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Catchwords: LEASES AND TENANCIES — Ejectment — Order for possession
TORTS — Trespass to land — Damages
COSTS — Gross sum costs order

Legislation Cited: Civil Procedure Act 2005 (NSW), ss 98(1). 98(4)(c)
Corporations Act 2001 (Cth), s 601AD
Legal Profession Uniform Law Application Act 2014 (NSW), Part 7
Real Property Act 1900 (NSW), ss 41, 42
Uniform Civil Procedure Rules, Part 16

Cases Cited: Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11
Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119
Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1
Hamod v State of New South Wales [2011] NSWCA 375
Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213
Konskier v B Goodman Ltd [1928] 1 KB 421
Pirovic v Barbieri [2021] NSWSC 1460
Sydney Local Health District v Macquarie International Health Clinic Pty Ltd (No 2) [2020] NSWCA 316
Wenham v Ella (1972) 127 CLR 454; [1972] HCA 43

Category: Principal judgment

Parties: McPhail Enterprises (NSW) Pty Ltd (Plaintiff)
Nicholas Drake (Defendant)

Representation: Counsel:
N Kirby (Plaintiff)
Solicitors:
Thurlow Fisher Lawyers (Plaintiff)

File Number(s): 2024/00342158

Publication restriction: Nil

JUDGMENT

1. This judgment concerns a claim for possession of land.

2. The plaintiff is McPhail Enterprises (NSW) Pty Ltd and is represented by N Kirby. McPhail is the registered proprietor of the land at XX Railway Road, North Mulgrave NSW 2768 (the property).

3. The defendant is Nicholas Drake. Mr Drake was the sole director and secretary of Drake Demolition Pty Ltd (Drake Demolition). Drake Demolition was incorporated on 28 June 2000 and reregistered on 19 November 2017. Mr Drake was called three times outside the court. He did not appear at the hearing.

Service of documents

4. On 4 November 2024 Peter McPhail (Mr McPhail), director of the plaintiff, affirmed an affidavit that set out the following:

5. On 29 October 2024, Mr McPhail personally served the defendant with:

(a) A Form 93 Possession of Land Cover Sheet with attached sealed copy of the Statement of Claim; and (b) Form 5 Notice to Occupier with attached copy of the Possession of Land Cover Sheet and of the Statement of Claim.

2. On 31 October 2024, Mr McPhail attended the property and found that the gates were locked. He attached an envelope containing the above documents to the gate, and placed another envelope containing the same documents on the ground just inside the gate.
3. Mr McPhail took a photograph of the locked gates displaying the two envelopes, and annexed it to his affidavit.

Notice of Motion

5. By the Notice of Motion filed 19 December 2024, the plaintiff seeks Judgment for the plaintiff for possession of the property.

6. On 1 February 2014, the plaintiff entered into a two-year lease (the Lease) with Drake Demolition. The defendant in these proceedings had been Drake Demolition's sole director. The Lease expired on 31 January 2016. The parties extended it to 31 May 2017. Upon the Lease's expiry, Drake Demolition continued in occupation on a month-to-month hold-over.

7. Unbeknownst to the plaintiff, Drake Demolition was deregistered on 19 November 2017. The defendant failed to inform the plaintiff of the tenant's deregistration. From 19 November 2017, the defendant continued to occupy the property and continued to pay rent to the plaintiff.

8. The plaintiff’s solicitor purported to serve Drake Demolition with a Notice terminating the Lease on 3 May 2024. The defendant did not vacate until 16 November 2024, leaving approximately 1,204 m3 of demolition-derived waste, damage to fixtures and removal of perimeter fencing.

9. The defendant has not engaged with the proceedings in any way. He has not filed a Notice of Appearance nor a Defence. The defendant’s whereabouts are unknown. He has not appeared at any of the seven directions hearings since 5 November 2024. The plaintiff claims that it is entitled to default judgment for possession and liquidated damages under Part 16 of the Uniform Civil Procedure Rules (UCPR).

