This is the respondent's application for costs in these proceedings and proceedings COM 14/59565 (the interim proceedings). For the reasons that follow we consider that the appellant should pay the respondent's costs of both proceedings, as agreed or assessed.
The proceedings involve a lease entered into on 24 June 2013 by the appellant Rose Nettis Pty Ltd as lessee and the respondent Three Tall Trees Pty Ltd as lessor. Some of the proceedings referred to below were commenced by the director of the appellant, Ms Rose in her own name. By consent orders of the Appeal Panel in proceedings COM 15/53477 on 23 December 2014 (see para [19] of the reasons for decision) the appellant, Rose Nettis Pty Ltd was substituted as applicant in the various proceedings commenced by Ms Rose.
[2]
Background
Disputes arose between the parties concerning the payment of rent and on 16 June 2014 Ms Jennifer Rose, the director of the appellant, commenced proceedings COM 14/30791 and COM 14/30793.
In proceedings COM 14/30791 the appellant sought orders that:
The appellant pay weekly rent of $3000 per week.
That the arrears are paid at $500.
The appellant explained its reasons for requesting those orders as follows:
The orders are urgent as the respondent demands payment by 1pm Monday 16 June 2014 of $33,301.45.
The business is to be placed on the market by 20 June 2014.
The appellant requires time to sell the business. There are 3 buyers who have previously approached the appellant.
The appellant has offered to make weekly payments to the respondent.
The appellant does not state the relief it was seeking in proceedings COM 14/30793. That application simply refers to proceedings COM 14/30791.
The parties entered into a deed of settlement on 18 June 2014. Consequentially, on 19 June, proceedings COM 14/30791 and COM 14/30793 were withdrawn.
On 4 November 2014 the appellant commenced proceedings COM 14/53477. The appellant sought the following interim orders:
Immediate review of rent and outgoings via reduction
Immediate review of Deed of Settlement signed under Duress - and ability for appellant to transfer lease to prospective buyer
Lessor lease advertising to future appellants and showing them property
On 11 November 2014 proceedings COM 14/53477 were dismissed by consent. In brief reasons the Tribunal stated that it was not satisfied that the proceedings should be entertained for the reason that there was no retail dispute as defined in the Retail Leases Act between the parties.
On 25 November 2014 the appellant commenced proceedings AP 14/56780 (the appeal proceedings) seeking to appeal the decision in proceedings COM 14/53477. In its grounds of appeal the appellant stated:
1. Denial of procedural fairness.
2. Applicant did not consent to the application [being] dismissed.
3. Matter listed for [first] time and I was not afforded the opportunity to put my case forward.
On 22 December 2014 the appellant commenced proceedings COM 14/59565 (the interim proceedings). These proceedings followed a lockout which occurred that day after the respondent served a notice to quit dated 20 November 2014 for the non-payment of rent. The Appeal Panel treated this application as an application for interim orders pending determination of the appeal. In summary the application stated that the appellant sought relief from forfeiture of the lease, a review of outgoings, a request for rent to be aligned with the current market rate (and thus a rent reduction) and compensation pursuant to s62E of the Retail Leases Act. The application also states that the respondent had not provided the appellant with a disclosure statement pursuant to s.11(1) of the Retail Leases Act.
The Appeal Panel delivered its decision in relation to the interim proceedings on 23 December 2014. The Appeal Panel noted that Ms Rose acknowledged during the course of the interim proceedings that the rent remained unpaid in an amount of approximately $77,714.00. The Appeal Panel stated at [31]:
The significance of the outstanding rent is as follows. Even if the tribunal at first instance had concluded by reason of duress that the deed of settlement was unenforceable, it appears to the appeal panel on the information presently available the rent remains unpaid and is substantially in arrears. Setting aside the deed, which was an arrangement to pay back rent by instalments, will not relieve the appellant of the obligation to pay.
The Appeal Panel considered that it was inappropriate to grant interim relief to restrain conduct that could not have been the subject of determination on appeal from the November decision and which was not otherwise conduct necessary to preserve the subject matter of the appeal. The Appeal Panel concluded that in circumstances where the appeal would not affect the rights of the respondent to effect forfeiture and re-entry and the appellant was unable to pay the substantial rent that was outstanding, it was inappropriate that an order be made in the form of a restraining order so as to facilitate the appellant being put back into possession of the premises pending the outcome of the appeal.
On 15 January 2015 the appeal proceedings were listed for callover. There was no appearance by the appellant and the proceedings were dismissed pursuant to s55(1)(c) of the Civil and Administrative Act 2013 (the Act). That section provides that the Tribunal may dismiss at any stage any proceedings before it if the applicant or appellant has failed to appear in the proceedings. The Appeal Panel made orders for the filing and service of submissions on costs and directed that the issue of costs in the appeal proceedings is to be heard on the papers together with the costs for the interim proceedings.
[3]
Submissions of the parties
The respondent subsequently provided written submissions dated 16 January 2015. No submissions were provided by the appellant.
