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[2026] NSWSC 504
Supreme Court of NSW
2026-05-12
Muston J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Allied Pinnacle Pty Ltd v G R Mailman & Associates Pty Ltd (No 2) [2026] NSWSC 504
Hearing dates: 2 April 2026
Date of orders: 13 April 2026
Decision date: 12 May 2026
Jurisdiction: Equity
Before: Muston J
Decision: See [41].
Catchwords: CIVIL PROCEDURE – variation of interlocutory orders – where previous hearing dealt with “liability issues” – where issue has arisen regarding scope of referral to a referee – whether scope issues are “liability issues”
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) r 36.16
Cases Cited: Allied Pinnacle Pty Ltd v G R Mailman & Associates Pty Ltd [2026] NSWSC 87
Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44
Liu v The Age Company (2016) 92 NSWLR 679; [2016] NSWCA 115
Nominal Defendant v Manning (2000) 50 NSWLR 139; [2000] NSWCA 80
State of New South Wales v Hollingsworth (No 2) [2023] NSWCA 283
Category: Consequential orders
Parties: Allied Pinnacle Pty Ltd (Plaintiff)
G R Mailman & Associates Pty Ltd (Defendant)
Representation: Counsel:
T Castle SC w/ S Erian (Plaintiff)
P Herzfeld SC w/ S Puttick (Defendant)
Solicitors:
Thomson Geer (Plaintiff)
Ashurst (Defendant)
File Number(s): 2025/00316240
On 19 September 2025, Pike J gave directions in these proceedings for the filing of evidence by the parties “in support of the liability issues” and listed the matter for hearing in December 2025 “on all issues of liability”. That hearing was conducted before me. For ease of reference, I will describe that phase of the proceedings as the “liability hearing”.
The plaintiff’s written opening submissions filed in connection with the liability hearing expressly stated that:
“The parties are agreed that the hearing concerns liability only. A damages assessment by a referee may only be required if the cross-claim is successful.”
An equivalent statement was made by the defendant in its written opening submissions.
At the commencement of the liability hearing, the following exchange took place between Mr Castle SC (who appeared for the plaintiff), Mr Giles SC (who then appeared for the defendant) and I:
“HIS HONOUR: Yes, okay. I think I understand how it all fits together. Then can I ask is there essentially a fourth issue around the - let's assume the answers to one, two and three are all no and we have this residual question about the uncontroversial make good obligations. Is there some residual issue around both a bank guarantee and something that needs ultimately to be referred out for determination by a referee?
CASTLE: On that hypothesis, yes. My learned friend and I, I think, are agreed that if any quantification issue arose it would go to a referee. Just procedurally one thing which has not been done is to formulate and have a separate question. The history of this is that there was a directions hearing before Pike J in September. In [the] orders that were made, [there] was only a requirement for the parties to put on evidence about, in effect liability, not damages.
HIS HONOUR: I understand.
CASTLE: The common view was that any damages would be dealt with later.
HIS HONOUR: I'm proceeding today though on the assumption that I'm not being asked to determine a separate question but rather I am hearing this matter on a final basis--
CASTLE: Your Honour is.
HIS HONOUR: --with the general understanding between the parties that on any question of the quantification of damages that that would be as part of the final determination of the matter referred out to a referee for quantification and some question or characterisation of exactly what the referee is going to be asked to do if that eventuality arises is something that will need some thought, I think.
CASTLE: That's correct. Can I just pick up one thing your Honour has said and then - my learned friend wishes to say something.
GILES: Can I hand up to your Honour what was going to be a proposal for the separate question?
HIS HONOUR: Thank you.
GILES: Because at some point, I'm not suggesting right now, we'd better get this onto the right procedural footing. The way that we've framed it is by reference to our learned friend's pleading and picking up the three issues that we have identified. We gave that to our learned friend a couple of minutes before your Honour came on the bench. I'm not suggesting that this need be sorted now. Conceptually what your Honour's just put to our learned friend is what the parties are seeking to achieve.
HIS HONOUR: This is the separate question that you--
GILES: That's essentially our learned friend's contract pleading and unconscionable conduct pleading.
