Lyons Road Pty Ltd v The Owners Strata Plan 38722 (RLD)
[2008] NSWADTAP 28
•5 May 2008
Appeal Panel - Internal
CITATION: Lyons Road Pty Ltd v The Owners Strata Plan 38722 (RLD) [2008] NSWADTAP 28 PARTIES: APPELLANT
RESPONDENT
Lyons Road Pty Ltd
The Owners Strata Plan 38722FILE NUMBER: 079048 HEARING DATES: 20 December 2007 SUBMISSIONS CLOSED: 4 February 2008
DATE OF DECISION:
5 May 2008BEFORE: Chesterman M - ADCJ (Deputy President); Rickards K - Judicial Member; Weule B - Non Judicial Member CATCHWORDS: Question of law MATTER FOR DECISION: Principal matter DECISION UNDER APPEAL: Lyons Road Pty Ltd v The Owners Strata Plan 38722 [2007] NSWADT 163 FILE NUMBER UNDER APPEAL: 065111 DATE OF DECISION UNDER APPEAL: 07/27/2007 LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Fair Trading Act 1987
Retail Leases Act 1994
Strata Schemes Management Act 1996
Supreme Court Act 1970CASES CITED: A Calkos Pty Limited v Taylor Farms (Australia) Pty Limited & Ors (Commercial Tribunal, G M M Hoeben, Deputy Chairman, 9 April 1998)
Brian Oxley and Frances Peroni v Imperial Charter Pty Limited (Commercial Tribunal, R B Davidson, Deputy Chairman, 26 August 1996)
Brown & Ors v Rezitis & Ors (1971) 127 CLR 157
Burswood Management Limited & Ors v Attorney General (Cth) & Anor (1990) 23 FCR 144
GPT Management & Anor v Spa Heaven Pty Ltd & Ors [2005] NSWSC 1043
Khao Thai Pty Ltd v Coles Myer Properties Holdings Ltd [2001] NSWADT 83
Lynch & Anor v Perpetual Trustees Australia Ltd [2000] NSWADT 78
Lyons Road Pty Ltd v The Owners Strata Plan 38722 [2007] NSWADT 163
Pascoe v Holyoake [2006] NSWSC 64
Taylor Farms (Aust.) Pty Limited v A Calkos Pty Limited & Ors [1999] NSWSC 186
Zouk v Lyons Road Pty Ltd [2005] NSWADT 143REPRESENTATION: APPELLANT
RESPONDENT
S Phillips, barrister
L Gor, barrister
J Mueller, solicitorORDERS: 1. Leave, if it is required under section 113(2A) of the Administrative Decisions Tribunal Act 1997, is granted for this appeal to be heard
2. The appeal is dismissed
3. Any application for costs in these proceedings must be filed and served, with supporting submissions, within 28 days of the date of this decision. The opposing party must file and serve submissions in reply within a further 28 days. Unless reasons are advanced for a hearing to be conducted, the matter will be resolved ‘on the papers’, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.
REASONS FOR DECISION
The facts giving rise to this appeal
1 This appeal raises a general issue of some significance concerning the limits of the Tribunal’s jurisdiction under the Retail Leases Act 1994 (‘the RL Act’). Specifically, the question is whether the Tribunal’s jurisdiction under the Act may extend in appropriate circumstances to proceedings in which the respondent is a ‘stranger’ to the lease: that is, neither a party, a former party, a guarantor nor a covenantor under a lease or former lease falling within the definition of ‘retail shop lease’ in section 3 of the RL Act.
2 In the decision under appeal (Lyons Road Pty Ltd v The Owners Strata Plan 38722 [2007] NSWADT 163), the Tribunal held that it had no jurisdiction to determine a claim instituted by the Appellant against the Respondent in the circumstances now to be described. The following summary of these circumstances is drawn chiefly from paragraphs [1] to [7] of the Tribunal’s decision.
3 The Appellant, Lyons Road Pty Ltd, is the registered proprietor of two lots in Strata Plan 38722, being Shops 13 and 14 within a property in Drummoyne (‘the Premises’). The Respondent is the owner of the common property of Strata Plan 38722.
4 On 20 August 2004, the Appellant granted a lease of the Premises, governed by the RL Act, to Ms Emelie Zouk (hereafter ‘the Lease’). The Lease, which was subsequently registered, was for a term of three years, with an option to renew for a further three years. Ms Zouk intended to conduct a clothes retailing business in the Premises.
5 Soon afterwards, Ms Zouk alleged that because there was asbestos in the roof of the Premises and water had penetrated them, she was unable to complete her fit-out or commence trading. On account of these problems, she withheld payment of the rent. Early in 2005, the Appellant purported to terminate the Lease. This prompted Ms Zouk to file an application in the Tribunal and the Appellant to file a cross application against her.
6 Ms Zouk’s application was determined in part on 28 June 2005: see Zouk v Lyons Road Pty Ltd [2005] NSWADT 143. The Tribunal held that the Appellant had not been entitled to terminate the Lease, but also that by the time of the hearing the Appellant was no longer in breach of any obligations in respect of asbestos contamination or water penetration within the Premises.
7 The necessary repairs had been carried out on the instructions of the Appellant. It had then obtained reimbursement from the Respondent for the cost of these repairs. According to the Appellant, the Respondent had accepted responsibility for these costs because the problems encountered by Ms Zouk derived from structural defects in the common property owned by the Respondent.
8 In an amended application, Ms Zouk subsequently complained about the presence of lead paint in the Premises. The Applicant maintained, however, that it had already rectified this problem.
9 Ms Zouk finally completed her fit-out of the Premises in or about August 2006. She has traded in the Premises since then. But in her amended application she claims damages from the Appellant for loss of profits allegedly suffered in the period when she was unable to occupy the Premises.
10 The proceeding with which this appeal is concerned is a cross application instituted by the Appellant against the Respondent on 20 July 2006 (‘the cross claim’). In the cross claim, the Appellant sought (a) an indemnity from the Respondent with respect to the amended claim brought against the Appellant by Ms Zouk; (b) damages for loss of rent during the period when Ms Zouk did not pay rent; and (c) the amount of the expenses incurred by the Applicant in repairing the Premises, except in far as it has already been reimbursed.
11 In pre-trial proceedings, the Respondent contended that the Tribunal had no jurisdiction over the cross claim. By consent, this question was set down for hearing as a preliminary matter.
Relevant provisions of the Act
12 The sections of the RL Act of most significance in this case are sections. 63, 65, 66, 68, 70, 71, 72, 75 and 76.
13 The relevant parts of section 63(1) state:
14 Within section 65, it is sufficient to note that the matters referred to in section 65(1)(a1) are (i) proceedings under sections. 19(3), 19A(3), 31(3) or 31A(3) between parties to a retail shop lease and specialist retail valuers and (ii) unconscionable conduct claims under section 62B.
party or former party to a retail shop lease or former shop lease includes a person who is a guarantor or covenantor under a lease or former lease.
retail tenancy dispute means any dispute concerning the liabilities or obligations (including an obligation to pay money) of a party or a former party to a retail shop lease or former lease, being liabilities or obligations which arose under the lease or former lease or which arose in connection with the use or occupation of the retail shop to which the lease or former lease relates, and without limiting the generality of the foregoing) includes a dispute about a security bond.
