Torchia v Swanton

[2010] NSWADT 142

CITATION:	Torchia v Swanton [2010] NSWADT 142
DIVISION:	Retail Leases Division
PARTIES:	Applicants: Eugine Torchia and Lesley Astill-Torchia Respondent: Beverley Swanton
FILE NUMBER:	095098
HEARING DATES:	on the papers
SUBMISSIONS CLOSED:	30 October 2009
DATE OF DECISION:	9 June 2010
BEFORE:	Molloy G - Judicial Member
CATCHWORDS:	Costs, Indemnity Costs
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Civil Procedure Act 2005 Retail Leases Act 1994
CASES CITED:	Barsoum v. Glebe Administration Board (No 2) [2002] NSWADT 174 B & L Linings Pty Ltd v. Chief Commissioner of State Revenue (No. 5) [2010] NSWADT 21 Calderbank v. Calderbank [1975] 3 All ER 333 Caltex Refining Co Pty Limited v. The Maritime Services Board of NSW (1995) 36 NSWLR 552 Corrigan & Gibson v. Watson [2009] NSWADT 110 Council of the Law Society of NSW v. Dimitriou (No 2) [2010] NSWADT 37 Kiernan v. Commissioner of Police (No. 3) [2010] NSWADTAP 32 Lal v. Dept of Transport and Infrastructure [2010] NSWADTAP 34 Neeson v. Director-General, NSW Department of Education and Training (No 2) [2010] Rucom Pty Limited v. Multiplex [2010] NSWADT 1 Salon Today Pty Ltd v. MMIR Pty Ltd [2009] NSWADR 71 Trust Company of Australia Ltd v. Craig [2005] NSWADT65
REPRESENTATION:	Applicant Representative: Michael McCall instructed by Stephen Tester Respondent Representative: Gary Hooper instructed by James Foggle Rummery
ORDERS:	The Applicants pay the costs of the Respondent on an indemnity basis in $10,113.50.

REASONS FOR DECISION

Background

1 The Respondent was one only of the lessors of property known as Shop 7, 68 Ballina Street, Lennox Head. The other lessor was the Respondent’s husband. For reasons not entirely clear the Respondent was the only person joined by the Applicant in these proceedings.

2 The Applicant is the lessee of those premises pursuant to a stamped and registered Transfer of Lease dated 7 June 2007. The lease acquired by the Applicants was a lease for three years terminating 2 May 2007 with an option for renewal for a period of three years. They held their title as joint tenants.

3 The Applicant operated from the premises a take-away food business, having purchased the business from the previous lessees. There was a formal Transfer of Lease and a Deed of Assignment of Lease with, of course, the assigned lease contract itself.

4 In March 2008 the Applicant applied to the Retail Tenancy Unit for mediation of a retail lease dispute. Mediation in fact took place on 8 May 2008 and the parties reached an agreement and executed a document styled “Heads of Agreement”.

5 The Heads of Agreement included clause 8 in the following terms:

“Each party expresses their intention to restore and maintain cordial relations and in this context to discuss in good faith and with fair consideration any request for a new lease”.

6 Doing the best that I can from the file it would seem that, notwithstanding the expression of goodwill above, the parties continued in dispute such that on 4 June 2009 the Applicants commenced proceedings in this Tribunal by way of a combined retail tenancy claim and unconscionable conduct claim seeking the following stated relief:

“$580.00 – reimbursement of mediation costs

$8,590.00 – balance of compensation claim taken to mediation

$726.00 – reimbursement of J. Fuggle’s fee

$125,000.00 – being the total of the following:

Purchase price

Capital investment to date

Loss of iconic location

Emotional stress of harassment and discriminatory behaviour”.

7 The formal Application had attached to it a detailed letter from the Applicants to the Tribunal which was said to set out the grounds for the application and the supporting particulars. There is no need to travel through the four detailed pages of the letter. Plainly, however, the Applicants felt seriously aggrieved and sought appropriate relief within the jurisdiction of this Tribunal.

