Alramon Pty Ltd v Lifuli Pty Ltd (No 2)[ [2010] NSWADT 49 (16 February 2010)

Last Updated: 17 February 2010

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL

CITATION:
Alramon Pty Ltd v Lifuli Pty Ltd (No 2)[ [2010] NSWADT 49


DIVISION:
RETAIL LEASES DIVISION

PARTIES:
APPLICANT
Alramon Pty Limited

REPSONDENT
Lifuli Pty Limited



FILE NUMBERS:
095013

HEARING DATES:
On the papers

SUBMISSIONS CLOSED:
21 December 2009



DATE OF DECISION:
16 February 2010

BEFORE:
Molloy G - Judicial Member





LEGISLATION CITED:
Administrative Decisions Tribunal Act 1997

CASES CITED:
Alramon Pty Limited v. Lifuli Pty Limited [2009] NSWADT 270
Alramon Pty Limited v. Jonamill Pty Limited (No. 2) [2009] NSWADT 302
Barsoum v. Glebe Administration Board (No 2) [2009] NSWADT 174 at [18-25]
Council of the Law Society of NSW v. Dimitriou (No 2) [2010] NSWADT 37
Cripps v. G & M Dawson Pty Limited [2006] NSWCA 81
Jonamill Pty Limited v. Alramon Pty Limited (No 2) (RLD) [2010] NSWADTAP 3
Potier v. Department of Correctional Services [2009] NSWADT 143
Salon Today Pty Limited v. MMIR Pty Limited [2009] NSWADT 71
Zeaiter Corporate Holdings Pty Limited v. Satchithanantham [2009] NSWADT 70

TEXTS CITED:


APPLICATION:
Costs

MATTER FOR DECISION:



REPRESENTATION:
APPLICANT
S Laface, solicitor
RESPONDENT
P Wood, solicitor


ORDERS:
The Respondent pay the Applicant’s costs of and incidental to the proceedings, including the costs with respect to the issue of costs as assessed or agreed.


Reasons for Decision:

REASONS FOR DECISION

Background

1 By Decision delivered 16 October 2009 (Alramon Pty Limited v. Lifuli Pty Limited [2009] NSWADT 270) the Tribunal determined that the Respondent Lessee pay to the Applicant Lessor $5,060.00 which the Tribunal determined was the cost of the damage caused by the Respondent to the leased premises owned by the Applicant.

2 There is no need to trawl through the Decision itself, except to make these salient points:

a) The Tribunal held that on the material before it there was a clear prima facie case presented by the Applicant which would normally have entitled it to a Judgment by default, alternatively, a clear Judgment in its favour on a ex parte hearing.

b) Consequently, the onus or burden of proof then fell to the Respondent to satisfy the Tribunal that somehow the Applicant was not entitled to such a finding.

c) The Respondent raised numerous arguments, all of which were rejected. Some of those arguments clearly had absolutely no merit at all – and this is plain from the Decision 16 October 2009.

d) Some of the arguments required some attention to detail, but even on those arguments they were rejected by the Tribunal.

e) It is in those circumstances that the Applicant applies for an order that the Respondent pay its costs of and incidental to the proceedings.

Applicant’s Submissions

3 The Applicant, understandably, was somewhat put out by the fact that it had to go to the Tribunal for relief over a relatively small amount of $5,060.00 yet was confronted by numerous arguments, all of which were rejected. It was submitted, understandably, that the Applicant "wholly succeeded on the claim for relief that it sought".

4 The Applicant based its arguments on Administrative Decisions Tribunal Act 1997 ("the Act") Section 88; submitted that its application was "focused from a statutory perspective concerning the new touchstone (ie the new Section 88 which came into operation 1 January 2009) which is "fairness" for the awarding of costs".