10. The plaintiff submitted that:

11. the requirements for default judgment for possession (UCPR rr 16.3, 16.4) and on the unliquidated damages claim (UCPR rr 16.6, 16.7) are satisfied on the affidavit material; and

12. the unchallenged evidence supports an assessment of damages as set out in the plaintiff’s Schedule of Damages (Annexure A).

13. The plaintiff relies upon four affidavits of Mr McPhail filed 4 November 2024, 18 December 2024, 3 December 2025 and 20 February 2026.

14. The issues for determination are:

15. whether the plaintiff is entitled to default judgment for possession of the property under UCPR rr 16.3 and 16.4; and

16. the proper assessment of damages for trespass and for breach of the 2014 Lease, including the cost of rectification, repairs and removing approximately 1,204 m3 of demolition waste left on the property.

Default Judgment

13. A defendant is in default for the purposes of Part 16 UCPR, if he has failed to file a defence within the time limited by r 14.3 (28 days after service of the Statement of Claim): UCPR r 16.2(1).

14. The plaintiff relies upon UCPR rr 16.3, 16.4 (default judgment for possession of land), 16.6 (default judgment on a claim for unliquidated damages - judgment for damages to be assessed) and 36.8 (judgment by default).

15. An affidavit in support of an application for default judgment must establish:

16. the originating process was duly served;

17. the time for filing a defence has expired;

18. no defence has been filed; and

19. the matters required by the rule applicable to the particular kind of judgment sought: UCPR r 16.3.

20. Where the originating process contains a claim for possession of land and a claim for unliquidated damages, judgment may be entered on each claim in accordance with the rule applicable to that claim (UCPR 16.8).

21. UCPR 16.4 sets out the requirements for default judgment for possession. Those requirements are satisfied: McPhail Affidavit of 18 December 2024.

22. UCPR 16.7 sets out the requirements for default judgement for an unliquidated claim.

23. On entry of default judgment, the allegations in the Statement of Claim are taken to be admitted by the defendant, and the Court enters judgment on that basis subject only to assessment of damages on a claim for unliquidated damages: Banque Commerciale SA (E**n Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 at pp 296-297 (Mason CJ and Gaudron J); Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1 at p 91 (Dixon J). The pleadings define the issues and constitute the admissions on which the default judgment is founded.

24. On a claim for unliquidated damages, the entry of default judgment is conditional on the Court's assessment of damages on the evidence (UCPR rr 16.6 and 16.7). The plaintiff bears the onus of proving the fact and quantum of damage by admissible evidence on the balance of probabilities but is entitled to the benefit of the deemed admissions in the Statement of Claim and to such inferences as may reasonably be drawn from those admitted facts.

Possession of land

21. As registered proprietor under the Real Property Act 1900 (NSW) (RPA), the plaintiff has an indefeasible right to possession of the property against the world, including against a former tenant or licensee whose right of occupation has been determined: ss 41, 42 RPA.

22. On the deregistration of a tenant company, the leasehold interest, being personal property, vests in ASIC pursuant to s 601AD of the Corporations Act 2001 (Cth). It does not pass to a former director who continues to occupy the premises.

23. Continued occupation following deregistration of the corporate tenant gives rise to a trespass or (at the highest in the defendant's favour) a tenancy at will or a tenancy by sufferance, determinable on reasonable notice (or, in the case of a tenancy at sufferance, no notice).

Mesne profits and reasonable occupation

24. A landlord whose tenant remains in possession after the lawful determination of the lease is entitled to recover, as damages for trespass, an amount commonly called "mesne profits". The ordinary measure is the market rent of the premises during the period of trespass: Sydney Local Health District v Macquarie International Health Clinic Pty Ltd (No 2) [2020] NSWCA 316.

25. Alternatively, where the relationship between the parties is contractual, the plaintiff may recover "reasonable occupation”, recoverable either as damages for use and occupation under the implied terms of a holdover tenancy, or in restitution for unjust enrichment. The measure is, again, the market rent.

