Lotz v Coco Chocolates Pty Ltd (No 2) (RLD)

[2013] NSWADTAP 56

Administrative Decisions Tribunal

New South Wales

Medium Neutral Citation:

Lotz v Coco Chocolates Pty Ltd (No 2) (RLD) [2013] NSWADTAP 56

Hearing dates:

On the papers

Decision date:

23 December 2013

Jurisdiction:

Appeal Panel - Internal

Before:

M Chesterman, Deputy President

Decision:

1. The Appellant is to pay to the Respondents the amount of $11,600 on account of their costs of the proceedings at first instance.

2. The Appellant is to pay to the Respondents the amount of $6,700 on account of their costs of these appeal proceedings.

Catchwords:

Retail lease - costs of proceedings at first instance and on appeal

Legislation Cited:

Administrative Decisions Tribunal Act 1997
Retail Leases Act 1994

Cases Cited:

Adwell Holdings Pty Ltd v Ull Pty Ltd [2010] NSWADT 166
AT v Commissioner of Police [2010] NSWCA 131
Chand v Railcorp of NSW (No 2) [2011] NSWCA 80
Coco Chocolates Pty Ltd v Lotz [2013] NSWADT 83
Jonamill Pty Ltd v Alramon Pty Ltd (No 2) (RLD) [2010] NSWADTAP 3
Lotz v Coco Chocolates Pty Ltd (RLD) [2013] NSWADTAP 43
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
Valentino Franchise Pty Ltd (ACN 114 469 662) v Brookfield Multiplex WS Retail Landowner Pty Ltd (ACN 109 033 794) (No 2) (RLD) [2012] NSWADTAP 40

Category:

Costs

Parties:

Debrah Ann Lotz (Appellant)
Coco Chocolates Pty Ltd (First Respondent)
Rebecca Kerswell (Second Respondent)

Representation:

P Glissan (Appellant)
Brown & Partners (Respondents)

File Number(s):

139018

 Decision under appeal 

Citation:

Coco Chocolates Pty Ltd v Lotz [2013] NSWADT 83

Date of Decision:

2013-04-19 00:00:00

Before:

Retail Leases Division

File Number(s):

125042, 125074

reasons for decision

Introduction

1. This decision relates to the costs of first instance and appellate proceedings in the Tribunal. These proceedings commenced with the filing of an application (file 125042) under the Retail Leases Act 1994 ('the RL Act') by Coco Chocolates Pty Ltd ('Coco') and Rebecca Kerswell against Ms Debrah Lotz. Subsequently, Ms Lotz filed a cross application (file 125074) against the Respondents.

1. In these reasons, I will refer to Coco and Ms Kerswell jointly as 'the Respondents', since from a practical point of view this was their role in both the first instance proceedings and the appeal.

1. The Tribunal heard the application and cross application on 13 August 2012. In a decision delivered on 19 April 2013 (Coco Chocolates Pty Ltd v Lotz [2013] NSWADT 83 - 'the Tribunal decision'), it dismissed both of them.

1. On 2 May 2013, pursuant to directions given by the Tribunal, the Respondents filed an application, with supporting submissions, for a costs order in their favour. Attached to the application was an invoice for costs and disbursements totalling $23,169.16, addressed by Brown & Partners to Ms Kerswell and dated 24 April 2013.

1. On 17 May 2013, Ms Lotz appealed against the dismissal of her cross application.

1. On 20 May 2013, Ms Lotz filed submissions in reply to the Respondents' application for costs.

1. In letters to the parties dated 28 May 2013, the Registrar advised that the costs of the first instance proceedings would be determined in due course by the Appeal Panel.

1. The hearing of Ms Lotz's appeal took place on 29 July 2013. Mr Glissan of counsel appeared for Ms Lotz. Mr Noonan, of Brown & Partners, appeared for the Respondents.