15 Section 66, so far as relevant, states in sub-section (1):
16 Sub-sections (1) and (3) of section 68 state:
Any or all of the parties or former parties to a retail shop lease may refer a retail tenancy dispute or other dispute or matter referred to in section 65(1)(a1) to the Registrar [of Retail Tenancy Disputes] for mediation of the dispute … .
17 Section 70 states:
(1) A retail tenancy dispute or other dispute or matter referred to in section 65 (1) (a1) may not be the subject of proceedings before any court unless and until the Registrar has certified in writing that mediation under this Part has failed to resolve the dispute or matter or the court is otherwise satisfied that mediation under this Part is unlikely to resolve the dispute or matter.
(3) This section does not apply to proceedings before a court for an order in the nature of an injunction.
18 Section 71(1) states:
In this Division:
retail tenancy claim means any of the following:
(a) a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned, being
(b) an application for the appointment by the Tribunal of a specialist retail valuer under section 19 or 31,
(i) a claim for payment of money (whether or not stated to be by way of debt, damages, restitution or refund),
(ii) a claim for relief from payment of a specified sum of money,
(iii) a claim for the doing of specified work or the provision of specified services,
(iv) a claim for the surrender of possession of specified premises,
(v) a claim for assignment of rights under a lease or for a declaration that a lessor is not entitled to withhold consent to an assignment of the rights of a lessee,
(vi) a claim for relief against forfeiture,
(vii) a claim regarding the rectification of the lease,
(viii) a claim regarding the invalidity of a lease for inconsistency with this Act or the regulations,
(ix) a claim for declaration of the rights, obligations and liabilities of the parties under a lease,
(x) without limiting the generality of sub-paragraph (i), a claim for compensation under section 10, 34, 35 or 62E,
(xi) without limiting the generality of any other sub-paragraph, a claim with respect to the entitlement of a party or former party under a lease to receive payment of the whole or a part of a security bond,
(c) an application for the appointment by the Tribunal of two specialist retail valuers under section 32A,
(d) an application under section 19 (3) or 31 (3), or under those provisions as applied by section 32A, by a specialist retail valuer,
(e) a claim against a specialist retail valuer under section 19A (3) or 31A (3), or under those provisions as applied by section 32A, for compensation for loss or damage suffered as a consequence of the use or communication or divulging of information.
19 The relevant parts of section 72 state:
A party or former party to a retail shop lease or former retail shop lease may lodge a retail tenancy claim in respect of the lease with the Tribunal for determination of the claim.
20 Sub-sections (1) to (3) of section 75 provide:
(1) In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate:
(a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person,
(b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings, …
21 Sub-sections (1) and (2) of section 76 provide:
(1) If civil proceedings pending in a court involve a retail tenancy dispute, the court must on the application of any party to the proceedings transfer the proceedings (or so much of the proceedings as involve such a dispute) to the Tribunal to be dealt with as a claim under this Division, but only if the court is satisfied that:
(2) In determining whether or not it is appropriate that a matter be dealt with by the Tribunal, a court is to have regard to the general principle that retail tenancy disputes should be dealt with by the Tribunal rather than by a court.
(a) the dispute is such as may effectively be dealt with as a claim under this Division and that it is appropriate that the dispute be dealt with by the Tribunal, and
(b) the interests of justice do not require that the matter be dealt with by the court.
(3) Proceedings are taken to involve a retail tenancy dispute if any issue in dispute in the proceedings involves a liability or obligation with which a retail tenancy dispute is concerned.
22 It is useful here to refer also to four provisions of the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’). Section 36 indicates that the ‘principal kinds of decision’ that the Tribunal may make include ‘original decisions’. Section 7 defines ‘original decision’ as ‘a decision of the Tribunal made in relation to a matter over which it has jurisdiction under an enactment to act as the primary decision maker’. The term ‘enactment’ is defined for present purposes in section 5(b) as ‘an Act (other than this Act)’. Section 37 states as follows:
(1) If a retail tenancy claim or an unconscionable conduct claim has been lodged with the Tribunal under this Part and at the time it was lodged no issue arising under the claim was the subject of a dispute in civil proceedings pending before a court, a court has no jurisdiction to hear or determine such an issue in civil proceedings, unless:
(2) If a retail tenancy claim or an unconscionable conduct claim has been lodged with the Tribunal under this Part and at the time it was lodged an issue arising under the claim was the subject of a dispute in civil proceedings pending before a court, the Tribunal, on becoming aware of those proceedings, ceases to have jurisdiction to hear or determine the issue, unless:
(a) the claim lodged with the Tribunal, or the part of that claim to which the issue relates, is withdrawn or is dismissed for want of jurisdiction, or
(b) a court of record has, on a judicial review, quashed or declared invalid an order, determination or ruling of the Tribunal made in respect of the claim on the ground that the Tribunal had no jurisdiction to hear and determine the issue.
(a) those proceedings, or the part of the proceedings relating to the issue, are or is transferred to the Tribunal by the court concerned, or
(b) those proceedings, or the part of the proceedings relating to the issue, are or is withdrawn or dismissed by the court, or by another court on appeal in those proceedings, for want of jurisdiction or without deciding the issue on its merits, or
(c) a court of record has, on a judicial review, quashed or declared invalid those proceedings or that part of those proceedings or any order, judgment or decision made in those proceedings in relation to the issue, on the ground that the first-mentioned court had no jurisdiction to hear and determine the issue.
The Tribunal’s decision
The Tribunal has jurisdiction under an enactment to act as the primary decision-maker if the enactment provides that applications may be made to it for decisions made in the exercise of functions conferred or imposed on the Tribunal or under that enactment.
23 The Tribunal upheld the Respondent’s argument that it (the Tribunal) had no jurisdiction to entertain the cross claim. It accordingly dismissed the cross claim. Its reasoning was as follows.
24 At [19 – 20], it endorsed the Respondent’s characterisation of the cross claim as ‘a claim arising from the respondent’s common law duties and statutory obligations under the Strata Schemes Management Act 1996 to maintain and repair the common property of the building’, and therefore as ‘a tortious action over which the tribunal has no general jurisdiction’. It went on to hold at [20 – 21] that, although the cross claim and Ms Zouk’s claim against the Appellant had in common ‘a very substantial stratum of facts and issues’, this was not enough to confer on a statutory body such as the Tribunal a jurisdiction ‘that it otherwise would not have’. The Tribunal referred here to A Calkos Pty Limited v Taylor Farms (Australia) Pty Limited & Ors (Commercial Tribunal of NSW, G M M Hoeben, Deputy Chairman, 9 April 1998).
