PHOENIX PROPERTIES INTERNATIONAL PTY LTD and JASHAN TECHNOLOGY PTY LTD
[2019] WASAT 29
•21 MAY 2019
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)
CITATION: PHOENIX PROPERTIES INTERNATIONAL PTY LTD and JASHAN TECHNOLOGY PTY LTD [2019] WASAT 29
MEMBER: MS D QUINLAN, MEMBER
MS C BARTON, MEMBER
HEARD: 25 AND 26 FEBRUARY 2019
DELIVERED : 21 MAY 2019
FILE NO/S: CC 1929 of 2018
BETWEEN: PHOENIX PROPERTIES INTERNATIONAL PTY LTD
Applicant
AND
JASHAN TECHNOLOGY PTY LTD
First Respondent
VINOD PARIHAR
Second Respondent
SANTOSH PARIHAR
Third Respondent
Catchwords:
Retail shop - Question arising under a lease - Use of contested areas - Licence - Waiver - Prior conduct - Liquor licence - Extended trading permit - Interpretation of lease
Legislation:
Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA), s 16, s 16(1), s 26, s 26(1)(b)
Liquor Control Act 1988 (WA), s 37(5), s 60(4)(h), s 61(1)(d)
Property Law Act 1969 (WA), s 73
Result:
Application successful in part
Category: B
Representation:
Counsel:
| Applicant | : | Mr H Jackson & Mr L Hager |
| First Respondent | : | Mr V Parihar (as sole director) |
| Second Respondent | : | In Person |
| Third Respondent | : | In Person |
Solicitors:
| Applicant | : | Hager Grubb & Partners Lawyers |
| First Respondent | : | N/A |
| Second Respondent | : | N/A |
| Third Respondent | : | N/A |
Case(s) referred to in decision(s):
Secure Parking (WA) Pty Ltd v Wilson [2008] WASCA 268; (2008) 38 WAR 350
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
These proceedings arise in the Tribunal pursuant to an application made under s 16(1) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (the Act) by Phoenix Properties International Pty Ltd (the applicant or landlord) referring a question arising under two leases where the applicant is the landlord. The tenant in both leases is Jashan Technology Pty Ltd (first respondent or tenant).
The landlord is the owner of premises at 150 St Georges Terrace, Perth, which comprise an office tower and three retail tenancies, including a café and bar. The applicant became a tenant of the café premises (known as the Deck) and bar premises (known as the Grand) by deeds of assignment, variation and transfer having effect from 14 October 2015. The third retail tenancy is a restaurant building that is presently unoccupied and in the process of being re-leased.
Mr Vinod Parihar, the second respondent in these proceedings, is the sole director of the tenant. The tenant has one shareholder which is Jashan Group Pty Ltd whose sole director and sole shareholder is Mrs Santosh Parihar, the third respondent in these proceedings.
A dispute has arisen under the two leases between the parties as to the tenant's use of five contested areas known in these proceedings as: Deck Fire Separation Area; Grand Fire Separation Area; Deck Roof (or AC Plant Room); Common Area (or Retail Passage Area); and Corridor.
It was common ground in the hearing that none of the contested areas are within the exclusive use leased areas of the Deck or the Grand: see page 174 of the applicant's bundle. The essence of the dispute between the parties was whether any of the existing uses of the contested areas are permitted under the respective leases or whether by the ongoing conduct of the tenant and landlord the use is lawfully permitted.
Background facts
Many of the background facts in these proceedings are not in dispute. The facts that are in dispute will be addressed by the Tribunal later in these reasons.
By a lease dated 4 August 2011 the landlord leased the Deck café premises for 10 years to St George's Tavern Pty Ltd with Adrian and Ilia Gastevski as guarantors (the Deck Lease).
By a lease also dated 4 August 2011 the landlord leased the Grand bar premises also for 10 years and also to St George's Tavern Pty Ltd with Adrian and Ilia Gastevski as guarantors (the Grand Lease).
On 14 October 2015, both the Deck Lease and the Grand Lease were assigned to the first respondent as tenant with the second and third respondents as guarantor.
There have been a number of variations to both the Deck Lease and the Grand Lease that are not relevant to these proceedings. The lease documents of particular relevance to these proceedings are the original leases for the Deck and the Grand both dated 4 August 2011. The terms of these two leases are identical in many respects with some divergences that are detailed, where relevant, later in these reasons.
The contested areas (with the two fire separation areas grouped together) can be described as follows:
(a)Both the Deck Fire Separation Area and Grand Fire Separation Area are not within the exclusive use area of the Deck Lease or the Grand Lease and consist of a 1 metre space between the office tower and the buildings that contain the retail tenancies, principally relevant to these proceedings are the two retail tenancies containing the Deck and the Grand: see page 175 of the applicant's bundle.
(b)The Deck Roof (or AC Plant Room) is not within the exclusive use area of the Deck Lease and consists of the roof area above the Deck which contains air conditioning units for both the Deck and the Grand accessed from behind the Deck by a set of open stairs contained within the Deck Fire Separation Area: see page 176 of the applicant's bundle.
(c)The Common Area (or Retail Passage Area) is an area behind the Deck that is not within the exclusive use area of the Deck Lease and consists of a lift, storage area, toilet and passageway: see page 183 of the applicant's bundle (but excluding the green shaded area in the Corridor).
(d)The Corridor is not within the exclusive use areas of either the Deck Lease or the Grand Lease and is an area between the Deck and the Grand that at the western end is open and the eastern end contains an entry and exit into the office tower: see page 189 of the applicant's bundle.
The relevant terms of the Deck Lease and the Grand Lease will be detailed later in these reasons when the Tribunal considers each of the contested areas.
Site view
During the hearing the Tribunal had the benefit of a site view at the Deck and the Grand and was able to view each of the contested areas. This site view has greatly assisted the Tribunal in evaluating the evidence and determining this matter.
Issues for determination
The issues for determination in these proceedings under s 16 of the Act are outlined as follows:
(a)Are the Deck Lease and Grand Lease each a 'retail shop lease' under the Act?
(b)Is there a question, or questions, arising under the Deck Lease and Grand Lease?