8 The procedures of this Tribunal in this Division require Applications for Original Decision to be listed for Directions so that the presiding Judicial Member can give directions regarding the future conduct of the Application with a view to either resolving the issues or bringing the proceedings on for hearing in such a way that all parties and the Tribunal know what is asserted by each party and what the particulars are of each assertion by reference to the evidence. It is often the case that an Applicant will file a formal Application unsupported by any sworn material and the Judicial Member will do his/her best in order to make sure that the procedures of the Tribunal in this Division are followed, sworn material is filed, the parties appropriately mediate with a view to reaching agreement and, if unsuccessful, then the Respondent to have an opportunity to put forward their case with a view to ultimate joinder of issue by completion of affidavit material, and then setting the matter down for hearing. In the current proceedings the Applicants filed detailed documentation, carefully set out in plastic sleeves in a bound folder.

9 It is also important to recognise that the Application was said to be a combined “retail tenancy claim and unconscionable conduct claim” within the terms of Retail Leases Act Sections 71 and 71A.

10 The Application was listed for Directions on 16 July 2009. Fox JM adjourned the Application for further Directions to the 23 July, noting that the Applicant was to obtain legal advice and also noting his understanding that the Applicant wished to litigate a mediation agreement. The Applicant was self-represented.

11 The matter then came before Fox JM again on 23 July 2009 when the Applicant again appeared in person, the Respondent was legally represented, the proceedings were adjourned for further directions to the 13 August 2009 and costs were reserved.

12 On 13 August 2009 the matter came before me. Again, the Applicants were unrepresented, the Respondent legally represented, and I made the following Directions:

“The Applicant was to file and serve their affidavits by the 9 September 2009; the Respondent to serve their affidavits and any Notice of Motion by 28 August 2009; the proceedings were adjourned for further directions to 10 September 2009; and I recommended that the Applicant obtain legal representation”.

Such a recommendation had previously been made by Fox JM, was made again by me; this is common practice at Directions where a party seeks to represent him/herself; and it is particularly important to make that recommendation where a party seeks to agitate an unconscionable conduct claim.

13 The proceedings next came before me for further Directions on 10 September 2009. By this stage the Respondents had filed an Notice of Motion 27 August 2009 seeking the following orders:

“1. These proceedings be dismissed, or in the alternative permanently stayed.

2. The Applicants to pay the Respondents’ costs of the proceedings.”

14 The Notice of Motion was supported by a very lengthy affidavit sworn 21 August 2009 by the solicitor for the Respondent.

15 Therefore, on 10 September 2009, and dealing with the Notice of Motion for dismissal, I directed the Applicant (ie the lessee) (who was now legally represented) to file and serve their affidavits by 2 October 2009; I noted that the venue for the hearing of the Motion would be Lismore; I noted that the parties would give a range of dates to the Registrar; and I adjourned the proceedings for further Directions to 8 October 2009.

16 On 8 October 2009 both parties were legally represented. I was informed by both counsel that the Applicant wished to withdraw their Application and that the Respondent would be seeking an order for costs. I formally noted that the Application was withdrawn and the Application was dismissed. I directed the Respondent to file and serve Written Submissions on costs by 16 October 2009; the Applicant to file and serve Written Submissions in reply by 23 October 2009; the Respondent to file and serve Written Submissions in reply by the 30 October 2009; and the Tribunal would decide the cost issue on the papers.

17 Both parties have filed detailed Written Submissions.

Preliminary Observations

18 The Tribunal wishes to make some preliminary observations. Firstly, the Application itself was not supported by any sworn material. Indeed, it has never been supported by any sworn material.

19 Secondly, the Application itself sought payment by the Respondent, being one only of the lessors, of $134,896.00. Not a sum to be sneezed at and certainly an amount that would encourage a Respondent to obtain legal advice and representation. Clearly warranted, one would think.