Damages for trespass or breach of lease covenants

26. To the extent that the defendant continued in occupation under the terms of the former lease with Drake Demolition, damages for breach of a lease are assessed on the ordinary contractual measure: the plaintiff is to be put, so far as money can do it, in the position it would have been in had the contract been performed: Wenham v Ella (1972) 127 CLR 454; [1972] HCA 43. Damages reasonably incurred in remedying the breach are recoverable provided they are not too remote. The non-removal of rubbish gives rise to continuing trespass, irrespective of whether a license once allowed them to store such goods: Konskier v B Goodman Ltd [1928] 1 KB 421.

Default judgment for possession

27. Each of the matters required by UCPR rr 16.3 and 16.4 is established on the affidavit material:

28. the originating process was duly served personally on the defendant on 29 October 2024: Affidavit of Service [3], CB.2;

29. the time for filing a Defence (extended by order of 5 November 2024 to 27 November 2024) has expired: CB.42;

30. no Defence has been filed at any time;

31. Notice to Occupier under UCPR r 6.8 was duly served on 29 October 2024 and again on 31 October 2024, and the time for any other occupier to apply for joinder has long since passed: Affidavit 18 December 2024 [2], CB.18; and

32. there are no other persons in occupation: the defendant himself vacated on or about 16 November 2024: Affidavit 18 December 2024 [6], CB.18; Affidavit 3 December 2025 [22], CB.47.

33. On the deemed admissions consequent on default, the plaintiff is the registered proprietor of the property and the defendant has no right of occupation. The plaintiff is entitled to judgment for possession.

34. The 2014 Lease was a lease of commercial premises. After expiry of the fixed term on 1 February 2016 the parties are deemed, by cl 58, to have entered into a month-to-month periodic tenancy. The lease was extended to 31 May 2017 by agreement evidenced by a new front page (CB.46 [14]; CB.60-61). After 31 May 2017, a month-to-month periodic tenancy continued.

35. On the deregistration of Drake Demolition on 19 November 2017, its leasehold interest vested in ASIC pursuant to s 601AD of the Corporations Act 2001 (Cth) and did not pass to the defendant. On the most generous characterisation in the defendant's favour, his interest (if any) thereafter was at most a periodic monthly tenancy on the terms of the 2014 Lease. That interest was lawfully determined by the Notice of Termination of Holding Over served on 3 May 2024 (CB.79).

Resolution

31. It is my view that the plaintiff has satisfied all the requirements to be entitled to a default judgment for possession. The plaintiff is entitled to judgment for possession of the property.

Damages

32. A Schedule of Damages (the Schedule) was provided which, item by item, identifies each amount claimed and the corresponding paragraph of Mr McPhail's Affidavit of 20 February 2026 and the page of the Court Book on which the supporting evidence appears.

33. The plaintiff seeks damages under five heads:

34. lost rent for the period 1 July 2023 to 16 November 2024: $42,986.66 incl GST;

35. mesne profits for the period from 16 November 2024 to date and continuing, calculated at $5,200 per month plus GST: currently estimated at $88,400;

36. past expenses of investigation, repair and remediation already incurred: $16,442.36 incl GST;

37. the future cost of repairs that are quoted (but not yet performed): $32,890 incl GST; and

38. the future cost of removing demolition-derived waste fill: $859,320 incl GST.

39. The details of the quantum and the evidence relied upon for each head of damages are set out below.

Lost rent - 1 July 2023 to 16 November 2024

35. From 1 July 2023 to 16 November 2024 the defendant occupied the property under a holdover periodic tenancy at the agreed rent of $2,600 per month inclusive of GST (notified by text message of 1 March 2023 and accepted by part-payment in April and October 2023): Affidavit 3 December 2025 [17]-[19], CB.47. Rent was paid up to and including June 2023. The amount owing for the period 1 July 2023 to 16 November 2024 is $42,986.66 inclusive of GST: Affidavit 20 February 2026 [14]-[16], CB.90.

