Gani v Maiolo (No 2) (RLD)

[2012] NSWADTAP 21

Administrative Decisions Tribunal

New South Wales

Medium Neutral Citation:	Gani v Maiolo (No 2) (RLD) [2012] NSWADTAP 21
Hearing dates:	On the papers
Decision date:	20 June 2012
Jurisdiction:	Appeal Panel - Internal
Before:	M Chesterman, Deputy President
Decision:	The Appellant is to pay the Respondents' costs of the appeal, as agreed or assessed.
Catchwords:	Retail shop lease - costs of appeal - 'substantial disparity' between the relative strengths of the parties' cases
Legislation Cited:	Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994
Cases Cited:	ACN 079830595 Pty Ltd t/as Jolly Joe's Fish 'n' Chips v Wallis Lake Fisherman's Co-operative Pty Ltd (No 2) [2010] NSWADT 253 Gani v Maiolo [2011] NSWADT 219 Gani v Maiolo (RLD) [2012] NSWADTAP 10 Jonamill Pty Ltd v Alramon Pty Ltd (No 2) (RLD) [2010] NSWADTAP 3 Meriton Properties Pty Ltd v DCM Leases-Five Pty Ltd (No 2) [2010] NSWADT 11 Rucom Pty Ltd and Anor v Multiplex & Ors [2010] NSWADT 1
Category:	Costs
Parties:	Mohammad Murul Gani (Appellant) Maria Maiolo and Raffaele Maiolo (Respondents)
Representation:	Counsel M Rollinson (Appellant) M Tibbey (Respondents) Karam C Ramrakha & Associates (Appellant) L Muriniti & Associates (Respondents)
File Number(s):	119047
Decision under appeal	Citation: Gani v Maiolo [2011] NSWADT 219 Date of Decision: 2011-09-14 00:00:00 Before: Retail Leases Division File Number(s): 105144

decision

Introduction

1. This decision by me, sitting alone, relates to an application by Ms Maria Maiolo and Mr Raffaele Maiolo for the costs of an appeal in which they were the successful Respondents.

1. Because this application was for the costs of appeal proceedings, it may be determined by a Deputy President sitting alone, pursuant to section 24A(2)(a) of the Administrative Decisions Tribunal Act 1997 ('the ADT Act').

1. In a decision delivered on 5 March 2012 (Gani v Maiolo (RLD) [2012] NSWADTAP 10 - 'the Appeal decision'), an Appeal Panel of the Tribunal held that the Appellant, Mr Mohammad Murul Gani, had failed to establish any grounds for setting aside an order of the Retail Leases Division (see Gani v Maiolo [2011] NSWADT 219 - 'the Tribunal decision') dismissing a retail tenancy claim that he had instituted against the Respondents.

The Tribunal decision

1. The Tribunal decision included the following findings. Pursuant to a retail shop lease ('the Lease') commencing on 13 April 2010 and having a term of five years and two days, the Appellant took occupation of premises at Manly ('the Premises') owned by the Respondents for the purpose of operating a restaurant. But they caused him to be evicted on 3 August 2010 on the ground of default in the payment of rent.

1. The Appellant maintained in the Tribunal proceedings that he had not been in arrears of rent at the time of the eviction. He sought an order that the Respondents should pay to the 'Rental Bond Unit' the amount of a security bond ($25,000) that he had provided at the commencement of the Lease.

1. The Tribunal decision rejecting this claim contained two rulings that the Appellant challenged in his appeal. These were (a) that a rent-free period on which the parties had agreed expired on 13 April 2010, not (as the Appellant had claimed) on 7 May 2010, and (b) that contrary to allegations made by him, Mr Maiolo had not borrowed a sum of $4,500 from him in order to pay for the installation of a new awning on the Premises.

1. There was a third ground of appeal, to the effect that the Tribunal decision did not make any mention at all of two matters raised in the proceedings. These were (a) an assertion by the Appellant that after evicting him the Respondents had refused to allow him to retrieve goods that he owned from the Premises and (b) a claim that the Appellant had made for compensation for the value of these goods.

1. The Tribunal's orders were as follows:-

1. The Applicant was in breach of the Lease on 3 August 2010.

2.The bond money is not to be returned to the Applicant but forfeited by (sic) the Respondent.

3.The parties are to pay their own costs of the proceedings.

The Appeal decision

1. The Appeal Panel held that none of the Appellant's three grounds of appeal was sufficient to undermine the conclusions reached by the Tribunal. Relevant aspects of the Panel's reasoning on each ground were as follows.

1. As to the first ground (see the Appeal decision at [35 - 50]), it rejected an argument based on section 17(1) on the Retail Leases Act 1994 ('the RL Act'). This provision has the effect of deferring the commencement of a lessee's liability to pay rent for as long as fit-out obligations imposed on the lessor have not been fulfilled.

