Hanave Pty Ltd v Wine Nomad Pty Ltd; Wine Nomad Pty Ltd v Hanave Pty Ltd

NCAT Appeal Panel|2022-11-15

In 2021/00340129 Wine Nomad Pty Ltd (Appellant) Hanave Pty Ltd (Respondent) Representation: In 2021/00325262 Counsel: M Sheldon (Appellant) G Sirtes SC and A Oakes (Respondent)

Solicitors: Gilbert Maine Solicitors (Appellant) Peterson Haines (Respondent)

In 2021/00340129 Counsel: G Sirtes SC and A Oakes (Appellant) M Sheldon (Respondent)

Introduction

On 12 May 2022 the Appeal Panel published a decision and reasons in connection with the present appeal which concerns a retail lease dispute and the operation of the Retail Leases Act 1994 (NSW) (RL Act): Hanave Pty Ltd v Wine Nomad Pty Ltd; Wine Nomad Pty Ltd v Hanave Pty Ltd [2022] NSWCATAP 153 (Principal Reasons).
Orders were made permitting the parties to make submissions on the issue of costs, including whether an order should be made under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) dispensing with a further hearing.
The tenant, Wine Nomad Pty Ltd, applied for an order for costs in its favour against the landlord, Hanave Pty Ltd. At the same time, the tenant said that there were errors in the orders made and in the reasons, which should be corrected under s 63 of the NCAT Act. The tenant provided submissions dated 25 May 2022. This included a claim that the Appeal Panel should make an order for the landlord repay the tenant rent.
The landlord consented to some of the proposed amendments but not the amendment which sought an order for repayment in respect of rent. On this latter point, the substantive dispute determined by the Principal Reasons concerned a valuation which had been prepared under a rent review clause of the lease and whether the Tribunal at first instance was in error in declaring that valuation invalid.
In the Principal Reasons the Appeal Panel determined that the valuation was valid. Consequently, the tenant says it is entitled be repaid any rent paid in excess of the rent that was consistent with the valuation.
In an email dated 27 May 2022, the landlord said it was seeking leave to appeal the decision of the Appeal Panel to the Supreme Court of New South Wales. The landlord said the issue of making an order for repayment should await the outcome of that application as the landlord "saw no utility in the issue being determined until a resolution of the appeal". At that time no submissions were filed on the question of costs by the landlord.
However, the landlord had filed some submissions on costs in support of its substantive appeal (see Hanave's submissions Appeal Book (AB) Tab 5 pp 88-90 paras 49-58). We will return to these submissions below.
In light of the landlord's response, on 1 August 2022 the Appeal Panel made the following orders and directions: 1 By consent, pursuant to s 63 of the Civil and Administrative Tribunal Act 2013 (NCAT Act), order 1 made 12 May 2022 is amended to read as follows: 1. Orders 2 and 3 made 3 November 2021 in application COM 21/08975 are set aside and in lieu thereof the following order is made: "2. For the purpose of clause 6(b) of the lease between Hanave Pty Ltd and Wine Nomad Pty Ltd dated 14 July 2012, dealing number AK318893, the amount of $252,000 plus GST is declared to be the fair market rent for the period commencing 14 July 2020." 2 Direct the Registrar to correct the reasons for decision published on Caselaw to record the above amendment to order 1 above and to amend the reasons for decision in accordance with Appendix A below. 3 On or before 12 August 2022 the parties are to file and serve any further submissions in relation to the following matters: a) whether an order for repayment in respect of rent should be made including: (i) whether such an order can and should be made under the slip rule (s 63 of the Civil and Administrative Tribunal Act 2013 (NCAT Act)); (ii) whether such an order can and should be made as an ancillary order in the appeal; and (iii) whether such an order can and should be made in light of the fact that such relief was not sought by Wine Nomad Pty Ltd in its original application to the Tribunal filed 21 February 2021, such application being limited to an order for repayment of the licence fee in the amount of $7571.17. b) any further submissions on costs. c) whether an order should be made dispensing with any further hearing pursuant to s 50(2) of the NCAT Act. 4 On or before 19 August 2022 parties are to file and serve any submissions in response.
Following a review of the Tribunal file, it appeared to the Appeal Panel that neither party had filed any further submissions. Consequently, the Tribunal made the following further directions on 24 August 2022 and provided reasons: 1 Any further submissions from either party in connection with the slip rule application and costs applications must be filed and served by 31 August 2022. 2 No further extensions will be granted except in exceptional circumstances. Reasons: On 12 May 2022 the Appeal Panel made orders in connection with the substantive appeals and made directions to permit the parties to make any application for costs in file and serve submissions in connection therewith. Wine Nomad Pty Ltd (tenant) applied for costs. In addition, the tenant applied under s 63 (slip rule) of the Civil and Administrative Tribunal Act 2013 (NSW) for the Appeal Panel to make alterations to its decision and/or reasons for decision. In consequence of the application under the slip rule, the Tribunal made directions in connection with the provision of submissions in respect of this application and in connection with the application for costs. These submissions were required by 19 August 2022. The lawyers representing Hanave Pty Ltd (landlord) initially provided an email to the Tribunal on 27 May 2022 indicating that they agreed to the correction of certain slips but did not agree to one part of the request, indicating that they had sought leave of the Supreme Court of New South Wales to appeal our decision and saw "no utility in the issue being determined until the resolution of the appeal". We made orders and directions on 1 August 2022. In part those orders made the agreed corrections to the orders and reasons for decision. The directions permitted the filing and service of submissions on the outstanding aspect under the slip rule as well as the costs application. The period for making submissions closed on 12 August 2022. No further submissions were received and, upon enquiry of the parties by the Registry, an email was received from the landlord that our decision was the subject of an application for leave to appeal to the Supreme Court of New South Wales and that, in those circumstances, the landlord's lawyers said "we do not consider it appropriate to provide submissions until the appeal is determined. As far as we are aware, leave to appeal has not been granted nor has the Supreme Court of New South Wales made any orders staying the proceedings before us. In these circumstances it is appropriate we make clear to the parties that we intend to finalise all aspects of this appeal, including the application under the slip rule and the application costs. The fact that leave to appeal is being sought is not a reason to delay us finalising all aspects of these proceedings. To the contrary, it seems to us this should occur first so that any challenge by way of application to the Supreme Court can be dealt with at one time. The above directions are made to provide a further opportunity for the parties to file and serve any submissions on the topics we have identified if they wish to do so. Absent any further submissions, we propose to determine the outstanding applications on the material already provided.
Further submissions were received from the tenant. These were dated 31 August 2022. No further submissions were received from the landlord.

