Rowinadon Pty Ltd v Ward & anor t/as Robbo's Spare Parts (RLD)

[2009] NSWADTAP 14

Appeal Panel - Internal

CITATION:	Rowinadon Pty Ltd v Ward & anor t/as Robbo's Spare Parts (RLD) [2009] NSWADTAP 14
PARTIES:	APPELLANT Rowinadon Pty Ltd RESPONDENT Geoffrey Roy Ward and Kathleen Teresa Ward t/as Robbo's Spare Parts
FILE NUMBER:	089074
HEARING DATES:	12 February 2009
SUBMISSIONS CLOSED:	12 February 2009
DATE OF DECISION:	13 March 2009
BEFORE:	Chesterman M - Deputy President; Rickards K - Judicial Member; Tyler T - Non-Judicial Member
FILE NUMBER UNDER APPEAL:	085156
DATE OF DECISION UNDER APPEAL:	11/19/2008
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Administrative Decisions Tribunal Amendment Act 2008
REPRESENTATION:	APPELLANT S Doherty, solicitor RESPONDENT F Levy, solicitor

Introduction

1 The principal issues arising in this case were as follows: (a) whether the terms of a Tribunal decision setting aside a valuation of current market rent due under a retail shop lease had the effect of setting aside the appointment of the valuer as well; and (b) whether such an appointment, having been made by the Australian Property Institute New South Wales Division pursuant to a clause in the lease, had been validly revoked by a subsequent decision of the Institute.

2 In the decision under appeal (Rowinadon Pty Ltd v G R Ward & K T Ward t/as Robbo’s Spare Parts, Unreported, Administrative Decisions Tribunal, 19 September 2008), the Tribunal answered the former question in the negative and did not directly address the latter question. It accordingly dismissed an application by the lessor of the relevant premises (‘the Premises’) for a specialist retail valuer to be appointed by the Tribunal under section 19 of the Retail Leases Act 1994 (‘the RL Act’).

3 The Appellant, Rowinadon Pty Ltd, is the lessor of the Premises. The Respondents, Geoffrey Ward and Kathleen Ward, are the lessees. The Premises are situated at Unit 446-459 Canterbury Road, Campsie. It is common ground that the lease between the parties (‘the Lease’) has at all times been governed by the RL Act.

Factual background

4 The Lease, although executed on 1 March 2000, commenced on 15 October 1999. It was for a term of ten years, with two five-year options of renewal. It provided for periodical review of the rent payable. One of the provisions on this matter (clause H of annexure 1 to the Lease) stated:-

H. The Lessor and the Lessee agree that the annual rental payable for the fifth year of the original term of the Lease shall be as agreed between the Lessor and the Lessee as being the market value of such rent and in the event that the Lessor and the Lessee can not so agree within six (6) weeks from the date of commencement of the fifth year of the term of the Lease then the rental shall be determined by a valuer appointed (on the application of either party) by the President for the time being of the Australian Property Institute New South Wales Division or its successor and such valuer shall act as an expert and not as an arbitrator and the decision of such valuer shall be final and binding upon both the Lessor and the Lessee and it is agreed between the Lessor and the Lessee that any costs incurred in obtaining such valuation shall be borne in equal shares by the Lessor and the Lessee. Such further Lease shall contain the same covenants and conditions mutatis mutandis as in this Lease with the exception of this clause H.

5 In a letter dated 11 February 2004 to the Respondents, the Appellant’s property manager (who was an employee of L J Hooker Commercial, Bankstown) stated that he had assessed the market rent at a figure exceeding the current rent by about $50 per square metre. In this letter, he referred to the review date as 15 October 2003.

6 In a reply dated 16 February 2004, the Respondents advised the property manager that they did not agree with this assessment and that they were prepared to continue to pay the current rent.

7 At that time, section 19 of the RLA provided as follows in subsections (1)(a) and (b):-

(1) A retail shop lease that provides for rent to be changed to current market rent is taken to include provision to the following effect:

(a) The current market rent is the rent that would reasonably be expected to be paid for the shop, determined on an effective rent basis, having regard to the following matters: ….

