Auskosu Pty Ltd v Lendlease Real Estate Investments Limited; Auskosu Pty Ltd v Lendlease Real Estate Investments Limited

The proceedings

1. The proceedings were commenced by applications filed 30 June 2023.
2. When the proceedings were commenced, the applicant was the licensee. The respondent was Lendlease Real Estate Investments Limited.
3. The licensee sought orders under the RL Act that the landlord consent to an assignment of the lease from the tenant to the licensee. The licensee contended that the grounds for refusing the assignment are not sufficient, reference being made to s 39 of the RL Act.
4. The proceedings were initially listed before the Tribunal for determination of the interim application on 4 July 2023. At that time, Lendlease contended that the licensee was not entitled to bring the application, s 71 of the RL Act only permitting "a party or former party" to lodge a retail tenancy claim in the Tribunal. In effect, the Tribunal's jurisdiction under the RL Act was not enlivened.
5. In light of the above, the interim application was adjourned for hearing on 7 July 2023. This was to permit the licensee to consider the issue of whether the Tribunal had jurisdiction in light of s 71 and/or to permit the licensee to speak to the liquidator to see whether the liquidator would consent to being joined as an applicant in the proceedings. In doing so, the Tribunal granted leave for the licensee to amend its claim and directed that points of claim and points of defence be filed together with further submissions and evidence as appropriate.
6. When the hearing resumed on 7 July 2023, by consent leave was granted for the licensee to amend the interim application and the substantive application by joining Sushi Bay Pty Ltd (In liq) as an applicant. The licensee and the tenant will be collectively referred to as "the applicants".

Claim for interim relief

1. In their amended application for interim relief, the applicants sought the following order: 2. Until 14 days after the conclusion of these proceedings and upon the usual undertaking as to damages given by the applicants: 1. The respondent is ordered to allow the applicant to retake possession of the premises forthwith; and 2. The respondent is restrained from taking possession of the leased premises, preventing the applicant, its agents, employees, servants or customers from entering the leased premises, granting a lease, licence or other concession in respect of the leased premises or otherwise taking action to prevent the applicant from carrying on business.
2. At the hearing on 7 July 2023, the applicants withdrew their application for an order restraining the landlord in the terms of order 2 sub- order 2 above. Rather, the application for interim relief was limited to an order to allow the licensee into possession for the purpose of carrying on the sushi restaurant business which it had operated under the licence dated 6 April 2023.
3. Such relief was sought until a determination of the substantive application.