Consideration

The tenant makes two applications. The first was an application under s 63 of the NCAT Act. That application was: "to correct an error in [the Appeal Panel's] decision by making an order to the effect of: an order that the landlord refund an amount equal to the overpayment of rent under the Lease from 1 August 2020 and provide a GST adjustment note in respect of that refund."
We note the final form of order sought under s 63 included an order for payment of a specific amount of money, a matter to which we will return below.
Secondly, the tenant seeks the following orders for costs: a. with respect to the proceedings commenced by Nomad (COM 21/17178 and AP 2021/00340129) (Nomad's proceedings), pursuant to r 38 of the NCAT Rules; and b. with respect to the proceedings commenced by Hanave (COM 21/08975 and AP 2021/00325262) (Hanave 's proceedings), pursuant to s 60(2) of the NCAT Act, on the basis that there are special circumstances warranting an order for costs.

Order dispensing with a hearing

The first issue to determine is whether a further hearing is required.
In its original submissions dated 25 May 2022, the tenant indicated said that a determination of its claim for costs could be adequately dealt with in the absence of the parties. However , the tenant reserved its position "until after it has reviewed any submissions in reply prepared by [the landlord]".
In its second submission dated 31 August 2022, the tenant made submissions concerning the slip rule application under s 63 of the NCAT Act. The tenant referred to its earlier submissions on costs and made no submissions concerning any revision to its position concerning whether an order should be made dispensing with a hearing.
In the absence of any further submissions from the landlord on costs after those filed in support of its substantive appeal and in the absence of any substantive submissions from the landlord on the slip rule application or whether an order should be made dispensing with a hearing, we are satisfied that an order should be made dispensing with a hearing. In part, this is because a further hearing would involve the parties incurring additional costs in circumstances where the landlord has not filed the submissions as directed.
Accordingly, we shall make an order pursuant to s 50(2) of the NCAT Act that a hearing of the slip rule application and application for costs be dispensed with.

