MILLROCK RESOURCES PTY LTD and QUESTA PTY LTD

[2012] WASAT 229

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

STREAM:   COMMERCIAL & CIVIL

ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)

CITATION:   MILLROCK RESOURCES PTY LTD and QUESTA PTY LTD [2012] WASAT 229

MEMBER:   MS L WARD (MEMBER)

HEARD:   DETERMINED ON THE DOCUMENTS

DELIVERED          :   22 NOVEMBER 2012

PUBLISHED           :  23 NOVEMBER 2012

FILE NO/S:   CC 1 of 2011

BETWEEN:   MILLROCK RESOURCES PTY LTD

Applicant

AND

QUESTA PTY LTD
Respondent

Catchwords:

Disposition of proceeding following appeal ­ Withdrawal ­ Leave to withdraw ­ Summary dismissal ­ Dismissal ­ Party's cost of proceedings ­ Preliminary position ­ Discretion to amend cost ­ Success of party not determinative

Legislation:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 3, s 16, s 16(1)
State Administrative Tribunal Act 2004 (WA), s 46(1), s 46(2), s 47, s 47(1), s 47(2), s 87, s 87(1), s 87(2)
Victorian Civil and Administrative Tribunal Act 1998 (VIC), s 75, s 75(1), s 75(2), s 109

Result:

Application dismissed

Summary of Tribunal's decision:

The Tribunal decided that the dispute between the parties was within the Tribunal's jurisdiction as it arose in respect to retail shop leases. That decision was set aside on appeal by the Supreme Court of Western Australia. The proceeding was remitted to the Tribunal for final orders. A dispute between the parties arose as to the order that should be made on disposition of the proceeding and on the question of costs of the proceeding. The Tribunal concluded that where the application failed for want of jurisdiction, it was misconceived within the meaning of that term in s 47(1) of the State Administrative Tribunal Act 2004 (WA) and the application should be dismissed. In these circumstances, the Tribunal should not grant the applicant leave to withdraw the proceeding. The proceeding was dismissed pursuant to s 47(1) of the State Administrative Tribunal Act 2004. As to costs, the Tribunal concluded that the matter comprised a genuine dispute that turned on an issue of construction of the lease. In such circumstances, the Tribunal concluded there was no reason why the primary position identified by s 87(1) of the State Administrative Tribunal Act 2004 should be displaced by an exercise of the Tribunal's discretion pursuant to s 87(2) of the State Administrative Tribunal Act 2004.  The Tribunal dismissed the respondent's application for costs.

Category:    B

Representation:

Counsel:

Applicant:     Mr L Hager

Respondent:     Ms J Wright

Solicitors:

Applicant:     Metaxas & Hager

Respondent:     Irdi Legal

Case(s) referred to in decision(s):

Chew and Director General of The Department of Education and Training [2006] WASAT 248

Laurent and Commissioner of Police [2009] WASAT 254

Pearce & Anor and Germain [2007] WASAT 291 (S)

Questa Pty Ltd v Millrock Resources Pty Ltd [2012] WASC 267

State Electricity Commission of Victoria v Rabel [1998] 1 VR 102

REASONS FOR DECISION OF THE TRIBUNAL: 

Introduction

1. The application concerned a dispute as to whether the respondent was entitled, as a matter of law, to charge the applicant management fees in respect of a lease of a commercial property.  The Tribunal made a decision on 13 June 2011 that there are two separate leases between the respondent, as lessor/landlord, and the applicant, as lessee/tenant, one relating to each of Units 8 and 9, No 86 Erindale Road, Balcatta, and each lease is subject to the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (CT(RS)A Act). This decision was made on a preliminary point going to the issue of jurisdiction of the Tribunal to hear and determine the application and going to the heart of the applicant's claim ­ that the CT(RS)A Act prohibits a lessor/landlord from recovering management fees from the lessee/tenant of a retail shop lease. The balance of the proceeding was to be the subject of further directions. The application was listed for directions before the Tribunal (differently constituted) but was adjourned several times on account of the respondent's appeal of the Tribunal's decision dated 13 June 2011.

2. On 27 July 2012, Pritchard J delivered a judgment in Questa Pty Ltd v Millrock Resources Pty Ltd [2012] WASC 267 (Questa) and upheld the respondent's appeal.  On 10 August 2012, the Supreme Court of Western Australia made the following orders:

   1.The orders made by the State Administrative Tribunal on 13 June 2011 in case no CC1 of 2011 be set aside.