(c)If the answer to (a) and (b) above are both 'yes', is the tenant lawfully permitted, either under the terms of the Deck Lease or the Grand Lease or the prior conduct of the parties, to continue to use the following contested areas:
(i)Deck Fire Separation Area;
(ii)Grand Fire Separation Area;
(iii)Deck Roof (or AC Plant Room);
(iv)Common Area (or Retail Passage Area); and
(v)Corridor.
(d)If the answer to (c) is 'no' in relation to any of the contested areas, should the Tribunal, in the exercise of its discretion under s 26 of the Act, make orders clarifying or restricting the use of any of the contested areas?
By consent of the tenant, the landlord's application for interim orders was made by the Tribunal on 17 September 2018 ordering the tenant (and its employees, contractors and agents) to cease to occupy, smoke within and obstruct access to and from what can generally be described as the fire separation areas. The second and third respondents were ordered to cause the first respondent to comply with the Tribunal's order.
In closing submissions, the respondents conceded that the Deck and Grand Fire Separation Areas (in accordance they say with their prior consent to the interim order) should be kept free from smoking, storage and any other obstruction. The respondents, however, disagreed that the table and rug (which is utilised for the Friday evening use of the Corridor) should not be stored in the Deck Fire Separation Area and asserted their ongoing right to use that area for storage.
Landlord's case
The landlord submits that the tenant is using the contested areas where either the use is not permitted or the use contravenes the conditions of the permission. The landlord submits, despite the removal of some items and the consent to the interim orders (as well as compliance) that the tenant has demonstrated by its conduct of the proceedings that it considers it has the right to use or occupy the contested areas.
In reply to the respondents' case that the landlord has by past conduct now waived its rights to enforce its rights under the Deck Lease or the Grand Lease, the landlord submits that the doctrine of waiver or election requires two aspects to be satisfied. Firstly, for the landlord to have knowledge of the facts giving rise to the election. Secondly, once armed with that knowledge, the landlord has then elected to pursue one of two mutually inconsistent rights.
The landlord submits in response that, firstly, with the small exception of the fixtures in the Common Area (or Retail Passage Area), there is no evidence that the landlord (through its agent) had knowledge of such use. Secondly, that clause 18.3 of both the Deck Lease and the Grand Lease precludes a finding that the landlord has waived its right to enforce clause 1(a) of Schedule 6 in relation to any of the uses of the contested areas and, further, there is no evidence that might amount to a written waiver. Lastly, and in any event, the landlord submits that clause 18.4 of both the Deck Lease and the Grand Lease and s 73 of the Property Law Act 1969 (WA) (PL Act) preclude a finding that a past act of waiver operates into the future so as to prevent the landlord from enforcing its rights under a lease.
The landlord relies on its statement of issues, facts and contentions, the bundles of documents provided to the Tribunal and the evidence of the following witnesses:
(a) Mr Aaron Bettridge who is a Director of Portland Properties which has been the Property & Asset Manager for the applicant since 2003;
(b)Mr Craig Dawson who was the allocated property manager from Knight Frank when it first became the landlord's property manager in 2013 until 2016. Mr Dawson is now the Head Partner in Western Australia for Knight Frank; and
(c)Mr Alexander Meneghello who is the current allocated property manager by his employer, Knight Frank, which is the Managing Agent appointed by Portland Properties. Mr Meneghello took many of the photographs that were provided to the Tribunal.
All of the applicant's witnesses attended the Tribunal to provide oral evidence and afford the respondents the opportunity for crossexamination of their evidence as well as answer questions from the Tribunal.
Tenant's (as well as second and third respondents') case
Counsel for the applicant sought to assist the Tribunal by attempting to summarise the respondents' case in written opening submissions at paragraphs 5 to 6 as follows:
The Respondents' case appears to rest on some form of waiver or election to assert an ongoing right to continue to use the areas despite the Applicant's complaint.
That is, it appears that the Respondents' claim:
(a)that the tenant (both the First Respondent and its predecessor) has for some time used the disputed areas in the alleged manner;
(b)that the Applicant was aware or should have been aware of such use but failed to complain about it until recently; and
(c)that the Applicant is, as a result of its previous failure to act, now precluded from complaining about it.
The respondents rely on their response to the applicant's statement of issues, facts and contentions, the bundles of documents provided to the Tribunal and the evidence of the following witnesses:
(a)Mr Adrian Gastevski who is a director of St George's Tavern Pty Ltd which was the previous tenant of both the Deck Lease and the Grand Lease;
(b)Mr Declan Carlin who was a bartender at the Grand from 2013 to 2018;
(c)Ms Courtney Bennett who was a barista at the Deck and the Grand from 2011 to January 2019;
(d)Mr Renzo Deleonardis who is the business broker who facilitated the sale of the Deck and the Grand business to the first respondent in 2015;
(e)Mr Gavin Yap who is a director of Kizuki Ramen and Izakaya Pty Ltd which previously had leased the third retail tenancy which contained a Japanese restaurant; and
(f)Mr Fab Spera who was a fit out contractor for Mr Gastevski.
The only witnesses relied upon by the respondents who attended the Tribunal to provide oral evidence and afford the applicant the opportunity for crossexamination of their evidence as well as answer questions from the Tribunal were Mr Gastevski and Mr Yap.
It was explained to the respondents at the hearing that the nonattendance of their other witnesses, that the applicant did wish to cross-examine, may affect the weight that the Tribunal will ultimately attribute to the evidence of those witnesses.
Consideration
There was no dispute that the Deck Lease and Grand Lease are each a 'retail shop lease' as defined under the Act. The Tribunal agrees with the landlord's submissions in this regard and so finds that the Deck Lease and Grand Lease are each a 'retail shop lease' as defined under the Act. There was also no dispute, and the Tribunal so finds, that the issues in dispute in these proceedings involve a question, or questions, arising under the Deck Lease and Grand Lease.
Before making specific findings in relation to each of the contested areas, the Tribunal makes the following findings regarding the factual evidence provided by the witnesses and also concerning the allegation made by the tenants of the waiver or election by the landlord or its agents.
