Maroubra Pool Café Pty Ltd v Fedele (No 2) - [2018] NSWSC 192

Supreme Court

New South Wales

Medium Neutral Citation: Maroubra Pool Café Pty Ltd v Fedele (No 2) [2018] NSWSC 192
Hearing dates: On the papers
Date of orders: 23 February 2018
Decision date: 23 February 2018
Jurisdiction: Equity
Before: Darke J
Decision:
See paragraph [24]

Catchwords: COSTS – departing from general rule – defendants unreasonably failed to accept Calderbank offer – indemnity costs ordered from date of offer – plaintiff succeeded on some issues and failed on others – appropriate to order that defendants pay only half of plaintiff’s costs for period prior to offer
Legislation Cited: Environmental Planning and Assessment Act 1979 (NSW)
Uniform Civil Procedure Rules 2005 (NSW), r 42.1
Cases Cited: Blair v Curran (1939) 62 CLR 464
Maroubra Pool Café Pty Ltd v Fedele [2017] NSWSC 1722
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Reichel v Magrath (1889) 14 App Cas 665
Walton v Gardiner (1993) 177 CLR 378
Category: Costs
Parties: Maroubra Pool Café Pty Ltd (Plaintiff)
Antonio Fedele (First Defendant)
Maria Fedele (Second Defendant)
Representation:
Counsel:
Mr M Ashhurst SC with Mr P M Barham (Plaintiff)
Mr C W Robinson (Defendants)
Solicitors:
Borodin Legal (Plaintiff)
Dimarco Lawyers (Defendants)

File Number(s): 2015/378241
Publication restriction: None

Judgment

Judgment in this commercial lease matter was delivered on 12 December 2017 (see Maroubra Pool Café Pty Ltd v Fedele [2017] NSWSC 1722). By reference to the six principal issues identified in the judgment (at [2]), the plaintiff succeeded on three issues (issues 1, 3 and 5), was partly successful on one issue (issue 4), and was unsuccessful on two issues (issues 2 and 6). The parties have reached agreement on the form of orders to give effect to the Court’s reasons, but remain in dispute as to costs.
The Court made directions for written submissions, with a view to the question of costs being determined on the papers. Submissions have now been received from each side. As neither side has indicated that a further oral hearing is necessary, the Court will proceed to deal with costs on the papers.
The parties take very different positions on costs. The plaintiff submitted that indemnity costs should be awarded in its favour from 20 October 2017 because the defendants unreasonably failed to accept a Calderbank offer which contained a genuine offer of compromise (see Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8]). In respect of the period up to 20 October 2017, the plaintiff seeks costs on the ordinary basis but, in recognition of its partial success, accept that the defendants should only have to pay 75% of its costs for that period.
The defendants submitted that because the plaintiff was on balance the less successful party (and on one issue should have to bear the costs in any event), the appropriate order for costs was that the plaintiff pay two-thirds of the defendants’ costs.…

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] NSWSC 192
Decision Date: 23 February 2018

CaseChat Overview and Summary

The case involved Maroubra Pool Café Pty Ltd, the plaintiff, and Fedele, the defendant. The dispute centred around the operation of a café in Sydney, with the plaintiff claiming that the defendant had breached a lease agreement. The case was heard in the Supreme Court of New South Wales. The plaintiff sought various remedies, including damages, an account of profits, and an injunction. The defendant denied the allegations and counter-claimed for unpaid rent and damages.

The court was required to determine whether the defendant had breached the lease agreement, the extent of any damages, and the appropriate costs order. The primary legal issue was whether the defendant unreasonably failed to accept a Calderbank offer made by the plaintiff, which could result in an indemnity costs order against the defendant. The court had to balance the plaintiff's partial success against the defendant's unreasonable refusal to accept the offer.

The court found that the defendant had breached the lease agreement, awarding the plaintiff damages and an account of profits. However, the court also found that the defendant unreasonably failed to accept the Calderbank offer, which resulted in an indemnity costs order from the date of the offer. The court considered the plaintiff's partial success and the defendant's unreasonable refusal to accept the offer, determining that it was appropriate to order that the defendants pay only half of the plaintiff's costs for the period prior to the offer. The court's final order included the aforementioned costs order, damages, and an injunction against the defendant.

Orders