Nordburger Pty Ltd v Koronis and Vari - [2025] SADC 15

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Interlocutory Application)
NORDBURGER PTY LTD v KORONIS AND VARI & ORS
[2025] SADC 15
Ruling of his Honour Judge Durrant
24 February 2025
LANDLORD AND TENANT - RETAIL AND COMMERCIAL TENANCIES LEGISLATION - DEFINITIONS - RETAIL SHOP LEASE OR LEASE
LANDLORD AND TENANT - COVENANTS - ACTIONS FOR BREACH OF COVENANT - INJUNCTIONS
Application to extend orders for injunction preserving applicant tenant in occupation of food outlet premises - prima facie sufficient likelihood of success to justify preservation of status quo - dispute whether conduct of tenant has disentitled it to renewal of lease - irrespective monthly tenancy asserted - balance of convenience - which course carried lower risk of injustice - possibility of urgent trial - harm to tenant and third parties if injunction not granted - adequacy of damages as a remedy - injunction extended until further directions hearing pending compliance with timetable for an urgent trial.
Held: The order by way of injunction to preserve the tenancy of the applicant be extended to a date to be fixed.
Retail and Commercial Leases Act 1995 (SA) ss 20, 68, referred to.
Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; Replay Australia Pty Ltd v NightOwl Properties Pty Ltd [2023] QCA 76; Nordburger Pty Ltd v Vari & Ors ; Tambakis v Ferluga [2010] SASC 112; STA v Apex Quarries Ltd [1988] VR 187; BCCM Group Pty Ltd v ASAP23 Pty Ltd [2022] SASC 141; BCCM Group Pty Ltd v ASAP23 Pty Ltd [2022] SASCA 139; Forza & Ors v Autocash Pty Ltd [2022] SASCA 133, considered.

NORDBURGER PTY LTD v KORONIS AND VARI & ORS
[2025] SADC 15
Introduction

By originating process dated 5 December 2024, the applicant Nordburger Pty Ltd (Nordburger), as tenant of premises on The Parade at Norwood, commenced an action against its landlord, the first respondents Messrs Veronis and Vari (the landlord), and the second respondent, the property manager for those premises, Thomas and Masters Estate (Comm) Pty Ltd.[1]
[1] Claim (FDN 1); The second respondent is no longer a party to this action, see Notice of and Consent to Discontinuance (FDN 33).
That action concerns a dispute about whether the lease of those premises had been renewed as of right for a period of five years from 1 July 2023, and as to the legality of a purported termination of the lease by the landlord and subsequent taking of possession of the premises in December 2024.
Nordburger sought specific performance by the landlord of its asserted right to renew its lease, called in aid equity and the powers contained in the Retail and Commercial Leases Act 1995 (SA) to obtain relief against forfeiture and compensation, claimed contraventions and damages under the Australian Consumer Law and sought a declaration and orders that the Notice of Termination of Monthly Tenancy (the termination notice) given by the landlord was unlawful and to restore its possession of the premises.
Nordburger also applied for urgent injunctive relief to restore its tenancy until an urgent trial could be heard. An injunction to that effect was granted and is due to expire on 24 February 2025.
These reasons relate to a further application of Nordburger to extend those injunctive orders until an urgent trial can be heard.
Procedural History- initial order for injunction
On 19 December 2024, orders by way injunction restored Nordburger to its tenancy until further order. At the same time, this action was set down for an urgent trial to commence on 27 February 2025.[2] A further order was made that a foreshadowed revision of the Statement of Claim be filed by 23 December 2024.
[2] Nordburger Pty Ltd v Vari & Ors CIV-24-011794 Reasons for Ruling dated 19 December 2024 (unpublished).
The evidence at the time that injunction was granted was to the effect that Nordburger had for many years been operating a food outlet from the premises.
Nordburger had alleged, as a consequence of the actions of the landlord in failing to renew and in terminating the lease and entering into possession, it would suffer detriment– including destruction of its business and harm to its employees and contractors- if an injunction to restore its tenancy was not granted.