The witness evidence
The Tribunal found that Mr Bettridge in particular, and also Mr Dawson, were both honest and forthright witnesses who impressed the Tribunal with the reliability and accuracy of their recollection of material matters of fact. Mr Meneghello was an honest witness, however he was also a somewhat unreliable witness in that he had difficulty recalling matters. However, we make no adverse criticism of Mr Meneghello as to credibility. To the extent that Mr Meneghello's evidence in any way differs from that of Messrs Bettridge and Dawson, we prefer the evidence of the latter over the former due to the memory failings of Mr Meneghello.
We find that Mr Gastevski was also a generally honest and forthright witness, however he was prone to occasionally take an adversarial or advocacy approach in his evidence (for example in relation to the Corridor) or be motivated to minimise his own responsibility to inform the incoming tenants of a dispute with the landlord such that this diminished his reliability as a witness. With one exception, where the evidence of Mr Gastevski differs from that of Mr Dawson or Mr Bettridge we prefer the evidence of the latter two over the former. The one exception is the evidence that Mr Gastevski gave concerning the additional fit out work that Mr Spera undertook in the Common Area (or Retail Passage Area) regarding which Mr Gastevski stated the landlord's agents had provided oral approval. This evidence from Mr Gastevski is accepted by the Tribunal and was also conceded in closing submissions by the landlord.
The Tribunal found Mr Yap to be an honest and forthright witness of fact. However, the Tribunal has not been assisted by his evidence in determining the issues in dispute in these proceedings.
In relation to the remaining witnesses that the landlord wished to crossexamine, namely Ms Bennett, Mr Carlin and Mr Spera, and who did not attend for cross-examination on their witness statements, the Tribunal makes the following findings on their evidence. In relation to Ms Bennett and Mr Carlin, to the extent that any of their evidence differs from the evidence of Messrs Dawson, Bettridge or Meneghello, the Tribunal prefers the latter three over the former. The landlord ultimately conceded in closing the issue as to the additional fit out work undertaken by Mr Spera. Mr Spera's evidence is also consistent with the evidence of Mr Gastevski on this issue. Therefore, the Tribunal accepts Mr Spera's evidence.
Waiver or election?
Except for the Corridor (dealt with later in these reasons on a different basis), the Tribunal finds in relation to the remaining contested areas that the landlord has not by past conduct allowed these uses of the contested areas to continue. The remaining contested areas are the Deck and Grand Fire Separations Areas, the Deck Roof (or AC Plant Room) and that part of the Common Area (or Retail Passage Area) in dispute that was not installed by Mr Spera.
The Tribunal relies on the evidence of Messrs Bettridge, Dawson and Meneghello to find as a matter of fact that the landlord was unaware of the tenant's use of these remaining contested areas until Mr Meneghello's two inspections in September 2017. Therefore, the Tribunal finds that there is no evidence, in writing or by conduct that could amount to a waiver by the landlord to enforce its rights under the Deck Lease or the Grand Lease in relation to these remaining contested areas.
In any event, the Tribunal also finds that the operation of clause 18.3 of both the Deck Lease and the Grand Lease precludes a finding that the landlord has waived its right to enforce clause 1(a) of Schedule 6 in relation to any of the uses of the contested areas.
Further, we find that any past act of waiver could not prevent the landlord from enforcing its rights under a lease in the future: see clause 18.4 of both the Deck Lease and the Grand Lease and s 73 of the PL Act.
Deck Fire Separation Area and Grand Fire Separation Area
In addition to the explanations provided by witnesses for both parties, the photographs provided to the Tribunal by the applicant indicate regular use of the Deck Fire Separation Area for permanent storage of furniture and a rug for the Friday evening use of the Corridor as well as for somewhat temporary storage on the floor area of crates, boxes and rubbish (which the landlord submits is an obstruction): see the photographs at pages 193-204 of the applicant's bundle.
In addition to the explanations provided by witnesses for both parties, the photographs provided to the Tribunal by the applicant indicate regular use of the Grand Fire Separation Area for storage (including what appears to be flammable chemicals near a gas pipe) as well as prolonged evidence of use by staff as a smoking area with the addition of lights, a chair and crates to sit on with numerous cigarette butts on the ground: see pages 205-222 of the applicant's bundle.
The landlord provided the Tribunal with an expert report dated 24 July 2018 from Mr Fernando Bernal, Senior Fire Engineer. This report was not disputed or contested by the tenant. Mr Bernal conducted an assessment of the use of the Deck and Grand Fire Separation Areas by the tenant as to whether it complies with the requirements of the fire engineering assessment report dated September 2009: see pages 250-300 of the applicant's bundle. Mr Bernal found that the combustibles present as well as evidence of smoking beside gas lines presents a fire safety risk of ignition in the event of a leak. Mr Bernal noted the fire evacuation exits from the Deck being obstructed with rubbish as well as combustibles and should be cleared immediately. The Tribunal finds that Mr Bernal's opinions are expressed with clear reasoning and logic and accepts his evidence in its entirety.
The Tribunal noted at the site view that the tenant is still utilising part of the Deck Fire Separation Area to store the furniture and rug for the Friday evening use of the Corridor. The Tribunal also observed at the site view that, presently, all other areas of the Deck and Grand Fire Separation Areas are no longer used for storage and are tidy and free from any obstruction.
The landlord submits, despite the removal of some items and the consent to the interim orders (as well as compliance), that the tenant has demonstrated by its conduct of the proceedings that the tenant considers it has the right to use or occupy the contested areas. Therefore, the landlord submits that the Tribunal should utilise its discretion to order the respondents to refrain from using and/or occupying each of the contested areas other than for the purpose of ingress and egress and, in any event, without causing obstruction to other users. Further, the landlord submits that the fire risk was recognised as a basis for the interim orders in these proceedings and should still be considered to be a relevant risk at this stage of the proceedings.
As found above, until the two inspections conducted by Mr Meneghello in September 2017, the landlord was unaware of the tenant's use of the Deck and Grand Fire Separation Areas in the ways evidenced by the photographs taken by Mr Meneghello at those inspections.