5 It was submitted that it was "germane to the question of whether costs are to be able to be awarded on the basis of fairness" to consider various paragraphs of the Tribunal’s Decision 16 October 2009, and the Applicant relied on paragraphs [7], [19], [31] and [40]. Importantly, the Tribunal found (at [40]) that the Respondent "was in breach of its contractual obligation under the lease, effectively (in fact) admitted such, had an obligation to make good, failed so to do (even though an opportunity was given to it by the Applicant), the Applicant obtained a quotation to make good, the quotation is limited to the amount required to make good and the Applicant has paid the builder in accordance with that quotation, quantum of which was not in issue".

6 It was argued that "when one considers the evidence and the admission at the outset by the Respondent as to the breach of the lease at paragraph [7] of the (16 October 2009) Judgment, the Applicant as a litigant should not, as a matter of fairness, be put to sustaining the incurring of the totality of its costs in seeking the relief that it did in order to put the matter beyond dispute". The Applicant relied on my Decision in Salon Today Pty Limited v. MMIR Pty Limited [2009] NSWADT 71 and also Zeaiter Corporate Holdings Pty Limited v. Satchithanantham [2009] NSWADT 70. It was submitted that both those decisions support the argument that "costs must be awarded as a matter of fairness in all the circumstances".

7 More importantly, the submission went on: "what we are submitting is that the manner in which the claim was defended given the admission by the Respondent which was conceded at the outset and the fact that the Applicant was compelled to file proceedings in order to recover what we respectfully submit what it was always entitled to recover from the Respondent without the need to incur any such costs. In addition, the Respondent’s resistance to the Applicant’s relief is respectfully submitted to be so unmeritorious to the point that it was both unfair and unjust and, in those circumstances, must suffer an award of costs as sought by the Applicant".

Respondent’s Submissions

8 The Respondent submitted that "nothing occurred in the conduct of the matter and no submissions are made by the Applicant which fall within sub-sections 88(1A)(b) or 88 (1A)(b) of the Act. It was further submitted that "the proceedings were prolonged and costs were increased by significant and continued failures on behalf of the Applicant to comply with orders and directions of the Tribunal in particular with regard to filing the evidence and responding to Summons to Give Evidence". It was submitted that the Respondent "had an arguable case both on the facts and on the law including the issues relating to the provisions of s.133A Conveyancing Act ... (and the) Applicant filed incorrect evidence which when tested by material filed in response to the Summons ... obliged the Applicant to file further evidence which contracted the evidence previous deposed by the Applicant."

9 It was further submitted that "due to cost considerations the Respondent represented itself in the matter. The Judgment makes it clear that the Tribunal was obliged to accept sworn evidence which if the Respondent had been represented may well have been successfully challenged whether by objection or cross-examination. In this regard reference was made to paragraphs 10, 11, 13, 15, 18, 21, 31, 33, 38, 39 and 43 of the Judgment". Pausing at this point it is worth dealing with this submission now: in my opinion there is absolutely nothing in the decision 16 October 2009 which would support that submission. In my opinion there is nothing in any of the paragraphs to which reference has been made and, if anything, paragraph 15 supports the view that the Respondent prepared "careful written submissions with references ... (and provided) ... copies of documents extracted from the various tendered bundles". In any event, even if there was some support for this submission the Respondent elected to appear itself, to represent itself and it cannot be argued that if it had been represented some different course of action or result may have eventuated. Indeed, there is nothing, in any event, to support that submitted conclusion.

10 The Respondent submitted that there was no finding "that there was no tenable case for the Respondent’s claim" and that because of the amount in dispute the "nature of the dispute did not justify the involvement of a solicitor let alone a barrister". It is perhaps important also to deal with this submission now: the Act entitles a party to legal representation. It is not to the point that the amount in issue may be relatively small. The legal entitlement is there. But even if that is not a complete answer to that submission the fact is that the assertions agitated by the Respondent alleged falsity and perhaps even fraud by the Applicant. Indeed, almost all of the Respondent’s case was based upon an assertion that, not only had the work not been done but even if it had, it had been paid for by the new lessee. Futhermore, there were serious assertions relating to invoices, a cheque butt which was said to be "false", a suggested "false invoice", the use of different post boxes and perhaps "some form of fraud in issuing a letterhead with a different post box number". It seems to me, and with great respect, that those types of assertions/allegations would certainly warrant the employ of legal representation.

