Flip About Pty Ltd v Alamdo Holdings Pty Ltd [2026] NSWSC 431 | Case summary

Flip About Pty Ltd v Alamdo Holdings Pty Ltd [2026] NSWSC 431 | Case summary | Zoe

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2026-04-29

Before

Pike J

Catchwords

LEASES AND TENANCIES — retail lease — termination, re-entry and forfeiture — whether lessor entitled to terminate lease — whether termination prohibited by COVID-19 pandemic regulation — COVID-19 Regulations and National Code of Conduct — scope of regulation-making power — whether lessor’s conduct repudiatory — whether breach gives right to private right of action in damages — breach notices — service of review notice — where alleged service by email and post — validity of notices and failure to dispute — assignment — guarantees and indemnities — effect on enforcement of rights — good faith obligations CONTRACT — lease construction — market rent review — where lessee was an “impacted lessee” — whether lessor and lessee acted in good faith — where lessee refused to provide financial information — whether refusal to provide financial information was justified — interpretation of commercial documents — interaction with statute — whether lessor in terminating lease and retaking possession constituted a repudiation — effect of erroneous but bona fide construction — whether conduct evinced unwillingness to perform — distinction between breach and repudiation — effect of statutory prohibition DAMAGES — whether lessee entitled to damages for repudiation — whether lessee entitled to damages for breach of statute — quantification of lessee’s loss — loss of opportunity and hypothetical profits — contingencies and vicissitudes — expert accounting evidence — discounted cash flow — reliance and expectation loss — whether lessee would have exercised option to extend lease — entitlement following repudiation — whether new, similar business is an appropriate proxy — mitigation — whether landlord failed to take reasonable steps to re-let premises — whether tenant denied access to perform make good obligations — causation — whether damages suffered by lessee were caused by actions of lessor – readiness and willingness to perform — wasted expenditure — whether expenditure rendered futile — goodwill and asset value EVIDENCE — expert evidence — concurrent evidence and joint reports — competing forensic accounting opinions — use of proxy financial data — reliability of comparable business performance — discounted cashflow methodology — weight and limit of expertise — fact-finding — admissibility of mediation communications — waiver of privilege — reliability of witnesses and contemporaneous records

Source

Original judgment source is linked above.

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Catchwords

LEASES AND TENANCIES — retail lease — termination, re-entry and forfeiture — whether lessor entitled to terminate lease — whether termination prohibited by COVID-19 pandemic regulation — COVID-19 Regulations and National Code of Conduct — scope of regulation-making power — whether lessor’s conduct repudiatory — whether breach gives right to private right of action in damages — breach notices — service of review notice — where alleged service by email and post — validity of notices and failure to dispute — assignment — guarantees and indemnities — effect on enforcement of rights — good faith obligations CONTRACT — lease construction — market rent review — where lessee was an “impacted lessee” — whether lessor and lessee acted in good faith — where lessee refused to provide financial information — whether refusal to provide financial information was justified — interpretation of commercial documents — interaction with statute — whether lessor in terminating lease and retaking possession constituted a repudiation — effect of erroneous but bona fide construction — whether conduct evinced unwillingness to perform — distinction between breach and repudiation — effect of statutory prohibition DAMAGES — whether lessee entitled to damages for repudiation — whether lessee entitled to damages for breach of statute — quantification of lessee’s loss — loss of opportunity and hypothetical profits — contingencies and vicissitudes — expert accounting evidence — discounted cash flow — reliance and expectation loss — whether lessee would have exercised option to extend lease — entitlement following repudiation — whether new, similar business is an appropriate proxy — mitigation — whether landlord failed to take reasonable steps to re-let premises — whether tenant denied access to perform make good obligations — causation — whether damages suffered by lessee were caused by actions of lessor – readiness and willingness to perform — wasted expenditure — whether expenditure rendered futile — goodwill and asset value EVIDENCE — expert evidence — concurrent evidence and joint reports — competing forensic accounting opinions — use of proxy financial data — reliability of comparable business performance — discounted cashflow methodology — weight and limit of expertise — fact-finding — admissibility of mediation communications — waiver of privilege — reliability of witnesses and contemporaneous records

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Flip About Pty Ltd v Alamdo Holdings Pty Ltd [2026] NSWSC 431

Hearing dates: 25 to 28 August 2025 and 4 September 2025

Date of orders: 29 April 2026

Decision date: 29 April 2026

Jurisdiction: Equity - Real Property List

Before: Pike J

Decision: (1) Direct the parties to confer to seek to agree orders to give effect to these reasons, including as to costs.
(2) Direct the parties to provide any agreed orders, or otherwise competing orders together with submissions of no more than 5 pages in support of these orders, to my Associate by email no later than 4pm on the second business day prior to the relisting date referred to in order 3 below.
(3) Stand the proceedings over for directions at 9.30 am on 20 May 2026 or such other date as may be arranged by email to my Associate, any such revised date to be arranged within 14 days of the date of these orders.

Catchwords: LEASES AND TENANCIES — retail lease — termination, re-entry and forfeiture — whether lessor entitled to terminate lease — whether termination prohibited by COVID-19 pandemic regulation — COVID-19 Regulations and National Code of Conduct — scope of regulation-making power — whether lessor’s conduct repudiatory — whether breach gives right to private right of action in damages — breach notices — service of review notice — where alleged service by email and post — validity of notices and failure to dispute — assignment — guarantees and indemnities — effect on enforcement of rights — good faith obligations
CONTRACT — lease construction — market rent review — where lessee was an “impacted lessee” — whether lessor and lessee acted in good faith — where lessee refused to provide financial information — whether refusal to provide financial information was justified — interpretation of commercial documents — interaction with statute — whether lessor in terminating lease and retaking possession constituted a repudiation — effect of erroneous but bona fide construction — whether conduct evinced unwillingness to perform — distinction between breach and repudiation — effect of statutory prohibition
DAMAGES — whether lessee entitled to damages for repudiation — whether lessee entitled to damages for breach of statute — quantification of lessee’s loss — loss of opportunity and hypothetical profits — contingencies and vicissitudes — expert accounting evidence — discounted cash flow — reliance and expectation loss — whether lessee would have exercised option to extend lease — entitlement following repudiation — whether new, similar business is an appropriate proxy — mitigation — whether landlord failed to take reasonable steps to re-let premises — whether tenant denied access to perform make good obligations — causation — whether damages suffered by lessee were caused by actions of lessor – readiness and willingness to perform — wasted expenditure — whether expenditure rendered futile — goodwill and asset value EVIDENCE — expert evidence — concurrent evidence and joint reports — competing forensic accounting opinions — use of proxy financial data — reliability of comparable business performance — discounted cashflow methodology — weight and limit of expertise — fact-finding — admissibility of mediation communications — waiver of privilege — reliability of witnesses and contemporaneous records

Parties

Applicant/Plaintiff:

Flip About Pty Ltd

Respondent/Defendant:

Alamdo Holdings Pty Ltd

Legislation Cited (19)

Cited:** Conveyancing Act 1919(NSW)

Conveyancing (General) Regulation 2018(NSW)

Coronavirus Economic Response Package (Payments and Benefits) Act 2020(Cth)

Coronavirus Economic Response Package (Payments and Benefits) Rules 2020(Cth)

Electronic Transactions Act 2000(NSW)

SME Commercial Leasing Principles During COVID-19 Public Health Act 2010(NSW)

Retail and Other Commercial Leases (COVID-19) Regulation 2020(NSW)

Retail Leases Act 1994(NSW)

Small Business Commissioner Act 2013(NSW)

New Tax System (Goods and Services Tax) Act 1999

Bankruptcy Act 1966

Health Act 2010

Benefits) Rules 2020

Competition and Consumer Act 2010

Leases Act 1994

Transactions Act 2000

(Conveyancing (General) Regulation 2018

Cases Cited: Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310
Allianz Insurance Ltd v Waterbrook [2009] NSWCA 224
Ampol Petroleum (Victoria) Pty Ltd v Findlay (Supreme Court of Victoria, Fullagar J, 30 October 1886, unreported)
Australia City Properties Management Pty Ltd v Owners – Strata Plan No 65111 [2021] NSWCA 162
Baird v George [2025] TASSC 4
BestCare Foods Ltd v Origin Energy LPG Ltd [2013] NSWSC 1287
Bofinger v Kingsway Group Ltd (2009) 239 CLR 269; [2009] HCA 44
Brodie v Singleton Shire Council (2001) 206 CLR 512; [2001] HCA 29
Burger King v Hungry Jack’s Pty Ltd [2001] NSWCA 187
Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24
Catley & Anor v Watson & Anor (1981) V Conv R 54-003
CCL Secure Pty Ltd v Berry [2019] FCAFC 81
Cessnock City Council v 123 259 932 Pty Ltd (2024) 281 CLR 39; [2024] HCA 17
Croc’s Franchising Pty Ltd v Alamdo Holdings Pty Ltd [2023] NSWCA 256
Croc’s Franchising Pty Ltd v Alamdo Holdings Pty Ltd (No 2) [2023] NSWCA 286
Dainford Ltd v Smith (1985) 155 CLR 342; [1985] HCA 23
Darzi Group Pty Ltd v Nolde Pty Ltd [2021] NSWSC 774
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 432; [1978] HCA 12
Edwin Davey Pty Ltd v Boulos Holdings Pty Ltd (2022) 20 BPR 42,355; [2022] NSWCA 65
Emhill Pty Ltd v Bonsoc (No 2) [2007] VSCA 108
Esso v Mardon [1976] 2 WLR 583
Ex parte Whelan [1986]1 Qd R 500
Foran v Wight (1989) 168 CLR 385; [1989] HCA 51
GEC Marconi Systems v BHP-IT (2003) 128 FCR 1; [2003] FCA 50
Headway Global Pty Ltd v Golden Seeds Education Pty Ltd [2024] NSWSC 1068
HNOE Ltd v Angus and Julia Stone Pty Ltd [2024] NSWCA 271
Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542
Hungry Jack’s v Burger King [1999] NSWSC 1029
Karacominakis v Big Country Developments Pty Ltd (2000) 10 BPR 18,235; [2000] NSWCA 313
Lewington v Dulykarn [2025] NSWSC 635
Lindsay-Owen v HWL Ebsworth Lawyers [2023] NSWSC 68
Martin v Western District of Australasian Coal and Shale Employees Federal Workers Industrial Union of Australia (Mining Department) (1934) 34 SR (NSW) 593
McCartney v Orica Investments Pty Ltd [2011] NSWCA 337
Metal Fabrications v Kelcey [1986] VR 507
O’Connor v SP Bray Ltd (1937) 56 CLR 464; [1937] HCA 18
Plumor Pty Ltd v Handley (1996) 41 NSWLR 30
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; [1985] HCA 14
Robinson v Becata (2004) 12 BPR 22,699; [2004] NSWSC 310
Sacher Investments Pty Ltd v Forma Stereo Consultants [1976] 1 NSWLR 5
Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127
Shevill v Builders Licensing Board (1982) 149 CLR 620; [1982] HCA 47
Stonewall Hotel Pty Ltd v Papantoniou (2017) 18 BPR 37,045; [2017] NSWSC 964
Summers v Commonwealth (1918) 25 CLR 144; [1918] HCA 33
Sydney Local Health District v Macquarie International Health Clinic Pty Ltd [2020] NSWCA 274
The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54
Van Rensburg v Adilinis; Van Rensburg v Raft [2024] NSWSC 1146
Westfield Management Limited v AMP Capital Property Nominees Limited (2012) 247 CLR 129; [2012] HCA 54
Woodar Investment Development Ltd v Wimpey Construction [1780] 1 All ER 571
Zonia Holdings Pty Ltd v Commonwealth Bank of Australia [2025] FCAFC 63

It is an historical fact that the world experienced the COVID-19 pandemic from early 2020 onwards. The pandemic had a significant impact worldwide, including on businesses in Australia.
In response to the impact of COVID-19 on Australian businesses, State and Federal governments introduced a variety of initiatives. The present case concerns, at least in part, the regulations introduced concerning the ability of landlords to terminate leases for non-payment of rent.
Up until November 2020, the plaintiff, Flip About Pty Ltd (Flip About) occupied the premises at Unit 4, 6-8 Hudson Avenue, Castle Hill (Premises). The defendant, Alamdo Holdings Pty Ltd (Alamdo) was the owner of 6-8 Hudson Avenue and thus Flip About’s landlord.
Flip About conducted a business from the Premises of operating an indoor trampoline centre under the “Flip Out” franchise name and model (Business).
The Premises were originally let to another tenant in 2014. In or about July 2017, that lease was assigned to Flip About, and subsequently varied. The lease as varied (Lease) was never registered.
These proceedings began their life on 25 October 2019, as a challenge by Flip About to the validity of a purported market rent review notice issued by Alamdo and dated 26 February 2019 (Market Rent Review Notice).
The proceedings assumed a different character after 10 November 2020, when Alamdo re-entered and took possession of the Premises following non-payment of rent at the height of the COVID-19 pandemic. On 12 November 2020, Flip About contended that Alamdo was not entitled to re-enter the Premises and that such conduct amounted to a repudiation which Flip About accepted, thus bringing the Lease to an end.
The proceedings did not progress very far for several years. The parties are not to be criticised in this regard. The delay was due to the fact that the dispute between Alamdo and the tenant adjoining the Premises (Unit 5) – Croc’s Franchising Pty Ltd – which raised a number of issues similar to those raised in the present proceedings, was winding its way through the Court. Alamdo succeeded at first instance. By majority, the appeal was allowed from the decision of the trial judge: see Croc*’s Franchising Pty Ltd v Alamdo Holdings* Pty Ltd [2023] NSWCA 256 (Croc***’**s No 1). An application by Alamdo for special leave to the High Court was refused on 7 March 2024, on the basis that it did not raise any question of general principle and had insufficient prospects of success: see Alamdo Holdings Pty Limited v Croc’*s Franchising [2024] HCASL 50.
The proceedings then progressed to a hearing which took place between 25 August and 4 September 2025. Mark Ashhurst SC and Daniel Meyerowitz-Katz appeared for Flip About and a former director of Flip About Jim Tsaganas (Mr Tsaganas). Jason Potts SC and Connor Bannan appeared for Alamdo.
In the reasons that follow, I have determined the multitude of issues as presented by the parties and invite the parties to advise me of any remaining issues or otherwise seek to agree orders to give effect to these reasons, including as to costs. The proceedings will then be listed for directions to make final orders or timetable the determination of any remaining issues.