(b) If the lessor and the lessee do not agree as to what the actual amount of that rent is to be, the amount of the rent is to be determined by valuation carried out by a specialist retail valuer appointed by agreement of the parties to the lease, or failing agreement, appointed by the person for the time being holding or acting in the office of President of the Australian Property Institute (NSW) or President of the Real Estate Institute (NSW).

Note. The parties may agree to appoint a specialist retail valuer nominated by the President of the Australian Property Institute (NSW) or the President of the Real Estate Institute (NSW), or nominated by some other person of the parties’ choice.

8 On 24 February 2004, in accordance with clause H of the Lease, the Appellant wrote to the President of the Australian Property Institute New South Wales Division (‘the Institute’) requesting the nomination of a valuer. This letter did not specify the review date.

9 The Institute nominated Mr P G Dupre, of Egan National Valuers. In letters dated 20 April 2004 addressed to each of the parties to the Lease, Mr Dupre identified 14 October 2004 as the review date. This was clearly incorrect, as the date stipulated by Clause H was 15 October 2003. As requested by Mr Dupre, both parties then sent him signed forms indicating their acceptance of the terms of his valuation. Neither of them corrected the review date.

10 Following further correspondence between Mr Dupre, the Institute and the Appellant’s property manager, Mr Dupre inspected the Premises on 2 August 2004 and assessed the market rent. He forwarded a written determination to the parties on 8 September 2004. Both on the first page and in a statement on the final page giving his assessment of the market rent, he identified the effective date of the review as 14 October 2004.

11 On 18 October 2004, the property manager wrote to Mr Dupre expressing concerns about the determination. One of these concerns was that the valuation date should have been 14 October 2003. This was the first reference in the correspondence to the fact that an incorrect date had been used in the determination.

12 In a reply to the property manager dated 17 January 2005, Mr Dupre stated that the reference to 14 October 2004 was a typographical error and that the assessment date was in fact 14 October 2003.

13 We were advised at the hearing of this appeal that during the ensuing months the parties discussed in a number of letters the status of Mr Dupre’s determination. This correspondence was not, however, put into evidence.

14 By virtue of the Retail Leases Amendment Act 2005, which commenced on 1 January 2006, section 19(1)(b) of the RLA (see [7] above) was amended so as to read as follows:-

(b) If the lessor and the lessee do not agree as to what the actual amount of that rent is to be, the amount of the rent is to be determined by valuation carried out by a specialist retail valuer appointed by agreement of the parties to the lease, or failing agreement, by the Tribunal

15 None of the amendments made to section 19 applied ‘to or in respect of’ Mr Dupre’s determination because he was appointed before 1 January 2006: see Schedule 3, part 6, clause 25 of the RL Act (in its present form).

16 On 7 July 2006, the Appellant applied to the Tribunal for an order setting aside Mr Dupre’s valuation. During the hearing of this application on 19 February 2007, Mr Dupre acknowledged in cross-examination that the references to 14 October 2004 in his determination were not merely typographical errors, but were the result of a mistake on his part in calculating when the rent should be assessed pursuant to clause H of the Lease.

17 In a decision delivered on 28 March 2007 (Rowindon (sic) Pty Ltd v Ward & Anor trading as Robbo’s Spare Parts [2007] NSWADT 66 – hereafter ‘the earlier decision’), the Tribunal upheld the application and set aside Mr Dupre’s determination.

18 In the earlier decision at [59], the Tribunal observed as follows: ‘The valuer obtains his authority from the agreement between the parties to obtain a determination in respect of the reviewed rent in accordance with Clause H of the lease.’

19 At [60], it summarised the ground of its decision as follows:-

60 … the critical question that must always be asked is:
“Was the valuation made in accordance with the terms of [the] contract?”

The terms of the contract in this matter are as set out in the lease, particularly as prescribed in Clause H of that lease. The calculation of the date for the review of the rent must be in accordance with that clause. The calculation of the date at a day twelve (12) months post the correct date is a fundamental error and must be considered to be a vitiating error. In coming to this conclusion there has been no need to have regard to the substance of the valuation (determination) of the valuer.

