Hosmer Holdings v Sixsmith
[2025] ACTMC 13
•13 June 2025
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Hosmer Holdings v Sixsmith |
Citation: | [2025] ACTMC 13 |
Hearing Dates: | 4 December 2024, 26 March 2025 |
Decision Date: | 13 June 2025 |
Before: | Magistrate Temby |
Decision: | See paragraph [78] |
Catchwords: | CIVIL – LEASES – implied terms – guarantor - costs |
Legislation Cited: | Court Procedures Rules 2006, rr 1619 and 1720(3)(c), Schedule 2 Leases (Commercial and Retail) Act 2001, s 154 |
Cases Cited: | Arthur McWitton Pty Limited v Perpetual Trustee Co Limited [2005] TT 793 of 2000 Beach Petroleum NL v Jonson (No 2) (1995) 57 FCR 119 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Canvas Graphics Pty Ltd v Kodak (Australasia) Pty Ltd [1998] FCA 23 Jorgensen v Wilson (No 3) [2023] ACTSC 124 Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus [2007] FCA 1878 Polleycutt v Taylor [2020] ACTSC 158 Saddler v Wakim [2023] ACTMC 11 |
Parties: | Hosmer Holdings Pty Limited (First Applicant) Stavroula Lourandos (Second Applicant) Stephania Lourandos (Third Applicant) Cameron James McDougall (3rd Plaintiff) Aikaterina Yiannakopoulos (Fourth Applicant) Nicholas James Lourandos (Fifth Applicant) Alayna Sixsmith (Respondent) |
Representation: | Counsel Jason Moffett (Applicants) Solicitors MV Law (Applicants) |
File Number: | CL 6 of 2024 |
MAGISTRATE TEMBY:
Introduction
1․The Applicants own a block in Braddon. On 1 October 2019 they entered into two agreements – a lease and a licence – with Mort Street Bar Ltd (Mort Street Bar) for the use of premises on the block and an associated car park.
2․Mort Street Bar was in arrears with respect to its financial obligations under the two agreements for some time. Ultimately, the Applicants terminated the agreements in July 2023 and they now seek to recover the debt that Mort Street Bar owes to them.
3․As Mort Street Bar was in liquidation, the Applicants brought the present proceedings against the Respondent, relying on a guarantee that the Respondent gave to them with respect to Mort Street Bar’s obligations under the two agreements. I note that Mort Street Bar has now been deregistered.
The relevant agreements
4․The Applicants are, and were at all relevant times, the Registered Proprietors of Section 28, Block 20, Braddon.
5․On 9 December 2019, the Applicants entered into a lease with Mort Street Bar for the use of premises (the Premises) on that block (the Lease). Also on 9 December 2019, the parties entered into a related licence which permitted Mort Street Bar to use one of the car parks on the block (the Licence). Both the Lease and the Licence commenced on 1 October 2019. The Respondent was a guarantor with respect to both agreements.
Mort Street Bar’s financial obligations under the Lease
6․Under the Lease, Mort Street Bar was obliged to pay the Applicants ‘Rent’ by monthly instalments (clause 7). ‘Rent’ was defined to mean ‘the aggregate of all the amounts payable by the Tenant under this Lease’.
7․The Lease explicitly identifies certain items that Mort Street Bar was required to pay to the Applicants, namely:
(a)water consumption charges (clause 8.2);
(b)a contribution to outgoings for each ongoings year (clause 9.1 and Items 12 and 25 of the Reference Schedule at Annexure A to the Lease);
(c)any GST payable on a taxable supply (clause 12.2); and
(d)interest payable on any amounts not paid by Mort Street Bar on time, calculated on daily balances at the rate of 14% per annuum (clause 13.6 and Item 15 of the Reference Schedule).
8․The Lease also identified an ‘Annual Rent’ figure (clause 1.1 and Item 14 of the Reference Schedule). That figure was $100,000 at the commencement of the Lease and was subject to rent reviews (clause 7.2 and Items 16 and 17 of the Reference Schedule).