25 At [22 – 23], after mentioning section 37 of the ADT Act and sections. 70 and 72 of the RL Act, the Tribunal indicated that the Appellant relied principally on the width of the phrase ‘in connection with a liability or obligation with which a retail tenancy dispute is concerned’ within the definition of ‘retail tenancy claim’ in section 70. It noted that the Respondent, while conceding that the words ‘in connection with’ should be given a broad construction, argued also that they should be interpreted in the context of the section as a whole and of the RL Act.
26 At [23 – 24], the Tribunal then quoted at some length from a Supreme Court decision on which the Respondent relied. This was the decision of Kirby J, on appeal from the Commercial Tribunal decision that has just been cited, in Taylor Farms (Aust.) Pty Limited v A Calkos Pty Limited & Ors [1999] NSWSC 186. It was to the effect that the former Commercial Tribunal had no jurisdiction to determine a cross claim brought by a tenant against the landlord alleging misleading or deceptive conduct under sections 42 and 68 of the Fair Trading Act 1987.
27 As the Tribunal pointed out, at the time when this case was decided, the list of claims in section 70 of the RL Act was not as long as it is now, but the introductory words were the same. Similarly, for the purpose of this application, the definition of ‘retail tenancy dispute’ in section 63 of the RL Act was in effect the same as it is today.
28 As the decision in Taylor Farms requires careful consideration by us, it is useful here to reproduce the passages quoted by the Tribunal. At [30] to [39], Kirby J said:
30 The tenant, Taylor Farms, contends that a “retail tenancy claim” has been deliberately framed in broad terms. Relevantly, it is a claim for payment of a specified sum of money, or a claim for relief from payment. The issue is whether a claim under section 68 for a breach of section 42 of the Fair Trading Act 1987 is a “retail tenancy claim”.
31 The Cross Claim of Taylor Farms seeks to establish liability on the part of the landlord under the Fair Trading Act 1987, which might then be set off against any liability for unpaid rent. The contention is, therefore, that the Commercial Tribunal has jurisdiction to determine whatever issues may separate retail landlord and tenant.
32 Counsel for the landlord, Calkos, resisted such a construction upon a number of bases. …
35 [The] jurisdiction in the Commercial Tribunal is founded upon there being “a retail tenancy claim”. A retail tenancy claim, in turn, is dependent upon there being “a retail tenancy dispute”. The “retail tenancy dispute” has, as its touchstone, a liability or obligation, which arises in one or other of two ways, namely:
36 Taylor Farms do not suggest that the obligation upon Calkos arose under the lease. Do such obligations arise “in connection with the use or occupation of the retail shop to which the lease relates”? The words “in connection with” are of wide import ( Burswood Management Limited & Ors v Attorney General (Cth) & Anor (1990) 23 FCR 144). Barwick CJ, in Brown & Ors v Rezitis & Ors ((1970-71) 127 CLR 157), a case concerned with section 88F of the Industrial Arbitration Act 1940, said this: (at 165)
either under the lease, or
in connection with the use of the retail shop to which the lease relates.
However, I do not believe that the words in the definition are so broad as to encompass any liability, whatever its source. The retail landlord and tenant come into contact by reason of that relationship. That contact may give rise to liability in a variety of ways. The tenant may assert, for instance, that he or she has been defamed by remarks made by the landlord. However, in a claim for rent by the landlord, the Commercial Tribunal, in my view, would not be vested with jurisdiction to determine (without a jury) whether rent should be offset by an award of damages for defamation. It was suggested, by counsel for Calkos, that the causal connection required to satisfy the requirements of a “retail tenancy dispute” can only be met if the obligations arise either under the lease, or by virtue of the Retail Leases Act 1994. The definition, for instance, is apt to pick up obligations upon the landlord arising under section 34, in respect of which the retail landlord may be obliged to pay compensation, were he in breach.
"Whilst it can be said that the expression 'in connection with' is of wide import, it does emphasise the need for a close connection between the order made and the contract or arrangement varied or avoided ..."
29 At [25], the Tribunal outlined as follows a further decision of the Supreme Court:
37 Such a construction may be too narrow. Negligence by the landlord impacting upon the tenant, where damage was foreseeable, may be enough (cf Brian Oxley and Frances Peroni v Imperial Charter Pty Limited (Commercial Tribunal, 26.8.96, Deputy Chairman R B Davidson)).
38 Whatever the limits, I believe that determining a claim for damages under the Fair Trading Act 1987 (sections 42 and 68) is beyond that limit. I believe, with respect, Deputy Chairman Hoeben expressed the point well when she said this:
39 I believe, therefore, that the Tribunal was correct to strike out paragraph 2.
“Statutory substantive jurisdiction cannot be found by mixing and matching any number of pieces of legislation, whether they give limited jurisdiction to the Tribunal (as it does by section 78 of the FTA) with another jurisdiction conferred by legislation, the latter forming the basis of the claim. If the Tribunal was to have jurisdiction under sections 42 (and therefore 68) Parliament would either have enacted the relevant amendment under either the Tribunal Act or the FTA, as it did with the District Court in 1992 with the introduction of section 135. Parliament has made no such amendment.”
30 At [26], the Tribunal expressed the opinion that this decision was ‘of little assistance in the proper construction of section 72 of the RL Act and the meaning of a ‘retail tenancy claim’ in section 70 of that Act’. It added the comment, however, that the decision ‘does support a construction of the tribunal’s powers under the RL Act as being a specialist tribunal for hearing and determining retail tenancy claims’.
25 The respondent also referred to the decision of Rein AJ in Pascoe v Holyoake [2006] NSWSC 64 in which the applicant, the administrator of the estate of the landlord of a retail shop lease, sought to have transferred to the Supreme Court a claim that the tenant to the lease had lodged in the tribunal so that the administrator could bring a cross claim against the managing agent of the premises the subject of the lease. In that case it was conceded that the tribunal had no jurisdiction to hear and determine an application by the administrator of the landlord against the managing agent and reliance was placed on section 23 of the Supreme Court Act 1970 as the basis for transfer. However, Rein AJ determined the issue on the proper construction of section 76 of the RL Act, which he held at [20] that the combined effect of sections75 and 76 of the RL Act was that they together ‘evince an intention that the Tribunal is a specialist forum in which retail tenancy disputes should be heard, unless both parties to the dispute are content to have their dispute heard in another forum, or proceedings have first been commenced in a court and the interests of justice or other matters make it inappropriate for the Tribunal to hear the dispute.’