1. In a decision delivered on 25 September 2013 (Lotz v Coco Chocolates Pty Ltd (RLD) [2013] NSWADTAP 43 - 'the appeal decision'), the Appeal Panel dismissed the appeal. It also gave directions for the filing of submissions regarding the costs of the appeal and of any additional submissions that the parties might wish to make as to the costs of the proceedings at first instance.

1. On 23 October 2013, the Respondents filed an application, with supporting submissions, for an order that Ms Lotz pay their costs of the appeal. This application was accompanied by a statutory declaration sworn by their solicitor in the proceedings, Mr Noonan, on 22 October 2013. Annexed to the declaration was a copy of an invoice for costs and disbursements associated with the appeal, addressed by Brown & Partners to Ms Kerswell and dated 22 October 2013. The total amount quoted was $10,168.19. In their submissions, the Respondents renewed their application relating to the costs at first instance.

1. On 20 November 2013, Ms Lotz filed submissions in reply.

1. Because the present decision relates only to questions of costs, it may be determined by a Deputy President sitting alone, pursuant to section 24A(2) of the Administrative Decisions Tribunal Act 1997 ('the ADT Act').

1. Section 77A of the RL Act provides that costs in Tribunal proceedings brought under this Act may be awarded under section 88 of the ADT Act. Relevant parts of section 88 are reproduced below.

1. Under section 88, an Appeal Panel hearing an appeal from a decision at first instance has power to award costs in relation to both the proceedings that led to this decision and the appeal proceedings themselves. This was established by a ruling of the Court of Appeal in Chand v Railcorp of NSW (No 2) [2011] NSWCA 80.

1. The appeal decision contains an outline (at [7 - 25]) of relevant aspects of the dispute between the parties and the proceedings at first instance. In the ensuing paragraphs, the Appeal Panel summarised the principal contentions advanced by Mr Glissan in support of the appeal and its rulings in relation to them. These passages in the appeal decision should be read in conjunction with the present decision.

Principles regarding costs orders

1. Section 88 of the ADT Act states, so far as relevant:-

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.

2) The Tribunal may:

(a) determine by whom and to what extent costs are to be paid, and

(b) order costs to be assessed on a basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis.

1. The following passage in the Appeal Panel's decision in Valentino Franchise Pty Ltd (ACN 114 469 662) v Brookfield Multiplex WS Retail Landowner Pty Ltd (ACN 109 033 794) (No 2) (RLD) [2012] NSWADTAP 40 at [18] bears on the application of section 88(1A) to proceedings under the RL Act:-

(1) The criterion established in this subsection is a 'relatively low hurdle for an applicant seeking an order', since 'the criterion of "fairness" will take into account the compensatory purpose of an award of costs, which will generally favour the successful party': AT v Commissioner of Police [2010] NSWCA 131 at [33].

(2) When proceedings in the Tribunal are commercial in nature, involving two parties who are acting in trade and commerce, one significant effect of the amendment to section 88 introducing the notion of 'fairness' (this took effect on 1 January 2009) is to 'broaden the basis upon which costs might be awarded': Adwell Holdings Pty Ltd v Ull Pty Ltd [2010] NSWADT 166 at [22]...

1. Also relevant is the following passage in Rucom Pty Ltd and Anor v Multiplex & Ors [2010] NSWADT 1 at [37]:-

37 So, it is plain to me that, not only is this Division a commercial division dealing with commercial issues between lessors and lessees in a retail lease environment, but, and in addition, proceedings should only be commenced in this Tribunal after very careful consideration of the merits of the case: see Trust Company of Australia Ltd v. Craig [2005] NSWADT 65 at [44]. After all, commencing proceedings without such consideration inevitably results in considerable expense being incurred by the other party and one might not unreasonably ask: "why should the other party have to bear those expenses when the proceedings should not have been commenced in the first place?"

1. Reference should also be made to the decision of the Appeal Panel in Jonamill Pty Ltd v Alramon Pty Ltd (No 2) (RLD) [2010] NSWADTAP 3. It 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'.

