) its costs of instituting the proceeding, drafting the statement of claim, considering the defence and counterclaim and drafting a reply.
Prospects of success at the time the offer was made
The plaintiff says that the defendants had no real prospects of success at the time of the offer. The plaintiff pointed this out at length in the offer, and says that its view has been upheld by the summary judgment granted and the discontinuance of the counterclaim.
The defendants do not argue with this proposition in their costs submission.
I take into account that there has been no hearing on the merits of the counterclaim. However, the arguments in favour of the defendants’ submission that the plaintiff remained a tenant were canvassed at length in both sides’ submissions.
The parties agreed that:
·Upon the exercise of an option and termination of the original Sub-Lease by effluxion of time, a new sub-lease comes into existence, if all requirements of a sub-lease are met;
·What would otherwise be a sub-lease is void for uncertainty unless, at its commencement, its duration is certain.
The terms of the Sub-Lease made it clear that the duration of the new sub-lease depended on the Permit being extended or a new permit being granted so that a new expiry date was fixed before a new sub-lease commenced.
The Permit was not extended. The fact that the defendants have tried to have it extended does not change that fact. Nor does their argument that a permit was merely a historical necessity, but is now unnecessary in order for the sign to be permitted to stay up. The defendants’ reliance on ‘existing use rights’ may assist with a dispute regarding whether the sign was legally able to continue to be displayed, but has nothing to do with the duration or existence of a new sub-lease.
The defendants’ submission was that a 15-year term for the new sub-lease arose because the words ‘the new Sub-Lease contains the same terms and conditions as this Sub-Lease’ appear in clause 2.3(b) of the Sub-Lease, and the term of the Sub-Lease under items 6, 7 and 8 of the Schedule is 15 years. I reject this submission. It ignores clause 2.3, referred to above, which specifically deals with the term of the new sub-lease.
I consider the offer was made to settle a case in which the defence and counterclaim had no real prospects of success at the time the offer was made.
Clarity of the offer
No issue is raised about this. The offer was clear.
Foreshadowing application for indemnity costs
The application for costs was foreshadowed. No issue is raised about this.
Order
I am satisfied that the plaintiff should have its costs assessed and paid on an indemnity basis, in default of agreement. Whilst the plaintiff sought the indemnity from the date it sent the Calderbank offer, I consider it appropriate to allow indemnity costs from 2 days after it made the Calderbank offer.
I will order:
The defendants pay the plaintiff’s costs of the proceeding and counterclaim on a standard basis until 26 February 2020 and thereafter on an indemnity basis, to be assessed by the Costs Court in default of agreement.
---
Certificate
I certify that these 17 pages are a true copy of the reasons for judgment of Her Honour Judge Marks, delivered on 17 July 2020, revised on 29 July 2020.
Dated: 29 July 2020
Zeinab Ali
Associate to Her Honour Judge Marks
|
0
11
0