HIS HONOUR: Okay. Once Mr Castle's had an opportunity to think about that, let's return to it because there's a conceptual question about whether today is a separate question hearing or whether today is a final hearing and then there is some carved-out question for determination on damages.
GILES: Everyone agrees--
HIS HONOUR: Conceptually--
GILES: --that that which is not being determined by your Honour should go to a referee to work out how - if I'm otherwise correct in whole or in part, how much Mr Castle's client owes as damages for having failed to remove the 2015 fit‑out and for having failed to paint or do the residual make good.
HIS HONOUR: And/or.
GILES: And/or. Quite.
CASTLE: Can I say this, your Honour, I actually prefer your Honour's formulation to that proposed by my learned friend for this reason: that when I look at it, and I haven't had a chance to study it--
HIS HONOUR: Let's come back to it. I don't need to hear you on that right now, but at some point before we adjourn I will need to work out exactly what‑‑
CASTLE: Probably after lunch I think we'll--
HIS HONOUR: --it is conceptually we're doing.
CASTLE: --deal with that.
GILES: We thought so.
CASTLE: I don't think there's any misunderstanding between us as to what we're about …”
“GILES: That's right and if I'm successful in part or whole I'll get-
HIS HONOUR: There'll be a next step.
GILES: There'll be a next step, there might be a question about the need for declarations alone, that maybe a neat way of tying up what we've done and a reference.
HIS HONOUR: Yes, well my thinking around it is that the formulation of the declarations and whether it's there or whether it's in the terms of the reference at some point if there is to be a next step in this case the person who's embarking upon that and the parties will need to know exactly what it is they're off to do.
GILES: What they're doing. Absolutely.
HIS HONOUR: Just the issue you raised a moment ago in response to the question that I was going to ask but you got in before me around well what do we make of things like the, you know, to what extent has loss actually been suffered and how does that fit into it, we need to work out exactly where that sits in the landscape in terms of resolving any residual dispute. Is it something that also needs to be quantified by a referee for example, is it something that needs to be resolved now so the referee can then go and deal with it or is it something that needs to be resolved at the time of the adoption of the referee's report.
Feels to me just thinking out loud that in the event that we need to go anywhere from here, having a pretty clear understanding of both sides of that coin, namely the quantification of cost of doing any works that might still be required to be done and at least an identification of what might be being quantified in terms of an assessment of the loss that might be suffered or the impact that the absence of actually suffering loss might have on what happens is something that would be useful to--
GILES: I think it should be thought about and it may--
HIS HONOUR: --tease out.
GILES: --also depend on--
HIS HONOUR: Where we end up.
GILES: --where we end up and the identity of the referee. If we just have a QS then legal issues in advance might be a good idea if we have someone who's--
HIS HONOUR: Yes, I understand that.
GILES: --legally qualified, assisted by expert evidence then it might be best done on an adoption.
HIS HONOUR: Yes, well I can hear the, ultimately in due course if necessary, I can hear--
GILES: But that's something to be thought about.
HIS HONOUR: --the parties in relation to it…”
Beyond this, the issue was left largely unresolved.
On 17 February 2026, I published reasons in relation to the liability issues agitated by the parties in the liability hearing: Allied Pinnacle Pty Ltd v G R Mailman & Associates Pty Ltd [2026] NSWSC 87. I will assume familiarity with those earlier reasons.
After delivering my earlier reasons, I directed the parties to provide short minutes of order containing the orders required to facilitate the assessment of damages by a referee.
If agreement on the form of those orders could not be reached, I directed that a single set of orders, marked-up to reflect the differences between the parties be provided. I further invited the parties to provide written submissions, not exceeding three pages each, addressing those areas of difference, and indicated that I would resolve any dispute on the papers.
Agreement was not reached in relation to the proposed orders. The parties each provided brief submissions. On 5 March 2026, I made orders referring to Stephen Bolt of WT Partnership Australia the following matters:
“1. The cost of performing the outstanding redecoration works as defined in paragraph [12] of the judgment of Muston J dated 17 February 2026 (Judgment) (and see also [140]) being:
a. the removal of loose furniture and equipment, including chairs, cabinets, couches and shelving;
b. the repainting of internal wall surfaces, plasterboard ceilings, and internal doors;
c. the cleaning of carpets and replacement of any carpet tiles in areas where existing floor coverings are sufficiently worn;
- The cost of painting all exterior surfaces of the Premises with at least two coats of first quality paint as stated in paragraphs [110] and [140] of the Judgment.”