Slip rule application

Section 63 of the NCAT Act provides: 63 Power to correct errors in decisions of Tribunal (1) If, after the making of a decision by the Tribunal, the President or the member who presided at the proceedings is satisfied that there is an obvious error in the text of a notice of the decision or a written statement of reasons for the decision, he or she may direct a registrar to alter the text of the notice or statement in accordance with the directions of the President or the member. (2) If the text of a notice or statement is so altered, the altered text is taken to be the notice of the Tribunal's decision or the statement of its reasons, as the case may be, and notice of the alteration is to be given to the parties in the proceedings in such manner as the President or member may direct. (3) Examples of obvious errors in the text of a notice of a decision or a statement of reasons for a decision are where - (a) there is an obvious clerical or typographical error in the text of the notice or statement, or (b) there is an error arising from an accidental slip or omission, or (c) there is a defect of form, or (d) there is an inconsistency between the stated decision and the stated reasons.
In Yang v Oppidan Homes Pty Ltd [2016] NSWCATAP 146, the Appeal Panel said at [83]-[84]: 83 … In our view, the slip rule mechanism should be limited to the subject matter expressly referred to in s 63 namely for the correction of obvious errors, and should not be a vehicle for revised or fresh findings of fact. 84 In this respect, we note the following. 1. In Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 McHugh JA (at 449) referred to the inherent power of the Courts of Common Law and the Court of Chancery to correct any clerical mistake or error in a judgment or order if it was the result of an accidental slip or omission (referring to Lawrie v Lees (1881) 7 App Cas 19 at 34-35). His Honour there noted that the "dividing line between a mistake or error which is the result of an accidental slip or omission and a mistake or error which is the product of a deliberate decision has often been difficult to draw". 2. In order for the slip rule to apply, the Court (here the Tribunal) must be satisfied that had the matter been drawn to its attention it would have made the correction at once: Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 at 453; Newmont Yandal Operations Pty Limited v The J Aron Corporation and the Goldman Sachs Group [2007] NSWCA 195; 70 NSWLR 411 at [137]; Wardle v Agricultural & Rural Financers Pty Ltd (No 3) [2013] NSWCA 207; (2013) 303 ALR 298 at [61]. 3. The slip rule is not applicable where it involves the exercise of an independent discretion not exercised at the time in question: Storey & Keers Pty Ltd & Anor v Johnstone (1987) 9 NSWLR 446; Tonab Investments Pty Ltd v Optima Developments Pty Ltd [2015] NSWCA 287 at [62] to [64].
In the present case the tenant said that it "sought in its cross-appeal an order of the form sought in the present application". Reference was made to the Principal Reasons at [16] where we recorded at (3) the orders sought in the notice of appeal. The tenant submitted that "a refund of overpaid rent flows as a natural consequence of the Appeal Panel's determination of the correct rental". Consequently, an adjustment should be made in light of the Appeal Panel's decision.
The tenant's submission continued that no stay order had been made in connection with the decision of the Appeal Panel. The tenant said that if the landlord does not refund the overpaid rent, the tenant may be required to institute new proceedings to obtain that refund. Requiring such an outcome would be "entirely contrary to the guiding principle in NCAT Act s 36 for just quick and cheap resolution of the real issues in the proceedings".
In making this submission, the tenant acknowledged "the refund order was not addressed in oral submissions by any Counsel". So far as we can ascertain it was not addressed in written submissions either. There was no development of the claim for a refund in the tenant's claim at first instance, which we have set out below at [35(2)].
In any event, the tenant contended that the authorities to which it had referred are wide enough to permit the Appeal Panel "to make an order which it failed to make due to an accidental omission by counsel to bring the matter to its attention". Reference was made to the decision of R v Cripps; ex parte Muldoon [1984] QB 686. There the Court said at 695: In the case of the High Court, the slip rule power is contained in R.S.C., Ord 20, r.11: "Clerical mistakes in judgements or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the court on motion or summons without an appeal." It is surprisingly wide in scope. Its primary purpose is akin to rectification, namely to allow the court to amend a formal order which by accident or error does not reflect the actual decision of the judge. But it also authorises the court to make an order which it failed to make as a result of the accidental omission by counsel to ask for it. It even authorises the court to vary an order which accurately reflects the oral decision of the court, if it is clear that the court inadvertently failed to express the decision which it intended.
The tenant also referred to the decision of Brereton JA in Re Adoption of SRK (No 2) [2014] NSWSC 160 at [5] where His Honour said: A useful test in applying the rule is to ask the hypothetical question whether, had the matter overlooked been drawn to the attention of the Court or the parties at the relevant time (before entry of the judgment), it would have been corrected as a matter of course [Hatton v Harris [1892] AC 547, 558]. The rule permits the correction of a clerical error in a judgment which has arisen as a consequence of an accidental slip or omission by a party's legal advisors [Navimpex Centrala Navara v George Moundreas & Co SA, noted in (1984) 58 ALJ 114].
The tenant then made reference to evidence before the Tribunal which it said was unchallenged concerning rent paid and what it says is now payable in light of the valuation and orders made. The tenant concluded by saying: 15. Accordingly, the Tribunal can be satisfied that the overpayment of rent from 1 August 2020 to 30 June 2021 was $62,048.88 (being $42,340.58 + $19, 708.30). The Tribunal may therefore prefer to make orders to the effect of: 1. An order that the landlord refund to the lessee the amount of $62, 048.88 in respect of overpayment of rent from 1 August 2020 to 31 June 2021. 2. An order that the landlord refund to the lessee the difference between the rent in fact paid by the lessee since 1 July 2022 and the rent payable in accordance with Order 1 of the orders made on 12 May 2022. 3. An order that the landlord provide to the lessee a GST adjustment note in respect of any refunds made in accordance with Orders 1 and 2 above.
In short, for the period "1 August 2020 until 31 June 2021 (sic)" the tenant seeks a money order, and thereafter an order for repayment, with a "GST adjustment note" to be provided.
In our view, the form of orders finally sought at para 15 of the submissions filed 31 August 2022 should not be made under the slip rule. In the absence of an agreement between the parties, in order to make an order in the form set out in para 15, the Appeal Panel would be required to make a factual finding about the amount of the overpayment. In the absence of the matter being raised during the hearing of the substantive appeal, in our view it could not be said that such a finding involves an "obvious clerical error or omission" or that it constitutes "an error arising from an accidental slip or omission".
The acknowledgement by the tenant that this matter was not addressed in oral submissions before the Appeal Panel, and the fact that it was not addressed in written submissions on appeal, makes it inappropriate in the present circumstances for the issue now to be addressed under s 63.
For these reasons, we are not prepared to make an amendment under the slip rule.
However, we accept that to require further proceedings would be inappropriate. In this regard an application could be made for an ancillary order. We will make an order to permit an application to the Tribunal at first instance. Hopefully a further application will not be necessary and the parties can agree what should happen.

Costs

The last matter to deal with is costs. We shall deal with the issue of costs under three headings: 1. Applicable costs rule; 2. Costs of the first instance proceedings; 3. Costs of the appeal proceedings.

