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Catchwords: JUDGMENTS AND ORDERS – amending, varying and setting aside – to specify the judgment debt and price of relief against forfeiture

Legislation Cited: Civil Procedure Act 2005 (NSW), s 14
Uniform Civil Procedure Rules 2005 (NSW), rr 6.8, 36.16(1), 36.16(3A)

Cases Cited: Valor and Pride Hospitality Group Pty Ltd v Ord Developments Pty Ltd [2026] NSWSC 862

Category: Principal judgment

Parties: Valor and Pride Hospitality Group Pty Ltd (Plaintiff/Cross-Defendant)
Ord Developments Pty Ltd (Defendant/Cross-Claimant)

Representation: Counsel:
M Klooster (Defendant/Cross-Claimant)
Solicitors:
JDK Legal (Defendant/Cross-Claimant)

File Number(s): 2025/481644

Publication restriction: Nil

JUDGMENT

1. HIS HONOUR: By its notice of motion dated 6 August 2026, Ord Developments seeks orders pursuant to UCPR 36.16(1) and/or 36.16(3A) that my orders and reasons for judgment published on 27 July 2026 be varied in certain specified respects: see Valor and Pride Hospitality Group Pty Ltd v Ord Developments Pty Ltd [2026] NSWSC 862.

2. Several of the proposed variations are uncontroversial. For example, Mr Smith provided a guarantee of Valor and Pride’s obligations under the lease which is the subject of the proceedings. I referred to that fact at [120] of my judgment but did not make a specific finding that Mr Smith was liable to Ord Developments in his capacity as a guarantor. Mr Smith has since then specifically accepted that he is liable in that capacity and Ord Developments has indicated that it is content with Mr Smith’s uncontroversial acknowledgement. It remains necessary in those circumstances to amend some of the orders I have made to clarify Mr Smith’s liability as a guarantor.

3. In addition, I made orders staying execution of a writ of possession against all occupants of the premises on certain terms and conditions and for the service of documents on them. Valor and Pride Hospitality Group Pty Ltd was referred to in those orders but Mr Smith was not. A variation to include Mr Smith in the relevant orders is sought and should be made.

4. By its statement of cross-claim filed on 1 April 2026, Ord Developments claimed damages from Valor and Pride and Mr Smith for breach of the covenants to pay rent at the rate of $13,120.14 per month plus outgoings and plumbing costs for the period from 1 November 2025 until 1 February 2026. The sum claimed for these items for that period comes to $52,317.80, calculated in accordance with Ord Developments’ schedule of damages which became Exhibit 2. Invoices supporting the amounts claimed were included in the Court Book.

5. In that last respect, Slattery J directed the parties on 17 December 2025 to carry out the plumbing works on what was in effect an urgent basis and to share the costs pending later determination of who was ultimately responsible for the work. It will be recalled that Mr Smith’s decision partially to abate rent pending satisfactory completion of the works was based upon his contention that Ord Developments was responsible for structural repairs and that the plumbing defects qualified as such. I rejected Mr Smith’s interpretation of the relevant clauses of the lease and concluded that Valor and Pride was responsible for rectification of the plumbing problems. It followed from this, and I decided, that Valor and Pride was not entitled to withhold payment of rent or outgoings under the lease or any part of it based upon the contention that the lessor was responsible. Ord Developments now seeks that I vary my original orders to include judgment for the amount of $52,317.80. Having regard to my original findings, Valor and Pride became and remains liable for the payment of outstanding rent and outgoings as well as plumbing costs paid by Ord Developments plus interest, calculated in accordance with Exhibit 2. It follows that Ord Developments is entitled to judgment for $52,317.80 in accordance with its cross-claim.

6. A further and significant matter upon which Ord Developments seeks clarification relates to the order I made granting Valor and Pride relief against forfeiture and the conditions upon which it was granted. The order that I made was in these terms:

“(13) Stay orders (2), (4) and (5) above, and grant Valor and Pride Hospitality Group Pty Ltd relief against forfeiture of the lease, upon the condition that Valor and Pride Hospitality Group Pty Ltd and/or Mark Joseph Smith pays to Ord Developments Pty Ltd or as it may direct by no later than 4pm on 11 September 2026 the whole of any rent then due under the lease but which then remains unpaid by Valor and Pride Hospitality Group Pty Ltd to Ord Developments Pty Ltd.”