20 The following extracts from the ensuing paragraphs of the earlier decision are also relevant to this appeal:-

61 The valuer gave forthright evidence under oath as to the gathering of comparable evidence…

62 The valuer was appointed pursuant to the terms of the lease and accordingly was not appointed pursuant to Section 19(1)(b) of the Act…

63 Taking into account the fact that the incorrect date was used as the rent review date it is clear that the valuation must be set aside. Both parties accepted the appointment of the valuer to determine the rent review in accordance with the lease. This appointment was made by the Institute and notwithstanding the apparent miscalculation of the date for review, the valuer has been deemed by the Institute and the parties to be capable of providing the determination. The parties should now require the determination to be made at the correct date.

64 Both parties have contributed to the valuation being undertaken as at the incorrect date, although it would appear that this was not intentional. Therefore the valuer having incorrectly calculated the date is in a position to now prepare the determination as at the correct date.

65 The appointment by the Institute has not been discharged as the valuation was not in accordance with the contract. The appointment was made on 4 March 2004 and it is not limited in time…

21 The relevant order of the Tribunal was in these terms: ‘The determination prepared by Mr P G Dupre dated 8 September 2004 is set aside.’ The Tribunal’s orders did not refer to the status of Mr Dupre’s appointment as a valuer.

22 In the earlier decision, the Tribunal also rejected an application by the Appellant for orders that (a) the time be extended for filing an application under section 32A of the RL Act for the appointment of two specialist retail valuers to review Mr Dupre’s determination and (b) two such valuers be appointed. The Appellant sought these orders as alternatives to the setting aside of the determination. The ground of rejection (see the decision at [66]) was that the Appellant’s delay in applying under section 32A was excessive. But section 32A was not applicable in any event to Mr Dupre’s determination because it was made before 1 January 2006: see Schedule 3, part 6, clause 27 of the RL Act.

23 On 30 April 2007, Ebsworth and Ebsworth Lawyers (subsequently, HWL Ebsworth Lawyers – hereafter ‘Ebsworths’) advised Forbes-Smith and Company (‘Forbes-Smith’) by telephone that the Appellant ‘withdrew its acceptance’ of Mr Dupre as the valuer. These two firms have at all material times been solicitors for the Appellant and the Respondents respectively.

24 On 11 October 2007, Ebsworths wrote to the Institute requesting it to appoint a new valuer, in place of Mr Dupre, to determine the market rent for the Premises as at October 2003, in accordance with the Lease. They alleged that Mr Dupre had stated in an affidavit filed in the Tribunal that the reference to October 2004 in his determination was a typographical error. They stated also that the Appellant ‘had no faith in Mr Dupre’s ability to accurately value the property as at the correct date’ and that in the period since the earlier decision the parties had been unable to reach agreement as to the rent since October 2003. Enclosed with this letter were copies of (a) the Institute’s letter appointing Mr Dupre as the valuer, (b) Mr Dupre’s determination and (c) the Tribunal’s decision.

25 On or about 11 October 2007, Ebsworths sent to Forbes-Smith a copy of this letter.

26 In a letter dated 22 October 2007, the Institute notified the Appellant that it had made an offer of appointment to Mr Peter Hepworth, of Amalgamated Property Valuers, to determine the rent of the Premises as required by the Lease. The letter indicated that the Institute had also sent notification to the Respondents. It concluded with the following statement: ‘This cancels the previous appointment of Mr Pierre Dupre AAPI.’

27 In a letter to Ebsworths dated 29 October 2007, Forbes-Smith expressed the opinion that Ebsworths should revoke their request of 11 October to the Institute. The reason advanced was that on account of the amendment made to section 19(1)(b) of the RL Act as from 1 January 2006 (see [14] above), the Tribunal had replaced the Institute as the appropriate authority to appoint specialist retail valuers.