At the commencement of the hearing, Mr Tsaganas sought leave to rely on an amended defence to the cross-claim against him as guarantor under the Lease. By the amendments contained in the proposed amended defence, Mr Tsaganas sought leave to withdraw an admission that he had made to the allegation that he guaranteed Flip About’s obligations under the Lease.
Although the draft proposed amended defence sought to deny that Mr Tsaganas in fact executed the document containing the guarantee, I was advised that this contention was no longer pressed. The arguments Mr Tsaganas thus sought to raise were largely construction arguments.
The application to amend was opposed. Mr Bannan, who had the carriage of the argument for Alamdo referred to the fact that no explanation had been provided for the late amendment. It also involved withdrawal of an admission. It was also contended that if the amendment was allowed Alamdo would need to consider whether to plead an estoppel against Mr Tsaganas contending he had not guaranteed Flip About’s obligations.
Having heard the argument, I refused the application to amend. I was not satisfied that it was in the interests of justice to permit the amendments. The point could, and should, have been pleaded well prior to the hearing. Allowing the amendment would have created a real risk that the hearing might need to be adjourned to enable the estoppel to be alleged. Even the process of considering whether such a case should be advanced would have disrupted the hearing and imposed prejudice on Alamdo and its legal representations.
Alamdo also sought to expand the issues raised on the pleadings. This issue arose late on the first day of the hearing when Alamdo sought leave to amend its defence and cross-claim. Whilst it ultimately turned out that Flip About had no opposition to the proposed amendments, senior counsel for Flip About raised a concern, in the context of Alamdo seeking access to an unredacted copy of the Binding Financial Agreement (BFA) entered into by Mr Tsaganas and Vicky Tsaganas (Ms Tsaganas) in March 2020, whether Alamdo was going to contend that Flip About was not ready, willing and able to specifically perform the Lease because a transfer of Mr Tsaganas’ interest in Flip About to his former wife would constitute a change in control in breach of the terms of the Lease.
Mr Bannan confirmed that Alamdo did intend to advance that contention. He submitted that it was not necessary for Alamdo to plead this point and that Alamdo only became aware of the terms of the BFA on 14 August 2025.
In response, Mr Ashhurst SC contended that the “surprise rule” required the contention to be pleaded and if it had been pleaded – in circumstances where Alamdo had been aware since about October 2022 of the existence of a separation agreement between Mr and Ms Tsaganas – Flip About would likely have adduced factual evidence to meet the case.
After hearing argument I ruled that Alamdo was not permitted to advance the change in control argument. Again, I was not satisfied that it was in the interests of justice to permit such an argument to be run. The point could, and should, have been pleaded so as to prevent Flip About being taken by surprise. The fact that Alamdo only became aware of the BFA on 14 August 2025 was a consequence of its own delay in seeking production, which did not occur until 11 August 2025. There is no apparent reason why the document could not have been sought many years earlier and the point raised in a timely manner. Allowing the point to be raised now would likely cause the hearing to be adjourned or at least extended to enable Flip About to consider the point and adduce responsive evidence.

A number of lay and expert witnesses were called for each of the parties.
The principal lay witness for Flip About was Ms Tsaganas. She made a number of affidavits and was extensively cross-examined. She gave her evidence in a straightforward manner, and I formed the impression that she was doing her best to assist the Court.
Mr Tsaganas also gave evidence, albeit briefly. He presented as an honest and straightforward witness who was likewise doing his best to assist the Court.
The remaining lay witnesses for Flip About – Rodney Pymont, David Apolo, Stephen Knight, Talisha Jones and Paul Kean – played relatively minor roles in the scheme of the case. I did not understand any serious credit attacks to be levelled at their evidence. I formed the view that they were each doing their best to assist the court. It must be appreciated, however, that they were each giving evidence about events that occurred a number of years prior to the hearing which necessarily affects their reliability.
The principal lay witness for Alamdo was Anthony Maurici (Mr Maurici). Again, he made a number of affidavits and was extensively cross-examined by Mr Ashhurst SC for Flip About. Flip About contended that I should not accept his evidence in a number of respects and in particular that I should find that he was not negotiating in good faith. I do not accept these contentions. I formed the view that Mr Maurici was giving his evidence in an honest manner, doing his best to assist the Court. Much of the attack on Mr Maurici’s evidence was premised on a construction of the National Code for which Flip About was advocating and with which Mr Maurici/Alamdo did not agree. As set out below, I agree with the construction propounded by Mr Maurici/Alamdo. In any event, I do not think it can seriously be contended that Mr Maurici did not honestly hold the view that he was entitled to the information he was seeking from Flip About.
The second lay witness for Alamdo was Sebastian Maurici (Sebastian Maurici/Sebastian). He was cross-examined by AVL from Singapore. He gave his evidence in a straightforward and honest way. He openly admitted that he had recently discussed his evidence with his father. Whilst it no doubt would have been preferrable if this did not occur, it does not, in my view, substantially affect the reliability of Sebastian’s evidence or his father’s. The discussion occurred after each had made their affidavits.
Two groups of experts gave evidence – each group in concurrent session.
The first group comprised the valuers – Paul Dale (Mr Dale) and Grahame Hollinshead (Mr Hollinshead). Although they gave evidence concurrently, only Mr Dale was asked questions by junior counsel for Alamdo. No questions were asked of Mr Hollinshead. They ultimately agreed on the market rental of the Premises and as such not much turns on their evidence.
The second group comprised the expert forensic accountants – Anh Nguyen (Mr Nguyen) and Jeffrey Hall (Mr Hall).
There were a significant number of areas of disagreement between them, which were explored in detail by questioning in concurrent session. I formed the view that each was doing their best to assist the Court. I reject the criticism of Mr Hall that in some of the opinions he expressed he was straying beyond his expertise. Mr Hall was clear under cross-examination as to his experience or otherwise which provided the basis, if any, for some of the opinions he expressed. This enables me to consider what weight, if any, I am able to attribute to Mr Hall’s opinions. None of this, in my view, bears adversely on his credit.
Mr Nguyen was doing his best to assist the Court. The primary substantive opinion expressed by Mr Nguyen which I do not accept concerns whether there should be two discount rates used. For the reasons set out later in these reasons, I prefer Mr Hall’s opinion on this aspect.

On or about 1 February 2014, Alamdo leased the Premises to ACN 167 835 341 Pty Ltd with Brent Grundy (Mr Grundy) and Shane Zarafa (Mr Zarafa) as guarantors.
On or about 24 July 2014, Mr Zarafa guaranteed a franchise agreement between Flipout Trampoline Arena Franchises Pty Ltd (Franchisor) (as franchisor) and SNZ Holdings Pty Ltd (Original Franchisee) (as franchisee) in relation to the operation of a “Flip Out” franchise business (indoor trampoline centre) at the Premises (Business).
On or about 24 February 2017, Flip About entered into a contract to purchase the Business from the Original Franchisee for a price of $1.2 million, comprising $600,000 of Goodwill and $600,000 of Equipment.
At the time of the sale, Mr Tsaganas was the sole director of Flip About and was married to Ms Tsaganas.
On or about June 2017, Flip About took an assignment of the Lease of the Premises, with Alamdo remaining as lessor. Mr Tsaganas signed a variation of the Lease and a Deed of Consent and Assignment of Lease and Guarantee in his capacity as the sole director of Flip About and personally as incoming guarantor.
The Lease was never registered.
On 12 June 2017, Flip About entered into a franchise agreement with the Franchisor which permitted Flip About to assume the operation of the Business from the Premises. Flip About completed the purchase of the Business and took possession of the Premises on or about 22 June 2017.
Shortly after the sale of the Business completed, Mr and Ms Tsaganas separated. Mr Tsaganas remained the sole director until on or about 7 November 2018 whereupon Ms Tsaganas became the sole director of Flip About. Mr Maurici was not notified that Mr Tsaganas ceased to be a director. Ms Tsaganas was responsible for the operation of the Business after the separation.
In late February 2019, Mr Maurici of Alamdo sent an email to the personal email addresses of Mr and Ms Tsaganas attaching the Market Rent Review Notice seeking to invoke the market rent review provisions under the Lease. That notice was not responded to until June 2019, disputing its validity. That dispute could not be resolved, leading to these proceedings being commenced in October 2019 by Flip About challenging the validity of the Market Rent Review Notice.
The COVID-19 pandemic then struck in March 2020 onwards. The Business was subject to the government imposed COVID restrictions and was forced to close for a period from March 2020. The parties engaged in unsuccessful negotiations in relation to rental abatement and waiver.
On 8 September 2020, Alamdo sent the Breach Notice (defined below) to Flip About seeking payment of rental arrears
On 10 November 2020, the rental arrears not having been paid, Alamdo sought to re-enter the Premises and forfeit the Lease, contending that Flip About was in breach of the Lease and that the government restrictions did not prevent Alamdo from taking this course.
Flip About responded on 12 November 2020 contending that Alamdo’s conduct was repudiatory and purporting to accept the repudiation. Following this, Ms Tsaganas commenced looking for new premises from which to conduct the Business.
On 9 February 2021, Ms Tsaganas incorporated Flip Take Two Pty Ltd (Flip Take Two) for the purposes of setting up and operating a new “Flip Out” franchise business. Ms Tsaganas was not prepared to continue conducting the Business through Flip About because of the existence of these proceedings and Alamdo’s claim for unpaid rent against Flip About.
On 23 April 2021, Flip Take Two entered into a lease of premises at Showground Business Park in Anella Avenue, Castle Hill, approximately one kilometre from the Premises (Anella Avenue Premises). The lease was to commence on 1 May 2021.
On 20 May 2021, Flip Take Two entered into a Franchise Agreement with FO Franchising Pty Ltd permitting Flip Take Two to conduct a Flip Out franchise business from Anella Avenue Premises. The Franchise Agreement commenced on 11 October 2021 and on that day Flip Take Two commenced operating a new Flip Out franchise business from the Anella Avenue Premises. Flip Take Two has successfully operated from the Anella Avenue Premises since this time.
Alamdo entered into a lease with Dutton Retail 2 Pty Ltd commencing 7 June 2022 for the whole of the premises previously occupied by Croc’s and approximately 490 square metres of the Premises. The balance of the Premises were leased by Alamdo to Reece Australia Pty Ltd commencing on 23 December 2022.
Flip Take Two continues to conduct an indoor trampoline business from the Anella Avenue Premises although no longer as a Flip Out franchise.

Flip About contended that Alamdo had no right to demand the financial information that it did, seeking to understand the impact of COVID-19 on Flip About’s profitability, it being contended that the National Code focused on reduction in turnover, not profitability. Insisting on the provision of information evidenced a lack of good faith on Alamdo’s part.
A further and related aspect of Flip About’s contentions in this regard was that Alamdo had not made offers in accordance with the Leasing Principles set out in the National Code. This was also said to evidence a lack of good faith on Alamdo’s part.
Alamdo contended that the National Code was not prescriptive in confining consideration solely to turnover with the Leasing Principles setting out a default position or starting point. The National Code had to be construed as a whole.
I have set out above the provisions of the National Code, highlighting those points that are relevant to the present debate.
The starting point, as was made clear by the decision in Croc*’*s No 1, is that nothing in the National Code affects the contractual relations as between a landlord and tenant. The National Code did not of itself, have any legislative effect until it was implemented, relevantly, through the Regulations – version 1, version 1A and version 2. The National Code must be construed together with the applicable version of the Regulation.
In this case, the obligation to renegotiate in good faith arose under Clause 5 of the Regulations. Clause 5(4) of version 2 (clause 5(3) in versions 1 and 1A), required a party to an impacted lease, upon request, to renegotiate in good faith the rent payable under, and other terms of, the impacted lease.
Clause 5(6) of version 2 (clause 5(4) of version 1 and 1A) relevantly required the parties to re****negotiate the rent payable under, and other terms of the impacted lease, having regard to two matters. First, the economic impacts of the COVID-19 pandemic. Second, the Leasing Principles set out in the National Code.
The first of these matters is obviously not confined to turnover, let alone to the economic impacts on a tenant only. The requirement to have regard to “the economic impacts” is expressed in broad terms. It encompasses the financial position of both landlord and tenant, including matters such as profitability, cash flow and available financial reserves. The impact of COVID on an entity with little to no cash reserves could likely be greater than the impact on an entity with substantial reserves.
Insofar as the Leasing Principles are concerned, the Regulation states that the renegotiation must have regard to those principles. The Leasing Principles cannot, however, in my view, be construed in isolation from the other provisions of the National Code.
The Leasing Principles, on their face, make it clear that they apply to a negotiation, rather than setting out some rules or even a default or starting position. Failing to make an offer strictly in accordance with the Leasing Principles does not contravene them.
The arguments advanced by Flip About in this regard bear a similarity to those advanced and rejected in Croc*’*s No 1.
In Croc*’*s No 1, it was ultimately accepted that it was incorrect for a lessee to claim it was entitled to rental relief calculated by reference to the reduction in turnover: see Payne JA at [118]. At [117], Payne JA stated that the assertion of an entitlement was not correct (see also [119]).
Other provisions of the National Code make it clear that the impact of COVID-19 on a landlord is not irrelevant – see in particular the Overarching Principles which refer to the object of the Code being to share, in a proportionate, measured manner, the financial risk and cashflow impact during the COVID-19 period, whilst seeking to appropriately balance the interests of tenants and landlords.
Dealing with Flip About’s contention that Alamdo’s request for certified information was wrong, the other provisions of the National Code also make it clear that landlords and tenants will act in an open, honest and transparent manner, and will each provide sufficient and accurate information to the other. Further context is given to what is encompassed by “sufficient and accurate information” to include information generated from an accounting system. There is nothing in the National Code requiring a lessor to simply accept what is said by a lessee and preventing a lessor from requiring some form of verification or confirmation of the information provided. A virtually identical request for information to that criticised by Flip About was made by Alamdo to Croc’s. Payne JA described that request at [116] as “not unreasonable”.
Read as a whole, the position is not as prescriptive as is contended for by Flip About.
In short, I do not accept the position advanced by Flip About.
As explained below, I do not regard the approach taken by Mr Maurici on behalf of Alamdo in the negotiations as evidencing a lack of good faith. He was justified in seeking to understand the broader impact of COVID-19 on Flip About’s profitability, and wanting to balance that against the impact on Alamdo. He was also justified in requiring that the financial information be certified by an accountant, rather than simply accepting any information provided by Flip About without verification. There was no lack of good faith on his part in conditioning the making of an offer on the provision of certified financial information demonstrating that Flip About was an impacted lessee and outlining the broader impact of the pandemic on its business.