Hearing on 7 July 2023

1. At the hearing on 7 July 2023, each of the parties was represented by lawyers. In the case of the applicants, this was Mr Mathas, solicitor. Mr Furlan of Counsel appeared for the respondent.
2. The parties relied on various affidavits, to which I will refer as necessary below. There were no objections to this evidence and no cross examination of witnesses.
3. The respondent opposed the making of any interim orders. The respondent contended that the application for interim relief should be dismissed for the following reasons: 1. An application under s 39 of the RL Act would inevitably fail because the original application for assignment was made by the licensee, not by the tenant. Reference was made to the decision of the Court of Appeal in Lockery v Historic Houses Trust of New South Wales [2012] NSWCA 249. 2. The original application was made by the licensee, not by the tenant. Insofar as the licensee submitted it had made the application exercising some residual powers of the company or did so on behalf of the company, this was not permitted. Reference was made to s 198G of the Corporations Act 2001 (Cth) which prevents an officer of the company exercising a function of power of a company while it is under external administration, including liquidation. 3. The lease had been validly terminated by reason of the forfeiture affected by re-entry on 30 June 2023 and by reason of the written notice given to the tenant on that date. 4. On this issue the Tribunal noted that the notice of termination did not appear to have been given prior to any re-entry being affected, contrary to the provisions of s 129(1) of the Conveyancing Act 1919 (NSW) (Conveyancing Act). 5. The landlord also submitted it had not waived any rights of re-entry, despite having corresponded with the licensee concerning a proposed assignment. In this regard there was no estoppel, the respondent pointing to the letter from the liquidator's office dated 23 June 2023 (see affidavit of Ms Amy Southwell sworn 7 July 2023 p 14) concerning whether the landlord intends to exercise its right to terminate. In oral submissions, the landlord said that the liquidator had thereby conceded the right of the landlord to terminate the lease. 6. In any event, the right to terminate for non-payment of rent meant the re-entry and forfeiture was valid. 7. There was unpaid rent of $37,988.34. There was no offer to pay this rent and bring the lease up to date. In addition, the tenant was in liquidation. Both of these matters constituted a breach of the lease entitling the landlord to terminate the lease. 8. The licensee occupied the premises under a licence. In this regard the parties accepted for the purpose of this application that the tenant had entered into the licence agreement with the licensee but had not obtained the consent of the landlord as required by the lease. 9. The actions of the licensee, who by reason of directorships and family connections was related to the tenant, was an attempt to purchase the business from the tenant for approximately $150,000 in circumstances where the tenant owed creditors approximately $2.8 million. 10. By reason of what had occurred, the applicants would need to establish the tenant was entitled to relief against forfeiture as well as that the landlord had unreasonably refused to consent to the assignment of the lease in order to succeed in the substantive application. In this endeavour, the applicants had little or no prospects of success. In short, there was no serious issue to be tried. 11. The landlord also contended it would suffer prejudice if interim orders were made. The landlord said that it has a prospective new tenant, albeit for less rent, to whom it had issued an offer for a new lease by letter dated 6 June 2023. In connection with this proposed new lease, the new tenant was required to sign the lease within 14 days and the landlord was required to carry out various works to make the premises available, the commencement of such works to occur no later than mid-August 2023 in order to hand over the premises to the new tenant on 18 September 2023. 12. On this last point, the Tribunal indicated that an earlier hearing could be arranged, possibly 11 August 2023, if interim relief was granted. 13. The landlord also submitted that there was a risk it may lose the prospective new tenant by reason of these proceedings and the grant of any interim relief. 14. Finally, the respondent submitted that damages are an adequate remedy and, in light of the evidence provided, including the relationship of the tenant and licensee and the directors as well as the lack of evidence concerning the financial position of the licensee, any undertaking as to damages would not be sufficient.
4. In short, the licensee should not be permitted back into the premises.
5. As noted above, the applicants withdrew any application for an order in the nature of an injunction, at least insofar as it would prevent the landlord from dealing with the premises and/or entering into a new lease. The only application pursued was an order to be let back into the premises pending determination of these proceedings.
6. In summary, the applicants said: 1. There is a serious question to be tried. There was an application to assign which was considered and rejected by the landlord for reasons not permitted by s 39 of the RL Act. Otherwise, there are no reasonable grounds to refuse consent as at 20 June 2023. 2. The argument concerning s 198G of the Corporations Act should be rejected. Inter-alia, the liquidator had power to and did appoint Mr Sol Shin as an agent and the request for assignment was made by the tenant. The applicants relied on s 337(2)(k) of the Corporations Act, a matter challenge by the landlord. 3. The evidence concerning the circumstances of termination does not deal with when the notice of termination was served, the re-entry and forfeiture being ineffectual by reason of non-compliance with the Conveyancing Act. 4. The licensee had paid rent for the period June to July 2023, the applicants accepting that any unpaid rent would need to be paid for the purpose of assignment. 5. The applicants are offering a payment of $10,000 as security for any liability that might arise by reason of the orders made. In this regard, it was unclear whether this security and/or an undertaking as to damages was still proffered in light of the withdrawal of the application for an order restraining the landlord dealing with the property. 6. As to the undertaking and security being offered, reliance was placed on Mr Shin's affidavit sworn 5 July 2023 at paras 24-25. 7. As to whether damages is an adequate remedy, the applicant said damages would be difficult to quantify and that there would, in any event, be a loss of staff as well as loss of custom. In this regard the applicant said the employment of a sushi chef would be lost although the respondent pointed out there was no evidence of this fact provided in support of the interim application.
7. The decision on the application for interim relief was reserved and the proceedings were stood over for further direction on 13 July 2023.