The costs at first instance

1. Submissions by the Respondents. In relatively brief submissions prepared by Brown & Partners and filed in support of an application for these costs to be paid by Ms Lotz, the Respondents advanced the following propositions.

1. Ms Lotz's allegation that, in fitting out the premises that she had leased to them ('the Premises'), they had breached the Building Code of Australia in a number of ways made it necessary for them, when preparing their defence to her application, to obtain legal and technical advice regarding the contents of numerous documents, thereby exposing themselves to substantial costs.

1. Ms Lotz, by serving on them the 'section 129 Notice' (i.e., a letter dated 17 February 2012, described in the appeal decision at [12 - 14]), forced them to apply to the Tribunal during a 'critical sales period' (i.e., the Easter holidays) for an interim order preventing them from being locked out from the premises.

1. The 40-day period stipulated in this Notice for compliance with its requirements was clearly inadequate, because Ms Lotz required the Respondents to pay for a copy of a building code assessment report ('the BCA Report') to which the Notice referred (see the appeal decision at [15]). By imposing this requirement, Ms Lotz sought to conceal from them the true reason why she had commissioned this Report. It was not until the Tribunal called for production of the Report that she disclosed a section of it showing that she had commissioned it for the purposes of a strata subdivision of the building. This conduct on her part 'was less than forthright' and showed that she was 'prepared to withhold material that was prejudicial to her case, even if it meant that the Tribunal would be misled'.

1. In a 'self-serving' letter to her insurer, Ms Lotz claimed that the Premises might not be safe. The Tribunal found, however, that she had 'no reasonable basis for this belief' (the relevant passage in its decision is in paragraph [51]). The motivation for her letter could only have been to support her claim for lost rent of a residential unit above the Premises (this matter is dealt with in the appeal decision at [143 - 149]). But an email from her to her estate agent showed that she never intended to let this unit.

1. In truth, Ms Lotz's claims had 'no basis in fact', except in relation to certain light fittings in the ceiling of the Premises (as to this, see the appeal decision at [116 - 142]). The inference should therefore be drawn that she 'wanted nothing more than to evict Coco from the premises in order to perform the strata subdivision'.

1. Notwithstanding an argument to the contrary put by Ms Lotz, Ms Kerswell had instructed Brown & Partners to act both for Coco and for herself (the sole director of Coco) in these proceedings. Mr Noonan's statutory declaration made this clear. Both the Respondents were accordingly liable to pay to Brown & Partners the costs and disbursements itemised in the invoice dated 24 April 2013.

1. Ms Lotz's submissions. In submissions prepared by Mr Glissan, the following contentions were advanced on Ms Lotz's behalf.

1. The invoice issued by Brown & Partners on 24 April 2013 was addressed to Ms Kerswell only. It followed that no order for costs could be made in favour of Coco.

1. Ms Lotz had not misconducted herself in the proceedings in any way contemplated by section 88(1A)(a) or (b) of the ADT Act.

1. The proceedings involved complex and difficult questions relating to retail leases and to the alterations to the Premises forming part of Coco's fit-out. Resolution of the building issues was particularly difficult because the parties received inconsistent advice from Mosman Council and from the certifier, Fitzgeralds (see the appeal decision at [43 - 46]). The legal and factual issues to be determined were not straightforward and required careful consideration. There was accordingly no 'substantial disparity' between the relative strengths of the parties' cases. For these reasons, there were no grounds for a finding that it would be 'fair' to make a costs order against Ms Lotz pursuant to section 88(1A)(c), (d) or (e).

1. The application by the Respondents that initiated the proceedings was dismissed by the Tribunal. It had previously given them leave to amend this application by adding a claim for relief against forfeiture and withdrawing their other claims (see the Tribunal's decision at [10]). In initiating the proceedings, therefore, they had failed to abide by the Tribunal's injunction (in the passage from Rucom v Multiplex quoted above at [18]) to take 'very careful consideration of the merits of the case'. It followed that there should be a 'mutual cancelling out of any costs being ordered' against any of the parties.