9․Payment of the Annual Rent figure is not expressly required by the Lease. However, an obligation for Mort Street Bar to do so (and, therefore, that ‘Annual Rent’ fell within the definition of ‘Rent’ given by the Lease) should, by implication, be read into the Lease. Implying such a term satisfies all of the conditions for the implication of specific terms set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-3.
10․I note, in particular:
(a)the nature of the Lease, being an agreement that is typified by the use of premises in exchange for the payment of rent (in the sense of being a land use payment rather than the definition given by the Lease);
(b)the parties’ agreement on an Annual Rent figure;
(c)the absence of any other obligation to pay a land use charge; and
(d)the assumption in certain clauses of the Lease that the Lease did require Mort Street Bar to pay Annual Rent (see, for example, clause 12.1).
11․In my view, it is reasonable and equitable to imply a term that Mort Street Bar was required to pay the figure agreed for Annual Rent, it is necessary to do so to give business efficacy to the agreement, it is obvious that such a term should be implied, it is a term that is capable of clear expression and it does not contradict any express term of the contract.
12․I also note that Mort Street Bar made payments to the Applicants which included an amount for Annual Rent, without reservation or objection. It is apparent that the parties proceeded on the basis that Mort Street Bar had an obligation to pay the Annual Rent figure.
13․Mort Street Bar also had an obligation to take out and maintain certain kinds of insurance (clause 22). If Mort Street Bar failed to do so, the Applicants could (with notice) pay any outstanding premiums or take out any relevant insurance policies. The Applicants could then recover those amounts from Mort Street Bar.
14․Mort Street Bar’s obligation to make payments under the lease continued despite the termination of the Lease (clause 13.5(a)).
Repair and maintenance obligations
15․At the termination of the Lease, Mort Street Bar was required to return the Premises to the Applicants in the same repair and condition as they were in at the commencement of the Lease (except for fair wear and tear) (clause 20.1(b)).
Default and termination
16․Each of the clauses referred to above was an essential term of the Lease (clause 27.1). As such, the Applicants could terminate the Lease, on giving notice, if Mort Street Bar did not comply with any of those clauses (clause 27.3).
17․Mort Street Bar was required to vacate the Premises on termination of the Lease (clause 28.1). It was required to remove its property prior to the date that the Lease was terminated (clause 28.2) and make good any damage caused in removing its property from the Premises. Mort Street Bar was required to pay the Applicants liquidated damages if it did not comply with its obligations under clause 28.
18․Breach of an essential term also required Mort Street Bar to compensate the Applicants for loss or damage they suffered as a consequence of the breach (clause 27.4(a)). The Applicants’ entitlement to damages is in addition to any other remedy to which they are entitled, including termination of the Lease (clause 27.4(c)) and recovery of rent, outgoings, costs, expenses and interest (clause 27.6).
19․Mort Street Bar was required to pay the Applicants’ reasonable legal costs (on a full indemnity basis) in relation to any breach or default by Mort Street Bar under the Lease (clause 33.8(d)).
Relevant terms of the Licence
20․Under the Licence, Mort Street Bar was obliged to pay the Applicants a licence fee of $2,000 per annum (subject to review), payable in monthly instalments (clauses 4, 7(a) and Item 3 of the Reference Schedule) and any GST payable on a taxable supply (clause 19).
21․The Applicants could terminate the Licence, on giving notice, if Mort Street Bar did not comply with any term of the Licence (clause 10(b)). Further, pursuant to clause 6 of the Licence, the Licence was taken to be interdependent with the Lease, such that the Licence would terminate on the termination of the Lease.
22․Although the Licence does not contain a clause which explicitly entitles the Applicants to seek recovery of unpaid licence fees, they are entitled to damages for breach of contract. Mort Street Bar is liable for the Applicants’ costs in relation to the enforcement of the Licence (clause 20).