The Tribunal finds that the tenant has utilised the Deck and Grand Fire Separation Areas, which are not part of the exclusive use areas of either the Deck Lease or the Grand Lease, contrary to the terms of those leases and without the permission of the landlord. The Deck and Grand Fire Separation Areas have also been used by the tenant contrary to the fire safety requirements in the fire engineering assessment report dated September 2009.
In consideration of all the circumstances, and in the exercise of the Tribunal's discretion, the Tribunal has determined it will order the tenants to remove all items owned by the tenant, meaning they must remove the furniture and rug, as well as refrain from using and/or occupying the Deck or Grand Fire Separation Areas other than for the purpose of ingress and egress or maintenance and, in any event, without causing obstruction to other users or creating a fire risk. The Tribunal will also order the second and third respondent to ensure that the tenant (and its employees, contractors and agents) complies with the order.
Deck Roof (or AC Plant Room)
In addition to the explanations provided by witnesses for both parties, the photographs provided to the Tribunal by the applicant indicate extensive and prolonged use of the Deck Roof (or AC Plant Room) for storage on the floor and on the tenant's shelving units and for washing: see pages 223-229 of the applicant's bundle. The Tribunal noted at the site view continued use of the Deck Roof as shown in the photographs.
Mr Bernal noted that the fire engineering assessment report dated September 2009 did not assess such usage of the Deck Roof and recommends, unless fire safety risks in relation to this use are considered and addressed, that the Deck Roof (or AC Plant Room) should be restored to its original condition.
The Deck Roof is outside the exclusive use area of both the Deck Lease and the Grand Lease. Neither the Deck Lease nor the Grand Lease provides permission for storage or other use on the Deck Roof other than service maintenance.
The Tribunal finds that until the second inspection conducted by Mr Meneghello on 22 September 2017 the landlord was unaware of the tenant's extensive use of the Deck Roof for storage in the ways evidenced by the photographs taken by Mr Meneghello and as were evident at the site view undertaken by the Tribunal.
The Tribunal finds that the tenant has utilised the Deck Roof (or AC Plant Room), which is not part of the exclusive use areas of either the Deck Lease or the Grand Lease, contrary to the terms of those leases and without the permission of the landlord.
In consideration of all the circumstances, and in the exercise of the Tribunal's discretion, the Tribunal has determined it will order the tenant to remove all of its items from the Deck Roof, as well as refrain from using and/or occupying the Deck Roof other than for the purpose of maintenance of services, such as air-conditioning. The Tribunal will also order the second and third respondent to ensure that the tenant (and its employees, contractors and agents) complies with the order.
Common Area (or Retail Passage Area)
In addition to the explanations provided by witnesses for both parties, the photographs provided to the Tribunal by the applicant indicate extensive and prolonged use of the Common Area (or Retail Passage Area) for storage. This comprises items such as an unfixed shelving unit (with the evidence indicating it was put there by the current tenant and had been removed by the time of our site view) and other storage and shelving fixtures (installed by the previous tenant) as well as for somewhat temporary storage on the floor area of crates, boxes and rubbish (which the landlord submits is an obstruction): see pages 230-243 of the applicant's bundle.
In closing, the landlord accepted the evidence of Mr Spera and Mr Gastevski, and conceded the additional fit out of fixed shelving and cabinet installed by Mr Spera was done with the permission of the agent for the landlord around the time of the initial fitout and opening of the Deck and the Grand. However, the landlord submitted that the unfixed shelving unit (see page 231 of the applicant's bundle) was only very recently removed and, due to the way that the respondents have conducted these proceedings, the Tribunal should order that the tenant refrain from putting it back and refrain from obstructing ingress and egress through that area.
The Tribunal finds that the additional fit out work done by Mr Spera at the request of Ms Gastevski was done with the permission of the agent of the landlord. The Tribunal finds that the unfixed metal shelving unit was placed there by the current tenant without the permission of the landlord contrary to the Deck Lease and the Grand Lease. The Tribunal also finds, when all of the photographs of the Common Area (or Retail Passage Area) and the bottom of the stairs near the exit in the Deck Fire Separation Area are considered, that the tenant has, on more than one occasion, obstructed ingress and egress throughout that area contrary to clause 1(a) of Schedule 6 of both the Deck Lease and Grand Lease.
The Tribunal has determined, in consideration of all the circumstances and in the exercise of the Tribunal's discretion, that even though the unfixed shelving unit had been removed by the time of the Tribunal's site view, it will order the tenant to refrain from putting it back and refrain from obstructing ingress and egress through that area. The Tribunal will also order the second and third respondent to ensure that the tenant (and its employees, contractors and agents) complies with the order.
Corridor
A genuine dispute arises in these proceedings as to the operative effect of the licence granted for the use of the Corridor under the terms of the Grand Lease. This is a dispute that commenced between the landlord and the previous tenant since from at least 2012: see pages 9-10 of the landlord's supplementary bundle of documents dated 22 February 2019.
The explanations provided by the tenant, witnesses for both parties and the photographs provided to the Tribunal by the landlord all consistently show ongoing use of the Corridor on Friday evenings. This use of the Corridor involves the placement of a rug, tables, chairs as well as the standing and sitting of patrons in the Corridor between the hours of 4.30 pm to 8.30 pm on Friday evenings: see pages 244-249 of the applicant's bundle.
Relevant to these proceedings, the tenant has a tavern restricted licence for the Grand which also covers the Deck area (liquor licence) and an extended trading permit (ETP) for the Corridor. The ETP is granted under s 60(4)(h) of the Liquor Control Act 1988 (WA) (Liquor Control Act) which allows an ETP to be granted in relation to 'an extended area'. The difference between an ETP and a tavern restricted licence in the Liquor Control Act is that s 37(5) requires exclusive occupation of the area the subject of a tavern restricted licence, whereas s 61(1)(d) provides that an ETP may be granted in relation to land which the licensee is entitled to use for that purpose.
The liquor licence and the ETP provide that when the Grand, the Deck and the Corridor are in use the maximum occupancy of the entire premises is 400 patrons. If any of the above three areas are not in use the maximum occupancy is limited to 50 patrons in the Deck and 200 in the Grand.
