Paul George Pty Ltd v Peros (No.2)

[2003] NSWADT 218

CITATION:	Paul George Pty Ltd v Peros (No.2) [2003] NSWADT 218
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Paul George Pty Ltd RESPONDENTS Garry Peros and Irene Peros
FILE NUMBER:	025051
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	07/13/2003
DATE OF DECISION:	09/22/2003
BEFORE:	Montgomery S - Judicial Member
APPLICATION:	Costs
MATTER FOR DECISION:	Costs
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994
CASES CITED:	Barsoum v Glebe Administration Board (2) [2002] NSWADT 174 Wood and Anor v Bergman (No.2) [2003] nSWADT 175 Gizah Pty Ltd v AXA Trustees Ltd (No.2)[2001] NSWADT 164 Randi Wiks Pty Ltd v Pokana Pty Ltd (RLD) [2003] NSWADTAP 27 Randi Wiks Pty Ltd v Pokana Pty Ltd [2003] NSWADT11 11 March 2003
REPRESENTATION:	APPLICANT C Felicio, solicitor RESPONDENTS D Chambers, solicitor
ORDERS:	1 The Applicant's application for costs is refused

1 In the substantive matter, Paul George Pty Ltd (“the Applicant”), as lessor of Shop 1, 85 Avoca Drive, Avoca Beach ("the Premises"), sought certain declaratory orders and orders retraining the conduct of Garry Peros and Irene Peros as lessees (“the Respondents”).

2 In determining the substantive matter I made the following orders:

“The Respondents are to refrain from doing any of the following on the Premises:
(a) selling coffee in china mugs in circumstances where the sale cannot be classified as takeaway coffee because of the obligation on the purchaser to return the mug to the Respondents;

(b) serving food on stainless-steel or other non-disposable platters;

(c) providing ‘table service’;

(d) placing tables within the Shop; and

(e) placing more than one table on the upper terrace area.”

3 The Applicant has sought an order for costs in relation to the matter. I note that the Applicant also sought guidance in relation to the practical application of the orders made in the substantive matter. I am unable to provide the guidance sought. In any event, it is my view that the orders are self-explanatory.

4 The parties each provided submissions in relation to the costs application. This determination is made on the basis of the written submissions without the need for the parties to attend.

Relevant Legislation

5 The Tribunal’s power to award costs in relation to proceedings before it is governed by section 88 of the Administrative Decisions Tribunal Act 1987 (“the ADT Act”). Section 88 of the ADT Act provides:

“88 Costs

(1) 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 there are special circumstances warranting an award of costs.

(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 the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on any other basis.

(3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs.

(4) In this section, costs includes:

(a) costs of or incidental to proceedings in the Tribunal, and

(b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application.”

6 Pursuant to section 88(3) of the ADT Act, the power to award costs does not apply in proceedings for an original decision, such as the present proceedings, unless the enactment conferring jurisdiction provides for the awarding of costs. Section 77A of the Retail Leases Act1994 (“the Act”), which is the enactment conferring jurisdiction, provides:

“77A Tribunal may award costs

The Tribunal may award costs under section 88 of the Administrative Decisions Tribunal Act 1997 in respect of proceedings commenced by an application made under this Part.”

7 The Applicant submits that an order for costs should be made in its favour in this matter on the following grounds:

“1. The Applicant's Application was wholly successful.

2. The Applicant was represented by solicitors and Counsel.

3. The legal costs incurred by the Applicant up to and including the hearing totalled $8,690.00. Costs incurred after that date total about $2,000.00.

4. The Application was not affected by undue delay.

5. Prior to the Application being made the Applicant participated in a mediation with the Respondent which failed to resolve the issues the subject of the Application.

6. The Respondent's defence was unmeritorious and this is supported by the finding of facts made by the Judicial Member.”

8 The Respondents answered the Applicant’s submissions as follows:

“1. Section 88 of the Administrative Decisions Act 1997 provides:

(1) 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 there are special circumstances warranting an award of costs.

(emphasis added)

2. The Tribunal has previously considered what is meant by "special circumstances" within the meaning of section 88. See Barsoum v Glebe Administration Board (2) [2002] NSWADT 174.

3. There is nothing in the Applicant's submission for costs which constitutes "special circumstances". Mere success (whether partial or total) is not enough - See Barsoum's case at paragraph 46 to 48.

4. Contrary to the submissions by the Applicant the Applicant’s case was not “wholly successful”:

(a) The Applicant sought declarations that lease registration number 7067312B restrains the Respondents as follows:

"1. Serving coffee in china mugs/cups in lieu of take-away disposable containers.

2. Serving meals that cannot be described as `seafood takeaway'.

3. Serving meals on plates (plastic) and provide knifes and forks (plastic) in lieu of serving them in take-away containers.

4. Providing table service.

5. Having too many chairs placed on the upper terrace and tables and chairs inside the shop."

The Respondents answer that other than a reference to matters 4 and 5 above, which have never been disputed by the Respondents, no such declarations were made by the Tribunal.

(b) The Applicant sought orders against the Respondents from:

"1. Serving coffee in china mugs/cups in lieu of take-away disposable containers.