20 Thirdly, no reason was provided to the Tribunal on 8 October 2009 for the withdrawal of the proceedings. Indeed, no reason is provided in the Applicant’s Written Submissions as to costs for the withdrawal of the proceedings. Rather, the Written Submissions candidly made these observations:

“a) The application here was withdrawn before any statements of evidence were filed by the parties and at such an early stage that it is difficult for the Tribunal to assess the relative merits of the parties’ cases.”

“b) The Applicants did not discontinue the proceedings until after the Respondent filed a notice of motion to dismiss the proceedings on the basis that there was an accord and satisfaction of the claim the subject of the proceedings.”

21 Thirdly, the Tribunal notes that the Application was withdrawn and dismissed on the eve the Motion being set down for hearing. It might not be unfair to tentatively conclude that the relief sought in the Motion and the material deposed to by the solicitor for the Respondent was such to encourage a view that the Motion would succeed or, at least, that the Applicants did not wish to file any material in response (thus leaving it to the Tribunal to decide whether the Motion would succeed or fail simply on the affidavit material filed in its support).

Submissions

22 Both parties made lengthy and detailed Written Submissions through their respective legal advisers. The Respondent, understandably, relied upon the sworn evidence of their solicitor; criticised the Applicant’s claim, asserting that it “was destined to fail”; criticised the various items claimed; asserted that “the whole of these proceedings were barred by the principles of accord and satisfaction”, asserting that “the accord was the applicant’s agreements recorded in the mediation agreement and the satisfaction was the subsequent payments, rental abatement, consents and building work given by the respondent”; asserted that the “mediation agreement on the face of it appears to encompass all the complaints raised by the applicants …” and that if the proceedings had not been withdrawn then … “they would have been dismissed after consideration of the mediation agreement and subsequent events …”; submitted that the “inherent flaw in the applicants’ claim was that they were seeking to litigate matters which had been the subject of a binding agreement … such that … the claim was weak and the respondent had a strong defence to the claim (and that the) relative strengths of each party’s case make it fair that costs be awarded in favour of the respondent”.

23 It was also asserted that the claim was “complex”; that the “applicants filed voluminous material in support of the application (and that it) was stated to be an unconscionable conduct claim (and that the) size and complexity of the claim make it fair that costs be awarded in favour of the respondent”.

24 More importantly, the Respondent asserted that “the manner of the applicants’ withdrawal of the proceedings is a sufficient factor for the Tribunal to determine that it is fair that the applicant pay the respondents’ costs of the proceedings”. Reliance was placed upon the history of the matter (as I have endeavoured to set out above) and it was asserted that at the very first Directions Hearing on 16 July 2009 “the respondent raised that the proceedings were barred by the principles of accord and satisfaction due to the previous mediation agreement (and that Fox JM warned the Applicants “of the possible costs consequences of the proceedings and recommended that (they) seek legal advice), yet even after obtaining legal representation the applicants still sought to continue the proceedings (such that the) respondent was obliged to prepare a notice of motion seeking orders that the proceedings be struck out or permanently stayed and affidavits in support”. It was asserted that “due to the nature of the accord and satisfaction issue the affidavit by (the solicitor) was a significant piece of work (and that as a result the) applicants only discontinued the proceedings at the mention when the motion was to receive a hearing date”. It was submitted that a “party which discontinues proceedings is normally obliged to pay the other party’s costs (on the basis that the) rationale is that the other party should not be put of pocket by reason of defending a proceeding which the plaintiff chooses not to proceed with”. It was submitted that the “ respondent has had to incur costs in responding to proceedings which the applicants had determined that they no longer wished to run (and, perhaps more importantly,) the applicants did not withdraw the proceedings until after the respondent had been obliged to incur significant costs in responding to the proceedings (and in) this regard it is quite fair that the applicants pay the costs of the respondent (and that it was also) relevant to the issue of fairness that the applicants were on notice throughout the proceedings that costs were a live issue” and reference was made to a number of supporting letters.