Mesne profits - 16 November 2024 to date and continuing

36. From 16 November 2024 the plaintiff has been unable to re-let the property because of the substantial waste left by the defendant and the related repair works required. The plaintiff seeks mesne profits (or, alternatively, damages for use and occupation, or for breach of the obligation to deliver vacant possession in good condition), measured at the market rent of the property assuming it was in a lettable condition. Three independent rental appraisals are in evidence:

37. Savills (July 2024): $86,520 - $108,150 p.a. plus outgoings plus GST (Exhibit PJM-2 pp 56-65; CB.167);

38. Blox (February 2025): $61,290 - $85,720 p.a. plus outgoings plus GST (Affidavit 20 February 2026 [18(b)], CB.91); and

39. InFocus Property: $65,000 - $75,000 p.a. plus outgoings plus GST (Exhibit PJM-2 pp 66-86; CB.181).

40. Mr McPhail's evidence is that the current market rent is not less than $5,200 per month plus GST (i.e. $62,400 + GST p.a.). That is the lower amount of those independent appraisals: Affidavit 20 February 2026 [19], CB.91. The midpoint of each of the appraisals is, respectively, $97,335, $73,505 and $67,500 and the combined mean is $79,446 per annum.

41. The Schedule conservatively calculates the figure as at the date of preparation at $88,400 (i.e. 17 months x $5,200) and notes that the figure is an "estimate currently". The figure will increase by a further $5,200 per month plus GST until the date of judgment, and thereafter until the property is restored to a state in which it can be re-let. The plaintiff is entitled to mesne profits as above.

Past expenses of repair, investigation and remediation

39. The Schedule itemises the categories of expenditure already incurred by the plaintiff in remedying the damage caused by the defendant and in investigating the waste. Each item is supported by invoices and/or bank statement entries exhibited at Exhibit PJM-2:

40. Hot water system replacement: $1,581.42 incl GST (Exhibit PJM-2 p 115; CB.223);

41. Excavator hire (levelling) - Kennards Hire: $469 incl GST (Exhibit PJM-2 p 97; CB.205);

42. Roller hire (levelling) - JMJ I iHire2u: $1 430 incl GST (Exhibit PJM-2 p 99; CB.207);

43. Skip bin hire - H.X. Services Pty Ltd: $935 incl GST (Exhibit PJM-2 p 95; CB.203);

44. Hawk Geo Pty Ltd payment on contamination assessment: $5,335 incl GST (Exhibit PJM-2 p 96; CB.204); and

45. Bundle of receipts for repair labour, plumbing supplies, electrical components and family-member labour to office and yard: $6,691.94 incl GST (Exhibit PJM-2 pp 100-119; CB.208-227).

46. In addition, two items remain to be performed and are the subject of quotations:

47. Deck repairs and rails - Admire Build Pty Ltd quotation dated 16 February 2026: $9,625 incl GST (Exhibit PJM-2 p 120; CB.228); and

48. Fence repair - Australian Security Fencing quotation: $23,265 incl GST (Exhibit PJM-2 p 121; CB.229).

49. Each of these amounts is recoverable as damages for breach of the 2014 Lease (cll 24, 31, 33 and 38) and as damages for trespass.

Future cost of waste removal

42. The principal item of damage is the cost of removing the approximately 1,204 m3 of demolition-derived waste fill from the property. Following sampling on 15 November 2025, the Hawk Geo Preliminary Targeted Contamination Assessment dated 3 February 2026 classifies the fill as General Solid Waste (GSW), and not asbestos: Exhibit PJM-2 pp 3-55, CB.1 11-163.

43. The plaintiff relies on the Moits Civil Contracting quotation at Exhibit PJM-1 p 31 (CB.82). On Mr McPhail's evidence (Affidavit 20 February 2026 [23]-[28], CB.92), and applying his 30 years' experience as a civil construction contractor and an average density of 2 tIm3 for demolition fill (consistent with the Wastebook data exhibited), the total cost of waste removal - comprising spotter, excavator hire and cartage and disposal - is estimated at $781,200 plus GST (i.e. $859,320 md GST). Mr McPhail also gives evidence that contractor rates have risen since the date of the quotation.

