Sushi Sushi Realty Pty Ltd v Revsa Leasing Pty Ltd - [2025] SADC 24

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
SUSHI SUSHI REALTY PTY LTD v REVSA LEASING PTY LTD
[2025] SADC 24
Decision of her Honour Judge Thomas
13 March 2025
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS
In the peculiar circumstances of this case, the respondent and interested party seek costs orders against the applicant for various interlocutory applications that culminated in an urgent hearing in the District Court at which an interim injunction granted in the Magistrates Court was discharged and formal discovery orders were made against the respondent.
As between the parties, the respondent seeks its costs of the injunction and transfer applications on an indemnity basis, payable forthwith as lump sums and certified fit for senior and junior counsel. The respondent seeks its costs of the discovery application on a standard costs basis, despite discovery orders being made against it. In addition to the Colgate-Palmolive principles, the respondent relies on rr 61.13(2) and 61.14(4) of the Uniform Civil Rules 2020 as entitling it to costs on an indemnity basis. As between the applicant and the interested party, the interested party seeks its costs of the injunction application on a standard costs basis, payable forthwith and certified fit for junior counsel.
The applicant opposes any application for costs against it, contending costs should be in the cause or should be reserved to the trial judge. The applicant seeks dispensation from non-compliance with the pre-action steps required under Chapter 7 Part 1 of the Uniform Civil Rules 2020.
Held:
1. As between the parties:
1.1.    The respondent’s application for the costs of the injunction application FDN 2 and transfer application FDN 12 as costs thrown away under UCR 61.14(4) is dismissed.
1.2.    The question of costs under UCR 61.13(2) for the applicant’s failure to serve a pre-action claim is reserved to the trial judge to be determined when the Court ultimately considers orders relating to the costs of the proceeding in accordance with UCR 61.16.
1.3.    The applicant’s application for dispensation from compliance with its pre-action obligations under UCR 61.8 is reserved to the trial judge to be determined when the Court ultimately considers orders relating to the costs of the proceeding together with the question of costs under UCR 61.13(2).
1.4.    The applicant is to pay the respondent’s costs of and incidental to the injunction application FDN 2, including 80% of the 22 November hearing, on a standard costs basis, payable after final determination of the proceeding on taxation or agreement, certified fit for junior counsel.
1.5    The costs of and incidental to the transfer application FDN 5 (but not the costs of the 13 November 2024 hearing) are to be costs in the cause. The costs of the 13 November 2024 hearing are to be treated as part of the costs of the injunction application FDN 5.
1.6.    The costs of and incidental to the discovery application FDN 12 are to be costs in the cause, allowing 20% of the 22 November 2024 hearing in dealing with it.
1.7.    There will be no order as to the costs of and incidental to the determination of these costs orders.

2. As between the applicant and the interested party, the applicant is to pay the interested party’s costs of and incidental to the injunction application FDN 2, including the costs of the interested party’s application for costs, on a standard costs basis, payable forthwith on taxation or agreement, certified fit for junior counsel.
District Court Act 1991 (SA) s 42; Magistrates Court Act 1991 (SA) s 8(2); Retail and Commercial Leases Act 1995 (SA) s 68; Uniform Civil Rules 2020 (SA) rr 21.1, 61.7, 61.8, 61.12, 61.13, 61.14, 61.16, 102.0, 194.4 and 194.5, referred to.
Anders and Anor v NACS Nominees Pty Ltd [2013] SASC 152, distinguished.
Bell v Deputy Coroner of South Australia (No 2) [2020] SASC 77; City of Burnside v Attorney-General of South Australia (1994) 63 SASR 65; Colgate-Palmolive Co & Anor v Cussons Pty Ltd (1993) 46 FCR 225; Duncan as Liquidator of WDR Iron Ore Pty Ltd (In Liquidation) v SMA Industries Pty Ltd (No 2) [2020] SASC 127; Koonara Management Pty Ltd (Receivers and Managers Appointed) v Fabriano Pty Ltd [2019] SASC 99; Mayfield Family Wines Pty Ltd v Growers Wine Group Pty Ltd (No 2) [2021] SASC 75; Re Hyde (No 2) [2023] SASC 177; Stanley v Phillips (1966) 115 CLR 470, considered.

SUSHI SUSHI REALTY PTY LTD v REVSA LEASING PTY LTD
[2025] SADC 24
Overview

The Respondent and Interested Party seek costs orders against the Applicant for various interlocutory applications that culminated in a hearing before me on 22 November 2024 following the granting of interim injunctive relief by a Magistrate on 13 November 2024. Given the urgency, I delivered an ex tempore decision and made substantive orders dealing with the various applications, reserving the question of costs.[1]
[1] FDN 18.
On 6 December 2024, I ordered that the issue of costs arising out of the following interlocutory applications be determined on the papers and set a timetable for written submissions:[2]
·the Applicant’s injunction application (FDN 2)[3]
·the Applicant’s urgent discovery and production application (FDN 12)
·the Respondent’s transfer application (FDN 5)
[2] FDN 23, now replaced by FDN 37.
[3] FDN 2 also seeks various procedural orders including dispensation from the obligation to serve a pre-action claim under r 61.8 of the Uniform Civil Rules 2020 (SA) (UCR). This detail is relevant to Revsa’s costs claims for breach of the pre-action protocols discussed below.
I also ordered the Applicant file and serve an amended statement of claim by 5:00pm 20 December 2024.
The Unfolding Dispute
The Applicant, Sushi Sushi Realty Pty Ltd (Sushi), as lessee and the Respondent, Revsa Leasing Pty Ltd (Revsa), as lessor, are parties to a retail shop lease as defined in the Retail and Commercial Leases Act 1995 (SA) (Leases Act) for premises in the food court (shop FC09A) of the City Cross Shopping Centre in Adelaide.
Revsa claims it validly terminated the lease on 5 September 2024 and re-entered shop FC09A. Sushi contends the termination and re-entry were unlawful and without cause, claiming Revsa thereby breached and repudiated its obligations under the lease. At the heart of their dispute is Sushi’s allegation that the lease was terminated in bad faith under false pretences so Revsa could make shop FC09A available to another preferred tenant. In its defence, Revsa contends Sushi’s allegations are misconceived and it was entitled to negotiate and enter into an agreement with a new tenant in circumstances where the lease had been validly terminated.
