Khadka v Chai
[2011] QCAT 654
•17 October 2011
| CITATION: | Khadka v Chai and Anor [2011] QCAT 654 |
| PARTIES: | Mr Hari Saran Khadka t/as Mitho Nepali Restaurant (Applicant) |
| v | |
| Mr John Chai Mrs Glenda Chai (Respondents) |
| APPLICATION NUMBER: | RSL050-11 |
| MATTER TYPE: | Retail shop leases matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Ms Joanne Browne, Member |
| DELIVERED ON: | 17 October 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The Notice of Dispute RSL050-11 is dismissed. 2. The Applicant pay the Respondents’ costs of the application to strike out the Notice of Dispute RSL050-11 on a standard basis to be assessed on the District Court scale of costs. 3. The Respondents deliver to the Applicant an itemised claim for costs referring to the relevant item contained in the District Court scale of costs. 4. If within 14 days of that delivery, the parties have not agreed to an amount of costs, the costs shall be assessed by a legal costs assessor nominated by the Respondents’ solicitor. 5. The Applicant shall pay the Respondents’ costs (as agreed or assessed) within 14 days of such agreement or assessment. |
| CATCHWORDS: | RETAIL SHOP LEASE – JURISDICTION – COSTS – whether retail shop lease ended – whether proceedings were misconceived – application for costs – interests of justice Queensland Civil and Administrative Tribunal Act 2009, ss 47, 100 CPT Custodian Pty Ltd v Ironbark Hills Pty Ltd and Others [2011] QDC 4 |
APPEARANCES and REPRESENTATION (if any):
Decision on the papers pursuant to s 31 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
This is a decision on the papers to determine an application for miscellaneous matters filed by the respondents on 23 June 2011, as directed by a Senior Member of the Tribunal on 20 September 2011.
The respondents are the registered owners of a building situated at 178 Wickham Street, Fortitude Valley (the premises).
The applicant and the respondents entered into a lease of the premises for a term of four years commencing on 1 December 2007 (to 30 November 2011).
The applicant operated a business (“Mitho Nepali Restaurant”) on the premises during the term of the lease from the date of commencement of the lease until the applicant sold the business on 12 October 2009.
The applicant filed a Notice of Dispute (Retail Shop Leases Act 1994) in the Tribunal on 3 June 2011. In the Notice of Dispute, the applicant seeks an order/s from the Tribunal for (amongst others) compensation and expenses relating to repairs to the premises including the roof and taps, and purchase of equipment.
The respondents seek an order that the Notice of Dispute should be dismissed or struck out in its entirety; and that the applicant pay the respondents’ costs of and incidental to the Notice of Dispute.
Each party has filed written submissions and supporting material in relation to the respondents’ application to strike out proceedings as directed by a Senior Member of the Tribunal on 24 August 2011.
Jurisdiction
For the purposes of these proceedings the Tribunal has jurisdiction under s 103 of the Retail Shop Leases Act 1994 (the Act) to hear “retail tenancy disputes”, defined in the Schedule of the Act as:
…any dispute under or about a retail shop lease, or about the use or occupation of a leased shop under a retail shop lease, regardless of when the lease was entered into.
Section 55 of the Act provides that a party to a “retail tenancy dispute” that is “within a mediator’s jurisdiction” under s 97 may lodge a notice of the dispute with the chief executive (as defined under the Act).
The Act confers power under s 56 on the chief executive to nominate a mediator to mediate the retail tenancy dispute as soon as practicable after the dispute notice is lodged.
The mediator has power under s 63 of the Act to refer the dispute, as provided under the Queensland Civil and Administrative Tribunal Act 2009 (the QCAT Act) to the Tribunal in certain circumstances:
63 Reference of dispute – by mediator
(1) This section applies if-
(a) a retail tenancy dispute is within QCAT’s jurisdiction and-
(b)the retail shop lease has not ended (whether by expiry, surrender or termination) more than 1 year before the dispute notice was lodged.
The respondents contend that the Tribunal does not have jurisdiction pursuant to s 63 of the Act. The applicant sold the business; and the parties, together with another entity (the new owners of the applicant’s business), entered into a Deed of Assignment and Variation of the Lease on or about 7 October 2009. The Deed of Assignment and Variation was registered on 16 October 2009.