The Constitutional jurisdictional issue

1. During the course of preparing reasons in connection with the interim application, the Tribunal identified that the contest concerning the Corporations Act appeared to raise a federal matter. If that was correct, the Tribunal had no jurisdiction to determine the proceedings: see Burns v Corbett (2018) 265 CLR 304; [2018] HCA 15 (Burns v Corbett): Attorney General for New South Wales v Gatsby (2018) 99 NSWLR 1; [2018] NSWCA 254
2. This issue had not been identified by the parties in their written and oral submissions made to the Tribunal at the earlier hearings nor in the points of claim or points of defence which had been filed. The Tribunal did not, itself, identify this issue at these earlier hearings.
3. Consequently, on 10 July 2023 the Tribunal made orders for the proceedings to be relisted for hearing on the Constitutional jurisdictional issue and provided reasons for doing so as follows: 1. The applications are listed for directions/hearing on 11 July 2023 at 9:30 am. 2. The matter is listed by AVL hearing although the parties may also appear in person. Reasons: An application for interim relief was heard by the Tribunal on 7 July 2023 and the decision was reserved. During the course of submissions, an issue arose as to whether the application for assignment of the lease to which this dispute relates was lodged by the lessee, Sushi Bay Pty Ltd or Auskosu Pty Ltd and whether Mr Sol Shin did so on behalf of Sushi Bar and, if so, in what capacity. In this regard, Sol Shin said he was the general manager of Sushi Bay. The respondent argued Mr Shin was prohibited in acting on behalf of the Sushi Bay by reason of s 198G of the Corporations Act 2001 (Cth). For the applicants, they said, insofar as it was relevant, s 477(2) of the Corporations Act permitted the liquidator of Sushi Bay to appoint an agent to act on his behalf. This dispute appears to raise a Federal matter within the meaning of the Constitution. If so, this Tribunal has no jurisdiction to adjudicate: see Burns v Corbett (2018) 265 CLR 304; [2018] HCA 15: Attorney General for New South Wales v Gatsby (2018) 99 NSWLR 1; [2018] NSWCA 254. As the decision is pending in relation to the interim application, a preliminary issue arises about which the party should be afforded an opportunity to be heard, namely whether this Tribunal has jurisdiction to decide the interim application. Having regard to the urgent nature of the application for interim relief, the proceedings should be listed immediately for the parties to provide submissions, including whether the Tribunal has power to transfer these proceedings to the Supreme Court of New South Wales (and if so whether it should make such an order) having regard to the decision of the Court of Appeal in Wilson v Chan & Naylor Parramatta Pty Ltd [2020] NSWCA 213.
4. The hearing of the Constitutional jurisdictional issue occurred on 11 July 2023.
5. At that time, the Tribunal also noted that there are two landlords named on the lease, one of whom had not, but should be, joined as a party to these proceedings. That was GPT Funds Management Limited (GPT). For reasons that will appear below, the question of joinder of GPT was not resolved until 13 July 2023.
6. Ultimately, it was accepted by the parties at the hearing on 11 July 2023 that the issue concerning the Corporations Act and whether Mr Sol Shin had authority to act on behalf of the tenant to lodge a request for assignment raised a federal matter: Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16 (Citta) at [31]; LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575; [1983] HCA 31 at 581.
7. Consequently, the Tribunal did not have jurisdiction to determine the proceedings.
8. There remained a residual question about whether, if the issue arising under the Corporations Act was withdrawn, the Tribunal would then have jurisdiction to proceed. Due to the need to identify relevant authorities on this topic, this matter remained to be resolved, the applicants being given an opportunity to consider their position.
9. In doing so, the Tribunal indicated its then understanding that whether or not an issue that made proceedings a federal matter was subsequently withdrawn, the proceedings remained a federal matter and therefore the Tribunal had no jurisdiction. This was the position of the landlord.
10. In addition, on the assumption that the Tribunal had no jurisdiction, the second matter which remained unresolved was what should be done with these proceedings. The Tribunal noted there appeared to be three options: 1. dismissal of the proceedings; 2. transfer of the proceedings to the Supreme Court of New South Wales. In this regard it appeared Sch 4 cl 6 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) may permit such a transfer; or 3. the Tribunal could decline to deal with the matter, there being a possibility of an application to a court for leave to proceed in accordance with Part 3A of the NCAT Act: see eg Dalton v Qantas Airways Ltd; Dalton v Morrison [2020] NSWCATCD 2.
11. The landlord's position was that the proceeding should be transferred to the Supreme Court of New South Wales so they could be resolved.
12. The applicants' preliminary position was that they did not wish the proceedings to be transferred to the Supreme Court of New South Wales. However, they wished for time to consider their position.
13. Consequently, the proceedings were adjourned until 13 July 2023 for the applicants to consider the outstanding matter concerning jurisdiction and what should happen with the proceedings and for the landlord to consider whether GPT should be joined as a respondent.

