Kapadia Pty Ltd v Trust Company of Australia Ltd

[2012] QCAT 194

CITATION: Kapadia Pty Ltd v Trust Company of Australia Ltd [2012] QCAT 194

PARTIES:	Kapadia Pty Ltd t/as Choice Variety Store (Applicant)
v
Trust Company of Australia Ltd (Stockland) (Respondent)

APPLICATION NUMBER: RSL025-11

MATTER TYPE: Retail shop leases matters

HEARING DATE: 2 November 2011

HEARD AT: Brisbane

DECISION OF: Dr Bridget Cullen, Presiding Member
Mr Greg Clarke, Member
Mr Don McBryde, Member

DELIVERED ON: 10 May 2012

DELIVERED AT: Brisbane

ORDERS MADE: 1.    The Respondent Trust Company of Australia Ltd (Stockland) to provide the Applicant Kapadia Pty Ltd t/as Choice Variety Store, and file in the Tribunal, a short-form assessment of legal costs, calculated on the District Court scale, from the conclusion of the 4 July 2011 mediation onward, no later than 18 May 2012.

CATCHWORDS:

PROCEDURE – COSTS – DISCRETION TO AWARD COSTS in retail shop leasing matters to a successful Respondent – whether prima facie position in s 100 should be displaced and costs ordered against wholly unsuccessful applicant pursuant to s 102(3)

Queensland Civil and Administrative Tribunal Act 2009, ss 100, 102(3)

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).

REASONS FOR DECISION

Member Clarke and Member McBryde:

1. We have had the advantage of reading the reasons of Presiding Member Dr Cullen and agree with those reasons, her conclusions, and the order she proposes.

Member Dr Cullen:

Background

1. The dispute underpinning this costs decision if perhaps best characterised as a Daryl Kerrigan ala “The Castle” Little Guy vs Big Guy dispute.  The unfortunate reality here, however, is that there was not one iota of evidence capable of supporting the “Little Guy” Applicant, Kapadia Pty Ltd t/as Choice Variety Store’s, claim. 

1. Kapadia had made allegations that the “Big Guy” Respondent, Trust Company of Australia Ltd (Stockland), had:

§Used an incorrect Gross Lettable Area (GLA) figure in calculating Kapadia’s outgoings, asserting that Stockland used a GLA of 26,853 metres squared where it should have used 34,607 metres squared; and that

§Kapadia may have been charged outgoings referrable to Stockland Centres, other than the Burleigh Heads premises where Kapadia was a tenant.

Evidence available to Kapadia pre-hearing

1. With respect to the “GLA claim”, at a very early juncture, Stockland provided Kapadia with information substantiating that the GLA figure it used was, in fact, correct.  Kapadia had formed its view that it was incorrect when Stockland mistakenly published the incorrect figure in a Marketing Handbook.  That error was corrected in subsequent editions of the Marketing Handbook.  Kapadia had no other evidence in support of its GLA claim.

1. Turning to the “outgoings claim”, Kapadia had formed what was essentially a conspiracy theory; hence my reference to “The Castle,” that Stockland, which centralises some of their billing and management systems, may have been incorporating the costs of managing other shopping centres it owns into the outgoing costs at Burleigh Heads.  The evidence of Stockland was that this is not the case; that Stockland separately accounts for outgoings items for each shopping centre it owns, and with invoices that are issued to the Stockland group generally, apportions the appropriate cost to each individual shopping centre.  Kapadia had no evidence of cross-subsidization of other shopping centres by Burleigh Heads. 

1. The parties attended mediation at the Tribunal on 4 July 2011 before Member Dooley.  All of the evidence that Stockland relied upon in its defence was available to Kapadia in some form either prior to or at that mediation.  It is my view that Kapadia should have been capable of taking stock of the circumstances at that juncture, and should have pulled up stumps after having the opportunity to review Stockland’s evidence, and to discuss the matter with the assistance of the trained Tribunal mediator. 