Applicable costs rule

The first question concerning costs is whether, in circumstances where there are two applications, one in the nature of a cross-application, there is an amount claimed or in dispute in each proceedings at first instance greater than $30,000 so that r 38(2)(b) applies.
The tenant says: 1. s 60 applies to costs in first instance proceedings commenced by the landlord COM 21/08975 and appeal proceedings 2021/00325262 (Hanave's proceedings). 2. r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (Rules) applies to costs in first instance proceedings commenced by the tenant COM 21/17178 and appeal proceedings 2021/00340129 (Nomad's proceedings).
In the costs decision at first instance, having referred to the Appeal Panel in The Owners Corporation Strata Plan No. 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256, the Tribunal found: 1. in respect of the Hanave proceedings at first instance, having regard to Malachite at [5], r 38 did not apply to those proceedings. Rather, s 60 regulated the entitlement of a party to costs in those proceedings. Here the Tribunal relied on the claim as finally propounded by the landlord, these claims essentially being declarations in connection with the valuation and compliance with s 31 of the RL Act and the July agreement and its effect. 2. in respect of the Nomad proceedings at first instance, that there was an amount claimed or in dispute greater than $30,000 and, having regard to Malachite at [3(1)], r 38 applied to those proceedings. In this regard we note Nomad's Amended Statement of Orders and Reasons filed 16 June 2021 in the proceedings at first instance where, at paras 25-26 (AB Tab 14 p 248), the tenant set out its claims as follows: 25. In the premises of paragraphs 14 to 24 above, the Cross-Claimant is entitled to refund of overpayments of rent under the Lease as follows: (a) for the period between 1 August 2020 to 31 January 2021, a total amount of $42,340.58 (being $30,156.76 minus $23,100, times six); (b) for the period from 1 February 2021 to present, an amount of $3,941.66 per month (being $27,041.66 minus $23,100). 26. The Cross-Claimant claims: (a) A declaration that rent payable under the Lease from 1 August 2020 is the rent determined by Michael Hermiz of Anderson Group Valuers in his 10 February 2021 valuation, being $252,000 per annum net and exclusive of GST. (b) An order that the Cross-Respondent: (i) pay to the Cross-Claimant, by way of refund, an amount equal to the overpayment of rent under the Lease since 1 August 2020; and (ii) provide a GST adjustment note in respect of that refund. (c) In the alternative to (a) and (b), a declaration that the Cross-Claimant is entitled to a market rent review under the Lease as at 14 July 2020.
In its submissions in the substantive appeal dated 8 February 2022, in support of its challenge to the costs orders made by the Tribunal in the costs decision, the landlord said (Appeal Bundle (AB) 89): 53. … , applying The Owners Corporation Strata Plan No. 63341 v Malachite Holdings Ply Ltd [2018] NSWCATAP 256 at [3]45], the Primary Member held that Rule 38 of the NCAT Rules did not apply to proceedings COM 21/08975 (being Hanave's application). That was wrong. The amount "in dispute" in the proceedings was more than $30,000.00 within the meaning of Rule 38(2)(b). That was because the difference between the rent that Nomad said was payable and the rent that Hanave said was payable was in excess of $76,000.00 for the first year ($328,928.00 - $252,000.00). 54. Malachite which concerned the reallocation of units in a strata scheme says nothing relevant about the application of Rule 38 in these circumstances. That was not a case that was in substance about money (being the basis of the finding that r38 did not apply, see [14] - [15]), but rather about the allocation of units in a strata scheme which could be ascribed a monetary value. This case was a case about money. It concerned a dispute about rental payments. The amount in dispute was more than $30,000. 55. To the extent that Malachite has been interpreted as authority for some broader proposition beyond its proper application to the facts of Malachite then any broader application places an inappropriate gloss to express words of rule 38(2)(b) and that broader application should be rejected by this Appeal Panel. 56. That means that the costs of the proceedings of COM 21/08975 needs to be considered by the Appeal Panel in light of the applicability of Rule 38 of the NCAT Rules.
At the time these submissions were made by the landlord, the tenant said submissions on costs should await determination of the substantive appeal: tenant's submissions para 24 dated 22 February 2022, AB 97. In support of its current application the tenant said in its submission dated 25 May 2022 (footnote included): Nomad does not agree with that position.2 Nonetheless, Nomad submits that the Appeal Panel has jurisdiction to make a costs order in respect of Hanave's proceedings under s.60(2) of the NCAT because there are special circumstances warranting an award of costs. Special circumstances are "circumstances out of the ordinary but need not be those which are exceptional or extraordinary': Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 at [9]. Footnote: 2 As Nomad submitted at first instance, r.38 does not apply to Hanave's proceedings because Hanave did not make a claim for a money order: see Malachite at [5].
Rule 38 relevantly 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 - …, or (b) the amount claimed or in dispute in the proceedings is more than $30,000.
In Malachite at [3]-[5] the Tribunal summarised the operation of r 38 as follows: 3. Rule 38(2)(b) applies to the following proceedings: (1) Where the relief claimed in the proceedings is for an order to pay a specific amount of money, or an order to be relieved from an obligation to pay a specific amount of money, and that amount is more than $30,000; (2) Where an order is sought in the proceedings for the performance of an obligation (such as to do work), and the Tribunal has power make an order to pay a specific amount of money, even if not asked for by the claimant, provided that (a) there is credible evidence relating to the amount the Tribunal could award; and (b) that evidence, if accepted, would establish an entitlement to an order for an amount more than $30,000. 4. Rule 38(2)(b) may also apply to proceedings where the orders sought in the proceedings depend upon the claimant proving there is a debt owed in order to establish an entitlement to the relief sought, and that amount is in dispute and is more than $30,000. 5. Rule 38(2)(b) does not apply to proceedings: (1)Where a claim for relief in the proceedings (not being a claim for an order to be paid or be relieved from paying a specific sum) may, as a consequence of that relief being granted, result in the loss of any property or other civil right to a value of more than $30,000; or (2) Where there is a matter at issue amounting to or of a value of more than $30,000 but: (a) no direct relief is sought and no order could be made in the proceedings requiring payment or relief from payment of an amount more than $30,000; or (b) the relief sought does not depend on there being a finding that a specific amount of money is owed.
As made clear in Malachite at [75] and following, r 38 is not concerned with the value of rights that might be in issue or any change in wealth. Unlike s 101(2)(r) of the Supreme Court Act 1970 (NSW), r 38 does not require consideration of whether the proceedings: 1. involve a matter at issue amounting to or of a value of $30,000 or more, or 2. involve (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $30,000 or more.
Rather, r 38(2)(b) applies where "the amount claimed or in dispute in the proceedings is more than $30,000".