11 It was nextly submitted that if the proceedings had been taken in the Local Court they would have been dealt with in the Small Claims Division and no order for costs could have been paid. This submission is at variance with the law simply because on the application of either party those proceedings would have been transferred to this Tribunal. It is this Tribunal that has jurisdiction to deal with this type of matter.

12 The Respondent made a number of legal submissions. Firstly, it submitted that sub-section 88(1A)(e) must be read ejusdem generis with the preceding sub-clauses of the sub-section. Nextly, it was submitted (correctly in my view) "that the underlying principle is that each party should pay their own costs and that sub-section 88(1A) can only be relied on if its express terms are satisfied". In any event, the Tribunal "is given a discretion by use of the word "may"." Reference was made to the Act Section 3 and in reliance thereon it was submitted that "an award of costs in the matter of this nature would be contrary to the objects of (that) Act". Pausing again at this point, this last-mentioned submission, if accepted, would nullify s.88 and in any event is not supported by Barsoum v. Glebe Administration Board (No 2) [2009] NSWADT 174 at [18-25].

13 It was submitted that paragraph [77] of Salon Today was (perhaps) incorrect because of the ejusdem generis submission made above; that Zeaiter Corporate Holdings was in any event made under the repealed provisions of Section 88 and the Respondent relied on Potier v. Department of Correctional Services [2009] NSWADT 143 and Alramon Pty Limited v. Jonamill Pty Limited (No. 2) [2009] NSWADT 302 and submitted "that the reasoning in those decisions should be adopted in this matter". It was submitted that "nothing in the nature of the matter, the manner in which it has been conducted or the submissions of the Applicant justify the Tribunal from departing from the general principle enunciated in Section 88(1) of the Act; and even if the position were found to be otherwise, the Tribunal has a discretion whether or not to order costs which again, having regard to the nature of the matter and the manner in which it was conducted, should be exercised in favour of the Respondent".

14 There was a further submission in or to the effect that by letter dated 2 December 2008 from the solicitors for the Respondent the Respondent "without prejudice except as to costs" offered to the Applicant "$2,000.00 in full settlement" and stated that if "the offer is not accepted and the matter proceeds to the (Tribunal) this letter will be submitted in support of an application for a costs order". Apparently no response was received to that letter and the offer lapsed but, it was submitted, "if the offer had been accepted considerable savings would have been enjoyed by both parties in terms of cost and time".

Tribunal’s Reasoning

15 Firstly, there is no need to set out in detail Section 88 neither is there any need to review in detail the now established law on this Section. All of this is adequately set out in the most recent decision of Council of the Law Society of NSW v. Dimitriou (No 2) [2010] NSWADT 37, at [10-11]. In my opinion there is no need to repeat that material.

16 Reference can also be made to Dimitriou at [18]. There is again no repeat that paragraph. It is plain that the primary principle in Section 88(1) "is that each party to proceedings should .... bear that party’s own costs". It is also plain that an "award of costs is an exception to this general principle". It must follow that "in order to obtain a costs order in this Tribunal one must fit the parameters within s.88(1A).