“3. The cost of any other outstanding redecoration works in accordance with clause A24.1 of the lease of the Premises which had not been undertaken by the Plaintiff, including (but not limited to):
a. repair all damage, including but not limited to cracking or staining, to all surfaces within the demised premises, including plasterboard ceilings, floors, internal doors (including replacement or re-hanging of missing internal doors), walls and partitions;
b. preparing all external surfaces of the Premises to be painted, including cleaning and priming of all external surfaces;
c. repair (including, but not limited to, reseating, realigning and descaling) all plumbing items and sanitary wares in the bathrooms (including the replacement of damaged toilet seats), kitchens and other amenities of the Premises; and
d. removing all debris associated with the works that ought to have been undertaken by the Plaintiff;
- The cost of obtaining a test and tag electrical report (with an accompanying itemised schedule) to ensure all electrical items that have been left in the Premises, have been left in a safe condition;
- The cost of re-keying the Premises associated with the Plaintiff’s failure to return the keys to the Premises to the Defendant;
- What (if any) portion between the Plaintiff vacating the Premises on 14 August 2025 and 30 September 2025 (i.e., when the incoming tenant took possession) is attributable to the failure of the Plaintiff to perform the works referred to in 1 and 2. If any, what is the quantum of lost rent and outgoings for that period?; and
- What, if any, is a reasonable rental abatement (to be provided to the present tenant) to facilitate any additional redecoration works to be undertaken in accordance with items 1,2 and 3 of this Schedule.”
Based on what was – at least in one important respect – my misunderstanding of the issues which remained in dispute between the parties following my determination of the “liability issues”, I declined to refer any of those additional matters to Mr Bolt.
On 31 March 2026, the defendant requested that I relist the matter to address an issue which had emerged regarding the scope of the referral to the referee. That course was opposed by the plaintiff. I acceded to the defendant’s request.
Coincidentally, and unbeknownst to the parties, Mr Bolt had delivered a copy of his report addressing the issues which had been referred to him for consideration shortly prior to the relisting of the matter. A copy of that report was provided to the parties by my chambers as soon as it became apparent that it had not also been provided to them by Mr Bolt. For present purposes, nothing turns on the content of Mr Bolt’s report.
When the parties appeared before me, the defendant sought a variation of the 5 March 2026 orders so as to include, amongst the matters to be determined by Mr Bolt, the following:
“3. What was the cost of:
a. repairing damage, including but not limited to cracking or staining, to all surfaces within the demised premises, including plasterboard ceilings, floors, internal doors (including replacement or re-hanging of missing internal doors), walls and partitions; and
b. removal of all dyna bolts from the warehouse floor, and filling of the associated dyna bolt fixings?
- What (if any) portion of the period between the Plaintiff vacating the Premises on 14 August 2025 and 30 September 2025 (i.e., when the incoming tenant took possession) is attributable to the failure of the Plaintiff to perform the works referred to in 1, 2 and/or 3? If any, what is the quantum of lost rent and outgoings for that period?”
I will refer to what is set out in paragraphs 3 and 4 in the above extract as “proposed paragraph 3” and “proposed paragraph 4” respectively.
Several further variations to those orders, aimed at facilitating the preparation of a report addressing the additional matters, were also proposed. These ancillary variations are of no particular relevance for present purposes.
The plaintiff opposed the variations; initially contending that I lacked power to vary the orders made on 5 March 2026 and citing in support of this proposition Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’) r36.16 and the principles discussed in State of New South Wales v Hollingsworth (No 2) [2023] NSWCA 283 at [13]-[20]. The plaintiff, appropriately, retreated from that initial position.
The orders I made on 5 March 2026 were clearly interlocutory, as was ultimately accepted by the plaintiff. The Court retains jurisdiction to set aside, vary or discharge an interlocutory order up to the time of the final disposition of the proceedings: Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46.
