Petria Pty Ltd v Makhoul

[2005] NSWADTAP 12

Appeal Panel - Internal

CITATION:	Petria Pty Ltd v Makhoul [2005] NSWADTAP 12
PARTIES:	APPELLANT Petria Pty Ltd RESPONDENT Edward Makhoul
FILE NUMBER:	049015
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	02/11/2005
DATE OF DECISION:	03/21/2005
DECISION UNDER APPEAL:	Makhoul v Petria Pty Ltd [2004] NSWADT 51
BEFORE:	Chesterman M - ADCJ (Deputy President); Boyce P - Judicial Member; Weule B - Non Judicial Member
CATCHWORDS:	costs
MATTER FOR DECISION:	Costs
FILE NUMBER UNDER APPEAL:	035146
DATE OF DECISION UNDER APPEAL:	03/10/2004
LEGISLATION CITED:	Anti-Discrimination Act 1977 Retail Leases Act 1994
CASES CITED:	Citadin Pty Ltd (No 2) v Eddie Azzi Australia Pty Ltd & General Pants Co Pty Ltd (RLD) [2001] NSWADTAP 31 Commissioner of Police v Mooney (No 3) (EOD) [2004] NSWADTAP 22 Gizah Pty Ltd v AXA Trustees Ltd (No 2) [2001] NSWADT 164 Irresistible Frocks Salon Pty Ltd v Sparbac Pty Ltd and Roche Group Pty Ltd (No 2) [2004] NSWADT 72 Makhoul v Petria Pty Limited [2004] NSWADT 51 Petria Pty Limited v Makhoul [2004] NSWADTAP 47 Tu v University of Sydney (No 2) (EOD) [2002] NSWADTAP 25
REPRESENTATION:	APPELLANT D L Warren, barrister RESPONDENT T Hall, barrister
ORDERS:	1. This application by the Appellant for the costs of the appeal is dismissed; 2. No order on the costs of this application.

Introduction

1 The issue in this case is whether the Appellant (the respondent at first instance), having succeeded before us in its appeal against a decision of the Tribunal at first instance, is entitled to its costs on the appeal.

2 The Appellant appealed against the decision of the Tribunal, constituted by Judicial Member Fox, in Makhoul v Petria Pty Limited [2004] NSWADT 51. In that decision, the Respondent (the applicant at first instance) was the successful party.

3 The principal order (Order 1) made by the Tribunal was a declaration that the Appellant was obliged to tender to the Respondent a lease. This lease was to be in accordance with an option of renewal contained in an expired registered lease between the Appellant, as lessor, and the Respondent together with two co-lessees. The expired lease was a ‘retail shop lease’ governed by the Retail Leases Act 1994. Order 1 was the primary focus of the appeal.

4 Our decision on the appeal (Petria Pty Limited v Makhoul [2004] NSWADTAP 47) was delivered on 1 November 2004. We ordered that the appeal should be allowed and Order 1 of the Tribunal, together with two accompanying orders, should be set aside. We also gave liberty to both parties to apply within 28 days to argue the costs of the appeal, adding that if no application was made within that time, there would be no order for costs.

5 On 17 November 2004, the Appellant applied for its costs of the appeal. We directed that, in the absence of any objection by a party, the matter of costs should be resolved ‘on the papers’ under s 76 of the Administrative Decisions Tribunal Act 1997 (‘the Tribunal Act’). We have since received written submissions from both parties.

The Appellant’s submissions on costs

6 These submissions commenced by pointing out that the Appellant had been totally successful in the appeal, but that at no stage before or during the hearing had the Respondent conceded any of the issues or points raised by the Appellant.

7 The Appellant contended next that the power of an Appeal Panel to award costs is to be found in s 114(1) of the Tribunal Act. This states that if an appeal is restricted to questions of law, the Appeal Panel ‘may make such orders as it thinks appropriate in light of its decision’. The submissions described this power as ‘unfettered’, though it was a power to be ‘exercised judicially’ and in two cases referred to – Tu v University of Sydney (No 2) (EOD) [2002] NSWADTAP 25 and Commissioner of Police v Mooney (No 3) (EOD) [2004] NSWADTAP 22 – a different approach was adopted.

8 The Appellant then advanced the proposition that an Appeal Panel’s power to award costs is broader than the power granted to the Tribunal under s 88 of the Tribunal Act. The relevant part of this provision is subsection (1), which is as follows: -

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.

9 The Appellant’s submissions then quoted the following passage from the Appeal Panel’s decision in Tu v University of Sydney (No 2) at [63]: -

In cases where there has been a full contest and an appeal is lodged, the position will often be different, and often there may be no order as to costs in relation to the appeal, in keeping with the approach reflected in s 114 of the ADA. The appeal, though unsuccessful may have, for example, raised an important point of law that was not free from doubt.