7. In circumstances that I will explain, there is a dispute between the parties about what is, or what I intended to refer to as, “the whole of any rent then due under the lease but which then remains unpaid”. I do not understand there to be, or indeed how there could be, any arithmetical dispute that by the time 1 September 2026 arrives, the total amount of unpaid rent due under the lease (assuming it not to have been paid beforehand) will in simple numerical terms be $127,741.48, calculated from 1 November 2025 until 1 September 2026 at the rate of $13,120.14 per month. If Mr Smith has a difficulty with the arithmetic, he has not explained it. Mr Smith’s position is also that Valor and Pride has no obligation to pay a portion of the sum of $127,741.48, being $82,529.92 for rent from 1 March 2026 until 1 September 2026, because it is not “rent then due under the lease” by reason of the operation of an 11 February 2026 agreement. This is explained in what follows.

8. By reason of the terms of that agreement, into which Valor and Pride and Ord Developments entered on 11 February 2026, Mr Smith maintains that the lessee’s liability to pay any rent was put on hold until certain works at the premises were completed. The terms of a letter dated 11 February 2026, written by the solicitor for Ord Developments to Mr Smith, were accepted by Mr Smith and became the agreement in question. It was in the following relevant terms:

“Dear Mr Smith

ORD DEVELOPMENTS PTY LTD ATS VALOR AND PRIDE HOSPITALITY GROUP PTY LTD – OFFER

We refer to your letter dated 10 February 2026 and email of 11 February 2026.

We believe that the parties’ positions are closely aligned in so far that:

■ The Lessee’s interest (if any) in all seven (7) GMEs are reserved for determination at the final hearing.

■ These settlement terms do not affect both parties’ rights in relation to the issues in dispute, including, but not limited to, rent abatement and losses.

However, as the Lessee has proposed additional terms, the offer contained in our letter of 10 February 2026 is not considered to have been accepted.

To avoid any uncertainty regarding the terms of a settlement agreement, we are instructed to again make the following offer in a genuine attempt to settle the interim relief. You will note, we have included additional terms relating to structural repairs and filing fees in response to your letter in order to facilitate a resolution.

The Defects

1. The Lessor will (without admission) engage Mr Fullick to undertake plumbing works necessary to remedy the alleged defects (if any) identified in paragraphs 26, 27, 28 and 34 of Mr Smith’s affidavit of 3 February 2026.

2. The Lessor will (without admission) engage a qualified tradesperson to undertake works necessary to remedy the balance of the alleged defects (if any) identified in Mr Smith’s affidavit of 3 February 2026.

3. Mr Fullick and the tradesperson engaged in accordance with [2] above will be instructed to:

(a) inspect the defects identified in Mr Smith’s affidavit;

(b) provide a report identifying, with specificity:

(i) the location of any defects (if any);

(ii) the cause, existence and extent of any defects (if any);

(iii) the method(s) of rectification for any matters identified in (i) and (ii) above (the ‘Remedial Works’); and

(iv) the estimated cost of the Remedial Works, and

(c) undertake the Remedial Works identified in [3](b)(iii).

4. The Lessor will, without admission, pay all costs of Mr Fullick and the appointed tradesperson. The ultimate liability for Mr Fullick and the tradesperson’s costs will be determined by the Court at a final hearing.

5. The intention of the Lessor making the above offer is to identify and fix any alleged defects as promptly as possible, whilst reserving the question as to who is ultimately responsible under the Lease to pay for those repairs.

Rent and Outgoings

6. Upon completion of the Remedial Works (‘Completion Date’), the Lessee will on the day after the Completion Date pay all rent and outgoings for the remainder of that calendar month on a pro rata basis. The Lessee must then pay all future amounts as they fall due in accordance with the Lease. The rent and outgoings will be paid by the Lessee into JDK Legal’s trust account. JDK Legal will not be authorised to release any amounts paid by the Lessee until the Court’s further orders or Supreme Court proceedings (2025/00481644) are otherwise determined, discontinued or dismissed.

