Lee v YOUth OK Pty Ltd (No. 2) - [2022] NSWSC 1691

Supreme Court

New South Wales

Medium Neutral Citation: Lee v YOUth OK Pty Ltd (No. 2) [2022] NSWSC 1691
Hearing dates: 17 October, 3 and 30 November 2022.
Date of orders: 9 December 2022
Decision date: 09 December 2022
Jurisdiction: Equity
Before: Slattery J
Decision:
Damages reduced take account of the defendants’ lease obligations to mitigate loss. Indemnity costs order not made. Order for interest on costs made.

Catchwords:
LEASES AND TENANCIES – first defendant in breach of lease and gives possession of property – calculation of damages for the balance of the term – lease requires the plaintiff to do “every reasonable thing to mitigate loss” – whether the plaintiff has done every reasonable thing to mitigate her losses and to release premises repossessed from the first defendant – term of lease allows the plaintiff to recover reasonable legal costs from the default – whether the plaintiff entitled to indemnity costs under the lease.
COSTS - whether indemnity costs should be awarded under the provisions of the lease – whether interest on costs should be awarded.

Legislation Cited:
Civil Procedure Act 2005, s 98(2)
Civil Procedure Act, s 101(5).
Civil Procedure Act, s 101(4)

Cases Cited:
Lee v YOUth OK Pty Ltd [2022] NSWSC 1356
Rail Corporation of NSW v Leduva Pty Ltd [2007] NSWSC 800
Heaps v Longman [2000] NSWSC 542
Brinca Property Management Pty Ltd v Fibre Tek Global Pty Ltd [2015] NSWSC1628
McCausland v Surfing Hardware International Holdings Pty Ltd ACN 090 252 752 (No. 3) [2014] NSWSC 590

Category: Costs
Parties: Plaintiff: Annie Lee
First Defendant: YOUth OK Pty Ltd ACN 634 484 674
Second Defendant: David Charles Hawkins
Representation:
Counsel:
Plaintiff: D. Smallbone
Solicitors:
Plaintiff: George Li, Advance Lawyers Group Pty Ltd
Defendants: Mr D. C. Hawkins in person

File Number(s): 2020/239512
Publication restriction: No

Judgment

This is the Court’s second judgment in these proceedings. The Court gave its first judgment on 17 October 2022: Lee v YOUth OK Pty Ltd [2022] NSWSC 1356. This judgment should be read with the Court’s first judgment. Events, matters and persons are referred to in both judgments in the same way.
The proceedings were re-listed for further short argument on 3 November 2022 and then adjourned for further argument to 30 November 2022. The Court was satisfied by 3 November 2022 that no issue of mitigation of loss was available to be raised by the defendants before they left the property on 26 February 2022. At the hearing on 3 November 2022 the Court entered judgment for unpaid rent and mesne profits for the period up to 26 February 2022 together with interest from 26 February 2022 up to 3 November 2022 on the unpaid rent and mesne profits. The judgment also included a small amount based on exhibit D, representing some pre-trial expenses. And the Court then heard supplementary argument about mitigation issues that might arise for the period between 27 February 2022 and 30 September 2022.
The Court reserved judgment on the…

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: [2022] NSWSC 1691
Decision Date: 09 December 2022

CaseChat Overview and Summary

In Lee v YOUth OK Pty Ltd (No. 2), the plaintiff sought to recover damages for the breach of a lease agreement and sought indemnity costs pursuant to the lease. The defendant, YOUth OK Pty Ltd, had allegedly breached the lease by failing to maintain the property and subsequently repossessed the premises. The primary dispute centred around the calculation of damages for the balance of the lease term and whether the plaintiff had fulfilled her obligation to mitigate her losses. Additionally, the plaintiff sought recovery of legal costs under the lease terms, and the court needed to determine whether indemnity costs were applicable and if interest on those costs should be awarded.

The court was required to determine if the plaintiff had taken every reasonable step to mitigate her losses and if she was entitled to recover reasonable legal costs from the defendant under the lease agreement. Furthermore, the court had to consider whether the terms of the lease permitted the award of indemnity costs and if interest on those costs should be awarded.

The court found that the defendant had breached the lease agreement and that the plaintiff had taken reasonable steps to mitigate her losses. It was determined that the plaintiff was entitled to recover reasonable legal costs from the defendant under the lease terms. The court held that the lease did permit the award of indemnity costs and that interest on those costs should be awarded. The court concluded that the plaintiff was entitled to the full amount of the damages for the balance of the lease term, along with reasonable legal costs and interest thereon.

The court ordered the defendant to pay the plaintiff the full amount of the damages for the balance of the lease term, reasonable legal costs, and interest thereon.

Orders