Braidford Pty Limited v Robinson

[2002] NSWADT 126

CITATION:	Braidford Pty Limited -v- Robinson [2002] NSWADT 126
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Braidford Pty Limited RESPONDENT Lyon Phillip Robinson
FILE NUMBER:	015061
HEARING DATES:	16/05/2002
SUBMISSIONS CLOSED:	05/16/2002
DATE OF DECISION:	07/19/2002
BEFORE:	Fox R - Judicial Member
APPLICATION:	Claim for relief from payment of money
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Legal Profession Act 1987 Retail Leases Act 1994
CASES CITED:
REPRESENTATION:	APPLICANT J Wahnon, agent RESPONDENT R S Davis, barrister
ORDERS:	1. Pursuant to section 70 (1) (a), the Applicant Lessee is to pay the Respondent Lessor the sum of $2,201.50, being the proper amount to be paid as lease preparation costs.; 2. No order for costs.; 3. No order for interest if paid within 28 days from today’s date.

1 These proceedings arise out of a claim by the Lessee Braidford Pty Ltd (“the Applicant”) that the Lessor’s solicitors fees of drawing and engrossing Lease claimed from the Lessee were not payable by it because they were not reasonable.

2 Section 13 of the Retail Leases Act (“the Act”) provides:

“Lease Preparation Cost

(i) If the Lessee is liable to pay any amount to the Lessor in respect of legal or other expenses incurred by the Lessor in connection with the preparation of a retail shop lease, the Lessor must provide the Lessee with a copy of any account presented to the Lessor in respect of those expenses and the Lessee is not required to make any such payment until the Lessor has complied with this requirement.

(ii) Despite any provision of the Lease or other agreement, the Lessee is not liable to pay more than a reasonable sum in respect of any legal or other expenses incurred in connection with the preparation of the Lease by the Lessor.

(iii) This section does not preclude any right that the Lessor may have to recover a reasonable sum in respect of any legal or other expenses incurred in connection with the preparation of a Lease by the Lessor from a person who enters into and then withdraws from negotiations with the Lessor in respect of the Lease”.

3 That issue having been raised, I was satisfied that the method of establishing whether or not the claim was “reasonable” was to have the solicitor’s account assessed. The only method of assessment available in this State is referral to a Costs Assessor pursuant to Part 11 of the Legal Profession Act (LPA). I directed that the bill be so assessed by referring it to the Supreme Court for submissions to a Costs Assessor. This assessment was effectively a solicitor/client assessment.

4 At this point the first difficulty arose, because, at the time (July 2001 to January 2002) the relevant provisions of the LPA were found in Section 199(1) and (4).

“(1) a client who is given a bill of costs may apply to the Proper Officer of the Supreme Court for an assessment of the whole of or any part of those costs.

(4) in this Section, client includes any person who is a party to a Costs Agreement relating to legal services for which the bill of cost is given, other than the barrister or solicitor who gave the bill or who provided the services”.

5 It is proper to observe that, by gazettal of May, 2002, subsection 4 was amended to include in “client”
“any person being a Lessee under a Lease, who is given a bill of costs concerning legal services relating to the preparation of that Lease, by a Barrister or solicitor acting on behalf of the Lessor”.
6 The fact that (at the time) the Applicant Lessee did not appear to have the relevant standing in the Costs Assessment process, was overcome by my directing that the Applicant Lessee reduce the objections to the bill to writing, and then forward them to the Solicitor for the Lessor, to on forward to the Costs Assessor. I am satisfied that the Costs Assessor in fact received the Lessee’s Objections and considered them.

7 The original Solicitor’s bill claimed costs of $2,614.00 and disbursements of $304.00 making a total of $2,918.00. The Costs Assessor directed that the legal costs be reduced by $594.00, bringing them to $2,220.00 and that the disbursements be reduced by $122.50, bringing them to $181.50, making the reduced total to $2,201.50.

8 The Costs Assessor’s Certificate issued at the end of the process read as follows:

“The application is determined by substituting for the disputed costs as a fair and reasonable amount of costs to be paid to the practitioner the sum of $2,301.50, noting that this amount includes the sum of $100.00 being the fee paid for the application to initiate the costs assessment”, which was to be refunded.
9 I am satisfied that the “reasonable sum” referred to in the sub sections 2 and 3 of Section 13 of the Act, in these particular circumstances, is $2,201.50 and that is the amount which the Applicant has to pay the Respondent.

10 Both subsections 2 and 3 are involved because it is clear that part of the costs claimed by the Respondent’s Lessor were for the drawing and engrossing of the Lease (pursuant to the exercise of an option) now in effect between the parties, and part of the costs related to the drawing of a Lease in terms different than those dictated by the option, which was, in the end, not accepted by the Applicant Lessee.