Relevantly, all invoices for rent thereafter sent from Maurici Management Pty Ltd were marked on the invoice as being to the “Attention” of “castlehill@flipout.net.au”.
From 2018 to early 2019, Mr Tsaganas and Ms Tsaganas sent a number of emails to Mr Maurici from their personal email accounts:
On 16 February 2018, Ms Tsaganas sent an email to Mr Maurici regarding a running water issue at the Premises from “vickytsaganas@gmail.com”;
On 19 February 2018, Ms Tsaganas sent an email to Mr Maurici regarding access to the property to fix the running water issue at the Premises from “vickytsaganas@gmail.com”. On 20 February 2018, a further email was sent by Ms Tsaganas from “vickytsaganas@gmail.com” regarding access to the Premises;
On 3 March 2018, Ms Tsaganas sent an email to Mr Maurici regarding notification of payment from “vickytsaganas@gmail.com”;
On 12 March 2018, Ms Tsaganas sent an email to Mr Maurici regarding an annual fire safety statement of the Premises from “vickytsaganas@gmail.com”;
On 5 June 2018, Mr Maurici sent email to Mr Tsaganas’ personal email “Jimt@buildingpermits.com.au” and the other tenants of 6-8 Hudson Avenue regarding security. On 8 June 2018, Mr Tsaganas replied to Mr Maurici from “Jimt@buildingpermits.com.au”, stating “Please discuss with Vicky”. On 8 June 2018, Ms Tsaganas replied to the email from Mr Maurici regarding security from “vickytsaganas@gmail.com”;
On 16 June 2018, Ms Tsaganas sent an email to Mr Maurici regarding the car park from “vickytsaganas@gmail.com”; and
On 28 October 2018, Ms Tsaganas sent an email to Mr Maurici regarding the cleaning of the car park from “vickytsaganas@gmail.com”.
Ms Tsaganas’ personal email address of “vickytsaganas@gmail.com” was connected to her iPhone and a number of these emails were sent from her iPhone.
On 30 January 2019, Mr Maurici sent an email to “castlehill@flipout.net.au” attaching an invoice dated 30 January 2019. The covering email stated:

KPMG Wollongong relocated its office from 63 Market Street to 77 Market Street on 19 June 2017, but Alamdo was not notified of this relocation.
Flip About claims that it did not receive a hard copy notice at either the Premises or at the registered office at KPMG Wollongong and contends that Mr Maurici never sent the notices by post.
I am satisfied that Mr Maurici did in fact send the two notices on 6 March 2019. Mr Maurici clearly wanted to put Mr Tsaganas and Ms Tsaganas on notice regarding the market rent review as demonstrated by the email on 30 January 2019. He printed s 170 of the CA, further evincing his intention to put Mr and Ms Tsaganas on notice of the market rent review in accordance with cl 23 of the Lease. He then issued a series of invoices and sent a series of emails (extracted below), referring to the market rent review. These contemporaneous records pre and post-dating 6 March 2019 affirm that Mr Maurici did cause two letters to be sent with the market rent review on 6 March 2019.
I also reject the suggestion that Mr Maurici deliberately sent his 26 February 2019 email to the personal email addresses of Mr and Ms Tsaganas rather than the “castlehill@flipout.net.au” address as he did not want the notice to come to their immediate attention. Mr Maurici denied any such strategy. Mr Maurici sent it to both Mr and Ms Tsaganas and used the email addresses that, as set out above, both Mr and Ms Tsaganas had communicated with him in relation to the Premises. It is also obvious from the 26 February 2019 email that Mr Maurici wanted to formally serve the notice on the registered office of Flip About. There is nothing to support the suggestion of any attempt to surreptitiously effect service.
I deal with these matters in more detail below when determining this issue.
On 27 March 2019, Flip About paid rent of $38,394.73 (including GST) – the pre-30 January 2019 invoice monthly rental rate.
On 29 March 2019, Mr Maurici sent an invoice dated 29 March 2019 by email to “castlehill@flipout.net.au” which stated:

The starting point is clause 23 of the Lease which I have extracted above. The parties were agreed that clause 23 was permissive rather than mandatory.
Although not strictly relevant to the contentions raised, I reject the suggestion by Flip About that Alamdo/Mr Maurici deliberately sent his 26 February 2019 email to Mr Tsaganas and Ms Tsaganas at their personal email addresses rather than the “castlehill@flipabout.net.au” address because he did not wish the Notice to come to their attention. The address “castlehill@flipabout.net.au” had been notified some 18 months earlier. Alamdo had been using that address for invoices including, most relevantly, the email of 30 January 2019 attaching the invoice of that date, which advised that Mr Maurici would soon provide the landlord’s appraisal of Market Rent for the Market Rent review as at 1 February 2019.
In the period between August 2017 and February 2019 there had been considerable email correspondence between Mr Maurici and each of Ms Tsaganas and Mr Tsaganas in relation to the Premises where Mr and Ms Tsaganas had each used their personal email addresses. On the evidence those addresses appear to be the primary email addresses used by Mr and Ms Tsaganas for corresponding with Mr Maurici in relation to the Premises.
Contrary to the suggestion made by Flip About, Mr Maurici said he addressed the 26 February 2019 email as he did so as to increase the chances of it coming to the attention of Mr and Ms Tsaganas. The objective communications prior to 26 February 2019 support this evidence and I accept it.
Accordingly, I am satisfied that the use of personal email addresses was both deliberate and reasonable in the circumstances, and not indicative of any attempt to avoid bringing the notice to the attention of Flip About.
I consider first the contention that service was effected by the 26 February 2019 email addressed to Ms Tsaganas’ personal email address. In my view this effected service.
Flip About relied on the decision of Young J in Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542 at 544-5 in support of the contention that there is no personal service until the relevant document comes to the attention of the Flip About which was said to be about 11 June 2019.
I do not regard anything said by Young J as supporting Flip About’s position. If anything, the decision tends against Flip About.
At 544-5, Young J stated:

It is clear that the section is not intended to be exclusive but is intended to extend and widen the circumstances in which it will be taken to be effective service: see generally, Stonewall Hotel Pty Ltd v Papantoniou (2017) 18 BPR 37,045; [2017] NSWSC 964 (Stonewall Hotel) at [9]-[12].
Service on a different email address is not ineffective – the sender simply cannot take the benefit of the section. Receipt of the notice by email is effective at general law: see Stonewall Hotel at [49].
In any event, I am not satisfied that “castlehill@flipout.com.au” was the only email address specified by Flip About for the service of notices of that kind. The position might have been different had Ms Tsaganas not used her personal email address so extensively after August 2017 in dealing with Mr Maurici/Alamdo in relation to the Premises. It is clear that the parties, by their conduct, quickly moved on from the emails of 28 June and 9 August 2017. Relevantly, Ms Tsaganas, by her conduct, consented to receiving emails in relation to the Premises and the Lease addressed to her personal email account.
Further, s 13A of the Electronic Transactions Act 2000 (NSW) (ETA), does not assist Flip About. First, s 13A(1) only applies to the extent not agreed between the parties.
By clause 23 of the Lease the parties agreed to incorporate s 170 of the CA. Section 170(1A) of the CA provides that for service by email, the notice is taken to be served “on the day the notice is sent unless sufficient evidence to the contrary is presented”. The ETA thus does not apply.
Even if the ETA did apply, I am satisfied that Ms Tsaganas by her conduct, in regularly communicating with Alamdo in relation to the Lease and the Premises using her personal email address, designated her personal email address as an electronic address for the purpose of communications about the Premises and the Lease.
I am also satisfied on the evidence that Ms Tsaganas became aware that the email had been delivered on or around 26 February 2019. Ms Tsaganas’ evidence was that she returned to work on 28 February 2019 after her operation and checked her emails. It is not to the point that Ms Tsaganas did not appreciate the significance of the email at the time, or indeed the subsequent emails of 29 March 2019, 8 April 2019 or 24 April 2019 which notified Flip About of the market rent review. What is material is that the email came to her attention, in the sense that it was received and was available to be read by her had she chose to do so.
I turn now to consider whether the Market Rent Review Notice was served by post on 6 March 2019.
Putting to one side Flip About’s argument in relation to whether the envelopes were correctly addressed, the relevant issue is whether I am satisfied that Mr Maurici posted the notices as he contends he did, not whether the notices were received.
Provided an item is posted, delivery is deemed. This common law position is confirmed by the terms of clause 23 and by s 170(1)(b) of the CA.
Flip About led considerable evidence of non-receipt, either at the Premises or by KPMG. The lack of receipt was relied on to support the contention that I should not accept Mr Maurici’s evidence that he sent the Market Rent Review Notice to the Premises and KPMG.
However, evidence of non-receipt does not, of itself, displace a finding that the notices were properly posted, particularly when there is otherwise cogent evidence supporting that conclusion.
Mr Maurici gave the following evidence in chief in an affidavit made 31 July 2020:

(a) as set out above, I reject the contention that Mr Maurici deliberately sent the Market Rent Review Notice to the personal email addresses of Mr and Ms Tsaganas so as to reduce the likelihood of it coming to their attention; (b) in the covering email of 26 February 2019, Mr Maurici stated that he did not have Flip About’s registered office address to send a formal notice to and requested Mr or Ms Tsaganas to send it to him or accept the email as proper notice. This is objective evidence that Mr Maurici wanted to give formal written notice to the registered office of Flip About; (c) Mr Maurici’s sworn evidence as to what he then did is contained in an affidavit made 31 July 2020, relatively proximate in time to the events in question. I accept that sworn evidence; (d) on 28 February 2019, two days after the email, Mr Maurici printed a copy of s 170 of the CA. The print date is apparent on its face. This objective act is consistent with Mr Maurici’s evidence that in the absence of any response to his 26 February 2019 email, he was considering what was necessary in order to comply with clause 23 of the Lease. I reject the contention that the printing of s 170 could have been unrelated to the Lease and service of the Notice. No other possible candidate was identified. It is natural to infer that Mr Maurici, having wanted to send a formal notice and printed s 170, acted in accordance with s 170; (e) when the issue of validity of service was first raised by Flip About’s solicitor on 13 June 2019, Mr Maurici immediately responded on 15 June 2019 pointing out that within a week of his email he had posted copies to KPMG and to the Premises; (f) Mr Maurici had earlier sent an email which referred not only to emails about the rent increase but also “messages”. Mr Maurici said this was intended to be a reference to the posted letters and whilst he was challenged on this, no other “messages” were identified; and (g) the fact that the posted letters may not have been received either at the Premises or by KPMG does not command a conclusion in the circumstances, that the letters were not sent. KPMG had, unbeknownst to Mr Maurici, moved offices on 19 June 2017, nearly two years prior to Mr Maurici sending the letter to its old address. The evidence of Mr Pymont of Australia Post, some six years after the events in question, comfortably allows for the possibility that the letter was delivered to KPMG’s old address. In relation to the Premises the evidence also comfortably allowed for the possibility that letters were delivered and then lost. There was no letterbox at the Premises. Deliveries were to the front desk which was not always attended. Ms Tsaganas did not make any enquiries of staff members in June 2019 whether the notice had been delivered to the Premises in March 2019.

Flip About contended that I should not accept Mr Maurici’s evidence as to the sending of the notices by post because I would not accept Mr Maurici’s evidence as to what occurred at the subsequent mediation. As set out later in these reasons I am inclined to accept Mr Maurici’s evidence as to what occurred at the mediation and so the argument does not get off the ground. Had I not been inclined to accept Mr Maurici’s evidence as to what relevantly occurred at the mediation, it would not follow that his evidence about sending the notices should also be rejected: see CCL Secure Pty Ltd v Berry [2019] FCAFC 81 at [94]. As set out above, the evidence in relation to sending the notices is supported by contemporaneous correspondence and a reasonably proximate affidavit.
Flip About also rely on the fact that Mr Maurici did not keep any record supporting the sending by post, including sending them by registered post. I have had regard to this absence of evidence along with the other evidence that does exist. Having done so I accept Mr Maurici’s evidence.
I am thus satisfied that Mr Maurici sent the two letters as he said he did.
In light of these two conclusions, namely that the Market Rent Review Notice was validly served on Flip About both by email to Ms Tsaganas and by post to the Premises and to KPMG, it is not necessary for me to consider the third argument of whether service was validly effected by email to Mr Tsaganas and the anterior question of whether it was open to Alamdo to run this point. Had I been required to determine this issue I would have been inclined to permit Alamdo to run the point and would have upheld it. It is far from clear to me what evidence Flip About would have led to counter the contention that Mr Tsaganas had ostensible authority. In circumstances where, notwithstanding that (unbeknownst to Alamdo), Mr Tsaganas had ceased to be a director of Flip About, he continued to deal with Alamdo in relation to the Premises, the existence of at least ostensible authority is strongly supported.
I also reject Flip About’s final argument that the Market Rent Review Notice was not effective because the envelopes were not correctly addressed.
The envelope containing the notice sent to KPMG was relevantly addressed:

Ms Tsaganas gave evidence that no offer was made by Mr Maurici and refused to accept in cross-examination that an offer was made. Ms Tsaganas also could not recall the mediator’s name. The position that she also adopted was similar to that advanced in her 29 April 2020 email – namely, the rent should revert back to what it was before the rent review, and the current proceedings need to be dropped with no costs.
Some aspects of her recollection of the mediation were different to others – for example, her recollection was there was a “screen” being a reference to a video conference. She thought the mediation went for “a couple of hours, maybe”.
Her recollection of Mr Maurici’s position was that he would not put an offer unless he saw Flip About’s financials.
Ms Tsaganas’ position was that the mediation ended on the basis that there would be a further exchange of information – Flip About would provide BAS’s and information to show Flip About was on JobKeeper and thus an impacted tenant.
Mr Maurici gave evidence that at the mediation he had repeated the offers he had made before and said they were still current. Mr Maurici made notes prior to and at the mediation. The notes prior to mediation relevantly include an enumerated list of nine position points of Alamdo. Point number four of Mr Maurici’s notes state “Alamdo offered ½ rent – pick up during 6 months”. Mr Maurici claims that he read this list out at the mediation and repeated the offer of a rent abatement. Mr Maurici conceded that his notes were not exhaustive but that he was sure he made an offer at the mediation.
Sebastian gave evidence in his affidavit of 22 August 2025 that an offer for rent abatement was made by Mr Maurici. In cross-examination, via AVL from Singapore, Sebastian maintained that an offer was made. Sebastian also stated that he had been sent Mr Maurici’s affidavit of 14 August 2025 “a couple of days” before giving his oral evidence on 28 August 2025 and that he had spoken with his father about the mediation.
In my view it is not necessary for me to reach a concluded view on whether an offer was made by Mr Maurici. Whether an offer was made at the mediation is not determinative of whether Alamdo acted in good faith. It is only one aspect of the conduct. Further, the offer which was said to have been made was a repeat of the third offer which was conditional financial information being provided which Ms Tsaganas was not prepared to provide. I incline to the view, for the reasons set out below, that Mr Maurici repeated his offer of a 50% rent abatement and 50% rent deferral at the mediation. This offer continued to be linked to Flip About providing certified financial information to demonstrate the impact of COVID-19 on Flip About.
First, Mr Maurici had made three similar offers in March and April 2020. The offer that Alamdo contends was made at the mediation is the same, or at least substantially similar to the last of, these three previous offers. Alamdo did not contend that a better offer was made, merely that the similar offer was repeated. It is probable that Mr Maurici repeated an offer in similar terms at the mediation. Nothing probative was said by Flip About as to why Mr Maurici’s position would have changed such that he was retreating from his previous position.
Second, it is clear from the contemporaneous records prior to the mediation that Mr Maurici and Sebastian Maurici, on behalf of Alamdo, were seeking to negotiate in accordance with the Code. As set out above, on the eve of the mediation, on 15 July 2020, Sebastian Maurici emailed the NSW Small Business Commission stating, “We have attempted to negotiate in good faith as per the code, however we have been unable to reach an agreement ...”. Alamdo was willing to attend the mediation in an effort to reach a compromise position. In these circumstances, it is probable that an offer was made. Again, no persuasive explanation was advanced as to why Mr Maurici’s position would have gone backwards from what he had previously put.
Third, while Mr Kean’s file note does not refer to any offer, number four of Mr Maurici’s notes prepared prior to the mediation state “Alamdo offered ½ rent – pick up during 6 months”. I am inclined to accept that Mr Maurici set out Alamdo’s position in the mediation in accordance with these notes, making an offer in accordance with item number four on his list.
None of the contemporaneous records suggest that Mr Maurici’s position at the mediation was that he was not prepared to make any offers and thus had gone backwards in his position. Rather they indicate that he wanted financial information from Flip About so that he could assess the impact of COVID-19 on it.
The contemporaneous records before and during the mediation are indicative of an offer being made at the mediation. Consistent with the well-established principles, these contemporaneous records provide a more reliable guide to what occurred than the memories of all five of the witnesses which clearly have faded in the five years since the mediation.
I do not perceive much difference between the recollections of Mr Maurici on the one hand and Ms Tsaganas on the other. Mr Maurici’s recollection was that he repeated the earlier offer subject to the provision of financials whereas Ms Tsaganas’ recollection was that Mr Maurici was not prepared to make any offer unless Flip About provided financial information. Such a difference, given five years after the event in question, is not significant. On both accounts, progress was contingent upon Flip About agreeing to provide further financials which Ms Tsaganas was reluctant to do. The evidence given by Mr Kean (extracted above) to the effect that Ms Tsaganas was beside herself at the end of the mediation is understandable in this context and consistent with an unacceptable offer being made – contrary to her expectation, there had been no progress.
As stated above, it should also be kept in mind that what occurred at the mediation is only one aspect of the enquiry into whether Alamdo and/or Flip About negotiated in good faith. I reject the suggestion put by Flip About’s senior counsel that what occurred at the mediation was significant in and of itself. It is only one part of the enquiry.
After the mediation, on 22 July 2020, Ms Tsaganas sent Alamdo eight BAS from 2019 and 2020 and a document entitled “Jobkeeper.pdf” which showed that Flip About was enrolled for JobKeeper.
The BAS showed, amongst other things:

Prior to the mediation, Flip About made one offer on 29 April 2020 the effect of which was that the Court proceedings commenced by Flip About challenging the rent review would come to an end (being these proceedings) with each party covering their own legal costs, rent would revert to the old rent and to only increase by CPI for the duration of the lease. Further, Flip About would pay 25% of the rent owing with the remainder to be waived, covering the period until the government lockdown ended. Rent would revert to the full amount (being the old rent) one month after the government permitted reopening.
Ms Tsaganas accepted that at the time she made her offer she had significant funds on deposit with the National Australia Bank in her own name which she could have loaned to Flip About if she had chosen to do so. She also accepted that it had been her practice, up to that time, to make interest free loans from her own personal funds to Flip About when it required capital.
As set out above, I am inclined to the view that Mr Maurici reiterated Alamdo’s third offer at the mediation. In any event, whether the offer was formally reinstated there is nothing to indicate that Mr Maurici’s position was that he was not prepared to make any offers. Rather his position was consistently that he required certified financial information from Flip About so that he could assess the impact of COVID-19 on Flip About.
He continued to adopt this position after the mediation. There was, in my view, nothing unreasonable in Mr Maurici adopting this position.
Ms Tsaganas was not willing to provide this information to Mr Maurici. She accepted in cross-examination that she took the view that he was not entitled to the financial information that he was requesting. I am satisfied that this is the real reason why Ms Tsaganas did not provide any financial information to Mr Maurici beyond the BAS statements which she did provide. Her arm had to be twisted at the mediation to agree to provide further information. She subsequently provided eight BAS and a document showing Flip About was enrolled for JobKeeper. Thereafter, Ms Tsaganas refused to provide the further information requested and proceeded to pay rent which she had calculated based on what she contended the National Code required having regard to Flip About’s reduction in turnover.
Various other reasons were given by Ms Tsaganas in cross-examination as to why the requested financial information was not provided. These included an assertion that Mr Maurici had not been sufficiently specific in what he had requested. I do not accept these reasons – there is nothing in the objective contemporaneous material, as summarised above, which supports them.
It was also suggested by Ms Tsaganas that she was unable to provide the financial information requested because the financial statements had not been prepared. Whilst it may be accepted that the annual financial statements for Flip About had not been prepared at the time Mr Maurici made his requests, for financial information from May 2020 onwards, this does not greatly assist Flip About. Mr Maurici was not asking for audited annual accounts to be prepared. The rental relief request form sent by Sebastian on 10 June 2020 (and resent on 10 August 2020), for example, sought:

At no stage did Ms Tsaganas tell Mr Maurici the information sought could not be provided. It is clear that information could be extracted from Xero and had in fact been extracted by Flip About’s accountant for provision to the NSW Government. No offer was ever made to Mr Maurici or indication as to what information could be provided.
What was clearly being sought was certified trading figures and financial reports showing loss of profitability compared to the corresponding period in the previous year. No information of that character was ever provided or offered.
I have set out above my construction of the National Code. As there set out, I reject the suggestion that the National Code did not permit any inquiry beyond Flip About’s turnover in negotiating any rent relief. I reject the suggestion that Mr Maurici was not acting in good faith in requesting the information that he did from Flip About.
I am satisfied that at all times Mr Maurici was acting in good faith in his discussions with Flip About/Ms Tsaganas. He made offers to waive/defer outstanding rent, including likely restating his offer at the mediation.
In any event in relation to this last aspect, as I have said elsewhere in these reasons, I do not regard the issue of whether an offer was made by Mr Maurici at the mediation as overly determinative. Mr Maurici did not indicate that he was not prepared to make any offers. The mediation seemed to go nowhere because each party maintained their existing positions and, importantly, Ms Tsaganas was not prepared to provide the financial information that Mr Maurici was seeking. Thereafter, Ms Tsaganas refused to provide any substantive certified financial information and adopted the position, contrary to my interpretation of the National Code, and what I take to be the interpretation adopted by Stevenson J at first instance in Croc*’s and upheld by the majority in Croc’*s No 1, that the National Code only required Flip About to pay rent consistent with its reduction in turnover.
I do not regard anything said by Robb J in Darzi as being inconsistent with what I have held above. In particular, I do not regard Robb J’s observations at [134]-[135] as setting out any general principles. Robb J in effect says as much at [135]. Insofar as Robb J should be taken to be saying that the National Code requires or permits an impacted lessee to pay rent based on the reduction in its turnover, this appears to me to be inconsistent with what the majority said in Croc*’s No 1 – see [116]-[119] per Payne JA, and what was ordered in Croc’*s No 2.
I am also satisfied that, on balance, Flip About acted in good faith during the negotiations. Whilst I have held that the position adopted by Flip About in paying reduced rent in accordance with turnover and not providing the certified financial information requested, was not in accordance with the National Code, I do not regard Flip About (through Ms Tsaganas) as acting in bad faith in this regard. She was at all times operating honestly in what may aptly be described as ‘unchartered waters’. She was not acting arbitrarily or capriciously.
The offer which she made prior to the mediation, which was apparently restated at the start of the mediation, included that the existing rent review proceedings, which Flip About had commenced, be brought to an end on the basis of no order as to costs and that Alamdo effectively forego any market rent increase. This was effectively the position that Ms Tsaganas said she adopted at the mediation – rent should revert back to what it was before the rent review. There was no proper basis, in my view, for Flip About to adopt this position – the two issues – temporary rent relief due to COVID-19, and validity of the market rent review notice, were quite separate. Linking the two was not in good faith.

I approach this issue on the basis, as found above, that the Market Rent Review Notice was valid and as such the rent outstanding as at the date of termination is to be calculated on the basis of the increased rent. There was no issue, as I understand it that rent was outstanding on this basis. Indeed, even if the notice was not valid, Flip About accepted that there was rental arrears as at 10 or 12 November 2020 which was subsequently satisfied when the guarantee was called on.
Alamdo accepts that in light of the decision of the Court of Appeal in Croc*’s No 1, the COVID Regulations prevented it from taking the action that it did. I am nevertheless asked to decide the issue as Alamdo contends that the decision in Croc’*s No 1 was plainly wrong.
Flip About contends that Alamdo’s conduct was a repudiation because Alamdo’s right to re-enter under clause 30(2) was expressly conferred “unless prohibited by statute” and as such Alamdo’s conduct was in breach of the terms of the Lease. It was said to be a fundamental failure of Alamdo’s covenant to grant quiet enjoyment of the Premises to Flip About, which went to the heart of the Lease.
Flip About also contended that the COVID Regulations prohibited the issuing of the default notice which meant that Flip About could not be in fundamental breach by failing to pay the rent demanded.
A separate point was also made to the effect that the Breach Notice was defective because it did not clearly state the breach relied upon in a way that Flip About could understand.
Alamdo contended that it was entitled, subject to the regulatory prohibition determined in Croc*’*s No 1, to determine the Lease under clause 30(3). Clause 30(3) was said to constitute a right separate from clause 30(2) of the Lease and accordingly, Flip About’s reliance on the words “unless prohibited by statute” in clause 30(2) was not relevant.
Alamdo contends it did not evidence an intention not to perform the Lease according to its terms. Rather, Alamdo was insisting on its performance. In the language of the High Court in DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 432; [1978] HCA 12 (DTR Nominees), Alamdo, though asserting a wrong view it believed to be correct, was willing to perform the contract according to its tenor. It follows that “an intention to repudiate the contract could not be attributed to [Alamdo]”. Alamdo’s understanding of its rights was not outlandish or even unreasonable as is demonstrated by the fact that two of the four judges in Croc*’*s No 1 reached the same view.
The seed for the no repudiation argument is the following observation by Payne JA in Croc*’*s No 1 at [184]:

I deal first with Flip About’s contention that the Breach Notice was defective in form because it did not clearly state the breach relied on.
It was not in dispute that the legal principles were the same as applied above in relation to the Market Rent Review Notice.
I do not accept that the Breach Notice was defective because it did not clearly identify the breach relied upon. It did. The breach was the failure to pay rental arrears. It also clearly identified what was required in order to remedy the breach – namely payment of rental arrears within 7 days.
The fact that there may be debate in relation to other statements in the Breach Notice concerning whether Flip About had provided evidence it was an impacted lessee and the like is not to the point. They do not concern the breach relied on and what was required to remedy the breach.
The Breach Notice was given pursuant to clause 30(3)(i)(a) not clause 30(2).
Whilst clause 30(3) is stated to be “further and additionally to” the rights under sub-clauses (1) and (2) above, it does not expressly confer a right to forfeit the Lease by notice and re-entry. The additional rights conferred by clause 30(3)(ii) are confined to an entitlement to recover as damages all loss suffered by Alamdo. By contrast, the right of re-entry conferred by clause 30(2) is permitted to be exercised if the Lessee commits a fundamental breach as defined in clause 30(3) – see clause 30(2)(vi). The right of re-entry under clause 30(2) is subject to “unless prohibited by statute”.
I do not regard clause 30(3) as providing a standalone right to forfeit by notice and re-entry. The contractual right is contained in clause 30(2). There is no reason, in my view, to impute to the parties an intention to confer two relevant rights to re-enter, one of which is subject to “unless prohibited by statute”, the other of which is not.
At [244] of Alamdo’s closing submissions, it was contended that clause 30(3) gave Alamdo the option to determine the lease if it chose to do, as it provides that a failure to pay rent was an essential condition, provided that a notice has been served and the breach has not been rectified. The submission then continued “in that event, Alamdo was entitled to forfeit the lease”. In support of the submission a reference was provided to [17.5] of Bradbrook, Croft and Hay, Commercial Tenancy Law (3rd ed, 2009) and the authorities cited.
I have considered the passage referred to and the authorities cited. The fourth (current) edition of the learned work is identical to the third edition.
In my view, nothing said by the learned authors or in the authorities cited, supports the contention that, in the context of clause 30(2) and clause 30(3), the latter provides a rights of re-entry separate from the right provided for in clause 30(2).
Flip About also contended, as I understood the submission, that it would not matter if clause 30(2) was not qualified by “unless prohibited by statute”, because the same result would follow from the proper construction of the Regulations.
Reliance in this regard was placed on what was said by the High Court (French CJ, Crennan, Kiefel and Bell JJ) in Westfield Management Limited v AMP Capital Property Nominees Limited (2012) 247 CLR 129; [2012] HCA 54 (Westfield) at [46]:

Flip About contended that clauses 4(2) and 5(1) of the Regulations clearly had a protective purpose in the public interest in the sense referred to in Westfield and accordingly, to the extent clause 30(3) of the Lease was inconsistent with those provisions it was ineffective or void. Put another way, clause 30(3) could not permit Alamdo to do something the Regulations effectively forbade Alamdo from doing and likewise there could not have been a common law right to do anything that the statute forbade.
As I understood the oral closing submissions on behalf of Flip About, it was also contended that the failure to pay rent in accordance with the 8 September 2020 Breach Notice was not a fundamental breach by Flip About because the notice that could have caused it to be a fundamental breach was itself invalid – either as to form or by operation of the Regulations that were in place at the time.
Alamdo disputed that the passage relied on from Westfield stood for any freestanding proposition that conduct in contravention of a regulation necessarily results in invalidity of that kind suggested by Flip About.
I do not regard the decision in Westfield as overly significant in the context of the present case. Alamdo accepts that the effect of the operative version of the Regulations, as construed by the majority in Croc*’*s No 1 was to prevent its action. There is no suggestion that the provisions of the Lease were effective to oust the effect of the Regulations. As set out above, I also do not regard clause 30(3) as providing a right to re-entry separate from clause 30(2).
For completeness, I do not regard anything said by the High Court in Westfield, as applied to the Regulation and the circumstances of the present case, as rendering void the Breach Notice. The definition of “prescribed action” in clause 1 of version 2 is not so broad. Nor do I accept that the Breach Notice was invalid as to form; it clearly set out the breach relied on and what was required to remedy the breach.
No submission was advanced by Alamdo that the prohibition in the COVID Regulations on taking the prescribed action did not meet the description of “unless prohibited by statute” in clause 30(2). The position is such that whilst, as a matter of fact, Alamdo was precluded from terminating the Lease by reason of the COVID Regulations, as a matter of contract this was a breach of the Lease. The position is thus slightly different to Croc*’*s No 1 where it does not appear, on my review of the decisions, that the contractual right to re-enter was subject to “unless prohibited by statute”.
The issue thus arises as to whether Alamdo’s conduct was repudiatory.
Repudiation is a serious matter and not lightly to be found or inferred: see Shevill v Builders Licensing Board (1982) 149 CLR 620 at 633; [1982] HCA 47 per Wilson J. Evidence of a sufficient absence of readiness and willingness on the part of the promisor must be clear: Plumor Pty Ltd v Handley (1996) 41 NSWLR 30 at 38 per McLelland CJ in Eq.
A contracting party repudiates (or renunciates) a contract when he or she evinces an intention no longer to be bound by that contract or to fulfil it only in a manner substantially inconsistent with that party’s obligations. The test is whether the conduct of one party is such as to convey to a reasonable person in the position of the other party renunciation either of the contract as a whole or a fundamental obligation under it: see Australia City Properties Management Pty Ltd v Owners – Strata Plan No 65111 [2021] NSWCA 162 at [286] per Bathurst CJ (Payne and McCallum JJA agreeing).
The assessment is thus an objective one. It is a question of fact and the onus is on the promisee: see Dainford Ltd v Smith (1985) 155 CLR 342 at 366; [1985] HCA 23 per Brennan J.
Where a promisor asserts an erroneous view of its rights or obligations, including a mistaken construction of a contract, and acts on that view or evinces an intention to do so, the bona fides of the promisor is relevant to whether the promisor’s lack of readiness or willingness evidences a refusal to perform: see JW Carter, Carter*’*s Breach of Contract (3rd ed, 2024, JW Carter Publishing) (Carter) at [8-26].
In DTR Nominees at 432, Stephen, Mason and Jacobs JJ said:

There are authorities where the principle has been applied to leases – see Emhill at [68] and [74] upholding the decision of the trial judge Nettle J – see Emhill Pty Ltd v Bonsoc Pty Ltd [2003] VSC 333 at [29] and [31]; and Baird v George.
Flip About contended that Baird v George was wrongly decided. I do not accept this contention. I am not convinced that it is plainly wrong.
As I understood the submissions advanced orally by Flip About in relation to Emhill, it was contended having regard to the correspondence in that case, that on no view could it be said to be repudiation. Further, and perhaps somewhat at odds with the first submission, it was contended that the “critical point … is that there was never any attempt in this case to accept the repudiatory conduct”. Neither submission deals with this point of principle.
I proceed on the basis that, if for no other reason than Flip About is seeking to claim damages, it is necessary for it to demonstrate as at its acceptance of Alamdo’s repudiatory conduct, that it was ready, willing and able to perform its obligations under the Lease.
I am satisfied that Flip About has demonstrated that as at the date of its acceptance of Alamdo’s repudiatory conduct, it was ready, willing and able to comply with its obligations under the Lease.
Ms Tsaganas gave evidence, which I accept, that she was ready, willing and able to fund Flip About’s rent payments if necessary. She had a practice of loaning money to Flip About on a needs basis and it was not in dispute that as at 26 October 2020 she had $355,279.94 on deposit with the NAB. The Business was a profitable business.
The increased market rent demanded by Alamdo from Flip About was disputed. Proceedings were commenced by Flip About in October 2019.
Whilst Flip About was in arrears of rent, absent the purported market rent increase, that arrears was not substantial. Even if the disputed rent is included, Ms Tsaganas’ available funds would have enabled this to be paid.
I also do not accept the opinion of Jeffrey Hall, Alamdo’s expert accountant, that Flip About was not solvent as at 10-12 November 2020. That opinion seems to hinge on whether the moneys which Ms Tsaganas had loaned to Flip About were then due and payable. I do not accept that the moneys were then due and payable. Ms Tsaganas gave evidence, which I accept, that she had no intention of calling on the loan.

The more general the statutory duty, and the wider the class of persons in the community who may derive a benefit from its performance, the less likely it is that the statute can be construed as conferring a right of action for damages for non-compliance: Brodie v Singleton Shire Council (2001) 206 CLR 512; [2001] HCA 29 at [326] per Hayne J.
The authorities were also recently reviewed by Bell CJ (with whom Leeming and Payne JJA agreed) in H**NOE Ltd v Angus and Julia Stone Pty Ltd [2024] NSWCA 271 at [60]-[71]. Having referred to the classic statement of Dixon J in O*’*Connor v SP Bray Ltd (1937) 56 CLR 464 at 477-478; [1937] HCA 18 and highlighting that an important aspect of Dixon J’s formulation was that any implied statutory duty would generally exist adjacent to an existing common law duty of care, the Chief Justice referred at [65]-[66] to what Jordan CJ in Martin v Western District of Australasian Coal and Shale Employees Federal Workers Industrial Union of Australia *(*Mining Department) (1934) 34 SR (NSW) 593 at 596 identified as the most important matter pointing against the existence of such an intention, being a special means of enforcement in the statute for the new duty created by the statute. If a means for enforcement is stated, prima facie there is no other remedy.
Importantly, what was said by Jordan CJ is the most important matter pointing against the existence of an action for breach of the statutory duty. The fact that no special means for enforcement is provided does not, however, mean that an intention to create an action will be implied.
I am not satisfied that the COVID Regulations should be construed so as to provide a civil remedy for damages for breach of the Regulations.
The Regulations confer a benefit on a broad class of persons. That conclusion tends against the implication of a private right of action for breach.
Further, there are no existing common law duties of care to which any implied statutory duty would attach or exist adjacent to.
The Regulations also make clear in clause 9 of the Second COVID Regulations that the rules of equity and common law are preserved. This clause applies expressly to the termination of a commercial lease by a lessor (clause 9(b)). This again points against the implication of a private right to damages.
I agree with Payne JA in Croc*’*s No 1 at [183] that an injunction may be issued to restrain termination of a lease in contravention of the Regulations. It is, however, an altogether different matter to imply a private action for damages.
A further important matter, as identified by Alamdo, is that the regulation making power for the COVID Regulations (s 87 of the Retail Leases Act 1994 (NSW)) is expressly confined to creating regulations for the prohibition, regulation and prevention of the exercise of rights and does not include any power to create a new right to damages by regulation. This also strongly militates against the implication of a private action for damages.

The evidence in respect of the relative size of the two premises suggests that there may not be as big a difference as Mr Hall suggests. The Flip About Lease describes the Premises as a “bulky goods showroom of 1977 square metres”. A mezzanine level was also installed by the original franchisee measuring between 340 square metres (Sebastian Maurici’s measurement) and 560 square metres of useable space (Ms Tsaganas’ evidence). The resulting total area is between 2,317 and 2,537 square metres.
By contrast, the Anella Avenue Premises lease indicates its premises comprises 2,646 square metres of floor space, of which 1,885.3 square metres is warehouse and the remaining 760 square metres is office space.
Mr Hall also did not profess to be an expert in the running of a business of the kind being operated, nor in assessing the impact of floor space on such a business.
Ms Tsaganas also gave evidence as to the new attractions introduced by Flip Take Two – being a laser tag area, a haunted house, and a playground area. These were all installed from late 2023 onwards and thus were not on offer in the period up to June 2022, being the period covered by the financials relied on by Mr Nguyen.
The third matter relied on – reduced rental costs – does not bear on the revenue earned by Flip Take Two which is the proxy being used.
It was also suggested that the financial information relied on by Mr Nguyen, and assumed by him to be reliable, may not in fact be reliable. This contention was premised on the fact that both Mr Nguyen and Mr Hall agreed that the financial information for Flip Take Two for later years provided to Mr Hall was not in fact reliable. Examples were given in relation to the later financial information to question its reliability. Nothing was said based on the contents of the 2022 financial information to question its reliability. I do not regard this as a reason not to use Flip Take Two as a proxy.
Mr Nguyen was cross-examined on whether Flip Take Two results were a proxy for Flip About by reference to an example of two McDonalds restaurants located one kilometre apart. On the assumption that each of the restaurants were trading concurrently, Mr Nguyen agreed that he would need to know a lot more about the respective restaurants before he could justify a conclusion that the revenue in one would be the revenue in the other. Such an assumption does not represent the present situation. On the more analogous assumption that one McDonalds closes and another opens one kilometre away some 11 months later, Mr Nguyen maintained that it would be reasonable to expect that customers of the old McDonalds would buy from the new. He accepted, however, that he was assuming that the two businesses were identical and if he had information to suggest they were not, he would take it into account. He emphasised, in the answer I have provided below, that this was not an exercise of precision, but rather using the best evidence available. I accept this evidence of Mr Nguyen.
In circumstances where Flip Take Two essentially continued to conduct the Business previously carried on by Flip About at the Premises, and given that I do not accept the matters raised by Mr Hall undermining its suitability, I am of the view that it is appropriate to use Flip Take Two as a proxy for the revenue that would have been earned by Flip About in the corresponding period.
As Mr Nguyen made clear in cross-examination, he was using the information as a proxy – “it’s not on the exercise of precision, it’s the best available information to, to estimate the lost sales of Flip About”.
This approach is consistent with what Bell P described in Searle at [205] as the inherently difficult task of estimating future and hypothetical events.
The uncertainties and difficulties pointed to by Alamdo in this and other respects on damages are all matters that I will keep in mind in assessing an appropriate discount.

Mr Nguyen adopted a different discount rate in each of his two scenarios.
For scenario A – which proceeds on the basis that Flip About’s losses can be estimated using Flip Take Two’s revenue as a proxy – a 16.8% discount rate is used.
For scenario B – which proceeds on the basis that Flip About’s losses can be estimated using Flip About’s actual data – a 21.8% discount rate is used.
Mr Hall disagrees that it is appropriate to use different discount rates in the two scenarios and opines that only one rate of 21.8% should be used.
In scenario A, Mr Nguyen adopted Mr Hall’s revenue growth assumption which assumes that the financial year 2022 revenue levels will grow in line with long term average inflation of 2.5%. In scenario B, Mr Nguyen applied a much higher revenue growth profile than 2.5%. Mr Nguyen contends that because scenario A assumes no real revenue growth this scenario is significantly more certain than scenario B which assumes a much higher revenue growth profile. In his opinion, because the two scenarios have different revenue growth forecasts, it is appropriate to adopt different discount rates to account for this difference. The role of a discount rate is to account for the inherent uncertainty embedded in the cashflow forecast to which it is applied.
Mr Hall contends that Mr Nguyen’s opinion reflects a misconception of the nature of expected cashflows and discount rates in the context of discounted cashflow methodology. In Mr Hall’s opinion, the relevant question is which estimate of future cashflows represents the best estimate of expected cashflows, not whether the two sets of estimates differ, with the selected discount rate applied to the preferred estimate.
Under cross-examination, Mr Nguyen moderated his position accepting that even using his methodology, a 5% difference would not be reasonable, and the difference would have to be much less than 5%.
I do not accept Mr Nguyen’s opinions in this respect and prefer those of Mr Hall. The discount rate is to allow for risk. The proper approach in the circumstances is to estimate the likely future cash flows. Where there is some uncertainty in relation to what those future cashflows will be, there are, as Mr Hall referred to, various methods to deal with that including probability weighting the cashflows to derive one future cashflow. It is that cashflow that is discounted using the selected discount rate.
In the present case, only one discount rate should be used – 21.8%.

As set out above, both Mr Nguyen and Mr Hall agreed that a margin of 45% (based on EBITDA before rent, owners’ salaries and insurance deductible) is appropriate as a starting point.
However, they differed on two related issues. First, whether the EBITDA margin should be adjusted to exclude $100,000 of assumed fixed operating expenses before then deducting $100,000 as a fixed expense. Second, whether the assessment should be undertaken on the basis that Ms Tsaganas would not have drawn a wage in 2022.
I deal with each issue in turn.
Mr Nguyen calculated that Flip About had achieved an EBITDA margin before owner’s wages, rent and insurance of about 45% in the 2018 and 2019 financial years – 46.6% in 2018 and 45.1% in 2019. This formed the basis for the agreed position. Mr Nguyen’s assessment was based on all costs recorded for Flip About – whether fixed or variable.
Mr Hall’s position was that it was unrealistic to assume that 100% of Flip About’s operating expenses were variable and that failing to recognise this risked over compensating Flip About. Mr Hall openly acknowledged that he did not have the information that he required in order to make a precise estimate of the extent to which Flip About’s operating expenses were fixed rather than variable. He was only able to offer categories of costs that, in his opinion, were likely to be fixed – minimum staffing costs, minimum utility costs and minimum maintenance costs irrespective of customer numbers. He also accepted that the $100,000 figure was a subjective number that he had picked.
In the absence of some evidence that there are costs likely to be fixed as opposed to variable, and some material to enable even a rough estimate as to their likely quantum, I am not prepared to make the adjustment sought. Questions of Ms Tsaganas could have been asked on these matters, including minimum staffing levels and the like. No questions were asked.
This is an example of uncertainty arising in the assessment of future hypotheticals where it is reasonable to err on the side of generosity in favour of Flip About.
The second issue – whether Ms Tsaganas would have taken a wage in 2022 – was, as Mr Hall accepted in cross-examination, really a matter for Ms Tsaganas. Ms Tsaganas gave unchallenged evidence that in the 2022 financial year she would not have drawn a wage from Flip About due to the financial impacts of the extended lockdown on the Business.
Ms Tsaganas’ evidence should be accepted and the assessment conducted on the basis – as Mr Nguyen was instructed to assume – that Ms Tsaganas would not have taken a wage for the 2022 financial year.