25 The Applicants challenged the assertion that the Heads of Agreement operated as a bar to the proceedings. Detailed reference was made to the Heads and the Tribunal was invited to conclude that the Heads were not expressed to be reached in settlement of any dispute but rather that the parties had reached an agreement on matters within the Heads and not “on matters beyond those expressly set out in the Heads …”. In any event, it was asserted that the Tribunal could not “be satisfied that the application in these proceedings contained the same claims as thoughts that were … settled (by the Heads of Agreement)”. Indeed, it was asserted that the orders sought, in particular the claim for $125,000.00 (the larger part by far of the relief claimed) and particularised were not of the same nature or like nature in the mediation application or the Heads of Agreement. In particular, and perhaps more importantly, the Applicant asserted that the application “here was withdrawn before any statements of evidence were filed by the parties and at such an early stage that it is difficult for the Tribunal to assess the relative merits of the parties’ cases (such that the Respondent) has not established that the applicants had no tenable basis in fact or law or was weak to such an extent as would justify an order for costs against them”.

26 The Applicants submitted that there was in effect nothing in the argument advanced by the Respondent that would warrant a finding that costs should be awarded because of “the size and complexity of the proceedings”; furthermore it was submitted that the “difficulty with the respondents argument in respect of the manner of withdrawal of the proceedings is that it assumes that the motion to dismiss the proceedings would have been successful”; and submitted that the “general principle that a party that discontinues proceedings is required to pay the costs of the other party” was a principle that should be adopted; however “that principle is simply a corollary to the ordinary rule that “costs follow the event” (and that) ordinary rule does not apply to proceedings before the Tribunal and is inconsistent with” Section 88 of the Administrative Decisions Tribunal Act.

27 The Applicants concluded with the submission that the Heads of Agreement “do not expressly bar the applicants from bringing claims against the respondent, whether of the sort that were to be the subject of these proceedings, or otherwise (and that there was) also considerable doubt about whether the dispute which was the subject matter of the discontinued application in these proceedings is the same subject matter as the earlier dispute (and the) respondent has not demonstrated that because of the heads of agreement the applicants’ was untenable or so weak as to warranty the making of a costs order”.

28 In her submissions in reply the Respondent made detailed reference again to the mediation agreement, submitted that the Applicants were “complaining about the same matters as in the mediation proceedings but they had determined to claim different (and substantially higher) damages”; submitted strongly that “the manner in which the proceedings were withdrawn (at the directions hearing with no prior agreement as to costs, at the time when it was to be set down for hearing and when they were in default of the order to file and serve evidence) can only lead to the conclusion that the applicants and their (legal) representatives determined that the applicants would lose the motion and consequently the proceedings (such that) the withdrawal itself adds to the submission that the applicants had a weak case in this matter”.

Decision of the Tribunal

29 The submissions of the parties in or to the effect that the Tribunal should form certain views relating to the width and legal effect of the Heads of Agreement is not initially attractive. The issue of costs is to be dealt with on the papers and it would be quite wrong (in my view) for the Tribunal to embark upon an analysis and dissertation relating to the events leading up to the mediation, the mediation itself, the Heads of Agreement, and what may have followed thereafter. That type of argument is best reserved for a full hearing, unless it is crystal clear on its face. For my part I do not think it helpful, nor educative, to embark upon such an analysis, particularly when the issue of costs is being determined “on the papers”.