28 Replying to Forbes-Smith on 1 November 2007, Ebsworths observed that Forbes-Smith did not appear to ‘have any objection to the appointment of a new valuer per se’. Ebsworths did not concede that the Tribunal, rather than the Institute, was the appropriate body to appoint a new valuer. They maintained that in any event the question of the appropriate body was ‘peripheral to the main issue’, which was to obtain a ‘proper valuation’ so that the parties could ‘get back “on track” as far as payment of rent is concerned’. They also stated that if Forbes-Smith continued to insist on appointment by the Tribunal, their client would ‘make a further request of’ the Tribunal’.

29 Replying to Ebsworths on 13 November 2007, Forbes-Smith indicated (a) that the Respondents did not agree with the request to the Institute to appoint a new valuer and (b) that in view of observations made by the Tribunal in the earlier decision at [63] and [64] (see [20] above]), it seemed ‘appropriate’ that Mr Dupree should redetermine the rental, ‘in accordance with the directions of the Tribunal’.

30 Replying to Forbes-Smith on 20 February 2008, Ebsworths confirmed the Appellant’s position as follows: (a) it would not accept Mr Dupre as the valuer, particularly since the Institute had cancelled his previous appointment; (b) it relied on the Institute’s appointment of Mr Hepworth; (c) it noted that Mr Hepworth’s fee was quoted at $5,500, which was considerably less than that of Mr Dupre; (d) if Forbes-Smith continued to maintain that the Tribunal was the correct authority to appoint a valuer, it would file an application (after reviewing the matter), though this would ‘obviously’ be ‘at cost and time’.

31 Replying to Ebsworths on 3 June 2008, Forbes-Smith stated that the Respondents insisted on ‘adopting the ruling’ of the Tribunal in the earlier decision at [64], to the effect that Mr Dupre should ‘now prepare the determination as at the correct date’. They added that Mr Dupre had quoted a fee of $3,000 plus GST (which was ‘some 55%’ of the fee quoted by Mr Hepworth) and that the Institute had ‘no jurisdiction or right’ to cancel his appointment, in light of the Tribunal’s ‘ruling’.

32 On 12 August 2008, the Appellant applied to the Tribunal for the appointment of a specialist retail valuer under the RL Act. The application specified section 31 as the relevant provision, though it was later conceded on both sides (and noted by the Tribunal in the decision under appeal) that any such application should have been made under section 19.

33 In further correspondence between the parties’ representatives during September 2008, the positions just outlined remained unchanged, except in relation to a contention raised by Forbes-Smith. This was that if the Appellant had been dissatisfied with the Tribunal’s statements indicating that Mr Dupre was still the appointed valuer, it should have lodged an appeal against the earlier decision. The response by Ebsworths was that since the application to the Tribunal (which had been successful) had been for Mr Dupre’s determination to be set aside, ‘any comments made by the Tribunal member as to the capacity or otherwise of Mr Dupre to re-do the valuation were not the appropriate subject matter of an appeal’.

The decision under appeal

34 The decision under appeal (Rowinadon Pty Ltd v G R Ward & K T Ward t/as Robbo’s Spare Parts, Unreported, Administrative Decisions Tribunal, 19 September 2008) was made without a hearing, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.

35 In that decision, the Tribunal made two orders. Order 1 was that the Appellant’s application for the appointment of a specialist retail valuer should be dismissed. Order 2 was that the Appellant should pay the Respondents’ costs on a party/party basis. The Appellant has appealed against both orders.

36 As summed up by the Tribunal at [9], the ground on which Order 1 was based was as follows. In the earlier decision, the Tribunal had ‘directed the valuer to “have another go”’. This was ‘what should now be done, all pursuant to the original appointment of …Mr Dupre which followed from the agreement of the parties in the Lease’. These consequences flowed from the Tribunal’s statement in the earlier decision (at [63]) that ‘the parties should now require the determination to be made at the correct date’.