Hearing on 13 July 2023

1. When the hearing resumed on 13 July 2023, the following occurred: 1. The landlord accepted that GPT should be joined as a second respondent. The Tribunal will make that order. 2. Having considered further written submissions of the landlord, the applicants accepted that once a matter is a federal matter it remains so, whether or not the issue constituting the federal matter is withdrawn or struck out: see Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212, 219 (per Bowen CJ, Morling and Beaumont JJ) approved in Citta per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ at [38]-[40]. 3. The applicants sought an order that the proceedings be dismissed as the applicants wished to withdraw the proceedings. The respondents did not oppose an order dismissing the proceedings. Accordingly, I will make that order pursuant to s 55(1)(a) of the NCAT Act.
2. In addition, the respondents sought costs of the proceedings. With the agreement of the parties I determined this application could be made orally and the parties were afforded an opportunity to make submissions and did so.

Costs application

1. The respondents sought an order that the costs of the whole proceedings, namely the ancillary application and the substantive application, should be paid by the applicants, such costs to be as agreed or assessed on an ordinary basis.
2. There was no dispute that, in order to be entitled to costs, the respondent must establish special circumstances and that s 60 of the NCAT Act applied to the costs of the proceedings.
3. There was also no dispute that the Tribunal had authority to determine the costs application and to make an award for costs, if appropriate, having regard to the decision of the Court of Appeal in Wilson v Chan & Naylor Parramatta Pty Ltd 103 NSWLR 140; [2020] NSWCA 213 (Wilson v Chan).
4. I will return to the particular submissions below.

