Prasad & Anor v Fairfield City Council (RLD)

[2002] NSWADTAP 2

Appeal Panel

CITATION:	Prasad & anor -v- Fairfield City Council (RLD) [2002] NSWADTAP 2 revised - 26/02/2002
PARTIES:	APPELLANTS Daniel Prasad Stephen Walker RESPONDENT Fairfield City Council
FILE NUMBER:	019021
HEARING DATES:	02/08/2001
SUBMISSIONS CLOSED:	08/02/2001
DATE OF DECISION:	01/07/2002
DECISION UNDER APPEAL:	Prasad & anor -v- Fairfield City Council [2001] NSWADT
BEFORE:	O'Connor K - DCJ (President); Hole M - Judicial Member; Weule B - Member
CATCHWORDS:	costs - costs - adequacy of reasons - costs - relevant considerations
MATTER FOR DECISION:	Principal matter
FILE NUMBER UNDER APPEAL:	005020
DATE OF DECISION UNDER APPEAL:	04/19/2001
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994
CASES CITED:	Prasad & anor v Fairfield City Council [2001] NSWADT 28 Prasad & Anor v Fairfield City Council [2000] NSWADT 164 Mayhew v A [1999] NSWADTAP 1 Woodside & anor v Director General, Department of Community Services [2000] NSWADTAP 8 Fowdh v Fowdh and Anor, Court of Appeal (NSW), unreported, 4 November 1993 Graham v Director General, Department of Community Services [2001] NSWADTAP 4
REPRESENTATION:	APPELLANTS A Macpherson, solicitor RESPONDENT M Jenkins, barrister
ORDERS:	1. That the decision under appeal be set aside; 2. That the application for costs be remitted to the Retail Leases Division for determination having regard to the record of proceedings and without the hearing of further evidence or submissions; 3. That the Registrar advise the parties as to action taken in relation to Order 2.

1 On 21 February 2001, the Retail Leases Division of the Administrative Decisions Tribunal (the Tribunal) delivered its decision in relation to a retail leases claim made under the Retail Leases Act1994 by Messrs Prasad and Walker, lessees of a retail shop, the Abbotsbury Gourmet Pizza, in the shopping centre known as the Abbotsbury Community Shopping Centre. The lessor is the Fairfield City Council. See Prasad & anor v Fairfield City Council [2001] NSWADT 28 (21 February 2001).

2 The application to the Tribunal for relief had been prompted by the council serving notices to quit, terminating the long-term tenancy and substituting a week-to-week tenancy. The shopping centre was a small one that had a difficult history: see para 2 of the Tribunal’s principal decision cited above.

3 This appeal relates only to the further decision issued by the Tribunal on 19 April 2001 on the question of costs. The Tribunal decided that there be no order as to the costs.

4 Before turning to the appeal (see para 23) it is desirable to give a history of the proceedings.

Original Application and Outcome
5 The original application (as amended 15 May 2000) made a number of claims. The lessees first claim was that the council had permitted other tenancies to exceed their permitted uses and sell products that competed with the products sold by them, to their detriment. The claim then made allegations in effect that the council had failed to observe various obligations as a landlord, such as a duty of fair dealing (it was alleged that the main tenant, a supermarket, had been leased to a relation of the mayor), a duty to maintain adequately the centre, unlawfully terminating their lease and converting to week-to-week, making arrangements to lease the premises to someone else without notifying them, failing to account fully for rent monies received in respect of outgoings.

6 Original Claim: The application sought declarations that the two notices to quit were invalid; in the alternative relief against forfeiture; and a declaration that the council not enter into any lease with tenants in the Centre if such lease permits those lessees to conduct business activities which are in conflict with those conducted by the applicants and fall within the scope of the applicants’ exclusivity clause.

7 The Tribunal delivered its principal decision disposing of the claim on 19 February 2001.

8 Outcome: The lessees succeeded in their principal claims, and had also succeeded previously on key preliminary points such as the issue as to whether the lessor should be released from the undertaking and on jurisdiction. The final decision did not address the issue of costs.

