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The injunction granted by Lindsay J

3. On 2 September 2025, orders were made by Lindsay J which included an order that:

“…pending the final determination of these proceedings or further order of the Court, that [GR Mailman] be restrained from taking any steps to call upon or enforce the Bank Guarantee referred to in clause C9.4 of [the lease]…”.

4. The parties have each indicated that it is no longer appropriate for the injunction to continue.

5. The orders I made this morning, in combination with the determination of the residual question as to costs, likely amounts to “the final determination of these proceedings”. On that basis, the injunction granted by Lindsay J on 2 September 2025 has likely reached its natural end. For the avoidance of doubt, Order 1 made by Lindsay J on 2 September 2025 will be discharged.

Costs

6. Section 98 of the Civil Procedure Act 2005 (NSW) gives the Court a broad discretion in relation to appropriate costs orders, although, Uniform Civil Procedure Rules 2005 r 42.1 provides that:

...if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.

7. There was some debate between the parties in this case as to what constituted the relevant “event”.

8. There were two central questions of construction raised in the proceedings:

9. first, whether the make good obligations provided for in the lease extended to the removal of the 2015 fit out; and

10. secondly, whether the plaintiff was obliged by the terms of the lease to repaint the exterior of the premises before it was vacated.

11. The first of these issues was foundational to the claim for declaratory relief brought by Allied. Allied succeeded on that first issue. GR Mailman succeeded on the second of those issues.

12. Surrounding these questions of construction was a more wide-ranging dispute about the circumstances in which Allied had failed to complete the outstanding redecoration works that it accepted were required by the terms of the lease to have been completed before Allied vacated the premises. A claim to recover damages for that failure underpinned GR Mailman’s cross-claim.

13. GR Mailman’s cross-claim was not confined to these works. It also positively asserted an entitlement to recover costs associated with the removal of the 2015 fit out; thus proceeding on the assumption that — on the proper construction of the lease — Allied was required to remove the 2015 fit out. In this sense the first question of construction that I have identified was also an important issue in GR Mailman’s cross-claim.

14. Insofar as the outstanding redecoration works were concerned, Allied’s failure to complete those works was attributed by Allied to GR Mailman’s assertion that the 2015 fit out was required to be removed.

15. In turn, this founded claims of unconscionability, an alleged failure by GR Mailman to mitigate and an alleged breach, or possibly repudiation, by GR Mailman of an implied term requiring it to act in good faith. It was said by Allied that, for any one or more of these reasons, it had been relieved of its contractual obligation to perform the outstanding redecoration works.

16. These last issues accounted for a substantial portion of the evidence and submissions at what I have previously described as the “liability hearing”. Allied was unsuccessful in all of these issues.

17. The Court answered the two questions of construction, and dealt with Allied’s arguments in relation to the outstanding redecoration works. The dispute between the parties continued.

18. The quantification of damages was referred to a referee. The parties disagreed about the questions to be referred to the referee. Neither party was wholly successful in relation to that issue.

19. As my second judgment in this matter makes clear, the issue of the questions to be considered by the referee was revisited by the parties at the request of GR Mailman. The disagreement between them on what should be considered by the referee continued.

20. Whilst I was persuaded to refer a further issue to the referee — namely, the reasonable time required to complete the outstanding redecoration works — this was not the only additional matter that GR Mailman had sought to have added to the matters already referred to the referee. Once again, neither party was wholly successful in relation to the dispute ventilated before me on that occasion.

21. When it came to adopting the referee’s report, fresh disputes emerged. Whilst there was general agreement between the parties in relation to the referee’s first report and the impact it would have on the outcome of the proceedings, the same cannot be said in relation to the referee’s second report.

22. Before turning to the referee’s second report, I note — as was pointed out by Allied in its submissions on costs — that the referee ultimately determined that the costs of completing the outstanding redecoration works fell somewhere between the figures being propounded by GR Mailman and Allied respectively. I further note that, on this issue at least, the parties were arguing before the referee over something less than $62,000 having regard to the without prejudice offers which had been made and the submissions each party had made to the referee.

23. As to the referee’s second report, a fresh dispute emerged in relation to the quantification of GR Mailman’s claim for lost rent and outgoings. Thankfully, that dispute was narrowed by the parties by the time they came to make oral submissions before me. However, neither party suggested that I should adopt the answer given by the referee to the question they had agreed should be referred to him in quantifying this aspect of GR Mailman’s claim (i.e. simply substituting the figure provided by the referee as a means of quantifying the damages). My third judgment addresses this final dispute and the way in which it was resolved; ultimately in GR Mailman’s favour.

24. Against this background, a real question arises as to which event costs should follow.

25. Allied said that the real event was that which it said precipitated the commencement of proceedings; namely, GR Mailman’s continued assertion that Allied was required by the terms of the lease to remove the 2015 fit out. Allied said that it should not be denied its prima facie entitlement to the costs of its success on its claim.

26. GR Mailman pointed to the fact that judgment has been entered in its favour and said, unsurprisingly, that it had succeeded in the most important event.

27. Allied answered this with an analysis of each of the issues in the proceedings. As to the outstanding redecoration works, Allied pointed out that they have been valued by the referee at $54,305 and said that it had offered to pay up to a maximum of $100,000 for these works before it vacated the premises. On this basis, Allied said that GR Mailman did no better than its pre-litigation offer in respect of the outstanding redecoration works and thus Allied — and not GR Mailman — should recover its costs on this aspect of the claim. I do not agree.