37 In the decision under appeal, the Tribunal added at [8] and [11 – 13] that if the Appellant was dissatisfied with what was said in the earlier decision on the matter of Mr Dupre’s appointment, it should have sought rectification under the ‘slip rule’ or should have lodged an appeal. The Tribunal found it ‘difficult to follow’ the contention by the Appellant that ‘any comments made by the Tribunal member as to the capacity or otherwise of Mr Dupre to re-do the valuation were not the appropriate subject matter of an appeal’.

38 At [10], the Tribunal made its sole mention of the evidence regarding the Institute’s purported cancellation of Mr Dupre’s appointment. This was as follows:-

I note that it is suggested that the appointment of Mr Dupre as valuer was withdrawn by the Australian Property Institute, but again I cannot understand how that would happen in the face of the specific 2007 direction of the Tribunal.

39 At [15], the Tribunal outlined its reasons for making Order 2 as follows:-

There are, I am satisfied, special circumstances of the kind identified in Hector v Scheib [2001] NSWADT 1 [the case is in fact Hoctor v Schieb [2001] NSWADT 141] where I indicated that I was not satisfied that the Applicant “had any prospect of any order being made in his favour”.

The appeal against the Tribunal’s refusal to appoint a specialist retail valuer

40 The parties’ submissions. The principal contention advanced by Ms Doherty, who appeared for the Appellant, in challenging Order 1 of the Tribunal was that it had erred in holding (a) that in the earlier decision Mr Dupre had been ‘directed’ to assess the current market rent for the Premises once more (using the correct valuation date) and (b) that this ‘direction’ was enough of itself both to prevent his appointment being cancelled by the Institute and to preclude any appointment of a specialist retail valuer by the Tribunal under section 19(1)(b) of the RL Act (as amended since 1 January 2006 by the Retail Leases Amendment Act 2005).

41 According to Ms Doherty, the suggestions in the earlier decision that Mr Dupre should or might redetermine the rent were obiter dicta, falling short of a formal direction or order. This followed, she maintained, not only from the terms of the decision but also from the fact that the application filed in the Tribunal by the Appellant had not sought an order relating to Mr Dupre’s appointment as a valuer. The order sought had related only to the determination that he had made, based on an incorrect valuation date.

42 Ms Doherty further submitted that in view of these considerations the Tribunal, in the decision under appeal, had erred in suggesting that the Appellant could have challenged the correctness of the observations made in the earlier decision regarding Mr Dupre’s status as a valuer, either by seeking rectification under the ‘slip rule’ or by lodging an appeal.

43 With regard to the Institute’s purported cancellation of Mr Dupre’s appointment, Ms Doherty stated that the reasons why the Appellant had requested this were (a) that according to its interpretation of the earlier decision the appointment remained on foot and (b) that it had no confidence in Mr Dupre’s capacity to arrive at a correct valuation, particularly in view of his having initially attributed the appearance of the incorrect date in his determination as a typographical error. She also drew attention to the fact that, as indicated above at [24 – 25], Ebsworths had sent to Forbes-Smith a copy of the letter making this request of the Institute.

44 Ms Doherty argued that the Institute, being the body that had appointed Mr Dupre in accordance with clause H of the Lease, clearly had the power to revoke this appointment. But she was unable to cite any legal authority supporting this proposition or specifying the circumstances in which any such power might validly be exercised.

45 The principal contention advanced by Mr Levy, appearing for the Respondents, was that the Tribunal, in the decision under appeal, had correctly interpreted the relevant passages in the earlier decision as constituting a ruling that Mr Dupre’s appointment as a valuer remained on foot. He maintained that if the Appellant had wished to challenge this ruling, it could easily have done so by lodging an appeal or seeking ‘clarification’ by some other means, in each case within a relatively short period of time. But it had not done so. It had instead decided, after a period of considerable and unexplained delay, to try to avert the consequences of the ruling by applying to the Tribunal for the new appointment of a new valuer.

46 The position adopted by Mr Levy with regard to the purported cancellation of Mr Dupre’s appointment was simply that the Institute had no power to take this step. But like Ms Doherty, he could not cite any authority bearing upon this question.