Mr Thomas Martin, the sole director of Nordburger, deposed: [3]
·the tenant operated a hamburger restaurant business (which he defined as the ‘Nordburger business’) as part of a group of companies;
·as of 2 December 2024 the Nordburger business traded from two locations, at Hindmarsh and the Norwood premises;
·injunctive relief was necessary to allow Nordburger to resume trading from the Norwood premises from which it operated the restaurant and at which preparation work for the Hindmarsh outlet was undertaken;
·‘the inconvenience and detriment to be suffered by [Nordburger] from continuing cessation of its occupation and trade at the Norwood premises would be drastic and severe’;
·if Nordburger was not urgently reinstated… there [was] a real and immediate risk to the survival of the Nordburger business;
·‘[w]ithout the cash flow from trade at both locations, the margin of liquidity of the Nordburger business [could] soon erode’; and
·‘[d]enial of the injunctive relief sought would have an impact extending well beyond the immediate interests of [Nordburger], adversely affecting staff and suppliers and others, and may otherwise result in the destruction of an otherwise viable business’.
[3] Affidavit of Thomas Patrick Martin made 12 December 2024 (FDN9). Mr Martin is a non- practising legal practitioner and a former partner of the firm Norton Rose Fulbright.
In granting the orders sought by way of injunction, on 19 December 2024, I had been satisfied on the evidence as it stood:[4]
[4] Nordburger Pty Ltd v Vari & Ors CIV-24-011794 Reasons for Ruling dated 19 December 2024 (unpublished).
·Nordburger had under lease been operating a food outlet known as Nordburger since 2013, from the premises;
·Nordburger had been entitled to obtain a renewal, subject to its disputed compliance with the lease, from 1 July 2023 until 30 June 2028;
·Nordburger had given notice of renewal but the landlord asserted it had been in breach of the lease due to the non-payment of the fees of the property manager and was not entitled to a renewal;
·the dispute which had arisen involved the interpretation of the lease and, subject to an intended revision of the Statement of Claim filed, was factually limited and could be addressed in an urgent two-day trial;
·the landlord had acted on the termination notice and had taken possession of the premises;
·Nordburger sought injunctive relief to restore its tenancy and continue to operate a restaurant business as permitted by the lease, until an urgent trial;
·the interpretation of the lease contended by Nordburger was conceded, for the purpose of Nordburger’s application for injunction, to prima facie have a sufficient likelihood of success at trial;
·given the nature of the business operated at the premises Nordburger would suffer detriment if an order by way of injunction to restore it to the premises until trial was not made; and
·there was no evidence the landlord would- if rent and outgoings were paid by the tenant- suffer any detriment.
Interlocutory steps after interlocutory injunction granted
The landlord had foreshadowed it would plead, as well as the breach relied upon in the notice of termination, that further breaches of the lease existed during the period of allowed renewal and they had also disentitled Nordburger to any renewal. It said also it would apply for security for costs.[5]
[5] Subsequently made by FDN 18.
Nordburger did not file a revised Statement of Claim by 23 December 2024.[6]
[6] The then solicitor for Nordburger explained the delay up to 3 February 2025, was his and counsels, and not his clients.
On 10 February 2025, Nordburger engaged new solicitors and counsel.
At a hearing for directions on 11 February 2025, the urgent trial date was vacated and the orders for injunction were amended to expire on the next hearing for directions date, 18 February 2025.
The time for filing any revised claim was also extended at that hearing until 14 February 2025. Nordburger was also ordered to file by 14 February 2025 any further application and supporting evidence for: an urgent trial; an extension of the injunctive orders; and in response to the application for security for costs.
The application for security for costs was then listed for argument, together with a hearing for directions, on 18 February 2025
As for the further breaches the landlord said it would also rely upon, Nordburger accepted it would address those in the material it would file.[7]
[7] See my discussion with counsel for Nordburger at transcript 11 February 2025 at T28.18-T31.31.