The respondents submit that the lease between the parties came to an end on 16 October 2009 (the date of registration of the Deed of Assignment and Variation of the Lease) and the applicant therefore had no jurisdiction to file the Notice of Dispute on 3 June 2011 on the basis that the lease ended more than one year before the Notice of Dispute was lodged.
The respondents, in written submissions, refer to the decision of CPT Custodian Pty Ltd v Ironbark Hills Pty Ltd and Others[1] in which Reid DCJ determined that s 67 of the Land Title Act 1994 did not abrogate the common law principle that an alteration of an existing lease operates as a surrender of an old lease and the grant of a new one.
[1] [2011] QDC 4.
Furthermore, the respondents submit that pursuant to s 50A of the Act an assignor of a retail shop lease (subject to certain conditions) is “released from any liability under the lease to which the assignor would otherwise be subject if there is any default by the assignee”.
The applicant, in written submissions, argues that he was “not aware of the time requirement” to lodge a Notice of Dispute under the Act and states that “it was briefly mentioned by the respondents’ lawyer during the QCAT mediation on 1 July 2011 and confirmed by [the Tribunal] during the hearing for directions on 24 August 2011”.
The applicant submits that he will “only accept 17 e [sic] of the respondent’s application which is to struck [sic] out my notice of dispute at QCAT”.
Application to strike out
The respondents refer the Tribunal to s 47 of the QCAT Act which provides that a proceeding may be struck out by the Tribunal where it considers the proceeding is frivolous, vexatious or misconceived; or lacking in substance; or otherwise an abuse of process.
The term “misconceived” has been described as a proceeding which “lacks substance, force or effect because the court or tribunal in which it was brought lacks the jurisdiction to determine it”.[2] The Tribunal has power to “control proceedings brought to it…[w]here, as here, a proceeding cannot succeed for want of jurisdiction and is, therefore, bound to fail, the Tribunal has an inherent jurisdiction to stay or dismiss proceedings”.[3]
[2] M & J Gray Investments Pty Ltd v AMP Pacific Fair Pty Ltd & Ors [2010] QCAT 454, [11].
[3] M & J Gray Investments Pty Ltd v AMP Pacific Fair Pty Ltd & Ors [2010] QCAT 454, [11].
The circumstances referred to in s 47 of the QCAT Act will enliven when a proceeding filed by an applicant in the Tribunal does not establish jurisdiction under the relevant enabling Act (Retail Shop Leases Act 1994).
The Notice of Dispute filed on 3 June 2011 relates to a retail shop lease which ended more than one year before the notice was lodged; the parties having entered into a Deed of Assignment and Variation registered on 16 October 2009.
The Tribunal does not have jurisdiction in respect of the Notice of Dispute filed under the Act and the proceedings therefore attract circumstances referred to in s 47 of the QCAT Act. It is appropriate for the Tribunal to make an order that the proceedings be dismissed accordingly.
Costs
The respondents seek an order for costs of and incidental to the Notice of Dispute.
The respondents submit that they ought to be entitled to recover their costs incurred as a consequence of the Notice of Dispute or as a consequence of the application to strike out the proceedings.
The respondents submit that the applicant filed the Notice of Dispute without proper grounds and the respondents have been “unnecessarily disadvantaged” and have otherwise incurred expense. Furthermore, the applicant made no effort to abandon his claim and forced the respondents to make the appropriate application to strike out the proceedings.
The respondents’ costs include (amongst others) the costs of and incidental to obtaining legal advice and retaining solicitors to draft various documents on their behalf, the legal costs associated with attending the mediation and the Directions Hearing; the costs of reviewing the applicant’s submissions and the preparation of submissions in relation to the application to strike out the proceedings.
The respondents contend that the QCAT Act in no way “prohibits or discourages obtaining legal advice”. It does, however, restrict legal appearance before the Tribunal in the course of a hearing.
The respondents, in their written submissions, refer the Tribunal to various decisions including decisions of the former Retail Shop Leases Tribunal in relation to the applicable law concerning costs.
The applicant in written submissions states that he was not aware of any “time requirements” in respect of lodging a Notice of Dispute and that he “tried to resolve this case with the respondents when [the] lease agreement was current with them”.
