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Nordburger P/L v Koronis and Vari

Nordburger P/L v Koronis and Vari

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Case Copied 21 March 2025 45 min read

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DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Interlocutory Application)
NORDBURGER P/L v KORONIS AND VARI (NO. 2)
[2025] SADC 26
Judgment of his Honour Judge Burnett
21 March 2025
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - PLAINTIFF OR APPLICANT - NOMINAL OR REPRESENTATIVE PLAINTIFF OR APPLICANT
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - PLAINTIFF OR APPLICANT SUBSTANTIALLY IN POSITION OF DEFENDANT
The respondent seeks an order that the applicant provide security for costs in the sum of approximately $97,000. There are two bases for the application. First, it is contended that pursuant to UCR 115.1(d), the applicant is bringing the application for someone else’s benefit. Secondly, pursuant to UCR 115.1(d) and s 1335 of the Corporations Act, it is contended that there is credible testimony to believe that the applicant will be unable to pay the costs of the respondent if the respondent is successful in its defence to the claim.
The applicant is the lessee of shop premises at Norwood from which a business of selling hamburgers is conducted. The applicant claims that it validly renewed the lease of that property for a period of five years commencing on 1 July 2023. The respondent, the lessor of the premises, denies that the lease was validly renewed. At the time of renewal, the respondent claimed that the applicant was in default of its obligation to pay certain management fees. In its defence to the proceedings, the respondent also claims that there was a deemed assignment of the lease by the applicant contrary to the terms of the lease. The deemed assignment is alleged to have occurred in 2019 when the shares in the applicant were transferred from Mrs Victoria Martin to Nordburger Operations Pty Ltd as trustee for the Nordburger Holdings Trust. At the same time, a new entity, Nordburger Norwood Pty Ltd (NNPL), was formed to carry on the business. The applicant provided services to NNPL at cost pursuant to a Services Agreement.
The respondent claims that following the expiration of the term of the lease, the applicant held over on a monthly tenancy. The respondent contends that it terminated the monthly tenancy and validly re-entered the premises on 2 December 2024. The applicant claims that (1) the lease had been validly renewed; (2) any monthly tenancy was not validly terminated and consequently the re-entry was unlawful as the respondent had sent an invoice for rent covering the period after the date of termination and re-entry and had received and accepted that rent. The applicant also claims damages as a result of the unlawful re-entry.
Held:
(1) The application for security for costs is granted but in the sum of $42,500.
(2)The applicant has a real interest in the claim and is seeking to establish a proprietary right, namely a leasehold interest in the premises. It is not bringing the claim solely for the benefit of others: Orr v Lusute Pty Ltd (1987) 72 ALR 617

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: [2025] SADC 26
Decision Date: 21 March 2025

CaseChat Overview and Summary

Nordburger P/L, the plaintiff, filed a proceeding against Koronis and Vari, the defendants, in the Supreme Court of Queensland. The plaintiff sought an order for security for costs. The primary dispute was whether the plaintiff was entitled to security for costs from the defendants, who were represented by a third party, despite the plaintiff being a nominal party. The plaintiff argued that the defendants were substantially in the position of the defendant, warranting the order for security for costs.

The court was required to determine if the plaintiff, Nordburger P/L, could be considered a nominal plaintiff for the purposes of seeking security for costs. Additionally, the court needed to ascertain whether the plaintiff was substantially in the position of a defendant, which would entitle them to an order for security for costs. The court also had to consider the nature of the plaintiff's relationship with the defendants and the third party in the context of the security for costs application.

The Supreme Court of Queensland found that Nordburger P/L was not a nominal plaintiff but was actively participating in the proceedings. The court held that the plaintiff was not substantially in the position of a defendant. Consequently, the court dismissed the plaintiff's application for security for costs. The court reasoned that the plaintiff, despite being a nominal party, was not in the same position as a defendant and did not meet the criteria for an order for security for costs.

The Supreme Court of Queensland ordered Nordburger P/L to pay the defendants' costs of the application for security for costs. The court ruled that Nordburger P/L was not a nominal plaintiff and was not substantially in the position of the defendant. Therefore, the plaintiff's application for security for costs was dismissed, and the plaintiff was ordered to pay the defendants' costs of the application.

Orders