Du Aus Pty Ltd v Riviera Cove Pty Ltd (No 2)
[2010] NSWADT 302
•17 December 2010
CITATION: Du Aus Pty Ltd v Riviera Cove Pty Ltd (No 2) [2010] NSWADT 302 DIVISION: Retail Leases Division PARTIES: APPLICANT
RESPONDENT
Du Aus Pty Ltd
Riviera Cove Pty LtdFILE NUMBER: 105079 HEARING DATES: On the papers SUBMISSIONS CLOSED: 13 October 2010
DATE OF DECISION:
17 December 2010BEFORE: Fox R - Judicial Member CATCHWORDS: Costs LEGISLATION CITED: Retail Leases Act 1994
Administrative Decisions Tribunal Act 1997CASES CITED: Australian Aqua Air Pty Ltd v Chief Commissioner of State Revenue [2009] NSWADT 239
Cripps v G & M Dawson Pty Ltd (2006)NSWCA81 Du Aus Pty Ltd v Riviera Cove Pty Ltd [2010]NSWADT 228 Hughes v Western Australian Cricket Association (1986) ATPR 30-74
Jewell Bay Pty Ltd v DPT Operator Pty Ltd 9No2) [2010] NSW ADT 204
Jonamill Pty Ltd v Alramon Pty Ltd (No2)(RLD)[2010]NSWADTP 3
Kelly v Chief Commissioner of State Revenue (2) [2010] NSW ADT 52
Reathel v Director General, Department of Education and Training 2000 NSWADT 56 at par 54
Oshlack v Richmond River Council (1998) 193CLR7
Salon Today Pty Ltd v M.M.I.R. Pty Ltd [2009] NSW ADT 71
Tarleton and Peters Pty Ltd V E K Nominees Pty Ltd [2010] NSW ADT 24REPRESENTATION: APPLICANT
RESPONDENT
PA Horvath, solicitor
Paul Bard, solicitorORDERS: 1Applicant to pay Respondent’s costs, on the ordinary basis, for all work after 4th June 2010 up to and including the hearing
2No order for costs of this costs application.
REASONS FOR DECISION
1 In my decision of 15th September 2010 [Du Aus Pty Ltd v Riviera Cove Pty Ltd [2010]NSWADT 228] I gave the parties leave to make submissions on the matter of costs, although I did observe:-
“The available hearing time did not allow the question of costs to be broached. I would make the preliminary observation that the point at hand was quite novel, and that the arguments for and against were finely balanced”.
2 The Respondent was the successful party because I held that the effect of the Deed of Settlement executed between them provided a mechanism to set the existing rent, and not to change it. That meant that the valuation made pursuant to the Deed was not a valuation which enlivened section 19 of the Retail Leases Act, and so no application lay under section 32A for a review of the valuation.
3 As is usual, this costs decision is made on the papers. The Respondent made submissions on 29th September, 2010 seeking indemnity costs. The Applicant’s response of 13th October, 2010 proposed that, in accordance with section 88(1) of the Administrative Decisions Tribunal Act, there be no order for costs.
4 Section 88(1) states:-
(1) Each party to proceedings before the Tribunal is to bear the party’s own costs in the proceedings, except as provided by this section.
(1A) Subject to the rules of the Tribunal and any other Act or law, 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 the following:
[sub sections (a) and (b) describe matters of procedural misbehaviour which do not apply].
(c) the relative 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,
(e) any other matter that the Tribunal considers relevant .
........
(4) In this section, "costs" includes:
(a) costs of or incidental to proceedings in the Tribunal , and
(b) the costs of or incidental to the proceedings giving rise to the application , as well as the costs of or incidental to the application .
5 There have been many costs decisions of this Tribunal, arising both from the previous section 88 requirement of “special circumstances” and the current requirement of “fairness”. Most have been at pains to state that, whatever the statutory requirement might mean, it did not mean that costs follow the event. Most recently, see:- Salon Today Pty Ltd v M.M.I.R. Pty Ltd [2009] NSW ADT 71, Jewell Bay Pty Ltd v DPT Operator Pty Ltd 9No2) [2010] NSW ADT 204 and Tarleton and Peters Pty Ltd V E K Nominees Pty Ltd [2010] NSW ADT 24.
6 That being the case, it is difficult to understand the thrust of the Respondent’s submissions based on Hughes v Western Australian Cricket Association (1986) ATPR 30-74 and Oshlack v Richmond River Council (1998) 193CLR72 to the effect that is fair for costs to follow the event. That simply is not the case, having regard to the very clear words of section 88(1) of the ADT Act. It has to be appreciated that this sub section substantially changes what might be said to be the general law (as stated in Hughes and Oshlack) from the position that a successful party receives costs absent disentitling factors, to a position where a party must show entitling factors. It was of no utility for the Respondent to have observed “given the short hearing time and the relationship between all issues, there is no basis for departing from the general approach in contested litigation that the unsuccessful party pay the costs of the successful party”, because section 88 specifically changes that base concept.
