Alramon Pty Ltd v Jonamill Pty Ltd (No 2)

[2009] NSWADT 302

CITATION:	Alramon Pty Ltd v Jonamill Pty Ltd (No 2) [2009] NSWADT 302
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Alramon Pty Ltd RESPONDENT Jonamill Pty Ltd
FILE NUMBER:	085020
HEARING DATES:	On the papers
DATE OF DECISION:	7 December 2009
BEFORE:	Rickards K - Judicial Member
CATCHWORDS:	Costs
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997
CASES CITED:	Salon Today Pty Ltd v MMIR Pty Ltd [2009] NSWADT 71 Zeaiter Holdings Pty Ltd v Satchithanantham (No 2) [2009] NSWADT 71 Satchithanantham v Zeaiter Holdings Pty Ltd [2009] ADTAP 53
REPRESENTATION:	APPLICANT S Stanton, solicitor RESPONDENT M Sneddon, solicitor
ORDERS:	1. Each party is to pay its own costs in the proceedings

REASONS FOR DECISION

1 Orders were made in favour of the Applicant in these proceedings on 30 April 2009.

2 At the time, it was stated that there would be no order as to costs unless either party filed and served written submissions within 14 days.

3 The Applicant filed written submissions seeking a costs order in its favour. An appeal was subsequently lodged by the Respondent, which has now been determined in favour of the Applicant.

4 The Respondent has subsequently filed submissions in reply on the question of costs.

5 The main provision relating to costs in the Tribunal is section 88 of the Administrative Decisions Tribunal Act 1997 (“the ADT Act”).

6 Pursuant to the ADT Act, the general rule has always been that each party bears its own costs. The previous section 88 of the ADT Act permitted the Tribunal to make an order that one party pay the costs of another party but only if “special circumstances” existed. The question of what constituted “special circumstances” justifying an order for costs was the subject of a number of previous decisions at first instance and upon appeal, which need not be recited here.

7 Since January 2009, the newly amended section 88 (1A) of the ADT Act has provided that the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that it is “fair to do so” having regard to five defined factors which may permit an order for costs:

a. the manner in which a party has conducted the proceedings

b. whether a party has been responsible for unreasonably prolonging the time taken to complete the proceedings

c. the relevant strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law

d. the nature and complexity of the proceedings, and

e. any other matter that the Tribunal considers relevant.

8 The Tribunal’s Practice Note 22 contains guidelines concerning costs. Paragraph 5 of this Practice Note recites the terms of section 88(1A) and confirms that many of those matters now listed in this section are similar to the “special circumstances” previously identified by the Tribunal as justifying an award of costs under the old provisions.

9 Unless there is some particular circumstance falling within the ambit of section 88(1A) of the ADT Act, each party should bear its own costs.

10 Generally, the previous approach of the Tribunal toward what constituted “special circumstances” was that such circumstances had to be exceptional, or out of the ordinary. Following the subject amendments to the ADT Act, a factor or circumstance which renders the awarding of costs “fair” under section 88(1A) need not necessarily be exceptional or out of the ordinary.

11 The decision as to whether or not costs should be awarded, does not simply involve a balancing exercise to determine what is fair. To reiterate, section 88 provides that each party is to bear its own costs unless there is some particular circumstance which makes it fair to order a party to pay the costs of another party and, if such circumstance exists, the Tribunal may then order costs but only if it considers in its discretion that it is appropriate to do so.

12 The primary issue between the parties in these proceedings was whether or not the Respondent’s option to renew its lease had been validly exercised. The relevant notice exercising this option had been sent to the old postal address of the Applicant landlord in circumstances where I found that notice of change of address for service of notices had previously been effectively communicated by the Applicant to the Respondent, even though this notice of change of address was a standard letter which did not specifically identify the premises in question and which did not specifically refer to the provisions of the lease agreement between the parties under which this notice of change of address was being communicated.

13 In its submissions as to costs, the Applicant has criticised the Respondent’s system for receiving and filing of correspondence and has drawn attention to the concession made by the Respondent’s manager that she could neither affirm nor deny the possibility that the Applicant’s letter notifying change of address had been received by the Respondent before the time that it sent out its notice of exercise of option to renew the lease. The Applicant submits that these factors “necessitate(s) a finding that, as a matter of fairness, costs must be awarded in terms of the defence put up by the Respondent to the Applicant’s assertion.”

14 The Applicant also relies upon the findings made in these proceedings concerning the communication of the notice of change of address by the Applicant to the Respondent as justifying the contention that the Applicant “should not, as a matter of fairness, be put to sustaining the incurring of the totality of its costs in seeking the declaratory relief that it did in order to put the matter beyond dispute.”

15 The Applicant’s submissions refer briefly to sub sections (c) and (e) of section 88(1A) of the ADT Act as being the grounds upon which its application for costs is based. I am not satisfied that the Respondent’s claim had no tenable basis in fact or law as required by section 88(1A)(c), nor can I identify any other relevant factor pursuant to section 88(1A)(e) which would make it fair to order that the Respondent pay the Applicant’s costs.

16 The Respondent had a clearly arguable case that it had validly exercised its option to renew the subject lease. It can also reasonably be stated that the subject dispute may not have arisen if the Applicant had adopted a more efficient way of specifically communicating notice of its change of address for service of notices under the subject lease to the Respondent.

17 There is also no evidence of any reasonable settlement position taken by the Applicant which, if accepted, would have avoided the need for a hearing; rather, evidence emerged during the hearing that the Applicant had indicated a willingness to issue a new lease to the Respondent for the subject premises, but only upon terms that required the Respondent to pay a rent substantially higher than that which it would have been required to pay had it validly exercised its option to renew.

18 The Applicant has drawn my attention to the decision of Judicial Member Molloy in Salon Today Pty Ltd v MMIR Pty Ltd [2009] NSWADT 71 in which the provisions of section 88(1A) were considered and a costs order made. That decision of course turns largely upon its own facts, and particularly upon the findings of the Tribunal that the respondent in that case had unreasonably persisted with its resistance to the applicant’s claim and that it had failed to accept reasonable settlement offers. Such circumstances do not exist in the present matter.

19 The Applicant has also sought to reply upon the decision of the Tribunal in Zeaiter Corporate Holdings Pty Ltd v Satchithanantham (No.2) [2009] NSWADT 70 as providing support for a costs order in its favour. The issue of costs in that matter was eventually decided on appeal in Satchithanantham v Zeaiter Holdings Pty Ltd[2009] NSWADTAP 53 and, after consideration of the provisions of section 88 (1A), the Appeal Panel ordered the appellant to pay the respondent’s costs because she had herself, and through her husband as legal representative, engaged in conduct specifically falling within the provisions of the section by causing delay through mainly irrelevant and repetitive cross examination, by failing to obey directions from the Tribunal, and by significantly delaying resolution of the dispute due to the filing of a separate and unmeritorious application seeking damages from the respondent on grounds connected to the respondent’s procedural conduct before the Tribunal. No such circumstances exist in the present proceedings and there is no evidence of conduct by the Respondent which would justify exercise of the discretion to order costs.

20 For the above reasons, the order I make is that each party is to pay its own costs of the proceedings.