As such, the real question in the present case is whether I should, in the proper exercise of that discretion, vary my 5 March 2026 orders.
The plaintiff argued I should not, contending that the matters the defendant had sought to have included in the reference were “liability issues” which had – or ought to have – been dealt with in the earlier hearing. Further, the plaintiff relied on the “ordinary rule of practice” referred to in Brimaud (at 46), to the effect that an interlocutory order of a substantive nature made after a contested hearing should not be revisited unless there has been a material change of circumstances or the discovery of fresh material.
In dealing with the contention that the two matters the defendant seeks to have added to the reference were “liability issues” which ought to have been addressed during the liability hearing, it is necessary to consider each matter separately.
The issue identified in proposed paragraph 3 can be dealt with quickly. It was implicitly recognised by the parties that the works contemplated in 3(b) formed part of the works the plaintiff was required, by the lease, to complete prior to vacating the premises. In its Amended Points of Claim, the plaintiff positively asserted that it had carried out these works. The defendant admitted that works “generally described” in that way had been undertaken, albeit denying that the plaintiff had thereby complied with its obligations under the lease.
The matters identified in proposed paragraph 3(a) were not explicitly addressed by the parties in their respective pleadings, but might reasonably be said to have formed part of the more general obligation that the plaintiff deliver up the premises in good repair and working order. This obligation most likely also captures the matters identified in proposed paragraph 3(b). That more general obligation was expressly relied upon by the defendant in its Points of Cross-Claim. It was further asserted – albeit in an unparticularised manner – that the plaintiff had failed to comply with this more general obligation.
Quantifying the costs associated with carrying out either of those categories of work is relevant only if, in breach of the lease, those works were not undertaken by the plaintiff before vacating the premises. In my view, that is a liability issue.
If the defendant wished to establish that the plaintiff had breached the lease by failing to carry out the works described in proposed paragraph 3(a) and (b), it ought to have done so in the context of the hearing of the “liability issues”. It did not. It was in no way relieved of the need to adduce evidence in support of that aspect of its breach claim at that hearing by the common understanding of the parties that the quantification of loss flowing from any breach was to be assessed by a referee at a later time.
The view I have expressed in the above paragraph underpinned the observations and findings I made in paragraphs [9]-[10] of my earlier reasons, and my refusal to include the quantification of matters similar to those in proposed paragraph 3 when making the 5 March 2026 orders.
In these circumstances – and despite the residual ambiguity about the precise nature of the liability hearing – I do not think it is appropriate to vary the orders I made on 5 March 2026 to include proposed paragraph 3(a) or (b). The defendant has not proved – and made no real attempt to prove – that the plaintiff failed to undertake these works before vacating the premises. As such, the defendant is not now entitled to recover the costs of completing those works and there is no utility in having those costs quantified by a referee.
Proposed paragraph 4 is in a different category. I do not accept the plaintiff’s characterisation of the matters addressed in that paragraph as a “liability issue”.
The plaintiff suggested that this position was in some way altered by the fact that an affidavit of Gregory Robert Mailman sworn 21 August 2025 was served by the defendant but not ultimately read in the proceedings. In that affidavit, Mr Mailman said:
“24. The Landlord has secured a new tenant for the Premises at a higher rent. The failure of the Tenant to yield up the Premises in the required condition is preventing the Landlord from providing access to the new tenant, causing the Landlord to suffer ongoing financial loss. At pages 110 and 147 of Exhibit GM-1 is a copy of the lease with the incoming tenant.”
In my view, nothing turns on this fact. That aspect of Mr Mailman’s affidavit was not relevant to the determination of any liability issue; in fact, this point was made by the plaintiff in foreshadowing its objections to Mr Maolman’s affidavit in advance of the liability hearing. The fact that an affidavit containing that evidence had been served by the defendant did not operate to expand the scope of the liability hearing to incorporate any quantum issue that might have been touched on in that affidavit.