9 The orders made were as follows:

1. Occupancy by Applicants of the Respondent's premises known as shop 4 the Abbotsbury Community Shopping Centre is governed by Lease for a term to end in April 2002, on the conditions and covenants contained in the Lease entered into between the Respondent and the Youssef brothers in 1994, as varied by Deed executed between the Applicants and the Respondent in November 1997. ;
2. Application by Applicant for relief against forfeiture granted.;
3. Pursuant to Section 72(1)(c)(iv) Respondent ordered to submit Lease document to the Applicants no later than 23 March 2001, all parties to execute it no later than 27th April 2001.;
4. Respondent to: (i) Prevent owner of shop 1 in the Centre from selling hot barbecued chickens or prepared coffee, by 23 March 2001, and if that is not done by that date, then the Applicants are relieved from the obligation to pay rent under their Lease from 23 March 2001 until such time as the Respondent effects such compliance by the occupier of shop 1.; (ii) Take all other action necessary to ensure that occupant of shop 1 trades within the authorised use in the Lease as presently registered on title.;
5. Respondent not to enter into any Lease for any part of the Abbotsbury Community Shopping Centre which would allow such premises to be used for the preparation or sale of take-away foods of any kind, or for a restaurant of any kind selling foods similar to those sold by the Applicants pursuant to the authorised use in the Applicants Lease.
Preliminary Stages
10 The case went through a number of preliminary stages before coming on for hearing.

11 The Registry file records that there were -

· directions hearings before Judicial Member Donald (27 April 2000), Deputy President Hennessy (9 May 2000), the President (22 May 2000),
· an application to vacate the hearing date of 29 May 2000 (heard by Judicial Member Davidson that day and granted, see ruling),
· an urgent interlocutory application by the lessor giving rise to a ruling that the lessor not be released from an undertaking given pending resolution of the case (9 June 2000, Judicial Member Davidson),
· a return of summons hearings before Judicial Member Davidson (19 May 2000) and the Registrar (29 June 2000),
· culminating in a hearing on jurisdiction before Judicial Member Davidson on 5 July (decision delivered 7 July 2000: Prasad & Anor v Fairfield City Council [2000] NSWADT 164),
followed by the main hearing -
· which commenced on 7 July 2000 before Judicial Member Davidson with the Tribunal then needing to be reconstituted and it continued before Judicial Member Fox over four days, 28, 29, 30 August and 1 September 2000.
12 At the conclusion of evidence on 1 September 2000, Judicial Member Fox gave the parties a general indication of his provisional views, pending the consideration of written submissions. As to costs, he said (transcript, 1/9/00:99):
‘On the question of costs, I doubt there is anything in what I have heard to indicate the extraordinary, the special circumstances which empower me to make an order for costs. The way the Act reads is I must be satisfied with respect to circumstances, and I’m open to persuasion in that regard.’
13 Submissions as to liability were made following the close of hearing, and were filed as follows: for respondent, 41 pages, 12 September 2000; for applicants/lessees, 41 pages, 16 October 2000; respondent in reply, 35 pages, 3 November 2000; for applicants styled ‘assessment of costs’, 28 November, 7 pages, 28 November 2000. (As counsel for the lessor noted, the ‘assessment of costs’ submissions were inaccurately described and were in fact submissions on damages.)

Submissions on Costs made prior to decision of 19 February 2001
14 The applicants pressed throughout the proceedings for cost orders. There were costs applications at various stages, for example, Judicial Member Davidson expressly reserved costs in his rulings of 29 May 2000 and 9 June 2000. The applicant’s ‘statement of issues’ filed on 4 October 2000 includes an application for costs.

15 The submissions filed between September and November 2000 addressed the question of costs at these points:

Respondent’s submissions, 13 September 2000: no reference.

Applicant’s submissions, 16 October 2000: item Q, page 36-37. The submission focussed on ‘special circumstances’ that might arise from findings of fact. The submissions are short, and it is convenient to set them out below:

‘If the restraint condition is found to exist or estoppel or misrepresentation (negligent or fraudulent) or false and misleading conduct or conspiracy is found the applicant should get costs.
While it is clear that most of the reported decisions of the Tribunal are to the effect that ‘each party pay their own costs’ the applicants have demonstrated in the evidence as described above, activity of the respondent which should give rise to costs orders against it regardless of any finding in the applicants’ favour.
In relation to the late payment of rent it is submitted that because the doctrine of waiver applies, because the applicants were able to and in fact did correctly correct [sic] the position, because the respondent contributed to the applicants arrears of rent, because the respondent set a trap in respect to its approach to rent over the period August 99 to January 2000, because the Tribunal earlier indicated there was no issue on rent and because the applicant notwithstanding put a misleading position to the Tribunal in an attempt to discredit the applicants, because the respondent failed to call Hao Dang and because the respondent failed to discover the correspondence it used in such discrediting, the issues of delay in rental payments should not be held against them in any award of costs.’
16 The respondent made submissions in reply, 3 November 2000, pages 33-34. We will not set out the reply submissions in full. The submissions open as follows:
‘The applicants argue in favour of a costs order against the respondent. Where have the costs been generated in this case? The applicants are the moving party and have the running of the case. They identify the issues. In the applicants’ submissions an ever-increasing variety of issues, in the form of legal liabilities are mounted against the respondent.’
17 The submissions then amplify on this point, and seek to refute various points made by the applicants including in the above-quoted submissions. The final paragraph contains a counter-application for costs:
‘The applicants’ claim should fail. However win, lose or draw the applicants should pay the costs.’
Enquiries after decision of 19 February 2001
18 The lessees, through their solicitor, made enquiries of the Registry on 16 March 2001, and a letter followed dated 16 March 2001 as follows:
‘We apply to the Tribunal for the following Orders:
1. That the Respondent pay the Applicant’s costs in the sum of $50,000.
2. In the alternative, that the Respondent pay the Applicants such sum for costs as is awarded by the Tribunal.
3. In the alternative, that the Respondent pay the Applicant’s costs as assessed.

The grounds of the application are:
1. The Tribunal has made a decision in the Applicant’s favour in this matter on 21 February 2001.
2. The Applicants have in these proceedings, incurred substantial costs and expense.
3. The Tribunal has the power to award costs to the Applicant.
4. It is fair and reasonable that the amount claimed be awarded to the Applicants.’

Costs Rule in Retail Leases Claims
19 Section 77A of the Retail Leases Act 1974 provides that the Tribunal may award costs under s 88 in respect of claims such as the present. Section 88 of the Administrative Decisions Tribunal Act 1997 (the Tribunal 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.’
The Decision on Costs
20 By letter dated 12 April 2001 Judicial Member Fox wrote to the Registry forwarding reasons for publication in relation to costs in the form of a document headed ‘Addendum’ (to the decision of 19 February 2001). The covering letter included the following sentence: ‘I refer to [the solicitor for the lessees] Mr McPherson’s (perhaps less than formal) request for a costs order, and now enclose herewith, by way of Addendum, some further observations.’

The Costs Decision
21 The Tribunal was not persuaded as to the desirability of departing from the usual rule that unless there are special circumstances each party bears their own costs.

22 As the costs decision is a short one, we set out its text in full below:

REASONS FOR DECISION
1. By letter dated 27 March 2001 the solicitor for the Applicants herein sought an order that the Respondent pay the Applicant’s costs.
2. On re-reading my Reasons published in this matter I am satisfied that I turned my mind to the question of an order for costs at the time, and regret that I did not advert thereto in my written Reasons.
3. I was not satisfied that there were special circumstances, and consequently no costs order of any kind was indicated.
4. The Tribunal is given the power to award costs by Section 77A of the Retail Leases Act 1994, but that power is limited by Section 88 of the Administrative Decisions Tribunal Act 1997 (the Tribunal Act). The latter Act, as far as relevant states “…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”.
5. These words place the matter beyond the customary legal rule of “costs follow the award”.
6. The full extent of this stricture is still to be considered, but, in the present instance, where the ultimately successful Applicant pleaded, gave evidence on, and argued several major matters which, in the end, I found not to be proven, I am satisfied that there are no such special circumstances. It might conceivably have been otherwise had the Applicants had a finding in their favour in respect of every matter raised and pleaded and in addition had, prior to the hearing, made an offer of settlement in terms no less generous than the eventual orders made by the Tribunal after the hearing.
7. That certainly was not the case in this matter.
8. In order to remove any doubt from the matter, I observe that, even had I been free from legislative restriction and been obliged to consider the matter on a “costs follow the result” basis, I am not at all satisfied that I would not have substantially reduced the costs awarded in favour of the ultimately successful Applicants.
Appeal
23 The lessees appeal against the latter decision. The appeal is made pursuant to s 113 of the Tribunal Act. There is a right of appeal in relation to questions of law. An appeal may by leave be extended to the merits. The lessees did not apply for leave to extend to the merits.

Appeal Jurisdiction
24 Though the distinction is often a difficult one to apply, a ‘question of law’ is to be distinguished from a ‘question of fact’. The appeal right is clearly restricted to questions of law.