17 It is convenient to firstly deal with the Respondent’s ejusdem generis submission. As I understand that submission sub-section 88(1A)(e) must be read ejusdem generis with the preceding sub-clauses of that sub-section. With respect, I would reject that submission. I adopt the reasoning that I sought to explain in Salon Today and I also adopt the reasoning in Dimitriou at [18] where that Tribunal observed that sub-section (e) is a wide import and ought not to be read down or ignored. It is my view that to attempt to restrict sub-section (e) would do violence to the section itself and would be contrary to its precise terms. Firstly, it would be difficult to read "any other matter that the Tribunal considers relevant" ejusdem generis with "the relative strengths of the claims made by each of the parties ...", or "attempting to deceive another party or the Tribunal" or ‘the nature and complexity of the proceedings". Ejusdem generis means "of the same kind or nature". Quoting Osborne 4th Edition: "The rule that where particular words are followed by general words, the general words are limited to the same kind as the particular words". However, in my view that rule has nothing to do with section 88, nor with sub-section (1A)(e). Otherwise the discretion given to the Tribunal to consider relevant "any other matter" would be simply taken away and sub-section (e) would have little or no utility. It is plain to me that the Parliament intended the Tribunal to, but subject to s.88(1), have the ability and discretion to make orders for costs when considering matters other than referred to in sub-section (1A) that are relevant to cost issues. Otherwise, one might rhetorically ask: what was the point of the words "any other matter that the Tribunal considers relevant?" If it was thought that those words should be read
ejusdem generis with the previous sub-sections then Parliament could well have used words in or to the effect: "any other matter that the Tribunal considers relevant having regard to the other sub-sections of this sub-section (1A)", or words to that effect. In my opinion the words in sub-section (e) ought not to be restricted in the manner submitted by the Respondent. See also the decision of the Appeal Panel in Jonamill Pty Limited v. Alramon Pty Limited (No 2) (RLD) [2010] NSWADTAP 3 at [27-28].

18 The Respondent relied upon Potier and Alramon (the 2009 Decision) [13] above and submitted "that the reasoning in those decisions should be adopted in this matter". Potier involved an application pursuant to Freedom of Information Act 1989 Section 58 and Administrative Decisions Tribunal Act 1997 Section 131(1). These Sections deal with contempt and improper conduct. Montgomery JM at [20] observed that the issues raised by Mr Potier "as supporting his application for costs are either not ones that can be taken into account in regard to this costs application or are not persuasive". In my opinion there is nothing in Potier that would relate in anyway to the issues now before the Tribunal in this matter.

19 With regard to the 2009 Alramon v. Jonamil decision. Firstly, that decision seems to support the view that I had previously expressed that the terms of s.88(1A)(e) is of wide import and should not be restricted – see the observations of Rickards JM at [15]. In any event, I am unable to see anything in this 2009 decision that assists the Respondent. Rather, one might not unreasonably think, to the contrary – Rickards JM at [19] noted that "there is no evidence of conduct by the Respondent which would justify exercise of the discretion to order costs", and in this matter it is that conduct that is basically relied upon by the Applicant. Indeed, it was that sort of conduct.

20 Pausing at this point it is worthwhile referring to Cripps v. G & M Dawson Pty Limited [2006] NSWCA 81. Although it is true that this decision of the Court of Appeal in relation to costs was based on the "old" s.88, the statements of principle remain apposite. And ought in my respectful opinion, and in an appropriate case, be applied. The Court made these important observations, in the context of a case where the losing parties failed to consent to an assignment in circumstances where they should have, as a matter of law, the appellant failed to recognise the existence of the respondent’s lease, refused to register it without proper cause and "taking advantage of that failure, and being fully on notice of (the respondent’s) need for the lease to be registered and consent to its assignment given so that the sale of its business could proceed, in breach of the (Retail Leases) Act and of the lease (the appellant) withheld consent to that request for assignment of the lease. This was notwithstanding that (the respondent) had complied with the requirements of the Act, including in particular s.41 thereof, covering consent to assignment. The result was the lost sale ... and the consequent damage. ... Thus the commencement of the proceedings was prompted by the need to ensure that the lessor recognised both the existence of the lease and the obligation to consent to its assignment". (At [57-58]). The result was 5 hearing days before the Tribunal at first instance, further hearing days before the Appeal Panel strenuously contested (at [59]) and another hearing day before the Court of Appeal.