31 At [27 – 28], the Tribunal set out in the following terms its reasons for concluding that it had no jurisdiction over the cross claim:
32 In its Notice of Appeal, which it filed on 24 August 2007, the Appellant contended that the Tribunal’s decision contained a number of errors of law. It is however convenient to summarise the arguments advanced in this appeal (which were set out fully in written submissions and supplemented by oral submissions at the hearing) by reference to the separate issues that arose, rather than to the alleged errors.
27 I agree with the respondent’s submissions that notwithstanding the amendments to sections 70 and 63 of the RL Act the construction of a ‘retail tenancy claim’ under section 72 of the RL Act as applied by Kirby J in Taylor Farms (Aust.) (supra) continues to be applicable. That is, the words ‘in connection with’ in section 70(a) when read together with the remaining words in the introductory part of that paragraph, in particular the words ‘retail tenancy dispute’ which in turn is defined in section 63 to mean a dispute ‘concerning the liabilities or obligations of a party or former party to a retail shop lease’ does not encompass a general tortuous ( sic ) claim of the kind that is the subject of this application.
28 I also agree with the respondent’s submissions that support for such this construction of a ‘retail tenancy claim’ can be found in the parliamentary debate and second reading speech for the Retail Leases Bill 1994 (No 2): see NSW Legislative Council Hansard, 13 May 1994 at article 32 and 48.
Whether leave to appeal was required
33 In addition to filing its Notice of Appeal, the Appellant filed an Application for Leave to Appeal from an Interlocutory Decision. In the latter Notice, it indicated that it was filing this Notice ‘for abundant caution’, because if, contrary to its own view, the Tribunal’s decision was a ‘summary dismissal’ within the definition of ‘interlocutory function’ in section 24A(1) of the ADT Act, leave to appeal would be required.
34 The Respondent did not address this issue, either in its Notice of Reply to Appeal or in its submissions.
35 The provision of the ADT Act (section 113 (2A) under which leave to appeal is required is in fact expressed to apply to ‘interlocutory decisions’ of the Tribunal, not to ‘interlocutory functions’ as defined in section 24A(1). Since, as the Tribunal pointed out at [29], its decision did not prevent the Appellant pursuing the cross claim in another jurisdiction, this decision may well have been interlocutory only.
36 We do not need, however, to resolve this issue, as we consider that leave, if it is required under section 113(2A), should be granted. The Tribunal’s decision determined adversely to the Appellant its right to pursue a claim in the Tribunal. Moreover, it addressed directly an important question relating to the scope of the Tribunal’s jurisdiction under the RL Act.
Whether the dispute to which the cross claim relates is a ‘retail tenancy dispute’
37 Mr Philips of counsel, who appeared for the Appellant, submitted that the cross claim satisfied the definition of ‘retail tenancy dispute’ in section 63 of the RL Act because it was ‘a dispute concerning its liability as a party to a retail shop lease which arose under that lease’. The liability in question, he said, was the Appellant’s alleged liability to Ms Zouk, as asserted by her in her application to the Tribunal. He submitted further, however, that this question need not be resolved in this appeal, because the ‘central question’ was whether the cross claim was ‘a retail tenancy claim’ within the definition of that phrase in section 70.
38 In the submissions for the Respondent advanced by Mr Gor of counsel and his instructing solicitor, Mr Mueller, it was argued that a ‘retail tenancy dispute’ was one which solely concerned the liabilities or obligations of a ‘party or former party’ (including those persons identified in the extended definition of these words in section 63) to a retail shop lease or former lease. The phrase did not extend to disputes concerning the obligations or liabilities of a non-party to a lease.
39 It is sufficient to say at this stage that on this issue we accept Mr Gor’s submission. Our reasons for so doing are closely bound up with our conclusions regarding the scope of the phrase ‘retail tenancy claim’ in section 70 of the RL Act. They will be explained in that context.
40 We will, however, make one observation here. Even if the dispute as to whether the Appellant, as it alleges in the cross claim, is entitled to an indemnity from the Respondent against any liability to Ms Zouk could be characterised as ‘a dispute concerning its liability as a party to a retail shop lease which arose under that lease’, the same could not sensibly be said of any dispute regarding the Appellant’s alleged entitlement, also forming part of the cross claim, to the amount of rent that it did not receive from Ms Zouk during the period when she could not install fit-out or carry on business in the Premises. The latter ‘dispute’ does not relate to any ‘liability’ on the Appellant’s part. So far as the Appellant is concerned, it related to the loss (under section 36 of the RL Act, if not also on other grounds) of an entitlement to receive rent in accordance with the terms of the Lease. During the relevant period, Ms Zouk would have been subject to a liability to pay rent under the Lease if the Premises had been fit for occupation, but it cannot be said that the dispute between the Appellant and the Respondent regarding responsibility for the unfit state of the Premises is a dispute ‘concerning’ this (non-existent) liability.
41 As Mr Philips suggested, the question whether the cross claim is a ‘retail tenancy claim’ as defined in section 70 is indeed the ‘central question’ in this appeal. The submissions on both sides addressed it from a number of perspectives.
The wording used in section 70
42 The Appellant’s contentions. The principal argument mounted by Mr Philips in challenging the Tribunal’s decision was that the phrase ‘retail tenancy claim’ in section 70(a) of the RL Act, being evidently intended to be broader than ‘retail tenancy dispute’, was broad enough to include the cross claim.
43 This argument was founded chiefly on the opening words of section 70(a), which are as follows: ‘a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned’. Citing dicta of the Full Federal Court in Burswood Management Limited & Ors v Attorney General (Cth) & Anor (1990) 23 FCR 144 at 146 (to which Kirby J referred also in Taylor Farms (Aust.) Pty Limited v A Calkos Pty Limited & Ors [1999] NSWSC 186 at [36]), Mr Philips submitted first that the phrase ‘in connection with’, when used in a statute, must be given a wide interpretation, albeit that it must be an interpretation that took account of the particular statutory context.
44 Mr Philips went on to advance the proposition that section 70(a), when construed according to its natural and ordinary meaning, empowers the Tribunal to determine any claim by a party to a retail shop lease, whether against another party or a ‘stranger’, so long as the claim has a sufficient connection with a retail tenancy dispute. He submitted that a sufficient connection existed so long as (a) it was ‘real and not too remote or fanciful’ and (b) the claim concerned the occupation or use of the relevant premises.
45 According to Mr Philips, this proposition was entirely consistent with the observations of Kirby J in Taylor Farms. It was, he said, on all fours with his Honour’s apparent rejection, at [36 – 37], of the suggestion that ‘the causal connection required to satisfy the requirements of a “retail tenancy dispute” can only be met if the obligations arise either under the lease, or by virtue of the Retail Leases Act 1994’. His Honour suggested instead that ‘(n)egligence by the landlord impacting upon the tenant, where damage was foreseeable, may be enough’. At the same time, Kirby J did express the opinion that the phrase ‘retail tenancy dispute’ would not include, for example, a dispute as to a retail lessor’s liability to pay damages on account of having made defamatory remarks about the lessee, because the phrase was not broad enough to ‘encompass any liability, whatever its source’.