The applicant does not state that he consents to the Tribunal making the order to strike out proceedings. The applicant does, however, state that he “only” accepts the respondents’ application to strike out the Notice of Dispute. The applicant also states that during the Directions Hearing “[QCAT] also advised that [it] did not had [sic] any jurisdiction for this case as [the Notice] was not lodged within the timeframe as required by the [Act]”.
Section 100 of the QCAT Act provides that, other than as provided under the QCAT Act or an enabling Act, each party to a proceeding must bear their own costs. The Tribunal may, however, make an order for costs under s 102(1) if it considers the interests of justice require it.
The Tribunal in determining whether to exercise its discretion to make an award for costs (under s 102(3) of the QCAT Act) may have regard to the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; and whether a party has acted in a way that unnecessarily disadvantages another party.
In considering the “the phrase ‘the interests of justice’” and whether to exercise its discretion to award costs the Tribunal should be satisfied that the particular circumstances of the case “point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100”.[4]
[4]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412, [29].
After filing the Notice of Dispute the parties attended the mediation on 1 July 2011 at which time the respondents have elected to be represented by their legal representatives having made the appropriate application for representation. The respondents did, however, file the application to strike out the proceedings on 23 June 2011 before attending the mediation (on 1 July 2011).
The respondents’ legal representatives also appeared at the Directions Hearing before the Tribunal on 20 September 2011. This (legal representation) was again by the respondents’ own election.
The right to be represented in respect of a mediation under the Act is limited in that s 57 provides that each party “must conduct the party’s own case”. However, a party may be represented by an agent in circumstances “permitted” by the mediator under s 57(b)(ii)).
The right to be represented in a proceeding before the Tribunal is also limited by virtue of s 43 of the QCAT Act. Section 43 refers to representation in a “proceeding” before the Tribunal and provides that the main purpose of the section is to “have parties represent themselves unless the interests of justice require otherwise”. A party may be represented by “someone else” if the party has been given leave by the tribunal to be represented, as required by s 43(2) of the QCAT Act.
The respondents, in written submissions, indicate that the jurisdictional issues concerning the Notice of Dispute were raised at the mediation and later at the Directions Hearing before the Tribunal. This is not disputed by the applicant. The applicant does, however, state that he had made attempts to resolve the matter when the lease was current and it “took a long period of time and didn’t get resolved”. The applicant also states that he was not aware of the time requirements for lodging a Notice of Dispute.
The Tribunal has considered whether the respondents should be entitled to recover their costs of and incidental to the Notice of Dispute where such costs would include legal costs in relation to attending the mediation and Directions Hearing in circumstances where the respondents have not been granted leave (by the Tribunal) to be represented in the proceedings.
The Tribunal is not persuaded by the respondents’ submissions that their costs associated with being legally represented at the mediation and the Directions Hearing should be paid by the applicant when considering s 43 of the QCAT Act (representation in tribunal proceedings) and the discretionary factors which give rise to an order for costs under s 102 of the Act. More importantly the respondents (by their own election) were legally represented in the proceedings in circumstances where the respondents submit there was no basis for the Notice of Dispute being filed, giving rise to grounds to apply to the Tribunal for an order that the proceedings be struck out accordingly.
The Tribunal does, however, accept the respondents’ submission that they have incurred expense including legal costs in relation to the preparation of the application to dismiss the proceedings in circumstances where the applicant “made no effort to abandon his claim and forced the respondents to make [the] application”.
The respondents’ application to strike out the proceedings in circumstances where the Tribunal does not have jurisdiction and where the applicant has not made an effort to abandon his claim, does “point so compellingly”[5] to the Tribunal exercising its discretion to make an order for costs under s 100 of the QCAT Act.
[5]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412, [29].
The Tribunal finds that although the applicant states that he was not aware of the time requirement for bringing the Notice of Dispute, he has not made attempts to abandon his claim after being informed of the time requirement issues at the mediation and the Directions Hearing.
The Tribunal also finds that it was reasonable for the respondents to be legally represented in relation to the preparation of the application to strike out the Notice of Dispute together with supporting written submissions having regard to the nature and complexity of the issues involved: the orders sought by the applicant in the Notice of Dispute and the discretionary factors to be considered by the Tribunal under s 47 of the QCAT Act.
The Tribunal orders that the applicant pay the respondents’ costs of and incidental to the application to strike out the Notice of Dispute including the respondents’ legal costs in relation to the preparation of written submissions in support of the application.
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