Registrar of Retail Tenancy Disputes v Lyndhurst Developments Pty Ltd & Davies

1 These reasons are given in elaboration of the short oral reasons given at the close of argument on 26 June 2001 dismissing the Registrar's appeal. 2 This appeal is an interlocutory one, brought by the Registrar of Retail Tenancy Disputes (the Registrar) while proceedings under the Retail Leases Act 1994 (the Act) between the applicant-lessee (Ms Davies) and the respondent-lessor (Lyndhurst Developments Pty Ltd) remain on foot in the Retail Leases Division of the Tribunal (the Tribunal). They are respectively the second and first respondents to this appeal. 3 In a decision delivered on 12 January 2001, Judicial Member Fox made a series of orders designed to seek to achieve progress in the resolution of an application by the lessee of retail shop premises against the lessor, being a retail tenancy claim within the meaning of the Act. The lessee sought a number of orders arising from long-term concerns that she has had over the adequacy of financial disclosure by the lessor as to costs of operation of the shopping centre chargeable to lessees. 4 The Registrar sought to have set aside a further order by the Tribunal which dismissed the Registrar's application for certain orders to be made in the proceedings. 5 The Registrar's office is created by the Act, and its functions and responsibilities are set out in Part 8 Div 2 (ss 64-69). Basically retail tenancy disputes must first be dealt with by the Registrar before they can be ventilated in the Tribunal. The Tribunal's jurisdiction can only be invoked if the Registrar issues a certificate stating that mediation is unlikely to resolve the dispute. There is an exception provided for in s 68(1) allowing the Tribunal to continue to deal with an application if it is 'satisfied that mediation under this Part is unlikely to resolve the dispute or matter.' 6 The Registrar submits that the Tribunal erred in interpreting the provisions conferring on him a right to intervene in proceedings before the Tribunal so as to preclude him from applying for specific orders to be made as between the parties. 7 That the Registrar has a power to intervene in proceedings under s 65(2) is not in issue. The whole of s 65 is relevant. It provides: '65. Functions of Registrar (1) The Registrar has the following functions: (a) to make arrangements to facilitate the resolution by mediation, or by some other appropriate form of alternative dispute resolution, of retail tenancy disputes (whether or not a dispute has been formally referred to the Registrar under this Act), (a1) to make arrangements to facilitate the resolution by mediation, or by some other appropriate form of alternative dispute resolution, of disputes or applications under section 19 (3), 19A (3), 31 (3) or 31A (3) or the subject, or possible subject, of a claim under section 62B, (b) to report to the Minister on the operation of this Act, (c) to take proceedings for an offence against this Act or to authorise persons to take proceedings for offences against this Act, (d) such other functions as may be conferred or imposed on the Registrar by or under this or any other Act. (2) The Registrar may, at any stage of proceedings brought before a court concerning a retail tenancy dispute intervene in the proceedings. If the Registrar intervenes in proceedings, the Registrar becomes a party to the proceedings and has all the rights (including rights of appeal) of a party to the proceedings. (3) In making arrangements for the resolution by mediation of disputes or other matters, the Registrar is to have regard to the need for mediation of those disputes or other matters to be conducted by persons who are experienced in the field of retail shop leases. (4) In the exercise of his or her functions under this Act, the Registrar is not subject to the control or direction of the Minister.' 8 In issue is the scope of the powers of the Registrar on intervention. The Registrar's application in this case had sought various orders affecting the parties. He asked, for example, for declarations that the lessor had failed to comply with s 28 of the Act. Section 28 deals with the lessor's obligations to provide an 'outgoings statement' that details all expenditure by the lessor in each accounting period of the lessor during the term of the lease on account of outgoings to which the lessee is required to contribute; and related items. 9 The Tribunal did not accept the power of intervention could go so far as to seek orders that affected the relationship between the parties. The Tribunal also held that it was not permissible for the Registrar to adopt a partisan position advocating the cause of one of the parties. The Tribunal considered that the Registrar's role was strictly confined to making submissions, and those submissions must relate strictly to the role of the Registrar as provided in s 65(1) of the Act, cited earlier. The Tribunal considered submissions from the Registrar but dismissed his application. 10 The most relevant passages from the Tribunal's reasons are as follows: '15 It seems to me that a much more difficult question arises once the Registrar has intervened - what can he do? 16 Section 65 gives the Registrar, once he has intervened, all the rights of a party, and so he has full standing, but, as a creature of statute, that standing must, in my view, be limited by the Retail Leases Act itself. 