10 By way, it would seem, of trying to distinguish the present appeal from this statement of principle, the Appellant then argued that in this instance no important point of law was raised, but merely the application of existing law, which the Tribunal misconstrued at first instance.

11 The concluding argument made by the Appellant was that there was nothing in the circumstances of the appeal to warrant a departure from the ‘normal rule’ that a successful appellant should be entitled to its costs, particularly when no points of law needing determination were raised by the appeal.

Our views on these submissions

12 In our judgment, this line of argument is misconceived, for the following reasons.

13 It has been held more than once that s 88(1) of the Tribunal Act applies to decisions on costs by Appeal Panels in cases, like the present case, that fall within the Tribunal’s jurisdiction under the Retail Leases Act. The Appellant’s claim that the Appeal Panel’s powers are ‘broader’ than those conferred by s 88(1) is therefore incorrect.

14 In Citadin Pty Ltd (No 2) v Eddie Azzi Australia Pty Ltd & General Pants Co Pty Ltd (RLD) [2001] NSWADTAP 31 at [15], the Appeal Panel pointed out that this result flows from the wording of s 77A of the Retail Leases Act, which empowers ‘the Tribunal’ to award costs under s 88 of the Tribunal Act, and ss 4(1) and 113(1) of the Tribunal Act, which make it clear that ‘the Tribunal’ includes any Appeal Panel of the Tribunal.

15 The two authorities relied on by the Appellant in contending that s 88(1) was inapplicable were Tu v University of Sydney (No 2) (EOD) [2002] NSWADTAP 25 and Commissioner of Police v Mooney (No 3) (EOD) [2004] NSWADTAP 22. These cases are not in point because they deal with awards of costs by the Tribunal in its exercise of jurisdiction under the Anti-Discrimination Act 1977. As explained in the latter case at [53 – 54], such awards are made under s 114 of the Anti-Discrimination Act, which displaces the operation of s 88(1) of the Tribunal Act.

16 In the phrase ‘s 114 of the ADA’ within the passage from Tu quoted by the Appellant (see [9] above), the reference is in fact to s 114 of the Anti-Discrimination Act, not s 114 of the Tribunal Act, as the Appellant appears to have believed. The confusion is understandable since s 114 of the Tribunal Act is one of the provisions defining the powers of an Appeal Panel (see [7] above).

17 For these reasons, the Appellant’s submissions identifying what it considered to be relevant features of the present appeal (see [9 – 11] above) are directed to the wrong statutory provision. They refer to criteria that may be relevant to an application for costs under the Anti-Discrimination Act, but do not address at all the central criterion that is stated in s 88(1) of the Tribunal Act and is applicable to cases brought under the Retail Leases Act. This is that the Tribunal – whether at first instance or when constituted by an Appeal Panel – must be ‘satisfied that there are special circumstances warranting an award of costs’. If such circumstances are not present, the ‘assumption’ regarding costs in Tribunal proceedings, as pointed out in the Respondent’s submissions, is that each party will pay its own costs.

The concept of ‘special circumstances warranting an award of costs’

18 Although, for the reasons just given, the Appellant put forward no argument to the effect that the essential requirement of ‘special circumstances’ had been satisfied, it is appropriate for us briefly to consider whether such an argument might have been available to it.

19 ‘Special circumstances’ have been defined, in a case brought under the Retail Leases Act, as ‘circumstances that are out of the ordinary, but without having to be extraordinary or exceptional’ (Gizah Pty Ltd v AXA Trustees Ltd (No 2) [2001] NSWADT 164).

20 In Appeal Panel proceedings brought under the Retail Leases Act, it has been held that ‘special circumstances’ existed, ‘warranting an award of costs’, where ‘an appeal was dismissed as disclosing no sufficiently arguable questions of law’ (Citadin Pty Ltd (No 2) v Eddie Azzi Australia Pty Ltd & General Pants Co Pty Ltd (RLD) [2001] NSWADTAP 31 at [23]). It is also recognised that, in cases brought under this Act, ‘special circumstances’ may be constituted by the unreasonable rejection of an offer of compromise that was less advantageous to the offering party than the result at the hearing (see eg Irresistible Frocks Salon Pty Ltd v Sparbac Pty Ltd and Roche Group Pty Ltd (No 2) [2004] NSWADT 72) or by behaviour of a party causing the proceedings to be unnecessarily protracted.

21 This is not a case of an appeal within any of the categories that we have just outlined, or within any other recognised category of ‘special circumstances’ of which we are aware.

22 Without needing to consider further the submissions by the Respondent, we are bound to conclude, therefore, that this application by the Appellant for the costs of the appeal must be dismissed.

23 There will be no order regarding the costs of this application.