   2.The matter be otherwise remitted to the State Administrative Tribunal for consideration by Member Ward of any part of case no CC1 of 2011, which is not disposed of by this appeal.

   3.The Respondent pay the Appellant's costs of this appeal, to be fixed (if not agreed).

3. The proceeding was listed for a directions hearing on 6 August 2012.

The directions hearing

1. On 6 August 2012, the applicant (the respondent to the appeal) moved for leave to withdraw the proceeding as being the appropriate method of concluding the proceeding in the Tribunal. The respondent (the appellant in the appeal) moved that the application should be summarily dismissed pursuant to s 47(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act), upon the basis that the application was misconceived or lacking in substance.

2. The applicant submitted the proceeding should be withdrawn with the Tribunal's leave because the applicant did not intend to appeal the judgment in Questa.  The respondent submitted that the Tribunal proceedings should be disposed of by a 'summary' dismissal.

3. Further, the respondent moved for an order that the applicant pay the respondent's costs in the Tribunal proceedings.  This was resisted by the applicant.

4. The parties were directed by the Tribunal (differently constituted) by an order made on 6 August 2012 to file submissions in support of their respective positions and the issue of the disposal of the proceeding, and costs would be determined on the documents.  The parties filed their submissions and the respondent also filed a folder of documents in support of its position.

The method of disposition of the Tribunal proceedings

1. Save for the issue of costs, the parties were in agreement that the judgment in Questa, in the appeal, disposed of all matters before the Tribunal. There was no question arising from a retail shop lease for the Tribunal to determine (s 3 of the CT(RS)A Act and the definition of 'retail shop' and 'retail shop lease' read together with s 16(1) of the CT(RS)A Act) because the lease in issue is not a retail shop lease.

Summary dismissal

1. The respondent has provided substantial submissions concerning 'summary' dismissal in support of its contention that the application is misconceived or lacking in substance. Section 47 of the SAT Act relevantly provides:

   (1)This section applies if the Tribunal believes that a proceeding ­

   (a)is … misconceived …

   …

   (2)If this section applies, the Tribunal may order that the proceeding be dismissed … and may make any appropriate orders.

2. In Laurent and Commissioner of Police [2009] WASAT 254 ,Pritchard J held (citing State Electricity Commission of Victoria v Rabel [1998] 1 VR 102 (Rabel) at [108] and [109] (per Ormiston JA)):

   … the term 'misconceived' connotes a misunderstanding of legal principle while the term 'lacking in substance' connotes an untenable proposition of law or fact.

3. The Tribunal concludes that the application is misconceived because on a proper view of the law, as held by Pritchard J in Questa, the lease in question is not a retail shop lease and the CT(RS)A Act does not apply to that lease. As a consequence, the Tribunal does not have jurisdiction to hear and determine any question arising under or from a retail shop lease pursuant to s 16 of the CT(RS)A Act. An application to the Tribunal that is not within the Tribunal's jurisdiction is misconceived or lacks substance because of the incorrect application of legal principle in this proceeding.

4. For these reasons, and pursuant to s 47(2) of the (SAT Act), the application is dismissed.

Leave to withdraw and a withdrawal

1. The Tribunal does not accept the applicant's contention that the Tribunal should grant leave to withdraw and order the proceeding withdrawn.  The applicant submitted that 'there is no reason for leave to be refused'.  Where an applicant informs the Tribunal that it intends to withdraw the proceedings, the Tribunal may either grant leave to the applicant to withdraw the proceedings (s 46(1) of the SAT Act) or it may dismiss the proceedings (s 46(2) of the SAT Act).

2. At the hearing before Mmember Ward, the applicant contended that the dispute the subject of the proceeding was within the Tribunal's jurisdiction as conferred by the CT(RS)A Act.  The applicant resisted the appeal on that issue.  This is not a case where the applicant sought leave to withdraw before the hearing of the preliminary issue in the Tribunal.  The hearing took place and the decision was appealed and all the while the applicant maintained its position.

3. In the Tribunal's view, the disposal of the proceedings in the Tribunal should reflect the true outcome of the dispute and be determinative of the application in the Tribunal. For this reason, the Tribunal concludes that the application should be, and is, hereby dismissed pursuant to s 47(2) of the SAT Act.

Costs

1. Section 87 of the SAT Act relevantly provides:

   (1)Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal.

   (2)Unless otherwise specified in the enabling Act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party or of a person required to produce a document or other material on the application of the party under section 35.

