North East Developments Pty Ltd v Business to All Australia Pty Ltd (No 2)
[2012] NSWADT 256
•05 December 2012
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: North East Developments Pty Ltd v Business To All Australia Pty Ltd (No 2) [2012] NSWADT 256 Hearing dates: On the papers Decision date: 05 December 2012 Jurisdiction: Retail Leases Division Before: D Patten, Deputy President Decision: The Respondent pay the Applicants costs on a party and party basis as agreed or as assessed
Catchwords: Respondent - weak case - costs order appropriate Legislation Cited: Administrative Decisions Tribunal Act 1997 Category: Costs Parties: North East Developments Pty Ltd (Applicant)
Business to All Australia Pty Ltd (Respondent)Representation: Herbert Geer Lawyers (Applicant)
Andresakis & Associates (Respondent)
File Number(s): 115175 and 115098
REASONS FOR DECISION
On 17 September 2012 I published my decision in this matter. Upon the application of North East Developments Pty Ltd (the applicant) I ordered Business to All Australia Pty Ltd (the respondent) to pay the sum of $98160. A separate application by the respondent was dismissed.
Each party was given leave to make submissions as to costs within 21 days. The applicant did so within time and the respondent made submissions in reply albeit slightly outside the period of 14 days stipulated. I will nonetheless have due regard to those submissions:
In relation to its own claim the applicant sought an order for costs on an ordinary that is party and party basis up to 24 April 2012 and on an indemnity basis thereafter. In relation to the respondents application the applicant sought all of its costs on an indemnity basis. In accordance with para 68 of the reasons published on September 17 I will proceed to deal with the matter on the papers.
As the applicant made a separate submission in respect of each of the two matters I will need to deal with them individually. In relation to its application 115098 it relied upon an offer of compromise to justify the claim that part of the costs be paid on an indemnity basis (Calderbank v Calderbank [1975] 3 All ER 333)
The offer was contained in a letter dated 24 April 2012 written "without prejudice save as to costs" by the applicants solicitors Herbert Geer to the respondents Solicitor Andresakis & Associates. The letter omitting formal parts read:
By letter dated 30 January 2012, you forwarded Grounds for Application (including Particulars) which alleged a cause of action or cross-claim by your client against our client on the basis of alleged misleading and deceptive conduct in contravention of sections 62B and 62D of the Retail Leases Act 1994 (the Act).
By letter dated 13 March 2012, we served you with the affidavit of Andrew Buchanan sworn 13 March 2012.
That affidavit outlined how:
On about 22 October 2009, our office served your office with, amongst other things, a lease and disclosure statements;
On about 4 December 2010, our office requested from your office a copy of the materials and lease documents that your office had on file; and
By email dated 4 December 2010, your office replied and enclosed the same correspondence that was attached to our earlier letter of 22 October 2009, which included, amongst other things, the same lease and discloser statements.
Further, that affidavit evidenced that:
Your client was served with the necessary disclosure statements required by our client under section 11 of the Act: and
Your client did not comply with its obligations under section 11A of the Retail Leases Act 1994. We note that the obligations under section 11A of the Act fall with the lessee and not the lessor.
In light of our client's evidence and by operation of the Act, any allegations that:
The lease is purportedly void by reason of a party's failure to provide a disclosure statement; and/or
Any alleged representations made by our client constitute misleading and deceptive conduct, are, in the circumstances, unsustainable and incorrect.
Further, your client has been asked to produce, and to date has failed to produce, any documentary evidence of ever having made it known prior to the signing of the Lease that it had ever relied on the alleged representations.
In the circumstances, your client's cause of action is not supported by the contents of its affidavit evidence and even less by the oral evidence already adduced at hearing.
Clearly, your client's case is without merit and may well be characterised as being vexatious, frivolous and an abuse of process.
Accordingly, we hereby put you on notice that we have been instructed to claim costs on an indemnity basis; and if necessary to join your firm in relation to costs.
In support of same, we also note that:
At the commencement of the hearing, your client's Counsel, for the first time, conceded that a substantial component of your client's claim was untenable;
Your client's Counsel interfered with the expert witness, as admitted by the expert witness under oath; and
The expert witness has largely undermined whatever may be left of your client's claim for damages.
In light of the issues raised in this letter, our client offers to settle proceedings on a full and final basis on the condition that your client pay our client the sum of $150, 000 inclusive of costs.
This offer is open for acceptance until 4pm 1 May 2012 and is made in accordance with the principles of Calderbank v Calderbank [1975] 3 All ER 333.
Should this offer not be accepted we hereby notify you of our client's intention to further rely on this letter in support of an order for indemnity cost in the event that our client obtains orders in terms more favourable than this offer.
As part of its submission but unsupported by any evidence the applicant quantified its costs and disbursements up to the Calderbank offer at $46322.91 and stated that up to 21 September 2012 it had incurred costs and disbursements including counsel fees of $149332.
It was submitted that on any basis the Calderbank offer to accept $150000 inclusive of costs was a "genuine and significant compromise." It was also submitted that the offer was unreasonably rejected.
In my opinion it is impossible to regard the applicant's Calderbank offer as a genuine and significant compromise. It was made on a costs inclusive basis and the respondent had no means of assessing the value of its components. Moreover on the applicant's own figures its costs when added to the amount awarded in its favour as at 24 April 2012 did not exceed $150000.
I reject the claim for indemnity costs in respect of matter 115098.
In relation to matter 115175 the applicant submitted that the respondent should pay all the costs on an indemnity basis. This submission was put on the basis that the respondent claim's wholly failed was never properly articulated and was only made in the context of proceedings instituted by the respondent seeking to set aside a statutory demand for unpaid rent. It was contended that matter 115175 had no tenable basis in fact or law and had the effect of unnecessarily prolonging the other proceedings. There is some force in those submissions, which are certainly relevant to the making of a costs order, but in the circumstances I do not think they justify the making of such an order on an indemnity basis.
As to whether any costs order should be made I have regard to s88 of the Administrative Decision Tribunal Act and to the criteria set forth in ss(1A). Most significantly I give weight to para (c) being of the opinion that the position of the respondent was extremely weak and went close to one "that has no tenable basis in fact or law.
In my opinion in the circumstances of this case bearing in mind that the dispute was between companies engaged in commercial pursuits it would be fair to order that the respondent pay the applicant costs.
Accordingly I order that the respondent pay the applicant's costs of both matters on a party and party basis as agreed or as assessed
Decision last updated: 05 December 2012
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