46 In written submissions filed after the hearing, Mr Philips relied on a Tribunal case not cited at the hearing, namely, Lynch & Anor v Perpetual Trustees Australia Ltd [2000] NSWADT 78. Here the Tribunal, in an ex tempore decision, granted to the lessees of premises in a retail shopping centre an injunction restraining the lessor from granting a lease to two specified companies (namely, Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Ltd) authorising them to use premises within the same centre for the purpose of a hot bread bakery. The ground of the injunction was that the lease to the applicant lessees contained a covenant not to lease, or permit the use of, any other part of the centre for this purpose. Neither Coles Supermarkets nor Bi-Lo was a party to the proceedings, since neither the lessees or the lessor, despite prompting from the Tribunal, had applied for them to be joined under sections 67 and 68 of the ADT Act. There was evidence indicating that Bi-Lo was already a lessee of premises in the centre and suggesting that new leases being negotiated between the lessor and these two companies permitted the use of premises within the centre as a hot bread bakery.
47 The passages within the Tribunal’s decision in Lynch that should be quoted here are these:
48 Mr Philips argued that in paragraph [29] the phrase ‘or a matter in connection with a retail lease, rather, coming within the Act’ implied that in the Tribunal’s opinion a cross claim against persons who are not parties to the relevant lease, alleging a matter ‘in connection with’ that lease, would fall within the Tribunal’s jurisdiction. This inference received further support, he said, from the terms of paragraph [38], notably its final sentence. It should be drawn even though this part of the decision was based on section 63 rather than section 70(a) of the RL Act.
28 However the question of the aspect of the non-joinder of the third parties is a more difficult question and has much more substance …
29 The Retail Leases Act 1994 provides for relief as between lessors and lessees. The Tribunal is unable to make an order, which is binding upon the third party, Coles Supermarkets Australia Pty Ltd, or Bi-Lo Pty Ltd. The respondents itself (sic) may take proceedings alleging a retail lease as between – or a matter in connection with a retail lease, rather, coming within the Act – as between itself and Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Ltd by way of cross-claim and declaratory orders.
30 However, even if the applicants and the respondents did not take that step then, of course, a party might be interested and be joined under sections 67 and 68 of the Administrative Decisions Tribunal Act 1997 …
38 The applicants seek relief in respect of a provision contained in their lease. That squarely brings the matter within the Retail Leases Act 1994. It follows from that that the Tribunal is clearly granted power to make an order, which resolves a dispute in connection, that particular lease. That appears quite clearly from section 63 of the Retail Leases Act 1994, which defines a retail tenancy in wide terms. It directs, firstly, attention to the lease itself and then directs attention to liabilities or obligations arising under that lease or former lease or liabilities or obligations which arose in connection with the use or occupation of the retail shop to which the lease or former lease relates. The word ‘arose’ is wide, the words ‘in connection’ are wider still than that.
39 The matter accordingly, on any view, must fall within the jurisdiction of the Tribunal …
49 A further point made about this judgment by Mr Philips was that the opening sentence of paragraph [29] could not be taken as a comprehensive statement of the scope of the Tribunal’s jurisdiction because it did not take account of the earlier amendment to section 63 enlarging the terms ‘party’ and ‘former party’ to include guarantors.
50 In Mr Philips’ submission, the ‘fundamental error’ made by the Tribunal in its decision in the present case was its characterisation of the cross claim as ‘purely a tortious action’ and ‘a general tortious claim’ (see the decision at [19] and [27]). These descriptions failed to take account of (a) the ‘very close connection’ between Ms Zouk’s claim against the Appellant (which undoubtedly involved a ‘retail tenancy dispute’) and the cross claim and (b) the fact that both of these claims arose out of the use of the retail shop to which the Lease related. This was not, he said, an ‘extraneous claim’ such as an action for defamation or a claim of misleading or deceptive conduct under section 42 of the Fair Trading Act 1987.
51 The Respondent’s contentions. The position taken in the Respondent’s submissions with regard to the terms defining ‘retail tenancy claim’ in section 70(a) was more or less in line with its arguments relating to section 63. It maintained that these terms necessarily confined this category of claims to those seeking to establish the liabilities and obligations of ‘parties or former parties’ (as extended in section 63) to a retail shop lease or former lease. They did not extend to the liabilities or obligations of any third parties.
52 With reference specifically to the observations of Kirby J in Taylor Farms at [35] regarding the ‘touchstone’ of a retail tenancy dispute, the Respondent submitted that if a claim is to be a retail tenancy claim, it must (a) call for a decision to be made about the liabilities or obligations of one or more of the parties or former parties to a lease or former lease, (b) require a determination of liabilities and/or obligations that arise either under the lease or in connection with the use or occupation of the premises and (c) be made with the intention of resolving a dispute between these parties through the process of adjudication by the Tribunal.
53 In advancing these propositions, the Respondent relied on certain dicta of Rein AJ in Pascoe v Holyoake [2006] NSWSC 64 at [6]. The facts of this case were outlined in the Tribunal’s judgment (see [27] above). But the Tribunal did not cite these dicta, which are as follows:
54 The Respondent also relied in this context on a number of brief statements from judicial and extra-judicial sources regarding the scope of the Tribunal’s jurisdiction under the RL Act. They included the following:
6 Mr Golledge of counsel, who appears for Mr Pascoe [the administrator of the landlord’s estate], does not dispute that Ms Holyoake’s [the tenant’s] claim is one that does fall within the jurisdiction of the Tribunal. Relying on sections 63, 70 and 71 of the Retail Leases Act 1994 and also section 37 of the Administrative Decisions Tribunal Act 1997, he argues that his client is precluded from bringing any claim in the Tribunal against Jarpen [the managing agent] and/or the other persons by virtue of the definitions found in the Retail Leases Act 1994. I think that there is considerable force in this argument but for reasons I shall elucidate I do not need to determine that issue, and I will assume in his client’s favour that that is the position.
55 Written submissions filed by Mr Mueller after the hearing contained observations about the Tribunal’s judgment in Lynch & Anor v Perpetual Trustees Australia Ltd [2000] NSWADT 78. These were to the effect that (a) the first sentence of paragraph [29] supported the Respondent’s contention that the RL Act only provided for relief between lessors and lessees, and (b) the Tribunal’s recognition in that paragraph that the lessor could take proceedings against Coles Supermarkets or Bi-Lo was based on the evidence relating to the existing lease to Bi-Lo and to the existence of agreements for new leases to both these companies. The true situation, according to Mr Mueller, was that by virtue of the broad definition of ‘retail shop lease’ in section 3 of the RL Act each of these companies fell within the category of alleged lessee. They were not third parties like the Respondent in this appeal.