1. The reason why Ms Lotz filed her cross application was that the Tribunal, on 27 March 2012, had made an interim order restraining her from interfering with Coco's possession of the Premises.

1. When the Premises were inspected during October 2012, pursuant to leave granted by the Tribunal, significant defects in the light fittings that the Respondents had installed in the ceiling of the Premises were discovered. At all relevant times, therefore, Ms Lotz had a legitimate concern that the residential unit above the Premises might not be fire safe.

1. Finally, there had been 'no retail tenancy mediation'; neither Coco nor Ms Kerswell had made any offer of settlement; and Ms Lotz, who was 'not a commercial giant', had incurred substantial legal costs at first instance.

1. Discussion and conclusions. It is clear from section 88(1) of the ADT Act that the starting-point of the costs regime established by the Act is a prima facie principle that the parties to proceedings should bear their own costs. A party seeking an award of costs has the onus of showing that such an award would be 'fair', having regard to the considerations outlined in paragraphs (a) to (e) of section 88(1A).

1. In my opinion, the Respondents have discharged this onus to the extent that they should be awarded a substantial proportion of their costs at first instance.

1. This conclusion is principally based on paragraph (c) of section 88(1A). Except with regard to a small number of the numerous allegations of breach of the Lease made against Coco by Ms Lotz, her case was a very weak one.

1. The following specific claims made by her, each of which was rejected by the Tribunal and/or the Appeal Panel, were distinctly unmeritorious: (a) that defaults by Fitzgeralds in performing the duties of a certifier were to be treated as defaults by Coco, on the ground that Fitzgeralds acted as an agent of Coco; (b) that Mr Lotz was not the agent of Ms Lotz in any sense, with the consequence that any statements or conduct on his part signifying approval of the actions of Coco or of persons engaged by Coco did not constitute approval by her; (c) that certain work done on the Premises was not 'workmanlike' for the sole reason that the builder responsible for it, Mr Sharp, was unlicensed; (d) that Ms Lotz could not obtain insurance for the building on account of concerns that Coco's fit-out operations may have rendered it structurally unsound (it may be noted that the Tribunal's rejection of this claim was not challenged in the appeal); (e) that Coco should bear responsibility for the fact that the height of a step at an entrance to the Premises contravened a clause in the Building Code of Australia; and (f) that Coco's conduct, seen overall, amounted to repudiation of the Lease.

1. On all these matters, there was in my opinion a 'substantial disparity' between the strength of Ms Lotz's case and that of the Respondents.

1. I reject Ms Lotz's claim that Coco should not receive any award of costs because it did not retain Brown & Partners to act for it. Mr Noonan's declaration sufficiently refutes this contention.

1. In addition, it is irrelevant that no retail tenancy mediation occurred, that neither Coco nor Ms Kerswell had made any offer of settlement and that Ms Lotz is 'not a commercial giant'.

1. The reasons why I consider that the Respondents should not have an award covering all of their costs at first instance can be summarised in four propositions.

1. First, not all of Ms Lotz's claims of breach of the Lease by Coco were unfounded. For reasons summarised in the appeal decision at [134], Coco bore responsibility for ensuring that the new ceiling that it had installed in the Premises was fire safe. Following the inspection carried out by Ms Lotz in October 2012, it acknowledged that it had not discharged this responsibility and it arranged for fire protection downlight covers to be fitted. For reasons explained at [136 - 149], the Appeal Panel concluded that this default on Coco's part did not confer on Ms Lotz any right to terminate the Lease or claim damages. But as it stated at [141], it would have awarded damages to her if Coco had not agreed to attend to this task at its own cost.

1. Secondly, because the evidence on key matters furnished to the parties by Mosman Council and by Fitzgeralds was both contradictory and confusing, this was not a case in which Ms Lotz, at the time when she filed her cross application, could have discerned all the weaknesses in her case that subsequently became apparent. In particular, both the Council and Fitzgeralds advised her that the complying development certificate issued by Fitzgeralds made did not take account of the planned removal of an internal wall (see the appeal decision at [44]). Other evidence put before the Tribunal and the Appeal Panel was sufficient to ground a finding to the opposite effect. But Ms Lotz could fairly maintain that, until the question had been adequately investigated, there were good reasons for believing that both the certifier and the responsible local authority had permitted Coco's fit-out operations to proceed without taking account of this important aspect of them.