The questions to be determined are what is the amount "claimed", what is the amount "in dispute" and what are "the proceedings" in circumstances where there are two applications, the second in the nature of a cross-application ("cross application").
The first matter to consider is what are the "proceedings" for the purpose of r 38.
Unlike proceedings in courts brought under the Civil Procedure Act 2005 (NSW), which permits a cross-claim in the original proceedings, save in limited circumstances (for example, a supplier under the Fair Trading Act 1987 (NSW)), a person seeking an order in the person's favour must file a separate application. Consequently, it is frequently the position that the Tribunal has before it two separate applications where the opposing parties each seek remedies.
In Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 (Allen) the Appeal Panel considered the meaning of "proceedings" used in r 38. The Appeal Panel said at [36]-[38]: 36 From these rules, it is apparent that the parties to "proceedings" commenced by the lodging of an application or a notice of appeal are limited to: (1) The applicant or appellant; (2) Those against whom the orders are sought; (3) In the case of an internal appeal, anyone who was a party to the proceedings at first instance; and (4) Any intervener or person joined under s 44 of the NCAT Act or any person falling within par (e) in each case. 37 These examples from the NCAT Act and the NCAT Rules demonstrate that "proceedings" refers to the process set in motion, or commenced, by lodging an application or notice of appeal. That process includes the steps taken by the Tribunal to hear and determine whether to grant the relief sought in the application or notice of appeal, as well as any interlocutory or ancillary steps. Proceedings are defined by the subject matter raised in the application or notice of appeal. The participants in proceedings are limited to the parties determined in accordance with s 44 of the NCAT Act and the NCAT Rules. 38 The Tribunal may hear two or more proceedings at the same time, especially if that is conducive to the just, quick and cheap resolution of the real issues in each set of proceedings, as required by s 36(1) and (2) of the NCAT Act. Nothing in the NCAT Act or the NCAT Rules suggests, however, that when such proceedings are heard together there is only one set of proceedings rather than two or more separate proceedings, absent an order of the Tribunal in effect consolidating the different sets of proceedings into one.
That is, for the purpose of r 38 the application and cross application are "different sets of proceedings" unless the two applications are consolidated. Therefore, r 38 must be considered in respect of each separate proceedings.
The next question is, what is the amount claimed or in dispute in each proceeding and is any cross application relevant to determining the amount in dispute in each proceeding.
As is evident from the reasons, in Malachite no amount was claimed or in dispute. The proceedings in Malachite did not involve two applications, one in the nature of a cross application, raising common issues or a consideration of the how these matters should be taken into account for the purpose of the operation of r 38. Consequently, there was then no occasion to determine how r 38 operates in the context of two proceedings involving a primary application and an application in the nature of a cross-claim.
Similarly, the decision in Allen did not deal with two proceedings, one in the nature of a cross application .
The general principles in Malachite are applicable to all proceedings. Identifying what is claimed in particular proceedings is straightforward. However, where there is a primary application and cross application, the task of determining in each proceeding what is "the amount … in dispute in the proceedings" requires a consideration of what is claimed in the particular proceedings and the issues raised by way of the defence to the relief sought in those proceedings.
Some assistance can be gained from the decision of White J (as he then was) in Steak Plains Olive Farm Pty Ltd v Australian Executor Trustees Limited [2015] NSWSC 289 (Steak Plains) about what are the issues in proceedings, how issues are identified and, therefore, what is the amount in dispute in particular proceedings. There His Honour considered what were the issues for the purpose of determining jurisdictional questions in connection with the operation of Sch 4 cl 5(3) of the NCAT Act and whether proceedings in the Court should be stayed. That clause deprives a court of jurisdiction to deal with the same issues first raised in proceedings commenced in the Tribunal prior to the court proceedings being commenced.
The proceedings before the Court in Steak Plains were in the nature of a cross-claim or counter-claim, brought in the Court by a plaintiff that was a respondent to Tribunal proceedings. Inter alia, the plaintiff sought compensation in the Supreme Court proceedings for an amount beyond that which the Tribunal had power to make an order under the Agricultural Tenancies Act 1990 (NSW).
Schedule 4 cl 5(6) of the NCAT Act provides, for the purpose of Sch 4 cl 5(3), that "an issue arises under an application made to the Tribunal … if the existence of the issue is shown in the applicant's claim or is recorded in the record made by the Tribunal in accordance with this Act".
In examining what were the issues for the purpose of determining the operation of Sch 4 cl 5(3), White J referred to the decision of the Court of Appeal in Advance Earthmovers Pty Ltd v Fubew Pty Ltd [2009] NSWCA 337 (Advanced Earthmovers).
In Advanced Earthmovers, the Court was considering the meaning of "issue" for the purpose of s 22(3) of the now-repealed Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (CTTT Act). Section 22(3) was in the same terms as that now found in Sch 4 cl 5(3) of the NCAT Act. At [40] Young JA (Tobias JA agreeing) said of the expression "issue": 40 "Issue" in litigation means a point in dispute between parties as in the pre-Judicature pleadings where in due course issue was joined by formulating a question to which a jury could answer "Yes" or "No".
In Tribunal proceedings, determination of what is an issue in proceedings (and is therefore in dispute in the proceedings) is guided by what White J said in Steak Plains at [105] and following: 105 In Cohen-Hallaleh v Cyril Rosenbaum Synagogue Pty Ltd Barrett J said (at [38]) that the purpose of the relevant provisions is to avoid the risk of concurrent findings by the Tribunal and a court with respect to a particular issue. This was approved by Sackville AJA in Advance Earthmovers Pty Ltd v Fubew Pty Ltd at [108]. The characterisation of the issue should be made with that statutory purpose in mind. That purpose would not be advanced by the adoption of a narrow characterisation of the issue as being whether SPOF is entitled to equitable relief against forfeiture. In furthering the statutory purpose of clause 5, Parliament has provided, in effect, that if an issue arising under the application can be dealt with either by a court or the Tribunal, the issue should be determined by the court or tribunal in which proceedings are first commenced. 106 For these reasons I conclude that by reason of clause 5(3) of Schedule 4 to the Civil and Administrative Tribunal Act this Court does not have jurisdiction to determine the issue of whether AET should or should not be given possession of the property. The claims for relief in paras 1, 2 and 3 of the "Relief Claimed" in the statement of claim and paras 1, 2, 3 and 4 of the summons are all directed to that issue. Those claims for relief should be dismissed. 