47 Our conclusions. In our judgment, Order 1 made by the Tribunal in the decision under appeal was correct, but not for the reasons stated in the decision.

48 We agree with Ms Doherty that the earlier decision did not contain any order or direction to the effect that the parties must continue to treat Mr Dupre as the valuer authorised to determine the market rent under clause H of the Lease. This follows simply from the fact that it made no formal order to this effect. The fact that no such order was sought in the application to which the earlier decision related is relevant in this context, but not conclusive.

49 The Tribunal expressly stated (particularly at [65]) that in its opinion Mr Dupre’s appointment remained on foot. But this expression of opinion did not amount to an order addressed to the parties (or indeed to Mr Dupre, who was not a party) requiring them to act in accordance with it.

50 We do not, however, accept Ms Doherty’s claim that the Institute had power to ‘cancel’ Mr Dupre’s appointment, least of all in the manner in which it purported to do so. Not being aware of any authority directly bearing on this question, we do not see why a power to appoint a valuer such as clause H of the Lease conferred on the Institute should be taken to confer, by implication, a power to revoke an appointment once made. Even if the source of the Institute’s power to appoint Mr Dupre is more correctly taken to have arisen from section 19(1)(b) of the RL Act (in the form that it took before 1 January 2006), we still do not see why this provision should be taken to have conferred, by implication, a power of revocation.

51 If we are wrong in this conclusion, we would still conclude that the purported revocation by the Institute was void and of no effect. Our reason is that, although the Respondents, through their solicitors Forbes-Smith, received notice of the Appellant’s request for revocation (dated 11 October 2007), the Institute proceeded to grant this request (on 22 October 2007 at the latest) without giving any adequate opportunity to them to communicate a response. The Institute did not write to the Respondents or to Forbes-Smith to ask for submissions on the matter. Furthermore, as just indicated, a noticeably short period of time – a mere eleven days at most – elapsed between the Appellant’s request to the Institute and the granting of this request.

52 We should add here that we have made our own attempts to locate cases dealing with the question of the status of a valuer who, having been appointed by a third party such as the Institute pursuant to a clause such as clause H of the Lease, has made a determination which must be set aside on account of error. In the judgments on which the Tribunal relied in concluding, in the earlier decision, that Mr Dupre’s determination must be set aside, this question is not addressed. The only authorities that we have found that might be said to cast some light on the question are Mayne Nickless Ltd v Solomon [1980] Qd R 171 and Campbell v Edwards [1976] 1 WLR 403.

53 For present purposes, it is sufficient to quote a passage from the former case. At 178-179, Sheahan J said:-

In the view I take of the matter it is unnecessary finally to determine whether a “speaking valuation” is examinable for error, or to consider other questions which might conceivably arise if a speaking valuation may be impeached for error or mistake. One is — under what circumstances and for what kinds or degrees of error may such be done? Another is— what would happen in the instant case if the valuation is set aside or declared by a Court to be unenforceable by the plaintiffs? It would be unreal to think that the parties would ask Mr. Wolfs to prepare a fresh valuation, and even if they did ask him, one could imagine him refusing such a request. Failing agreement between them as to another valuer could one or other of them again seek the appointment of a valuer by the President of the Real Estate Institute? If such person refused to make another appointment could he be compelled to do so, he or his predecessor in office having already made an appointment for the purpose of the rental clause? This kind of difficulty was observed upon by Lord Denning M.R. in Campbell v Edwards [see [1976] 1 WLR 403 at 408]. He said as follows:

“I may add that counsel for the tenant put forward an additional argument. He said:

‘If this valuation is set aside, what is to take its place?’

The answer is, ‘Nothing’. The only surveyors on whom the parties have agreed are Messrs. Chesterton. The parties are unlikely to agree on any other surveyors. And Messrs. Chesterton cannot reasonably be asked to make another valuation. So there would be nothing to take the place of this valuation.”

These and other considerations incline me strongly to the view that a valuation speaking, or non-speaking, made by a valuer chosen by the parties should not be impeachable for error or mistake. If mistake can be demonstrated the party adversely affected by it may have a remedy in damages against the valuer.

