Jewell Bay Pty Ltd v DPT Operator Pty Ltd (No 2)

[2010] NSWADT 204

CITATION:

Jewell Bay Pty Ltd v DPT Operator Pty Ltd (No 2) [2010] NSWADT 204
This decision has been amended. Please see the end of the decision for a list of the amendments.

DIVISION:

Retail Leases Division

PARTIES:

APPLICANT
Jewell Bay Pty Ltd

FIRST RESPONDENT
DPT Operator Pty Ltd

SECOND RESPONDENT
DPPT Operator Pty Ltd

FILE NUMBER:

095123

HEARING DATES:

On the papers

SUBMISSIONS CLOSED:

16 November 2009

 
DATE OF DECISION: 

17 August 2010

BEFORE:

Fox R - Judicial Member

CATCHWORDS:

Costs

LEGISLATION CITED:

Retail Leases Act 1994
Administrative Decisions Tribunal Act 1997

CASES CITED:

Plant v Meriton Properties Pty Ltd (No.2) [2010] NSWADTAP
Salon Today Pty Limited v M.M.I.R. Pty Limited [2009]NSWADT 71
Hoctor v Scheib [2001]NSWADT 141
Dimozantos & Anor v Deutsche Property Funds Management Limited [2002] NSWADT 221
Sarip Investments Pty Ltd v Uno Uno Pty Ltd [2004] NSWADT 27
Sarker v World Best Holdings Ltd, World Best Holdings Ltd v Sarker (No 3) [2004] NSWADT 119
Risorto & Ors v Hanjoena Pty Ltd [2004] NSWADT 171 Usagi Ya Pty Ltd v Murar [2005] NSWADT 27

REPRESENTATION:

APPLICANT
G Doyle, solicitor

RESPONDENTS
S Johnson, solicitor

ORDERS:

Applicant to pay one half of Respondent’s costs on the ordinary basis

REASONS FOR DECISION

Exercise of Discretion to extend time for submissions.

1 In my 25^th August2009 decision in this matter, in relation to any claim for an order for costs, I directed:-

“Costs reserved, Applicant to file Submissions on costs within 14 days, Respondent has 14 days to respond, papers then to be referred to me for decision on costs order, if no submissions filed, no order for costs.

2 Subsequently, on 30^th September 2009 the solicitor for the Respondent, by letter to the Tribunal sought what was in effect a retrospective extension of time to file such submissions. The Applicant had written to the Tribunal on the preceding day, drawing attention to the passage of time, and referring to what I said in paragraph 49 of my decision:-

“In accordance with the developing practice of this Division, I indicate that I would propose to make no order for costs unless the parties wish to debate that aspect. I formally reserve the question of costs. If neither party seeks an order for costs, I will simply order “no order for costs” at the expiry of 28 days from the date of application of this decision”. The Respondent, in its’ request, drew attention to an email which had been sent to the solicitor for the Applicant on 16^th September in which it indicated that submissions on costs were intended to be made, (within time), asking, as a preliminary:- “ However, could you please let us know whether you client will consent to costs being awarded in our clients favour”

3 Those submissions were then filed late, and the matter was referred to me for a preliminary decision. The obvious issue was whether or not my order of 25^th August had been self executing, so closing the matter on 23^rd September 2009.

4 Although the words of the order may have hinted at self execution, what I said in paragraph 49 required me to make an actual order. Had I intended otherwise, I would have used words to the effect of:- “without further order of this Tribunal” in my order.

5 I had not made an order when the Respondent’s request for an extension reached the Registry, and, all things considered, it seemed to me not inappropriate that I grant the request, and I did so, allowing the Applicant to file and serve submissions in response by 16^th November 2009.

6 As was indicated in Plant v Meriton Properties Pty Ltd (No.2) [2010] NSWADTAP in relation to the amendment of s88 at para 6 “..The major change appears in subsection (1A) Previously the Act provided that the Tribunal ‘may award costs... but only if it is satisfied that there are special circumstances warranting an award of costs’. Now the key words read ‘but only if it is satisfied that it is fair to do so’, and various factors that might be relevant are set out. In the old provision there was no list of possibly relevant factors

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
(ii) failing to comply with this Act, the regulations, the rules of the Tribunal or any relevant provision of the enactment under which the Tribunal has jurisdiction in relation to the proceedings, or
(iii) asking for an adjournment as a result of a failure referred to in subparagraph (i) or (ii), or
(iv) causing an adjournment, or
(v) attempting to deceive another party or the Tribunal , or
(vi) vexatiously conducting the proceedings,
(b) whether a party has been responsible for prolonging unreasonably the time taken to complete 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.

