Davies v Lyndhurst Developments Pty Ltd [2001] NSWADT 9 (12 January 2001)

Last Updated: 6 June 2001

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL RETAIL LEASES DIVISION

CITATION: Davies v Lyndhurst Developments Pty Ltd [2001] NSWADT 9

PARTIES: APPLICANT

Jane Ann Davies

RESPONDENT

Lyndhurst Developments Pty Ltd

FILE NUMBERS: 995021

HEARING DATES: 13/10/2000

SUBMISSIONS CLOSED: 13/10/2000

DECISION DATE: 12/01/2001

BEFORE: Fox R - Judicial Member

LEGISLATION CITED: Retail Leases Act 1994

CASES CITED:

APPLICATION: Jurisdiction

Right of Registrar of Retail Tenancy Disputes to appear

MATTER FOR DECISION: Application by Respondent: strike-out Applicant's amended claim; strike-out appearance of Registrar of Retail Tenancy Unit; strike-out Applicant's claim generally

APPLICANT REPRESENTATIVE: In person

RESPONDENT REPRESENTATIVE: A McInerney, barrister

ORDERS: 1. Respondent's application to strike-out Applicant's amended claim dismissed

2. Respondent's application to strike-out appearance of Registrar of Retail Tenancy Dispute dismissed.

3. Application by Registrar of Retail Tenancy Disputes for Declarations dismissed.

4. Respondent ordered to:

(i) Make accounting records available to Applicant within 21 days- being records for the period from 1st October 1994 to 30th June 1995

(ii) Applicant, within 7 days of inspection to submit list of discrepancies (if any) to Respondent (and Respondent's accountant)

(iii) Accountant within 14 days to respond by way of statement addressing such discrepancies, such statement also to indicate whether the audit certificate of 30th August 2000 complies with the requirements of Section 27 Retail Leases Act as it applied at that time.

5. Matter now to be listed for further Directions on 22 January 2001

Reasons for Decision:

1 Judicial Member Davidson ruled on 6th April 2000 that the Applicant's claim pursuant to Section 71(2) was limited to payments made by her on and after 10th November 1996.

2 The Registrar of Retail Tenancy Disputes pursuant to Section 65(2) intervened.

3 The Applicant filed an amended claim.

4 In this interlocutory application the Respondent moved to:

(a) strike-out the amended claim because it was filed later than directed

(b) strike-out the Registrar's appearance

(c) strike-out so much of the claim as survived the 6 April 2000 order because it could not possibly succeed on jurisdictional grounds.

5 The matters were argued by way of written submissions and orally on October 13th.

6 Firstly, I accept the Applicant's amended claim, although clearly filed much later than she was directed to. Her explanation, which turned on the fact that she was firstly occupied in exploring the cost of an Appeal against Mr Davidson's ruling, and then ascertained that the cost of that, or, for that matter, the cost of further legal representation in these continued proceedings was beyond her means, and she was finally thrown back on her own resources and now appears for herself, rang true, and satisfied me that she had not simply disregarded the imposed time limit.

7 In any event, it seemed to me to be clear that the Respondent had not been seriously prejudiced by the delay.

8 The Respondent also argued that, pursuant to Section 6(a) of the Act I had no jurisdiction to hear the matter because Mrs Davies, as lessee, occupied the premises after 30th September 1997 as monthly tenant holding over, a situation which continued until 14th April 1998, when she quit the premises. Of course, absent any other matter, the Respondent correctly asserts that this Tribunal would have no jurisdiction in relation to any of the matters arising between the parties as a result of that holding over from 30th September 1997 onward. However, Mrs Davies has filed a statement in which she asserts that she was persuaded by a director of the Respondent not to exercise her three year option to extend her term from 30th September 1997 to 29th September of the year 2000 but instead offered her a five year lease with a further five year option, an offer which the Applicant accepted. If those assertions by the Applicant be proven then, of course, there would be a lease within the terms of the legislation (despite the absence of writing) and that would give me jurisdiction. This is obviously a matter which, if it remains alive, needs to be tested and this part of the Respondent's application for dismissal must fail.

9 The Respondent's objection to the Registrar's appearance turned on the definition section of Part 8-

"Court means a court, tribunal or other body or person authorised by law, or by consent or agreement of parties, to decide or resolve any issue that is in dispute between parties, and includes an arbitrator".