30 The real issue, in my opinion, is very simple: commencement of proceedings, engagement of legal representation by a respondent/defendant, and discontinuance of those proceedings. Putting aside the Heads of Agreement the Applicants commenced proceedings in this Tribunal. They filed in support of their Application detailed documentation but did not file any sworn material, notwithstanding directions so to do. The Respondent engaged legal representation – in my opinion the Respondent was quite justified in obtaining the services of a solicitor and counsel. The amount in issue was not inconsiderable and clearly the legal issues required more than considerable attention. Various directions were made, various warnings were issued by myself and Fox JM, and yet it was not until after the filing of the Notice of Motion and the “final” Directions Hearing before the Motion would be set down for hearing at Lismore, that the Applicants abandoned the field of battle and withdrew the proceedings. By that stage the Respondent had sought and obtained legal advice, legal representation, no doubt had the benefit of various conferences, had prepared, filed and served a very detailed affidavit and were clearly gearing up for a legal stouch at Lismore. Considerable legal costs had been incurred.

31 I have made it plain in previous decisions that persons should not commence legal proceedings in court or tribunal without having given grave and weighty attention to the evidence and the law to ensure that they have at least an arguable case. Commencement of proceedings inevitably results in considerable inconvenience to the other party and, more often or not, the incurring of legal costs and expenses, all of which would be simply thrown away, to the financial detriment of the other party, if an applicant/plaintiff could commence proceedings and then abandon those proceedings without a costs penalty.

32 In Rucom Pty Limited v. Multiplex [2010] NSWADT1 I observed at [37] “ … proceedings should only be commenced in this Tribunal after very careful consideration of the merits of the case: see Trust Company of Australia Ltd v. Craig [2005] NSWADT65 at [44]. After all, commencing proceedings without such consideration inevitably results inconsiderable expense being incurred by the other party and one might not unreasonably ask: “why would the other party have to bear those expenses when the proceedings should not have been commenced in the first place?””

33 The Tribunal in Council of the Law Society of NSW v. Dimitriou (No 2) [2010] NSWADT 37 set out at [10-11] the terms of Administrative Decisions Tribunal Act 1997, Section 88 and the relevant decided cases relating to that Section and how it should be applied. In my opinion there is no need for me to re-hash that material. It is now clear. I agree entirely with the proposition that in this Tribunal costs simply do not “follow the event” and in order to obtain a costs order one must fit within the parameters of Section 88. (See also Neeson v. Director-General, NSW Department of Education and Training (No 2) [2010] NSWADT 92 at [19]). In my view the costs application of the Respondent fits squarely within Section 88. Indeed, in my view the costs application would also fit squarely within the former Section 88 in that the withdrawal/abandonment of proceedings would constitute “special circumstances”; but in this case I am satisfied that it is “fair” to award costs to the respondent in relation to the proceedings if for no other reason that the proceedings were simply abandoned after service, after a number of Directions Hearings, after the respondent had engaged legal representation and incurred legal costs and expenses and after a Motion had been filed seeking dismissal of the proceedings. In my opinion those matters, individually and collectively, I consider relevant to whether an award of costs is fair. For the reasons that I set out in Salon Today Pty Ltd v. MMIR Pty Ltd [2009] NSWADT 71 the matters to which the Tribunal is enjoined to give attention in considering costs applications under Section 8 are not limited by the Section; rather the Section provides guidance to the Tribunal in that it sets out some, but not all by any means, of the factors which the legislature has enjoined the Tribunal to consider. See also B & L Linings Pty Ltd v. Chief Commissioner of State Revenue (No. 5) [2010] NSWADT 21 at [43-44], [52-59] and [122].

34 At the risk of repeating myself, in Trust Company of Australia Ltd v. Craig [2005] NSWADT 65 at [44] I made these relevant observations: -

“The applicant withdrew these proceedings and the proceedings have been dismissed. In those circumstances the common law makes it plain that a Respondent is entitled, absent disentitling factors, to a costs order. In my opinion, the withdrawal of proceedings is a circumstance out of the ordinary within the meaning that I gave to it in Gizha v. AXA and within the meaning of subsequent decisions of this Tribunal. The commencement of proceedings against a party should only be carried out after the greatest of consideration to ensure that proceedings are not commenced in circumstances where they should not have been commenced. After all, the amount in issue in this case was not small and the only reason given for the withdrawal of the proceedings in this case was “commercial reasons”. In my opinion the applicant should have thought very carefully on a commercial basis before commencing proceedings …”.