On 8 October 2024, the Interested Party, McDonald’s Australia Ltd (McDonald’s) entered into a deed of agreement for lease (AFL) with Revsa for shop FC09A and two adjacent tenancies (McDonald’s Premises).
On 10 October 2024, possession of McDonald’s Premises was handed over to McDonald’s. By hand over, Revsa had carried out the lessor’s works under the AFL, including an initial gutting and demolition of the existing fit-out of shop FC09A to effectively a shell. From hand over, McDonald’s began carrying out significant fit-out works for a pre-Christmas opening. The expected cost of its fit-out is a significant six figure sum.
On 31 October 2024, Sushi instituted this proceeding against Revsa in the Magistrates Court seeking relief under s 68 of the Leases Act, damages for breach of contract and relief against forfeiture. Sushi sought as its primary relief specific performance of the lease or orders that Revsa return to it possession of shop FC09A and its plant, equipment, stock, fit-out and fixtures. Damages or compensation in the amount of $450,000 was sought.[4]
[4] Claim (FDN 1).
There was an unexplained issue with the filing on the Court portal of the accompanying interlocutory application for urgent injunctive relief and various procedural orders. As a result, Sushi’s injunction application and the supporting affidavit of Sushi’s Chief Financial Officer and Company Secretary, Mr Hasan, made on 31 October 2024[5] was not filed and served until 11 November 2024.
[5] Exhibit A4 (FDN 3).
The injunction application was listed for an urgent hearing on 13 November 2024.
Meanwhile, on 12 November 2024, Revsa filed interlocutory application FDN 5 seeking orders for the transfer of the proceeding to the District Court and a stay of the proceeding and costs orders under UCR 61.13(2) and 61.14(4) for Sushi’s failure to take pre-action steps.
On 13 November 2024, both applications FDN 2 and FDN 5 were heard by Magistrate Panagiotidis. Orders were made transferring the proceeding to the District Court and granting an injunction to preserve the status quo at least until the District Court could consider the matter, reserving the question of costs.[6]
[6] FDN 9 and 10.
On 14 November 2024, the parties sought an urgent listing of the proceeding before the District Court. On 15 November 2024, both interlocutory applications were listed for hearing on 22 November 2024 before me.
Also on 15 November 2024, by separate letters from Sushi’s solicitors and Revsa, McDonald’s was first advised of the existence of the proceeding and the injunction and Sushi’s claims for re-possession of shop FC09A comprising part of McDonald’s Premises. Although not bound by the terms of the interim injunction, McDonald’s ceased works as a result of dispute between the parties, having already spent more than half of the expected cost of the fit-out. Its works program was tight and McDonald’s had brought contractors from Victoria to meet its pre-Christmas deadline. There was considerable uncertainty arising from the injunction that disrupted the fit-out works and risked pushing the store opening into 2025 at significant commercial prejudice to McDonald’s.
On 20 November 2024, McDonald’s sought to be heard at the 22 November hearing including as to its (unfiled) application to be joined as an interested party. Sushi then filed interlocutory application FDN 12 seeking urgent discovery and production of documents recording communications between Revsa and McDonald’s and McDonald’s knowledge of Sushi’s alleged interest in shop FC09A.
By the 22 November hearing, the parties had filed extensive affidavit evidence that was tendered without objection.[7] All relied on written submissions.[8]
[7] Exhibit A4 (FDN 3), Exhibit A5 (FDN 13), Exhibit R6 (FDN 7), Exhibit R7 (FDN 14), Exhibit IP9 (FDN 21).
[8] FDN 15, 17, 22.
Sushi relied on two affidavits. The first, the 425-page supporting affidavit of Mr Hasan of Sushi made on 31 October 2024,[9] sets out the background leading to the breach notice and termination of the lease. The history of the dispute was long. It started with initial relocation discussions in 2022, then segued into the detail of the former franchisee’s breaches of the lease from November 2022 and dispute correspondence from June 2023 about allegedly overdue invoices and payments, culminating in a dispute about an outstanding balance of $4,259.06 in July 2024. The second, an affidavit made on 20 November 2024 by Sushi’s solicitor,[10] sets out a detailed chronology of without prejudice communications between the parties and their solicitors from 6 September to 10 October 2024 that were unsuccessful in resolving the underlying dispute.
[9] Exhibit A4 (FDN 3)
[10] Exhibit A5 (FDN 13).
Revsa relied on three affidavits. Two were made by its director, Mr El-Hazouri, on 13 and 21 November 2024, respectively. The first affidavit briefly addressed events post-termination of the lease and exhibited the AFL and photographs of the status of the gutted shop FC09A.[11] The second addressed in greater detail Revsa’s discussions with McDonald’s, the consequences to Revsa of the cessation of McDonald’s works and exhibited further solicitors correspondence.[12] The third was the brief affidavit made by Revsa’s solicitor in support of the transfer application.[13]
[11] Exhibit R6 (FDN 7).
[12] Exhibit R7 (FDN 14).
[13] Exhibit R8 (FDN 6).
McDonald’s relied on a (confidential) 70-page affidavit made by its national director of property and development, Mr Andrew Swaney on 21 November 2024.[14] This affidavit addressed the relevant personnel at McDonald’s involved in the identification and development of the McDonald’s Premises, their knowledge of Sushi’s claims (including what they knew and when), the progress of negotiations with Revsa, entry into the AFL and its key terms, the nature, cost and progress of McDonald’s fit-out works, the significance of the site to its business and the significant prejudice to McDonald’s interests should the injunction continue.
[14] Exhibit IP9 (FDN 21).
Mr Swaney’s affidavit addressed different topics to the affidavits relied on by Revsa. On common topics, he gave greater detail than Mr Hasan about the nature and progress of the fit-out works and, importantly, the participation and knowledge of McDonald’s personnel in negotiations with Revsa and Sushi’s claims for re-possession of shop FC09A.
