B & R Holdings Pty Ltd v Nine Dogs Pty Ltd

[2008] NSWADT 276

CITATION:	B & R Holdings Pty Ltd v Nine Dogs Pty Ltd [2008] NSWADT 276
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT B & R Holdings Pty Limited RESPONDENT Nine Dogs Pty Limited
FILE NUMBER:	085129
HEARING DATES:	28 August 2008
DATE OF DECISION:	13 October 2008
BEFORE:	Molloy G - Judicial Member
CATCHWORDS:	Jurisdiction
MATTER FOR DECISION:	Exercise of Jurisdiction
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994
CASES CITED:	Great Tastes of Australia Pty Limited v. Shorty Holdings Pty Limited [2006] NSWADT 253 Minister for Immigration and Multicultural Affairs v. Bhardwaj [2002] HCA 11 Wieland v. Newcastle City Council [2008] NSWDC 4
REPRESENTATION:	APPLICANT C Dalton, solicitor RESPONDENT No appearance
ORDERS:	1. Declare that there was no decision made 28 August 2008 appointing Randolph Rossi as Specialist Retail Valuer 2. In relation to the Applicant’s Objection to Appointment I make the following Directions 2.1 Applicant to file and serve no later than 3 November 2008 any affidavit material and written submissions in support of the filed Objection 2.2 Respondent to file and serve any affidavit material and written submissions in reply no later than 24 November 2008 2.3 Matter listed before me for further directions at 10:00 am on 4 December 2008 2.4. The Objection to Appointment will be thereafter determined on the papers unless any party wishes to be heard orally. Should a party wish to be heard orally then notification in writing should be given to the Tribunal, copy to the other party, no later than 3 December 2008.

1 By letter dated 3 September 2008 the solicitor for the Applicant requested “that the Tribunal provide a statement in writing of the reasons of the Tribunal for its decision dated 28 August 2008 in this matter pursuant to section 89 of the Administrative Decisions Tribunal Act 1997”.

Facts

2 The Applicant applied to the Tribunal by formal Application for Original Decision filed 30 June 2008 for the appointment of a Specialist Retail Valuer pursuant to Retail Leases Act section 19. Section 19 provides a system for the calculation of “current market rent” in circumstances where the parties to a lease cannot agree “as to what the actual amount of that rent is to be” where a “retail shop lease … provides for rent to be changed to current market rent …”.

3 Sub-section 1(A) provides that a party to a lease may apply to the Tribunal for the appointment of a specialist retail valuer in circumstances where section 19 applies and the parties do not agree. In this case the Applicant is the lessor of certain premises situate at 135 Darby Street Newcastle pursuant to a lease commencing 15 July 2005, terminating 14 July 2012 with an option for renewal and an option for purchase. The lease was registered AB729697N.

4 The lease was varied by registered by registered Variation of Lease AB359398K. This Variation made a number of alterations to the Lease itself but relevantly, for the purposes of “current market rent” made no relevant alteration. The lease itself (clause 5.4, Item 16) provided that as an from the review date 14 July 2008 “current market rent” was payable.

5 By Deed of Assignment of Lease 31 January 2008 the Respondent became the lessee by way of assignment.

6 Consequently, the only matter before the Tribunal was the appointment of a specialist retail valuer pursuant to the provisions of section 19 of the Retail Leases Act.

Tribunal’s Procedures

7 The formal Application came before S Higgins JM on 31 July 2008. In accordance with the Tribunal’s procedures and Practice Note 20 the Judicial Member directed that four valuers be approached with a view to ascertaining their respective availabilities, and fees, for carrying out the valuation. Of those four valuers approached three responded, namely Mr Randolph Rossi, who noted his fees at $1,870.00 (GST incl), Mr Robert Dupont, who noted his fees at $2,000.00 (GST incl), and another who noted his fees at $4,400.00 (GST incl).

8 In responding to the Tribunal’s approach Mr Rossi noted: “I can confirm that I have no conflict of interest. I have the expertise required and in fact have given a report/opinion on the abovementioned prior to the lease to the previous lessee. I can complete the work within 6 weeks”.