107 In its submissions AET also sought the stay or dismissal of SPOF's claim for damages. It did not submit that this Court does not have jurisdiction to hear and determine that claim. In my view the Court does have such jurisdiction. SPOF's claim for damages does not arise "under" AET's application in the Tribunal. Indeed, the Tribunal does not have jurisdiction to award more than $500,000 in damages and SPOF claims substantially more than that sum. 108 AET submitted that the damages claim should be dismissed because SPOF, so it was submitted, does not have a realistic or seriously arguable claim for damages that exceeded the jurisdictional threshold in the Tribunal and the claim for damages, if it were to be raised, should be raised in the Tribunal. The reason AET submitted that it was not seriously arguable that SPOF could maintain a claim for damages in excess of $500,000 was that AET could have no liability for most of the damages claimed by reason of clause 12.2 of the lease. It provides: "12.2 Consequential loss Despite any other provision of this Lease, neither Party is liable to the other for: loss of revenue; loss of reputation; loss of profit; loss of business opportunity; consequential, indirect or special loss; or any Claim, including loss or damage (including economic loss in connection with such a claim) made by third parties." 109 Clause 1.2(c) of the lease provides that headings are inserted for convenience only and do not affect the interpretation of the lease. 110 It is not appropriate to determine the effect of clause 12.2 on the present application. AET has not filed a defence to the statement of claim. If by way of defence it pleads clause 12.2 as an answer to SPOF's claims for damages, it is not at present known what, if any, issue might arise in relation to that clause. SPOF might seek rectification. Or it might be argued that irrespective of the heading, when the clause is read in context with other provisions, including clause 12.1(d) (which provides that "the Parties indemnify and will at all times keep the other Party indemnified against all Claims … (d) arising as a direct result of a breach by the Party of this Lease") clause 12.2 should be construed as applying only to consequential loss. Counsel for SPOF submitted (albeit without reference to clause 12.1) that clause 12.2 was so limited and that the damages claimed were not in the nature of consequential loss. These are not issues that should be decided on the present application. 111 The hearing in the Tribunal might well result in the determination of issues relevant to SPOF's claim for damages. If those issues are essential to whatever orders the Tribunal makes then issue estoppels may well arise. The damages claim should not proceed in this Court whilst the proceedings in the Tribunal continue. There should be a stay of that claim until the final determination of the proceedings in the Tribunal or further order.
From this analysis, it can be seen that, if the relief sought in the proceedings does not require a determination of issues raised in a cross application then the issues in the cross application have no relevance to the principal claim. Therefore, Sch 4 cl 5(3) could not operate to deprive the court of jurisdiction. By parity of reasoning, where an amount in dispute in the cross application is a matter that need not be determined in the principal proceedings, then r 38(2)(b) could not operate merely because the amount claimed in the cross application was greater than $30,000. This is so even where the proceedings are heard together.
In relation to identifying the issues, as recognised in Steak Plains and in Advanced Earthmovers, in court proceedings the issues or matters in dispute are defined by the pleadings, usually being a plaintiff's statement of claim and a defendant's grounds of defence.
In Tribunal proceedings, where there are no pleadings, identification of the issues (including what is the amount in dispute) may be more difficult than in a court. What is the amount "in dispute" in each proceedings for the purpose of r 38(2) is not simply determined by the amount claimed or relief from payment sought in the particular proceedings. Rather, any asserted defence must also be considered, the substance of which may be found in the cross application.
The analysis required to determine the amount in dispute can be simply illustrated by considering proceedings where both parties file applications seeking damages or other orders requiring a determination of particular monetary amounts. Examples are claims under the Home Building Act 1989 (NSW) (by a homeowner and a builder) and under the Residential Tenancies Act 2010 (NSW) (by a landlord and a tenant).
What is the amount in dispute in such cases is ascertained as follows: 1. Is there an amount "in dispute" in each of the proceedings? In this regard we note: 1. As explained at [40] above, r 38 is not concerned with the value of rights or a change in wealth; 2. even where there is an amount claimed in proceedings, it may not be in dispute or part of the amount claimed may not be in dispute; and 3. an amount is in dispute if it is necessary to determine the disputed amount in order to grant the relief claimed, even if no order is sought for payment or relief from payment: Malachite at [110]. 1. If yes, are either or both disputed amounts in each application greater than $30,000? 2. If no in either or both applications, does r 38 nonetheless apply to each proceedings where the amount claimed is less than $30,000 or no amount is claimed. This can arise where: 1. The relief sought by an applicant is dependent on establishing an entitlement of one party to an amount which is in dispute. An example is where a landlord seeks termination of a residential tenancy agreement asserting accrued arrears of rent of $50,000 and the tenant seeks an order restraining the landlord from terminating the residential tenancy agreement, the tenant claiming all rent is paid up to date. In this situation, in each proceeding, the Tribunal must make a finding as to the amount of rent, if any, which is outstanding, the amount in dispute being $50,000. This finding is required in each application even though the Tribunal could not make a money order for unpaid rent greater than $15,000 (or $30,000 if made in connection with a bond claim): see Residential Tenancies Regulation 2019 (NSW) cl 40; or 2. The claims are interdependent, and the respondent's cross application is properly categorised as a set-off permitted in law or by way of equitable defence in the primary application. 3. In this regard it is important to remember there is no general right of set-off under the NCAT Act equivalent to that found in s 21 of the Civil Procedure Act 2005 (NSW) (CP Act) which applies to courts and the Tribunal is not a court for the purpose of the CP Act: CP Act Sch 1. 4. This circumstance often arises in home building applications, for example where: 1. a homeowner asserts no amount remains unpaid under the building contract and also claims an entitlement to damages for incomplete work or defective work; 2. a builder asserts an entitlement to the unpaid contract price and denies any breach. 1. Where a set-off exists, then the difference between the best possible outcome for each party (after allowing amounts not in dispute) is the amount in dispute for the purpose of applying the rule to each proceeding.
Otherwise, s 60 applies and r 38 does not displace its operation. This is because if one proceeding only seeks relief which is wholly independent of the need to determine an amount of money, there can be no amount claimed or in dispute in that proceeding.
A different view, namely that r 38 applies to both proceedings provided at least one of those proceedings had an amount claimed or in dispute greater than $30,000, is inconsistent with the express language of r 38 which says it applies if "the amount claimed or in dispute in the proceedings (emphasis added) is more than $30,000".