Joinder of McDonald’s as an Interested Party
At the outset of the 22 November hearing, I made an order joining McDonald’s as an interested party. McDonald’s application was supported by Revsa and unopposed by Sushi.[15]
[15] FDN 18, order 1.
The Parties’ Contentions on Costs
By way of overview, Revsa seeks the costs of Sushi’s injunction application FDN 2 and its transfer application FDN 5 on an indemnity basis, payable forthwith and certified fit for interstate senior and junior counsel. As for Sushi’s discovery application FDN 12, Revsa seeks an order for its costs on a standard costs basis, despite Sushi substantially succeeding on its application.
McDonald’s seeks an order that Sushi pay its costs of and incidental to the 22 November hearing and Sushi’s injunction application FDN 2, payable forthwith. It takes no position on Sushi’s discovery application FDN 12.
Sushi resists the applications made by Revsa and McDonald’s for costs. It submits the costs of and incidental to the 22 November hearing should be costs in the cause or be reserved as between the parties. As for McDonald’s, Sushi submits it has no entitlement to costs as an interested party. Sushi relies on the principle that where a prima facie case is established, the Court is not often in a position to confidently analyse where the costs of an interlocutory injunction should sit and costs should therefore be in the cause or reserved. The parties filed written submissions on the costs issues[16] and relied on further affidavit evidence.[17]
[16] FDN 22, 25, 28, 30 and 32.
[17] FDN 24, 26, 29 and 31.
Relevant Principles
The applicable costs principles are well-established. Costs are in the discretion of this Court under s 42 of the District Court Act1991 (SA) (District Court Act). The discretion is unfettered but must be exercised judicially.
The presumptive rules and general cost principles set out in the UCR are expressly provided to be subject to any order of the Court to the contrary[18] and the overriding discretion of the Court.[19] It is well understood that they are best regarded as ‘rules of thumb’ having been formulated in relation to the exercise of the Court’s discretion on costs in many and varied circumstances.
[18] UCR 194.4(1).
[19] UCR 194.5(1)(d).
The unifying factor underlying many of the general costs principles is that in determining an award of costs, the Court is endeavouring to ascertain which party caused or contributed to the incurring of the costs in question.[20] This is because an award of costs is compensatory in the sense they are awarded to indemnify the successful party against the expense they have been put to by reason of the legal proceeding brought by the unsuccessful party. They are not awarded to punish the unsuccessful litigant. Hence the general principle that costs follow the event.
[20] Mayfield Family Wines Pty Ltd v Growers Wine Group Pty Ltd (No 2) [2021] SASC 75 (Mayfield) at [6] citing Koonara Management Pty Ltd (Receivers and Managers Appointed) v Fabriano Pty Ltd [2019] SASC 99 at [51]; Bell v Deputy Coroner of South Australia (No 2) [2020] SASC 77 at [24]; Duncan as Liquidator of WDR Iron Ore Pty Ltd (In Liquidation) v SMA Industries Pty Ltd (No 2) [2020] SASC 127 at [29].
Of course, the exercise of the Court’s discretion on costs in any case must be decided on its own facts having regard to the relevant costs principles.
In determining the costs of an interlocutory application, it may be appropriate for the Court to order:
·that the unsuccessful party pay the costs of the application of the successful party regardless of the ultimate event in the proceeding
·that the costs of the application be costs in the cause
·that there be no order as to the costs (each party bears its own costs) or
·that the costs of the application be reserved to the trial judge to be determined when the outcome of the proceeding is known.
The appropriate costs order in any case will principally be informed by an analysis of the proximate cause of the incurring of the relevant costs and whether the Court can be confident about its determination at an interlocutory stage of the proceeding.[21] Relevant considerations include whether at the stage of the proceeding the costs incurred are merely part of the overall costs of the action, whether the outcome of the application is mixed and whether the application finalises a discrete issue or depends on contingencies in the proceeding yet to occur. Different considerations apply to different types of interlocutory applications.
[21] Mayfield op cit at [9].
As for interlocutory injunctions, Blue J explained in Mayfield:[22]
The analysis in relation to an interlocutory application for an interlocutory injunction is more complex. If the applicant for the interlocutory injunction fails to establish a prima facie case (or a reasonable case to be tried) and the application is consequentially dismissed, it may be that it is an appropriate exercise of the discretion to order that the applicant pay the costs of the interlocutory application. However, most applications for interlocutory injunctions are decided on the “balance of convenience”. The principal purpose of an interlocutory application is to regulate the interim rights and liabilities of the parties on a basis that is most fair and equitable pending the ultimate determination of the ultimate rights and liabilities of the parties (assuming that the applicant establishes a prima facie case). The balancing exercise may be finely tuned and in any event involves the exercise of a discretion. As a result, it will often be the case that the Court is not at that stage in a position to analyse confidently which party caused the incurring of the costs of the interlocutory application and often an order will be made that the costs be costs in the cause.
[22] Ibid at [11].
For more common interlocutory applications such as for discovery, the results are often mixed (such as where they partly succeed). The appropriate costs order might be that the costs of the application are costs in the cause or no order is made. However, where there is complete or substantial success, costs might follow the event of that application because the proximate cause of the incurring of the costs is that the unsuccessful party resisted the application.[23]
[23] Ibid at [10].
As for the pre-action protocols in UCR Chapter 7, Part 1, their object is to encourage parties to resolve a dispute before commencing proceedings.[24] The intent of the steps required to be taken is to inform the parties’ decision making about settlement by requiring the parties to exchange as much cogent information as possible about the issues in dispute.
[24] UCR 61.1(a).

There are harsh costs consequences for non-compliance. Under UCR 61.14(4), unless there is good reason to order otherwise, if an applicant failed to serve a pre-action claim in breach of UCR 61.7 or instituted the proceeding in breach of UCR61.13, the applicant must pay the non-defaulting party’s costs of a special direction hearing (to determine whether orders should be made for any pre-action steps to be taken) and any costs thrown away by reason of any breach on an indemnity basis, payable in a lump sum forthwith. Under UCR 61.13(2), unless the Court orders otherwise, in addition to the consequences of non-compliance under Division 6, an applicant who breaches this rule is not entitled to recover the costs of preparing, filing or serving the claim.
