Advanced Underpinning Pty Limited v Voukelatos

[2001] NSWADT 100

CITATION:	Advanced Underpinning Pty Limited -v- Voukelatos & Anor [2001] NSWADT 100
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Advanced Underpinning Pty Limited RESPONDENTS Zois Voukelatos Vessela Voukelatos
FILE NUMBER:	015040
HEARING DATES:	07/05/2001
SUBMISSIONS CLOSED:	05/07/2001
DATE OF DECISION:	05/07/2001
BEFORE:	Fox R - Judicial Member
APPLICATION:	Costs
MATTER FOR DECISION:	Costs
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997
CASES CITED:
REPRESENTATION:	APPLICANT A McPherson, solicitor RESPONDENT R Davis, solicitor
ORDERS:	1. Applicant to pay Respondent's costs on a party/party basis

1 In these proceedings, which were today set for a 2 day hearing, Mr Andrew McPherson appeared for the Applicant and Mr Davis of Middleton Moore and Bevans appeared for the Respondent.

2 Mr McPherson indicated this morning that his client did not wish to proceed with the matter, and of course that does not come as a surprise, because, late on Friday afternoon, Mr McPherson forwarded a letter to the Tribunal indicating that his instructions had been withdrawn. He explained this morning that he had limited instructions to appear today, to withdraw the application.

3 Mr Davis sought an order for costs.

4 It is necessary to consider some of the history of the matter.

5 On 2 April 2001 the Applicant Lessee gained an Interim Order staying any action by the Respondent Lessor to deny the Applicant possession of the premises for failure to pay rent. The terms were:-

1. The lessee be entitled to continue in occupation of the premises and the lessor be restrained from terminating the lease on conditions that:

a) by close of business on 5 April 2001 the lessee pay as rent $16910.96 in cleared funds.
b) the rights of the parties as to rent increases continue to be governed by the lease.
c) the covenants of the lease continue to govern the parties.
d) this order be without prejudice to any mutual claims under the lease.

2. The matter be listed for hearing on 7-8 May 2001.

6 Of course, that order sought to hold the issues between the parties in status quo until the hearing.

7 The Applicant did not pay the rent, and the Respondent took possession on 11 April.

8 After that there was correspondence by the Respondent’s solicitor to the Applicant’s solicitor both seeking compliance with the pleading timetable and seeking an indication of what issues were still “live” between the parties now that possession had been retaken. I am satisfied that the Respondent took all necessary steps in that regard, only to be met with the Applicant’s solicitor’s response to the effect that he had no instructions to respond to that issue. Despite that, at the same time, it is common ground between the parties that there were negotiations ongoing.

9 This Tribunal’s jurisdiction to make an order for the payment of costs is limited by Section 88 of the Administrative Decisions Tribunal Act, “… The Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs…”. The issue which I have to resolve is:- are there special circumstances in the context of these facts?

10 It seems to me to be clear that the Legislature’s intent was to give parties access to this Tribunal without having to assess the risk of failing to obtain a result (for whatever reason) and having then not only to pay own costs, but also those of the other side. But, obviously, there must be a recognition that whatever an Applicant or Respondent may do or threaten to do in the Tribunal may put the other party to proper trouble and expense to seek to meet that or that threat and that, it seems to me is an aspect addressed by the Section 88 special circumstances gateway. If the threat or proposed action by one party is careless of the cost of the necessary response by the other, then that failure to have regard for the inevitable response of the other party may cross the special circumstances threshold.

11 Indeed, that is the case here. The application for a “stay” of the Respondent’s threat to take possession for failure to pay rent is proper only if the Applicant, at the time of making that application, has the funds to pay the current rent. It seems to me as a matter of general principle that if an Applicant granted a stay fails to make the payment upon which that stay is conditioned, then, unless there be a compelling explanation, an order for the costs of the Respondent then obtaining possession is appropriate. To do otherwise is to encourage actions which may well be an abuse of the process of the Tribunal. A party who does not have the wherewithal to pay the rent as it falls due should not seek to use the Tribunal’s procedures as a method of delaying of the (almost inevitable) taking of possession. It is for this reason that I make the order in respect of the Respondent’s costs of obtaining possession of the premises on 11 April 2001.

12 Similar reasoning leads me to say that the Applicant should have, knowing that his position had become untenable, on or about 11 April, approached the Respondent at least noting that the issues between the parties had greatly changed and either identifying and particularising those changed issues with a view of approaching the Tribunal for a new pleading timetable and perhaps a new hearing date, or alternatively, to simply then and there raise the white flag. That not having been done, the Respondent was placed in a position of having to prepare, as best it could, for some kind of contest on the fixed hearing date, and that too, I am satisfied, is special circumstances.

13 I note that Mr Davis asked for orders for full indemnity costs but it seems to me, considering the spirit of the legislation generally, that an order for party/party costs achieves the level of fairness.

14 My order is:-

The Applicant is to pay the Respondent’s costs on a party/party basis as assessed (unless they can reach agreement) incurred from 11 April 2001 to 7 May 2001. I note that the Respondent was notified of the ‘no contest’ position of the Applicant at the close of business on 4 May 2001, so that the preparation for hearing ceased at that time, but because the Respondent had actually taken possession at the end of March I intend my order to include the Respondent’s work preparatory to and including the actual “re-taking” of possession on 11 April including agent’s costs and outgoings for that purpose of recovering possession.