Guarantees and indemnities
23․Under clause 29.1 of the Lease, the Respondent guaranteed to the Applicants:
(a)the due payment by Mort Street Bar of all the amounts payable by Mort Street Bar under the Lease; and
(b)the timely performance and observance of all the covenants and agreements contained or implied in the Lease and to be performed and observed by Mort Street Bar.
24․Under clause 29.2 of the Lease, the Respondent also gave the Applicants an indemnity against claims made against the Applicants as a result of Mort Street Bar breaching the Lease, however no claims of that kind have been made against the Applicants.
25․Clause 29.3(b) reads:
The guarantee and indemnity given by the Guarantor under this clause 29 will be irrevocable and continuing and will extend to cover all obligations of the Tenant to the Owner however arising, and they will continue and remain in full force and effect until the due performance and observance by the Tenant of all the agreements and conditions to be performed and observed by the Tenant in accordance with the terms of this Lease.
26․The rights of the Applicants, and the liabilities of the Respondent, under the Lease continued beyond the termination of the Lease (clause 29.3(a)(vi)).
27․Clause 17 of the Licence is to similar effect as clause 29 of the Lease. Clauses 17.1 and 17.3(b) read:
17.1 The Guarantor guarantees to the Licensor the timely performance and observance of all the covenants and agreements contained or implied in this Deed and to be performed and observed by the Licensee.
17.3(b) The guarantee and indemnity given by the Guarantor under this clause 17 will be irrevocable and continuing and will extend to cover all obligations of the Licensee to the Licensor however arising, and they will continue and remain in full force and effect until the due performance and observance by the Licensee of all the agreements and conditions to be performed and observed by the Licensee in accordance with the terms of this Deed.
28․The rights of the Applicants, and the liabilities of the Respondent, under the Licence continued beyond the termination of the Licence (clause 17.3(a)(v)).
Mort Street Bar was in arrears
29․On 23 February 2023, the Applicants’ then property managers for the Premises (CBRE) produced an ‘Aged Arrears Report’. It showed that Mort Street Bar was, as at 16 January 2023, in arrears with respect to its financial obligations to the Applicants in the sum of $88,257.32. CBRE produced a balance report on 7 February 2023 which summarised the components of that arrears balance, being:
Financial obligation
Balance owing
Base Rental – Retail
$68,894.34
Rent Deferred – Payable (Covid)
$9,782.58
Rental Abatement / Free – Covid 19
($5,416.67)
Fitout incentive
($5,555.55)
Car Park Rental
$1,368.76
Car Park Rental Abatement – Covid 19
($83.84)
Car Park Rental Deferred – Covid 19
$133.65
Insurance Recharge
$7,414.11
Water & Sewerage Recharges
$413.69
OPEX – General
$3,742.26
OPEX – Deficit/Surplus
($459.40)
GST Output Payable
$8,023.39
30․“OPEX” is a shorthand for the sums Mort Street Bar was required to pay by way of outgoings pursuant to clause 9.1 of the Lease. The “Covid 19” rent deferrals and abatements reflect an agreement that the parties had apparently agreed to, in order to deal with disruptions caused by COVID-19, under the Leases (Commercial and Retail) COVID-19 Emergency Response Declaration 2020.
31․I refer to an apparent agreement because the only evidence of the terms of that agreement are contained in an email that CBRE sent to Mort Street Bar on 10 February 2021, which purported to ‘confirm the outcome of mediation to date’ but which Mort Street Bar did not respond to, despite the email requesting that Mort Street Bar confirm its agreement to the terms which were set out in the email. Ultimately, I accept the Applicants’ position that the arrangement resulted in payments that Mort Street Bar would otherwise have been required to pay under the Lease and the Licence being reduced or deferred and thus the Applicants’ reliance on that arrangement is to Mort Street Bar’s benefit.
32․The figures in the CBRE documents are uncontested. Not in the sense that the Respondent, having considered the documents, decided not to challenge the accuracy of the documents at the hearing, but in the sense that the Respondent decided not to contest the proceedings at all.