54 While these observations draw attention to difficulties that may arise when a valuer whose determination is set aside for error is called upon to prepare a fresh determination, they do not, in our opinion, provide specific guidance on the question that we are now considering.

55 For the foregoing reasons, our conclusion regarding Order 1 in the decision under appeal is that it must stand. This is the appropriate outcome, even though in our opinion the Tribunal’s reasons given in support of this Order overstated the impact of relevant dicta in the earlier decision and paid insufficient attention to the question whether the Institute’s purported revocation of Mr Dupre’s appointment was effective.

The appeal against the Tribunal’s award of costs

56 Ms Doherty argued that, despite the Tribunal’s observations at paragraph [15] of the decision under appeal (see [39] above), this was not a case where her client, the Appellant, had not had any prospect of succeeding in its application. It could not be said, she submitted, that the application had no tenable basis in fact or in law. The Appellant had in fact approached the Tribunal in good faith with a view to resolving a long-running dispute regarding the rent to be charged for the Premises.

57 In making these arguments, Ms Doherty referred implicitly to the requirement of ‘special circumstances warranting an award of costs’ that was prescribed, until 31 December 2008, in section 88(1) of the ADT Act. Section 77A of the RL Act makes this provision applicable in retail tenancy proceedings conducted in the Tribunal. In a number of retail tenancy decisions interpreting section 88(1), it has been held that ‘special circumstances’ arise when the matters asserted in making or defending an application have no tenable basis in fact or in law. The case relied on by the Tribunal, Hoctor v Schieb [2001] NSWADT 141, provides a sufficient example.

58 In response, Mr Levy submitted that there had indeed been no reasonable prospect of an order in the Appellant’s favour and that there had been an excessive delay, attributable to the Appellant, between the revocation of Mr Dupre’s appointment and the application to the Tribunal.

59 In our opinion, the case was not as clear-cut and as one-sided as the Tribunal indicated. This is apparent from the foregoing discussion. We note also that, as indicated above at [27], the Respondents did for a time take the view that an application to the Tribunal might be an appropriate expedient for the parties to adopt in seeking to resolve their dispute.

60 We conclude accordingly that while the Tribunal’s handling of the concept of ‘special circumstances’ did not betray any error, its finding that ‘special circumstances’ existed, being based on a misunderstanding of aspects of the law relating to the substantive issues in the case, must be regarded as erroneous. We cannot discern any ground on which ‘special circumstances’ might be held to have existed, or that any such circumstances might ‘warrant’ an award of costs.

61 For these reasons, Order 2 made in the decision under appeal must be set aside.

Concluding observations

62 During the hearing, we were advised that the Respondents consented to an interim order, for which the Appellant had previously applied, staying Order 2 made by the Tribunal. We accordingly made an interim order in those terms. Our decision regarding Order 2 makes this interim order redundant.

63 Both parties applied for the costs of this appeal. Because the hearing of the appeal took place after 1 January 2009, these costs must be determined in accordance with a new version of section 88 of the ADT Act, inserted by the Administrative Decisions Tribunal Amendment Act 2008. The applicability of the new version to the costs of this appeal appears to us to follow from transitional provisions to be found in Part 11 of Schedule 5 of the ADT Act, as amended (see in particular subparagraph (2)(i) of clause 43).

64 In this new version (see subsections (1) and (1A) of section 88), the prima facie position is that each party should pay its own costs. But costs may be awarded if a criterion of fairness, replacing the former requirement of ‘special circumstances warranting an award of costs’, is satisfied.

65 Having regard particularly to the foregoing reasons, there is no obvious ground why any award relating to the costs of the appeal should be made. But there may be circumstances of which we are not aware. We accordingly direct as follows:-

There will be no order for the costs of this appeal unless a party files and serves an application for costs, with supporting submissions, within 21 days. In such event, the other party is to file and serve submissions in response within a further 21 days. The question of costs will then be determined ‘on the papers’, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.