The starting point (or put another way, the extent to which) the tenant is permitted to use the Corridor is governed by the terms of the Grand Lease. Therefore, whilst the liquor licence and ETP provide contextual information regarding the use of the Corridor, neither the liquor licence nor the ETP can determine the extent of the licence to use the Corridor as such permission is provided under the terms of the Grand Lease.
The landlord submits that the licence to use the Corridor under the Grand Lease is limited to ingress and egress between the Deck and Grand. The landlord also submits that the Tribunal should, when interpreting the extent of the licence to use the Corridor under the Grand Lease, take into account the negotiations prior to entering into the lease where the landlord made it clear that it did not wish any tables or chairs to be placed in the Corridor.
The tenant submits that the licence to use the Corridor includes the placement of items such as a curtain, rug, tables and chairs allowing for patrons to sit and stand in the area in accordance with the requirements of the liquor licence and ETP.
Clause 4.12 of the Grand Lease provides that the tenant will observe the building rules and regulations (in Schedule 6) and that the landlord reserves the right to amend, add or vary the rules and regulations. Therefore clause 4.12 incorporates the rules and regulations contained in Schedule 6 into the terms of the Grand Lease.
Relevant to this dispute, the Deck Lease and the Grand Lease both provide in clause 1(a) of Schedule 6 that the tenant must not obstruct or use the corridors in any way except for ingress and egress.
Clause 18.23 of the Deck Lease and the Grand Lease both provide for special conditions in Schedule 4. The Tribunal notes the parties agreed that the reference in clause 18.23 of the Grand Lease to Schedule 3 is a typographical error and should be a reference to Schedule 4. Clause 18.23 of the Deck Lease and the Grand Lease, as agreed, provides as follows:
The special conditions specified in Schedule 4 are incorporated into and form part of this Lease. To the extent of any inconsistency between a special condition and another term of this Lease, the special condition will prevail.
The Deck Lease does not include a special condition in Schedule 4 regarding the use of the Corridor. The Grand Lease includes special condition 5 in Schedule 4 concerning the use of the Corridor as follows:
The Landlord grants to the Tenant non-exclusive rights to use the Corridor as shown on the plan annexed in Schedule 5 which rights are subject to and subordinate to the right of the Commonwealth Bank of Australia as lessee of the Building and its customers and employees to use and access the Corridor during banking business hours.
In Secure Parking (WA) Pty Ltd v Wilson [2008] WASCA 268; (2008) 38 WAR 350 his Honour Buss JA summarised the proper approach to construction of written contracts (in that instance a lease) at [84]-[86] as follows:
The general principles to be applied in the construction of written contracts are set out in the judgment of Gibbs J in Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99:
It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, 'even though the construction adopted is not the most obvious, or the most grammatically accurate', to use the words from earlier authority cited in Locke v. Dunlop ((1888) 39 Ch. D. 387, at p. 393), which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley's Case ((1880) 16 Ch. D. 681, at p. 686). Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co. Ltd. v. Arcos Ltd ((1932) 147 L.T. 503, at p. 514), that the court should construe commercial contracts 'fairly and broadly, without being too astute or subtle in finding defects', should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf. Upper Hunter County District Council v. Australian Chilling and Freezing Co. Ltd ((1968) 118 C.L.R. 429, at p. 437)) (109 110).
The construction of a written contract involves ascertaining what a reasonable person would have understood the parties to mean. Consideration should ordinarily be given not only to the language of the document, but also to the surrounding circumstances known to the parties, and the apparent purpose and object of the transaction. See Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165, where Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said:
This Court, in Pacific Carriers Ltd v BNP Paribas ((2004) 218 CLR 451), has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction (Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 461 - 462 [22]) [40].
Also see Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181 [11]; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22]; International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 82 ALJR 419 [8], [53]; Jumbo King Ltd v Faithful Properties Ltd [1999] 3 HKLRD 757, 773 - 774.
The preponderance of Australian authority supports the proposition that post contractual conduct is not admissible in determining what a contract means, as distinct from determining whether it was formed. See Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 [26] (Heydon JA). Also see County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 [161]; Bowesco Pty Ltd (receiver and manager appointed)v Zohar [2007] FCAFC 1; (2007) 156 FCR 129 [79].
In consideration of the Grand Lease, in particular the clauses relating to the use of the Corridor, the Tribunal finds that the landlord's position during negotiations prior to entering into the Grand Lease does not assist the Tribunal in determining the common intention of the parties.
The Tribunal finds that the relevant terms regarding the licence to use the Corridor under the Grand Lease are harmonious with one another. However, the Tribunal does find, on a plain and ordinary reading, that special condition 5 of Schedule 4 of the Grand Lease is inconsistent with that part of clause 1(a) of Schedule 6 relating to the use of corridors otherwise than for ingress and egress. Therefore, by operation of clause 18.23, the Tribunal finds that special condition 5 prevails.
The Tribunal finds that the plain and ordinary meaning of the word 'use' in special condition 5 in the context of the Grand Lease is that such use is not restricted to ingress and egress. The Tribunal has formed the view that the word 'use' and its context in the Grand Lease includes the use for the purposes of the liquor licence and ETP as the tenant has done for a number of years. The restrictions in special condition 5 are that the rights are non-exclusive (so the tenant must not obstruct the Corridor) and that the tenant's right to use is subject to and subordinate to the right of the Commonwealth Bank and its customers and employees to use the Corridor during banking business hours. The Tribunal's finds that the way in which the tenant uses the Corridor is consistent with their rights for such use under special condition 5 and by such use the tenant has not obstructed the Corridor or acted in a way that is not subordinate to the right of the Commonwealth Bank and its customers and employees to use the Corridor during banking business hours.
The Tribunal finds in relation to the Corridor that the tenant is lawfully permitted to continue to use the Corridor as it has done so in the past. Therefore, in the exercise of its discretion under s 26 of the Act, the Tribunal finds that there is no need to make any orders clarifying or restricting the use of the Corridor.
Conclusion
Therefore, the Tribunal answers the issues for determination as follows:
(a) The Tribunal finds that the Deck Lease and Grand Lease are each a 'retail shop lease' under the Act.
(b)The Tribunal finds that there are questions arising under the Deck Lease and Grand Lease.