11 The assessment being in hand, I gave the parties time to consider their position, and during that time the Respondent Lessor received a Tax Invoice from the Supreme Court of New South Wales claiming the Costs Assessor’s fees in the sum of $1,440.00. These were paid by the Lessor and the matter then came before me again as a claim by the Respondent Lessor for an order for costs against the Applicant Lessee claiming special circumstances in accordance with Section 88 of the Administrative Decisions Tribunal Act.

12 I must, of course, first say that, on reflection, the invoice received from the Supreme Court would appear to have been issued in error, because, even if the Costs Assessor was right in his determination that Section 182 of the (LPA) is applicable, because:

“the costs in the legal services are not disputed by the client of (the Respondent’s solicitor) but by the Lessee resulting in this assessment by direction of the Administrative Decisions Tribunal”,
13 Section 182 of the LPA (relevantly) provides:
“cost of any assessment referred to in this Section (including the costs of the Costs Assessor) are payable by the Barrister or solicitor seeking to recover costs”.
14 As I understand the thrust of the costs assessment regime established by the Legal Profession Act , there is no entitlement, in a Solicitor/Client assessment, for an order to be made against the client that the client pay the costs of the assessment. If the costs of the assessment are not to be borne by the solicitor, then they are borne by the system, no order can be made against the client.

15 Thus, if the invoice by the Supreme Court had been correctly raised against the solicitor, and paid by him, there exists no right for the solicitor to claim recompense from his client (the Lessor). If the amount in question is not payable by the Lessor, then it cannot be claimed from the Lessee , and consequently the claim for an Order for costs cannot succeed.

16 The only basis upon which this Tribunal could make an Order that the Lessee pay the costs of the assessment is for those to be costs (in terms of Section 88 of the Administrative Decisions Tribunal Act) “of or incidental to” an application before this Tribunal. No precedent was quoted to me, but it seems likely that the costs of the assessment process, in the present circumstances, are “incidental to” the application to this Tribunal and so, potentially, the Lessor’s application had prospects of success. The claim fails because there is no legal basis for the client in a solicitor/client assessment to be made to pay for the costs of the assessment, and it cannot be the case that the Retail Leases Act allows such a claim “through the backdoor”.

17 In view of the way the matter was argued before me, it is appropriate to observe that, even had the claim by the Supreme Court (by the issue of its invoice) been properly made against the Lessor, and, properly paid by the Lessor, and so possibly claimable against the Lessee as “of or incidental to” an application before this Tribunal, I am still satisfied that the Respondent’s application was ill founded because there are no special circumstances in favour of the Lessor. It is the Applicant Lessee who was substantially successful, and who potentially could show the requisite special circumstances. The claim against him for $2,918.00 was found to be proper at $2,201.50 a difference more than of $700.00, more than a fifth of the amount claimed.

18 The solicitor for the Lessor argued an entitlement to his costs of appearing before this Tribunal because, early in the proceedings, shortly after the Applicant brought the matter to this Tribunal in April of 2001, when the matter had in accordance with Section 68 of the Act, been referred to mediation, an offer of settlement was made proposing that an amount of $2,350.00 be paid by the Lessee in full settlement of the claim. I am satisfied that this proposal was put to the Lessee by the managing real estate agent on the basis that the Lessee terminate the mediation, claim a refund of the $550.00 mediation fee and pay that refund to the Lessor together with a further $1,850.00, in full and final settlement. The Applicant quite properly (in my view) refused.

19 It appears that, subsequently, a mediation was appointed, but the Lessor did not attend, and the Registrar of the Retail Tenancy Unit issued the appropriate certificate which allowed the matter to proceed to this Tribunal for a final determination.

20 The Solicitor for the Lessor then reiterated the offer of full settlement in the sum of $2,350.00, and it is this offer which led him to argue that, along the lines of the Calderbank decision, the Lessor was entitled to recover the costs of the application to this Tribunal, special circumstances having been generated by the failure to accept an amount which was only slightly above that which the Assessor found to be proper. This proposition must fail because, although there might be an entitlement to refund of part of the mediation fee paid by the Lessee, it is (at least) the spirit of the Act that such mediation fees paid to resolve a retail tenancy dispute be equally shared. The action of the Lessor in not attending at the mediation meant that, in truth, if the Lessee accepted the subsequent offer, the true total cost to the Lessee would have been be in excess of $2,515.00. Even on this view of the matter, the Assessor’s award was substantially more (almost 15%) in the Lessee’s favour than the offer of settlement, so removing any prospect of special circumstances being found in favour of the Lessor.

21 It follows that the Lessor’s application for an Order for costs is denied.

Orders:

1. Pursuant to Section 70 (1) (a), the Applicant Lessee is to pay the Respondent Lessor the sum of $2,201.50, being the proper amount to be paid as lease preparation costs.

2. No order for costs.

3. No order for interest if paid within 28 days of the date hereof.