On 14 February 2025, Nordburger filed an Amended Statement of Claim.[8] It pleaded that because of the wrongful termination and breach of the lease by the landlord, it ‘has suffered loss and damage comprising lost profits and revenue; ongoing costs and expenses and wastage in amounts to be assessed’.[9]
[8] (FDN34).
[9] Ibid at [34].
In respect of that asserted wrongful termination, Nordburger sought relief against forfeiture for several reasons:
·It had paid, under protest, albeit late, the property management fees and the landlord had waived any default or breach in that respect, by accepting later rent and outgoings, and had elected to affirm the lease;[10]
·It had paid the disputed sum prior to expiration of the lease and as no subsisting default existed at expiry of the lease, it had been unconscionable for the landlord to re-take possession;
[10] See Clause E.
Alternatively, Nordburger claimed the rendering of an invoice for a holding over monthly tenancy on 8 November 2024, and its payment, secured its right of monthly tenancy for December 2024 and the termination and re-entry by the landlord on 2 December 2024, was unlawful and a breach of the lease.
Application for extension of the injunction
Mr Martin affirmed a second affidavit in support of an application for extension of the injunction. He addressed the two matters raised by the landlord as further disentitling breaches of the lease.[11]
[11] Second Affidavit of Thomas Patrick Martin made 14 February 2025 (FDN36), at [2]-[3].
Counsel both addressed those two asserted breaches in argument and whether Nordburger prima facie had a sufficient likelihood of success in obtaining the relief it sought, such as to justify preservation of the status quo pending trial.[12]
[12] Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 per Gummow and Hayne JJ at [55].
In determining that application I considered, first, prima-facie, if the evidence remains as it is, the probability at the trial of this action that Nordburger will be held entitled to the relief it claims. Second, does the balance of convenience favour the grant of an injunction. Third, would damages provide an adequate remedy for the injury Nordburger is likely to suffer, in the event the injunction is refused.[13] Fourth, any residual discretionary matters.
[13] See as well Tambakis v Ferluga [2010] SASC 122 per Gray J and STA v Apex Quarries Ltd [1988] VR 187.
Mr Martin accepted there had been a transfer of the whole of the capital of Nordburger, without obtaining the written consent of the landlord, by his wife Mrs Victoria Martin, to Nordburger Operations Pty Ltd, in October 2019.
Mr Martin accepted Nordburger had agreed with Nordburger Norwood Pty Ltd (Nordburger Norwood) certain matters going to the operation of the restaurant business from the premises since late 2019.
Mr Martin exhibited remittance advices from the landlord dated 5 February 2020, and later, which had receipted payment of rent and outgoings under the lease by Nordburger Norwood.[14] He deposed they showed the landlord had ‘direct knowledge of the involvement of Nordburger Norwood for five years’.
[14] Ibid at [5].
Nordburger, as I understand it, while denying there had been any breach as a matter of interpretation of the lease, submitted that evidence of the ‘involvement’ of Nordburger Norwood established an election and waiver of the asserted disentitling breach of the lease.
In that respect, it was deposed that Mrs Martin had transferred the whole of the issued shares in Nordburger to Nordburger Operations Pty Ltd in October 2019, as her replacement as trustee. As I understood it, he asserted there had been no change of control and no consent had been required.
Alternatively, if there had been a breach, it was submitted, it had been waived or it should be excused because the landlord would have consented to the transfer and the involvement of Nordburger Norwood. In support of that, Mr Martin deposed that to his knowledge the landlord had not raised any concern about the involvement of Nordburger Norwood as a breach of the lease.
Clause(1) P) of the lease provides:
(P) ASSIGNMENT
In the event of the lessee being a proprietary company or private company a transfer of shares (and/or a change in beneficial entitlement thereto) totaling [sic] more than one half of the issued share capital of the lessee company or of the controlling interest therein during the said term shall be deemed to be an assignment of this lease requiring the consent of the lessor’[15] (my bold)
[15] FDN3 Memorandum of Lease Clause P) Assignment 1.04.