9 The Tribunal made an interim appointment of Mr Rossi on 14 August 2008 and notification was given to the parties. There was no response from the Respondent but the Applicant, through its solicitor, filed an Objection to Appointment. The Objection was in the following terms:

“The Applicant objects to the appointment of Randolph Rossi as the Specialist Retail Valuer upon the following grounds:-

1. Mr Rossi operates the Castle Realty Property Groups located at 77 Beaumont Street Hamilton, NSW which is a general agency practice including residential, retail, commercial and industrial sales and management.

2. Mr Rossi has previously provided advice on this lease to the original lessee (Mr and Mrs Heaton) under this lease. Annexed hereto and marked with the letter “A” is extracted pages 5 + 6 from the former lessees’ application to the Tribunal in matter No:94/2007.

3. Mr Rossi and the Solicitor for the applicant in these proceedings have previously been involved in a personal lease dispute with regards to a property Mr Rossi manages at Hamilton NSW.

4. The applicant would seek the appointment of a Specialist Retail Valuer who undertakes valuations only and does not undertake the marketing sale, negotiation and management of real estate within the same area as the subject lease.

5. The applicant submits that any valuation undertaken by Mr Rossi would not be at arms length”.

10 It can be seen from paragraph 2 above that Mr Rossi had “previously provided advice on this lease to the original lessee”. There were annexed portion only of some documentation. I pause to observe that the documentation provided does not relate, as far as I can see, to any matter in this Tribunal but rather to a file in the Retail Tenancy Unit.

11 By Notice of Appointment dated 28 August 2008 Mr Rossi was appointed specialist retail valuer.

Jurisdiction

12 In Great Tastes of Australia Pty Limited v. Shorty Holdings Pty Limited [2006] NSWADT 253, I examined in some detail the appointment procedures under Real Leases Act sections 19, 31 and 32A. I adhere to the views therein expressed. There is no need for me to repeat them. In particular, I repeat my observation in paragraph [21] where I said “It is important to bear in mind that the persons who put their names forward on the respective separate lists are professional persons and as such the Tribunal is entitled (in my view) to rely upon their professionalism and ethics in responding to valuation appointment requests”. Mr Rossi, when responding to the appointment request confirmed that the had “no conflict of interest” but rather suggested that he had “the expertise required” and noted that he had “given a report/opinion on the abovementioned (the lease) prior to the lease to the previous lessee”.

13 As I stated above (paragraph [1]) the Applicant has applied for a statement in writing of the reasons of the Tribunal in appointing Mr Rossi (paragraph [11]). I called for the Tribunal’s file. Situate within the file was the Objection (paragraph [11]) above which had not been considered by me when I made the appointment of Mr Rossi 28 August 2008. The filing of the Objection had not been drawn to my attention at that time. The practice, in the Registry, as I understand it, is that such a document is generally placed on the front of the file, often accompanied by a post-it note to the effect that an Objection has been filed. That assists the Judicial Member in determining what steps should then be taken.

14 The procedures of the Tribunal make provision for permitting any party to the lease to file a formal Objection at any time within 12 days of the interim appointment. There is good reason for this: the Tribunal may not be aware of matters that would go towards whether the Tribunal should properly confirm the interim appointment. In this case, there was nothing in the Application itself that indicated any objection by either party to any particular person being appointed. Consequently, absent the Objection coming to my attention, there was nothing that would indicate that Mr Rossi was not a proper person to be appointed.

15 However, the filing of the request for a statement in writing of the reasons of the Tribunal encouraged a more careful review of the Tribunal’s file and this review threw up the Objection placed near the back of the file.

Issue

16 The question that I have asked myself is this: Is my appointment of Mr Rossi made 28 August 2008 a proper exercise of jurisdiction and, if not, what powers have I got to set that appointment aside or treat it as a nullity?

17 The starting point for consideration of this question is the Retail Leases Act 1994. That Act establishes a procedure for the appointment of a Specialist Retail Valuer in certain defined circumstances. The exercise of power by the Tribunal “cannot be regarded as adversarial but rather consistent with the power given in a contract to a particular or officeholder to appoint, for example, an arbitrator under the Commercial Arbitration Act 1984 to resolve the dispute”. (Great Tastes at [12]).

18 An application for such an appointment is a “retail tenancy claim” (Section 70(b)). The Tribunal then exercises its power, not under section 72 but rather (in this case) under Section 19.