17 Section 65 gives the Registrar the following functions:- [entire section as above quoted] 18 The Registrar sought in these proceedings to move that a Certificate purporting to be an auditor's certificate did not in fact comply with Section 28 of the Act. 19 The Registrar says that once he has elected, he may pursue any issue which arises in the dispute, specifically out of the rights and obligations given by the Act. He calls Section 65(1)(d) in aid for this proposition- "Such other functions as may be conferred or imposed on the Registrar by or under this or any other Act". This may enable the Registrar, under Section 78, to bring to the Court or Tribunal knowledge of the accepted practices and interpretation within the relevant industry, I do not, however, readily perceive any other functions which are conferred upon the Registrar by any other section in the Act. 20 The Registrar argues, with some apparent initial justification, that as Section 65 (2) enters him in a dispute, at his election, "as a party", he has the rights of any of the disputants in any dispute in which he intervenes. However, I cannot accept that, because that must mean that the Registrar would have to take the side of either the Applicant or Respondent in the hearing. (Indeed, that is what he seeks to do in these proceedings, because he seeks, against the Respondent, to question the propriety of a certificate given by or on behalf of the Respondent, and so it appears to be clear that the Registrar is "siding" with the Applicant). Whilst I do not doubt that the legislature can give a statutory functionary such a partisan role, the words used to so empower would have to be very clear words indeed, I am not satisfied that these words ("as a party") establish the intention of the legislature to allow the Registrar to take sides in a dispute and so I am not satisfied that the Registrar is given the power to elect to stand on the shoes of one of the Parties. 21 Thus, when he intervenes (in any court) the Registrar can only raise or be involved in argument relating to all and any of the Section 65 alternative dispute resolution requirements which, presumably, in the main, enables him to, in circumstances where there has been no mediation, claim a halt to the proceedings until there has been such. Similarly, if there is litigation involving the propriety of a rental valuation, then again the Registrar could intervene to force a mediation of such a dispute before any court orders were made. It may even be the case if, in a matter before this Tribunal, it became clear that a lessor had failed to give a Disclosure Statement (and so committed an offence) the Registrar could intervene, and as a Party to the proceedings to obtain the evidence for his prosecution in an appropriate Court. 22 Other instances may come to mind, but I am satisfied that the Registrar has no power, in these proceedings, to put his motion for a Declaration in relation to Section 27(3). 23 I take comfort from the fact that the Registrar's right of intervention is found in the Part of the Act which is concerned with Dispute Resolution and the Division which is concerned with mediation, but that comfort may be reduced by the fact that the same section in addition to the mediation function, gives the Registrar power to take proceedings for an offence, something well beyond an ADR function. 24 I can understand the logic of the Registrar's claim, which in the hearing I described as his right to be a guardian of the Act, but I am satisfied that there need to be clearer words of legislative intent to achieve that result. 25 To take, for example, the sections now in issue:- Section 28 clearly imposes obligations on landlords in relation to audited reports, but does not, it seems to me, give the Registrar any function. The Section does not, for instance, say "such auditor's certification as may be approved by the Registrar of Residential Tenancy Disputes" or "such auditor's certificates shall be conclusive unless rejected by the Registrar of Retail Tenancy Disputes". 26 The fact is that the Act sets out two distinct enforcement regimes for its regulatory proscriptions. Either an imposition becomes unenforceable because of a failure to comply with the requirements of the Act (i.e Section 11 (1) & (2)); or failure to comply (presumably more serious) is made a specific offence (i.e Section 9), which the Registrar can prosecute. 27 I suppose it to be true that the Act creates a third category of requirements (and Section 28 is one of these) which imposes obligations and creates rights but establishes no technique of enforcement. Section 28(d) and (e) simply make the bald statements that the lessor is to provide an audit certificate within a certain time frame, but seems to indicate no consequence for failure to do so. Although I do not propose that the list is exhaustive, other sections which state requirements without establishing penalty or other disincentive are: 15(1) 19(2) 20(2) 25(h) and 31(2). 28 Sections 27, 28 and 55 all impose requirements which, if not complied with presumably mean that the liability does not arise, or conversely, if there has been payment pursuant to a purported certification which in fact it turns out not to comply, then presumably there is a right of recovery. 29 Sections 29(d) and (e) highlight a further variation of the difficulty, because the required adjustment is to take place between one and four months after the relevant accounting period:- if it is not done, and there has been an underpayment by the tenant, does the lessor lose the right to claim? Or if there is an overpayment, and the adjustment is not made, does the lessee lose the right of recovery if the lessee does not ask for the adjustment within the four month period? 30 As I indicated earlier, it may well be appropriate that there be a guardian of the legislation to police these requirements, and it may well be that the Registrar is the appropriate functionary, but I am satisfied that he currently does not have the power. I therefore dismiss the Registrar's motion for the declaration.' 11 The Tribunal has had the benefit of considered written submissions from Dr Galbraith of the Crown Solicitor's Office for the Registrar, and from Mr Kennett of counsel for the lessor-respondent to the original proceedings. Mr Kennett's client had originally asked for the Registrar to be removed from the proceedings. That application was unsuccessful. Mr Kennett no longer presses an objection of that width, but made submissions in support of the Tribunal's decision. Ms Davies, the applicant-lessee in the original proceedings, appeared in person and made submissions in support of the Registrar's appeal. 12 Our conclusion is that the Registrar has a broader power to intervene than that proposed by the Tribunal, but we agree with the Tribunal's fundamental proposition that the Registrar can not participate to the extent of being entitled to apply formally to the Tribunal for orders affecting the relationship between the parties. So the Registrar's appeal must be dismissed in so far as he seeks to have that construction of his powers by the Tribunal reversed. 