25 Accordingly, the appellant must show an error in the reasons as to the Tribunal’s understanding of the applicable law, or an error in procedure or the reasoning itself that amounts to an error of law. It is not enough to succeed on appeal that the appellant disagrees (as aggrieved parties often do) over the findings of fact made by the Tribunal or with its exercise of a discretion, provided that the outer limits set by the law in relation to the exercise of the fact-finding function and the exercise of a discretion are not breached. See generally Mayhew v A [1999] NSWADTAP 1, Woodside & anor v Director General, Department of Community Services [2000] NSWADTAP 8, for a discussion of these issues.

Grounds of Appeal
26 The grounds of appeal are that:

1. The Tribunal requested no submissions in respect of costs and no submissions were made by the applicant following the Tribunal’s decision on the substantive issues.
2. The Tribunal did not take into account the proceedings before the Tribunal which were not heard by the Tribunal member who heard the substantive issues. There were three prior occasions on which the respondents sought to frustrate the applicant’s position, namely on the issue of jurisdiction, on the issue of subpoenas and discovery and on the issue of release of an undertaking or order in respect of the premises, all of which were decided in the applicant’s favour.
3. The criteria used by the Tribunal in respect of paragraph 6 for ‘special circumstances’ are inappropriate in this matter in particular and in general.
4. The Tribunal did not ask what settlement negotiations were made and therefore was not in a position to say as was held in paragraph 7 ‘that certainly was not the case in this matter.’
5. The Tribunal has indicated that the application of ‘costs followed the result’ is only applicable in circumstances where the applicant succeeds on all matters pleaded.
6. The finding in paragraph 8 is an irrelevant issue to which the Tribunal turned its mind.
7. While the Tribunal did not find in favour of the conspiracy allegation, it is clear that there was evidence to the effect that there was at least collusion between the intending lessee of the ‘pizza shop’ which was to adjoin the applicant’s pizza shop and collusion between the respondent and the proprietor of shop 1 and indeed a relationship established between the two which went beyond the bounds of a normal commercial relationship. Such circumstances could constitute ‘special circumstances.’
8. While it is apparent that the concept of the Tribunal both as to its powers and the methods of its hearing are greater than a Court and different to a Court in respect of evidence, the respondent attempted to and did apply strict legal procedures and the hearing (sic) to the detriment of the applicant and to the cost of the applicant even to the extent of attempting to prevent the Tribunal from open asking (sic) its own questions of the applicant’s witnesses and to enforce rules of evidence on the Tribunal which the Tribunal could waive under its legislation. These circumstances constitute ‘special circumstances.’’
Respondent’s Reply
27 As to the natural justice objection, counsel for the respondent referred to the appellant’s submissions that were made in October 2000. The submissions, it was contended, were before the presiding member, the applicants had been given an opportunity to put their submissions and the respondent had replied to those submissions. Counsel for the respondent emphasised that the power of court or tribunal in relation to the question of costs involved the exercise of a discretion. He noted that appellate courts do not lightly intervene to find an error of law in the exercise of the costs discretion. It is, he submitted, well recognised that it is a broad discretion.

28 He referred to the dicta of Mahoney JA in Fowdh v Fowdh and Anor, Court of Appeal (NSW), unreported, 4 November 1993:

‘Questions as to costs are matters upon which persons of sound judgment may differ. In such cases, a decision can be made, reversed and reversed again, not because of perceived error in the decision but because the discretionary judgment of the subsequent Appeal Court produces a different result. In such a case, no better reason can be given for interference than that the appeal judge prefers his own judgment or assessment to that of another.’
29 The respondent’s submission is that the case now being put merely reagitates that put originally to the Tribunal. The respondent submits that no relevant error can be discerned in the reasons given.

Assessment
30 It will be seen that the grounds of appeal may be divided into issues of procedural fairness (ground 1), failure to take into account relevant considerations (ground 2), taking into account of an erroneous or irrelevant consideration (grounds 4 and 6), error of law in interpretation of meaning of ‘special circumstances’ (grounds 3, 7 and 8) and error of law in interpretation of the costs rule in litigation (ground 5).

Procedural Fairness (Ground 1)
31 The lessees did have an opportunity to make written submissions on costs prior to delivery of the reasons for decision on 21 February 2001. After the close of the hearing a written submissions timetable was set. It was clear, we consider, that the parties understood that all issues, including costs, were to be disposed of in that decision. The comments of Judicial Member Fox on 1 September 2000 show that he had the question of costs in mind, and had formed a provisional view. As it happened he overlooked the issue in the reasons for decision. He then rectified that omission.