Costs of the proceedings at first instance

In light of our decision on the substantive appeal in the Principal Reasons and having regard to the success of the tenant, it is necessary to determine issues of costs in respect of each of the proceedings at first instance and on appeal.

What costs rule applies to the proceedings at first instance?

In the Hanave Proceedings, as recorded in the landlord's application (AB Tab 12), the orders sought and reasons were: ORDERS SOUGHT 1. The Valuation of AG Valuers of 10 February 2021, or either of the two preceding versions, is not a valuation in accordance with the Retail Leases Act. 2. The respondent was not entitled to seek a market rent review 14 July 2020. 3. The rent for the premises is the rent in accordance with Heads of Agreement of the Settlement of 14 July 2020. REASONS 1. AG Valuers did not perform the task of determining the current market rent using the criteria set out in Clause 31 of the RTA. 2. The parties agreed to a settlement having regard to the Covid 19 mandatory code that the rent was determined from 17 April 2020 to 31 December 2020. 3. The Respondent and the Applicant are bound by the HOA executed 14 July 2020.
In the Hanave proceedings, in neither the tenant's points of defence (AB Tab 13) or the "Joint Statement of Claims and Counter Claims, Facts and List of Issues" (AB Tab 15) is there identified a claim for money or an amount in dispute. Rather, as recorded in the application at AB Tab 12, the relief sought did not require the Tribunal to resolve any monetary claim as part of the resolution of those proceedings.
The Nomad proceedings, which could be described as a cross application, did not raise a defence by way of set-off in the Hanave proceedings in the sense we have explained above.
Consequently, there was no amount claimed or in dispute in the Hanave proceedings and the Tribunal was correct to so conclude. It follows s 60 of the NCAT Act applies in determining costs of the Hanave proceedings at first instance.
As to the Nomad proceedings, there was an amount claimed or in dispute greater than $30,000: see Nomad's "Cross-claimant's Amended statement of Orders and Reasons (AB Tab 14) eg at para 13, (AB 246) and paras 25-26 (AB 248). Therefore r 38 applies to those proceedings as the Tribunal found.

What orders should be made in the proceedings at first instance?