(c)The Tribunal finds in relation to the contested areas as follows:
(i)The tenant is not lawfully permitted, either under the terms of the Deck Lease or the Grand Lease or any prior conduct of the parties, to continue to occupy or use the Deck Fire Separation Area or the Grand Fire Separation Area for a staff smoking area or storage of any goods or furniture. The tenant is only permitted to use the Deck Fire Separation Area or the Grand Fire Separation Area for the purposes of ingress and egress and access to services for maintenance purposes as expressly provided under the Deck Lease and Grand Lease.
(ii)The tenant is not lawfully permitted, either under the terms of the Deck Lease or the Grand Lease or any prior conduct of the parties, to continue to occupy or use the Deck Roof (or AC Plant Room) for storage or for washing purposes. The tenant is only permitted to use the Deck Roof (or AC Plant Room) for the purposes of access for maintenance purposes as expressly provided under the Deck Lease and Grand Lease.
(iii)The tenant is permitted to continue to use the Common Area (or Retail Passage Area) with the additional fit out of fixed shelving and cabinetry as installed by Mr Spera but is to refrain from returning the unfixed grey shelving unit to the Common Area and is to refrain from obstructing ingress and egress.
(iv)The tenant is lawfully permitted under the Grand Lease to continue to use the Corridor as it has done so in the past, that being on Friday evenings outside of banking hours and also without obstructing the use of the Corridor by people who wish to enter or exit the Commonwealth Bank tenancy during the evening.
Orders
Accordingly, in the exercise of the Tribunal's discretion, the Tribunal orders are follows:
1.Pursuant to s 26(1)(b) of the Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA), the first respondent (and its employees, contractors and agents):
(i)shall refrain from occupying, and shall within 14 days of the date of this order remove all items owned by the tenant from the Deck Fire Separation Area; Grand Fire Separation Area; and Deck Roof (or AC Plant Room); and
(ii)shall refrain from obstructing the Common Area (or Retail Passage Area) and refrain from returning the unfixed grey shelving unit to the Common Area.
2.The second and third respondent shall cause the first respondent (and its employees, contractors and agents) to comply with order 1.
3.If the tenant does not comply with these orders within the time specified, subject to any further agreement between the parties, the landlord is entitled to exercise its rights to enter the Deck Fire Separation Area, Grand Fire Separation Area, Deck Roof (or AC Plant Room) and Common Area (or Retail Passage Area) to remove items owned by the tenant that are not permitted to remain in the contested areas.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS D QUINLAN, MEMBER
21 MAY 2019
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)
CITATION: PHOENIX PROPERTIES INTERNATIONAL PTY LTD and JASHAN TECHNOLOGY PTY LTD [2019] WASAT 29 (S)
MEMBER: MS D QUINLAN, MEMBER
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 1 AUGUST 2019
FILE NO/S: CC 1929 of 2018
BETWEEN: PHOENIX PROPERTIES INTERNATIONAL PTY LTD
Applicant
AND
JASHAN TECHNOLOGY PTY LTD
First Respondent
VINOD PARIHAR
Second Respondent
SANTOSH PARIHAR
Third Respondent
Catchwords:
Retail shops - Application for costs by unrepresented party - No 'costs' incurred - No reason to depart from presumptive position - Genuine questions arising under lease - Not vexatious
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 49
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 16(1)
State Administrative Tribunal Act 2004 (WA), s 87, s 87(1), s 87(2), s 87(3)
Result:
Application dismissed
Representation:
Counsel:
| Applicant | : | N/A |
| First Respondent | : | N/A |
| Second Respondent | : | N/A |
| Third Respondent | : | N/A |
Solicitors:
| Applicant | : | Hagar Grubb & Partners Lawyers |
| First Respondent | : | N/A |
| Second Respondent | : | N/A |
| Third Respondent | : | N/A |
Case(s) referred to in decision(s):
Cachia v Hanes (1994) 179 CLR 403
Jashan Technology Pty Ltd & Ors and Phoenix Properties International Pty Ltd [2019] WASAT 30
Lai and Costa [2006] WASAT 117
Murphy and RDC Constructions Pty Ltd [2018] WASAT 131
Phoenix Properties International Pty Ltd and Jashan Technology Pty Ltd & Ors [2019] WASAT 29
Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41 (S)
Springmist Lty Ltd and Shire of AugustaMargaret River [2005] 41 SR (WA) 207; [2005] WASAT 143 (S)
WA Country Builders Pty Ltd and Hathersage Nominees Pty Ltd [2016] WASAT 70
Walsh and Shire of Peppermint Grove [2009] WASAT 46 (S)
Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
Following a two day hearing held on 25 and 26 February, the Tribunal published its reasons on 21 May 2019 in Phoenix Properties International Pty Ltd and Jashan Technology Pty Ltd & Ors [2019] WASAT 29 (Phoenix and Jashan).
The proceedings concerned an application made under s 16(1) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (the Retail Shops Act) by Phoenix Properties International Pty Ltd (the applicant or landlord) referring a question arising under two leases where the applicant is the landlord and Jashan Technology Pty Ltd is the tenant (the tenant).
For the background facts to this costs application, these reasons should be read in conjunction with the earlier substantive decision of the Tribunal in Phoenix and Jashan. In short, a dispute had arisen under the two leases between the parties as to the tenant's use of five contested areas known in those proceedings as: Deck Fire Separation Area; Grand Fire Separation Area; Deck Roof (or AC Plant Room); Common Area (or Retail Passage Area); and Corridor.
As to the issues that arose for consideration in the proceedings, the Tribunal in Phoenix and Jashan concluded at [70] as follows:
Therefore, the Tribunal answers the issues for determination as follows:
(a)The Tribunal finds that the Deck Lease and Grand Lease are each a 'retail shop lease' under the Act.
(b)The Tribunal finds that there are questions arising under the Deck Lease and Grand Lease.
(c)The Tribunal finds in relation to the contested areas as follows:
(i)The tenant is not lawfully permitted, either under the terms of the Deck Lease or the Grand Lease or any prior conduct of the parties, to continue to occupy or use the Deck Fire Separation Area or the Grand Fire Separation Area for a staff smoking area or storage of any goods or furniture. The tenant is only permitted to use the Deck Fire Separation Area or the Grand Fire Separation Area for the purposes of ingress and egress and access to services for maintenance purposes as expressly provided under the Deck Lease and Grand Lease.