1. The Panel held that neither of two conditions set out in the provision had been satisfied. It also expressed its agreement with findings of the Tribunal as to the extent to which works on the Premises carried out by Mr Maiolo had disrupted the Appellant's trading in the period following commencement of the Lease, and it observed that the Appellant did not make any assertion that his liability to pay rent was deferred until after he had been evicted.

1. The Appeal Panel's discussion of the first ground of appeal concluded as follows:-

50 All these considerations point in the same direction. The Tribunal's rejection of Mr Gani's claims that the rent-free period commenced on 7 May 2010 and his liability to pay rent therefore commenced on 7 June 2010 was entirely correct in law and in accordance with the evidence. This ground of appeal fails.

1. At the end of its discussion of the second ground (at [51 - 58]), the Appeal Panel summarised as follows its reasons for rejecting this ground:-

58 In our judgment, this ground of appeal must fail, principally for two reasons. First, the Tribunal's finding that the alleged loan of $4,500 by Mr Gani was not made was clearly open to it on the evidence, having regard particularly to the matters noted in the preceding paragraph and to the Tribunal's criticisms, mentioned earlier, of Mr Gani's credibility as a witness. Secondly, even though Mr Maiolo's evidence on this matter was also unsatisfactory, with the consequence that it is not at all clear who paid for the awning and in what amount(s), it was Mr Gani, not Mr Maiolo, who bore the onus of adducing reliable evidence on the matter.

1. As to the third ground (see [59 - 74]), the Appeal Panel accepted the Appellant's argument that the Tribunal should have dealt with his claim for compensation for the value of goods left the Premises. It held that the Tribunal's failure to do so was an error of law. But it held nonetheless that the Appellant had failed to demonstrate that the Tribunal's decision should be set aside. At [71], it set out as follows its principal reason for reaching this conclusion:-

71 We are however satisfied, having regard to the material before us, that this claim must be dismissed. Our principal reason is that, as Ms Tibbey [counsel for the Respondents] argued, the evidence adduced by Mr Gani as to both the nature and (most importantly) the value of the goods left in the Premises falls well short of what was required. A list of broadly described categories of goods, without any indication of the numbers of items in a number of the categories or of the age or other defining characteristics of any of the goods, is clearly inadequate. So too are a series of bald assertions as to the value of the items in each of the 27 categories.

1. At [72 - 73], the Panel observed as follows: (a) although documents left by the Appellant in the premises may have contained material relevant to the nature, quantity and value of the goods, no claim to this effect was made on his behalf; (b) there was unchallenged evidence that on two occasions his representative cancelled appointments for a joint inspection of the premises, at which any such documents could have been identified and returned to him; and (c) a claim by the Respondents to be entitled under clause 11 of the Lease to treat the goods as abandoned had some merit.

1. At [76], having stated that the parties would be given an opportunity to apply for the costs of the appeal, the Panel added that 'the grounds of appeal advanced by the Appellant were not strong'.

The costs of the appeal

1. In submissions prepared by Ms Tibby and filed on 23 March 2012, the Respondents claimed costs on four grounds. Each of them related to the considerations to be taken into account by an Appeal Panel when deciding whether it is 'fair' to award costs under section 88 of the ADT Act. This section is made applicable to proceedings under the RL Act by section 77A of that Act.

1. For present purposes, the relevant provisions within section 88 of the ADT Act are these:-

88 Costs

(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:

(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as:

(i) failing to comply with an order or direction of the Tribunal without reasonable excuse, or...

(vi) vexatiously conducting the proceedings,

(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.

1. Submissions in reply, prepared by Mr Rollinson of counsel, were filed on 12 April 2012.

1. The first ground advanced by Ms Tibbey on behalf of the Respondents was that because these were 'purely commercial' proceedings commenced in the Retail Leases Division between parties who were engaged in trade and commerce, 'at arms' length' from each other and legally represented, it was 'fair and appropriate that costs follow the event'. In support of this proposition she cited Rucom Pty Ltd and Anor v Multiplex and Ors [2010] NSWADT 1 at [37] and ACN 079830595 Pty Ltd t/as Jolly Joe's Fish 'n' Chips v Wallis Lake Fisherman's Co-operative Pty Ltd (No 2) [2010] NSWADT 253 at [13].

1. Mr Rollinson's submissions on behalf of the Respondents did not specifically address this proposition.

1. In my opinion, Ms Tibbey's proposition goes further than the case law permits. The fact that unsuccessful proceedings have been commenced in the Retail Leases Division, rather than in another Division of the Tribunal, and indeed the fact that an appeal, as opposed to a proceeding at first instance, has been held unsuccessful are both factors tending to support the conclusion that it would be 'fair' under subsection (1A) of section 88 to award costs against the unsuccessful party. In this way, the 'nature' of the proceedings is brought into account as required by paragraph (d) of that subsection. But neither of these features of proceedings is sufficient, of itself, to require that costs should simply 'follow the event'.

