Cervo v Kingsley's Pty Ltd - [2018] ACTSC 179

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Cervo v Kingsley’s Pty Ltd
Citation:	[2018] ACTSC 179
Hearing Dates:	12 February 2018
DecisionDate:	21 June 2018
Before:	McWilliam AsJ
Decision:	See [97]
Catchwords:	APPEAL – APPEAL FROM THE MAGISTRATES COURT – whether the proceedings seeking costs and compensation following termination of a commercial lease were res judicata – effect of concession made by counsel – whether clause of lease should be construed to give rise to a claim for costs or compensation only upon demand – where claim for compensation had not yet crystallised – appeal allowed in part
Legislation Cited:	Magistrates Court Act 1930 (ACT) s 274 Court Procedures Rules 2006 (ACT) r 425
Cases Cited:	Abigroup Limited v Sandtara Pty Limited [2002] NSWCA 45 Apparel Group Pty Ltd v Bettina Liano Pty Ltd [2014] NSWSC 670 Australia and New Zealand Banking Group Ltd v Pola [2014] NSWSC 59 Blair & Perpetual Trustee Co Ltd v Curran (1939) 62 CLR 464 Champerslife Pty Ltd v Manojlovski & Anor [2010] NSWCA 33; 75 NSWLR 245 Equuscorp Pty Ltd & Anor v Acehand Pty Ltd & Ors [2010] VSC 89 Gomba Holdings (UK) Limited v Minories Finance Ltd (No 2) [1993] Ch 171 Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 Jackson v Goldsmith (1950) 81 CLR 446 Jana Pty Ltd (atf Azizi Family Trust) v Ezistripdemo Pty Ltd & Sam Sharan [2017] NSWSC 1286 Kyabram Property Investments Pty Limited v Murray [2005] NSWCA 87 Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd [2015] FCAFC 127; 237 FCR 534 Meriton Apartments Pty Ltd v Industrial Court of New South Wales [2009] NSWCA 434; 263 ALR 556 NSW Rifle Association Inc v The Commonwealth of Australia(No. 2) [2012] NSWSC Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Rayner & Anor v Australia and New Zealand Banking Group Ltd [2003] WASCA 264 Re Coldham (1989) 84 ALR 208 Ringrow Pty Ltd v BP Australia Pty Limited [2006] FCA 1446 Vertzayias v King & Ors [2011] NSWCA 215
Parties:	Renato Antonio Cervo (First Appellant) Margaret Anne Cervo (Second Appellant) Kingsley’s Pty Ltd (First Respondent) Kingsley Singarajah Selvarajah (Second Respondent)
Representation:	Counsel Mr M Orlov (Appellants) Mr P Walker SC with Ms K Katavic (Respondents)
Solicitors Gil-Jones Barker (Appellants) Colquhoun Murphy (Respondents)
File Number:	SCA 58 of 2017
Decision under appeal:	Court/Tribunal: Magistrates Court of the ACT Before: Magistrate Morrison Date of Decision: 21 June 2017 Case Title: Renato Antonio Cervo & Anor v Kingsley’s Pty Ltd & Anor Court File Number: CL 7 of 2016

This appeal broadly concerns whether a claim in the Magistrates Court for compensation for breach of a terminated lease and for legal costs ought to have been permitted to proceed to hearing in the court below, rather than being summarily dismissed on 22 June 2017 as an abuse of process.

The appellants, Renato and Margaret Cervo (landlords) hold a Crown lease for a commercial…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] ACTSC 179
Decision Date: 21 June 2018

CaseChat Overview and Summary

The appeal was brought by Cervo, the lessor, against Kingsley's Pty Ltd, the lessee, following the termination of a commercial lease agreement. The primary dispute centred on whether proceedings seeking costs and compensation following the termination of the lease were res judicata, given a previous decision made by the Magistrates Court. The appeal was heard in the Supreme Court of Victoria. The case arose from a dispute over the interpretation of a lease clause, which the lessor argued should be construed to give rise to a claim for costs or compensation only upon demand. The lessor further contended that the claim for compensation had not yet crystallised, meaning it could not be said to have been finally adjudicated.

The legal issues before the court included whether the earlier decision was res judicata and, if not, whether the clause in question was properly construed. The court had to consider whether a concession made by counsel in the earlier proceedings had the effect of waiving any claim for costs and compensation and whether this concession was binding on the parties. The court also needed to determine if the lease clause should indeed be interpreted as allowing a claim for costs or compensation only upon demand, and whether such a claim had crystallised at the time of the earlier decision.

The court found that the earlier decision was not res judicata because the concession made by counsel did not waive the right to seek costs and compensation. It further held that the lease clause should be construed to mean that a claim for costs or compensation could only be made upon demand, and that such a claim had not yet crystallised at the time of the earlier decision. Therefore, the appeal was allowed in part, and the case was remitted to the Magistrates Court for further proceedings. The Supreme Court directed that the earlier decision was not binding and that the lessor's claim for costs and compensation could proceed.

In summary, the Supreme Court allowed the appeal in part and remitted the matter to the Magistrates Court for further consideration. The court held that the earlier decision was not res judicata and that the lease clause in question should be construed as allowing a claim for costs or compensation only upon demand, with such a claim not having crystallised at the time of the earlier decision. The court's final orders ensured that the case would be heard afresh, taking into account the proper interpretation of the lease clause and the nature of the claim for costs and compensation.

Orders

Orders of the court

See [97]

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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