1. Thirdly, both the interpretation of several provisions of the Lease on which Ms Lotz relied and their application to a fact situation involving significant building operations within the Premises were not straightforward. There were, as Mr Glissan submitted, 'difficult building and retail lease issues'.

1. Fourth and finally, the Respondents' application initiating the proceedings was defective in a number of respects. The relief that they sought - namely ' to trade in peace', 'an end to building disputes' and 'if no resolution then to end the lease' and 'seek compensation for loss of trade and legal expenses' - was formulated in a most unsatisfactory manner.

1. On account of these countervailing considerations, the costs relating to the first instance proceedings that Ms Lotz should pay by virtue (principally) of paragraph (c) of section 88(1A) should, in my opinion, be confined to 75% of the Respondents' costs and disbursements.

1. Contrary to a submission made by Mr Glissan, I believe this case to be one in which the Tribunal itself, in the exercise of the broad powers conferred on it by section 88(2) of the ADT Act, should fix the amount of costs to be paid. The evidence put before it shows that the amount charged to the Respondents by their solicitors is not unduly large.

1. The invoice dated 24 April 2013 sent by Brown & Partners to Ms Kerswell quantified the Respondents' costs and disbursements in the first instance proceedings at $23,169.16. Discounting this figure by 25%, and by a further amount to reflect the fact that my order relates to party/party costs only, an appropriate sum is $11,600.

The costs of the appeal

1. Submissions by the Respondents. In the relatively brief submissions prepared by Brown & Partners and filed in support of an application by the Respondents for these costs to be paid by Ms Lotz, the main propositions advanced were that she had been 'wholly unsuccessful on appeal' and that 'even where errors were identified by the appeal panel, these errors were of such a minor nature that they did not disturb the substance of the decision at first instance'.

1. Reliance was also placed on the fact that the Appeal Panel rejected an application by Ms Lotz for leave to adduce further evidence in the appeal proceedings. As explained in the appeal decision at [49 - 51], this evidence comprised (a) a copy of an adverse disciplinary determination made by the Building Professionals Board against Mr Fitzgerald, relating in part to a complaint lodged against him by Ms Lotz and (b) copy of a letter from Mosman Council to Ms Lotz, outlining the steps that needed to be taken if work on a property had been carried out without development consent.

1. The grounds on which the Panel rejected Ms Lotz's application to adduce these two items of further evidence were that the questions addressed in the Board's determination differed materially from those arising in the appeal and that the evidence furnished by the Council's letter was of insufficient weight to warrant its being admitted in appeal proceedings.

1. It was argued in the Respondents' submissions that they had been compelled to incur unnecessary expense in examining these items of evidence and responding to Ms Lotz's application for leave to adduce them.

1. Ms Lotz's submissions. The main argument put forward by Mr Glissan on Ms Lotz's behalf was based on the fact that the Appeal Panel discerned a number of errors of law in the Tribunal's decision and accordingly held that pursuant to section 113(2)(b) of the ADT Act the appeal should be extended to a review of the merits of this decision.

1. An associated argument was that the Appeal Panel 'reached a number of conclusions which were materially different to those reached by the Tribunal at first instance'.

1. In Mr Glissan's submissions, the specific matters on which the Appeal Panel's rulings differed from those of the Tribunal were identified through references to passages in the appeal decision. I will describe each of these matters in the next section of these reasons.

1. On these grounds, Mr Glissan contended that Ms Lotz's appeal had significant merit and that a costs order should therefore not be made against her.

1. Mr Glissan did not specifically address the submission by the Respondents based on the rejection of his application to adduce fresh evidence in the appeal.