33․Nevertheless, I reviewed the figures in the Aged Arrears Report that I could calculate for myself (being the monthly amounts for rent and licence fees, and the associated GST charges) to satisfy myself that I could rely on the documents. I note that the licence fees for each year, and the rent figures for Years 2 to 4, were correctly calculated in accordance with the terms of the Lease and the Licence, and the associated GST amounts were correct.
34․The rent figure for Year 1 was not correct, however the error was small (being $71.16 per month) and the error was in Mort Street Bar’s favour (that is, the amount said to be owing was less than what the Applicants were entitled to charge). The error was rectified in the Year 2 figures. I also note that the sum of the various amounts said to be owing in the documents are correctly calculated in the total that is identified in each of the documents.
35․I am satisfied, on the balance of probabilities, that the figures set out in the reports do not exceed Mort Street’s liability under the Lease and the Licence.
36․In or about July 2023, the Applicants’ subsequent property managers for the Premises (Sentia) produced a ‘Statement’ which identified amounts which became owing by Mort Street Bar to the Applicants, and amounts paid by Mort Street Bar, in the period 1 February 2023 to 30 June 2023. As I did for the documents produced by CBRE, I reviewed the rent and licence fee against the requirements of the contract and confirmed that those amounts, and the associated GST charges, had been correctly calculated. The total of the individual sums ($60,270.05) had also been correctly calculated.
37․I am satisfied, on the balance of probabilities, that the figures set out in the reports accurately reflect Mort Street’s liability under the Lease and Licence during the period 1 February 2023 to 30 June 2023.
Lease and Licence were terminated
38․On 13 June 2023, the Applicants gave Mort Street Bar and the Respondent notice that Mort Street Bar was in default of its obligation to pay $148,524.37. Mort Street Bar in fact owed $148,527.37 according to the spreadsheets that had been prepared by the Applicants’ proper managers, however I do not consider that the error, which was in Mort Street Bar’s favour, invalidates the notice.
39․The amount of $148,527.37 was the amount by which Mort Street Bar was in arrears with respect to its financial obligations under the Lease and Licence, as identified in paragraphs 29 and 36 of these reasons ($88,257.32 + $60,270.05). The total comprised arrears in payments for:
(a)annual rent;
(b)water and sewerage outgoings;
(c)Mort Street Bar’s outgoings contribution;
(d)insurance;
(e)the Licence fee;
(f)GST; and
(g)amounts owing under the temporary COVID arrangement.
40․The Applicants gave Mort Street Bar 14 days to remedy the default. Mort Street Bar did not remedy the default, entitling the Applicants to terminate the Lease and the Licence.
41․On 12 July 2023, the Applicants wrote to Mort Street Bar, giving notice that the Lease and Licence would terminate 14 days after that notice was served on Mort Street Bar. It was served on Mort Street Bar by sending the notice to Mort Street Bar’s registered office by express post on 12 July 2023. Under clause 30.2 of the Lease, the notice was taken to have been given on 14 July 2023, thus resulting in the termination of the Lease and Licence on 28 July 2023.
Amounts owed by Mort Street Bar to the Applicants
42․As noted above, Mort Street Bar was in arrears with respect to its financial obligations to the Applicants in the sum of $148,527.37 as at 30 June 2023.
43․Sentia produced a ‘Tenant Account Statement’ for Mort Street Bar which identifies, amongst other things, the additional amounts owed by Mort Street Bar for July 2023, until the end of 26 July 2023. While Mort Street Bar’s liability continued until the termination of the Lease and Licence on 28 July 2023, the error is again in Mort Street Bar’s favour.
44․The total amount owing to the end of 26 July 2023 was $12,661.49. Like I did for the other reports, I confirmed that the calculation of the rent and licence fees figures, and the total figure, set out in the report were correct..
45․Accordingly, as at the termination of the Lease and Licence on 28 July 2023, Mort Street Bar was indebted to the Applicants in an amount of at least $161,188.86 ($88,257.32 + $60,270.05 + $12,661.49). The Applicants do not seek to recover the total amount owing to them for Year 1 rent, nor for the amounts owing to them for 27 and 28 July 2023.
