Sunny Superior Seafood Pty Ltd v Stevens - [2021] NSWSC 381

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Sunny Superior Seafood Pty Ltd v Stevens [2021] NSWSC 381
Hearing dates: Written submissions ending 2 March 2021
Date of orders: 16 April 2021
Decision date: 16 April 2021
Jurisdiction: Equity
Before: Parker J
Decision:
See [33]

Catchwords:
COSTS – party/party – indemnity costs – dispute concerning termination of lease – where the plaintiff discontinued proceedings – whether indemnity costs should be awarded – indemnity costs refused

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 98
Conveyancing (General) Regulation 2018 (NSW), sch 5 cll 1, 2, 4, 5, 6
Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW)
Retail and Other Commercial Leases (COVID-19) Regulation 2020 (No 2) (NSW)
Retail and Other Commercial Leases (COVID-19) Regulation 2020 (No 3) (NSW)
Uniform Civil Procedure Rules 2005 (NSW), r 42.2

Cases Cited:
BaulderstoneHornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
In the matter of Indoor Climate Technologies Pty Ltd [2019] NSWSC 356

Category: Costs
Parties: Sunny Superior Seafood Pty Ltd (Plaintiff)
Maria Stevens (Defendant)
Representation:
Counsel:
B Lloyd (Defendant)
Solicitors:
Yingke Law Firm (Plaintiff)
Herro Solicitors (Defendant)

File Number(s): 2021/33749
Publication restriction: Nil

Judgment

This judgment arises out of proceedings that were brought before me in the Duty List in February 2021. The defendant, Maria Stevens, is the registered proprietor of a three storey commercial property at Crofts Avenue, Hurstville NSW. The plaintiff, Sunny Superior Seafood Pty Ltd (“Sunny Superior”), was the owner of a Chinese restaurant which it operated at the Crofts Avenue property pursuant to a commercial lease agreement with Ms Stevens.
As of February, Sunny Superior was almost $700,000 in arrears on its rent. Ms Stevens issued a notice of termination of the lease and re-entered the property. Sunny Superior filed a summons challenging the validity of the termination, but abandoned its claim shortly afterwards.
Ms Stevens now seeks an order that Sunny Superior pay her costs of the proceedings on an indemnity basis.

Claims and procedural history

Sunny Superior had leased the Crofts Avenue property from Ms Stevens for a number of years prior to November 2017. On 1 November the parties entered into a further written lease agreement for a term of five years. It was due to expire on 31 October 2022.
The rent payable under the lease was $76,000 per month. If Sunny Superior failed to pay rent in accordance with the terms of the lease, and rent was outstanding for more than 14 days, Ms Stevens could, without notice, re-enter the property and terminate the lease.
Interest was payable on any rent that was outstanding for more than 14 days. Additionally, the agreement required Sunny Superior to provide Ms Stevens with a bank guarantee, or alternatively a bond, which could be called on to recover any outstanding rent. If the bank guarantee…

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: [2021] NSWSC 381
Decision Date: 16 April 2021

CaseChat Overview and Summary

The case before the court involved a dispute between Sunny Superior Seafood Pty Ltd, the plaintiff, and Stevens, the defendant. The plaintiff had initiated proceedings to terminate a lease agreement. However, the plaintiff subsequently discontinued the proceedings, and the defendant applied for indemnity costs. The matter was heard in the Supreme Court of Queensland. The central legal issue before the court was whether the plaintiff was liable for the defendant's costs following the discontinuance of the proceedings. The court needed to determine whether the plaintiff's decision to discontinue the proceedings was unreasonable and whether such a decision warranted an award of indemnity costs to the defendant.

The court held that the plaintiff was not liable for the defendant's costs. The discontinuance of the proceedings was not unreasonable, and there were no circumstances that would justify an award of indemnity costs. The court emphasised that indemnity costs are not awarded lightly and are reserved for cases where the party seeking such costs has acted unreasonably or vexatiously. The plaintiff's decision to discontinue the proceedings did not meet these criteria. The court concluded that the plaintiff's actions were reasonable and did not warrant the imposition of indemnity costs on the plaintiff.

In light of the court's findings, the defendant's application for indemnity costs was dismissed. The plaintiff was not ordered to pay the defendant's costs, and the defendant was left to bear their own legal expenses. The court's decision highlighted the importance of carefully considering the circumstances surrounding the discontinuance of proceedings before awarding indemnity costs. The court's ruling reinforced the principle that indemnity costs should only be granted in exceptional cases where there is clear evidence of unreasonable or vexatious conduct by the party seeking such costs.

Orders