Exceed Education Pty Ltd t/as Young Minds Academy v Sylvester (No 2)

Texts Cited: Nil

Category: Costs

Parties: Exceed Education Pty Ltd t/as Young Minds Academy (Plaintiff)
Bianca Lee Sylvester (Defendant)

Representation: Counsel:
P Folino-Gallo
G Kassisieh
Solicitors:
Harrington Lawyers (Plaintiff)
Mullane Lindsay (Defendant)

File Number(s): 2025/00360902

Publication restriction: Nil

JUDGMENT

1. I gave judgment in these proceedings on 9 October 2025: see Exceed Education Pty Ltd t/as Young Minds Academy v Sylvester [2025] NSWSC 1185 (Primary Judgment). These reasons assume familiarity with and maintain the same abbreviations as in the Primary Judgment.

2. In the Primary Judgment I held that Ms Sylvester unreasonably withheld consent to the transfer of the Lease and ordered specific performance conditional on the payment of outstanding rent from Exceed Education to Ms Sylvester.

3. I directed the parties to seek to agree orders as to costs, failing which I would determine the issue of costs on the papers.

4. The parties were unable to reach agreement. These reasons determine the appropriate costs order. I have had the benefit of written submissions both in chief and in reply from both parties.

Overview of parties’ positions

5. Exceed Education seeks an order that Ms Sylvester pay Exceed Education’s costs on the ordinary basis.

6. Exceed Education submits that it was successful in the proceedings in establishing that consent was unreasonably withheld and costs should follow the event.

7. Ms Sylvester seeks an order that the plaintiff pay 50% of the defendant’s costs on the ordinary basis or in the alternative there be no order as to costs.

8. Ms Sylvester submits that:

9. the case involved two disputes – the consent issue and the rental arrears issue – with each party succeeding on one issue;

10. the Lease contains provisions that the lessee must pay the lessor’s reasonable cost of any application by the lessee for the lessor’s consent and the lessor’s reasonable legal costs relating to the lessor’s default; and

11. Exceed Education caused the unnecessary costs of the rental arrears dispute, of which Ms Sylvester was ultimately successful, and consistent with the provisions of the Lease, Ms Sylvester ought to be awarded her reasonable costs for that portion of the dispute (approximately 50%).

12. In reply, Exceed Education submits that the reliance placed by Ms Sylvester on the provisions of the Lease do not assist Ms Sylvester as Ms Sylvester acted unreasonably and the proceedings did not relate to Exceed Education’s default but rather Ms Sylvester’s withholding of consent.

Relevant legal principles

10. The relevant principles in relation to costs are not in dispute.

11. Costs are in the discretion of the Court: s 98 of the Civil Procedure Act 2005 (NSW). Costs ordinarily follow the event, unless it appears to the Court that some other order should be made: r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW).

12. The provisions of the Lease do not oust the discretionary power of the Court concerning costs but are an important factor that the Court considers in exercising its discretion as the parties have allocated risk in their agreement: see Goldstein v Shyzi Pty Ltd (No 2) [2017] NSWSC 543 at [12] per Darke J; Kyabram Property Investments Pty Ltd v Murray [2006] NSWSC 54 at [17]-[18] per Campbell J.

Determination

13. In the circumstances, the appropriate order is that there should be no order as to costs, to the intent that each party bear its or her own costs of the proceedings.

14. I do not accept Exceed Education’s submission that there “was no issue which the Plaintiff did not succeed” and that the rental arrears issue was an anterior issue that “had no bearing upon the outcome of the issue to be determined”. The proceedings were brought on quickly without the benefit of pleadings given the Notice to Complete served by the incoming purchaser.

15. Whilst the principal relief sought in the proceedings by Exceed Education was for a declaration that consent was being unreasonably withheld, it was obvious from the communications between the parties that a sticking point between them was whether there was any rent outstanding. The positions of the parties shifted at times as to whether the Court was required to determine whether there was rent outstanding. By conclusion of the hearing both parties agreed that the Court was required to determine this issue. If, for no other reason, issues of proportionality commended such an approach, notwithstanding the less than optimal way the issue was prepared and presented.

16. Whilst Exceed Education succeeded in establishing that consent was unreasonably withheld, Ms Sylvester was successful in establishing that rent was outstanding and specific performance orders were conditioned on the payment of the outstanding rent.

17. It is not inaccurate to approach costs on the basis that there were two principal issues litigated in a 1 day hearing.

18. Accepting there were two principal issues litigated which took up roughly equal hearing time and each party was successful on one and unsuccessful on the other, the appropriate order is no order as to costs, to the intent that each party bear its or her own costs.

19. While the provisions of the lease are a factor in favour of Ms Sylvester being awarded 50% of her costs, the provisions are not determinative. In my view, in the circumstances where each party achieved a measure of success, the appropriate order remains no order as to costs despite the provisions of the Lease.

Orders

20. The order of the Court is:

21. No order as to costs, to the intent that each party bear its or her own costs of the proceedings.

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