2. In Pearce & Anor and Germain [2007] WASAT 291 (S) (Pearce), Deputy President Chaney J (as he then was) considered the change in the legislation concerning costs of proceedings from when the former Commercial Tribunal was invested with the jurisdiction to hear and determine disputes arising under the CT(RS)A Act, to when the Tribunal was invested with that jurisdiction. His Honour noted the significant change in the language from the power vested in the Commercial Tribunal to make an order for costs of the proceedings between the parties (if the former Commercial Tribunal saw fit) and the language of s 87(1) and s 87(2) of the SAT Act. His Honour also considered various earlier decisions of the Tribunal and concluded at [24] that:

   … where it is necessary for a party to a retail shop lease to take proceedings in the Tribunal to vindicate its clear contractual entitlements, and to incur costs in doing so, it will 'often not be unreasonable for an award of costs to be made'.  The position is the same where costs are incurred in defending an obviously unmeritorious claim.  Where, however, there is a genuine dispute between the parties to a lease, their respective rights are unclear and one or both seek determination of their rights in the Tribunal, the starting point remains that each party should expect to pay their own costs, unless there are circumstances of the type identified in [Chew and Director General of The Department of Education and Training [2006] WASAT 248].

3. The circumstances referred to in Chew and Director General of The Department of Education and Training [2006] WASAT 248 were described by His Honour in Pearceat [22] 'where a party has conducted itself unreasonably or inappropriately, particularly where the conduct gives rise to unnecessary costs being incurred by the other party'.

4. In this proceeding, none of these kinds of factors exist. Mere success in terms of the outcome of the proceeding, whether it be on a jurisdictional basis or otherwise, is not sufficient to advance an argument that the primary position provided for by s 87(1) of the SAT Act should be displaced by the exercise of the Tribunal's discretion pursuant to s 87(2) of the SAT Act.

5. The jurisdictional issue in this application involved a detailed consideration of the covenants and other terms contained in the relevant document in question, referred to as the '2009 extension' in Questa.  At the heart of the jurisdictional issue were the competing contentions as to the construction of the express terms of the '2009 extension'.  In Questa at [66], Pritchard J identified the ambiguity of the terms of the '2009 extension' that would lend some support for the applicant's contentions before the Tribunal. Pritchard J came to her conclusion after having regard to the evidence of 'surrounding circumstances of objective facts known to both parties'.

6. It can be said that it was the express words of the '2009 extension', which both parties executed and intended to reflect their objective intention, which was at the heart of the jurisdictional dispute.

7. In those circumstances, it cannot be said that either party in the Tribunal had a 'clear contractual entitlement' that required 'vindication', or that either parties' position was 'unmeritorious'. This proceeding represents a genuine dispute as to the question of construction of the words that the parties used by adopting and executing the '2009 extension' to reflect their leasehold intentions with respect to Units 8 and 9, No 86 Erindale Road, Balcatta. There is no reason why the primary position, as provided for by s 87(1) of the SAT Act, should be displaced in this proceeding by an exercise of the Tribunal's discretion pursuant to s 87(2) of the SAT Act.

8. Further, the respondent has made lengthy submissions based upon the premise that the provisions of s 47 of the SAT Act is the same as, or similar to, s 75 of the Victorian Civil and Administrative Tribunal Act 1998 (VIC) (VCAT Act). The Tribunal considers that s 75 of the VCAT Act and s 47 of the SAT Act are not equivalent and are quite different when it comes to the issue of costs. Section 75(2) of the VCAT Act contains an express provision which permits that tribunal to make an order for costs where it has dismissed an application because it is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process (s 75(1) and s 75(2) of the VCAT Act). This power to award costs to one party is in addition to the general power to award costs provided for in s 109 of the VCAT Act, which is equivalent to s 87 of the SAT Act.

9. Section 75(2) of the VCAT Act is not replicated in s 47 of the SAT Act. The Tribunal does not accept the respondent's contention that s 75(2) of the VCAT Act is the equivalent of s 47 of the SAT Act in terms of a discretionary power to award costs. The authorities concerning s 75(2) of the VCAT Act are not relevant to the particular provision conferring power to award costs on the Tribunal pursuant to the SAT Act ­ that is, s 87 of the SAT Act.

10. Accordingly, the Tribunal shall dismiss the respondent's application for the costs of the proceeding in the Tribunal.

Order

1.The application is dismissed pursuant to s 46(2) of the State Administrative Tribunal Act2004 (WA).

2.The respondent's application for costs pursuant to s 47 or, alternatively, s 87 of the State Administrative Tribunal Act 2004 (WA) is dismissed.

I certify that this and the preceding [25] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

MS L WARD, MEMBER