G & M Dawson Pty Limited v Cripps & Ors (No 2) (RLD)

[2005] NSWADTAP 3

Appeal Panel - Internal

CITATION:	G & M Dawson Pty Limited v Cripps & Ors (No 2) (RLD) [2005] NSWADTAP 3
PARTIES:	APPELLANT G & M Dawson Pty Limited FIRST RESPONDENT Michael Lance Cripps, Executor of the Will of the late Kerrie Frances Cripps SECOND RESPONDENT Madonna Kaye Jones THIRD RESPONDENT HG & R Securities Pty Limited
FILE NUMBER:	049003
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	12/08/2004
DATE OF DECISION:	02/01/2005
DECISION UNDER APPEAL:	G & M Dawson Pty Limited v Cripps, Jones & Anor [2003] NSWADT 274
BEFORE:	Chesterman M - ADCJ (Deputy President); Rickards K - Judicial Member; Weule B - Non Judicial Member
CATCHWORDS:	costs
MATTER FOR DECISION:	Costs
FILE NUMBER UNDER APPEAL:	025079
DATE OF DECISION UNDER APPEAL:	12/23/2003
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994
CASES CITED:	Citadin Pty Ltd (No 2) v Eddie Azzi Australia Pty Ltd & General Pants Pty Ltd (RLD) [2001] NSWADTAP 31 G & M Dawson Pty Limited v Cripps, Jones & Anor [2003] NSWADT 274 G & M Dawson Pty Limited v Cripps, Jones & Anor (RLD) [2004] NSWADTAP 38 Sotiropoulos v Mattana Coiffure Pty Ltd (No 2) (RLD) [2004] NSWADTAP 43
REPRESENTATION:	APPELLANT S Reuben, barrister RESPONDENTS No appearance
ORDERS:	1. This application by the Appellant for an order costs in the appeal is dismissed; 2. No order for costs on this application

Introduction

1 In this appeal, the Appellant, G & M Dawson Pty Limited, successfully challenged before us one aspect of the decision of the Tribunal, constituted by Mr S Montgomery, Judicial Member, in G & M Dawson Pty Limited v Cripps, Jones & Anor [2003] NSWADT 274. This decision was given by the Tribunal in the exercise of its jurisdiction under the Retail Leases Act 1994 (‘the RL Act’).

2 The Appellant contended in the appeal that the Tribunal had erred in law in holding that it was not entitled to recover damages from the First and Second Respondents to its application in the proceedings, Kerrie Frances Cripps and Madonna Kaye Jones, under one of several heads that it had included in its claim. The issue raised was one of remoteness of damage under the law of contract. The Tribunal had in fact ordered that damages of $3,115.00 claimed under another head should be paid by these two Respondents to the Appellant.

3 The Appellant also sought leave from the Appeal Panel under s 113(2)(b) of the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’) for the appeal to extend to the merits.

4 On behalf of the Second Respondent, it was argued that the grounds of appeal put forward were unsustainable and furthermore did not allege an error of law so as to justify the granting of leave under s 113(2)(b).

5 The Third Respondent, HG & R Securities Pty Ltd, entered an appearance but did not participate in the appeal.

6 Before the conclusion of the hearing at first instance, the Tribunal had been notified that the person named in the Appellant’s application as the First Respondent, Kerrie Frances Cripps, had died. Its judgment nonetheless included an award of damages against her. Between the date of hearing of the appeal and the delivery of our judgment, we ordered that Michael Lance Cripps, to whom probate had been granted as the executor of the will of Ms Cripps, should be substituted as the First Respondent to the appeal in her place.

7 In our judgment, delivered on 8 September 2004 (G & M Dawson Pty Limited v Cripps, Jones & Anor (RLD) [2004] NSWADTAP 38), we allowed the appeal on the grounds that (a) the Tribunal had erred, as alleged by the Appellant, in its interpretation and application of the common law principles of remoteness of damage and (b) this error was an error of law. Having granted leave for the appeal to extend to the merits, we increased by $102,000.00 the amount of damages to be paid by the First and Second Respondents to the Appellant.

8 In our judgment, we gave liberty to the parties to file written submissions on costs within 28 days. We indicated that the matter of costs would be determined ‘on the papers’, pursuant to s 76 of the ADT Act, unless a party sought to be heard.

9 On 23 September 2004, the Appellant filed and served written submissions seeking an order for costs against the First and Second Respondents. On 6 October 2004, these two Respondents filed in the Supreme Court a Notice of Holding Appeal against our decision. On 1 November 2004, the Appellant’s solicitors wrote to the Registry requesting that we should determine the issue of the costs of the appeal to us in order that that issue could be included in the Supreme Court appeal proceedings if either party so desired.

10 On 17 November 2004, we directed that the Respondents should file any submissions in reply to those filed by the Appellant within 21 days. Notice to this effect was sent by the Registry to the solicitors for each of the Respondents.

11 No such submissions in reply have been filed. As the period specified in our direction expired some weeks ago, we must determine the issue of the costs of the appeal without having had the benefit of arguments on behalf of any of the Respondents.

Principles governing the award of costs

12 In its submission on costs, prepared by Mr Reuben of counsel, the Appellant argued that the requirement of ‘special circumstances’ set out in s 88(1) of the ADT Act was satisfied in this case. Section 77A of the RL Act makes this provision applicable in retail tenancy proceedings conducted in the Tribunal. Section 88(1) of the ADT Act states as follows:-

88 Costs

(1) 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 there are special circumstances warranting an award of costs.