(ii)The tenant is not lawfully permitted, either under the terms of the Deck Lease or the Grand Lease or any prior conduct of the parties, to continue to occupy or use the Deck Roof (or AC Plant Room) for storage or for washing purposes. The tenant is only permitted to use the Deck Roof (or AC Plant Room) for the purposes of access for maintenance purposes as expressly provided under the Deck Lease and Grand Lease.
(iii)The tenant is permitted to continue to use the Common Area (or Retail Passage Area) with the additional fit out of fixed shelving and cabinetry as installed by Mr Spera but is to refrain from returning the unfixed grey shelving unit to the Common Area and is to refrain from obstructing ingress and egress.
(iv)The tenant is lawfully permitted under the Grand Lease to continue to use the Corridor as it has done so in the past, that being on Friday evenings outside of banking hours and also without obstructing the use of the Corridor by people who wish to enter or exit the Commonwealth Bank tenancy during the evening.
On 21 May 2019 the Tribunal made the following orders:
1.Pursuant to s 26(1)(b) of the Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA), the first respondent (and its employees, contractors and agents):
(i)shall refrain from occupying, and shall within 14 days of the date of this order remove all items owned by the tenant from the Deck Fire Separation Area; Grand Fire Separation Area; and Deck Roof (or AC Plant Room);
(ii)shall refrain from obstructing the Common Area (or Retail Passage Area) and refrain from returning the unfixed grey shelving unit to the Common Area.
2.The second and third respondent shall cause the first respondent (and its employees, contractors and agents) to comply with order 1.
3.If the tenant does not comply with these orders within the time specified, subject to any further agreement between the parties, the landlord is entitled to exercise its rights to enter the Deck Fire Separation Area, Grand Fire Separation Area, Deck Roof (or AC Plant Room) and Common Area (or Retail Passage Area) to remove items owned by the tenant that are not permitted to remain in the contested areas.
Following the Tribunal's decision in Phoenix and Jashan, on 11 June 2019 the tenant made an application with supporting submissions for its costs in the proceedings under s 87(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act). On 12 June 2019 the Tribunal issued orders which directed the parties as follows:
1.The applicant is to file and serve any submissions and evidence in response to the respondent's costs application by 25 June 2019.
2.Subject to any further order the costs application is to be determined entirely on the documents pursuant to s 60(2) of the State Administrative Tribunal Act 2004 (WA).
The landlord duly provided its submissions in accordance with the Tribunal's directions. Without any direction to do so from the Tribunal, the tenant also provided 'additional evidence' on 18 June 2019 consisting of a number of email exchanges between the parties regarding rent relief, some of which the Tribunal has already seen in the proceedings determined in Phoenix and Jashan. Much of this 'additional evidence' has no relevance to the tenant's costs application.
On 10 July 2019, the Tribunal caused a query to be sent to both parties stating that the tenant's application does not detail what actual costs of the proceedings are being sought and explaining that such costs are generally understood to be legal costs, disbursements and expert costs. The tenant was advised that it would have a further opportunity until 17 July 2019 to file with the Tribunal and provide to the landlord any evidence or submissions as to this issue. On 17 July 2019 the tenant provided further evidence and submissions and on 19 July 2019 the landlord provided submissions in reply.
Legal principles
Section 87(1) of the SAT Act provides that each party bear its own costs unless the Tribunal orders otherwise. Section 87(1) of the SAT Act commences with the proviso, unless specified in the enabling Act. However, the Retail Shops Act has no specific provision in relation to costs.
Section 87(2) of the SAT Act provides that the Tribunal may exercise its discretion and make an order for the payment by a party of all or any of the costs of another party. In the recent decision of the Court of Appeal in Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32, Murphy JA (Martin CJ and Corboy J agreeing) (Questdale), found at [51]:
Section 87(2) is to be construed in the context that the legal rationale for an order for costs is not to punish the person against whom the order is made, but to compensate or reimburse the person in whose favour it is made. That rationale is evident in s 87(3) of the SAT Act. Accordingly, even in a statutory context where the presumptive position is that no costs will be ordered, generally speaking, the question is whether, in the particular circumstances of the case, it is fair and reasonable that a party should be reimbursed for the costs it incurred. The onus is on the party seeking an order in its favour.
(footnotes omitted)
The Court of Appeal in Questdale also found at [55]:
Nevertheless, the mere fact that a landowner ultimately fails on some contention or contentions advanced at trial would not, in itself, signify that it has acted inconsistently with the objectives in s 9. That is particularly so in the context that under s 46, s 47 and s 48 of the SAT Act, plainly unmeritorious claims, or claims made or pursued in circumstances which, broadly speaking, may be characterised as involving misconduct, may be screened out before final hearing. The Tribunal in such circumstances may act on its own volition or on the application of a party.
The general principles that apply to the award of costs in proceedings under s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) and s 87(2) of the SAT Act were recently set out by the Tribunal in Murphy and RDC Constructions Pty Ltd [2018] WASAT 131 (Murphy) where the Tribunal quoted Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41 (S), WA Country Builders Pty Ltd and Hathersage Nominees Pty Ltd [2016] WASAT 70 and the Court of Appeal in Questdale.
In the present application for costs before the Tribunal, where there is no specific costs provision under the Retail Shops Act and the application is solely pursuant to s 87(2) of the SAT Act, the Tribunal is of the view that the following principles cited in Murphy at [14]-[16] are relevant considerations:
14The relevant principles are conveniently set out by Senior Sessional Member Clive Raymond in Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41 (S) at [8]-[9]:
There are a range of factors that might contribute to the Tribunal making a costs order, including the following non-exhaustive list:
a)where a party conducts itself unreasonably, particularly where the conduct leads to unnecessary costs to the other party;
b)where a party has conducted itself inappropriately, particularly where the conduct leads to unnecessary costs to the other party;
c)where credibility of evidence is at the heart of a matter;
d)where the application undermines the integrity of proceedings under the relevant Act;
e)where the case is weak, being incredible or implausible or obviously unmeritorious;
f)where a party has to embark in proceedings to vindicate its clear contractual entitlement;
g)the circumstances of the case having regard to the above, or other factors, are such that the justice of the case supports moving away from the initial position that each party should bear their own costs; and
…
15In WA Country Builders Pty Ltd and Hathersage Nominees Pty Ltd [2016] WASAT 70 (Hathersage), the Tribunal set out the relevant principles which apply in relation to the claims for costs, bearing in mind the decision of the Court of Appeal of the Supreme Court of Western Australia in Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32[.]