46․On 9 August 2023, the Applicants called on a bank guarantee that Mort Street Bar had delivered to the Applicants prior to the commencement of the Lease. The full amount of $27,500 was paid by the National Australia Bank on 11 August 2023. This reduced the debt that Mort Street Bar owed to $133,688.86.
47․Mort Street Bar did not remove all of its property prior to the termination of the Lease, nor return the Premises to the Applicants in the same repair and condition as they were in at the commencement of the Lease, as they were required to do. The cost to the Applicants to remove Mort Street Bar’s property and return the Premises to their original condition was $5,896.
48․Under clause 27.4(a) of the Lease, the Applicants are entitled to recover the amounts identified in paragraphs 46 and 47 of these reasons, totalling $139,584.86 ($133,688.86 + $5,896).
Interest
49․Pursuant to clause 13.6 of the Lease, the Applicants are also entitled to interest on the amounts Mort Street Bar owed to it from time to time. Rule 1619 of the Court Procedures Rules 2006 permits the Court to order that interest be included in the amount for which judgment is given.
50․Having regard to the fact that the parties agreed under the Lease that Mort Street Bar would be liable to pay a particular rate of interest on unpaid amounts, being 14% per annum, I consider that that is the appropriate rate of interest to apply to Mort Street Bar’s arrears under the Lease.
51․There is no contractual right to interest for unpaid amounts under the Licence, however I also consider that it is appropriate to apply a 14% interest rate for arrears under the Licence as well. While that is higher than the applicable rates for pre-judgment interest under Schedule 2 of the Court Procedures Rules, I consider that it is appropriate to apply the rate of interest sought by the Applicants given that:
(a)the Licence was, to some extent at least, interdependent with the Lease;
(b)the overall sum claimed by the Applicants is less than the amount they are owed under the Lease and Licence;
(c)the Applicants have not sought interest in relation to their repair costs; and
(d)the contribution made to the overall sum, for arrears under the Licence, is small.
52․Excluding the Applicants’ repair costs (with respect to which, as I have noted, the Applicants do not seek interest), Mort Street Bar is required to pay interest in the sum of $52,945.46 for the amounts that Mort Street Bar has owed from 1 February 2021 until 13 June 2025.
Applicants’ claim against the Respondent
53․On 18 August 2023, the Applicants wrote to the Respondent, demanding payment of the amount that Mort Street Bar owed to them. As noted earlier in these reasons, under the Lease and the Licence the Respondent guaranteed:
(a)the due payment by Mort Street Bar of all the amounts payable by Mort Street Bar under the Lease; and
(b)the timely performance and observance of all the covenants and agreements contained or implied in the Lease and the Licence and to be performed and observed by Mort Street Bar.
54․In circumstances where all of the amounts owing by Mort Street Bar fall within the scope of these guarantees, the Applicants are entitled to recover the amounts owed to them by Mort Street Bar from the Respondent.
Costs
55․The Applicants seek a costs order in their favour.
56․The starting point for a consideration of the Applicants’ request is s 154 of the Leases (Commercial and Retail) Act 2001. It provides:
The parties in a proceeding under this Act must bear their own costs unless the Magistrates Court or Supreme Court makes an order about costs
57․In Saddler v Wakim [2023] ACTMC 11, I summarised the principles that have been developed in the cases that have considered the operation of s 154. It is clear that the Court has a discretion to depart from the usual rule where the circumstances of the particular case make it just to do so (Arthur McWitton Pty Limited v Perpetual Trustee Co Limited [2005] TT 793 of 2000 (9 March 2005), per Magistrate Burns (as his Honour then was)).