The defendant’s Points of Cross-Claim expressly referred to “lost rent for the period 15 August 2025 to 30 September 2025 (inclusive)” as part of its particularisation of loss. Whatever ambiguity might exist in relation to the nature of the liability hearing, the quantification of any losses flowing from any established breach of the lease formed no part of it. Both parties made very clear that this quantification exercise was, by agreement between them, to be referred to a referee for assessment.
Having now had the benefit of more fully developed argument on this issue, I am comfortably satisfied that the issue addressed in proposed paragraph 4 is a genuine quantum issue and ought to have been included in the list of matters in the order for reference I made on 5 March 2026.
There may be question as to whether or not receiving this more developed argument amounts to a change in circumstances of the type contemplated by McLelland J in Brimaud. Nonetheless, his Honour also noted (at 46):
“The overriding principle governing the approach of the court to interlocutory applications is that the court should do whatever the interests of justice require in the particular circumstances of the case.”
That proposition was adopted with approval in Nominal Defendant v *Manning (*2000) 50 NSWLR 139; [2000] NSWCA 80 at [46] and Liu v The Age Company (2016) 92 NSWLR 679; [2016] NSWCA 115 at [13] and [199].
In the present case, it is in the interests of justice that the defendant be given an opportunity to recover such loss as it may have suffered as a result of the plaintiff’s breach of the lease. The interests of justice would not be well served by me now precluding the defendant from recovering one potential aspect of that loss by reason only of the circumstances in which the orders of 5 March 2026 came to be made.
I propose to vary the orders made on 5 March 2026 to incorporate proposed paragraph 4 into the Schedule to those orders.
Having regard to the nature of the defendant’s claim for lost rent, I have some doubt that a quantity surveyor is an appropriate person to refer this issue to. At one level, there is more to this issue than mere quantification of rent. The extent to which rent has been lost as a result of the plaintiff’s breach of the lease may be controversial. It may be that determining this issue will require consideration of evidence adduced by one or both parties.
Clearly it is important that this process be conducted in a fair manner which enables the plaintiff to test – to the extent necessary and appropriate – any evidence which might be adduced by the defendant on this issue.
At the conclusion of the hearing of the defendant’s application, I foreshadowed to the parties the views I have expressed above. On 10 April 2026, the parties provided orders which, they agreed, gave effect to the views I had expressed. On 13 April 2026, I made those orders in chambers.
The Court orders:
Pursuant to paragraph 5 of the orders made by Muston J on 5 March 2026 (Orders), the Schedule to the Orders be varied to include the following question:
“3. The number of days it ought reasonably to have taken to perform the works referred to in each of items 1-13 in Table 1 of the Report of Stephen Bolt dated 31 March 2026, which of those works were able to be completed concurrently and the total time to complete the works.".
“4.3.7 consideration of any submissions or statements in accordance with [4.4] below made by representatives of either party in support of their positions in respect of the question at item 3 of the Schedule and submitted to the referee and the other party by 20 April 2026;
4.3.8 consideration of any expert reports obtained by either party in support of their positions in respect of the question at item 3 of the Schedule, and submitted to the referee and the other party by 20 April 2026.”
“4.6 the referee submit a supplementary report to the Court in respect of item 3 of the Schedule, in accordance with Pt 20 r 23 addressed to the Equity Division Registrar on or before 30 April 2026, with such report not to exceed 5 pages (excluding annexures) and a copy of such supplementary report to be provided at the same time by email to the solicitors for the parties.”
(a) written submissions of no more than five pages, excluding annexures, as to:
(i) the adoption of the referee’s report dated 31 March 2026 and the referee’s supplementary report; (ii) quantification of the defendant’s cross-claim; and
(b) any evidence relating to the question of damages or loss proposed to be led at the hearing in relation to the referee's report dated 31 March 2026 and the referee's supplementary report.
(a) adoption, or arguments in relation to the adoption, of the referee's reports; and (b) determination of the quantum of the Defendant's cross-claim for damages.
**********
Case title: (No 2) added.
Allied Pinnacle Pty Ltd
G R Mailman & Associates Pty Ltd (No 2)
(1988) 217 ALR 44
(2016) 92 NSWLR 679
(2000) 50 NSWLR 139