Non-compliance with Pre-action Protocols
The Issues
Despite certifying in its claim that the required pre-action steps had been taken, Sushi had not served a pre-action claim or held a pre-action meeting in accordance with UCR 61.7 and 61.12 before it commenced proceedings. It is not known why the certification was incorrect, but that ultimately does not matter. There is no dispute that it did not comply with the pre-action steps required to be taken under the UCR.
Instead, when it instituted the proceeding on 31 October 2024, Sushi sought dispensation from its pre-action obligations under UCR 61.8 in tandem with the injunctive relief sought in its interlocutory application FDN 2.
In his supporting affidavit, Mr Hasan deposed that Sushi had not complied with the pre-action steps because at the time of filing its claim it was seeking an interlocutory injunction to restrain Revsa from taking any further steps to prejudice its rights under the lease and he feared that without commencing the action and injunctive relief, Revsa would continue to take steps to prejudice its rights.[25] I accept Mr Hasan’s unchallenged evidence to this effect, bearing in mind his then limited knowledge (i.e. pre-action) about the dealings between Revsa and McDonald’s as disclosed by the other evidence before me.
[25] Exhibit A4 (FDN 3) [53]-[56].
The Parties’ Contentions
Despite Sushi’s dispensation application, Revsa contends that under UCR 61.13(2), by reason of its non-compliance with its pre-action obligations, Sushi is not entitled to the costs of preparing, filing and serving its claim and, under UCR 61.14(4), Revsa is entitled to the costs of the injunction and the transfer applications as costs thrown away, on an indemnity basis and payable forthwith. For the injunction application FDN 12, Revsa seeks a lump sum of $67,078.65 excluding GST, payable forthwith.[26] For its transfer application FDN 5, Revsa seeks costs a lump sum of $769.80 excluding GST, payable forthwith.[27]
[26] Affidavit of Jonathon De La Hoyde made on 11 December 2024 (FDN 26) (De La Hoyde Affidavit) [48b].
[27] Ibid [48a].
The foundation of Revsa’s costs claims is its contention that the taking of pre-action steps would have made a material difference to where the action was first instituted and the extent of the parties’ argument as to the relief against forfeiture. It is submitted that the pre-action steps would have allowed the parties to ventilate the issue of the appropriate forum and explore the rights of the third party McDonald’s thereby avoiding the argument on the injunction and almost all of the costs incurred by Revsa.
Sushi opposes Revsa’s costs claims, relying on its dispensation application in the circumstances of the unchallenged evidence of its Chief Financial Officer, Mr Hasan, as to the urgency of the injunction application and his fears that Revsa would continue to take steps that prejudiced its rights under the lease. Sushi also points out that Revsa has not applied for any special directions hearing within the meaning of UCR 61.14 and seeks costs orders beyond the contemplation of UCR61.14(4).
As to Sushi’s last contention, it should be accepted, as Revsa contends, that the Court has the power to make an indemnity costs order payable forthwith not only for the costs of a special directions hearing but for whatever costs it considers were costs thrown away by reason of an applicant’s non-compliance with UCR Chapter 7, Part 1. The power to do so is expressly provided in UCR 61.14(4) and within the Court’s general discretion as to costs under s 42 of the District Court Act.
Costs Thrown Away
That said, I do not consider that Revsa’s costs of the injunction and the transfer applications are costs thrown away by reason of Sushi’s non-compliance with the pre-action protocols. I am simply not persuaded that the taking of pre-action steps would have made a material difference and avoided the injunction and transfer applications in the circumstances of this case for the following reasons.
First, there is the long history of the dispute. The parties were entrenched in a long running dispute about a minor underpayment of rent following sizeable defaults by Sushi’s franchisee during 2022 and 2023 that had been remedied. Sushi terminated its franchisee’s sub-lease and took over the tenancy of shop FC09A. By July 2024, an impasse had been reached over the alleged arrears following dispute correspondence about an unpaid invoice for over a year in the amount of $6,460.41 that was inexplicably reduced to an outstanding balance of $4,259.06 in a final statement. Sushi claimed it had paid the invoice. Revsa said not. I was unable to reconcile the accounting records in evidence and determine where the merits lay. This dispute of fact will need to be resolved by the trial judge. Whilst Sushi claims it does not know why Revsa claims there was an unpaid amount, the parties well knew each other’s position on the arrears dispute and both were entrenched in their opposing positions.
Revsa then made a demand for payment on 30 August 2024. Payment was not made until 5 September 2024 under protest, by which time Revsa had given a notice of termination of the lease. Sushi claimed the termination was unlawful and it was entitled to re-enter. Revsa disagreed. The solicitors correspondence exchanged shows the parties knew the other’s position.
As for the injunction application, Mr Hasan of Sushi gave unchallenged evidence as at 31 October 2024 that he believed Revsa was intending to install a new tenant which appeared to be McDonald’s or its franchisee but he did not know whether any incoming tenant had been informed of Sushi’s claim to be entitled to re-enter and occupy shop FC09A. That Mr Hasan knew by 31 October that its fit-out had been gutted or that McDonald’s or its franchisee was the proposed tenant is not to the point. What is important is that pre-action, Sushi lacked cogent information about Revsa’s dealings with McDonald’s that affected critical issues in dispute about the conscionability of the Revsa’s conduct and McDonald’s knowledge of Sushi’s interest in shop FC09A and Revsa knew this.
Yet, pre-action, Revsa did not take the opportunity to inform Sushi of McDonald’s rights under the AFL executed on 8 October 2024 in circumstances where the parties had engaged (unsuccessfully) in without prejudice negotiations, both directly and through their solicitors until 9 October 2024.
Whilst the substance of the parties’ without prejudice negotiations pre-action is not known (because their communications are the subject of without prejudice privilege), it is apparent that Revsa did not tell Sushi about McDonald’s leasehold interest until after the claim was served. This should be inferred from the evidence that Mr El-Hazouri of Revsa would have told someone from Sushi about McDonald’s interest if there had been a pre-action meeting,[28] but he did not because there was not one. The first mention of McDonald’s leasehold interest is in Revsa’s solicitors letter of 11 November 2024.[29]
[28] De La Hoyde Affidavit [31].