35 At [45] I expressed the view that:

“The withdrawal of the proceedings in the circumstances of this case amounts to “special circumstances” within the meaning of the Act and the respondent is entitled to a costs order in their favour..”.

36 I adhere to the views therein expressed. I am firmly of the opinion that the commencement of proceedings and their subsequent withdrawal, absent disentitling factors, should result in a costs order under Section 88. There will be circumstances where such an order should not be made where disentitling factors are proven. To withdraw proceedings for “commercial reasons” (as in Trust Company v. Craig), or, as in this case, for no reason at all that is expressed to the Tribunal, and after more than considerable legal costs had been incurred by the Respondent, clearly indicates the fairness of making a costs order within the terms of Section 88(1A). See, in particular, Lal v. Dept of Transport and Infrastructure [2010] NSWADTAP 34 for a remarkably similar scenario.

Indemnity Costs

37 The Respondent applies for costs to be awarded on an indemnity basis. The Respondent submits, and it is the fact, that the Applicants “have been on notice for the whole of the proceedings that an order for costs would be sought”. The Applicants relied upon the concession by the Respondent that the relevant initial letter 19 June 2009 did not amount to “a Calderbank offer”. The letter was from the Respondent’s solicitors to the Applicant and which asserted that the Section 71 claim was “an attempt to relitigate” the original dispute which had been “resolved at mediation”, the Section 71A claim “sets out no grounds for a claim of unconscionable conduct” and warning the applicants that if they pursued their “application and are unsuccessful, we (the respondent) shall seek costs against you from the date of this letter” but if the application was withdrawn within 14 days no such costs order would be sought.

38 Reliance was placed upon Corrigan & Gibson v. Watson [2009] NSWADT 110. The letter referred to in Corrigan is described at [33] as a letter by the Respondent making “an “offer” that the Applicants withdraw the application and pay the Respondent’s costs to date on a party/party basis. In return, the Respondent agreed not to apply for indemnity in any court or tribunal or make any claim for damages”. There was no reply to that letter and the Respondent “submitted that as a result of sending that letter he should be entitled to costs on an indemnity basis”.

39 That Tribunal observed that the principles in Calderbank v. Calderbank [1975] 3 All ER 333 “may be a relevant matter when the Tribunal is determining whether it is fair to make an order for costs. However, unlike the (Victorian Civil and Administrative Tribunal Act) the (Administrative Decisions Tribunal Act) does not contain a specific provision which creates a presumption that costs will be awarded if certain settlement offers are rejected and the Tribunal subsequently makes orders that are not more favourable to the other party than the offer: VCAT Act s.112 … the question of whether we should exercise our discretion to award costs based on the respondent’s letter does not arise in this case because the letter is not a Calderbank offer. A Calderbank offer must involve “a real and genuine element of compromise” … and an offer that merely dismissal of proceedings and payment of costs lacks any element of compromise – it is a demand for capitulation designed solely to trigger an entitlement to indemnity costs … (and in any event) the proceedings were withdrawn before the Tribunal made an order of any kind. As the Tribunal did not determine the matter, no comparison can be made between the so-called “offer” and the Tribunal’s determination”.

40 It is my respectful view that Calderbank has got absolutely nothing to do with this issue now before the Tribunal. Thus, even if a letter such as the 19 June letter is not a Calderbank letter or a Calderbank offer, it constitutes a very clear warning to the applicants and very fairly gives them an opportunity to withdraw, and importantly, without costs penalty. Such letters are not uncommon and it does not follow, in my respectful view, that because such a letter is not specified to be a Calderbank letter, or does not meet the Calderbank requirements, that costs, and indemnity costs, should not flow as a consequence of the failure of the Applicants to heed the warning fairly given.