44. The waste-removal cost is recoverable as damages for trespass (the defendant having no right to leave waste on the property after the lawful determination of the holdover tenancy on 3 May 2024) and as damages for breach of cl 31 of the 2014 Lease (to the extent the defendant was in possession under the terms of his company's former lease).

Costs

45. The plaintiff’s counsel took me through all the supporting evidence. It is not necessary for me to reproduce it here. The amounts in the plaintiff’s submissions are correct. I am satisfied that the plaintiff is entitled to these damages under all the headings referred to and that the corresponding quantum is correct.

46. However, the plaintiff seeks a gross sum costs order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW) (CPA).

47. The plaintiff relies upon the Affidavit of Stephen Barry (Mr Barry) sworn 12 May 2026 and filed 13 May 2026 (Barry Affidavit). Mr Barry is the solicitor with day-to-day conduct of the matter, was admitted to practice in New South Wales on 6 May 1983, and has been continuously in practice since, with extensive experience of both taxation and assessment of costs in this and other Australian Courts: Barry Affidavit [1], [2], [5], [11].

48. The issues to be determined are: firstly, whether the Court should exercise its discretion under s 98(4)(c) CPA to order a specified gross sum, rather than making a general costs order and; and secondly, if so, the appropriate amount of that gross sum.

The Law on costs

49. By s 98(1) CPA, costs are at the discretion of the Court. S 98(4)(c) relevantly provides that, at any time before costs are referred for assessment, the Court may make an order to the effect that the party to whom costs are to be paid is to be entitled to “a specified gross sum instead of assessed costs”.

When a specified gross sum order is appropriate

50. The power under s 98(4)(c) "is not confined, and may be exercised whenever the circumstances warrant its exercise": Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [21] (Giles JA, Handley and Fitzgerald JJA agreeing) (Harrison v Schipp).

51. The principal purpose of the power is to avoid the expense, delay and aggravation involved in protracted litigation arising out of a taxation or assessment of costs: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at p 120 (von Doussa J), cited with approval in Harrison v Schipp at [22] and in Hamod v State of New South Wales [2011] NSWCA 375 at [813]-[820] (Beazley JA, Giles and Whealy JJA agreeing) (Hamod).

52. The circumstances that are favourable to the making of such an order are:

53. that the costs of assessment would be protracted, expensive, or disproportionate to the amount likely to be recovered: Hamod at [813]­[820];

54. that the financial circumstances, or the conduct, of the paying party are such that the receiving party is unlikely to be able to recover its costs on a formal assessment Pirovic v Barbieri [2021] NSWSC 1460 at [22]; and

55. that the Court has, on the materials available, sufficient confidence in arriving at an appropriate sum: Harrison v Schipp at [22].

Quantification of the gross sum

53. The fixing of a specified gross sum is not a process analogous to taxation or assessment. The Court takes "a much broader brush than would be applied on taxation", the figure being one that is "logical, fair and reasonable" having regard to the information before the Court: Harrison v Schipp at [22]; Hamod at [813]-[820].

The plaintiff’s submissions

54. An application of this kind is supported by evidence sufficient to allow the Court to make an informed estimate: Hamod at [820]. Mr Barry has set out in detail the work done, the rates charged, the disbursements, and the conventional assessment-stage reductions. This is conventional and ordinarily sufficient.

55. Mr Barry’s evidence as to costs is as follows:

56. the professional fees billed and unbilled by Thurlow Fisher Lawyers Pty Ltd ($35,758.34 and $5,100 respectively): Barry Affidavit [12], [16];

57. the hourly rates by reference to which those fees were calculated ($600/$500/$400 for Mr Fisher I Senior Solicitor / Solicitor), each of which falls within the range published by the NSW Costs Assessment Rules Committee in its guideline of 24 October 2023: Barry Affidavit [13], [181-El 9];

58. counsel's fees of $13,715, also within the published guideline rates: Barry Affidavit [14]-[15], [17], [18]-[19];

59. the disbursements paid by the firm, comprising court filing fees of $3,699 on the Statement of Claim and process server fees of $290 + $130: Barry Affidavit [14]; and

60. unbilled printing for Court Books and related documents of $1,247: Barry Affidavit [16].