Mr Martin also exhibited an Agreement for the Provision of Services between Nordburger and Nordburger Norwood dated 2 December 2019, which detailed the arrangements between those companies relating to the operation of the restaurant at the premises.[16] That agreement was exhibited to address the assertion of the landlord that in breach of the lease Nordburger had sub-let or parted with possession. In that respect clause 1.04 of the lease further provided:
The lessee shall not assign transfer demise underlet mortgage or otherwise part with the possession of the premises or any part thereof for the whole or any part of the said term without the prior written consent of the Lessor which consent shall not be unreasonably or capriciously withheld…..’. (my bold)
[16] FDN36 at [3] and Exhibit TM-5.
As mentioned Nordburger, in the event no right of renewal existed, had alternatively pleaded it had been holding over on a monthly tenancy.[17] In such event, it was submitted, the actions of the parties- the sending of an invoice by the landlord for the December rent, the giving of the notice of termination on 8 November 2024, and payment by Nordburger prior to the purported termination- was an election and waiver by the landlord to continue the holding over, and the termination was ineffective and Nordburger had a valid monthly tenancy.
[17] Clause 10.
Prima Facie Case – The Outgoings Issue
As mentioned, the landlord maintained the concession in respect of this dispute concerning the property managers fees.
Prima Facie Case – Transfer of Shares
Nordburger argued that there had been no breach of the lease because of the transfer of shares. Nordburger submitted properly construed clause P) 1.04 required both a transfer and a change of control of the tenant; the second ‘or’ in clause 1.04 should be read as an ‘and’ because the clause is directed to and designed to protect against a change of control.
While I do not need to and have not finally determined any issues of construction, I must consider the likelihood of success of such arguments and accept the evidence as it stands.
In that respect, the text of clause 1.04 seems to provide for alternative breaches; a transfer of shares or a change in control. Nevertheless, a change of control can occur both without a transfer of 50% of the issued capital and a transfer of more than 50% does not necessarily result in a change of control.[18]
[18] For example when a corporation has issued a governing share or shares with special rights.
Nordburger says subsequent correspondence referring to Norwood Nordburger and its payment of the rent is relevant to the extent that it did not disentitle the tenant to a renewal. There is evidence of the involvement of Nordburger Norwood after the transfer and that Mrs Martin was holding the shares of that company on trust and that Nordburger Operations had replaced her as trustee.
If Nordburger had been required to obtain the consent of the landlord to transfer Mrs Martin’s shares, Nordburger says such consent could not be unreasonably or capriciously withheld. As I understand it, Nordburger submitted, in the alternative, consent would have been granted by the landlord and that this court can act on a finding to that effect and disregard the breach.
In Replay Australia Pty Ltd v NightOwl Properties Pty Ltd[19] the Court of Appeal in Queensland considered a covenant in a lease for exercise of an option to renew effective only if the tenant had complied with the lease in all respects during its term. The tenant in that case had committed breaches after it had exercised the option but had not remedied those breaches until after the lease had expired. That was accepted to be a disentitling breach.
[19] [2023] QCA 76.
The tenant in that case sought orders for relief against forfeiture. The Court held that there must be an interest in respect of which that discretion to order relief against forfeiture can be exercised. To discern if there was such an interest, the Court looked to the terms of the lease.
Nordburger say the relevant ‘interest’ in this case is the obligation on the landlord to renew. It says the landlord waived any default or breach by continuing to accept payments for rent and outgoings from February 2022 from Nordburger Norwood and elected to affirm the continuing operation of the lease which then subsisted in all respects.[20]
[20] Amended Statement of Claim (FDN34) at [35].
Alternatively, it says the breach had been remedied at the time of expiry.[21]
[21] Ibid at [36].