21 The Court of Appeal (per Santow JA) at [60] made this telling observation:

"...In my view it suffices that the conduct of (the appellants) in relying upon their status as the registered proprietors of the freehold and the doctrine of indefeasibility of title to wrongly deny registration and consequent assignment of the lease, so acted as by their conduct to give rise to special circumstances; that is circumstances that were clearly out of the ordinary and grossly unreasonable so far as the Respondent tenant was concerned. On the other hand, the Tribunal correctly concluded that the Respondent, through no fault of his own, has been placed in the situation where it has been forced to pursue this litigation. Yet it (the Tribunal) still failed to find special circumstances. With respect, I consider that the Tribunal was in error in failing to conclude that special circumstances here applied. For this purpose, it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional. While a finding of "serious unfairness" is not a prerequisite to determining that there are special circumstances, it is none the less a highly relevant consideration".

22 It seems to me that the logic in Cripps equally applies in this case now before me. Here was a situation where the Respondent admitted the damage caused to the Applicant’s premises, did not challenge the quantum, failed to rectify its damage to the premises (16 October 2009 decision at [6-9]) yet sought to argue, totally unsuccessfully, that the work had not been done, or that the incoming new tenant had paid for it anyway, or that there was some kind of falsity or fraud being perpetrated by the Applicant or the builder, or otherwise as set out in the decision. But, and using the words of the Court of Appeal in Cripps, the Applicant, "through no fault of its own, has been placed in a situation where it has been forced to pursue this litigation" in circumstances where, quite frankly, the Respondent should simply have paid up and there would not have been any litigation and there would not have been any requirement by the Applicant to engage legal representation. If this type of situation was in fact "special circumstances" under the old s.88 then it would certainly fall within the "new" s.88 and clearly, in my view, falls within s.88(1A)(c) and (e).

23 It is further important to make this observation: the arguments raised by the Respondent either had no merit at all upon initial consideration or, upon more detailed consideration also had no merit. That is plain from my previous decision. In my view the Respondent was "clutching at straws" in an unsuccessful attempt to avoid paying for the damage that it had caused to the demised premises where neither liability nor quantum was really in issue, or at all.

24 The Respondent raised the letter written 2 December 2008 offering $2,000.00 in full settlement and submitted that "if the offer had been accepted considerable savings would have been enjoyed by both parties in terms of cost and time". No doubt that observation is true. However, if the Applicant had accepted the offer of $2,000.00 then it would have foregone and lost the difference between the Judgment of $5,060.00 and the offer of $2,000.00, nett $3,060.00. After all, the Applicant had paid out $5,060.00 as a result of the damage caused by the Respondent. Why should it have foregone $3,060.00 and why should an inadequate offer be used in an attempt to thwart the Applicant’s attempt to recover its costs for the full amount of the damage caused? Indeed, the $2,000.00 offer, although marked "without prejudice except as to costs", in the result, particularly on this argument relating to costs, seems to me to be an admission by the Respondent – but even if it should not be regarded in that fashion it certainly demonstrates that the Respondent was prepared to make a payment to the Applicant for the damage caused and that payment as so offered was clearly inadequate.

25 I refer again, if I may, to the decision of the Appeals Panel in Jonamil (above at [17]). The logic used by the Appeals Panel in relation to the appeal applies equally, with respect, to the approach taken by the Respondent in the matter previously before me. I refer to paragraphs [44-47] of Jonamil and note again that, having regard to the clear case advanced by the Applicant, which would have entitled the Applicant to a "judgment by default", alternatively a Judgment in its favour on an ex parte hearing, the burden in satisfying the Tribunal that the Applicant should not succeed "was obviously an uphill task" and the Respondent was ultimately left "with no sustainable grounds" on which to challenge the clear prima facie case proved by the Applicant.

26 In any event, in my opinion, the logic of the Court of Appeal in Cripps clearly applies.

27 It is my opinion that this is a classic and clear case where, not only was the Applicant entitled to a Judgment in its favour but also a classic and clear case where the Applicant is entitled to an order for costs for the reasons that I have set out above.

Order

28 The Tribunal orders:

The Respondent pay the Applicant’s costs of and incidental to the proceedings, including the costs with respect to the issue of costs, as assessed or agreed.