The experts were at odds as to Flip About’s revenue prior to 11 October 2021 when Flip Take Two commenced trading. Flip Take Two commenced trading from 11 October 2021 at the end of the lockdown period that began on 26 June 2021.
The issue is what revenue would have been earned by Flip About had it remained open from 10 November 2020. As I understood the submissions, there was no dispute as to the starting point of annualised revenue of $2.4 million.
Both Mr Nguyen and Mr Hall placed some reliance on the revenue figures for other Flip Out franchises at Penrith and Smeaton Grange. They did so in different ways. Mr Nguyen thought it reasonable to estimate that Flip About’s revenue would track the percentage movement in reverse at the other franchise operations whereas Mr Hall thought it reasonable to estimate that Flip About would have generated similar levels of revenue as the Penrith and Smeaton Grange businesses did during the ongoing COVID-19 recovery period. Consistently with that, his revenue projection was broadly in line with the actual revenue earned by these other two sites as opposed to the percentage increase over the pre-COVID-19 revenue used by Mr Nguyen.
Mr Hall also referred to the fact that a new franchise operation had opened up at Villawood just prior to the onset of COVID-19 and which re-opened in June 2020, which would have adversely affected the Flip About business in Castle Hill. Mr Nguyen did not agree that this would have had an adverse impact.
Appreciating that neither Mr Hall nor Mr Nguyen are experts in the conduct of a business similar to the Business, it is difficult to assess the impact, if any, of the Villawood franchise on the performance of the Business. In the circumstances, and appreciating the difficulties and limitations with any hypothetical exercise of the kind being undertaken, I prefer the approach of Mr Nguyen in this regard to that of Mr Hall. Tracking the change in revenue of Flip About to the percentage change in revenue of the Penrith and Smeaton Grange franchises is preferable to using the latter’s revenue figures.
Whilst it seems that Flip About had a slower than initial recovery than the Penrith or Smeaton Grange sites over the period between June and November 2020, at least a partial explanation for this, as Ms Tsaganas explained, was Flip About’s online booking system had been suspended in March 2020, and only became operational again on 7 September 2020.
Tracking Flip About to the percentage change in revenue of Penrith and Smeaton Grange is likely to be more reflective of what would have happened to Flip About in the same period, being a period after the initial lockdown where the takings of Penrith and Smeaton Grange show that there was a post-COVID-19 bounce in entertainment businesses of this kind.
Mr Nguyen’s figures for this period should be used.

The experts were at odds as to revenue and revenue growth post October 2021 and up to 30 April 2027 being the expiry of the option period.
In his first report, Mr Nguyen proceeded on the basis of Flip About data only and for the period between financial year 2023 to financial year 2027 (ending on 30 April 2027). Mr Nguyen used annual revenue of $2.4 million and applied 15% growth in financial year 2023, a slower growth in financial year 2024 and 5% in financial year 2025 before adopting 2.5% (representing inflation) from then on.
In his first report, Mr Hall accepted the $2.4 million annual revenue starting point but took issue with Mr Nguyen’s growth figures for financial years 2023, 2024 and 2025, contending that revenue should be projected to grow by 2.5% per annum.
Mr Nguyen then responded by using the Flip Take Two figures for financial year 2022 and expressing the view that Flip Take Two should be used as a proxy for Flip About. The annualised revenue for Flip Take Two for financial year 2022 was approximately $3.5 million, considerably higher than the $2.4 million starting point using the Flip About historical data. The new and preferred scenario presented by Mr Nguyen used Flip Take Two financial year 2022 revenue and applied the 2.5% per annum growth to 30 April 2027. Mr Nguyen maintained as Scenario B, the earlier analysis based on Flip About historical results and the more aggressive growth in financial year 2023 to financial year 2025.
I took from this analysis that Mr Nguyen accepted that if the Flip Take Two financial year 2022 figure were used, it was appropriate to assume 2.5% per annum growth. Mr Nguyen did not contend that his more aggressive financial year 2023 to financial year 2025 growth figures should be used or something in between.
Accordingly, the debate in relation to whether the more aggressive financial year 2023 to financial year 2025 growth rates only relates to Flip About’s fallback position of Scenario B.
As set out above, I have concluded that for the purposes of the analysis, being a hypothetical one with all of the uncertainties and imperfections that entails, the Flip Take Two financial year 2022 figures should be used as a proxy for Flip About during the same period. Given this conclusion, I do not need to determine whether the more aggressive financial year 2023 to financial year 2025 growth figures should be used.
If, however, I be in error, in my conclusion that Flip Take Two should be used as a proxy for Flip About, I do not regard the growth assumptions used by Mr Nguyen in his Scenario B analysis, again bearing in mind its limitations, as being outside the range of what is permitted, although perhaps at the aggressive end of the range. The initial period is after all COVID restrictions have ended and as such it is not unrealistic to see growth in this period in a business such as the Business. It must be appreciated that the starting point in this regard is the $2.4 million Flip About revenue figure and not the much higher Flip Take Two annualised financial year 2022 figure.
By contrast, Mr Hall’s figures of 2.5% growth across all five years of the option are, in my view, too conservative. I am satisfied that prior to the termination of the Lease, and more particularly prior to the onset of COVID in early 2020, the financial results for Flip About show that it was still growing. The analysis of Mr Nguyen based on the historical trading of Flip About supports the growth assumptions that he has made.

Both parties accepted that, in addition to dealing with the matters which divided the expert forensic accountants, it was appropriate for an overall percentage discount to be applied to the resultant damages to take account of the vicissitudes.
Flip About did not suggest a particular percentage discount for the court to apply.
Alamdo, relying on Lindsay-Owen v HWL Ebsworth Lawyers [2023] NSWSC 68, contended it was a matter for the Court’s assessment. A discount of 50% was suggested. Whilst accepting that this aspect was a matter of impression and little assistance can be derived from other authorities, Alamdo drew attention to the application of a 55% discount in Hungry Jack*’s v Burger King [1999] NSWSC 1029, which was not disturbed on appeal: see Burger King v Hungry Jack’*s Pty Ltd [2001] NSWCA 187 at [581].
In BestCare Foods Ltd v Origin Energy LPG L**td [2013] NSWSC 1287, Stevenson J at [175] aptly described the task as involving an exercise of judgment, which takes account of the dealings between the parties prior to the breach, and which, necessarily, cannot be scientific or mathematical in nature, nor susceptible to a detailed process of reasoning. The figure is to take into account the vicissitudes or contingencies to which the damages award must be subjected.
There are a number of contingencies and uncertainties associated with the profits that would have been earned by Flip About. Without in any way being exhaustive they include: whether Ms Tsaganas would have funded Flip About to pay the outstanding rent; whether Ms Tsaganas would have continued to fund Flip About throughout the remaining initial period of the Lease and, if exercised, the option; whether Ms Tsaganas would have caused Flip About to exercise the option ending 30 April 2027; the likely future revenue of Flip About which includes whether Flip Take Two was an appropriate proxy, what revenue Flip Take Two earned or would have earned beyond the one year of reliable figures available; what would have been the impact of competing businesses and alternative businesses; and what would have been the profit margin earned by Flip About on its revenue.
These matters underscore the inherently speculative nature of the assessment and the need for a substantial discount to ensure that damages do not overcompensate.
In all of the circumstances, the discount I propose to reflect the exigencies and uncertainties is 40%.

In its submissions on damages served prior to the hearing, Flip About contended that if the Court is not minded to award damages for the loss of the valuable opportunity to remain in the Premises and earn profits for the remainder of the term of the Lease, including the option, then Flip About seeks damages for wasted expenditure. Reliance in this regard was placed on what was said by the High Court in Cessnock at [49] (Gordon J) and [61] (Edelman, Steward, Gleeson and Beech-Jones JJ). These initial submissions put the wasted expenditure at a minimum of $400,000 on the basis that Flip About paid $600,000 in goodwill in respect of a business it had rights to operate for 10 years but only got to operate for 40 months (about one third of the period).
In Flip About’s closing submissions on damages, an additional amount was added, being the loss apparently suffered on the assets it was unable to recover and sell to Flip Take Two. The value of those assets was said to be $348,321.33 – the total claimed thus being $748,321.33.
In support of this additional amount, reliance was placed on a journal entry in Flip About’s accounts together with some evidence given by Ms Tsaganas in cross-examination concerning the value ascribed to the assets transferred from Flip About to Flip Take Two.
In response, Alamdo pointed out that the alternative claim is not pleaded. It was not contended that Alamdo was prejudiced in this regard and thus the point should not be permitted to be argued.
Rather it was contended that the claim is unsustainable, being unsupported by any expert evidence and based on a back of an envelope lawyer’s calculation. It is further contended that there is an inconsistency in the position advanced by Flip About in, on the one hand, basing part of the claim for wasted expenditure based on goodwill and, on the other, denying that any goodwill was transferred to Flip Take Two because it belonged to the franchisor. Finally, it was contended that there is no sense in which this is a wasted expenditure as the goodwill was “wasted” because of the free and voluntary choice of Flip About to transfer its business to Flip Take Two for no or nominal consideration, and to cease trading through Flip About.
I deal separately below with the causation contention.
Regardless of the question of causation, I am not satisfied that the claim for wasted expenditure has been made good.
The two passages relied on by Flip About from Cessnock are [49] and [61].
At [49], Gordon J stated:

It is convenient to deal with these two issues together as they are related, arising out of the decision of Ms Tsaganas not to continue the Business through Flip About but to incorporate a new entity, Flip Take Two.
The relevant underlying facts are not really in dispute. This is because Ms Tsaganas was quite upfront as to what she did and why she did it.
The chronology relevantly begins with Flip About contending, by letter dated 12 November 2020, that Alamdo’s conduct on 10 November 2020 in re-entering and forfeiting the Lease was repudiatory, and electing to accept the repudiation, thus bringing the Lease to an end.
As early as 11 November 2020, Ms Tsaganas, with the assistance of her then boyfriend (now fiancé), Mr Knight, was looking for new premises for the Business. On 12 November 2020 an offer was made on behalf of Flip About for a lease over new premises.
After a period of somewhat protracted negotiations involving lawyers and payment of a security deposit, Ms Tsaganas was given access to the Premises to remove Flip About’s goods and equipment. The goods and equipment were removed and stored in storage containers.
The offer made by Flip About on 12 November 2020 for a lease of new premises was not successful. On 15 December 2020, Mr Knight, on behalf of Flip About, sent an email enquiring in relation to new premises. Ms Tsaganas agreed that what she was intending at this time was to “restart the Flip About Pty Ltd business” in new premises. She was actively looking for new premises for Flip About.
Flip Take Two was incorporated on 9 February 2021. At that point Ms Tsaganas had already identified the Anella Avenue Premises and had either procured them or had progressed negotiations further enough to confirm it was going ahead. Ms Tsaganas indicated that at the time the Anella Avenue Premises were identified, it was with a view to Flip About continuing the Business in those premises.
When Ms Tsaganas was asked in cross-examination about what changed and caused her to incorporate Flip Take Two, she identified three reasons:

In relation to the first of these reasons, Ms Tsaganas was cross-examined by reference to the Binding Financial Agreement she entered into with Mr Tsaganas on 26 March 2020. She agreed that she understood from this time (March 2020) that she owned Flip About entirely, whether the shares were recorded in her name or not.
In relation to the second reason, Ms Tsaganas says she was told she needed a new franchise agreement as they were site specific and she needed a new step in deed with the landlord and franchisor. She agreed, however, that there was no reason why these new agreements could not have been entered into by Flip About.
On the third reason, Ms Tsaganas responded that she did not want the new premises being burdened by a damages claim from Mr Maurici.
Having regard to this evidence, I am not satisfied that the first two reasons were of any real moment. I am satisfied that the real and operative reason why Ms Tsaganas did not continue the Business in the name of Flip About was the third reason – namely, she did not want the business to be subject to a liability to Alamdo in the proceedings. She agreed it was her “real motivation”. I deal below with the legal effect of this conclusion.
Ms Tsaganas then agreed that after the incorporation of Flip Take Two on 9 February 2021, all of the “things” done in restarting the trampolining business were done by Flip Take Two. She also agreed, variously, that the business conducted by Flip Take Two is effectively a continuation of the old business conducted by Flip About, or that the new business is a broadly comparable business as the old business. The old business built up a significant customer base and many of those customers followed Ms Tsaganas to Anella Avenue.
The Anella Avenue Premises opened for business on 11 October 2021 upon the coming to an end of the latest relevant COVID lockdown restrictions.
It is not in dispute that a number (but not all), of the assets that had been used in the conduct of the Business, and placed in a storage container after termination of the Lease, were subsequently installed at Anella Avenue and used by Flip Take Two in the conduct of their new business.
There was a dispute as to whether any consideration was paid by Flip Take Two to Flip About for those assets.
On the first day of the hearing, Flip About produced to Alamdo an email from Mr Apolo to Ms Tsaganas dated 7 October 2022 which stated, relevantly:

The Main Arena $40,000
Dodgeball $20,000
Misc $10,000
Roller $10,000
When cross-examined, Mr Apolo gave evidence that he did not know when the assets were transferred and that to the best of his knowledge there was a book entry and not a payment of $80,000. He did not recall any valuations being done to support the figures.
Ms Tsaganas said that $80,000 was in fact paid by Flip Take Two to Flip About over three bank transfers between September and December 2021. She ascribed a value to each of the assets transferred either by reference to what she had sold an item back to the franchisor or based on the amortised value of the item.
On the final morning of the hearing Flip About tendered an extract of Flip About’s bank statements covering the period 1 October 2021 to 31 December 2021. The bank statements show three transfers from Flip Take Two to Flip About for $15,000 (29 October 2021), $55,000 (4 November 2021) and $15,000 (14 December 2021). No witness was called or recalled to explain how these entries sat with Ms Tsaganas’ evidence summarised above, given that the transfers total $85,000 and not $80,000. No submissions were ultimately advanced on this discrepancy.
For what it is worth, I am satisfied that Flip Take Two paid Flip About $80,000 for the equipment/assets previously used by Flip About which Flip Take Two used in the conduct of its business at Anella Avenue.
It was not in dispute that Flip Take Two did not make any payment to Flip About on account of goodwill.
Flip Take Two has been a successful business. Its revenue for financial year 2022 was $3.5 million expressed on an annualised basis. It is difficult to make any definitive findings as to its performance after financial year 2022 because although financial statements for Flip Take Two were provided to Mr Hall and Mr Nguyen, each subsequently agreed that they were unreliable.
Flip Take Two continues to operate a trampoline play business from Anella Avenue but no longer as part of a Flip Out franchise. Flip Take Two bought its way out of the franchise agreement.
Having set out these factual matters, I now turn to set out and then determine the contentions raised by the parties.
Alamdo pleaded, relevantly, two defences in the event Flip About established it had suffered loss or damage.
First, Alamdo denied that any such loss or damage was caused by the defendant. In substance, the particulars of this allegation are that Flip About, acting through Ms Tsaganas, made a free and voluntary choice to shut down and discontinue the business of Flip About, transfer its assets to Flip Take Two for no or nominal consideration and to effect continuation of the business of Flip About through Flip Take Two. That choice was said to be a new and intervening act, breaking the chain of causation between any alleged breach and the loss alleged to have been suffered.
Second, Alamdo alleged that Flip About has failed to take reasonable steps in order to mitigate any such loss or damage. The contention – as advanced in closing submissions – relied on the same matters relied on in respect of the causation argument.
In response, Flip About contended that the breach was a cause of the loss – which is sufficient - and there was no failure to mitigate, relying on the well-known cases that a party is not required to undertake a risky activity in order to mitigate its loss.
The relevant principles were not in dispute, only their application.
In Alexander v Cambridge Credit Corp**oration Ltd (1987) 9 NSWLR 310 (Cambridge Credit) at 358, McHugh JA stated:

In the perhaps somewhat unusual circumstances of the present case, I am satisfied that Flip About’s decision, made by its director Ms Tsaganas, not to continue the Flip About business at the Anella Avenue Premises (or at all for that matter) but rather to incorporate Flip Take Two for the purposes of continuing that business was a new and intervening act breaking the chain of causation between the assumed breach of contract and the loss claimed.
Any “loss” suffered by Flip About after Flip Take Two commenced operation in October 2021 was not caused by any breach of contract by Alamdo but rather by the decision to no longer continue the business in Flip About. Ms Tsaganas was quite candid that the intention, up until the incorporation of Flip Take Two, was to continue the business in Flip About and it was thereafter decided not to continue the business in Flip About but in Flip Take Two.
The fact that Ms Tsaganas would have been required to loan further moneys into Flip About to enable it to continue to trade does not, in my view, bring the case into one to be analysed by reference to the principles of mitigation and to contend that it was not unreasonable for Ms Tsaganas to make that decision. Ms Tsaganas had obviously previously been quite willing or prepared to loan her personal funds into Flip About when necessary and was also prepared to provide the necessary funds to enable Flip Take Two to continue to run the businesses from the Anella Avenue Premises.
Ms Tsaganas’ real motivation in deciding to no longer continue the business in Flip About was because she did not want the business to be exposed to a potential liability to Alamdo by reason of the market rent review and unpaid rent. That motivation was quite unrelated to the breach of contract alleged by Flip About against Alamdo.
It would, in my view, defy common sense to conclude that Flip About suffered any loss post the opening of Flip Take Two. It is to be remembered that the quantum of that loss is the profit in fact earned by Flip Take Two – being the new corporate entity incorporated by Ms Tsaganas to carry on the business for reasons unrelated to the alleged breach.

I have set out earlier in these reasons the terms of the Breach Notice and the terms of clause 30(3) of the Lease.
Flip About contended that the notice was not a valid notice for three reasons. First, the purported issue of the notice was “prescribed action” during the “prescribed period” based on a failure to pay rent during the prescribed period, and was therefore prohibited by clauses 4 and 5 of the COVID Regulation.
Second, the Breach Notice was invalid because it so wildly overstated the arrears that it did not give Flip About a reasonable opportunity to do what it was obliged to do: Ex parte Whelan [1986]1 Qd R 500 at 505-6 (Thomas J). This was premised on Flip About being correct about the validity of the Market Rent Review Notice.
Third, and not in terms attacking the Breach Notice, any breach that existed as at 8 September 2020 was cured through the payments Flip About made on 8 October 2020 of $27,872 and on 5 November 2020 of $33,822. Thus there was not, as at 10 November 2020, any fundamental breach of the Lease upon which Alamdo could have relied pursuant to clause 30(3). This submission was qualified in Flip About’s Supplementary Submissions by reason of an acknowledgment that Mr Nguyen had incorrectly calculated the rent outstanding. On the corrected calculations the rent outstanding as at 8 September 2020 was $31,779 and 10 November 2020 was $44,863 (both excluding GST). Accordingly, Flip About was in surplus after the bank guarantee was called on by Alamdo on 18 November 2020.
I did not understand it to be in dispute that, having regard to the decision in Croc*’*s No 1, the sending of the Breach Notice was the taking of prescribed action.
Alamdo disputed that there was any overstatement of rent. It was also contended that, in any event, it was clear on the face of the Breach Notice what had to be done and the arrears of rent could have been paid under protest. It is said that Ex parte Whelan makes this clear.
The principle dispute between the parties concerned the validity of the Market Rent Review Notice. As set out elsewhere in these reasons I have found that the market rent review notice was valid.
In Ex parte Whelan, Thomas J stated at 505-506:

Mr McGloin responded with a list of a number of “comparables” with rents between of $150 to $165 per square metre net. Mr Maurici said that his son thought the property was worth $200 per square metre and he agreed with him.
On 18 November 2020, Shelby Woodgate, a Leasing Executive at Retail Projex (Ms Woodgate), emailed Sebastian indicating that she had quoted “$250 sqm + outgoings + GST” for the Premises to “the two prospects you [met] today”.
Mr Maurici did not agree with the proposition that he was asking in the order of $70 per square metre greater than what his agent had advised him it was worth. He rightly pointed out that this was a different agent who obviously held the opinion that $250 was the right rate.
On 18 November 2020, Ms Tsaganas sent a letter to Mr Maurici seeking to remove Flip About’s property from the Premises.
On 19 November 2020, Mr Maurici responded to Ms Tsaganas’ letter stating that certain structural improvements were now Alamdo’s property and otherwise offered for Flip About to attend the premises to prepare an inventory of the property.
On 19 November 2020, Ms Tsaganas’ replied to Mr Maurici’s letter disputing that certain structural improvements were Alamdo’s property and seeking to arrange an inspection of the Premises on 24 November 2020.
On 23 November 2020, Mr Maurici replied to Ms Tsaganas’ letter maintaining that the structural improvements were Alamdo’s property, arranging for an inspection the next day on 24 November 2020, and requesting $378.40 for security to supervise the inspection.
On 23 November 2020, Ms Tsaganas replied to Mr Maurici’s letter seeking further clarification on Mr Maurici’s requirements.
On 24 November 2020, Mr Maurici replied to Ms Tsaganas’ letter with further details of the inventory and removal process.
On 25 November 2020, Paul McGlynn of Colliers (Mr McGlynn) emailed Sebastian advising that Bounce was interested in the Premises, and had made an offer which included rent of $225 square metre gross. Mr McGlynn suggested offering $225 per square metre net for rent in response.
On 26 November 2020, Sebastian replied to Mr McGlynn stating that he agreed that Mr McGlynn should go back at $225 per square metre net plus outgoings and GST.
On 26 November 2020, Ms Woodgate emailed Sebastian advising that she had received a verbal offer from a children’s play centre with a net rent of $200sqm for a term of five plus five years.
On 26 November 2020, Mr Maurici sent a letter to Ms Tsaganas regarding the removal of items from the Premises. The letter stated:

On 28 November 2020, Ms Tsaganas replied to Mr Maurici’s letter with a proposal to access and remove items from the Premises.
On 30 November 2020, Mr Maurici and Ms Tsaganas exchanged a number of emails and each sent a letter to the other regarding the access and removal of items from the Premises.
On 30 November 2020, Alamdo executed an Open Leasing Agency Agreement with effect from 16 November 2020. On that same day, Mr McGloin forwarded to Sebastian an offer that had been received from Tru Ninja. Recommendations were also made as to a response to the offer.
On 2 December 2020, Ms Tsaganas sent two letters to Mr Maurici regarding the access and removal of items from the Premises and offered $10,000 as security during the removal process.
On 3 December 2020, after the exchange of further correspondence, Alamdo and Flip About reached agreement on the terms of access to, and the property to be removed from, the Premises. Flip About also agreed to commence removal work as soon as possible after agreement was reached on the inventory.
On 4 December 2020, Sebastian, on behalf of Alamdo and Ms Tsaganas on behalf of Flip About, met at the Premises and agreed on items to be removed by Flip About.
On 7 December 2020, Mr McGloin sent a further offer that had been received from Tru Ninja.
Mr McGloin noted that whilst Tru Ninja had increased their offer in terms of net rent they were requesting that air conditioning be installed or alternatively better rent free or a cash contribution incentive. Mr Maurici gave unchallenged evidence that the revised offer contained a number of unacceptable features and as such negotiations did not go any further with Tru Ninja.
After a series of further negotiations, Flip About commenced removing its property from the Premises on 11 December 2020.
By 16 December 2020, Alamdo had prepared a new layout for the property, not just the Premises and Sebastian sent a copy of the new layout to Mr McGloin, seeking his views.
On 17 December 2020, Flip About ceased removing its property from the Premises. Mr Maurici offered a four-day extension for Flip About to remove its property on the condition of an additional $13,671 paid by Flip About to the trust account of Alamdo’s solicitors.
Between 18 to 23 December 2020, Sebastian continued to communicate with agents regarding potential leases and inspections of the Premises.
On 23 December 2020, Mr Maurici followed up on his 17 December 2020 offer for a four-day extension to Flip About.
On 24 December 2020, Ms Tsaganas replied noting that Flip About completed the removal of its goods on 17 December 2020 and that Flip About was unable to undertake make good works because of the supervision fee imposed by Alamdo.
From 4 to 8 January 2021 and 18 to 22 January 2021, Sebastian Maurici continued to communicate with agents (not just Norwest) regarding the potential lease of the Premises. An agency agreement with Homeway First National was entered into on 8 January 2021. CBRE appears to have become involved on about 22 January 2021. LJ Hooker were also consulted around this time.
On 2 February 2021, a further offer was received from Tru Ninja. Again, Mr Maurici gave unchallenged evidence as to why this further offer was unacceptable.
In March 2021, Sebastian continued to communicate with agents regarding the potential lease of the Premises. Belgravia Health expressed interest through Colliers on 23 March 2021.
On 21 April 2021, Alamdo received an offer from Reece Group to rent units 4 to 6 at $525,000 per annum plus GST, being $160 per square metre. The offer was for the Premises together with the Croc’s premises. Mr Maurici gave unchallenged evidence of the features of the offer that he did not regard as acceptable. Discussions with Reece continued.
On 30 April 2021, Alamdo received a further offer from Reece Group to rent units 4 and 5 (not 6) at $450,000 per annum plus GST, being $190 per square metre. Mr Maurici gave unchallenged evidence as to why this offer was not acceptable, being essentially the same as the problems with the earlier offer from Reece.
Mr Maurici was cross-examined on an email sent by a representative of Colliers to a prospective tenant indicating that, in relation to the Premises, what was being sought was guaranteed rent for six months and directors guarantees. Mr Maurici did not really recall the email although he had included it in the exhibit to one of his affidavits. I do not regard the email as of any significance absent some evidence that what was being asked for was exorbitant or unreasonable, let alone that that was the last sticking point in obtaining a tenant at this time.
In May 2021, Alamdo received further offers for a potential lease, including from Fuse Box Entertainment Pty Ltd (Fuse Box).
The offer from Fuse Box was for the ground floor only, not the mezzanine level. Mr Maurici gave evidence that in his opinion the tenant was a start-up operation and thus a significant risk. He did not pursue discussions with Fuse Box at this time for this reason and because negotiations with Reece were ongoing and he was hopeful that Reece would take a lease of the Premises without Unit 5.
Mr Maurici was cross-examined as to why he didn’t request an increased guarantee and the like to deal with the risk and it was suggested to Mr Maurici that he was not interested in obtaining a tenant in the shortest possible time which Mr Maurici denied. Mr Maurici said he was concerned not to have a tenant that would be subject to COVID lockdowns. I do not regard Mr Maurici’s conduct in this regard as unreasonable, particularly given what had occurred with Flip About.
In May 2021, another prospective tenant expressed interest to operate a sports bar and tavern but Mr Maurici indicated he was not interested in this type of tenancy because of its impact on other tenants. He was not challenged on this evidence.
Negotiations with Reece continued into June 2021. On 23 June 2021, Mr Maurici, on behalf of Alamdo, signed a non-binding Heads of Agreement (HOA) with Reece for the Premises for $450,000 per annum or about $194 per square metre net, plus GST and outgoings. Changes had been made to the previous offer made from Reece. The market rent review cap had been removed and the offer was for the Premises alone. Management fees were also payable. Reece was granted a 60 day exclusivity period to endeavour to agree to the lease terms. At this time, Mr Maurici was hopeful a lease could be concluded with Reece.
Thereafter, there were detailed and lengthy negotiations with Reece on the terms of the lease. They were delayed during the further government ordered lockdown between 26 June 2021 and 11 October 2021. Mr Maurici also gave unchallenged evidence that during this period other enquiries, unsurprisingly, also dried up.
A lease was drafted with Reece and contractors and tradespersons inspected and began works on the Premises on behalf of Reece in the expectation a lease would be entered into.
The prospective lease to Reece fell through in or about mid-October 2021. As such, in about late October 2021, leasing of the Premises was put back on the market.
On 26 October 2021, CBRE introduced a potential tenant, Steel Storage to Sebastian, and an inspection of the Premises took place. Nothing came of this.
Attempts were made in early November to reactivate discussions with Reece, but these attempts were unsuccessful.
On 10 November 2021, Mr McGloin of Norwest sent an email to Sebastian attaching an offer from another prospective tenant, Alto Group, for a portion of the Premises – being on the mezzanine side for 1,029 square metres. Mr Maurici gave unchallenged evidence that he was not prepared to agree to the terms with Alto Group because the rent offered did not justify the expense required for the installation of the inter-tenancy dividing wall of about $80,000, plus the cost of separation of services and provision of separate amenities of another $170,000.
In November 2021, Sebastian wrote to each of Norwest and CBRE proposing to appoint them both as lead agents to market Units 4 and 5, on an open basis.
Mr Alessi of CBRE responded the next day with a draft leasing agency agreement for Sebastian’s review and execution. An agreement was subsequently entered into with CBRE covering the period 15 December 2021 to 14 June 2022.
On 24 February 2022, Mr Alessi emailed Sebastian informing him that he had inspected the Premises with prospective tenant (HMPS) who was seeking between 2,000 and 2,300 square metres of office space. Sebastian responded on 25 February 2022 seeking further details and requesting that HMPS make a formal offer. No offer was in fact received.
Mr Alessi continued to provide Sebastian with updates in relation to prospective tenants throughout March 2022.
In late March 2022, Dutton One Group (Dutton) expressed interest in the Premises on 29 March 2022 and made an offer to lease Unit 5 together with part of the Premises.
Also on 29 March 2022 , CBRE emailed Sebastian indicating that a company which was currently based in Blacktown and looking at establishing another indoor sports centre within the Hills District, was interested in inspecting the Premises. Sebastian responded on 30 March 2022 to CBRE to the effect that it would depend upon what the financials were like for the prospective tenant because Alamdo was not “willing to lease to any start-ups or smaller operators”.
Mr Maurici was cross-examined in relation to this exchange. Mr Maurici was asked whether there was any occasion on which he would have agreed to have leased to a small organisation if they agreed to the bank guarantees, the directors guarantees, and Alamdo’s rental rates but would not provide Alamdo with their financials. Mr Maurici responded that if it was a personal guarantee of a start up he would ask for statements of the assets and liabilities of the directors to see whether they had the capacity to honour their personal guarantee. Mr Maurici did not shy away, however, from the fact that at this time he was not particularly interested in leasing to start-ups or small operators. He described that as pretty well a standard policy.
No submission was ultimately made directly on this point to suggest that such a policy was an unreasonable one.
Discussions with Dutton continued and on 11 April 2022, Sebastian received an email from Mr McGloin attaching a heads of agreement in relation to the leasing of an expanded Unit 5 which would now include part of the Premises.
On or around 7 June 2022, Alamdo and an entity associated with Dutton executed a new lease of the expanded Unit 5, which now included part of the Premises. The terms of the lease required Alamdo to relocate the existing dividing wall or install a new dividing wall to provide a lettable area of approximately 1,452 square metres. This would include 490 square metres of what was previously part of the Premises.
The Dutton lease rental was $355,740 net plus GST and outgoings for 1,452 square metres or $245 per square metre net.
After execution of the Dutton lease on 7 June 2022, further attempts were made to let the balance of the Premises.
Little occurred in this regard until September 2022 when Reece and Alamdo recommenced negotiations for a potential lease of the balance of the Premises. A further offer was made from Reece on 8 November 2022 at $230 per square metre.
Ultimately, on 23 December 2022, Alamdo and Reece executed a lease for the balance of the Premises. The lease provided that it was conditional upon development consent for Reece’s use and required Alamdo to provide an Occupation Certificate for the balance of the Premises. The rent for the Reece lease of part of what was previously the Premises is $230 per square metre net over the remaining part of the Premises, being 1,827 square metres, including the mezzanine area plus outgoings.