"Tribunal means the Administrative Decisions Tribunal of New South Wales established by the Administrative Decisions Tribunal Act 1997".

10 The proposition put by the Respondent was that because the definition of "court" did not specifically include "Tribunal" (but presumably merely subsumed it in the use of the word "tribunal"), the expressio unius exclusio rule of interpretation requires that "Court" is to be read as excluding the "Tribunal". If this interpretation be correct that would mean that the Registrar's right to intervene given by Section 65(2) is limited to courts and tribunals other than this Tribunal. I suppose that there is some support for this surprising proposal in the words of the sub section, because it uses the phrase "concerning retail tenancy disputes" a phrase which would have no meaning in reference to the Retail Leases Division of this Tribunal, because it can deal with nothing other than Retail Tenancy Disputes.

11 The argument then appeared to go to a next stage by drawing a distinction between a Retail Tenancy Dispute as defined in Section 63, and the fact that Section 72 empowers the Tribunal to deal with Retail Tenancy Claims (as opposed to Retail Tenancy Disputes).

12 I have earlier referred to this conclusion as surprising, because, as the Registrar rightly pointed out, it seems illogical to give him a right of audience in all other courts, but deny him that in the specialist tribunal charged with the consideration (albeit non exclusive) of the Retail Leases Act. As specifically stated in Section 75(2):- "... A Court is to have regard to the general principle that Retail Tenancy Disputes should be dealt with by the Tribunal rather than by a Court".

13 I am satisfied that the plain and simple intent of Section 63 is to cast its net as widely and inclusively as possible and that there is no exclusio. The word "tribunals" as used in the definition of "Courts" is plainly intended to be inclusive, and to incorporate this particular Tribunal. It seems to me that although there would have been greater precision imparted by the definition had it read "Court means a court, tribunal (including the Tribunal) or other body or person.....", the intention is clear. I am satisfied that Section 65(2) was intended to and does give the Registrar of Retail Tenancy Disputes a right to intervene in proceedings in this Tribunal.

14 I am also satisfied that when a matter has become a Retail Tenancy Claim (before this Tribunal) pursuant to Section 72, it is still a Retail Tenancy Dispute within the terms of Section 63, it has simply progressed from being a dispute which must be subject to various alternative dispute resolution considerations to one which has been submitted to those, found not to be resolvable, and so must be the subject of the Tribunal's more formal adversary proceedings.

15 It seems to me that a much more difficult question arises once the Registrar has intervened- what can he do?

16 Section 65 gives the Registrar, once he has intervened, all the rights of a party, and so he has full standing, but, as a creature of statute, that standing must, in my view, be limited by the Retail Leases Act itself.

17 Section 65 gives the Registrar the following functions:-

(a) to make arrangements to facilitate the resolution by mediation, or by some other appropriate for of alternative dispute resolution, of retail tenancy disputes (whether or not a dispute has been formally referred to the Registrar under this Act);

(a1) to make arrangements to facilitate the resolution by mediation, or by some other appropriate form of alternative dispute resolution, of disputes or applications under Section 19(3), 19A(3), 31(3) or 31A(3) or the subject, or possible subject, of a claim under Section 62B,

(b) to report to the Minister on the operation of this Act;

(c) to take proceedings for an offence against this Act or to authorise persons to take proceedings for offences against this Act;

(d) such other functions as may be conferred or imposed on the Registrar by or under this or any other Act.

65(2) Intervention in Proceedings:

The Registrar may, at any stage of proceedings brought before a court concerning a retail tenancy dispute intervene in the proceedings. If the Registrar intervenes in the proceedings, the Registrar becomes a party to the proceedings and has all the rights (including rights of appeal) of a party to the proceedings.

65(3) Considerations regarding Mediation:-

In making arrangements for the resolution by mediation of disputes or other matters, the Registrar is to have regard to the need for mediation of those disputes or other matters to be conducted by persons who are experienced in the field of retail shop leases.

65(4) No Ministerial Control:-

In the exercise of his or her functions under this Act, the Registrar is not subject to the control or direction of the Minister,

and, at first blush this appears to limit Registrar (in this Tribunal as well as elsewhere) to enforcing the mediation requirements of Sub-Sections (a) and (a1). I doubt that the Registrar's intervention rights have any application in relation to Sub-Section (c) because the prosecution in a court of criminal jurisdiction calls for something different than an intervention in proceedings.