19 A retail tenancy claim is lodged in and determined by this Tribunal (see the definition of “Tribunal” in section 3; and Division 3). This Tribunal exercises jurisdiction, not only under the Retail Leases Act 1994 but also under the Administrative Decisions Tribunal Act 1997. Jurisdiction is conferred by section 37 of the ADT Act. Reference should also be made to section 142 of that Act and Schedule 2 Part 3B. In exercising its powers under the Retail Leases Act 1994 the Tribunal is exercising original jurisdiction by making an original decision (ADT Act sections 36 and 142). The general procedures are set out in section 41, supported by section 45.

20 Before embarking upon an analysis of the ADT Act as it effects the procedures of the Tribunal in hearing a retail lease matter, it is educative to look at the objects of the ADT Act as defined in section 3. The objects refer primarily to review of decisions made by administrators such that most of Section 3 is not relevant to retail lease matters. However, section 3(a)(i) describes one of the objects as being “to establish an independent Administrative Decisions Tribunal … to make decisions at first instance in relation to matters over which it is given jurisdiction by an enactment …”.

21 Nextly, section 3(b) enjoins the Tribunal “to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair”. However, it is important to recognise that matters in the Retail Lease Division are generally commercial in nature such that, although reference can be made to the balance of section 3 as perhaps as guide, in dealing with commercial matters the Tribunal should, in my view, adopt a commercial approach to its procedures.

22 The procedure of the Tribunal generally is set out in ADT Act Chapter 6 commencing at section 67. Importantly, for the purposes of this Decision, Section 70 imposes an obligation on the Tribunal. Section 70 is in these terms:

“70. The Tribunal must ensure that every party with proceedings before the Tribunal is given a reasonable opportunity:

a) to present the party’s case (whether at a hearing or otherwise), and

b) to make submissions in relation to the issues in the proceedings”.

It is important to emphasise the word “must” in section 70 – it my opinion this imposes an absolute obligation on the Tribunal, generally in accordance with the rules of natural justice.

23 The importance of section 70 is re-enforced by section 71 (which deals with representation of parties and, in particular, appointing another person if a party is incapacitated, and the right to use the services of an interpreter.

24 Nextly, section 73 sets out the procedure of the Tribunal generally. Firstly, it may (subject to the ADT Act and the rules of the Tribunal) “determine its own procedure”. Secondly, it is “not bound by the rules of evidence” but is “subject to the rules of natural justice”. Thirdly, the Tribunal is enjoined “to act with as little formality as the circumstances of the case permit and according to equity, good conscience, and the substantial merits of the case without regard to technicalities or legal forms”. Fourthly, the Tribunal “is to take such measures as are reasonably practicable:

a) to ensure that the parties to the proceedings before it understand the nature of the assertions made in the proceedings and the legal implications of those insertions … (and)

c) to ensure that the parties have the fullest opportunity practicable to be heard or otherwise have their submissions considered in the proceedings”.

25 Furthermore, the Tribunal is to “act as quickly as is practicable” … “to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings (section 73(5)(b)) …”, may require evidence or argument to be presented in writing and decide on the matters on which it will hear oral evidence or argument” … and, in section 74(3) the Tribunal is enjoined not to make a determination unless it “is satisfied that the determination is in the best interests of the person whose interests are considered by the Tribunal … to be paramount.”

26 Section 86 provides relevantly that the Tribunal can “give effect to any agreed settlement reached by the parties” if (inter alia) “the Tribunal is satisfied that the agreed settlement is in the best interests of the person whose interests are considered by the Tribunal to be paramount”.

27 The Tribunal has power to make rules for practice and procedure (section 90 ff).

28 With a view to ensuring that justice is done between disputant parties, the Tribunal has, over the years, issued various Practice Notes. Practice Note 20 was issued 11 July 2006. This deals with the appointment of specialist retail valuers. Clauses 1-12 inclusive require certain steps to be taken administratively up to the issue of an Interim Notice of Appointment. That Interim Notice states that “unless within 12 days a party files and serves an objection to the appointment stating reasons, the appointment will be confirmed”.

29 Clause 13 states “If no objection is filed within that time, the Judicial Member will confirm the appointment and direct the Registry to issue a Final Notice of Appointment to the parties and to the appointed Valuer”.