In connection with Nomad's proceedings at first instance, as stated above r 38 applies.
Since Nomad was successful, costs should, ordinarily, follow the event: Thompson v Chapman [2016] NSWCATAP 6 at [69] and following. The fact that there are related proceedings (which are in the nature of a defence and counter-claim) means that the issues and outcome in those proceedings are relevant considerations in determining how any discretion should be exercised; principles and factors governing exercise of discretion are a different matter from the rules governing which costs rules apply.
Since s 60 applies to the Hanave proceedings at first instance, the tenant must establish special circumstance warranting an order for costs. Special circumstances means out of the ordinary, but not necessarily extraordinary or exceptional: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]. Factors relevant to determining if special circumstance exist include those in s 60(3) of the NCAT Act.
In the present case, the tenant submitted the following are special circumstances warranting an order for costs in its favour: 1. s 60(3)(c) Nature and complexity of proceedings The proceedings involved "complex constructional choices regarding the statutory requirements of a determination of current market rent under s 31(1)(a) of the RL Act. These submissions made revealed the complexity and it was appropriate for the tenant to legal advice. 1. S 60(3)(g) other relevant matters The issues in Hanave's proceedings at first instance "were substantially all addressed" in Nomad's proceedings at first instance. The proceedings were dealt with together. If costs were not awarded in the tenant's successful defence of the landlord's proceedings and there was an apportionment, the tenant would not properly be compensated for its costs in obtaining the relief sought. This result would be unjust. The financial consequences of the Hanave proceedings were significant. The valuation had the effect of adjusting the rent by more than $75,000 per annum. The legal fees incurred have been substantial.
In our view, the fact of a counter-claim and the nature and extent of the dispute between the parties is a relevant factor in considering if there are special circumstances (s 60(3)(g)), as is the complexity of the proceedings (s 60(3)(d)). The question of the Tribunal's powers to declare invalid a valuation prepared under s 31 of the RL Act was novel. Finally, there were significant financial consequence to the parties, depending on the outcome of Hanave's proceedings at first instance.
Taken together, we are satisfied these matters establish special circumstances in the present case and that an order for costs should be made in Hanave's proceedings at first instance as well as in Nomad's proceedings at first instance. In this regard there are no matters which would otherwise disentitle the tenant to an order for costs.
No submissions were made about a special order for costs, for example on an indemnity basis. Consequently, in both proceedings at first instance, an order for costs should be made on the ordinary basis.

What costs rule applies to the proceedings at first instance?

Section 60 applies to the Hanave proceedings on appeal.
Because r 38 applied to the Nomad proceedings at first instance, it also is applies to costs in the Nomad appeal. In this regard r 38A provides: 38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of - (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
Proceedings in this context means the appeal proceedings: Allen at [36] and following, set out above.
Applying r 38 to the Nomad appeal proceedings, the question is whether there is an amount claimed or in dispute and, is so, is that amount greater than $30,000?
As noted at [16(3)] of the Principal Reasons, the order sought by the tenant on appeal was an order that the landlord refund an amount equal to the overpayment of rent. There was no amount claimed and, as explained above, no amount in dispute in the appeal. The dispute concerning the amount to be paid was raised in the appeal after the substantive appeal was determined, a matter we have decided cannot be pursued as a slip rule application.
Since there is no amount greater than $30,000 claimed or in dispute in the Nomad appeal proceedings, s 60 is not displaced by r 38(2)(b). Consequently, in both appeals the tenant must demonstrate there are special circumstances warranting an order for costs: s 60(2) of the NCAT Act.

What orders should be made in the appeal proceedings?

The tenant's submissions concerning the costs of both appeals are substantially the same as those concerning the first instance proceedings.
We are satisfied there are special circumstances warranting an order for costs in both appeals for the following reasons: 1. The proceedings were complex, with issues including: 1. whether the licence was a retail lease, 2. the circumstances in which the Tribunal can intervene in connection with a valuation to which s 31 of the RL Act applies; and 3. the proper construction of what we described as the "July agreement", particularly in the context of the regulations passed by the Legislature in connection with the COVID-19 pandemic. 1. The proceedings had significant consequences for the landlord and tenant as to the amount of rent payable (depending on whether the valuation was upheld) under the ongoing rental obligations under the lease; and 2. The tenant was successful, there is no disentitling conduct and costs should follow the event.
Also, the interrelationship between the proceedings meant that the tenant would not be adequately compensated if the proceedings were treated separately in the exercise of the costs discretion.
In reaching this conclusion, we note the fact that a party is legally represented and/or seeks legal advice is not, of itself, a matter establishing special circumstances. While Sch 4 cl 7(b) expressly permits legal representation despite s 45 of the NCAT Act, this clause does not, by its terms or inferentially, displace the operation of s 60, an entitlement to an award of costs being an issue separate from representation.
Finally, no special order for costs was sought.
It follows from the above that an order for costs should be made in both appeal proceedings in favour of the tenant, such costs to be as agreed or assessed on the ordinary basis.

Orders

The Appeal Panel makes the following orders: 1. A hearing of the slip rule application and applications for costs is dispensed with pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 2. The application to amend the orders made 12 May 2022 in respect of repayment of any overpaid rent is refused. 3. If necessary, Wine Nomad Pty Ltd has liberty to apply to the Tribunal at first instance for an ancillary order in connection with the repayment of rent. 4. In respect of the proceedings at first instance, Hanave Pty Limited is to pay the costs of Wine Nomad Pty Ltd in proceedings COM 21/08975 and COM 21/17178, such costs to be as agreed or as assessed on the ordinary basis. 5. In respect of the appeal proceedings, Hanave Pty Limited is to pay the costs of Wine Nomad Pty Ltd in proceedings 2021/00325262 and 2021/00340129, such costs to be as agreed or as assessed on the 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: 15 November 2022

Consumer, Trader and Tenancy Tribunal Act 2001(NSW)

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Judgment (17 paragraphs)

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