The respondent submits that special circumstances exist that are sufficient to justify an order for costs being made against the appellant in accordance with s60 of the Act. Section 60 of the Act provides, in terms:
60 Costs
1. Each party to proceedings in the Tribunal is to pay the party's own costs.
2. The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.
3. In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following:
1. whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
2. whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
3. 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,
4. the nature and complexity of the proceedings,
5. whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
6. whether a party has refused or failed to comply with the duty imposed by section 36(3),
7. any other matter that the Tribunal considers relevant.
Section 60 has recently been considered by the Appeal Panel in CPD Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21. At [32] the Appeal Panel noted that the authorities are consistent in stating that "special circumstances" are circumstances that are out of the ordinary; they do not have to be extraordinary or exceptional circumstances.
The respondent does not differentiate between the appeal proceedings and the interim proceedings in its written submissions. It submits that both proceedings are frivolous and vexatious, lacking in substance, and undertaken for the collateral purpose of delaying the respondent's reasonable exercise of its rights, and as having no tenable basis in fact or in law. In summary the respondent submits that the appeal proceedings represented the culmination of a pattern of behaviour in which the appellant abused the jurisdiction of the Tribunal by commencing five proceedings during 2014, each for the collateral purpose of unreasonably prolonging the dispute between the parties. These arguments were amplified in the written submissions.
It is to be recalled that the proceedings COM 14/53477 were dismissed by consent. The order of dismissal of 11 November 2014 states:
By consent the application is dismissed because:
The proceedings should not be entertained for the reason: There is no retail dispute as defined in the Retail Leases Act between the parties.
In the notice of appeal signed by Ms Rose, she states the grounds of appeal were:
1. Denial of procedural fairness.
2. Applicant did not consent to the application [being] dismissed.
3. Matter listed for [first] time and I was not afforded the opportunity to put my case forward.
Ms Rose attended the hearing of proceedings COM 14/53477. She gives no particulars of how it was she was denied procedural fairness, or had no opportunity to put her case forward. Nor does she explain how the Tribunal could record the application being dismissed by consent, if she did not agree.
As noted above the appellant did not appear at the hearing of the appeal and the matter was dismissed pursuant to s55(1) of the Act. In support of the respondent's application for costs the respondent relies on the affidavit of its solicitor Mr Anthony Sunman sworn 15 January 2015. That affidavit annexes a series of telephone text messages between Mr Sunman and Ms Rose on the afternoon of Wednesday, 14 January 2015, that is, the day before the appeal was listed for directions. Those text messages provide evidence of a discussion between Mr Sunman and Ms Rose in which Ms Rose states that she would not be attending the hearing, and consented to the appeal being dismissed.
The Act sets out the basis upon which appeals from decisions of the Consumer and Commercial Division may arise under s80 of the Act. That section states that an appeal may be made as of right on any question of law or with leave of the Appeal Panel on any other grounds (s80(2)(b)). A notice of appeal requires an appellant to indicate whether they are seeking for leave to appeal. The appellant's notice of appeal states that the appellant was not asking for leave to appeal, implying therefore that the appellant was appealing on a question of law. Clause 12, Part 6 of Schedule 4 of the Act places limits on the grant of leave. Clause 12(1) provides:
1. An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because:
1. the decision of the Tribunal under appeal was not fair and equitable, or
2. the decision of the Tribunal under appeal was against the weight of evidence, or
3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In circumstances where the initial proceedings (that is proceedings COM 1453477) were dismissed by consent, and there is nothing stated in the notice of appeal that the Tribunal below made an error of law, where no submissions are put as to why leave should be granted for the appeal to proceed, we are of the view that the appeal proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance. We consider that the conduct of appellant, through its director Ms Rose, in not attending the appeal hearing, is consistent with a frivolous approach and the appeal lacking substance. We consider that the conduct of the appeal proceedings by the appellant is out of the ordinary and that special circumstances contemplated by s60 of the Act are established. The appellant in the appeal proceedings should pay respondent's costs as agreed or assessed.
As to the interim proceedings, the respondent submits that these proceedings are but another example of the appellant abusing the jurisdiction of the Tribunal by commencing proceedings for the collateral purpose of unreasonably prolonging the dispute between the parties.
We agree. The short history of the matter set out above demonstrates that the appellant regularly commenced proceedings in respect of the same dispute which were misconceived or doomed to failure. We consider that both the appeal proceedings and the interim proceedings should be considered as a whole. Accordingly the conduct of the interim proceedings by the appellant is out of the ordinary and we find that special circumstances contemplated by s60 of the Act are established.
[4]
Orders
For the above reasons, we make the following orders:
1. In proceedings AP 14/56780 the appellant is to pay the respondent's costs as agreed or as assessed.
2. In proceedings COM 14/59565 the applicant is to pay the respondent's costs as agreed or as assessed.
[5]
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
[6]
Amendments
26 March 2015 - Category - Costs
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Decision last updated: 26 March 2015