13 In Citadin Pty Ltd (No 2) v Eddie Azzi Australia Pty Ltd & General Pants Pty Ltd (RLD) [2001] NSWADTAP 31, an Appeal Panel of the Tribunal rejected an argument that this provision requiring ‘special circumstances’ to be shown applied only to decisions made by the Tribunal at first instance, and not to Appeal Panel decisions. The Panel stated, at [16], that ‘the s 88(1) rule applies to Appeal Panel proceedings arising out of proceedings for an original decision unless otherwise provided in the primary enactment conferring the jurisdiction to make an original decision’. The RL Act, which is the relevant ‘primary enactment’ in these proceedings, makes no such provision.

14 Citadin (No 2) is also authority for the proposition that ‘special circumstances’ may include factors connected with the nature of Appeal Panel proceedings (see the judgment at [16] and [24]).

The Appellant’s submissions regarding costs

15 In his written submission, Mr Reuben accepted these propositions established in Citadin (No 2). He contended however that the requirement of ‘special circumstances’ was satisfied in the present case. The reason for this was, he claimed, that counsel for the First and Second Respondents, both at first instance and in this appeal, had put forward arguments on the issue of remoteness of damage which, although accepted by the Tribunal at first instance, had been held by us to be ‘unsustainable’. The Appellant had ‘consequently had to have legal representation, including solicitors and Counsel, in order to expose and correct the error’. Since the costs payable by the Appellant for this representation were ‘wholly brought about by the submissions of the First and Second Respondents’, a costs order should be ‘visited upon them’.

16 In support of this line of argument, Mr Reuben cited the following two paragraphs in the Appeal Panel’s judgment in Citadin (No 2):-

23 In the present case the appeal was dismissed as disclosing no sufficiently arguable questions of law. It was reasonable for the respondents to engage counsel given the financial significance of the dispute and the factual and legal complexity inherent in retail leases disputes.

24 These in our view are factors sufficient in the context of an appeal to amount to ‘special circumstances’ for the purposes of s 88 and ones that warrant the respondents being given some relief as to costs.

17 Mr Reuben’s submissions concluded with the assertion that we should follow this ‘expression of principle’ in Citadin (No 2). This was because there was ‘no material distinction’ between the respondents in Citadin (No 2) having to engage counsel in a ‘financially significant and legally complex dispute’ and the Appellant in this case having to do so ‘in order to expose and correct the errors of law brought about by the position maintained by the Respondents, at first instance and in the Appeal’.

Our conclusions

18 In our judgment, this argument advanced for the Appellant is misconceived, for the following reasons.

19 The true ground of the decision in Citadin (No 2) awarding costs to the respondent was, as stated in the first sentence of [23], the fact that the appeal had been dismissed ‘as disclosing no sufficiently arguable questions of law’. At [2], the Appeal Panel formulated the ground of dismissal slightly differently, saying that ‘there were no questions of law identified by the notice of appeal that were sufficiently arguable to warrant further consideration of the appeal’.

20 In giving prominence to this question whether any questions of law had been identified, the Panel was taking into account the provisions of s 113(2) of the ADT Act. These are to the effect that an appeal may be made on any question of law and that is only with the leave of the Appeal Panel that the appeal can extend to a review of the merits.

21 On account of these provisions, it could fairly be said, to quote a phrase used in the judgment at [19], that there had been in Citadin a ‘threshold rejection’ of the appeal. The appeal was not however in one of the ‘extreme categories’ of an appeal ‘based on irrational grounds’ or an ‘otherwise vexatious’ appeal (see again [19]).

22 In the present case, the position is entirely different. The ground on which the Appellant seeks an order for costs is not that it incurred the costs of instructing solicitors and counsel in order to resist an appeal which ultimately suffered a ‘threshold rejection’. Instead, it incurred these costs in order to mount a challenge to the Tribunal’s rejection of a line of argument that it had advanced at first instance. As can be seen from our judgment on the appeal, that issue was far from straightforward.

23 The Respondents, having succeeded on this issue at first instance, should not be penalised by a costs order made pursuant to a requirement of ‘special circumstances’ simply because they engaged solicitors and counsel in order to defend their position in the appeal and, through so doing, compelled the Appellant to do likewise. Nothing in the judgment in Citadin (No 2) or in any other judgment dealing with costs in retail leases cases in this Tribunal (see eg Sotiropoulos v Mattana Coiffure Pty Ltd (No 2) (RLD) [2004] NSWADTAP 43) suggests that these are or might be ‘special circumstances’ under s 88.

24 If the traditional common law approach of ‘costs follow the event’ applied in the Tribunal, the Appellant, being successful, would have a prima facie entitlement to its costs. But as has been said in numerous cases within the Retail Leases Division (see eg Citadin (No 2) at [6 – 13]), the criterion of ‘special circumstances’ dictates a very different approach. If Mr Reuben’s submissions were correct, ‘special circumstances’ would potentially arise in any case where a party to proceedings, having failed at first instance on an issue of factual or legal complexity, incurred legal costs through conducting a successful appeal on the issue, against opposition from the other party.

25 For these reasons, this application by the Appellant for an order for costs in the appeal is dismissed. As the Respondents made no submissions, there is no basis for making an order for costs in their favour on the application itself.