32 The parties were on notice that a decision on the issue was likely to be made.

33 In traditional court practice it is the case that the costs issue tends to be dealt with as a separate matter once the principal decision is delivered. In the Tribunal it is common for it to be addressed as part of the principal case with no further opportunity being given. In this case it was clear that costs was a very live issue for the lessees and they wanted it addressed. They had the opportunity to make submissions as part of their closing submissions on liability, and did so. The Council replied to those submissions.

34 In the circumstances we do not consider that there was an absence of procedural fairness.

Interpretation of Meaning of ‘Special Circumstances’
35 Before turning to the remaining grounds, we make the following general observations on the application of s 88 to retail leases claims.

36 As we see it, the principle for which s 88 stands is that each party bear their own costs if their conduct in the litigation has been reasonable. If that standard of reasonable conduct is adhered to, then no costs order should be made against the unsuccessful party. There is another possibility. Both parties may have failed to conduct their cases reasonably, each deserves an order against the other but the degree of dereliction is equal leading to no order being made.

37 As we read the Tribunal’s decision it was applying the same approach. To that extent we do not consider there was any error of principle.

38 Whether all the matters alluded to in the reasons could be said to be ‘special circumstances’ going to the question of whether the conduct of the parties was reasonable, is a separate question. The scope of what can constitute a ‘special circumstance’ is broad.

39 The Tribunal has been criticised by the lessees for alluding to the traditional costs rule. While it is not the starting point in this legislative scheme, matters addressed by the traditional costs rule may still have relevance.

40 One matter clearly is not relevant - that costs orders should be made, as a matter of course, in favour of the successful party in relation to the ultimate matter for determination. But there are other occasions in the course of the litigation where it may be appropriate to compensate the successful party. It may not have been consistent with the reasonable conduct of litigation for various preliminary applications to have been made. They may have had the effect of elongating and making more costly the proceedings. There may have been failures to comply with directions giving rise to unnecessary delay and additional professional attendances on the Tribunal.

41 The Tribunal should not forego the costs sanction as a way of dealing with conduct of that kind. As the Tribunal noted in the decision, failure to accept an offer that was equal to or better than the ultimate amount may be a ground for a costs order against the successful party.

42 The matters addressed in s 109 of the Victorian Civil and Administrative Tribunal Act 1998 provide a good check-list of factors that may be relevant to making a ‘special circumstances’ costs award.

43 Ground 3 is that ‘The criteria used by the Tribunal in respect of paragraph 6 for ‘special circumstances’ are inappropriate in this matter in particular and in general.’

44 In para [6] of its reasons the Tribunal referred to the successful party not having been successful on several major matters that it pleaded and about which it gave evidence. The Tribunal then went on to say that it might ‘conceivably have been otherwise had the Applicants had a finding in their favour in respect of every matter raised and pleaded and in addition had, prior to the hearing, made an offer of settlement in terms no less generous than the eventual orders made by the Tribunal after the hearing.’

45 We see the Tribunal as saying no more than that the degree of success may be so great that it raises questions as to whether the unsuccessful party’s defence could be said to be so lacking in merit as to justify a costs order against that party. These can, in our view, be special circumstances. No error arises.

46 Ground 7 seeks to raise as a special circumstance the alleged collusion between the lessor and the other lessee in relation to dealing in the exclusive products. In commercial litigation oppressive conduct on the part of the unsuccessful party may well constitute a special circumstance. Collusion was in effect raised in the original application. It received considerable attention during the hearing. It was a matter upon which there was no ruling made in favour of the lessees. We are satisfied that this issue was well known to the Tribunal. It did not need to be separately addressed in disposing of the costs application.

47 We now turn to Ground 8. In light of the submissions made on behalf of the lessees, our understanding of this ground is as follows. The appellants claim that the Tribunal erred in acceding to submissions from counsel for the lessor which led the Tribunal to follow adversarial techniques rather than inquisitorial techniques. That resulted in the lessees incurring costs because of the elongation of the case and caused detriment to the lessee because the claim was not heard in an orderly and concise way. We are supplied with a substantial amount of academic and other commentary on the hearing methods to be adopted by tribunals. We do not see an issue of law in relation to the costs discretion arising by virtue of the mode of procedure that the Tribunal chooses to adopt in a particular case.

48 As to Ground 5, as previously indicated, we agree with the appellant that the ordinary costs rule is not the applicable rule, but we do not regard the Tribunal as having been in error on this point.

Relevant and Irrelevant Considerations (Grounds 2, 4 and 6)
49 Failure to Take into Account Relevant Consideration (Ground 2): The lessees’ objection here was that the Tribunal made no reference to the outcome of the preliminary applications that preceded the main hearing, for example those relating to jurisdiction, to the undertaking and to the subpoenas and discovery.