Having regard to the detailed chronology set out above, I reject any suggestion that Alamdo failed to act reasonably in seeking to re-let the Premises. Mr Maurici was quite candid in relation to what he did and did not do. He was seeking to obtain a secure long term tenant of the Premises being one that would not be subject to the impacts of COVID lockdown and the like. Whilst it took approximately two years to re-let the entirety of the Premises, I am not satisfied that Alamdo behaved unreasonably. It is important, in my view, to constantly bear in mind that the period over which Alamdo sought to obtain a tenant was a period where the effects of COVID, both legal and otherwise, continued to be experienced.
Flip About’s submissions in this regard focussed on two matters.
First, what was said to be Alamdo’s conduct in its dealings with Flip About concerning Flip About accessing the Premises to remove its property. We are talking here about a period of, at most, five to six weeks between 10 November 2020 and 17 December 2020. I am not satisfied that Alamdo behaved unreasonably during this period. Whilst there was a degree of back and forth as to the terms of access, this is to be viewed against the background that the parties were heavily in dispute at this time.
Whilst Flip About contended that Alamdo had no lawful basis to impose the conditions it did, no detailed submissions were advanced in support of this contention.
Second, it was contended that Alamdo did not make reasonable efforts to re-let the Premises. In particular, it was contended that soon after the Lease was terminated, Alamdo was informed that the achievable market rent for the Premises was $170 to $180 per square metre net and that Alamdo did not accept this advice and held out for an unrealistically high amount of rent and demanded onerous security.
I do not accept these criticisms. The initial advice was provided by one agent and appears to have been quite informal. None of the other agents involved appear to have suggested that Alamdo’s asking rent was excessive. Further in relation to the alleged imposition of onerous conditions, there is no evidence to support the contention that the terms sought were anything other than standard. Again, none of the agents involved advanced such a view.
I do not regard the market rental now agreed between the experts as overly significant. I place greater reliance on the real-world attempts to find a new tenant.

There are various components to the damages claimed, each of which I will address in turn.
First, there is the claim for lost rental income in respect of the period from 10 November 2020 to 12 June 2022. I did not understand Flip About to ultimately dispute the figures calculated by Mr Hall.
If, as I have found, the market rent review notice was valid, the net present value of the lost rent is $876,587.
If I am wrong as to the validity of the market rent notice, the net present value of the lost rent is $672,083.
Flip About contended that these amounts should be reduced on account of Alamdo’s alleged failure to mitigate its loss asserting that the Premises should have been re-let from about January 2021.
I have rejected the failure to mitigate argument and as such there should be no reduction on that basis.
Relatedly, Alamdo also seeks damages in relation to the rent that would have been payable if the Lease had been renewed up until replacement tenants were secured – being 7 June 2022 for part of the Premises leased to Dutton and 23 December 2022 for the remainder of the Premises leased to Reece.
Flip About contends that no such damages should be awarded because Alamdo had no contractual entitlement to require Flip About to renew the Lease and thus no contractual entitlement to the rent claimed for that period. Under clause 30(3)(ii) of the Lease, Alamdo was entitled to claim “as damages all loss suffered by [Alamdo] in consequence of the loss of benefit of any unexpired portion of the terms of the Lease”.
No authority was cited by Alamdo in support of the claim for damages for lost rent during the Lease renewal period until replacement tenants were found.
In my view, Alamdo has no such entitlement to claim rent during the renewal and I do not include any amount for damages on this account.
Third, Alamdo claims $137,432 in connection with the removal of Flip About’s property and the repair, make good, and reinstatement of the Premises. This claim is supported by evidence given by Mr Maurici, including the invoices annexed to his evidence.
Flip About contends that insofar as the claim is for the costs of making good the Premises, that loss was occasioned by Alamdo’s own unreasonable conduct. It is said that Flip About sought to arrange access to the Premises so it could comply with its make good obligations, but that Alamdo refused to provide such access.
Further, insofar as the damages claimed include amounts for security and supervising Flip About’s removal of property, it is said that Alamdo has no lawful basis to pass those costs on. The hours claimed for Sebastian are also said to be excessive.
The starting point is the provisions of the Lease.
Clauses 9(8) and (9) of the Lease provide:

The obligation to make good was not in dispute. Further, Mr Maurici was not cross-examined on his affidavit evidence concerning the works carried out by or on behalf of Alamdo after termination of the Lease. Whilst it may be accepted that Mr Maurici did not personally supervise all of the works, the bulk of the amount claimed – $118,914.53 – is supported by an invoice issued by Wembly Pty Ltd to Alamdo dated 31 March 2022 which was admitted without objection.
The majority of the remaining amount claimed is made up of an invoice from Maurici Management Pty Ltd to Alamdo, also dated 31 March 2022 for $18,517.95, admitted without objection. It was not in dispute that Maurici Management was another company associated with Mr Maurici and for whom Sebastian worked at the time. The invoice includes a charge for 58.5 hours for supervision at $200 per hour. Ms Tsaganas gave evidence that she estimated that Sebastian attended the Premises during the removal of the fitout for approximately 15 hours. Sebastian swore an affidavit dated 22 August 2025 that dealt only with his recollection of what occurred at the mediation. He was cross-examined by AVL from Singapore but only about the mediation.
In circumstances where the claimed hours are supported by an invoice, I see no reason not to accept the amount claimed. Ms Tsaganas’ estimate is not said to be based on any contemporaneous or objective material. No doubt her impression at the time of making her 30 June 2025 affidavit was as she deposed. However, I prefer the earlier objective evidence.
I turn now to consider the other arguments raised – whether Alamdo prevented Flip About from undertaking further removal/make good work, and whether Alamdo is permitted to pass on the security/supervision cost.
There was considerable correspondence between the parties prior to Flip About obtaining access to the Premises. It is not necessary to recount the back and forth in that regard. It is clear that Alamdo and Flip About reached an agreement as to the terms on which Flip About would access the Premises. This included that Flip About could pay for the attendance of security and Sebastian whilst Flip About was removing its items and $10,000 would be paid into Alamdo’s solicitors trust account as security for the payment of the security personnel and Sebastian.
In these circumstances, I see no reason not to allow Sebastian’s supervision costs in relation to the removal work, save for the causation argument to which I now turn.
The correspondence prior to Flip About obtaining access is, in my view, not relevant to the causation argument which focuses on Flip About’s subsequent attempts to obtain access to carry out the make good works.
It is not in dispute that Flip About left the Premises on 17 December 2020. At 5.04pm on that day, Mr Maurici wrote to Ms Tsaganas in the following terms:

As I have said repeatedly in these reasons, I have sought to deal with what I understand to be all of the issues raised by the parties. I have sought to do so principally by reference to the 18 issues formulated by Flip About.
If any of the parties contend that there are issues that I have not determined, they should identify those issues at the time that I provide below for the parties to seek to agree orders to give effect to these reasons. If I have substantively misunderstood the position of either party on the issues I have dealt with, this should also be brought to my attention.
The parties should consider these reasons and then confer to seek to agree orders to give effect to them and finally determine the legal claims made. They should also seek to agree an appropriate costs order.
My present view is that, although I have determined that Alamdo’s conduct was not repudiatory and thus Flip About’s damages claim does not arise, there would be utility, should the matter go further, in the accounting experts of the parties (Mr Nguyen and Mr Hall) calculating the quantum of Flip About’s loss in accordance with these reasons. If both parties agree that this should be done, they should cooperate for this to occur.
I will stand the proceedings over for 21 days to enable consideration of these reasons and conferral to seek to agree orders or determine the way forward. If any dispute remains, I will decide how best to resolve the remaining issues.
I make the following orders:
Direct the parties to confer to seek to agree orders to give effect to these reasons, including as to costs.
Direct the parties to provide any agreed orders, or otherwise competing orders together with submissions of no more than 5 pages in support of these orders, to my Associate by email no later than 4pm on the second business day prior to the relisting date referred to in order 3 below.
Stand the proceedings over for directions at 9.30 am on 20 May 2026 or such other date as may be arranged by email to my Associate, any such revised date to be arranged within 14 days of the date of these orders.

Flip About Pty Ltd v Alamdo Holdings Pty Ltd

At a glance

Court

Decision date

Before

Catchwords

Source

Email me a plain-English summary of this case

Catchwords

Judgment

Parties

Legislation Cited (19)

JUDGMENT

1. Introduction and overview

2 Issues in the Proceedings

2.1 An attempt to expand the issues

3 Overview of the witnesses

4 Overview of the facts

5 Relevant Provisions of the Lease

6 The Code and Regulations and their meaning

6.1 What did the National Code require?

7 Determination of the Agreed Issues

7.1 Issue 1 – invalidity of the market rent review notice

7.2 Issue 2 – Service of the review notice

7.2.1 The chronology

7.2.2 Determination of Issue 2

7.3 Issue 3 – Outstanding rent

7.4 Issue 4 – impacted lessee

7.5 Issue 5 – clause 4(2) of the COVID Regulation

7.6 Issues 6, 13 and 14 – Did the parties negotiate in good faith?

7.6.1 The chronology

7.6.2 Determination of Issues 6, 13 and 14

7.7 Issue 7 – Repudiation by Alamdo

7.8 Issue 8(a) - Flip About’s entitlement to damages for repudiation

7.9 Issue 8(b) – Flip About’s entitlement to damages for breach of statute

7.10 Issue 9 – Quantification of Flip About’s loss

7.10.1 Loss of Opportunity claim

7.10.2 Brief overview of Mr Nguyen’s opinions

7.10.3 Brief overview of Mr Hall’s opinions

7.10.4 The matters agreed between Mr Nguyen and Mr Hall

7.10.5 The critical differences between Mr Nguyen and Mr Hall and their resolution

7.10.5.1 Would Flip About have exercised the option?

7.10.5.2 Is Flip Take Two an appropriate proxy for Flip About?

7.10.5.3 Tax Gross Up

7.10.5.4 Discount rate

7.10.5.5 The Hypothetical Profit Margin

7.10.5.6 Period up to 11 October 2021

7.10.5.7 Period after October 2021

7.10.6 Overall percentage reduction

7.10.7 Wasted Expenditure

7.10.8 Conclusion on Flip About’s loss

7.11 Issues 10 and 11 – Mitigation of Loss and Causation

7.12 Issue 12: “Alter Ego”

7.13 Issue 15: Validity of breach notice?

7.14 Issue 16: Compliance with Breach Notice

7.15 Issue 17: Alamdo’s failure to mitigate

7.15.1 The chronology

7.15.2 Determination of Issue 17

7.16 Issue 18: Alamdo’s Damages

8 The claim against Mr Tsaganas

9 Conclusion and orders

Amendments

23 June 2026

Cases Cited (87)