The appellant was the tenant under a retail lease of premises in Kensington, Sydney that he used for a restaurant. He was unsuccessful in proceedings he commenced in the Tribunal and in his appeal from the decision in those proceedings. The proceedings he commenced in the Tribunal sought various relief following the termination of the lease by the landlord.
Costs were awarded against him by the Tribunal at first instance pursuant to the discretion conferred by Rule 38(2) of the Civil and Administrative Rules 2014 on the basis that he had been the unsuccessful party in those proceedings. That rule was applicable because the amount claimed by him in the proceedings exceeded $30,000. It exceeded that figure by a very considerable amount.
Following the outcome of the pursuit by the appellant of his appeal rights in relation to the dismissal of his appeal in this matter, in respect of which he was unsuccessful, the respondent has confirmed that it wishes to press an application for the costs of the appeal which it made after we gave our decision to dismiss the appeal: see Gan v Shop 3, 228-230 Hanvaylee Parade Kensington Pty Ltd [2016] NSWCATAP 210.
Following an opportunity given to the parties in accordance with s 55(3) of the Civil and Administrative Tribunal Act 2013 (NSW) to make submissions about whether a hearing of the costs application should be dispensed with, we have decided to dispense with such a hearing and deal with the application on the papers. No party objected to us proceeding in this way.
The application for costs was made on the basis that the respondent should be awarded its costs of the appeal because it had been the successful party and costs should follow the event in view of the fact that Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) was applicable. In this connection, the respondent also points to the fact that this rule was applied by the Tribunal at first instance in awarding it costs of those proceedings on the basis that it had been the successful party.
That Rule provides:
38 Costs in Consumer and Commercial Division of the Tribunal
(1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal.
(2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if:
(a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10 (2) of Schedule 4 to the Act in relation to the proceedings, or
(b) the amount claimed or in dispute in the proceedings is more than $30,000.
As we have said, there can be no dispute that Rule 38 is applicable because the amount claimed in the proceedings by the appellant well exceeded $30,000. His claim included a claim for an amount of $400,000 in connection with an alleged wrongful termination of the lease the subject of the proceedings: see [31(4)] in the above reasons for decision dismissing the appellant's appeal.
Accordingly, we have a discretion to award costs in the proceedings even in the absence of special circumstances.
In the exercise of that discretion, the usual, but not invariable, position is that costs will follow the event: Thompson v Chapman [2016] NSWCATAP 6 at [69] - [72].
In a number of documents, including written submissions and emails, the appellant has put forward various matters in opposition to the costs order sought by the respondent.
In his original written submissions the appellant asserted that the Appeal Panel decision and the Tribunal decision at first instance were wrong for various reasons and that costs should not be awarded to the respondent who had substantially benefited to an amount of around $700,000 from re-entry to the premises leased to the appellant, wrongful termination of the lease, conversion and unconscionable conduct.
However, these points were rejected by the Appeal Panel in its decision. Furthermore, the appellant's application to the Supreme Court for leave to appeal from this decision was refused: Gan v Shop 3, 228-230 Hanvaylee Parade Kensington Pty Ltd [2017] NSWSC 1322. The Court concluded that the appellant had failed to demonstrate that in contentions in support of his grounds of appeal that the Court should grant leave to appeal and that whilst the appellant had successfully identified questions of law he had failed to establish a proper basis for the grant of leave to appeal: at [189].
In an email to the Tribunal dated 28 December 2017, the appellant stated that in relation to the respondent's application for costs of the appeal:
The Supreme Court held that the [appellant's] appeal raised fairly arguable questions of law and successfully identified some questions of law. [Two judgments of the Court dated 8 March 2017 and 29 September 2017 were attached].
In the 18 December 2017 judgement in relation to costs order, the Supreme Court found there is an overwhelming case for the award of costs based upon the principle of costs follow the event and agreed with the [respondent's] costs order to pay to the [appellant's] costs in specified gross sum. [The judgement was attached].
The judgment of the Supreme Court dated 8 March 2017 (referred to in the above extract) dealt with an application by the respondent for security for the costs of the appellant's application for leave to appeal. The application for security for costs was dismissed. It was in the reasons for this decision that the court found that the appellant had raised fairly arguable questions of law. The judgment dated 29 September 2017 dealt with the application for leave to appeal and dismissed that application.
In a subsequent email to the Tribunal dated 23 February 2018 the appellant stated:
The Supreme Court has agreed to the respondent's costs order to pay the [appellant's] costs in a specified lump sum. The respondent was issued a Statutory Demand to settle the debt and has failed to comply.
The applicant has no further submission to make in relation to the respondent's application for costs.
However, the appellant is incorrect about the costs outcome of his unsuccessful application to the Supreme Court for leave to appeal from the Appeal Panel's decision. It is clear for the Supreme Court's decision on costs dated 18 December 2017 that it upheld an application by the respondent (the defendant in those proceedings) for an order that the appellant (the plaintiff in those proceedings) pay the respondent's costs in a specified amount: Gan v Shop 3, 228-230 Hanvaylee Parade Kensington Pty Ltd (No 2) [2017] NSWSC 1788: see, particularly, at [21], [24] - [27]. An order which reflected that outcome was made on 21 December 2017. In correspondence with the Tribunal the appellant has disputed the correctness of that order but, plainly, the appellant is wrong in doing so.
Accordingly, we reject the appellant's submission against a costs order based upon the costs outcome of the application for leave to appeal.
Other material has been sent by the appellant to the Tribunal from time to time, including Calderbank correspondence from the respondent concerning the first instance proceedings in the Tribunal and the appeal and a creditors petition issued by the respondent in respect of bankruptcy proceedings concerning the appellant. We have not been able to discern the relevance of any of this material to the current costs issue.
In the circumstances, we see no reason why costs should not follow the event, namely the dismissal of the appellant's appeal, with the consequence that the appellant should pay the respondent's costs of the appeal on a party/party basis.
[2]
Order
For the above reasons, we make the following orders:
1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013, order that a hearing of the respondent's application that the appellant pay the respondent's costs of the appeal be dispensed with.
2. The appellant pay the respondent's costs of the appeal on a party/party 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
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Decision last updated: 28 May 2018