41 As I pointed out in Barsoum v. Glebe Administration Board (No 2) [2002] NSWADT 174 at [40] that I did “not think that it makes any difference whether an offer was made in open court, by some form of letter or by some formal Offer of Compromise pursuant to particular rules of a particular court. The real issue is whether in all the circumstances the offer was properly made (having regard to the whole course of the litigation) and whether it was unreasonably rejected”.

42 In Barsoum I reviewed the law in some considerable detail. I adhere to the views that I expressed in that case. An indemnity order was made in Barsoum having regard to all the circumstances, one of which was the making of a very clear and precise offer made in open court on the first day of the hearing. In the case now before me it is plain that the letter 19 June 2009 constituted a fair and clear warning to the applicants that if they persisted with their claim and were unsuccessful a costs order would be sought against them. Furthermore, an “offer” was made (generously) to the effect that if the application was withdrawn within 14 days no costs order would be sought. Contrary to that “offer” the Applicants persisted and only withdrew their proceedings after substantial legal costs were incurred, after the respondent filed a motion and on the eve of the appointment of a hearing date for that motion.

43 I discussed in Barsoum at [32-36] why it is that the law has moved on since Calderbank. Calderbank is not to be regarded as holy writ to be followed slavishly without regard to modern rational thought. Calderbank represented an attempt by the courts to encourage litigants to settle and, if not, at their peril as to costs. The law has moved on since Calderbank. We now have alternative dispute resolution, expert determination, and so on; all directed at endeavouring to achieve resolution of conflicts. Calderbank is just one of many weapons in the armoury of an aggrieved party who is ultimately successful. Similarly, the Civil Procedure Act 2005 talks about “the just, quick and cheap resolution” of the issues (s.56 (1)) and reference can be made to the balance of s.56. Similarly ss.57-59. And, more recently, the concept of “the model litigant” – see Kieran v.. Commissioner of Police ( No. 3) [2010] NSWADTAP 32 at [8].

44 A “model litigant” would have taken careful note of the Respondent’s solicitor’s letter 19 June 2009 and, using the logic in Barsoum, re-assessed its case and accepted the “offer” to withdraw from the fray without penalty. Whether the letter satisfied Calderbank or not is, in my opinion, irrelevant. The letter is there, it was ignored, the Applicants batted on and ultimately withdrew, offering no exculpatory reason, but only after the Respondent had engaged lawyers and filed a Motion for dismissal/permanent stay.

45 There is no doubt that this Tribunal has power to make costs orders on an indemnity basis. Barsoum is adequate authority for that proposition; similarly, Rucom Pty Limited v. Mutiplex [2010] NSWADT 1. Indeed, in Rucom there was a careful analysis of the law relating to indemnity costs from [59 ff]. It is plain that the Tribunal “needs to be satisfied that there is “a sufficient or unusual feature”, or some “relevant delinquency” bearing a relevant relation to the conduct of the case. At [61] I observed that although “it is true that categories of conduct, “sufficient or unusual feature” or “relevant delinquency” are not closed … it is plain that indemnity costs orders are most regularly awarded where litigation is commenced with no reasonable prospects of success”. I also observed that although “it is true that a weak case will not ground an indemnity costs award, where the matter raised has been decided previously that would generally result in an indemnity order …”. In Rucom the issues/arguments raised by the Applicants were clearly covered by a previous decision of the Appeals Panel and also clearly covered by a Deed of Settlement entered into between the parties. But it is important to understand that in Rucom there were strenuous arguments relating to the effect of that Deed of Settlement and a very careful analysis by counsel for all parties and the Tribunal.

46 It is my view that the withdrawal of the proceedings in all the circumstances I have been at pains to set out above is “a sufficient or unusual feature” that would support an award of indemnity costs. In my view the Tribunal needs to look at the whole of the issues raised, starting from the commencement of the proceedings, the letter 19 June 2009, the continuation of the proceedings, the filing of a Motion seeking dismissal, various Directions Hearings and the ultimate abandonment of the proceedings without any reason being given.