2. Serving meals that cannot be described as `seafood takeaway'.

3. Serving meals on plates (plastic) and provide knifes and forks (plastic) in lieu of serving them in take-away containers.

4. Providing table service.

5. Having too many chairs placed on the upper terrace and tables and chairs inside the shop."

The Respondents answer that other than a reference to matters 4 and 5 above, which were not disputed by the Respondents, no such orders were made by the Tribunal.

5. There has been no apportionment of the Applicant's alleged costs with those that would have been spent on behalf of Mr Paul George, the second lessor and applicant.

6. The Respondents’ defence was by and large successful in that:

(a) There is no order prohibiting the Respondents from serving coffee in china mugs/cups as long as the purchaser has no obligation to return the mug to the Respondent, and this has always been the Respondents' position;

(b) There is no order prohibiting the Respondents from serving any of the type of foods served at their business;

(c) No order prohibiting the Respondents from providing meals on plastic plates and providing plastic forks and knives.”

9 The common law principle governing costs in civil cases is that costs 'follow the event'. However, section 88 of the ADT Act lays down a different principle, namely, that the Tribunal must be “satisfied” that there are “special circumstances warranting an award of costs”: Wood and Anor v Bergman(No. 2) [2003] NSWADT 175.

10 In Gizah Pty Ltd v AXA Trustees Ltd (No. 2) [2001] NSWADT 164, Judicial Member Molloy stated at paragraph 29:

“I am of the opinion that in order to satisfy the test of "special circumstances" one must find circumstances that are out of the ordinary, but without having to be extraordinary or exceptional, and those special circumstances would warrant an award of costs.

11 That view has been quoted with approval by several decisions of this Tribunal, most recently in Wood and Anor v Bergman. In that decision Deputy President ADCJ Chesterman also referred to other observations in Gizah Pty Ltd v AXA Trustees Ltd (No. 2) and observed that they were quoted with approval by an Appeal Panel of the Tribunal in the recent decision in Randi Wiks Pty Ltd v Pokana Pty Ltd (RLD) [2003] NSWADTAP 27. The Deputy President stated at paragraphs 11 and 13:

“11 It is recognised that the Retail Leases Division is unique within the Tribunal, in that it alone deals with commercial disputes between parties who are engaged in trade and commerce for reward. In Gizah , at [22] and [33 - 34], the significance of this for costs orders was explained as follows. Whereas in the context of appeals from administrative decisions the requirement of 'special circumstances' might be interpreted so as not to discourage proceedings by a private individual on account of the risk of an adverse costs order, no such consideration should apply in the context of retail lease disputes. The 'commerciality' of the Retail Leases Division calls for an interpretation quite different from that which might be adopted in any other Division of the Tribunal.”

“13. The proposition, however, that 'special circumstances' should be interpreted differently within this Division, because it deals with relationships of a commercial character, does not imply that costs should simply follow the event. This was made clear in Alessa Pty Ltd v Total & Universal Pty Ltd [2001] NSWADT 150 at [4].”

12 The question to be determined is whether in the circumstances of this case there are special circumstances that warrant the making of an order for costs. The expression “'special circumstances” is to be given its normal meaning. The question of whether the facts that had been proved constituted “special circumstances” is a question of fact: Randi Wiks Pty Limited v Pokana Pty Limited (RLD) [2003] NSWADTAP 27 at paragraph 27.

13 The primary submission on behalf of the Applicant appears to be that the application was wholly successful. I do not accept that this submission accurately reflects the outcome of the case. The true position is that outlined in the Respondents’ submissions as set out above.

14 In the unreported decision on an application for costs in Randi Wiks Pty Limited v Pokana Pty Limited [2003] NSWADT 11 March 2003 Judicial Member Molloy stated:

“The plain fact that a party wins or loses or is successful or unsuccessful on a point does not mean that they are entitled to or should be the subject of a costs order. I think that principle is plain. What the Parliament has done in section 88 is leave it to the relevant Tribunal to determine what are special circumstances in the particular circumstances of a matter before it, and as there are many permutations and combinations of what may amount to special circumstances then that simply requires the Tribunal to search and find, if there are any special circumstances, in the particular matter.”

15 That observation was endorsed by the Appeal Panel in Randi Wiks Pty Limited v Pokana Pty Limited (RLD) [2003] NSWADTAP 27 at paragraph 42. If it were otherwise, then in effect the common law rule that costs follow the event, which Parliament has sought to displace, would be reinstated.

16 It is incorrect to argue that “the Respondent's defence was unmeritorious” as the Applicant has done. As was the case in Randi Wiks, the arguments of the Respondents were put forward in good faith and had a reasonable basis. It was not as if they had persisted with an unarguable case. This is demonstrated by the outcome of the matter.

17 In these circumstances, there is nothing that falls into the category of "special" in the circumstances that have been urged upon me. I am not satisfied that the circumstances warrant any interference with the position that each party should bears their own costs. I am therefore unable to accede to the application that there be a costs order. Consequently, I make no order as to costs in relation to the whole of these proceedings.

Orders

1. The Applicant's application for costs is refused.