Consideration

1. Prior to deciding the application for costs, it is necessary to set out the circumstances in which this Tribunal can make an order for costs when making orders and dealing with proceedings where a federal matter is raised and the Tribunal is deprived of jurisdiction. As noted above, the Court of Appeal in Wilson v Chan explained the extent of the Tribunal's powers under s 60 of the NCAT Act.
2. In that case, there was a difference of opinion between the majority (Leeming JA, Macfarlan JA agreeing) and White JA (who dissented) on one question. That question was whether the Tribunal can make an order for costs in relation to the whole of the proceedings, as opposed to an order for costs of in respect of the jurisdictional issue only.
3. It is necessary to set out the views of the majority in order to understand why I am satisfied I have power to deal with the costs of the whole proceedings in the present case.
4. Firstly, all Judges in Wilson v Chan agreed that the Tribunal had jurisdiction to determine whether a federal matter was raised and the Tribunal was thereby deprived of jurisdiction to determine the dispute. This was because the decision on jurisdiction was anterior to any exercise of judicial power of the Commonwealth: Leeming JA at [19], White JA at [73], the latter judge's reasons on this point approved by the High Court in Citta as noted above.
5. However, unlike the majority, White JA was of the opinion that this power did not extend to making an order in respect of the whole proceedings, only the costs referable to the jurisdictional question. This was so whether or not the Tribunal (impermissibly) sought to exercise federal jurisdiction in relation to the substantive dispute: White JA at [90]-[91]. Consequently, His Honour proposed the costs order in respect of the whole of the costs of the proceedings at first instance should be set aside and, in lieu thereof, an order should be made limiting the costs payable to those costs of and incidental to the application to dismiss for want of jurisdiction.
6. The position of the majority was different. Having said the Tribunal has authority to decide the preliminary question of whether it has jurisdiction, Leeming JA (Macfarlan JA agreeing) said at [17]-[20]: 17 For those reasons, I cannot accept Mr Wilson's submission that all orders made by NCAT in proceedings which NCAT lacks jurisdiction to determine are nullities and there is no power to order costs. This is wrong in principle and contrary to authority. Mr Wilson's submission ignores the important distinction between the anterior exercise of authority to determine the limits of the Tribunal's own authority, and the subsequent adjudication of an application on its merits. And it is contrary to what was held in Gaynor v Attorney General (NSW). It is also contrary to the reasoning in Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629; [2000] HCA 33 at [17] which distinguished between orders which dismissed for want of jurisdiction (which did not determine any matter brought under the cross-vesting legislation and which were valid) and orders which dismissed or upheld proceedings on their merits, which were invalidly made pursuant to the cross-vesting legislation. Section 60(2) extends to the award of costs in favour of a respondent who successfully contends that NCAT lacks jurisdiction to hear the substantive claim advanced by the applicant. 18 It may be that the Tribunal is satisfied (wrongly as it turns out) that it has jurisdiction, and makes orders in favour of an applicant who has (wrongly) invoked its jurisdiction. There might be orders for interlocutory relief, or declarations that the respondent is liable, and consequential costs orders. If the Tribunal were exercising judicial power when making those orders, then those orders would all be liable to be set aside. That is because there is a single Chapter III matter, and the orders would amount to the exercise of the judicial power of the Commonwealth, contrary to Burns v Corbett. 19 It will be seen, therefore, that there is an important difference between an order that an applicant pay the costs of and incidental to the question of NCAT's jurisdiction, and an order that an applicant pay the costs of his or her unsuccessful application for interlocutory relief. The former is not an exercise of the judicial power of the Commonwealth, because it is a consequence of the anterior determination that the proceeding is not within jurisdiction. The latter is a (purported) exercise of the judicial power of the Commonwealth. 20 However, the power as to costs which is available when a proceeding involving a claim under federal law is dismissed by NCAT is not in my opinion confined to the costs of and incidental to that jurisdictional issue. That view accords with what was said by Katz J in Khatri v Price (1999) 95 FCR 287; [1999] FCA 1289.
7. Having set out the reasons of Katz J in Khatri v Price (1999) 95 FCR 287; [1999] FCA 1289 at [17]-[19], Leeming JA continued at [23]: It will be seen that Katz J distinguished three classes of case: (1) those in which the Court's jurisdiction was properly invoked; (2) those in which "the only jurisdiction which the Court has actually exercised has been its limited jurisdiction to determine that it does not have the jurisdiction purportedly invoked", and (3) those in which the Court had purported to exercise a non-existent jurisdiction.