58․I accept the Applicants’ submission that it is appropriate to award them their costs in this matter. This is for the following reasons:
(a)it was a term of both the Lease and the Licence that Mort Street Bar would be liable for the Applicants’ costs in relation to the enforcement of the agreements being, at least in relation to the Lease, on a full indemnity basis;
(b)on the evidence before the Court, there was no defence that Mort Street Bar or the Respondent could have raised to the Applicants’ claims; and
(c)the Respondent’s failure to respond to the demand that was issued to her, and to engage in the proceedings that the Applicants were subsequently forced to commence, meant that the Applicants were required to pursue the matter to final hearing and incur a range of costs in doing so.
59․The Respondent should pay the Applicants’ costs on an indemnity basis for reasonable legal costs incurred prior to the commencement of proceedings. The Applicants are contractually entitled to recover those costs on that basis (clause 33.8(d) of the Lease).
60․The Respondent should otherwise pay the Applicants’ costs on a party-party basis. This includes the Applicants’ costs with respect to the steps they took in order to commence proceedings, such as the preparation of their Originating Application. I accept that the arguments in favour of making a costs order, particularly the terms of clause 33.8(d) of the Lease, support an argument that the Respondent should pay all of the Applicants’ costs on an indemnity basis, however, ordinarily, costs in proceedings are awarded on a party-party basis. The usual features that might justify an indemnity costs order are absent in this case including, in particular, any notice from the Applicants that they intended to apply for an indemnity costs order (or, in fact, rely on clause 33.8) in either of the notices that were sent to Mort Street Bar or the demand that they sent to the Respondent prior to commencing proceedings.
Application for fixed costs order
61․The Applicants seek a fixed costs order. Such an order may be made under rule 1720(3)(c) of the Court Procedure Rules 2006.
62․The main reason favouring the making of a fixed costs order in this case is the likelihood that the Respondent will not attend any formal assessment of costs, given her lack of participation in the proceedings to date. It is desirable to save the parties (and the Applicants in particular) the difficulties, inconvenience and added expense of assessment.
63․However, the power to make a fixed sum costs order should only be exercised when the court considers that it can do so fairly between the parties and the court must be confident that the method used to fix costs is logical, fair and reasonable: Beach Petroleum NL v Jonson (No 2) (1995) 57 FCR 119.
64․Relevant considerations in this regard, as noted in Polleycutt v Taylor [2020] ACTSC 158 at [10], are that:
(a)the evidence relating to the costs sought must be sufficiently detailed and must clearly identify the components of the costs incurred and how they have been calculated: Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus [2007] FCA 1878 at [26]; and
(b)the costs should be proportionate to the nature and importance of the case: Canvas Graphics Pty Ltd v Kodak (Australasia) Pty Ltd [1998] FCA 23.
65․To similar effect, the court in Jorgensen v Wilson (No 3) [2023] ACTSC 124 noted that:
An affidavit in support of an application for a gross sum costs order should provide a secure foundation for the court’s assessment of the reasonableness of the gross sum sought. That requires the court to have sufficient information to assess, at a broad-brush level, whether costs have been reasonably incurred and are of a reasonable amount.
66․The Applicants tendered copies of all of the invoices rendered to them by their solicitors and their Counsel’s fee notes. The Applicants did not, however, identify a figure that they submit is appropriate. The Applicants accepted that one method of determining a fixed costs order is for the court to apply a percentage to the Applicants’ total costs, however the Applicants did not make any submissions as to what an appropriate discount should be.
67․As an aside, I note that, were a fixed sum costs order to be made, it would be preferable to have two discount percentages, one applying to the period prior to the commencement of proceedings and one applying after the commencement of proceedings, given that the Applicants’ costs with respect to each of those periods is to be assessed on different bases. However, this issue was not discussed at the hearing.
68․This was a straight-forward matter. Mort Street Bar failed to pay the amounts it owed under the Lease and the Licence. Prior to commencing proceedings, the Applicants chased payment, issued the relevant contractual notices, took possession of the Premises and arranged for the Premises to be repaired. Proceedings were commenced in August 2024 and, other than needing to obtain an order for substituted service, the matter proceeded expeditiously to hearing in December 2024. The proceedings were uncontested and the hearing was short. While a further hearing was held in March 2025, it too was short.