[29] Exhibit R8, Annexure A.
There is nothing to suggest that the taking of pre-action steps would have avoided the transfer application.
Having concluded that the costs of the injunction and transfer applications are not costs thrown away by reason of Sushi’s non-compliance with its pre-action obligations, this ground of Revsa’s application for costs under UCR 61.14(4) fails.
Delay
The delay between 31 October and 11 November 2024 in filing the injunction application and supporting affidavit is unfortunate. Whilst there is some force in Revsa’s criticism that Sushi could have put it on notice of its claims by serving the unsealed application and affidavit and the delay arising, this does not advance Revsa’s complaints about breach of the pre-action protocols. By then, Sushi had elected not to serve a pre-action claim and instead applied for dispensation from compliance under UCR 61.8.
Costs of Preparing, Filing and Serving the Claim
It is not appropriate at this interlocutory stage to determine whether Sushi should be denied the costs of preparing, filing and serving its claim under UCR 61.13(2).
The substance of the parties’ without prejudice communications is properly not before the Court. Without this correspondence, the Court cannot consider the parties’ conduct pre-action and specifically, whether either party unreasonably failed to accept an informal offer or a better informal offer that was made pre-action although not in compliance with UCR Chapter 7, Part 1. These are important considerations relevant to the Court’s discretion to depart from the presumptive rule in UCR 61.13(2).
Accordingly, the consequences of Sushi’s failure to serve a pre-action claim under UCR 61.13(2) should be reserved to the trial judge to determine when the Court ultimately considers orders relating to the costs of the proceeding in accordance with UCR 61.16.
Dispensation under UCR 61.8
The same conclusion follows for Sushi’s application for dispensation from compliance with its pre-action obligations under UCR 61.8. To properly determine Sushi’s dispensation application, the Court should have before it the parties’ pre-action without prejudice correspondence. Without this evidence, the Court is unable to assess the reasonableness of the parties’ conduct overall as relevant to Sushi’s failure to comply with its pre-action obligations under UCR Chapter 7, Part 1.
Accordingly, Sushi’s application for dispensation from compliance with its pre-action obligation under UCR 61.8 should also be reserved to the trial judge to determine when the Court considers orders relating to the costs of the proceeding. It follows that Revsa’s contentions against any dispensation being given should properly be ventilated at that time.
FDN 2 – Interlocutory Injunction
As between Sushi and Revsa
In the alternative to its claim for costs thrown away under UCR 61.14(4), Revsa seeks an order against Sushi for the costs of the injunction application as costs related to a discrete issue in the proceeding that has been fully resolved.
Revsa’s contention that Sushi was the unsuccessful party on a discrete application that is now fully and finally resolved should be accepted.
The injunction was discharged in the peculiar circumstances of this case where at the 22 November hearing, Sushi pressed for continuation of the injunction until it had the opportunity to review the documents sought in its (late) urgent discovery application concerning the issue of McDonald’s (actual and constructive) knowledge of its alleged proprietary interest in shop FC09A. Sushi pressed its application despite having had informal production late on 20 November of a substantial volume of the documents it sought be formally produced by order of the Court.
Sushi had also been served with Mr Swaney’s affidavit that deposed to McDonald’s actual lack of notice of Sushi’s claims and the significant prejudice arising from continuing delay to its fit-out works.
Since 11 November 2024, Sushi was on notice that Revsa opposed the injunction on grounds of delay, the adequacy of damages as a remedy and the significant prejudice it caused to the rights of Revsa and the third party McDonald’s. As late as by letter dated 20 November 2024, Revsa’s solicitors reiterated that Sushi’s suspicion that the lease was terminated on false pretences was misconceived.
Sushi contended it could not be confident it had all the relevant documents to properly assess its position and pressed on.
I accepted there was utility in Sushi’s discovery application and made orders in substantively the form sought but limited the relevant period and did not require discovery on oath. Ultimately, the discovery application was found to be necessary. A substantial number of further documents were produced by Revsa, despite emphatic denials in solicitors correspondence and from the bar table that there were no more.
Following the discovery made by Revsa, Sushi gave notice by its solicitors letter dated 4 December 2024[30] that whilst it would be proceeding with its damages claim against Revsa, it would not be pressing for proprietary relief for shop FC09A or joining McDonald’s as a respondent.
[30] Part of exhibit MAR-1 to the affidavit of Michael Augustus Rydon made on 11 December 2024 (FDN 24).
Sushi submits that the costs of its unsuccessful injunction application should be costs in the cause and follow the ultimate event. It submits that in circumstances where it established a prima facie case but the injunction was discharged on the balance of convenience on evidentiary material received over the preceding days, the Court is not yet in a position to analyse confidently which party caused the incurring of the costs of the application.
I disagree. In this case, not only was the injunction discharged, but Sushi subsequently abandoned its proprietary claim and the basis for seeking the interim injunction in the first place. It must be borne in mind that the primary purpose of an interim or interlocutory injunction is to regulate the rights and liabilities of the parties fairly and equitably pending the ultimate determination of the dispute about their rights and liabilities. This was the basis upon which the Magistrate granted an interim injunction to preserve the status quo until the matter could be heard by the District Court. This was the basis upon which Sushi pressed for a continuation of the injunction at the 22 November hearing.
On a proper analysis, the proximate cause of the incurring the costs of the injunction application was Sushi’s unsuccessful prosecution of it for the purpose of preserving the status quo for a claim it subsequently abandoned. Sushi’s claim in damages for Revsa’s deliberate breach of the lease to “usher in its preferred tenant in McDonald’s”[31] is not so closely connected to the subject matter of the injunction application that the costs of the injunction application should follow the ultimate event. Many of the issues ventilated in the hearing of the unsuccessful injunction application are sufficiently discrete for it to be appropriate to treat the injunction application as finalised.
[31] Written Submissions of the Applicant (FDN 28) [9d].
The costs should not be reserved to the trial judge when they can be confidently dealt with now.