30 Clause 14 provides:

“If an objection is filed by a party, the Judicial Member will either: -

(i) determine the matter without a hearing, under section 76 of the Administrative Decisions Tribunal Act 1997, having first given the other party an opportunity to make submissions in response, or

(ii) set the case down for directions, with a view to conducting a hearing on the matter.”

31 I have been to some trouble to set out what I see to be the provisions of the governing legislation and procedures for this reason: the question is: Does this Tribunal have any power once it has issued a Final Notice of Appointment?

Bhardwaj

32 In my opinion the guiding principles are set out by the High Court in Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11. In that case the High Court held, in the peculiar statutory regime that surrounded the Immigration Review Tribunal, that that Tribunal had power, in circumstances in which it had already heard an application and affirmed the decision of the Minister by way of administrative review of his decision, to hold a further hearing on the application and make a second decision.

33 The High Court effectively held that an administrative tribunal had capacity to correct its own error where, in consequence of that error, it had failed to discharge its statutory function. (Per Gleeson CJ at 602). The facts in Bhardwaj were not complicated and are coincidentally similar to the matter now before me. In that case the Tribunal heard an application in ignorance of a letter received by the Tribunal on the previous day stating that the Respondent was ill and would be unable to attend at the hearing and requesting an adjournment. As Gleeson CJ said (at 602) by “an administrative oversight, the letter did not come to the attention of the member of the Tribunal to whom the matter had been assigned”. The Chief Justice held (603) that “as the facts of the present case show, circumstances can arise where a rigid approach to the principle of functus officio is inconsistent with good administration and fairness”. His Honour examined the statutory scheme under the Migration Act 1958 and accepted (at 605) “that it is inconsistent with the scheme of the Act to conclude that the Tribunal, upon being persuaded that it has denied procedural fairness, at any time after it had made or purported to make a decision, and regardless of what a person affected by the decision has done or failed to do, may treat that decision as legally ineffective and consider afresh the matter that was originally before it … (in) the present case there was a denial of procedural fairness; but there was more to it than that. There was an error of the kind described as “error in fact” in the context of proceedings by writ of error: the non-fulfilment or non-performance of a condition precedent to regularity of adjudication such as would ordinarily induce a tribunal to “stay it hand if it had knowledge, or to re-open its judgment had it the power”. His Honour held (at 606) that in those circumstances “it was not inconsistent with the statutory scheme for the Tribunal, upon becoming aware that it had not given effect to its own intention, and that it had failed to conduct a review of the delegate’s decision, to give the respondent the opportunity which the statute required, which he wanted, and which the Tribunal intended to give him. On the contrary, it was in accordance with the requirements of the Act.”

34 Their Honours Gaudron and Gummow JJ held to like effect. At page 612 their Honours said that the Respondent was “denied a reasonable opportunity to answer the case against him … (the) failure of the Tribunal to give Mr Bhardwaj a reasonable opportunity to present evidence and argument had the consequence that it did not reach a decision after considering evidence and argument against the cancellation of his visa”. Their Honours held that as a consequence “the Tribunal did not conduct a review as required by the Act …” and therefore the first decision was not a “decision on review” for the purposes of the Act.

35 At 614-615 their Honours said this: “There is, in our view, no reason in principle while the general law should treat administrative decisions involving jurisdictional error as binding or having legal effect unless and until set aside. A decision that involves jurisdictional error is a decision that lacks legal foundation and is properly regarded in law, as no decision at all … (the) view that a decision involving jurisdictional error does not prevent the decision-maker from correcting that error by making a later decision” has been accepted elsewhere.

36 His Honour Hayne J (at 642) asked the question: “(When) did the Tribunal perform its statutory task?” and he answered that question (at 644) by finding that in its first decision the Tribunal committed “a jurisdictional error” in that what “it did was not authorised by the Act and did not constitute performance of its duty under the Act.”