1. It is not uncommon for self-represented persons to form a better understanding of their dispute following mediation, and to then make the noble and proper decision to withdraw their application thereafter.  Mediations are an opportunity for parties to inform themselves.  I am satisfied that Kapadia was informed of the circumstances surrounding Stockland’s straightforward and clear cut defence following the mediation, and instead chose to ignore Stockland’s evidence, and run its conspiracy theory claims to hearing before the Tribunal.  By the time of hearing, Kapadia had actually expanded upon its conspiracy theory, making allegations that Stockland had committed criminal offences and forged documents.  Again, there was no objective evidence in support of these claims, save for Kapadia’s speculation.

Application for costs by Stockland

1. Stockland has now made application for an award of costs. Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 provides that a party must bear its own costs of the proceeding. However, if the interests of justice require it to do so, the Tribunal is able to make an order for legal costs. Section 102(3) of the QCAT Act sets out factors that the Tribunal may take into account when considering a costs application. These factors include:

(3)In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following—

(a)  whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);

(b)  the nature and complexity of the dispute the subject of the proceeding;

(c) the relative strengths of the claims made by each of the parties to the proceeding;

(d) for a proceeding for the review of a reviewable decision—

(i)whether the applicant was afforded natural justice by the decision-maker for the decision; and

(ii)whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;

(e)  the financial circumstances of the parties to the proceeding;

(f)  anything else the tribunal considers relevant.

1. Turning to these factors, it is my view that Kapadia’s claim lacked any strength when viewed in the context of the evidence provided at an early juncture by Stockland.  Although I don’t think that Kapadia acted in an intentionally contumelious manner, I do think that it has unnecessarily disadvantaged Stockland by refusing, or being unable to, look at the evidence in an objective manner.

1. In its submissions arguing that the Tribunal should not make an award of costs to Stockland, Kapadia points out that QCAT is designed to be a low cost forum where parties can represent themselves. Here, however, the Tribunal made a decision to allow legal representation, and I must therefore conclude that the factors contained in section 43 of the QCAT Act were met by Stockland. I don’t think it fair for Kapadia to say that simply because Stockland is a large corporation, and Kapadia is operated by a small business man, that Stockland should not recover its legal costs in circumstances where Kapadia’s application has failed in its entirety.

1. As set out in Stockland’s submissions in support of an award of legal costs,[1] the loss to Stockland as a result of Kapadia’s conduct in this matter is significant.  Stockland has incurred legal fees of approximately $69,000, comprised of counsel fees and solicitor’s fees. 

   [1]        Received by the Tribunal on 11 November 2011.

1. I must have regard to the financial circumstances of the parties to this proceeding, as set out in section 102(3)(e) of the QCAT Act. In that regard, I note that Kapadia submits that it is in a precarious financial position. Specifically, Kapadia submits that:

“On the personal impact, the company provided me my main source of income which I used to support my family.  Recently I have been under a lot of financial stress as I have limited money and I am restricted as to what I can do.  I have been also visiting doctors because I am finding hard to cope with all the stress, that is, financial and unemployment.”

1. It concerns me greatly that Kapadia may find itself in an even more precarious position following an award of costs to Stockland.  The Tribunal needs to be available to the community, and persons with arguable cases should not be dissuaded from making applications out of fear of costs.  For this reason, I consider that Kapadia should not be penalised for its misguided application, up to and including the mediation before Member Dooley.  This mediation was an opportunity for Kapadia to carefully consider the evidence available to it at that juncture.  Kapadia did not reflect carefully on its own position, but instead clutched to its conspiracy theory, and put Stockland to the expense of a hearing.  This is not right, and it is only fair that there should be a remedy for this unnecessary expense, from the conclusion of mediation until the end of the hearing.

Orders

1. For these reasons, I order that Stockland provide Kapadia with a short-form assessment of legal costs, calculated on the District Court scale, from the conclusion of the mediation onward.  I order that Stockland provide a short-form assessment to Kapadia, and the Tribunal, no later than 18 May 2012, at which point that amount will be made the subject of a costs order against Kapadia, and in favour of Stockland.