ISPT Pty Ltd and AWPF Management No. 2 Pty Ltd v Cao and Zhao [2023] NSWSC 1115

ISPT Pty Ltd and AWPF Management No. 2 Pty Ltd v Cao and Zhao [2023] NSWSC 1115

The lease was not frustrated by COVID-19 public health orders as the leasehold estate remained usable (take away permitted, in-restaurant dining was only temporarily limited); the lease allocated risk to the tenant, and neither essential terms nor performance were rendered impossible or radically different; the plaintiffs acted reasonably to mitigate loss, and are entitled to unpaid rent, future rent, abatement, and enforcement costs, but not to make good costs, as the landlord required the fitout to remain.

Jurisdiction
Australia
Judgment Date
14 September 2023
Procedural Posture
Principal Judgment / Final Judgment With Directions for Precise Form of Orders to Be Brought in by the Parties
Outcome
Plaintiffs succeed except as to make good costs; lease not frustrated; plaintiffs entitled to unpaid rent, future loss, abatement, and enforcement costs; not entitled to make good costs; parties directed to bring in short minutes for orders and interest calculation.
Legal Topics
['commercial Leases' 'frustration of Contract' 'mitigation of Loss' 'guarantee and Indemnity' 'covid 19 Pandemic Restrictions']
['equity' 'real Property' 'contract'] ['commercial Leases' 'frustration of Contract' 'mitigation of Loss' 'guarantee and Indemnity' 'covid 19 Pandemic Restrictions']

Case Brief

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Procedural Posture

Principal Judgment / Final Judgment With Directions for Precise Form of Orders to Be Brought in by the Parties

Legal Issues

  1. 1 ['Whether the commercial lease was frustrated due to COVID-19-related public health orders and restrictions' 'Whether plaintiffs failed to mitigate their loss after breach and termination of lease' 'Whether plaintiffs are entitled to make good costs for the premises']

Ratio Decidendi

The lease was not frustrated by COVID-19 public health orders as the leasehold estate remained usable (take away permitted, in-restaurant dining was only temporarily limited); the lease allocated risk to the tenant, and neither essential terms nor performance were rendered impossible or radically different; the plaintiffs acted reasonably to mitigate loss, and are entitled to unpaid rent, future rent, abatement, and enforcement costs, but not to make good costs, as the landlord required the fitout to remain.

Court Disposition

Plaintiffs succeed except as to make good costs; lease not frustrated; plaintiffs entitled to unpaid rent, future loss, abatement, and enforcement costs; not entitled to make good costs; parties directed to bring in short minutes for orders and interest calculation.

Orders

  • ['Direct parties to bring in short minutes of order to give effect to these reasons and to address calculation of interest if agreed.' 'Leave for parties to approach Associate to Nixon J to relist the matter if orders cannot be agreed.']