50 The Appeal Panel has recognised that a simple refusal of a costs application accompanied by no or few reasons, or read in conjunction with the transcript of proceedings and the oral submissions, may be a sufficient exercise of the discretion as to costs: see, for example, Graham v Director General, Department of Community Services [2001] NSWADTAP 4. Much will depend on the circumstances and the nature and complexity of the case in forming a view on the issue of the adequacy of the primary Tribunal’s treatment of the issue of costs.

51 We share the lessees’ concern about the failure of the decision to expressly address the outcomes of the preliminary hearings. This was not a case in our view where the costs issues could properly be disposed of by such brief reasons. There had been changes in the constitution of the hearing, with the result that Judicial Member Fox heard the main case but other members had heard many of the preliminary matters. Costs applications had been expressly reserved on at least one occasion. The Judicial Member gave a bundled-up response to what had been a drawn out and complicated piece of litigation. There had been issues pressed and time taken up by the lessees on issues on which they did not succeed (principally the collusion allegations). On the other hand the lessees were significantly successful in relation to their original claim.

52 Similarly the hotly-contested preliminary motions had been decided substantially in favour of the lessees. Plainly a council has greater capacity than a small tenant to draw out litigation through interlocutory motions and extended submissions and defences, which capacity might be deployed to drive the claimant out of the arena. It was clearly a case in which significant costs were being incurred by a small lessee in order to assert what they saw as their rights. (The lessees’ solicitors advised the Appeal Panel by fax 25 July 2001 that the lessees had incurred legal fees relating to its disputes with the lessor of $24,443.25 (1999-2000 financial year), $34,615.69 (financial year 2000-2001) and the appeal costs estimate was $4,510. Whether all these costs would be recoverable under a costs award is another question, but on any view the legal costs incurred by the lessees in recent years - we are told all pertaining to this dispute - involve a very substantial amount, over $65,000.)

53 The Tribunal should have given express consideration to these issues. We are satisfied that the matters raised by Ground 2 were relevant considerations and that they were not considered by the Tribunal in its reasons for decision. In these regard we are satisfied that these considerations could constitute special circumstances for the purpose of s 88, a matter we have discussed already.

54 Taking into Account an Erroneous Consideration (Ground 4): We agree with the central proposition of Ground 4 that to take into account a factually wrong matter is to err. The lessees object to the Tribunal’s assertion in its reasons for decision that it was ‘certainly not the case in this matter’ that the lessees had prior to hearing ‘made an offer of settlement in terms no less generous than the eventual orders made by the Tribunal.’ There is nothing in the record of proceedings to found the Tribunal’s assertion. As there is no evidence for the assertion this objection is made out, and the Tribunal has taken into account an irrelevant consideration.

55 Taking into Account an Irrelevant Consideration (Ground 6): Here the lessees refer to the comments in para [8] of the reasons as to what the Tribunal would have done had the usual costs rule been in place. We agree that the comments were strictly unnecessary to the task that the Tribunal was called on to perform. We read them as being in the nature of ‘a fortiori’ comments. The Tribunal was seeking to emphasise the strength of its view by saying that even if the rule more generous to successful parties - the traditional rule - had applied, a favourable costs order still would not have issued. No error arises.

Summary of Conclusions
56 Grounds 2 and 4 succeed. There was a failure on the part of the Tribunal to assess with adequate reasons the question of whether the parties had reasonably conducted themselves in the litigation, in particular the respondent. That led in turn to a failure to consider matters which the appellant wished to canvass, in particular whether the lessor met the ‘reasonable conduct’ standard in relation to the preliminary hearings, what the position was in relation to pre-hearing settlement offers, the alleged collusion allegation and the lessor’s overall conduct of its defence.

57 The errors are sufficient to warrant intervention, and to direct that the matter be remitted. Because of the amount of time and money already expended, any further costs to the parties should be avoided. Accordingly, we exercise the power conferred on the Appeal Panel by the Tribunal Act, s 114(2)(b), and propose to remit the costs application for fresh determination without the hearing of further evidence or submissions.

Order
1. That the decision under appeal be set aside.
2. That the application for costs be remitted to the Retail Leases Division for determination having regard to the record of proceedings and without the hearing of further evidence or submissions.
3. That the Registrar advise the parties as to action taken in relation to Order 2.

Revised 26/02/2002 - paragraph 41.