7. The necessity of an independent market rent review is to be determined at a final hearing. Should the Court order a market rent review in accordance with the Lease, the Lessor acknowledges that any rent paid which exceeds the determined rental amount will be re-imbursed to the Lessee within 14 days of the determination of the market rent review.

8. The intention of the Lessor making the above offer is to require the Lessee to pay full rent and outgoings from the date after the Completion Date but, acknowledging the Lessee’s concerns about the quantum of rent payable, having the rent and outgoings paid into the Lessor’s solicitor’s trust account until the Supreme Court matters are finalised.

Termination and Rent Abatement

9. Subject to clause 10 below, the Lessor is restrained from terminating, forfeiting, re-entering, evicting, or otherwise interfering with the quiet enjoyment of the Lessee’s possession of the Hotel until Court’s further orders or the Supreme Court proceedings (2025/00481644) are finalised.

10. For the avoidance of any doubt, the Lessor reserves its rights to terminate the Lease for any new breaches of the Lease, including, but not limited to, the Lessee’s failure to pay rent and outgoings in accordance with clause 6 above.

11. The parties acknowledge that the amount of rent and outgoings payable under the Lease for the period from 1 November 2025 until the Completion Date will be determined at a final hearing.

12. The intention of the Lessor making the above offer is to allow the Lessee to make its rent abatement argument without the Lessor taking action to terminate the Lease, but also ensuring the Lessor is not prevented from taking action authorised under the Lease if the Lessee does not comply with the Lease after the Remedial Works have been completed.

…

Final Hearing and Costs

17. The interim hearing before Peden J on 12 February 2026 is vacated.

18. The parties will seek an expedited final hearing upon the Remedial Works being completed.

19. The parties agree to seek an adjournment of the hearing on 13 February 2026, noting that an expedited final hearing will be sought by both parties upon the Remedial Works being completed.

20. The intention of the above offer is to avoid the need for appearances at further interlocutory hearings this coming Thursday and Friday.

21. Costs of the proceedings are in the cause and will be determined at the final hearing.

Structural Repairs

22. The parties acknowledge that a central issue in dispute is the obligation under the Lease (including but not limited to clause 17.4) to undertake structural repairs at the Hotel and its application to the Remedial Works.

23. Determination of which party is obligated to undertake the Remedial Works will be determined at a final hearing. Notwithstanding, the Lessor has agreed, on without admissions basis, to undertake the Remedial Works at its costs initially in accordance with clause 4

Filing Fees

24. The parties acknowledge that costs of the proceedings to date are otherwise reserved and will be determined at final hearing.

25. Notwithstanding clause 24, the Lessor agrees to pay the Lessee $3,216, without admission and on a without prejudice basis, on account of its filing fees.

26. The Lessor reserves its rights in relation to the payment of $3,216 to the Lessee on account of the filing fees and in respect of the costs of the proceedings generally.

This offer is capable of immediate acceptance in writing, at which point in time a binding agreement comes into place between the parties.

This offer seeks to avoid further interlocutory hearings and preserve the status quo until the matter is resolved at a final hearing (if required). Upon the completion of the Remedial Works, the parties will be better positioned to work towards a final settlement.

Given the upcoming interlocutory hearing, this offer is open for acceptance until 2:00pm on Wednesday, 11 February 2026. If the Lessee does not accept the offer within the offer period, the offer will be taken to have been rejected.

Yours faithfully

JDK Legal”.

9. Although this agreement was pleaded as a foundation for relief in Ord Developments’ cross-claim, no relief pursuant to its terms was sought. Indeed, neither party sought any orders or relief from me based upon this agreement.

10. I decided the structural repairs issue, referred to at paragraphs 22 and 23 of the 11 February 2026 letter, in favour of Ord Developments. I concluded that the proper interpretation of clause 17.4 and other clauses of the lease imposed no obligation upon Ord Developments to carry out any of the works as they were not structural. There is no current dispute that the “Remedial Works” have now been performed as anticipated by, or at least in purported compliance with, the agreement. However, Mr Smith maintains that the works have not been completed satisfactorily so that the Completion Date has not yet arrived. Mr Smith maintains in those circumstances that Valor and Pride has no obligation to pay rent and outgoings as contemplated by paragraph 6 of the 11 February 2026 letter and that no such obligation will arise until the works are completed satisfactorily, whatever that means.

