Dong v West Services Pty Limited (No 2) [2010] NSWADT 231

CITATION: Dong v West Services Pty Limited (No 2) [2010] NSWADT 231

DIVISION: Retail Leases Division

APPLICANT Li Fang Dong PARTIES: RESPONDENT West Services Pty Limited

FILE NUMBER: 105013

HEARING DATES: On the papers

SUBMISSIONS CLOSED: 25 August 2010

DATE OF DECISION: 7 October 2010

BEFORE: Rickards K - Judicial Member

CATCHWORDS: Costs

LEGISLATION CITED : Administrative Decisions Tribunal Act 1997

Horwood v Memocorp Australia Pty Limited (No 2) [2010] NSWADT 174 CASES CITED: AT v Commissioner of Police [2010] NSWCA 131 Adwell Holdings Pty Ltd –v- Ull Pty Ltd [2010] NSWADT 166

APPLICANT B Kasep, solicitor REPRESENTATION: RESPONDENT D Tudehope, solicitor

ORDERS: The Applicant is to pay the Respondent's costs of these proceedings as are agreed or assessed.

REASONS FOR DECISION

1 In the original decision made in these proceedings on 15 June 2010, leave was granted to either party to file and serve written submissions as to costs within 14 days, with a further 14 days allowed in reply. It was further ordered that any decision as to costs would be resolved "on the papers" pursuant to Section 76 of the Administrative Decisions Tribunal Act 1997.

2 The parties subsequently requested a period of 28 days from 28 June 2010 in which to lodge any submissions as to costs, in view of continuing negotiations. Ultimately, the Respondent's solicitors filed submissions on 27 July 2010. On 9 August 2010 the Tribunal received a letter from the Applicant's solicitors indicating that the Respondent's submissions had only been received on 28 July 2010, that the Applicant's counsel would be absent until the end of August 2010, and accordingly seeking an extension of time until 25 August 2010. Submissions were then received on behalf of the Applicant on 25 August 2010. 3 Section 88(1) of the Administrative Decisions Tribunal Act 1997 provides that parties are to bear their own costs of proceedings unless the Tribunal is satisfied that it is "fair" to order that one party should pay another party's costs. 4 The circumstances which may make a costs order "fair" are widely expressed within section 88(1A), and include consideration of such factors as: the relevant strengths of the claims made by each of the parties; whether a party has made a claim that has no tenable basis in fact or law; the nature and complexity of the proceedings, and; any other matter which the Tribunal considers relevant. 5 In considering the effect of section 88, Basten JA in AT v Commissioner of Police [2010] NSWCA131 contrasted the general principle that each party should bear its own costs in the Tribunal to his observation that: "[33] there is a relatively low hurdle for an applicant seeking an order. The criterion of "fairness" will take into account the compensatory purpose of an award of costs, which will generally favour the successful party. The circumstances in which fairness may be identified are indicated by the specific attributes listed in sub section (1a), but subject to the generality of paragraph (e), read in its context. Other considerations will no doubt include the nature of the jurisdiction of the Tribunal which is invoked and the objects identified in section 3(b) – (g) of the Administrative Decisions Tribunal Act." 6 Relevantly, section 3(b) of the Administrative Decisions Tribunal Act 1997 states that the objects of the Act are "to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair". 7 The Tribunal in Horwood v Memocorp Australia Pty Limited (No 2) [2010] NSWADT 174 followed a long line of authority within decisions of the Tribunal that the "commerciality" of proceedings in the Retail Leases Division of the Tribunal permitted a broader interpretation of the "special circumstances" test which was previously required to ground an order for costs, as opposed to a narrower interpretation which might apply in other divisions. This approach was also followed by the Tribunal in Adwell Holdings Pty –v- Ull Pty Ltd [2010] NSWADT 166: "[22] The proceedings are commercial in nature, arising from two parties who were acting in trade and commerce. One significant effect of the amendment to s.88 is that the notion of 'fairness' is to broaden the basis upon which costs might be awarded, particularly in a jurisdiction which is commercial in nature."

8 The Tribunal in Horwood also referred with approval to earlier decisions in relation to costs within the Retail Leases Division, to the effect that proceedings should only be commenced after careful consideration of the merits of the case. This approach reflects the provisions of section 88(1A)(c) of the ADT Act in specifying that the relevant strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, are relevant factors to be taken into account in determining whether it is fair to make an order for costs. In commercial proceedings such as these, an unsuccessful claim which is tenable but weak may still attract an adverse costs order. 9 In the present proceedings, it clearly emerged from the evidence that there would be no binding agreement between the parties until such time as a formal lease had been executed, and also that such formal lease would not be prepared until certain specified requirements had been met by the Applicant. These specified requirements were not met, despite repeated requests, except for payment of an additional increment of rent in the sum of $476.65 which was made by the Applicant to the Respondent's agent. 10 There are a number of factors in these proceedings which operate in favour of a costs order being made. The Applicant's case generally lacked merit. There was no real evidence to indicate the existence of any new retail lease agreement between the parties. The notion of "fairness" in relation to consideration of making a costs order is wider within commercial proceedings such as these, as opposed to proceedings within other divisions of the Tribunal. Careful analysis by the Applicant prior to commencement of these proceedings should have indicated that the argument that a new retail lease agreement had been created would be unlikely to succeed. The Respondent has clearly been put to expense in defending the application. In these circumstances, it is fair that the Applicant should pay the Respondent's costs of proceedings.

ORDERS 1.The Applicant is to pay the Respondent's costs of these proceedings as are agreed or assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.