16Relevantly, to summarise:
(a)There is no presumption that a successful party is entitled to costs.
(b)The onus is on the party seeking an order in its favour to establish that a favourable order should be made.
(c)The nature of the dispute is a relevant consideration in any application for costs.
(d)Every party to proceedings before the Tribunal is taken to be cognisant of the objectives of the Tribunal as expressly provided for in s 9 of the SAT Act.
(e)It will be relevant to the Tribunal to consider whether and to what extent the party who bears the onus on costs can establish that the other party's conduct in connection with the proceedings has impaired the attainment of the Tribunal's statutory objectives to have the proceedings determined fairly and in accordance with the substantial merits of the matter with as little formality and technicality as possible and in a way which minimises the costs to the parties.
(f)The mere fact that a party fails on some contentions advanced does not of itself signify that that party has acted inconsistently with the objectives in s 9 of the SAT Act.
(g)Unmeritorious claims or claims made or pursued involving misconduct or which are vexatious or grossly exaggerated or presented in a way that is unduly burdensome may justify an exercise of the discretion conferred by s 87(2) of the SAT Act.
(h)The weight to be given to the mandatory consideration of a complaint offer is a matter for the Tribunal in each individual case.
(i)Even in a jurisdiction where the general rule is that costs follow the event, it does not follow that the grant of leave to withdraw attracts an order that the withdrawing party pays the costs of the other party. The withdrawing party does not carry any onus to establish that it ought not pay the other party's costs.
The tenant's submissions
The tenant seeks an order for its 'costs' in the total amount of $56,691.88 which are detailed as follows:
(a)$30,000 for financial loss, damage, pain, suffering, depression and anxiety due to the distraction created by 'legal actions' during the busiest months of trade;
(b)$12,000 for irreparable damage to their commercial relationship due to the landlord vexatiously adding the Corridor question to the proceedings;
(c)$4,794.60 for director and group director's fees for attending the Tribunal for four directions hearings, mediation, and two days of final hearing;
(d)$7,397.28 for 18 days of work gathering evidence, speaking to witnesses, preparing a statement of issues, facts and contentions; and
(e)$2,500 for miscellaneous, transport, printing and preparing.
For the reasons for the determination of the tenant's application for costs later in these reasons, the Tribunal does not consider it necessary to recount or summarise the submissions made by the tenant in support of its application. However, it is worth noting that much of the tenant's submissions in support of its application are either irrelevant to support its costs application or seek to re-agitate the issues already determined and, in many instances, misconstrue (or perhaps, misunderstand) the findings of the Tribunal in Phoenix and Jashan as well as the related proceedings where the tenant was wholly unsuccessful in Jashan Technology Pty Ltd & Ors and Phoenix Properties International Pty Ltd [2019] WASAT 30.
The landlord's submissions
The landlord opposes the tenant's application for costs and its submissions can be summarised as follows:
(a)The landlord brought the proceedings in relation to five disputed areas and was successful in relation to four of the five areas.
(b)The landlord was the successful party and the tenant cannot be described as successful in the proceedings.
(c)In any event the tenant was unrepresented in the proceedings and there are no costs of the proceedings that it is entitled to recover: see Lai and Costa [2006] WASAT 117 at [182] (Costa) citing the High Court in Cachia v Hanes (1994) 179 CLR 403 (Cachia).
(d)An amount to compensate a party for any expenses, loss, inconvenience, or embarrassment resulting from the proceeding under s 87(3) of the SAT does not extend to the type of compensation as to loss and damages being sought by the tenant: see Walsh and Shire of Peppermint Grove [2009] WASAT 46 (S) at [61]-[68] (Walsh) adopting Springmist Pty Ltd and Shire of AugustaMargaret River [2005] 41 SR (WA) 207; [2005] WASAT 143 (S) at [63]-[65] (Springmist).
(e)The tenant has not put forward any submissions having regard to s 87 of the SAT Act and the relevant legal principles which justify a departure from the usual position in the Tribunal that each party bear its own costs.
Consideration
In Questdale the Court of Appeal found that, generally speaking, the question is whether, in the particular circumstances of the case, it is fair and reasonable that a party should be reimbursed for the costs it incurred. The Court of Appeal also found that the onus is on the party seeking an order in its favour.
In consideration of the legal framework detailed earlier in these reasons, the particular facts and circumstances of these proceedings as well as the submissions made by the parties, in the exercise of the Tribunal's discretion to order costs the Tribunal has determined that the tenant should not be reimbursed for the so called 'costs' it has claimed to have incurred.
In reaching its decision the Tribunal finds as follows:
(a)In any event, the Tribunal follows the reasoning of the High Court in Cachia and adopts the previous Tribunal decision in Costa that, in the facts and circumstances of this case and the parameters of the costs sought, there are no costs of the proceeding that the tenant is entitled to recover.
(b)Further, the Tribunal adopts the reasoning in the previous Tribunal decisions of Walsh as well as Springmist to find that the loss and damages sought by the applicant is not within the breadth of s 87(3) of the SAT Act and, even if they were allowable, the Tribunal would not grant such costs to the tenant in the circumstances of these proceedings.
(c)If the Tribunal could grant the tenant its costs, it also finds it would not do so for the following reasons:
(a)The tenant cannot be described as successful in the proceedings to a sufficient extent that the Tribunal will depart from the presumptive position that each party bear its own costs;
(b)The proceedings brought by the landlord were genuine questions arising under the lease; and
(c)The Corridor question could not in any way be described as vexatiously brought by the landlord.
Orders
Accordingly, the Tribunal will order as follows:
1.The application is dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS D QUINLAN, MEMBER
1 AUGUST 2019
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