28. This aspect of Allied’s submissions does not take into account the fact that its offer — if in fact it was an offer — to pay up to a maximum of $100,000 in relation to all of its make good obligations under the lease, did not include the claim being made by GR Mailman for the additional costs associated with the exterior painting works. On any view, GR Mailman has done better through its cross-claim than it would have done had any offer of up to $100,000 been accepted.

29. Allied next said that GR Mailman’s lost rent claim formed no part of the liability hearing and that there was ultimately no contest in relation to the weekly rental amount to be used in calculating this claim.

30. While both are true, there remained a debate between the parties about the length of time GR Mailman was deprived of its rent and outgoings and costs were incurred in connection with that dispute. This is the dispute I resolved in my third judgment. GR Mailman was successful in this aspect of its case.

31. In relation to the exterior painting claim, Allied suggested that some deduction might be made from any award of costs it receives on account of this issue and suggested that this issue played a relatively minor role in the proceedings. Again, I disagree.

32. However, Allied was successful in relation to its case on the 2015 fit out. GR Mailman says that little turns on this because Allied need never have commenced the proceedings on that account. Whilst this may be strictly correct, in my view it is not a complete answer to Allied’s claim for the costs of this issue.

33. Allied’s purported offer based on the suggestion that its make good obligations could be completed for less than $100,000 was refused by Jordan Mailman in terms which are likely to have increased the temperature of the dispute which had, by that point, emerged between the parties. Proceedings were threatened. Lawyers became involved.

34. GR Mailman, through its lawyers, continued to assert that Allied was required by the lease to remove the 2015 fit out. It threatened to call in the $213,000 bank guarantee provided by Allied. As it submitted, it was ultimately entitled to do this given the quantum of the judgment entered in its favour exceeds that figure. However, this submission must be considered against the background of its own without prejudice offer to settle the dispute upon payment by Allied of $1,000,000. The explanation provided by its lawyers for that figure made clear that it incorporated the costs associated with the removal of the 2015 fit out.

35. GR Mailman’s $1,000,000 offer was rejected by Allied, which responded by offering to pay $162,500 in full and final satisfaction of its obligations under the lease. That offer was also rejected by GR Mailman.

36. Allied commenced the proceedings. It asserted that, properly construed, the lease did not require it to remove the 2015 fit out. This was contested by GR Mailman. As I have already noted, GR Mailman’s cross-claim itself incorporated an assertion that Allied was required by the terms of the lease to remove the 2015 fit out.

37. Whether or not Allied actually needed to commence the proceedings, GR Mailman must share some responsibility for the dispute which had emerged and continued between the parties in relation to the 2015 fit out. Once proceedings were commenced GR Mailman continued to contest this issue.

38. In fact, almost every issue was litigated by the parties.

39. In light of the fact that the issue as to its liability to meet the costs of removing the 2015 fit out was picked up by GR Mailman’s cross-claim - and was therefore disposed of finally by the judgment now entered on that cross-claim - it was ultimately unnecessary to make declarations to the effect of those sought by Allied in relation to this issue. Contrary to a submission made by GR Mailman, I do not think this reflects an “abandonment” of Allied’s claim for declaratory relief. In a practical sense, Allied succeeded on this issue.

40. However, Allied was unsuccessful in relation to other issues in the proceedings, including what I have described as the second construction question, and the various defences it raised in connection with the outstanding redecoration works. Whilst what I have described as the first construction question may well have been central to the parties’ thinking at all relevant times, it did not have a proportionate impact on the costs of the proceedings.

41. As I have already noted, the matters Allied raised in answer to GR Mailman’s claim for the cost of carrying out the outstanding redecoration works also made a material contribution to the costs of the proceedings.

42. Whatever view one might reach as to the relevant event my ultimate decision on costs must be made by reference to the facts of this case. As was observed in Calvo v Ellimark Pty Ltd (No 2) [2016] NSWCA 197 at [8]:

“Where a plaintiff is ultimately unsuccessful, but a defendant is unsuccessful on some - perhaps the majority - of matters raised by way of defence, there is recurringly a question whether costs should follow the event, or whether there should be a special costs order reflective of the plaintiff’s success on individual issues. In each case, it is very much a matter of impression, based upon matters such as the severability of the issues, the reasonableness of reliance upon the issues, and the extent to which the issues incurred expending additional costs and time”.

41. While the particular outcome being examined by the Court in that case is not what has occurred here, the principles stated are equally applicable to the present case. Neither party suggested that I should make costs orders referrable to specific issues in the proceedings. In my view this is appropriate having regard to the fact that the issues in these proceedings are not easily severable.

42. However, every issue and sub-issue in this case was hotly contested by the parties. At every stage in the proceedings the disputes about these issues have required resolution by the Court. On each of these occasions, each party has enjoyed both success and failure. The ultimate outcome of the proceedings represents a continuation of this pattern.

43. Having regard to the applicable principles and the matters to which I have referred, I have determined that there should be no order as to the costs in the proceedings. In my view, this best reflects the mixed outcome for the parties.

44. For the reasons above, I order:

45. The injunction granted through Order 1 made by Lindsay J on 2 September 2025 is dissolved.

46. Make no order as to costs of the proceedings.

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