37 Callinan J adopted the view (at 647) that “Once it is recognised that a court could set (the original decision) aside for jurisdictional error, the decision can be seen to have no relevant legal consequences.” His Honour found that in order to answer the question one had to “begin and end in the statutory provisions which are the source of the power that it is said has been exercised”. His Honour considered “the issue to be when the Tribunal exercised its powers and performed its duties to review the delegate’s decision”. His Honour (at 649) formed the opinion that the first decision was “something more than a breach of the rules of natural justice. It was a failure to exercise a jurisdiction which the Tribunal was bound to exercise … (to) fail or refuse to receive and consider (the document properly submitted by Mr Bhardwaj) and to make a decision without regard to it, is a failure to exercise jurisdiction. This is more than a failure to give a party a hearing. It is to proceed on a false basis, that such a document simply does not exist or has not been communicated to the Tribunal. The Tribunal would in these circumstances no more be exercising its jurisdiction than a court would be in deciding a case in favour of a defendant without looking at the plaintiff’s initiating document and pleading, or even knowing that they had been filed in the registry of the court. The application for an adjournment was an important document. The Tribunal was bound to give it consideration. … (this) is a case in which it is known that the application for an adjournment was not brought to the attention of the Tribunal in order to enable it to exercise its jurisdiction to grant or refuse the adjournment …”.

Tribunal’s Analysis

38 In my opinion Bhardwaj is not, in its terms and on the principles therein enunciated, restricted to reviews of administrative decisions. It is true that in this Tribunal many of its divisions have that function. I am not of the opinion that the Retail Leases Division exercises such a function but rather it exercises original jurisdiction to hear and determine matters brought before it under the Retail Leases Act 1994.

39 However, I am not persuaded that Bhardwaj, and the principles enunciated in that decision, are, or should be, restricted to reviewable administrative decisions. Rather, the principles do apply where the Tribunal has, like the Immigration Review Tribunal, fallen into jurisdictional error such that, having regard to the various statutes, it constitutes a failure to exercise jurisdiction.

40 There is absolutely no doubt that I would not have issued, or caused to be issued, a Final Notice of Appointment had I been aware of the filed Objection. The sections of the Administrative Decisions Tribunal Act 1997 that I have attempted to set out above, in particular sections 3(b), 70, 73(5)(b) and (d), coupled with section 74(3), require this Tribunal to give consideration to the filed Objection. It did not. In my opinion the Tribunal, constituted by myself, and in the circumstances set out above, failed to exercise the jurisdiction which it was bound to exercise.

41 I am fortified in my opinion by the observations of Her Honour Sidis DCJ in Wieland v. Newcastle City Council [2008] NSWDC 4 at [7] where Her Honour referred to section 56 of the Civil Procedure Act and the “overriding purpose of (that) Act and the rules of Court in their application in Court proceedings is to facilitate for the just quick and cheap resolution of the real issues in the proceedings … (and the) Court must seek to give effect to the overriding purpose when it exercises any power given to it under (the Civil Procedure Act) and or by rules of Court when it interprets any provision of this Act or any such rule”. As I read Her Honour’s Judgment Her Honour exercised jurisdiction to amend Consent Orders to include Orders for costs even those Consent Orders were made almost 12 months earlier. Consequently, in my opinion it is appropriate and proper to consider, as I have sought to do, the terms of the ADT Act with a view to determining whether or not the Tribunal exercised jurisdiction.

42 In these circumstances in my opinion the decision 28 August 2008 was not a decision of this Tribunal in exercise its jurisdiction such that, at law, there was no decision made 28 August 2008 appointing Mr Rossi as specialist retail valuer in these proceedings. Declaration accordingly.

Further Procedures

43 It now falls upon me to determine the Objection. In making the following directions I am mindful of the fact that in the Application for Original Decision neither party indicated any objection to any valuer being appointed by the Tribunal. There is now an Objection to Mr Rossi being appointed although, it seems to me, such an objection could have been made at the time of filing the original application. That fact, however, does not derogate from any proper objection.

44 If the Applicant seeks to proceed with its Objection then I give the following further directions:

1. Applicant to file and serve no later than 3 November 2008 any affidavit material and written submissions in support of the filed Objection

2. Respondent to file and serve any affidavit material and written submissions in reply no later than 24 November 2008

3. Matter listed before me for further directions at 10:00 am on 4 December 2008

4. The Objection to Appointment will be thereafter determined on the papers unless any party wishes to be heard orally. Should a party wish to be heard orally then notification in writing should be given to the Tribunal, copy to the other party, no later than 3 December 2008.