18 The Registrar sought in these proceedings to move that a Certificate purporting to be an auditor's certificate did not in fact comply with Section 28 of the Act.

19 The Registrar says that once he has elected, he may pursue any issue which arises in the dispute, specifically out of the rights and obligations given by the Act. He calls Section 65(1)(d) in aid for this proposition- "Such other functions as may be conferred or imposed on the Registrar by or under this or any other Act". This may enable the Registrar, under Section 78, to bring to the Court or Tribunal knowledge of the accepted practices and interpretation within the relevant industry, I do not, however, readily perceive any other functions which are conferred upon the Registrar by any other section in the Act.

20 The Registrar argues, with some apparent initial justification, that as Section 65 (2) enters him in a dispute, at his election, "as a party", he has the rights of any of the disputants in any dispute in which he intervenes. However, I cannot accept that, because that must mean that the Registrar would have to take the side of either the Applicant or Respondent in the hearing. (Indeed, that is what he seeks to do in these proceedings, because he seeks, against the Respondent, to question the propriety of a certificate given by or on behalf of the Respondent, and so it appears to be clear that the Registrar is "siding" with the Applicant). Whilst I do not doubt that the legislature can give a statutory functionary such a partisan role, the words used to so empower would have to be very clear words indeed, I am not satisfied that these words ("as a party") establish the intention of the legislature to allow the Registrar to take sides in a dispute and so I am not satisfied that the Registrar is given the power to elect to stand on the shoes of one of the Parties.

21 Thus, when he intervenes (in any court) the Registrar can only raise or be involved in argument relating to all and any of the Section 65 alternative dispute resolution requirements which, presumably, in the main, enables him to, in circumstances where there has been no mediation, claim a halt to the proceedings until there has been such. Similarly, if there is litigation involving the propriety of a rental valuation, then again the Registrar could intervene to force a mediation of such a dispute before any court orders were made. It may even be the case if, in a matter before this Tribunal, it became clear that a lessor had failed to give a Disclosure Statement (and so committed an offence) the Registrar could intervene, and as a Party to the proceedings to obtain the evidence for his prosecution in an appropriate Court.

22 Other instances may come to mind, but I am satisfied that the Registrar has no power, in these proceedings, to put his motion for a Declaration in relation to Section 27(3).

23 I take comfort from the fact that the Registrar's right of intervention is found in the Part of the Act which is concerned with Dispute Resolution and the Division which is concerned with mediation, but that comfort may be reduced by the fact that the same section in addition to the mediation function, gives the Registrar power to take proceedings for an offence, something well beyond an ADR function.

24 I can understand the logic of the Registrar's claim, which in the hearing I described as his right to be a guardian of the Act, but I am satisfied that there need to be clearer words of legislative intent to achieve that result.

25 To take, for example, the sections now in issue:- Section 28 clearly imposes obligations on landlords in relation to audited reports, but does not, it seems to me, give the Registrar any function. The Section does not, for instance, say "such auditor's certification as may be approved by the Registrar of Residential Tenancy Disputes" or "such auditor's certificates shall be conclusive unless rejected by the Registrar of Retail Tenancy Disputes".

26 The fact is that the Act sets out two distinct enforcement regimes for its regulatory proscriptions. Either an imposition becomes unenforceable because of a failure to comply with the requirements of the Act (i.e Section 11 (1) & (2)); or failure to comply (presumably more serious) is made a specific offence (i.e Section 9), which the Registrar can prosecute.

27 I suppose it to be true that the Act creates a third category of requirements (and Section 28 is one of these) which imposes obligations and creates rights but establishes no technique of enforcement. Section 28(d) and (e) simply make the bald statements that the lessor is to provide an audit certificate within a certain time frame, but seems to indicate no consequence for failure to do so. Although I do not propose that the list is exhaustive, other sections which state requirements without establishing penalty or other disincentive are: 15(1) 19(2) 20(2) 25(h) and 31(2).

28 Sections 27, 28 and 55 all impose requirements which, if not complied with presumably mean that the liability does not arise, or conversely, if there has been payment pursuant to a purported certification which in fact it turns out not to comply, then presumably there is a right of recovery.