1. Secondly, Ms Tibbey submitted, relying on paragraph (c) of subsection (1A), that costs should be awarded to the Respondents because the grounds of the appeal were very weak and the appeal had very little prospect of success. With reference to each of the three grounds of the appeal, she relied on the specific reasons given by the Appeal Panel (set out above at [10 - 15]) for rejecting them. She added that the Tribunal decision in favour of the Respondents had involved adverse findings regarding the Appellant's credibility.

1. In response, Mr Rollinson argued that the Appeal Panel did not dismiss the appeal as 'untenable', but merely was 'not persuaded by it'. With reference to the third ground of appeal, he pointed out that because the Tribunal did not deal at all with the Appellant's claim for compensation for the value of his goods, the appeal was the first occasion on which this claim was determined on its merits. He argued also that in consequence of the dismissal of the appeal the Respondents retained these goods and that this was 'a windfall in the circumstances'.

1. In my judgment, the Respondents' application for costs should succeed on this ground. My starting-point is that, as was stated in the Appeal decision at [76], 'the grounds of appeal advanced by the Appellant were not strong'.

1. In these circumstances, useful guidance on the issue of costs can be obtained from the decision of the Appeal Panel in Jonamill Pty Ltd v Alramon Pty Ltd (No 2) (RLD) [2010] NSWADTAP 3. As in the present case, this decision related to an application by a successful respondent for the costs of an appeal in proceedings under the RL Act. At [45], the Panel said that it would not regard the appellant's case in the appeal as 'unarguable, unreasonable or untenable'. But at [47 - 49] it went on to award costs to the respondent, having regard particularly to the 'substantial disparity between the relative strengths of the parties' claims'. It gave the following reasons:-

47 In the light of these considerations... we conclude as follows. Having regard to both the substantial disparity between the relative strengths of the parties' claims and 'the nature of the proceedings' (i.e., that it is an unsuccessful appeal from a decision in the Retail Leases Division), as is required of us by section 88(1A)(c) and (d), it is in all the circumstances 'fair' that the unsuccessful Appellant should pay the Respondent's costs.

48 There is no contradiction between this conclusion and the order made at first instance that each party should pay its own costs... The Tribunal pointed out in Meriton Properties Pty Ltd v DCM Leases-Five Pty Ltd (No 2) [2010] NSWADT 11 at [34] that 'in decisions under section 88 as it stood before the 2008 amendments, the Tribunal showed itself to be more willing to award costs in appeal proceedings (notably against an unsuccessful appellant) than against the losing party at first instance'.

1. It is true, as Mr Rollinson argued, that it was not until the appeal that the Appellant's claim for compensation for the value of his goods received consideration in the proceedings. The Tribunal at first instance erred in omitting to deal with it. But the evidence adduced in support of this claim was clearly inadequate. The Appellant appeared to believe that a single-page list of 27 different types of goods allegedly left in the premises, coupled with single-line entries purporting to state the value of each item on the list, constituted sufficient evidence of the nature and the value of the goods to sustain an order for compensation. This defect in his case was sufficient in itself to warrant rejection of the ground of appeal.

1. On the basis that this was an unsuccessful appeal in proceedings under the RL Act and that there was a 'substantial disparity' between the relative strengths of the cases brought by the parties, my conclusions is that the Respondents are entitled to an order for their costs pursuant to paragraphs (c) and (d) of section 88(1A) of the RL Act.

1. On account of this conclusion, it is sufficient for me to deal only briefly with the two remaining grounds on which the Respondent sought a costs order.

1. The third ground advanced by Ms Tibbey was that the credit findings recorded against the Appellant in the Tribunal decision showed that he had made unfounded allegations and should therefore be regarded as having behaved 'vexatiously' within the meaning of subparagraph (a)(vi) of section 88(1A) of the ADT Act.

1. In my opinion, the findings in question did not go so far as to support this conclusion. Equally, as Mr Rollinson pointed out, the appeal itself was not 'vexatious'. Standing alone, this ground for awarding costs is not made out.

1. Fourth and finally, Ms Tibbey pointed out that the Appellant had filed so-called supplementary submissions more than two months after the date stipulated in directions and only five days - in fact, only two working days, by virtue of both a public holiday and a weekend intervening - before the hearing of the appeal. No prior notice of these submissions was given and no explanation for their lateness was offered. It turned out that these submissions contained his principal arguments in the appeal. The consequence was that further preparatory work was imposed at a late stage on the Respondents and their legal advisers. For these reasons, Ms Tibbey claimed that costs should be awarded under section 88(1A)(a)(i) and (e) of the ADT Act.

1. Mr Rollinson submitted in response that the timetable breaches on the Appellant's part did not prejudice the proper management of the appeal.

1. In other circumstances, this aspect of the Appellant's conduct might well have had an impact on the matter of costs, though it would not of itself justify an award covering all of the Respondents' costs. But as I have already indicated, there is no need for me to rule on this particular question.

1. For the foregoing reasons, the Respondents are entitled to recover from the Appellant their costs of the appeal, as agreed or assessed.

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Decision last updated: 20 June 2012