For these reasons, as between Sushi and Revsa, Sushi should pay the costs of Revsa of and incidental to the injunction application FDN 2, including 80% of the 22 November hearing (since 20% concerned the discovery application and is the subject of a separate costs order considered below).
Indemnity Costs
The next issue to consider is the proper basis of this costs order.
Revsa contends Sushi’s initiation and conduct of the proceedings justifies an order for costs on an indemnity basis. Relying on the principles distilled from the authorities in Colgate-Palmolive Co & Anor v Cussons Pty Ltd,[32] Revsa advances six reasons as justifying the departure from the usual rule that costs be awarded on a standard costs basis.
[32] (1993) 46 FCR 225.
The first two contentions are that Sushi acted unreasonably in instituting the proceedings in the Magistrates Court and by pressing the injunction application in wilful disregard to the known facts (being McDonald’s rights and the demolished status of shop FC09A) and the established law on relief against forfeiture where third party rights intervene. Thirdly, Sushi breached its pre-action obligations under the UCR. Fourthly, Sushi persisted despite Revsa’s repeated requests for it to withdraw its injunction application. Fifthly, Sushi was on notice that Revsa would seek indemnity costs if it persisted. Sixthly, the monetary relief sought against Revsa is significant and Sushi was unsuccessful on its application.
The Court’s discretion to award indemnity costs always depends on whether the circumstances of the case are such as to warrant the Court departing from the usual course.[33] I am not persuaded that the matters relied on, in isolation or collectively, justify an order for indemnity costs.
[33] Ibid at page 233 per Sheppard J.
First, I do not consider Sushi’s breach of its pre-action obligations favours an indemnity costs award. As discussed above, I am not persuaded that the taking of pre-actions steps would have avoided the injunction application. In any event, determination of the costs consequences of non-compliance with the pre-action protocols and Sushi’s dispensation application should be reserved to the trial judge.
Next, commencing in the Magistrates Court does not justify a higher basis of costs. The Magistrates Court is vested with jurisdiction to hear and determine matters under the Leases Act by virtue of s 68 of the Leases Act. There is no prohibition on the Magistrates Court determining matters that exceed its general jurisdiction of $100,000. The parties may waive any monetary limit on the civil jurisdiction of the Magistrates Court and, in any event, the Magistrates Court has jurisdiction to determine the action without regard to that limit.[34]
[34] Section 8(2) of the Magistrates Court Act 1991 (SA).
Sushi was entitled to commence the proceeding in the general jurisdiction of the Magistrates Court. The decision in Anders and Anor v NACS Nominees Pty Ltd[35] should be distinguished. Its focus was inappropriate forum and abuse of process contentions where a proceeding had been commenced in the Magistrates Court between the same parties, arising from the same factual substratum, raising the same factual issues and questions of law, and seeking relief identical to that claimed in the proceeding already pending in the District Court. That is not the case in this matter.
[35] [2013] SASC 152.
The proceeding was quickly transferred and heard within the week.
The costs of the transfer application should be addressed separately as below.
Nor is it persuasive that Sushi was on notice that Revsa would seek indemnity costs if it did not withdraw its injunction as Revsa demanded it do. The solicitors correspondence in evidence shows the parties took a different view of the merits of the injunction application where they had opposing commercial interests and Sushi did not know what had transpired between Revsa and McDonald’s. I am not satisfied Sushi breached its obligations under UCR 102.0 that required the parties to endeavour to resolve the issues the subject of an interlocutory injunction having regard to the solicitors correspondence.
The more compelling consideration is whether Sushi should have known, if properly advised, that there was no chance of success in pressing for the continuation of its injunction. Taking into account all of the known circumstances, I do not consider Sushi wilfully disregarded the facts and the established law in pressing its injunction application.
At the first hearing of the injunction application on 13 November 2024, Sushi did not know what had transpired between Revsa and McDonald’s. Indeed, before the Magistrate, Sushi’s injunction application succeeded on an interim basis. Matters then developed quickly. Revsa made informal production of a substantial volume of documents late on 20 November 2024. Further affidavit evidence was filed in the two days preceding the 22 November hearing.

At the hearing on 22 November, success in continuing the injunction pending further discovery depended on a number of matters being determined in Sushi’s favour. It was not wholly unsuccessful.
First, Sushi needed to persuade the Court that it was necessary for orders for further discovery to be made, which it did. This gave rise to some uncertainty about completeness of the information before the Court. Indeed, it was not until the further tranche of documents was formally produced that Sushi had a proper opportunity to assess the merits of its claims for equitable relief against Sushi and the proposed joinder of McDonald’s.
As regards continuation of the injunction, Sushi did not fail because it did not establish a prima facie case. Instead, the application was decided on the balance of convenience. A key consideration in this regard was the intervention of McDonald’s rights as a third party. The primary evidence on this topic was adduced in Mr Swaney’s affidavit, sworn the preceding day. The Court was required to carefully consider the adequacy of Mr Swaney’s evidence (given he was one of the many representatives of McDonald’s involved) and what should properly be inferred as to McDonald’s actual or constructive notice of Sushi’s alleged interest in shop FC09A. These were nuanced matters the subject of competing submissions the Court was required to weigh to determine the balance of convenience. Ultimately, the balance of convenience favoured discharge of the injunction.
Overall, I do not consider Sushi’s conduct in pressing its injunction application unreasonable and justifies an order for costs against it in favour of Revsa on an indemnity basis. It is appropriate, as between Sushi and Revsa, that the costs of the injunction application be awarded on as standard costs basis.
Payable Forthwith
As between Sushi and Revsa, it would be inappropriate to order that the costs of any interlocutory application be payable forthwith. Either party might ultimately succeed with the result that costs liabilities should be set off. There is no basis for departing from the presumptive rule under UCR 194.4(8) that interlocutory costs orders are not to be taxed and become payable before final determination of the proceeding.
Senior Counsel/Two Counsel
Revsa seeks any costs orders made in its favour be certified fit for senior counsel and therefore two counsel.