In the further alternative, Nordburger says during the holding over period, the presentation by the landlord of the November 2024 invoice and its payment rendered the Notice of Termination unlawful and a breach of the lease.[22]
[22] Ibid at [37].
Dealing with each of those in turn, I must first consider in each instance whether there is an ‘interest’ in respect of which the equitable discretion to order relief from forfeiture can be exercised.
As already noted, clause P) 1.04 provides for a deemed assignment by the lessee ‘in the event ….. a transfer of shares……. totalling more than on half of the issued share capital of the lessee, company or of the controlling interest therein….’. That, subject to any election and waiver, would disentitle Nordburger to its renewal.
Applying the principles set out in Replay Australia, the landlord would argue there is no ‘interest’ in respect of which the equitable discretion to order relief against forfeiture can be exercised as that breach was subsisting for the whole of the renewal period.
Nordburger alternatively says, ‘as a matter of fact’, the landlord would have consented because it knew by August 2020 Nordburger Norwood had paid the rent and no objection was raised to that. It also relies on dealings between the tenant and landlord nearly four years earlier which it says were amicable.
The landlord submitted equity is not authorised to reshape the contractual relations between Nordburger and the landlord. The landlord submitted the Court cannot infer or reshape its relations to conclude consent would have been given.[23] Doing so, it submitted, would impermissibly create an interest which, upon the expiry of the renewal period, had ceased to exist.
[23] Replay Australia supra at [56].

Nordburger, as well as calling in aid equity, also pleaded relief under s 68(2) of the Retail and Commercial Leases Act 1995 (SA) for renewal of the lease. That section is of broad remit and does empower reinstatement of rights under a retail shop lease that have been forfeited or have otherwise been terminated.[24] In BCCM Group Pty Ltd v ASAP23 Pty Ltd[25], the Court of Appeal considered relief of the kind available under s 68(2)(f), is of the kind available in equitable relief against forfeiture such as to avoid injustice by relieving against unconscionable or unconscientious behaviour.
[24] BCCM Group Pty Ltd v ASAP23 Pty Ltd [2022] SASC 141 per Kourakis CJ at [47].
[25] BCCM Group Pty Ltd v ASAP23 Pty Ltd [2022] SASCA 139 per Livesey P, Doyle and Bleby JJA at [36].
Having said that, in Forza & Ors v Autocash Pty Ltd[26], the Chief Justice was not persuaded s 68(2)(f) empowered the Court to reinstate the power to exercise an option in that case, as a standalone right which was not anchored to a lease.
[26] Forza & Ors v Autocash Pty Ltd [2022] SASC 133 per Kourakis CJ at [87].
Prima Facie Case – Parting with Possession
As for any further breach by Nordburger of the lease as it had ‘parted with the possession of the premises’, Nordburger submitted the circumstances of the restructure of what is described as the Nordburger group, is relevant.
Mr Martin deposed, Nordburger ‘was the sole trading and operational entity for the Nordburger restaurant business’[27] but on 31 October 2019, Nordburger Norwood had been registered, ‘to provide goods and services and receive and handle the takings for [the] restaurant, with [Nordburger] remaining the central company and service company for …. the business as a whole’.[28]
[27] Second Affidavit of Martin at [5.15]-[5.16].
[28] Ibid.
That arrangement, deposed Mr Martin, was the subject of the Agreement for the Provision of Services dated 2 December 2019, between Nordburger and Nordburger Norwood.[29] Nordburger is defined in the Services Agreement as the Service Provider and Nordburger Norwood as the Principal.
[29] Ibid at [5.21] and Exhibit TM-5.
Mr Martin, by reference to the restructure and the Services Agreement, deposed Nordburger had ‘never sub-let or parted with possession of the premises, and the restructure did not result in [Nordburger] being alienated from any of its obligations under the lease’.[30]
[30] Ibid at [5.23].