13 But as the Registrar will, as we understand his intentions, continue to participate in the proceedings below, we should say more on the appropriate role of the Registrar as intervener. It is not to be confined narrowly in the way adumbrated by the Tribunal in the reasons set out above. 14 As intervener, the Registrar may make, as the Tribunal below recognised, submissions of a public interest kind. We differ from the Tribunal in two regards. One, we do not see his role as confined narrowly to issues or matters which might be said to relate to the functions connected with the provision of mediation services. (We note, as Dr Galbraith did, that the powers conferred by s 65(1), in particular (b), (c) and (d) go beyond that sphere.) 15 Nor do we see him as precluded from adopting a partisan stance advocating or promoting the case of a party. This may be an appropriate expression of the public interest in the proceedings. If the Registrar advocates a party's cause there may be a greater risk of an adverse order for costs in the event that he is unsuccessful than would otherwise be the case: see further Hales v Consumer Claims Tribunal [1990] ASC 55-975 per Allen J. 16 As to the key question of whether the Registrar can make formal direct application for orders, we agree with the submissions of Mr Kennett to the effect that this would be a distortion of the role of the intervener. 17 We agree with Mr Kennett that s 65(2) simply seeks to reflect the position that has developed under the general law in relation to the nature of the grant of intervener status: Corporate Affairs Commission v Bradley [1974] 1 NSWLR 391, 396; United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520, 534; and Cheesman v Waters (1997) 148 ALR 21. Similarly as to the position of an intervener pursuant to statute, see Park v Minister for Fair Trading [2000] NSWCA 66 at [50] per Powell JA. 18 The intervener is a party with a limited role. The intervener is not a party to proceedings in the same way as a manufacturer who is joined as a second defendant to an action brought by a plaintiff consumer against a defendant retailer in respect of a defective product. We do not regard s 65(2) as conferring on the Registrar 'party' status in that sense. In the example given, there are direct contractual relationships as between the consumer and retailer, and between the retailer and the manufacturer. There is also a direct relationship (founded on the duty of care) between the consumer and the manufacturer. 19 We understood Dr Galbraith not substantially to disagree with the basic proposition that the intervener is a party with a limited role. He conceded, as we understood him, that the Registrar had misconceived his role in making a direct application for orders as to the rights of the parties inter se (as between each other). The orders sought were ones, if granted, that would have benefited the lessee. The appropriate applicant for orders of that kind is the lessee. It is open to the Registrar to provide the form of desirable orders to the lessee, but the lessee must bring forward the application. We agree with Dr Galbraith that undue technicality should not intrude itself in to the proceedings of a Tribunal designed to be expeditious and practical in its approach to disputes: see also Administrative Decisions Tribunal Act 1997, s 73(3). However we see it as necessary that there be care exercised as to the way the relationship between an intervener, the disputing parties and the Tribunal is conducted. 20 We note that neither counsel could draw to our attention to any authority for the proposition that an intervener could seek orders determinative of the rights of the principal parties in the proceedings. The closest analogy was the case of Cummings Corp v Child Support Registrar (1995) 128 FLR 478 in which a business affected by child support proceedings brought against a non-custodial parent sought leave to intervene, was granted it and then sought and was granted a stay order. We see this simply as an instance of the court dealing with the procedural fairness considerations that might arise once intervener status is granted, so as to ensure that the intervener is afforded the ability effectively to participate in the proceedings of which it may only have recently received notice. 21 We recognise that the Registrar has an important role to play in the scheme of operation of the retail leases legislation. The Registrar provides an external statutory mediation service for parties in dispute. Those parties can normally only access the Tribunal if attempts at mediation before the Registrar are likely to prove ineffective. The Registrar specialises in retail leases dispute mediation, as does the Unit that he heads. He will be able to bring a specialist and informed knowledge to proceedings in which he intervenes. He may be able to assist the Tribunal in generating options for resolution of the dispute. He may be able to assist parties to better frame their cases. We see no difficulty with these roles being played in the public interest by the Registrar. 22 Clearly a more difficult situation arises if the Registrar adopts a partisan role, but we do not see that as precluded by the role of intervener. As Dr Galbraith pointed out, it is commonplace in the familiar situation where a Minister appears at appeals in respect of Tribunal decisions for the Minister to make submissions in support of the position of one of the parties. That may be the proper expression of the public interest in the circumstances. 23 We have not considered in this instance whether it may be appropriate for the Registrar to 'stand in the shoes' of a party, that is, to run the case on their behalf without the party actively participating in the proceedings. That is an issue that we may be called upon to consider on another occasion. In this case the applicant-lessee (Ms Davies) has actively participated in the proceedings. 24 The ultimate ruling under appeal is affirmed. Order 25 Appeal dismissed.

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