7 It is also again stressed (para 9) that the ‘fairness exception must not be allowed “to become a vehicle for introducing into the Tribunal the usual court practice of making orders for costs that follow the event.”

8 The point is illustrated by the consideration of this Tribunal in Salon Today Pty Limited v M.M.I.R. Pty Limited [2009]NSWADT 71,( a decision upon which the Respondent based it’s argument).In that decision Molloy JM spoke in terms of parties having been forced to travel down the litigious path, and the ancient wisdom of the law which held that the loser should meet the cost of the winner’s passage. He went on to point out that, despite the apparent width of s1A(e), this did not mean that it imported a regime that costs follow the event, the Tribunal must examine very carefully “the concept/principle of fairness”.

9 It seems to me to be appropriate to divide the guidelines encompassed in the “new” Section 88 into two categories of activities which may give rise to the unfairness required to support an order for costs. The first, which is properly described as “misbehaviour”, is covered by s1A(a) and (b). The second, which might well be called the “evaluation” category, is set out in s1A(c) and (d), because these call for an assessment of the background to the case, whether that be the issues of fact or law.

10 There are many decisions under the “old” special circumstances requirement which state that one party’s position was so untenable that the other should not have been put to the expense of disputing it and so should pay the costs (see for instance Hoctor v Scheib [2001]NSWADT 141, Dimozantos & Anor v Deutsche Property Funds Management Limited [2002] NSWADT 221,Sarip Investments Pty Ltd v Uno Uno Pty Ltd [2004] NSWADT 27, Sarker v World Best Holdings Ltd, World Best Holdings Ltd v Sarker (No 3) [2004] NSWADT 119, Risorto & Ors v Hanjoena Pty Ltd [2004] NSWADT 171 and Usagi Ya Pty Ltd v Murar [2005] NSWADT 27). Those decisions amounted to an evaluation of the strength of one of the sides of the argument. This applied to matters of law as well as matters of fact. It seems to me that the “new” fairness requirement does very little to change that.

11 Under the new regime it is still necessary for the Tribunal, having made its’ decision (which involved a consideration of the evidence and the law) to “go back” to weigh up the relative strength of the evidence in respect of factual matters, and the clarity of the law in respect of interpretative matters. The more discrete issues there were, the more difficult that evaluation becomes, (and the easier it is to understand the rationale of the “costs follow the event” approach of old). The decision maker must, in effect, award “points” to both sides to establish which of them should have known better than to seek to litigate it, and so deserve an order against them. However there will always be issues which are finely balanced, or reasonably arguable both ways, and it is those which require a refusal of a costs order.

12 Further,(and this may not have been expressed in previous decisions of the Tribunal on this point) I am satisfied that the concept of fairness must involve an evaluation of every individual issue considered in the contest, and so it may be necessary to award a party some costs to compensate them for having to defend or prosecute one issue, and to make no order in respect of another issue pursued in the same litigation.

Decision

13 That is the circumstance which arose in the matter at hand because two distinct issues were ventilated before me. The first was the question of whether the correspondence between the parties enlivened s42(d) to effect a deemed assignment. The second was the proper classification of the authorised use of the premises to establish whether s39(1)(a) entitled the Respondent to refuse consent. These separate issues occupied an approximately equal amount of time both at hearing, and in my consideration.

14 As I trust my reasons in the primary matter indicated, the first issue was very evenly balanced, involving as it did an evaluation of correspondence between experienced and competent business persons in a commercial issue. The second issue was not; it was always somewhat farfetched to suggest that a high class pizzeria could be classified as within the same description as the Applicant’s gourmet dining establishment. That said, I note that the Respondent did not seek an order on an indemnity basis; quite properly because the Applicant’s contention was not in, in my view, so untenable that it might be described as “extremely” farfetched. Had it been, the more “punitive” indemnity order may have been appropriate.

15 The two issues having involved an equal amount of time, it follows that the Applicant must pay one half of the Respondent’s costs.

08/09/2010 - Second respondent DPPT Operator Pty Ltd omitted from coversheet - Paragraph(s) Coversheet