1. Discussion and conclusions. As was stated in Meriton Properties Pty Ltd v DCM Leases-Five Pty Ltd (No 2) [2010] NSWADT 11 (in the passage quoted above at [19]) and in a number of other decisions under section 88 of the ADT Act, the Tribunal is more willing to award costs in appeal proceedings (notably against an unsuccessful appellant) than against a losing party at first instance.

1. In this appeal, the claim made by the Respondents for their costs of the appeal was based primarily on section 88(1A)(c). They maintained that there was a 'substantial disparity' between the strength of their case in the appeal proceedings and the strength of Ms Lotz's case.

1. The fact that in my judgment a 'substantial disparity' was discernible between the relative strengths of the parties' cases on a large proportion of the matters determined at first instance suggests that the same assessment should be made with regard to Ms Lotz's unsuccessful appeal. But consideration must be given to her argument that this does not necessarily follow, because the Appeal Panel identified a number of errors in the Tribunal's decision and arrived at conclusions on a number of specific issues diverging from those of the Tribunal.

1. Mr Glissan's submissions pointed to eight matters on which the Appeal Panel either held that the Tribunal erred in law or in some other way expressed a view or adopted reasoning diverging from that of the Tribunal. I will discuss each of these matters in the order in which they were dealt with in the appeal decision. The focus of my discussion will be on the extent, if any, to which the divergences of views between these two bodies provide justification for Ms Lotz's contention that her appeal had significant merit.

1. First, the Panel held (at [60]) that the complying development certificate relating to Coco's fit-out of the Premises was issued by Fitzgeralds, an accredited certifier, not (as the Tribunal appeared to assume) by Mosman Council.

1. This error identified by the Appeal Panel is not of significance because of the Panel's associated ruling, also stated at [60], that Fitzgeralds was not an agent of Coco (or, for that matter, of Ms Lotz). The significant point, on which the Tribunal and the Appeal Panel were in agreement, was that the authority that issued the certificate was independent of the parties.

1. Secondly, the Panel held (at [76]) that the Tribunal erred in law through not giving adequate reasons for its finding that Mr Lotz was an agent of Ms Lotz within the context of her dealings with the Respondents.

1. The Panel did not, however, consider this error sufficient to justify interference with the Tribunal's decision. It simply furnished substantiation for the Tribunal's finding by drawing attention to the relevant evidence. In deciding whether or not to appeal, Ms Lotz and her advisers could readily have identified this evidence for themselves and concluded that a challenge to the finding was likely to fail.

1. The third and fourth matters can usefully be considered in conjunction. At [91 - 94], the Appeal Panel held that the Tribunal erred in two ways: (a) by stating that Ms Lotz did not make any complaint about the quality of work done on the Premises by the unlicensed builder (Mr Sharp) whom Coco had engaged to complete its fit-out operations and (b) by overlooking the necessity to record its own finding as to whether these operations were carried out in a 'proper and workmanlike manner', as was required by a clause in the Lease.

1. The Panel's decision to extend the appeal to the merits and to review relevant aspects of the evidence was based in part on these two errors by the Tribunal. But their existence is not enough of itself, in my opinion, to provide significant support to Ms Lotz's claim that her appeal was meritorious. My reasons are as follows.

1. The issue to which the first error related was not of immediate significance. The question whether Ms Lotz did or did not complain about Mr Sharp's work was not in any sense determinative. In confirming the Tribunal's overall decision, the Appeal Panel did in any event take due account of the fact that she did complain.

1. In the course of addressing the question to which the second error related - whether or not Mr Sharp's work was 'workmanlike' - the Appeal Panel reached the same conclusions as the Tribunal regarding the three specific allegations of sub-standard work that Ms Lotz had made. It held that two of these allegations, relating respectively to plumbing work and the height of a step, were not borne out by the evidence (see the appeal decision at [112 - 113] and [157 - 158]). It also noted that Coco had acknowledged and responded appropriately to the third allegation (relating to fire safety), in the manner described above at [43].

