Todarello Property Investments Pty Ltd v GJA Kalra Pty Ltd (No 2) [2022] NSWSC 379

Supreme Court New South Wales

Medium Neutral Citation: Todarello Property Investments Pty Ltd v GJA Kalra Pty Ltd (No 2) [2022] NSWSC 379 Hearing dates: On the papers Date of orders: 4 April 2022 Decision date: 04 April 2022 Jurisdiction: Equity Before: Darke J Decision: See at [9]. Catchwords: COSTS – proceedings between landlord and tenant – where parties had mixed success on principal issues – where defendant ought be regarded as having enjoyed more success than the plaintiff – order made that plaintiff pay half of defendant's costs Cases Cited: Todarello Property Investments Pty Ltd v GJA Kalra Pty Ltd [2021] NSWSC 1678 Category: Costs Parties: Todarello Property Investments Pty Ltd (Plaintiff/Cross-Defendant) GJA Kalra Pty Ltd (Defendant/Cross-Claimant) Representation: Counsel: Mr P Afshar (Plaintiff/Cross-Defendant) Mr J Mack (Defendant/Cross-Claimant)

Solicitors:

KB Legals (Plaintiff/Cross-Defendant) Felicio Law Firm (Defendant/Cross-Claimant) File Number(s): 2020/317719 Publication restriction: None

Judgment 1. On 20 December 2021 the Court gave judgment in these proceedings between the plaintiff landlord and the defendant tenant (see Todarello Property Investments Pty Ltd v GJA Kalra Pty Ltd [2021] NSWSC 1678). The principal issues in the case were: 1. whether the defendant validly exercised an option for a renewed lease in 2019; 2. whether the plaintiff validly terminated the lease in October 2020 for breaches by the defendant and, if so, whether relief against forfeiture should be granted to the defendant; and 3. whether the plaintiff was entitled to recover outstanding amounts of rent and outgoings due under the lease. 1. Issue (1) was determined favourably to the defendant. So, too, was issue (2), the Court finding that the lease had not been validly terminated and, even if it had been, relief against forfeiture would have been granted. Issue (3) was eventually resolved by agreement between the parties. On the basis of that agreement, reached in November 2021, a judgment was entered in favour of the plaintiff in a sum of slightly more than $124,000. 2. The outcome of the proceedings was thus one which involved a mixture of success and failure for each party. At [88] of the earlier judgment I stated that there was something to be said for the view that there be no order as to costs, to the intent that each party bear its own costs of the proceedings. However, the parties did not agree that this would be the appropriate outcome regarding costs. Accordingly, directions were made for written submissions to be provided, with a view to having the question of costs determined on the papers. 3. I have read and considered the written submissions provided, including the material, attached to the plaintiff's submissions, in the nature of settlement offers made in the period from 20 September 2021 to 5 November 2021. 4. The defendant, by its submissions dated 14 February 2022 and 9 March 2022 (in reply) contends that the plaintiff should pay its costs of the proceedings, or alternatively, that each party bear its own costs with all existing costs orders to be vacated. The plaintiff, by its submissions dated 2 March 2022, contends that the Court should order each party to pay its own costs, with existing costs orders to remain in place. It should be noted that the plaintiff has the benefit of a costs order made on 16 June 2021 (the day scheduled for the final hearing) that the defendant pay the plaintiff's costs thrown away by reason of leave being granted to the defendant to file and serve further evidence. That grant of leave effectively caused the hearing to be adjourned. 5. I have come to the conclusion that it would be appropriate to order that the plaintiff pay 50% of the defendant's costs and that the existing costs order in favour of the plaintiff remain in place. That conclusion is based upon a broad brush appraisal of the relative degrees of success and failure obtained by the parties, and my assessment that the costs order made against the defendant on 16 June 2021 should stand. 6. In short, the defendant, having succeeded on two of the three principal issues, ought be regarded as having enjoyed more success than the plaintiff. The plaintiff should be regarded as having succeeded on the remaining issue, albeit that it was ultimately the subject of an agreement between the parties. The agreement reflected the reality that the defendant had failed to pay a substantial sum due under the lease, even if the precise amount outstanding was uncertain due to the operation of the COVID-19 legislation that applied to the lease. In this respect, I have taken into account the conduct of the parties concerning the rent and outgoings dispute, including in seeking and providing financial information relevant to the COVID-19 legislation, and the payment into Court made by the defendant. 7. Viewing the matter overall, it seems to me that it would be appropriate for the defendant to receive recompense from the plaintiff for half of its legal costs. However, I can see no good basis to disturb the costs order made against the defendant on 16 June 2021. The defendant's belated effort to adduce further evidence resulted in an adjournment of the hearing. That would have undoubtedly caused the plaintiff to incur legal costs unnecessarily. The plaintiff should be compensated for that expense. 8. For the above reasons, the Court will make the following orders: 1. Order that the plaintiff/cross-defendant pay 50% of the defendant/cross-claimant's costs of the proceedings; and 2. Note that the costs order made on 16 June 2021 in favour of the plaintiff remains in force.