47 There should be an award of costs on an indemnity basis.

Sum certain

48 The next issue raised by the respondent was whether the Tribunal should make a costs order in a sum certain. The Respondent made reference to the Cost Guideline referred to in the Tribunal’s Practice Note 22. It is interesting that clause 9 of that Practice Note makes this statement:

“Parties should tell the Tribunal and the other party that they will be applying for a cost order as soon as they become aware of circumstances which justify an order for costs. If the matter goes to hearing and the application for costs is pursued, the party applying for costs should file and serve a precise statement of the amount of costs actually sought and its components”.

49 There are two observations relating to that paragraph: firstly, there was the letter 19 June 2009; secondly, the Respondent has in fact prepared “a precise statement of the amount of costs actually sought and its components”. The purpose of this latter exhortation is to enable the Tribunal to make an order for costs in a precise amount, thus avoiding the need for a relatively costly Supreme Court assessment. The power is clearly granted to the Tribunal to “determine by whom and to what extent costs are to be paid” (Section 88(2)(a); and the Tribunal also has power to “order costs to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis” (Section 88(2)(b)). Thus, so it seems to me, the Tribunal can either direct costs be assessed on the usual basis (ie pursuant to the Legal Profession Act) or on some other basis, or, can make a determination that is final. After all, if the Tribunal does not have that latter power then what is the point of requiring a party to “file and serve a precise statement of the amount of costs actually sought and its components”?

50 It is not uncommon, but rather good practice, when seeking a costs order in a relatively small matter, to serve a detailed Bill of Costs upon the other party and hand a copy up to the Court at the time of making the application for costs. This good practice has been around for many years and it consistent with the principles set out by the Court of Appeal Caltex Refining Co Pty Limited v. The Maritime Services Board of NSW (1995) 36 NSWLR 552, discussed by me in Trust Company of Australia v. Craig at [7]. Indeed in Law Society v. Gallagher [1999] NSWADT 8 the Tribunal was invited to, and did, accept a detailed bill, took submissions thereon and then made a final order for costs.

51 It seems to me that, in an appropriate case, the Tribunal should endeavour to make costs orders that are in a sum certain, but subject to all the usual and proper constraints, including prejudice, costs, opportunities to make submissions and so on. See also Trust Company of Australia v. Craig at [37-38], and Lal at [3].

52 In the instant case the Respondent made detailed written submissions 14 October 2009 to which was attached a detailed Memorandum of professional charges and expenses and a detailed Memorandum from briefed counsel. In response to that the Applicants said that it was “not clear whether these costs are calculated on a party/party, solicitor/client or some other basis. If it was appropriate to make a costs order of any sought, then the costs order should be for an assessment of costs. This would allow the parties to raise matters concerning the reasonableness of costs claimed with an assessor appointed by the Supreme Court”. No attempt was made by the applicant to carry out any sort of analysis of the bill presented in detailed form.

53 It is plain to me that the submissions of the Applicant must be rejected. Not only is it plain to me that the bill of costs as submitted is fair and reasonable, both in professional rates charged and in content, but also not one single item has been challenged by the Applicants although they have been given more than adequate opportunity to so do. It is also plain to me that, not only are there only two bases for assessment of costs (reasonable and indemnity) but the bill as submitted in detailed form clearly is a bill in an indemnity form (formerly known as solicitor/client) and is, at the risk of repeating myself, fair and reasonable and no challenge has been made to it.

54 It is my clear view that the Tribunal not only has the power but, in appropriate circumstances, should exercise the power to make a final costs order in a sum certain. This is an appropriate case.

55 The Tribunal therefore orders the Applicants to pay the costs of the Respondent of the whole of the proceedings on an indemnity basis in the sum of $10,113.50.

Orders:

1. The Applicants pay the costs of the Respondent on an indemnity basis in $10,113.50.