Mr Martin deposed Nordburger ‘maintains all obligations under the lease and remains in possession of the premises in order to provide the services necessary to operate the business’. I consider that to be a reference to the landlord and Nordburger agreeing in the lease the permitted use of the premises for a restaurant business. As already mentioned they had also agreed:
‘The lessee shall not assign transfer underlet mortgage or otherwise part with possession of the premises or any part thereof for the whole or any part of the said term without the prior written consent of the lessor…’.
The execution of the Services Agreement, submitted Nordburger, had not parted with possession of the premises, ‘having regard to the nature and circumstances of the case, under which justice and convenience are addressed’.[31]
[31] Written Submissions of Applicant (FDN39) at [8a].
The background to the Services Agreement is relevant:
A.    The Principal [Nordburger Norwood Pty Ltd] wishes to conduct a burger restaurant at the premises.
B.     The Service Provider [Nordburger] has extensive experience in operating restaurants and negotiating terms of trade.
C.     The Principal has agreed to engage Service Provider to provide administrative, employment and managerial support to the Principal at the Premises on the terms set out in this agreement.
Clause 4 of the Services Agreement is relevant and addresses the provision of the premises by the tenant to Nordburger Norwood Pty Ltd:
4.1   The Service Provider must provide to the Principal exclusive access to the Premises.
4.2   The Principal may only use the Premises for the proper conduct of the Principal’s business and must not use or allow the premises to be used for any other purpose without the consent of the Service Provider.
4.3   The Principal must:
4.3.1use any facilities (including gas, water, electricity, air-conditioning, plumbing and telephone, plant, equipment, pipes, wires and cables) in the Premises carefully and responsibly;
4.3.2Repair or correct any damage or malfunction which results from any misuse or abuse of the above facilities by the Principal;
4.3.3Not make any material alterations or modifications to the Premises or above facilities without the consent of the Service Provider; and
4.3.4Keep the Premises safe and secure at all times when not occupied by the Principal.
By Clause 5 Nordburger agreed to ‘employ and provide to the Principal all the staff required to conduct the operations of the Principal’s business’. In argument, Nordburger said that was evidence it had remained in possession.
By Clause 10 the Principal ‘agree[d] to pay the Fee to the Service Provider in consideration of the Service Provider performing the Services’. That fee is the actual cost (net of GST) of the [tenant] in providing the services; on its face it does not provide any profit to Nordburger.
As for insurances, the Principal must maintain ‘insurance against all the risks which a reasonable and prudent operator of a business might be expected to insure against including public liability insurance’ up to $10M.
By Clause 14 either the Service Provider or the Principal may terminate the agreement on three months’ notice or at any time by mutual agreement.
In the event of material breach either party may terminate with immediate effect. Upon termination the Principal agreed it must ‘vacate the Premises’, ‘remove [it’s] property from the premises’ and ‘ensure that any signage erected….. is removed and that any damage to the Premises caused by the erection or removal of the signage is made good’.
The Services Agreement constituted the entire agreement between the parties about its subject matter and was agreed to ‘supersede […] any prior understanding, agreement, condition, warranty, indemnity or representation about its subject matter’.
In argument, Nordburger submitted the reference to ‘exclusive access’ in Clause 4.1 must be read in the context of the contract as a whole. It submitted as the agreement expressly provided for Nordburger to provide its services at the Premises the grant of exclusive access could not, in those circumstances, be seen as parting with possession.
Further, Nordburger submitted, properly construed, the Services Agreement does not concede possession in breach of clause 1(P) of the lease because the burger business operated by Nordburger Norwood would be incapable of operating were it not for the administrative management and employment provided by Nordburger at the premises.
In the event the Services Agreement is properly construed to part Nordburger from its possession of the premises, Nordburger submitted a distinction should be drawn between the construction of the Services Agreement and how it was performed post execution, as a matter of fact. That manner of performance, submitted the tenant, was evidenced by Mr Martin who deposed the tenant ‘remains in possession of the premises in order to provide the services’.[32]
[32] Second Affidavit of Thomas Patrick Martin made on 14 February 2025 (FDN36) at [5.24].