1. The fifth matter on which the Appeal Panel's reasons diverged from those of the Tribunal concerned a demand made by Ms Lotz in the section 129 Notice for 'certification' relating to plumbing operations that Coco had carried out in the Premises. The Panel held at [105] that this 'demand' was inadequate, on two distinct grounds, for the purposes of a Notice of this nature. In the ensuing paragraphs, it cited relevant authority.

1. By contrast, the Tribunal did not deal at all with this particular matter. But after reviewing Mr Glissan's submissions and the account of Ms Lotz's case given in the Tribunal's decision, I am not satisfied that it was raised before the Tribunal.

1. On this ground, this difference between the Tribunal's reasons and those of the Appeal Panel cannot be relied on as an indicator of merit in Ms Lotz's case on appeal.

1. The sixth point of divergence between the two sets of reasons related to responsibility for the state of the ceiling of the Premises following the fit-out operations. In its decision at [61], the Tribunal attributed this to Ms Lotz. The Appeal Panel held, however, at [135] that Coco was responsible for safety aspects of the ceiling because there was 'unchallenged evidence' that it had installed a new ceiling.

1. If Coco had not acknowledged responsibility before the Tribunal for the repairs needed to ensure the fire safety of the ceiling, this error on the Tribunal's part might well have been significant in the present context. But because Coco did acknowledge responsibility, Ms Lotz and her advisers, when considering the matter of an appeal, could have realised that irrespective of the Appeal Panel's view on the matter, the outcome of the appeal would be the same. Once again, the Tribunal's error is not sufficient on its own to support her claim that her appeal was meritorious.

1. The seventh point of divergence between the Tribunal and the Appeal Panel is discernible in their reasons for dismissing Ms Lotz's claim relating to the height of the rear step of the Premises. The Tribunal, in its decision at [55], held that there was no evidence showing the height of this step before Coco's fit-out operations commenced. The Appeal Panel, however, dealt with the matter as follows (at [158]):-

158 In our opinion, the photographs and accompanying testimony sufficiently establish the following: (a) the height of the step contravened the standard before the fit-out operations commenced; and (b) Mr Lotz knew that the height would remain the same after these operations were completed. In these circumstances, Ms Lotz cannot be permitted to claim forfeiture of the Lease, or an award of damages, solely on the ground of the continuation by Coco of her own pre-existing breach of the building standard. Coco was entitled to assume, at the time of the fit-out, that this was not a matter of concern to her.

1. The availability of this line of reasoning as an alternative justification for dismissing Ms Lotz's claim was known to her and her advisers when she lodged her appeal. Once again, therefore, the existence of a difference of opinion between the Tribunal and the Appeal Panel does not support her assertion that her appeal was meritorious.

1. Eighth and finally, the Appeal Panel, at [161], held that, contrary to a ruling in the Tribunal's decision at [46], a special condition (AC 23.01(d)) in the Lease relating to fire safety was an 'essential term'. But as the Panel pointed out in the preceding paragraph, it did not have to determine this matter. Ms Lotz may have succeeded on it, but it was of no avail to her in seeking to overturn the Tribunal's decision.

1. On the separate matter of Ms Lotz's unsuccessful application to adduce fresh evidence in the appeal, I agree with the Respondents' submission. The making of this application extended the scope of the appeal. To a limited extent, it had the effect of 'prolonging unreasonably the time taken to complete the proceedings', within the meaning of section 88(1A)(b) of the ADT Act.

1. For the foregoing reasons, I am satisfied under section 88(1A) that it is 'fair' to require Ms Lotz to pay the costs incurred by the Respondents in defending her appeal, assessed on a party/party basis.

1. In the invoice dated 22 October 2013 sent by Brown & Partners to Ms Kerswell, the amount charged for the Respondents' costs and disbursements in the appeal proceedings was $10,168.19. Once again, it is appropriate that an order for a fixed sum be made. This order will be for the sum of $6,700.

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Decision last updated: 07 January 2014