69․The evidence relied on by the Applicants comprised property and company searches, the property manager reports, the email identifying the terms of the temporary COVID arrangement, the Lease, the Licence, the contractual notices and documents in relation to the required repair work. All of this material should have been readily to hand and the legal issues that the material raised were not complex.
70․In those circumstances, the Applicants’ legal costs are higher than I would have expected. By my calculation, the sum of the invoices and fee notes is:
(a)$62,200.09 in professional fees excluding Counsel’s fees; and
(b)$13,475 in Counsel’s fees.
71․In addition, the Applicants’ solicitors say that:
(a)as at the date of the further hearing in March 2025, the work-in-progress balance was $5,568.20;
(b)their estimate for the further hearing was $660; and
(c)Counsel’s estimate for the further hearing was $2,200.
72․Accordingly, total costs are estimated to be $84,103.29. This figure does not include the Applicants’ repair costs incurred in repairing the Premises, which I have identified earlier in these reasons as being part of the total sum recoverable by the Applicants under clause 27.4(a) of the Lease.
73․The figure of $84,103.29 for legal costs seems out of proportion to the nature of the case, the total sum sought to be recovered and the work that I would have expected to be undertaken to progress it. However, it is not possible to identify the extent to which that is so.
74․As a general proposition, the total fees charged by Counsel seem reasonable and the time spent by the Applicants’ solicitors on various tasks since November 2024 do not seem excessive. However, the narrations set out in the invoices for professional fees for the period 3 July 2023 (the beginning of the period covered by the invoices) to 23 October 2024, and Counsel’s fee notes for 12 July 2024 (the beginning of the period covered by the fee notes) to 14 November 2024, are redacted.
75․During the periods covered by these invoices and fee notes (which includes the periods prior to and after the commencement of proceedings), approximately $44,000 was charged in professional fees and expenses and approximately $9,000 was charged by Counsel. Because the narrations are redacted I do not know what the Applicants’ solicitors or their Counsel did.
76․In circumstances where those sums comprise a large percentage of the Applicants’ total costs, the fact that I cannot ascertain what the Applicants’ solicitors and their Counsel did makes it difficult to identify what the appropriate discount percentages should be (or, alternatively, to identify an appropriate figure on some other basis). This, in turn, makes it difficult to assess the merits of the Applicants’ application for a fixed sum costs order.
77․Ultimately, I am not confident that I can determine a method to fix costs that is logical, fair and reasonable to both parties. As I have noted, the Applicants did not make any submissions as to what an appropriate figure should be, nor as to how I should calculate an appropriate figure, and I do not consider that I have sufficient information to assess, even at a broad-brush level, whether costs incurred between July 2023 and November 2024 were reasonably incurred and were of a reasonable amount. Accordingly, I do not consider that I am in a position to make a fixed sum costs order and I therefore decline the Applicants’ application.
Orders
78․I make the following orders:
1․ Judgment be entered against the Respondent in favour of the Applicants in the sum of $139,584.86.
2․ The Respondent is to pay interest to the Applicants in the sum of $52,945.46.
3․ The Respondent is to pay the Applicants’ costs:
a.on an indemnity basis with respect to reasonable legal costs incurred by the Applicants in responding to Mort Street Bar’s default under the Lease and the Licence, prior to the commencement of proceedings; and
b.on a party-party basis with respect to costs incurred by the Applicants in commencing and pursuing proceedings against Mort Street Bar and the Respondent.
4․ The Court orders that the Respondent pay the Applicants’ costs in an amount agreed by the parties pursuant to rule 1702 of the Court Procedures Rules 2006 or, if no agreement as to costs is filed within 28 days from the date of this order, in an amount assessed by the Registrar under Part 2.17 of the Court Procedures Rules.
| I certify that the preceding seventy-eight [78] numbered paragraphs are a true copy of the Reasons for Decision of His Honour Magistrate Temby. Associate: Noelle-Alexis Bowles Date: 13 June 2025 |
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