The relevant question is whether it was reasonably necessary and proper for the adequate presentation of Revsa’s case at the 22 November hearing to be represented by both junior and senior counsel. [36] The answer depends on the nature and circumstances of the case at bar.
[36] Stanley v Phillips (1966) 115 CLR 470.
In the present case, despite the urgency of the listing and the flurry of correspondence, affidavits and submissions exchanged in the preceding days, the issues were relatively straightforward once the facts were distilled. The issues were not sufficiently complex or involved any special difficulty so as to justify two counsel attending or senior counsel presenting any party’s case.
Of course, it is for the litigant to make its own decision about who it engages to represent it and no criticism should be made of Revsa deciding that the issues were of such significance to it that it was prepared to incur the cost of engaging two counsel familiar with its business. That this was a reasonable commercial decision to make does not justify the expenditure as reasonably necessary or proper for the purposes of exercising the Court’s discretion on costs.
Interstate Counsel and Solicitors
As is the usual practice, the reasonableness of the rates for interstate counsel and solicitors is a matter for the taxing master and not this Court.
As between Sushi and McDonald’s
For the following reasons, as between Sushi and McDonald’s, Sushi should pay McDonald’s costs of and incidental to the injunction application FDN 2 on a standard costs basis, payable forthwith on taxation or agreement, certified fit for junior counsel.
Referring to the explanatory note to UCR 21.1(4), Sushi contends that the costs rules as between the parties do not apply to McDonald’s and, despite its participation in the 22 November hearing, costs should not follow the discharge of the injunction. Further, McDonald’s gave no prior notice (either at the hearing or until 5 December 2024) that it would seek costs and made the forensic decision to apply for joinder as an interested party and not a respondent, with the attendant insulation from costs consequences. Sushi submits McDonald’s interests were adequately protected by Revsa, there was substantial duplication in the evidence adduced by both and McDonald’s were not bound by the injunction.
McDonald’s contends otherwise, relying on the Court’s unfettered discretion as to costs in the specific circumstances of this case.
Sushi’s submissions are not persuasive and McDonald’s claim for costs should be allowed for the following reasons.
Whilst the presumptive costs rules as between the parties do not necessarily apply to an interested party, the Court’s discretion as to costs for an interested party is unfettered and must be considered on the merits of the case at bar. Relevant factors include the nature of the interested party’s interest in the subject matter of the application, whether the interested party’s interests were adequately protected by an existing party and whether the interested party assisted the Court in identifying or elucidating issues or unnecessarily prolonged the length of the hearing.[37] Where the interested party’s involvement was necessary to protect its interests and has been of substantial assistance, an order for costs in its favour on a party’s unsuccessful application may be just and equitable.
[37] City of Burnside v Attorney-General of South Australia (1994) 63 SASR 65 at [57]-[62] per Debelle J; cited in Re Hyde (No 2) [2023] SASC 177 at [15] per Kimber J.
Here, Sushi was ultimately unsuccessful in prosecuting its injunction application in circumstances where McDonald’s was joined as an interested party under UCR 21.1(4), adduced important evidence and participated fully in the 22 November hearing. McDonald’s was a necessary party. It had possession of shop FC09A and Sushi could not seek proprietary relief for the return of shop FC09A or restrain it from continuing its fit-out works without its joinder to the proceeding. Sushi went further by asserting at the 22 November hearing that the injunction would prevent Revsa giving McDonald’s a disclosure statement under the Leases Act or executing a formal lease, despite Sushi (inconsistently) submitting McDonald’s was not bound by the injunction.
McDonald’s interests were not co-extensive with those of Revsa. Whilst they shared a common interest in the injunction being discharged, their legal positions were quite different, they had distinct and separate commercial interests and risked suffering different prejudice from the continuation of the interim injunction. There was insufficient commonality and overlap in their positions to find that Revsa could have adequately protected McDonald’s interests. McDonald’s adduced significant evidence that was important in determining whether the injunction should be continued until further discovery and production was made by Revsa. Contrary to Sushi’s submissions, its participation was of substantial assistance at the 22 November hearing.
Mr Swaney’s affidavit showed that Revsa was not in a position to adequately protect McDonald’s interests. Much of its contents concerned matters peculiarly within McDonald’s knowledge, such as its lack of notice of Sushi’s claimed interest in shop FC09A, the status of the fit-out works and the significant prejudice that would be caused by further disruption and delay from the continuation of the injunction.
In the circumstances, by unsuccessfully pressing for the continuation of the injunction at the 22 November hearing Sushi was the proximate cause of McDonald’s incurring the costs of resisting the continuation of the injunction. Sushi took this course despite the sworn evidence of Mr Swaney that McDonald’s did not know about Sushi’s claims before 15 November 2024 and having had production of 139 documents recording the dealings between Revsa and McDonald’s over McDonald’s Premises and shop FC09A.
That this all occurred very quickly does not alter the analysis as to responsibility for McDonald’s incurring costs in successfully resisting the continuance of the injunction at the 22 November hearing. As between McDonald’s and Sushi, the Court can be confident that the proximate cause of McDonald’s incurring the costs of resisting the injunction application was its unsuccessful prosecution by Sushi.
McDonald’s contentions that any costs order in its favour should be made forthwith should be accepted. There is now finality between Sushi and McDonald’s by reason of Sushi’s decision not to join McDonald’s or press its claims for proprietary relief for shop FC09A. There is no good reason to await the trial determination of the proceeding as between Sushi and Revsa when McDonald’s has no further role to play.
FDN 5 – Transfer Application
In the alternative to its claim for costs thrown away under UCR 61.14(4), Revsa seeks an order against Sushi for the costs of its transfer application as costs related to a discrete issue in the proceeding that has been fully resolved.
For the following reasons, as between Sushi and Revsa, the costs of and incidental to the transfer application FDN 5 (but not the costs of the 13 November 2024 hearing) should be costs in the cause.
The transfer application was filed on 12 November 2024 and supported by a brief solicitor’s affidavit.[38] This affidavit exhibited Revsa’s solicitors letter dated 11 November 2024 that, among other things, complained that the proceedings had been commenced in the wrong jurisdiction (because the damages claimed were $450,000) and reserved Revsa’s rights to make an application to transfer the proceeding without further notice.