29 Sections 29(d) and (e) highlight a further variation of the difficulty, because the required adjustment is to take place between one and four months after the relevant accounting period:- if it is not done, and there has been an underpayment by the tenant, does the lessor lose the right to claim? Or if there is an overpayment, and the adjustment is not made, does the lessee lose the right of recovery if the lessee does not ask for the adjustment within the four month period?

30 As I indicated earlier, it may well be appropriate that there be a guardian of the legislation to police these requirements, and it may well be that the Registrar is the appropriate functionary, but I am satisfied that he currently does not have the power. I therefore dismiss the Registrar's motion for the declaration.

31 The Respondent's motion to Dismiss the Applicant's claim generally faces the difficulty that the Applicant is able to suggest with some cogency that an auditor's certificate purporting to have been given on 9th February 1996 was in fact given at a much later date, and if so given might well place her claim inside the 3 year limitation period which applies to all claims. The Respondent sought to cure this difficulty by tendering a very recent (August 2000) certificate from yet another auditor, to establish the probity of the figures, but that, I am satisfied, did not address the preliminary issue which may arise in all claims pursuant to Section 26, 27 and 28. If an Applicant does not accept the figures proposed by the lessor, even if they be audited, an Applicant must (by implication if nothing else) have the right to explore that issue. That, in turn, raises the (disturbing) prospect of a full testing of each and every docket or claimed expenditure, in an "open court" adversarial hearing with all its attendant detail. (In effect, this is what the Applicant asks me to order).

32 In keeping with the spirit of the Act, to seek to resolve as many issues as possible by alternative dispute resolution means, and in an attempt, generally, at limiting the hearing to matters genuinely in issue, I direct the Respondent to make all dockets and records available to the Applicant at the offices of the relevant accountant (because they are all in or near Nowra) to give the Applicant an opportunity to examine the records and isolate those (if any) which in her view, were not evidence of proper outgoing. This process, on the one hand, will have more clearly defined the issues between the Parties, and, on the other hand, may well drive them both to the conclusion that the amount in issue is so small as not to justify the full expense and risk of a full hearing on this point.

33 Obviously, the matter will have to come before this Tribunal once more for Directions, but after the Applicant has concluded her consideration of the expenditure, and has filed a list identifying the discrepancies (if any) and the latest of the Auditors has filed a Statement of Explanation in relation to these particular alleged discrepancies. That will then allow there to be an indication of the written (or oral) evidence which will be required to explore those alleged discrepancies and will also then allow the matter of a possible claim for legal costs to be considered, or alternatively, if the Applicant is satisfied with the information she has obtained and is satisfied that she has not been "overcharged", then the only "live" issue by that time may be the question of a legal costs and it may not be necessary that the full effect of Section 28 be considered.

34 Yet a further possibility may be that, once the ambit of the Applicant's claim, as limited by this decision (and that of Mr Davidson before me), is known, the parties will consider themselves best served by a further attempt at mediation.

35 Finally, in relation to the question of costs as between the Registrar of Retail Tenancy Disputes and the Respondent, it is appropriate to observe that, technically, as the Registrar application for declarations against the Respondent was unsuccessful, the Respondent might be entitled to an order for costs. Whilst that may be the rule which flows in a general court of law, I am in fact constrained by the Administrative Decisions Tribunal and Section 88(1), I must be satisfied that there are special circumstances warranting an award of costs. The point at issue was, as far as I am aware, a novel one and, as I have been at pains to point out, the position taken by the Registrar was an understandable one. On that basis I am not satisfied that there are special circumstances and no order for costs is appropriate.

36 My orders are:-

1. Respondent's application to strike-out Applicant's amended claim dismissed.

2. Respondent's application to strike-out appearance of Registrar of Retail Tenancy Dispute dismissed.

3. Application by Registrar of Retail Tenancy Disputes for Declarations dismissed.

4. Respondent ordered to:-

(i) Make accounting records available to Applicant within 21 days- being records for the period from 1st October 1994 to 30th June 1995

(ii) Applicant, within 7 days of inspection to submit list of discrepancies (if any) to Respondent (and Respondent's accountant)

(iii) Accountant within 14 days to respond by way of statement addressing such discrepancies, such statement also to indicate whether the audit certificate of 30th August 2000 complies with the requirements of Section 27 Retail Leases Act as it applied at that time.

5. Matter now to be listed for further Directions on 22 January 2001.