8. Of category (2), being proceedings in which the only jurisdiction actually exercised by a court is limited to a determination that it does not have jurisdiction, Leeming JA continued at [25]-[31]: 26 I respectfully agree. Nothing turns on the absence from s 60 of the bracketed words in s 43 of the Federal Court of Australia Act "(including proceedings dismissed for want of jurisdiction)". The power in s 60(2) is expressed in broad terms, and is apt as a matter of construction to include any costs relating to the proceedings. 27 The mere fact that costs have been incurred in respect of an issue which if it had been determined would have been an exercise of the judicial power of the Commonwealth does not in my opinion mean that an order in respect of those costs falls foul of the implied limitation on State legislative power. 28 In my view, the limitation on power identified in Burns v Corbett operates more narrowly. If costs were incurred in respect of an issue which was purportedly determined by NCAT in the purported exercise of the judicial power of the Commonwealth, that determination could not validly sustain an exercise of the power to order costs. That incidentally is consistent with what was said in Burns v Corbett; Gaynor v Burns (2017) 96 NSWLR 247; [2017] NSWCA 3. Mr Burns (who had commenced proceedings against Mr Gaynor, a resident of Queensland), obtained a favourable costs order. In unusual procedural circumstances (where Mr Gaynor asked that his appeal from that order be dismissed), this Court dismissed the appeal noting that it would be "clear from the foregoing that the costs order made against Mr Gaynor by NCAT cannot be enforced": at [106]. The purported exercise of judicial power, contrary to the constitutional implication, cannot validly ground an exercise of power as to costs. 29 However, where there has not been a (purported) determination of any of the merits of the proceeding, and the only substantive determination by NCAT is that it lacks jurisdiction, then in accordance with the submissions advanced by the Solicitor-General, I see no reason to circumscribe the power in s 60 to the costs of and incidental to that determination. The power was exercised on the basis of the fact that costs had been incurred in connection with non-jurisdictional aspects of the proceeding, rather than the purported determination of non-jurisdictional aspects of the proceeding. This result accords with what was suggested in terms by Katz J in Khatri v Price in closely analogous circumstances. (It also accords with the costs orders made in Pezet v Pezet (1946) 47 SR (NSW) 45 at 51, Proust v Blake (1989) 17 NSWLR 267 at 272 and LDF Enterprise Pty Ltd v State of New South Wales (2017) 95 NSWLR 70; [2017] NSWCA 89 at [48], although it may be acknowledged that the absence of jurisdiction in those cases was not for constitutional reasons, and the reason the present appeal is not straightforward is that the constitutional limitation cuts into the generally worded conferral of power to order costs). 30 This distinction was raised during submissions: "MACFARLAN JA: Mr Sexton, sorry to interrupt. Another way of reaching the same conclusion is perhaps to focus on characterising the nature of the costs order that's made and asking whether that is truly the exercise of federal jurisdiction because it's not an adjudication in any sense on the merits of a claim which falls within federal jurisdiction; it's, in effect, dealing with a situation where the Court's time has been wasted by bringing to it a matter in which it has no jurisdiction. It's not resolving anything that is of a federal character; it's just dealing with its own time and effort." SEXTON: Well, I think we're trying to make that point, your Honour..." 31 Making an order for costs which extends to costs incurred in relation to non-jurisdictional issues, in cases where there has not been a purported exercise of a non-existent jurisdiction, does not contravene the implied limitation on power identified in Burns v Corbett, and consistently with s 31 of the Interpretation Act 1987 (NSW), s 60 is available in those circumstances.
9. In proceedings in the Tribunal, in which there are no pleadings, issues may be raised throughout the course of the proceedings. Parties are not necessarily confined to what is stated in any application, points of claim or points of defence. In this regard, s 38 of the NCAT Act provides guidance as to the obligations of the Tribunal and s 36(2) requires the Tribunal to give effect to the guiding principle, namely to "facilitate the just, quick and cheap resolution of the real issues in the proceedings".
10. In the present case, as the chronology of events above makes clear, the Tribunal embarked upon the process of hearing the parties in relation to whether interim orders should be made. It was during that hearing process that the issues giving rise to the federal matter are raised, first in the landlord's written submissions and then in the applicants' response.
11. At that time these issues were not identified as depriving the Tribunal of jurisdiction. Rather, after the federal matter was raised, but prior to the Tribunal exercising any judicial power concerning relief sought under the interim application or the substantive application, the Constitutional jurisdictional issue was heard and resolved.
12. As made clear by the majority in Chan v Wilson, the fact costs are incurred in preparation for hearing, providing evidence and undertaking work which would also be relevant to exercise of federal judicial power does not deprive the Tribunal of an ability to make an order of the costs. This is on the proviso "there has not been a [purported] determination of any of the merits of the proceeding, and the only substantive determination by NCAT is that it lacks jurisdiction". Such an award for costs in these circumstances "does not contravene the implied limitation on power identified in Burns v Corbett, and consistently with s 31 of the Interpretation Act 1987 (NSW), section 60 [of the NCAT Act) is available in those circumstances".
13. It seems to me that what occurred in the present case did not amount to a purported exercise by the Tribunal of judicial power to actually determine the rights of the parties in connection with either the interim application or the substantive application. Consequently, in the absence of any actual [purported] exercise of judicial power in relation to a federal matter, in my view I have power to make an order for costs relating to the whole proceedings.
14. The question remains whether there are special circumstances warranting, an award of costs and, if so, what costs order should be made.