Further, Nordburger submitted the landlord was under an obligation to act reasonably to consent to ‘access’ and would have consented.
The lease though does not require the landlord’s consent to allow access to a third party (like Nordburger Norwood). What is required is permission to ‘part with possession’. Irrespective, as with the transfer of shares, that the landlord would have so consented to a lease with Norwood Nordburger would be argued by the landlord to have constituted an impermissible re-shaping of the parties bargain.
Prima Facie Case – Holding Over
The parties accepted that if the tenant had no right of renewal, it had been holding over, and the landlord had purported to terminate that tenancy.
Nordburger submitted on that basis, the rendering of the November 2024 invoice, before the giving of the notice of termination and the payment of that invoice before re-entry, secured its right to the premises for another holding over period; the month of December.
Holding over is the subject of Clause 10 of the lease and deems the tenant to be a tenant from calendar month to calendar month. That tenancy may thereafter be determined by either party upon the expiration of one calendar months’ notice in writing given to the other.
By notice of termination in writing dated 21 October 2024, the landlord noted that the tenant had been holding over as a monthly tenant after 30 June 2023. That notice gave one month’s notice from 1 November 2024 that, expiring on 30 November 2024, the monthly holding over was terminated.
The tenant contends that by afterward giving an invoice for December 2024, and by its payment, it was not in breach of the monthly tenancy, and is entitled to relief against forfeiture as it was unconscionable for the landlord to take possession.
The landlord does not assert the tenant was in breach of the monthly tenancy. It says it exercised its contractual right to terminate. It says the invoice for rent on 18 November 2024 had no impact on that notice; which was valid and effective.
The tenant says by operation of the common law doctrine of election between inconsistent rights, the notice of termination was rendered void by subsequent conduct only consistent with the continuation of the lease.
The tenant acknowledges the setting aside of the notice of termination, would result in a monthly tenancy. While a pyrrhic victory, that would found a proprietary right to re-enter the premises and enjoy at least a further month.
Balance of Convenience
The balance of convenience must favour the grant of the injunction. I have considered what course appears to have the lower risk of injustice if the injunction is not granted.
In granting an injunction on 19 December 2019, I considered it would only operate for a short time, as an urgent listing for trial had been fixed.
That trial date has been vacated because the parties could not be ready. While not the fault of Nordburger, the vacation of the trial date is relevant because the injunction may now be in place for a longer period.
An application has been made for an urgent trial and this Court could accommodate a 3-day trial in late April this year.
Recognising that, it is the case that the detriment which was relied upon in granting the injunction on 19 December 2024, has taken on a difficult complexion. I consider the evidence from Mr Martin then was that Nordburger was directly operating the restaurant business and would suffer its potential destruction.
In noting that, I draw no conclusion going to his credit, just an observation as to the state of the evidence at that time. I must accept the evidence as it stands.
I consider his further evidence is that Nordburger does not directly operate the restaurant. Rather, it provides ‘exclusive access’ to the premises and provides employees and supplies so Nordburger Norwood can carry on that business.
As a services provider, it appears Nordburger is paid a fee ‘calculated on the actual cost (net of GST) of its provision of those services’; it is re-imbursed its costs – no more.
As for its loss, if Nordburger is unable to give exclusive access to the premises, it may agree with Nordburger Norwood to terminate the agreement immediately or it may terminate by giving 3 month’s notice. That would limit any loss it might suffer.
In the event Nordburger is reinstated a monthly tenancy, the outcome is the similarly limited albeit the landlord may terminate again (lawfully).
Where the potential destruction of the restaurant business might land though, is not entirely clear. Detriment or injury in those circumstances would appear to be suffered by Nordburger Norwood as operator of the restaurant and potentially Nordburger Operations Pty Ltd as trustee. Employees may be made redundant, and suppliers could be deprived of future business.