It is because the policy of the Act is to encourage parties to retail leases to discuss their differences constructively before resorting to legal proceedings that the definition of ‘retail tenancy dispute’ is so wide – GPT Management & Anor v Spa Heaven Pty Ltd & Ors [2005] NSWSC 1043 at [16] per Palmer J (this case is discussed further below).
Claims against guarantors were beyond the Tribunal’s jurisdiction, because a guarantor is not a party to a lease (definition of “party”, section 3(1)). That has now been cured by amendment (section 71(3)); also definition of ‘party or former party in section 63(1)) – Lang’s Commercial Leasing in Australia (CCH, current online service), paragraph 48-030.
The Tribunal will not be a rent-determining authority; it will be a body to resolve disputes concerning the liabilities or obligations of the parties to a lease – The Minister for Small Business and for Regional Development, NSW Legislative Assembly Hansard, 13 May 1994, article 32.
The Act operates to make more equal the negotiating strength of lessors and lessees, and, where the parties find themselves in dispute, there are provisions in the Act to allow a cost effective and timely process of dispute resolution – Second Reading Speech for the Retail leases Amendment Bill 1998, Hon Ms S Nori, NSW Legislative Assembly Hansard, 28 October 1998, page 9168.
56 According to the Respondent’s submissions, the relevant features of the cross claim for present purposes were twofold. First, it was instituted against a person who was not a ‘party or former party’ to the Lease (taking account of the extended definition of these terms in section 63). Secondly, it did not relate to any obligations or liabilities that arose under the Lease or in connection of the Premises. Instead, the obligations to which it related were obligations to maintain and repair common property imposed on the Respondent by the Strata Schemes Management Act 1996 and the common law, and the liabilities to which it related were those flowing from alleged breaches of these obligations.
The statutory context of section 70
57 The submissions of the parties included arguments of some significance based on the terms of sections 66, 71, 75 and 76.
58 The Appellant’s contentions. Mr Philips’ submissions focused on sections 75 and 76, which provide for the transfer of proceedings involving the RL Act between courts that exercise jurisdiction under this Act and the Tribunal. He argued that according to section 75(1), if proceedings such as the cross claim were commenced in a court, they would have to be transferred to the Tribunal if either party applied for a transfer. This followed, he said, from the existence of the phrase ‘must … transfer’ in section 75(1), the primacy given to the Tribunal by section 75(2) and the provision in section 75(3) that the proceedings required to be transferred under section 75(1) were those in which ‘any issue disputed’ involved ‘a liability or obligation with which a retail tenancy dispute is concerned’.
59 In support of this proposition, Mr Philips cited the judgment of Palmer J in GPT Management & Anor v Spa Heaven Pty Ltd & Ors [2005] NSWSC 1043. Here the plaintiff, a lessor of retail shop premises, claimed arrears of rent and damages for loss of future rent from the two lessees and two guarantors. The Second and Third Defendants, but not the First or the Fourth Defendant, appeared. They argued that summary judgment against them for the unpaid rent could not be entered, since no mediation of the dispute had occurred as required by section 68(1) of the RL Act. They also applied for the proceedings as a whole to be transferred to the Tribunal under section 75(1). Palmer J accepted both of these contentions.
60 In relation to the first of them, his Honour observed (see [16 – 17]) that the definition of ‘retail tenancy dispute’ in section 63(1) was ‘exceedingly broad’ and that ‘clearly enough, it is intentionally so’. He went on to say that since the ‘fundamental policy’ of the Act was to protect retail tenants, it pursued a policy of ‘mediation rather than litigation’.
61 At [16 – 18], he made the following observations, on which Mr Philips relied:
62 Within the reasons set out by Palmer J (at [22 – 29]) for transferring the whole of the proceedings to the Tribunal, the following two paragraphs were drawn to our attention by Mr Philips:
16 It is because the policy of the Act is to encourage parties to retail leases to discuss their differences constructively before resorting to legal proceedings that the definition of "retail tenancy dispute" in section 63(1) is so wide. Within the purview of Part 8 is "any dispute concerning" the liabilities or obligations of a party to a retail lease. That does not mean that the dispute is confined to legal issues, such as the existence or extent of an alleged legally enforceable liability or obligation. The dispute may be concerned with broader questions of fairness as to how an admitted legal liability may, or should, be enforced.
17 So, for example, a tenant may say to a landlord: “It is true that I, as one of several covenantors under the lease, have a joint and several liability with my co-covenantors. As a matter of law, you may enforce that liability against me alone. I have no defence to the claim, but I have a claim for contribution or indemnity from my co-covenantors and it would be harsh and unfair to rely on me alone to pay the whole of the liability when in justice I should be indemnified by my co-covenantors”.
18 The landlord may say: “Your claim against your co-covenantors is nothing to do with me legally: you alone are liable to me for the whole debt. Pay me first and sue your co-covenantors afterwards”.
19 If a tenant asserts that the landlord should, in fairness, stay its hand until the tenant has obtained contribution from a co-covenantor and the landlord refuses, asserting that is entitled to insist upon its strict legal rights, I do not see why that difference between them falls outside the words “any dispute concerning” the obligation of the tenant to pay the landlord arising under the lease. In my opinion, the words “any dispute concerning” should not be construed narrowly to mean “any legal issue concerning”, particularly in view of the remedial and protective character of the legislation as a whole.
20 The example, which I have given in discussion, is the situation in the present case. The Second and Third Defendants by their Cross Claim wish to indemnify themselves wholly or partly in respect of all of their liabilities to the Plaintiffs by recourse to the First and Fourth Defendants. Whether they should do so before or after paying the Plaintiffs the arrears of rent claimed in full, in my opinion, is capable of constituting a "dispute concerning" the obligations of the Second and Third Defendants to pay money under the lease for the purposes of Part 8 of the Act.
63 Mr Philips argued that the position of the Second and Third Defendants in the GPT Management case was analogous to that of the Appellant in this case. Like these two defendants, the Appellant had identified a claim for contribution or indemnity that it wished to pursue against third parties. The Court’s decision included a ruling that by virtue of section 75 the proceedings as a whole could and should be heard in the Tribunal.
22 I am satisfied that the whole of these proceedings involve a retail tenancy dispute for the purposes of Part 8 of the Act: the Cross Claim by the Second and Third Defendants against the First and Fourth Defendants is just as much "a retail tenancy dispute" as the claims by the Plaintiffs against the Second and Third Defendants. Accordingly, in obedience to section 75(1) of the Act, the Court must transfer the whole of the proceedings to the Administrative Decisions Tribunal unless the qualifications contained in section 74(1)(a) and (b) [sc 75(1)(a) and (b)] apply.
