TLF NOMINEES PTY LTD and NGUYEN - [2014] WASAT 143

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)

CITATION: TLF NOMINEES PTY LTD and NGUYEN [2014] WASAT 143

MEMBER: MR D AITKEN (MEMBER)

HEARD: DETERMINED ON THE DOCUMENTS

DELIVERED : 23 OCTOBER 2014

FILE NO/S: CC 800 of 2014

BETWEEN: TLF NOMINEES PTY LTD
Applicant
AND
TIEN LONG NGUYEN
THI AI NGUYEN
Respondents

Catchwords:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) Costs where no hearing on the merits Principles to be applied

Legislation:

Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA), s 16(1), s 25D(1)
Legal Profession Act 2008 (WA)
State Administrative Tribunal Act 2004(WA), s 87(1), s 87(2)
Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA)

Result:

Order made that respondents pay costs to the applicant

Summary of Tribunal's decision:

The respondents gave notice to the applicant of the termination of the lease of premises occupied by the applicant, to take effect one month after the date of the notice and required vacant possession of the premises on that date. The basis for the notice was that the respondents contended that they had not approved an assignment of the lease to the applicant and had also not agreed to an extension of the lease, which had expired.
The applicant applied to the Tribunal for the determination of the questions raised by the notice in relation to the lease and whether the respondents' termination of the lease was lawful. The applicant also sought an interim order prohibiting the respondents from terminating the lease and evicting the applicant from the premises.
The day after the application was filed the respondents notified the applicant that they would not contest the matter and that they would rescind the notice of termination and sign a Deed of Assignment and Extension of Lease which had been provided to them previously by the applicant's lawyer.
The applicant withdrew the proceeding, but sought an order that the respondents pay its costs.
The Tribunal examined the principles which apply in relation to the costs of parties in a proceeding under the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) and applied those principles to the circumstances of this proceeding.
The Tribunal decided to exercise its discretion under s 87(2) of the State Administrative Tribunal Act 2004 (WA) to make an order that the respondents pay costs to the applicant.

Category: B

Representation:

Counsel:

Applicant: Mr P Le
Respondents : Mr P May

Solicitors:

Applicant: Peter Legal
Respondents : Peter May Commercial Lawyer

Case(s) referred to in decision(s):

Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194
Chew and Director General of the Department of Education and Training [2006] WASAT 248
Pearce & Anor and Germain [2007] WASAT 291 (S)
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

This is the decision of the Tribunal regarding an application made at the conclusion of this proceeding by the applicant for an order that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] WASAT 143
Decision Date: 23 OCTOBER 2014

CaseChat Overview and Summary

TLF Nominees Pty Ltd and Nguyen were parties in a dispute heard in the State Administrative Tribunal of Western Australia. The case centred on the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) and the associated costs incurred during proceedings where no hearing on the merits occurred. The Tribunal was required to decide the principles to be applied in awarding costs in such circumstances.

The primary legal issue before the court was the application of the State Administrative Tribunal Act 2004 (WA) to determine the allocation of costs when no substantive hearing took place. The respondents argued that the Tribunal should not attempt to resolve a hypothetical case to determine the cost award based on who might have prevailed if the matter had proceeded. They cited precedents from the High Court and the Federal Court to support this contention. Additionally, the respondents claimed that the costs sought by the applicant were unreasonable due to the lack of detail regarding the time spent and the rate claimed, which exceeded the rate applicable to the Tribunal.

The court considered the principles outlined in the State Administrative Tribunal Act 2004 (WA) and prior cases such as Pearce and Summerville, which established that the Tribunal operates under a 'no costs jurisdiction'. However, the Tribunal has the discretion to award costs under certain circumstances, particularly where a party's conduct is unreasonable or inappropriate, leading to unnecessary costs for the other party. The court noted that while costs typically follow the event, in cases where a party vindicates clear contractual rights or defends an unmeritorious claim, it is often reasonable to award costs. However, in genuine disputes where rights are unclear, each party should generally bear their own costs unless specific circumstances warrant otherwise.

The court found that given the lack of a substantive hearing, the Tribunal should not attempt to resolve a hypothetical outcome to determine the costs. Instead, it should focus on the reasonableness of the costs claimed and the circumstances under which they were incurred. In this instance, the costs claimed by the applicant were deemed unreasonable due to insufficient detail and an excessive hourly rate. Consequently, the Tribunal ruled against awarding the claimed costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The respondents also say that there has been no hearing on the merits and in those circumstances, the Tribunal cannot try a hypothetical action between the parties for the purposes of determining who should be awarded costs by reference to who might have won if the matter had proceeded. The respondents cite a statement by McHugh J of the High Court of Australia in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 (Lai Qin) at 624 and a statement by Hill J of the Federal Court of Australia in Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194 (Aust-Home) at 201 as support for those contentions. The respondents further contend that, in any event, the costs claimed by the applicant are unreasonable to the extent that a total of four hours is claimed without any detail of how that time was spent and the rate per hour claimed exceeds the rate applicable to the Tribunal. Section 87(1) and s 87(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) state:(1)Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal.(2)Unless otherwise specified in the enabling Act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party or of a person required to produce a document or other material on the application of the party under section 35. The enabling Act in this matter is the CTRSA Act and it does not contain any provision regarding the costs of parties. Therefore the issue of costs is to be determined under the provisions of s 87(1) and s 87(2) of the SAT Act. The approach of the Tribunal to costs in proceedings under the CTRSA Act was considered by Deputy President Judge Chaney, as he then was, in Pearce. At [8], [22] and [24] of Pearce his Honour states as follows:8.As the Tribunal has reaffirmed on numerous occasions, the starting point in relation to costs in the Tribunal is that the Tribunal provides a 'no costs jurisdiction' see s 87(1) of the State Administrative TribunalAct 2004 (WA) (SAT Act). Notwithstanding that general position, s 87(2) of the SAT Act confers on the Tribunal a broad jurisdiction to award costs in appropriate cases.22.In Summerville, Barker J observed that s 87 does not identify factors to be taken into account by the Tribunal in exercising its jurisdiction under s 87(2), and it is not appropriate for the Tribunal to attempt finally to delineate the particular circumstances in which the discretion to award costs will be exercised. Costs orders have most commonly be (sic) made in the Tribunal in circumstances of the type identified by Deputy President Judge Eckert in Chew and Director-General of the Department of Education and Training [2006] WASAT 248 at [85], being circumstances where a party has conducted itself unreasonably or inappropriately, particularly where that conduct gives rise to unnecessary costs being incurred by the other party.24.In my view, the approach that should be taken to costs in proceedings under the CTRSA Act should reflect the approach explained by Barker J in Summerville. That is consistent with the reliance by the Tribunal in Bilek on the proposition drawn from Australia's Country Homes, that decisions on costs might serve to promote certainty and responsibility in parties to their contractual responsibilities. That does not mean that there is a presumption that costs will follow the event. Rather, where it is necessary for a party to a retail shop lease to take proceedings in the Tribunal to vindicate its clear contractual entitlements, and to incur costs in doing so, it will 'often not be unreasonable for an award of costs to be made'. The position is the same where costs are incurred in defending an obviously unmeritorious claim. Where, however, there is a genuine dispute between the parties to a lease, their respective rights are unclear and one or both seek determination of their rights in the Tribunal, the starting point remains that each party should expect to pay their own costs, unless there are circumstances of the type identified in Chew.