[38] Exhibit R8 (FDN 6).
Sushi’s solicitors responded by letter dated 12 November 2024. This letter principally addressed Sushi’s application for an interim injunction and its purported urgency. In this context, the letter advised that Sushi had no objection to the transfer of the proceeding to the District Court:[39]
…in the event that appropriate undertakings, or if your client declines to proffer any undertaking, our client’s application for an injunction is heard initially on an urgent basis by the Magistrates Court.
[39] Exhibit A5, page 10 of 33 of the exhibit.
It is unclear whether Revsa solicitors had received Sushi’s solicitors 12 November letter before the transfer application was filed. Its absence from Revsa’s supporting affidavit suggests not. However, that it may not have received this letter does not favour Revsa’s application for the costs of the transfer application. It seems a decision was made to incur the cost of making a formal application to transfer not knowing whether it would be opposed.
In the circumstances, a telephone call to the opposing solicitor should have been made to see if it was necessary to make a formal application. If an oral application has been made to the Magistrate, whether by consent or unopposed, the transfer order would have been made as of course as it was the following day.
The transfer application was by and large subsumed by the greater dispute about the injunction application and its purported urgency. The professional costs and disbursements referable to the transfer application ($904.20 including GST) are minor in scheme of things. Whilst Sushi commenced in the Magistrates Court, it was entitled to do so for the reasons discussed above. Similarly, Revsa, was entitled to apply to transfer the proceeding to the District Court.
Overall, it is appropriate, as between Sushi and Revsa, that the costs of and incidental to the transfer application FDN 5 (but not the costs of the 13 November 2024 hearing) be costs in the cause. The costs of the 13 November 2024 hearing should be part of the costs of the injunction application.
FDN 12 – Discovery and Production
For the following reasons, as between Sushi and Revsa, the appropriate costs order for the discovery application FDN 12 should be that costs be in the cause, allowing 20% of the 22 November hearing for the time taken to deal with it.
Despite the reformulation of the categories of documents sought and refusal that discovery be on oath, Sushi was substantially successful in its application. Contrary to Revsa’s submission, there was not a significant reduction in the substantive categories sought. Two categories of four were omitted because they sought the same documents in different terms when one would do. Truncation of the relevant time period was a more important consideration.
However, the breadth of the categories sought was not the basis of Revsa’s opposition to the application.
The application was opposed by Revsa principally because it was said to be unnecessary on two grounds. First, because Revsa had “already done it”.[40] Revsa contended it had promptly responded by making “full discovery” by voluntarily producing 139 documents on an informal basis late on 20 November 2024. An emphatic response had been given in solicitors correspondence that there were no more documents to find.[41]
[40] T.19.18.
[41] T18.21-.26;18.36-.37
Secondly, Sushi had unnecessarily pressed its discovery application despite knowing from Mr Swaney’s affidavit that McDonald’s did not have notice of Sushi’s alleged interest in shop FC09A until 15 November 2024.
At the 22 November hearing, Sushi challenged the adequacy of the discovery and production made and its informality. It contended that until it could be satisfied it had all the relevant documents it was unable to assess whether McDonald’s had constructive notice of its alleged proprietary interest.
Ultimately, some 40 further documents were formally discovered and produced as a result of further investigations by an employee of Revsa.[42]
[42] Exhibit JWB-1 to the affidavit of Jonathon William Brooking made on 18 December 2024 (FDN 29).
In the circumstances that unfolded, it cannot be said the application was unnecessary. More documents were produced. The application also had utility to the action overall. It informed Sushi’s subsequent decision to proceed with its claim for damages but not to press its claim for proprietary relief against Revsa or join McDonald’s as a respondent.[43] Practically speaking, the application brought forward discovery and production of discoverable documents that would otherwise have been costs that would follow the event of the action.
[43] Exhibit MAR-1 to the affidavit of Michael Augustus Rydon made on 11 December 2024 (FDN 24).
That the application was made late and specially returnable to the 22 November hearing on short notice has no bearing on the question of the appropriate costs order for the discovery application.
The Costs of the Costs Applications
As between Sushi and Revsa, the outcome of the various costs applications was mixed. Taking a broad-axe approach, there should be no order for the costs of the parties’ applications for costs.
As between Sushi and McDonald’s, McDonald’s as the successful party should have the costs of its application for the costs of the injunction application, on a standard costs basis, payable forthwith on taxation or agreement, certified fit for junior counsel.
Orders to be Made
The following orders should be made:
1.As between the parties, Sushi and Revsa:
1.1   Revsa’s application for the costs of the injunction application FDN 2 and transfer application FDN 12 as costs thrown away under UCR61.14(4) is dismissed.
1.2   The question of costs under UCR 61.13(2) for Sushi’s failure to serve a pre-action claim is reserved to the trial judge to be determined when the Court ultimately considers orders relating to the costs of the proceeding in accordance with UCR 61.16.
1.3   Sushi’s application for dispensation from compliance with its pre-action obligations under UCR 61.8 is reserved to the trial judge to be determined when the Court ultimately considers orders relating to the costs of the proceeding together with the question of costs under UCR61.13(2).
1.4   Sushi is to pay Revsa’s costs of and incidental to the injunction application FDN 2, including 80% of the 22 November hearing, on a standard costs basis, payable after final determination of the proceeding on taxation or agreement, certified fit for junior counsel.
1.5   The costs of and incidental to the transfer application FDN 5 (but not the costs of the 13 November 2024 hearing) are to be costs in the cause. The costs of the 13 November 2024 hearing are to be treated as part of the costs of the injunction application FDN 5.
1.6   The costs of and incidental to the discovery application FDN 12 are to be costs in the cause, allowing 20% of the 22 November 2024 hearing in dealing with it.
1.7   There will be no order as to the costs of and incidental to the determination of these costs orders.
2.As between Sushi and McDonald’s, Sushi is to pay McDonald’s costs of and incidental to the injunction application FDN 2, including the costs of McDonald’s application for costs, on a standard costs basis, payable forthwith on taxation or agreement, certified fit for junior counsel.