29 The Court is required to pay regard to the policy of the Act that retail tenancy disputes should be dealt with by the Tribunal rather than the Court unless there are reasons of efficiency and justice to the contrary: section 75(1), (2). In the present case, no reason is demonstrated why the Court should refuse to transfer these proceedings either in the interests of efficiency or in the interests of justice. Accordingly, I will accede to the application of the Second and Third Defendants to transfer the whole of the proceedings to the Administrative Decisions Tribunal pursuant to section 75 of the Act.
64 He submitted further that if the Appellant were now to seek the same relief in a court as it has already sought by filing the cross claim in the Tribunal, the court, by virtue of section 76, would be required to decline jurisdiction, following the reasoning adopted by the Supreme Court in Pascoe v Holyoake [2006] NSWSC 64.
65 While accepting that these analogies and the provisions of sections 75 and 76 were not sufficient in themselves to vest the Tribunal with jurisdiction that it otherwise would not have, Mr Philips argued that these matters must be taken into account in determining the limits of the jurisdiction conferred by sections 70 and 72.
66 A further authority that he cited in this context was a passage in the Tribunal’s judgment in Khao Thai Pty Ltd v Coles Myer Properties Holdings Ltd [2001] NSWADT 83. At [94], the Tribunal, rejecting an argument that it did not have jurisdiction to apply equitable doctrines when determining a case under the RL Act, said:
67 In response to the Respondent’s submission (outlined in the next few paragraphs) based on the fact that section 66(1) appears to confine the statutory mediation procedures to disputes between parties or former parties to a lease or former lease, Mr Philips argued that the legislature might well have intended that retail tenancy claims involving non-parties should not be subject to mediation requirements. This, he said, would be consistent with the notion that these procedures were designed only for cases where it was thought to protect weak parties (presumptively, tenants) against stronger parties (presumptively, landlords).
In my view a proper reading of the Retail Leases Act 1994 conferring on this Tribunal the wide jurisdiction in sections 71, 72, and in circumstances where other Courts must transfer proceedings in retail lease matters to this Tribunal on the application of any party, the clear intention of the legislature is to fully equip this Tribunal with authority to determine all matters as pleaded before it in a retail lease dispute …
68 The Respondent’s contentions. The Respondent’s line of argument on this matter commenced by pointing out that section 70 fell within Division 3 of Part 8 of the RL Act. This Division, which comprises sections 63 to 77C, is headed ‘Determination of claims by Administrative Decisions Tribunal’. The two preceding Divisions comprise respectively section 63, in which ‘retail tenancy dispute’ is defined, and the provisions for mediation of such disputes by the Registrar of Retail Tenancy Disputes (sections 64 to 69). By virtue of section 68, an unsuccessful attempt at mediation is generally a pre-requisite to a claim being determined under Division 3.
69 The Respondent’s submissions placed emphasis on four features of this scheme. First, subject to limited exceptions (that is, the matters referred to in section 65(1)(a1)), only a ‘retail tenancy dispute’ may be mediated under the RL Act (see section 66(1)). Secondly, only a party or former party to a retail shop lease may apply to the Registrar for mediation of a dispute (see again section 66(1)). Thirdly, only a party or former party to a retail shop lease may lodge a retail tenancy claim in the Tribunal (see section 71(1)). (The same, it may be added, applies to the lodgement of unconscionable conduct claims: see section 62B(8) and (10).) Fourthly, with limited exceptions outlined in section 68(3), only those disputes which are submitted unsuccessfully to mediation or are found to be unsusceptible to resolution through mediation may become the subject of a retail tenancy claim that is determined by the Tribunal (see section 68(1)).
70 According to the Respondent’ submissions, these provisions showed clearly that retail tenancy claims were intended to be a ‘subset’ of retail tenancy disputes. Such claims were to be limited to disputes concerning a dispute between the parties or former parties (including guarantors and covenantors) to a retail shop lease or former lease, relating to their liabilities and obligations which arose under the lease or in connection with the use or occupation of the retail shop. When the legislature chose to use the words ‘in connection with’ in section 70(a), it did not intend to extend beyond retail tenancy disputes the range of disputes that could form the basis of a retail tenancy claim.
71 The Respondent’s submissions also drew attention to the amendments, made in 1998 and 1999, which caused guarantors and covenantors to be added to the definitions of ‘party’ and ‘former party’ in section 63(1). The assumption clearly underlying these amendments, according to these submissions, was that before they were made retail tenancy claims could not be made by or against persons in this capacity because they were not lessors or lessees.
Broad policy considerations
72 The parties’ submissions referred also to two matters, which may be characterised as broad policy considerations relating to the scope of the Tribunal’s jurisdiction under the RL Act.
73 Referring aspects of disputes to the same forum. Mr Philips submitted that the Tribunal’s decision should be reversed in order to avoid duplication of proceedings in this matter and the risk of inconsistent findings. There were, he said, obvious practical advantages to be gained by interpreting the phrase ‘retail tenancy claim’ in section 70(a) sufficiently broadly to ensure that, in a case like the present, all aspects of a dispute that involved the parties to a retail shop lease and concerned the use and occupation of the leased premises could be resolved in the forum that, according to section 75(2), was the primary decision maker under the Act. This practical consideration of minimising significant inconvenience to the parties should be given weight in construing section 70(a).
74 In replying to this contention, the Respondent’s submissions pointed out that irrespective of the outcome of this appeal, the Respondent was and would remain subject to the ‘inconvenience’ identified by Mr Philips if it wished to institute its own cross claim against the Appellant, or indeed against Ms Zouk. This followed from the provision in section 71(1) that only a ‘party or former party to a retail shop lease or former retail shop lease’ may lodge a retail tenancy claim.
75 The Tribunal as a ‘specialist forum’. Referring to the description of the Tribunal as a ‘specialist forum’ in Pascoe v Holyoake [2006] NSWSC 64 and in the Tribunal’s decision in the present case (see [29] above), the Respondent argued that it was never intended that the Tribunal should assume jurisdiction over ‘outsiders’ such as a strata title owners corporation, a local authority or a managing agent. The range of issues that might be raised in proceedings against such bodies would greatly exceed what was appropriate for a ‘specialist forum’.
76 In reply, Mr Philips maintained that this would not be the case so long as any proceedings against an ‘outsider’ satisfied the conditions proposed by him in his submissions regarding section 70(a) (see [44] above). These were that the proceedings should have a ‘real’ connection, which was ‘not too remote or fanciful’, with a retail tenancy dispute and should concern the occupation or use of the relevant premises.
Our conclusions
77 We have not found this an easy appeal to determine. The principal reasons for this are that the RL Act gives no express guidance on the question to be resolved and that the inferences to be drawn from relevant provisions suggest conflicting answers.
78 Our decision, after drawing such inferences, as we believe to be appropriate, is that the appeal should be dismissed. According to our interpretation of the phrase ‘retail tenancy claim’ as used in section 70(a), it does not extend to claims made by or against a person who is not a ‘party’ or ‘former party’ (taking account of the extended meaning given to these terms by section 63) to a retail shop lease or former lease. It must be confined to proceedings between persons who are parties or former parties to such a lease.