15. The respondents relied on the factors in sub s 60(3)(b),(c), (e) and (g) as establishing special circumstances. These subsections provide: (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following - … (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative 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, … (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, … (g) any other matter that the Tribunal considers relevant.
16. In relation to the submissions based on factors (c) and (e), some of the submissions supporting a finding of special circumstances went to the merits of the case and its prospects of success. Having regard to my conclusion concerning jurisdiction, it would be inappropriate for me to express any views concerning the merits of the proceedings which have been brought or the prospect of success. As is evident from the submissions made by the parties, leaving aside the federal matter, there is a significant difference of opinion concerning the RL Act, its interpretation and its operation in the present circumstances. There are also significant disputes concerning what occurred in connection with the lease and the making of the application for assignment.
17. As to factor (b), the chronology of events does not support the view that the proceedings have been unreasonably prolonged in the time taken to complete. The proceedings were commenced on 30 June 2023 and have been resolved following a determination of the Constitutional jurisdictional issue. While the proceedings evolved in the manner I have explained above, this occurred in circumstances where issues were raised in submissions to which the opposing party has responded. Significantly, it was the Tribunal and not parties that identified the Constitutional jurisdictional issue. Suffice to say, the proceedings in the Tribunal were resolved within the period of 14 days from when they were commenced.
18. It follows that I am not satisfied special circumstances have been established based on grounds (b),(c) or (e).
19. Next, in relation to ground (g), the respondent said special circumstances are established because the applicants declined to have the proceedings transferred to the Supreme Court of New South Wales. Instead, the applicants asked that both applications be dismissed. In these circumstances the respondents should not be burdened with costs of these proceedings.
20. The applicants submitted that this was not a matter which the Tribunal could take into account for the purpose of s 60(3)(g) of the NCAT Act. Consequently, no order for costs should be made. Alternatively, the cost of these proceedings should be "costs in the cause".
21. First, any order to the effect that costs be "costs in the cause" would have no consequence because the proceedings are dismissed.
22. Secondly, in my view the matters identified by the respondents are circumstances that may be considered for the purpose of s 60(3)(g) of the NCAT Act. In this regard, it is a relevant consideration that a person seeks to invoke the jurisdiction of the Tribunal but when prevented from doing so for Constitutional reasons thereafter declines to have the proceedings transferred to a court for resolution, instead seeking dismissal under s 55(1)(a) of the NCAT Act on the basis the proceedings be withdrawn.
23. In the present case: 1. it was not suggested that there was no power to transfer these proceedings to the Supreme Court of New South Wales. The decision of Wilson v Chan would suggest there is such a power. 2. The respondent indicated their agreement to transfer the proceedings to the Supreme Court for the purpose of having the dispute finally resolved; 3. The applicants declined to seek an order for transfer, instead withdrawing their application.
24. It is not necessary to speculate about the reasons why transfer was not sought. However, it does seem to me in this case that it is out of the ordinary that the applicants have chosen to withdraw their application rather than seek a transfer to the Supreme Court. This constitutes special circumstances within the meaning of s 60 of the NCAT Act: see Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]. Further, this fact warrants the making of an order for costs. This is because the respondents were obliged to attend the Tribunal in respect of an application that was not ultimately pursued.
25. In addition, the respondents were required to respond to and make submissions concerning whether this Tribunal should make a restraining order, a matter also not pursued by the applicants. This added to the cost and time taken in dealing with the proceedings.
26. The question is what order should be made.
27. As noted above, the Constitutional jurisdictional issue was identified by the Tribunal. While not wishing to criticise either of the parties, failure of either party to identify this issue did result in additional hearing time. While it can be accepted the issue of jurisdiction is complex, the fact there were several hearings necessary to resolve the matter is a fact to be taken into account in any award for costs. In my view, some allowance should be made for this fact, both parties being represented by lawyers.
28. Taking account of these matters, I am satisfied that the applicants should pay the costs of the respondent, however those costs should be limited to 80% of the costs of the proceedings as agreed or assessed on an ordinary basis. This takes account of some additional hearing time which, in my opinion, could have been avoided.

Orders

1. The Tribunal makes the following orders: 1. GPT Funds Management Limited is joined as the second respondent. 2. Applications COM 23/30080 and COM 23/30082 are dismissed pursuant to s 55(1)(a) of the Civil and Administrative Tribunal Act as the applications are withdrawn. 3. The applicants should pay to the respondents 80% of the respondents' costs of proceedings COM 23/30080 and COM 23/30082, such costs to be as agreed or assessed on an ordinary basis.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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. Decision last updated: 14 July 2023