11. It will be apparent that until that issue, which I was not required by the parties to decide, is resolved, a question remains over what rent is contemplated by, or what rent is included within, the phrase “the whole of any rent then due under the lease but which then remains unpaid” in my order granting relief against forfeiture. It will be obvious that Valor and Pride and Mr Smith would potentially be at risk of forfeiture of the lease if they failed by the due date to pay rent properly payable in accordance with that phrase, based upon what turned out to be an erroneous interpretation of the 11 February 2026 agreement.

12. In order to avoid that problem or to expose Valor and Pride and Mr Smith to that risk, Ord Developments has proposed, in accordance with the relief sought in its notice of motion, and I agree that I should amend the relevant order to provide that the whole of any rent then due under the lease but which then remains unpaid may in the alternative be paid into Court. That option is important for a number of reasons, inasmuch as Mr Smith has foreshadowed lodging an appeal from my decision to the Court of Appeal. It is obviously important in that context that Valor and Pride and Mr Smith do not suffer any disadvantage by reason of any uncertainty about the way in which they might comply with the conditions upon which I granted relief against forfeiture in the event that Ord Developments opposed a stay of my orders pending disposition of any appeal.

13. Finally, some dates in the orders I now propose to make have been extended slightly to take account of any disruption that these variations may cause.

14. Taking account of all of these matters, I propose to vary the orders I made on 27 July 2026 by replacing them with the following orders:

15. Set aside the orders made by Hammerschlag CJ in Eq dated 5 February 2026.

16. Declare that Ord Developments Pty Ltd is entitled to terminate the lease between it as landlord and Valor and Pride Hospitality Group Pty Ltd as tenant of the premises known as “The Central Bar & Kitchen” situated at 51 John Street, Singleton.

17. Pursuant to s 14 of the Civil Procedure Act 2005, dispense with the requirements under UCPR 6.8.

18. Direct the entry of judgment in favour of Ord Developments Pty Ltd for possession of the whole of the land comprised in Folio Identifier 14A/63631 being the land situated at 51 John Street, Singleton and known as “The Central Bar & Kitchen”.

19. Grant leave to Ord Developments Pty Ltd forthwith to apply for the issue of a writ of possession.

20. Stay execution of the writ referred to in order (5) above against all occupants of the premises (excluding Valor and Pride Hospitality Group Pty Ltd and Mark Joseph Smith) until 4pm on 21 September 2026.

21. Direct Ord Developments Pty Ltd to serve on each occupant of the premises (excluding Valor and Pride Hospitality Group Pty Ltd and Mark Joseph Smith) as soon as practicable after 4pm on 11 September 2026:

(a) the cross-summons; (b) the amended statement of claim; (c) these orders; and (d) my reasons for judgment.

8. Grant leave to any occupant (excluding Valor and Pride Hospitality Group Pty Ltd and Mark Joseph Smith) to apply by notice of motion regarding the judgment for possession within 7 days after they have been served in accordance with order (7).
9. Direct that any application filed by any occupant pursuant to order (8) above be returnable before me at 10am on 21 September 2026.
10. Dismiss the amended statement of claim and amended summons.
11. Direct that all funds currently held in JDK Legal’s trust account on account of rent payable under the lease be released forthwith to Ord Developments Pty Ltd.
12. Order Valor and Pride Hospitality Group Pty Ltd and/or Mark Joseph Smith to pay Ord Developments Pty Ltd’s costs of the proceedings.
13. Stay orders (2), (4) and (5) above and (14) below, and grant Valor and Pride Hospitality Group Pty Ltd relief against forfeiture of the lease, upon the condition that Valor and Pride Hospitality Group Pty Ltd and/or Mark Joseph Smith pays to Ord Developments Pty Ltd or alternatively pays into Court by no later than 4pm on 11 September 2026 the whole of any rent then due under the lease but which then remains unpaid by Valor and Pride Hospitality Group Pty Ltd to Ord Developments Pty Ltd.
14. Direct the entry of judgment in favour of Ord Developments Pty Ltd as against Valor and Pride Hospitality Group Pty Ltd and Mark Joseph Smith in the amount of $52,317.80 in accordance with the calculations contained in Exhibit 2.
15. Grant liberty to apply on 2 days’ notice.

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