79 We acknowledge the force of Mr Philips’ contention that the phrase ‘in connection with a liability or obligation with which a retail tenancy dispute is concerned’ is potentially broad in scope, notably in the light of authorities interpreting the phrase ‘in connection with’. We take account also of the consideration, not in fact drawn to our attention in the submissions, that the two species of ‘retail tenancy claim’ defined in section 70(d) and section 70(e) involve claims by or against a person – specifically, a specialist retail valuer – who is not a party or former party to the relevant lease. But in our judgment, these factors are outweighed by two countervailing considerations arising from other provisions within Part 8 of the RL Act, to which Mr Gor and Mr Mueller drew our attention.
80 These countervailing considerations are as follows. First, if the Appellant’s contentions were correct, a limited range of retail tenancy claims – those instituted by or against ‘strangers’ to the relevant lease – would not be subject to the mediation requirements in sections 66 and 68 of the RL Act unless they were claims by or against a specialist retail valuer under section 70(d) or section 70(e). Secondly, the ‘stranger’ involved in such a claim could only be a respondent, since section 71(1) empowers only parties and former parties to a lease or former lease to lodge a retail tenancy claim with the Tribunal. (It may be noted, however, in passing that section 70(d) appears to create an exception to this stipulation.). As the Respondent pointed out, in the present proceedings it therefore could not file a further cross claim, either against the Appellant or against Ms Zouk, in response to the cross claim that the Appellant has lodged. We regard this second consideration as a particularly telling feature of the Act’s provisions regarding the Tribunal’s jurisdiction.
81 The submission made by Mr Philips (see [63] above) in reliance on the transfer provisions in section 75, as interpreted and applied in GPT Management & Anor v Spa Heaven Pty Ltd & Ors [2005] NSWSC 1043, does not, in our opinion, take full account of the provisions of that section or of the facts of that case. A significant factor enabling Palmer J to make the order transferring the proceedings in that case was that the two defendants who were covenantors, as well as the lessee defendants, were ‘parties’ to the lease within the extended definition of that term in section 63. It was on that basis that in paragraph [22] his Honour held that ‘the Cross Claim by the Second and Third Defendants against the First and Fourth Defendants is just as much “a retail tenancy dispute” as the claims made by the Plaintiffs against the Second and Third Defendants’. The clear inference to be drawn from this is that if he had not reached this conclusion he might well have thought it inappropriate to transfer any part of the proceedings before him to the Tribunal. A power to decline the application for transfer in such circumstances was available to him. It would have been open to him to rule that a transfer of only part of the proceedings would not serve ‘the interests of justice’ and therefore, pursuant to section 75(1)(b), should not be ordered.
82 Equally we do not agree with Mr Philips’ contention (see [64]) that if the Appellant were now to seek the same relief in a court as it has already sought by filing the cross claim in the Tribunal, the court, by virtue of section 76(1), would be required to decline jurisdiction. Our reason, stated shortly, is that we do not regard any of the issues raised in the cross claim as ‘an issue arising under’ the claim that Ms Zouk has instituted in the Tribunal against the Appellant. In line with the Respondent’s submission outlined above at [56], we consider that the two proceedings involve separate issues. There would accordingly be no ‘trigger’ for the operation of section 76(1).
83 Our view as to the proper scope of ‘retail tenancy dispute’ in section 63 and ‘retail tenancy claim’ in section 70(a) is consistent, we believe, with the observation by Kirby J at [37] in Taylor Farms (see [28] above) that ‘[n]egligence by the landlord impacting upon the tenant, where damage was foreseeable, may be enough’ to fall within the definition in section 63. This was in fact the decision in the case to which his Honour then referred (Brian Oxley and Frances Peroni v Imperial Charter Pty Limited (Commercial Tribunal, R B Davidson, Deputy Chairman, 26 August 1996)). For present purposes, the crucial element of Kirby J’s observation is that he was referring to a dispute or claim arising between the parties to a lease, not (as in the present case) between a party and a ‘stranger’.
84 With further reference to Taylor Farms, we would make the comment that, as we understand the decision, it was principally based on the fact that jurisdiction to deal with claims under section 42 of the Fair Trading Act 1987 had been expressly conferred on the District Court and the Local Court, but not on the Tribunal (see Kirby J’s judgment at [20 – 22]. It is to this aspect of the case that he referred in his quotation, at [38], from the judgment of Deputy Chairman Hoeben in the Commercial Tribunal. Arguably, his comments regarding the scope of ‘retail tenancy dispute’ were obiter only.
85 Although it was appropriate for the parties to draw our attention to the judgment in Lynch & Anor v Perpetual Trustees Australia Ltd [2000] NSWADT 78, we have not found it particularly helpful. Its observations that bear on the particular question to be decided in this appeal are somewhat ambiguous.
86 We recognise the inconvenience to the Appellant that arises from our decision. But as the Respondent pointed out (see [74]), it could potentially be subject to similar inconvenience if we allowed the appeal.
87 We attach some importance, as Rein AJ did in Pascoe v Holyoake [2006] NSWSC 64 at [20], to the notion that the legislature would appear to have envisaged the Tribunal (or more specifically, its Retail Leases Division) as ‘a specialist forum in which retail tenancy disputes should be heard’. If the Appellant’s contentions in this appeal were accepted, the range of issues that the Tribunal would be required to determine would go beyond such specialist knowledge and experience, as it possesses.
88 For these reasons, we consider that the Tribunal in this case arrived at the correct conclusion. The appeal must be dismissed.
89 Under section 77A of the RL Act and section 88 of the ADT Act, costs may be awarded in proceedings such as these, but only if there are ‘special circumstances warranting an award of costs’. As we pointed out at [77], this appeal has not easy to resolve. One consequence of this is that it does not fall within a well-recognised category of ‘special circumstances’ – namely, where an appeal has been instituted without any reasonable prospect of success.
90 There are, however, other recognised categories of ‘special circumstance’. We accordingly give directions on the matter of costs.
Orders91 Any application for costs in these proceedings must be filed and served, with supporting submissions, within 28 days of the date of this decision. The opposing party must file and serve submissions in reply within a further 28 days. Unless reasons are advanced for a hearing to be conducted, the matter will be resolved ‘on the papers’, pursuant to section 76 of the ADT Act.
1. Leave, if it is required under section 113(2A) of the Administrative Decisions Tribunal Act 1997, is granted for this appeal to be heard
2. The appeal is dismissed
3. Any application for costs in these proceedings must be filed and served, with supporting submissions, within 28 days of the date of this decision. The opposing party must file and serve submissions in reply within a further 28 days. Unless reasons are advanced for a hearing to be conducted, the matter will be resolved ‘on the papers’, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.
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