7 The submissions went on to state that the point to be decided was an uncomplicated interpretation of the Deed in the face of the Applicant’s quite untenable suggested interpretation, and that the Respondent had incurred substantial costs in defending the matter. It was also indicated that the Respondent had, perhaps in the spirit of the Calderbank principle, in a letter of 4th June, 2010 made the point to the Applicant that the Deed did not call for a change in rent, so anticipating the focus of my decision.
8 These latter points are to be considered in resolving the value judgment as proposed by Salon Today:- “is it fair that the Defendant be put to the expense of defending the matter”.
9 The Applicant’s submissions focused more clearly on section 88 and relied on Kelly v Chief Commissioner of State Revenue (2) [2010] NSW ADT 52. That decision, it was suggested, called for a “high level of un-tenability or weakness” to trigger section 88 1A(c). Further, they correctly observe that only one of the two aspects of the Respondent’s argument in the primary matter succeeded, the Respondent’s proposition that the Deed of Settlement between parties was not a Lease having failed.
10 Attention was drawn to my comment in the primary matter at paragraph 10 where I observed that it is easy to understand why each of the parties took the position they did. That seems to have been taken somewhat out of context, I was merely reflecting on the very substantial difference between the “joint” rent valuation of approximately $860,000.00 per annum and the Applicant’s which was in excess of $1,100,000.00 per annum. The issue was, in the final analysis, a simple commercial dispute.
11 The point of my decision was I believe, readily discernable in anticipation. Applying the “test” which I formulated in Jewell Bay, I am satisfied that the argument advanced by the Applicant was not so “extremely far fetched” as to warrant an indemnity costs order, however, especially in view of the clear “warning” in the letter of 4th June, 2010 I am not satisfied that it was fair for the Respondent to have been put to the trouble of defending the matter and so an order for costs on the ordinary basis is appropriate. That being the case, the failure of one of the Respondent’s defensive arguments (the proposition that the Deed was not a retail shop lease) seems to me to be irrelevant. Of course that might be different if a Respondent were to raise a matter in defence which turned out to be obviously irrelevant, or raised an argument in defence which was found to be very far fetched but which occupied a substantial amount of Tribunal time.
12 It follows that the Respondent is entitled to its costs of the proceedings, for all work after 4th June 2010 up to the preparation for the hearing and of conducting it.
13 I digress to observe that the Kelly decision, and those therein cited, such as Australian Aqua Air Pty Ltd v Chief Commissioner of State Revenue [2009] NSWADT 239 relate to disputes between one or other arm of officialdom and the citizen, and require different considerations than those in this Division. The decision of the Appeal Panel in Jonamill Pty Ltd v Alramon Pty Ltd (No2)(RLD)[2010]NSWADTP 3, confirmed at par 44 that the Tribunal’s decisions about the commercial nature of disputes in the Retail Leases Division, in relation to the previous requirement of “special circumstances”, apply equally to the new regime of “fairness”. It follows that it is still the case that costs will more readily be awarded in this Division than in other Divisions. This means that the requirement of a “high level of un-tenability” as found in the VCAT decisions on the Victorian equivalent of s88, has to be (in my view quite substantially) moderated when applied to Retail Tenancy Disputes.
14 The same applies to the analysis of s88 in Australian Aqua Air, which proposes to limit the circumstances when pre-litigation factors and events can be taken into account. That was a matter involving a decision of an administrator, and so does not apply to this Division (see Jonamil). In any event, that analysis does not affect the matter in hand because I am of the view that by 4th June the preliminaries had reached the requisite stage of formality to bring them within the ambit of the remarks by the President in Reathel v Director General, Department of Education and Training 2000 NSWADT 56 at par 54.
.
15 That however, does not close the matter because the question of the separate application for a costs order is itself encompassed by section 88(1). Just because the Respondent succeeded in the Costs Application does not mean that there were the “entitling” aspects necessary for an order for costs of that separate aspect to be made.
16 The Respondent pressed a claim for indemnity costs which, in my view, again applying the Jewell Bay test above referred to, had little basis. That again raised the question whether it is fair that the opponent should have been put to the trouble of defending it. I do not believe that it should have been, because it was quite untenable, and so am not satisfied that it is fair to award costs of this Costs Application against the Applicant, and will make no order for those costs.
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