As for detriment suffered by the landlord, it has been receiving rent and outgoings. It was submitted that the landlord suffers prejudice if the injunction is maintained because it does not have recourse against the real tenant Nordburger Norwood. I give that little weight as any failure to pay rent or outgoings would mean Nordburger would be hard pressed to resist revocation of the injunction maintaining Nordburger’s occupation. Any loss suffered by the landlord would therefore be limited, particularly if an urgent trial can be listed.
Damages an Adequate Remedy
Nordburger contends damages are not an adequate remedy because it would be unjust in all the circumstances to confine it to a remedy in damages.
Nordburger, it was submitted, if successful, has a proprietary right to a renewed lease. Damages, it was submitted, would be an inadequate substitute for that subsisting proprietary right.
Consideration
The prima facie likelihood of Nordburger succeeding in its claim is a mixed bag having assessed the various issues argued as relevant to that question.
In many respects those issues are conflated as multiple entities of the Nordburger group are involved.
The question of the disputed outgoings relevant to the fees of the property manager is properly conceded as having a sufficient likelihood of success.
While that was the breach relied upon at the time to disentitle Nordburger to its right of renewal, two other breaches have now been identified. Those breaches have not been fully articulated in a pleading and as the evidence stands, by payment of the rent by Nordburger Norwood it is asserted the landlord knew about the restructure and elected to continue and waive the breaches.
Nordburger claims an entitlement to multiple and alternate remedies to be relieved from forfeiture, obtain a renewal of its lease until 2028 and to be restored to its monthly tenancy. Those claims are based in contract, equity and under statute. It is open to the Court to make such orders.
In considering whether there is a sufficient likelihood of Nordburger succeeding to obtain those remedies at trial, I have been mindful that it is a proprietary right that is asserted. That right to control and use the premises is linked and intertwined with the corporate and trust structure as discussed by Mr Martin. It is those whole circumstances which goes to whether the likelihood of success justifies the preservation of the lease until an urgent trial.
I have capacity to fix an urgent trial for 3 days in the week commencing 28 April 2025. That is an important consideration given the continuing requirement for Nordburger to pay rent and outgoings. If it does not, then Nordburger may find it hard to resist an application that the injunction be discharged. In the same respect, if the timetable to trial is not met by Nordburger it may find it difficult to resist an application to vacate the trial and discharge the injunction.
Without finally determining the construction of the lease concerning the transfer of shares, the issue of election and waiver are enlivened. As the evidence stands, the connection between the ‘involvement’ of Nordburger Norwood and the transfer of shares to Nordburger Operations is that Mrs Martin held those shares as trustee and Nordburger Operations is the newly appointed trustee.
As for whether Nordburger ‘parted with possession’, that is not completely straightforward. While the Services Agreement does require Nordburger to give ‘exclusive access’, there are some parts of the Services Agreement which might refer to the continuous possession of Nordburger of the premises, ie the provision of employees to continue to run the operations.
As for the monthly tenancy issue, success for Nordburger would result in a monthly tenancy which could well be terminated by the landlord. Again, on the evidence as its stands, election and waiver are enlivened for consideration.
I still consider the balance of convenience favours the continuation of the injunction. While the detriment to Nordburger may be limited to its loss of the service fee for three months or a monthly tenancy, the interests of third parties is relevant and the restaurant business could be destroyed.
The detriment to the landlord though is limited if rent and outgoings are paid.
If an urgent trial is listed, then continuation of the injunction represents the lower risk.
In all the circumstances, given the right claimed by Nordburger is proprietary, damages may not be an adequate remedy.
As for the accepted residual discretion to refuse relief, I was troubled previously by the elapse of time since the dispute over property manager outgoings first arose. Now with several new disputes, delay is less of an issue if an urgent trial can be heard and dealt with.
I will extend the injunction until the next hearing for directions, which will be fixed with a timetable to urgent trial in mind.