Whether a specified gross sum order is appropriate

56. Counsel for the plaintiff submitted that each of the indicia identified above is present in this case.

57. First, the defendant has not engaged in the proceedings since the earliest days of the proceedings. He did not appear at any of the seven directions hearings before the Court between 5 November 2024 and 2 October 2025. He has not responded to the plaintiff’s correspondence enclosing the Court Book sent on 7 May 2026 by Express Post, email and SMS: Barry Affidavit [6]-[9]. There is no reason to suppose that he will engage in a formal costs assessment, which would, in practical terms, be uncontested.

58. Second, an unopposed costs assessment under Part 7 of the Legal Profession Uniform Law Application Act 2014 (NSW) would impose on the plaintiff further professional fees, application fees, and delay, disproportionate to a possession proceeding against a single unrepresented defendant. The avoidance of that expense, delay and aggravation is the very mischief at which s 98(4)(c) is directed.

59. Third, the Court has the detailed evidence it requires to be confident in fixing a sum.

Whether the proposed gross sum is fair and reasonable

60. In Pirovic v Barbieri [2021] NSWSC 1460 the Court decided to fix a gross sum on the broad-brush methodology in circumstances where the paying party did not appear at the costs hearing. It is submitted that the position here is stronger: the defendant has not engaged in the proceedings at all since 2024.

61. Mr Barry, who deposes to his 43 years of experience of taxations and assessments in this and other Australian Courts (Barry Affidavit [11]), gives evidence that on a party/party (ordered costs) assessment a Costs Assessor would conventionally allow 65% to 70% of the solicitor's professional charges, 90% to 100% of counsel's fees, and other disbursements at cost: Barry Affidavit [20]. He has, on a conservative footing, applied a 65% reduction to professional charges and allowed counsel's fees and disbursements at 100%.

62. Applying those allowances to the figures referred to above:

63. professional costs are $40,858.34 x 65% = $26,557.70;

64. counsel's fees are $13,715, allowed at 100%;

65. court filing fees and process server fees aggregate $4,119, allowed at cost; and

66. document production for Court Books is $1,247, allowed at cost.

67. The total of those figures is $45,638.70.

68. That figure is a conservative estimate of the costs recoverable by the plaintiff on a party/party assessment. It is logical, fair and reasonable, and is supported by clear and detailed evidence from a senior solicitor of long experience: it is a sum in which the Court can have sufficient confidence within the principle in Harrison v Schipp at [22].

Resolution

65. I agree that the plaintiff should not be put to the expense of a costs assessment when the defendant has played no role in these proceedings. The amount sought by the plaintiff applying the broad-brush approach is conservative. The plaintiff is entitled to a gross sum costs order for its costs of the proceedings including the Notice of Motion in the sum of $45,638.70.

Result

66. The plaintiff is entitled to judgment for possession of the property and judgment against the defendant in the sum of $1,040,039.02.

Judgment

67. The plaintiff is entitled to a judgment for possession of the land comprised in Folio Identifier 245.752061, being the land situated at and known as XX Railway Road, North Mulgrave NSW 2756.

68. The plaintiff is entitled to a judgment against the defendant for damages for breach of the 2014 Lease and for trespass to the property and mesne profits in the sum of $1,040,039.02

The Court orders that:

1. The plaintiff is also entitled to mesne profits that accrue at $5,200 per month plus GST until the date of judgment, and thereafter until the property is restored to a state in which it can be re-let.
2. The defendant is to pay the plaintiff’s costs of the proceedings in the specified gross sum of $45,638.70, pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW).