Costs
18Westfield claims in its submissions that:
"(a)For the reasons in these submissions, the Tribunal can be satisfied that it is fair to award costs to P.T., having regard to paragraphs (b), (c), (d) and (e) of s.88(1A).
(b)Because each of paragraphs (b), (c) and (d) (or any combination of them) justifies an award of costs, the Tribunal should make an award of costs to P.T. based on those paragraphs and, based on paragraph (e), order that the costs be paid on the indemnity basis.
(c)The existing costs order made on 12 April 2007 and modified on 20 June 2007 (see [2007] NSWADT 130) should be vacated and, in its place, the Tribunal should order Spuds Surf to pay P.T.'s costs of the proceedings.
(d)Because Spuds Surf relied on its claims as its only defence to the proceedings brought by P.T. and because the proceedings were heard together, there should not be separate costs orders for the two proceedings.
(e)The Tribunal should make an order that Spuds Surf pay P.T.'s costs of both proceedings, on the indemnity basis."
19So far as is relevant here, s88 of the RLA provides:
"(1)Each party to proceedings before the Tribunal is to bear the party's own costs in the proceedings, except as provided by this section.
(1A)Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that it is fair to do so having regard to the following:
(a)whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as:
(i)failing to comply with an order or direction of the Tribunal without reasonable excuse, or
(ii)failing to comply with this Act, the regulations, the rules of the Tribunal or any relevant provision of the enactment under which the Tribunal has jurisdiction in relation to the proceedings, or
(iii)asking for an adjournment as a result of a failure referred to in subparagraph (i) or (ii), or
(iv)causing an adjournment, or
(v)attempting to deceive another party or the Tribunal, or
(vi)vexatiously conducting the proceedings.
(b)whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings.
(c)the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,
(d)the nature and complexity of the proceedings,
(e)any other matter that the Tribunal considers relevant."
20In the Profilio decision, the Tribunal, appropriately in my opinion, canvassed at [33] to [38], relevant matters of principle and practice relating to s88 of the RLA. In particular, I extract from that coverage:
(a)In respect of the criterion in the previous s88 of "special circumstances", "it was consistently held that because of the 'commerciality' of proceedings in the Retail Leases Division the interpretation of the phrase 'special circumstances' should differ significantly from the interpretation that might be adopted in any other division of the Tribunal."
(b)In Salon Today Pty Ltd v MMIR Pty Ltd [2009] NSWADT 71 at [72] (in this Division) the Tribunal stated:
"What the Parliament has done, in its 1 January 2009 amendments, is recognise that there is a need for this Tribunal to be more flexible and widen the scope of a litigant's entitlement to costs. This is a concept generally that is now accepted in this Division, and certainly touched upon by the Court of Appeal in Cripps (Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81), and the result of this re-assessment by the Parliament is a different test, a test of fairness, having regard to a number of parameters/factors."
(c)In Rucom Pty Ltd v Multiplex [2010] NSWADT 1 (in this Division) the Tribunal said at [37]:
"So, it is plain to me that, not only is this Division a commercial division dealing with commercial issues between lessors and lessees in a retail lease environment, but in addition, proceedings should only be commenced in this Tribunal after very careful consideration of the merits of the case ... After all, commencing proceedings without such consideration inevitably results in considerable expense being incurred by the other party and one might not unreasonably ask: "why should the other party have to bear those expenses when the proceedings should not have been commenced in the first place?"
(d)In the Court of Appeal in a case emanating from the General Division of the Tribunal, AT v Commissioner of Police [2010] NSWCA 131, Basten JA delivering the judgment of the Court, referred at [33] to "the force of the general principle" in s88(1) that "each party should bear its own costs in the Tribunal, a principle applicable at both first instance and before the Appeal Panel" and then said:
"Although an order varying the general rule may be made 'only if' the relevant criterion is satisfied in a particular way, there is a relatively low hurdle for an applicant seeking an order. The criterion of 'fairness' will take into account the compensatory purpose of an award of costs, which will generally favour the successful party. The circumstances in which fairness may be identified are indicated by the specific attributes listed in sub-s (1A), but subject to the generality of paragraph (e), read in its context. Other considerations will no doubt include the nature of the jurisdiction of the Tribunal which is invoked and the objects identified in s 3(b)-(g) of the [ADT Act]."
21In support of its claims concerning costs Westfield submits more particularly, and I summarise:
1.Section 88(1A)(b) of the RLA has application in that Spuds Surf unreasonably prolonged the proceedings by -
(i)having the hearing vacated in April 2007 with it not then commencing until May 2009;
(ii)a great deal of time in preparation and hearing was consumed on the pre-lease misrepresentation claim which was abandoned in closing submissions and had no tenable basis in fact or law;
2.Section 88(1A)(c) has application in that Spuds Surf made claims that had no tenable basis in fact or law, namely, in respect of
(i)pre-lease misrepresentation;
(ii)alteration to the lease;
(iii)under s34(1) of the RL Act;
(iv)unconscionable conduct; and
(v)loss and damage.
3.Section 88(1A)(d) has application in that the proceedings brought by Spuds Surf were complex.
4.Section 88(1A)(e) has application in that before Spuds Surf commenced its proceedings PT offered to resolve complaints made by Spuds Surf and on each occasion was more favourable to Spuds Surf than the result of the proceedings and PT made a calderbank offer to Spuds Surf on 4 June 2007 which was not accepted.
I will now deal with each of those particular submissions.
22In relation to Westfield's submissions in relation to s88(1A)(b) (summarised above) it is correct that the hearing listed to commence in April 2007 was vacated on the application of Spuds Surf on 12 April 2007 as noted in the Principal Decision at [8]. The part of the history of both proceedings summarised in the Principal Decision in and around [8] is more extensively covered in the Tribunal's reserved interlocutory decision in proceedings 065171 delivered on 20 June 2007 ([2007] NSWADT 130 - "the 20 June 2007 decision") at [15] to [24]. It is also correct that the hearing did not thereafter commence until 11 May 2009. That two years' interruption was significant but it may not be appropriate to blame Spuds Surf totally for it. In particular, first, Westfield instituted proceedings 085081 on 23 April 2008. Secondly, on 29 October 2008, when I had my first involvement with these proceedings following a successful application to the Tribunal otherwise constituted by Westfield for such an interlocutory step, a day was spent dealing with Westfield's objections to Spuds Surf's evidence. On that day rulings were made on those objections and the parties indicated that more evidence would be put on. A direction was made that any further evidence that either party sought to rely on be filed and served within 28 days from that day, with the question of any evidence in reply to that new evidence being reserved. It should be added that, as Spuds Surf's submissions mention, the September 2009 hearing tranche (Principal Decision at [9]) was unfortunately cut short by a sudden death within my family. It is also correct, however, as Westfield submits, that a great deal of time, certainly in hearing was, and, obviously, in preparation would have been, consumed by the pre-lease misrepresentation claim which was abandoned in closing submissions. The abandonment by Spuds Surf of that claim at the end of the hearing is a telling factor in my opinion. It was pressed until then, and in relation to that situation paragraph [107] to [119] in the Factual Details section of the Principal Decision and [201] to [207] of the Findings section of the Principal Decision are relevant. Spuds Surf, I am satisfied, did unreasonably prolong the time to conduct the proceedings in respect of the pre-lease misrepresentation claim.
23In supplementation of its submissions in relation to s88(1A)(b), and also its submissions in relation to s88(1A)(c) Westfield says that:
"In June 2008, nearly a year before the final hearing commenced, P.T. warned Spuds Surf that its claim would fail. The then Registrar of Retail Tenancy Disputes convened a meeting of the parties on 10 June 2008. Spuds Surf was represented by its then counsel and P.T. by senior in-house counsel, its solicitor and Senior Counsel. P.T. gave Spuds Surf and the Registrar a document entitled "Twenty reasons that the applicant's claims will fail", a copy is attached as Attachment B to these submissions. In the event that Spuds Surf maintains that this meeting was "without prejudice", the document nonetheless is admissible under Evidence Act 1995 s.131(2)(h) because it is relevant to determining liability for costs."
I deduce that on 10 June 2008 the parties were before the Registrar of Retail Tenancy Disputes for another mediation, consequent upon institution by Westfield of proceedings 085081. In the Application for Original Decision in those proceedings filed 23 April 2008, there is included a copy of a certificate by the Registrar dated 12 October 2006 that a mediation under Part 8 of the RLA has failed to resolve the dispute between the parties. There had been a mediation on 6 October 2006 as noted in the Principal Decision at [6]. On the assumption which I make that what occurred on 10 June 2008 was also a mediation, I am of the opinion that I should not receive into evidence on this application the document which is Attachment B to Westfield's submissions as it constituted a privileged and confidential communication made at the mediation. The provisions of the RLA dealing with mediations are conveniently referred to in DB Rreef Funds Management Ltd & PT Ltd v Valentino Home Fashion Pty Ltd; Valentino Home Fashion Pty Ltd v Westfield Hurstville (Westfield Management) [2008] NSWADT 332 ("the Valentino decision") at [46] to [49]:
"46 In particular 1 in respect of Order 3 which it seeks in the Notice of Motion, the Lessor asserts that in paragraphs 5 and 7 of the Application for Mediation which the Lessee lodged with the Retail Tenancy Unit on 6 June 2007 "that, in entering into the retail shop lease, it did not rely on a pre-lease misrepresentation with respect to sales per square metre for homewares at Westfield Hurstville".
47 Division 2, sections 63-69, of Part 8 Dispute Resolution, of the RL Act mandates participation in a mediation process before proceedings can be taken in respect of a retail tenancy dispute. Such a mediation occurred in this case, and as I have noted, the Registrar, Retail Tenancy Disputes certified on 20 August 2007 that the mediation had failed to resolve the dispute between the Lessor and the Lessee in respect of the subject premises. Section 69 makes statements made in the course of a mediation inadmissible in subsequent proceedings:
"Any statement or admission made in the course of the mediation of a retail tenancy dispute or other dispute or matter referred to in section 65(1)(a1) pursuant to arrangements made by the Registrar under this Part is not admissible at a hearing of a claim under Division 3 or in any other legal proceeding."
There is an expanded definition of "mediation" in section 67:
"mediation is not limited to formal mediation procedures and includes the following:
(a) preliminary assistance in dispute resolution, such as the giving of advice designed to ensure that the parties are fully aware of their rights and obligations and that there is full and open communication between the parties concerning the dispute.
(b) other appropriate forms of alternative dispute resolution."
48 The RL Act provisions concerning mediation referred to above are not as extensive as those in sections 99-111 of the ADT Act dealing with Tribunal ordered mediations (and neutral evaluations) and in particular sections 107 and 108 of the ADT Act are extensive provisions relating to Privilege and Secrecy respectively. See also sections 25-34 of the Civil Procedure Act 2005 and Uniform Civil Procedure Rules 20.1-20.7 relating to Court ordered mediations. Section 125 of the ADT Act dealing with privileged documents and the Evidence Act 1995 might also be noted. Privilege and confidentiality are features also of consensual mediations and mediation agreements traditionally contain provisions detailing those features. Against that sort of background I had an instinctive reaction against accepting the Application for Mediation in evidence. Nevertheless, in some situations evidence may be given of matters associated with mediations (apart, of course, from proceedings to enforce a compromise agreement made at mediation). For example, in Al Mousawy v J A Byatt Pty Ltd [2008] NSWSC 264 the Court admitted evidence of written communications by one party refusing to participate in a mediation which had been arranged. The Court acknowledged the provisions in the Uniform Civil Procedure Act 2004 relating to privilege and said at [17]:
"The purpose of such provisions is clear. As Gleeson CJ said in Gain & Anor v Commonwealth Bank of Australia & Anor (1997) 42 NSWLR 252 at 256 in relation to the same wording:
'The reason for such legislative provision is obvious. It is the policy of the legislation that parties should be encouraged to discuss their differences without the risk that things they say might later be used against them, in court, if the mediation does not result in settlement.'"
Explaining why it admitted the communications into evidence, the Court said at [21]:
"The facsimile and email, however, were not prepared for use in the mediation or in any preparatory stage leading up the mediation. The documents are the very antithesis of the sort of documents which the section is designed to protect from disclosure and which were described in Gain. These documents relate to the cancellation of a mediation session. They are at most collateral or incidental to it but do not gain the protection afforded by section 30(4)."
Another example is Alessa Pty Ltd v Total and Universal Pty Ltd [2002] NSWADTAP 16 where evidence had been received of advice by an officer of the Retail Tenancy Unit to a party prior to the mediation (evidently not of the sort covered by section 67 of the RL Act).
49 In the case before me, in the Application for Mediation, in response to the questions within the form "What is the dispute about?" and "What do you hope to achieve from mediation?" the Lessee attached four closely printed pages of details. These go beyond the identification of matters for the purpose of answering the questions and set out, in some detail, contentions and complaints by the Lessee against the Lessor. As such, this material should, I think, be viewed as not just part of a document formally starting the mediation process but also as the presentation of matters for the purposes of the mediation. It therefore comprises, in my opinion "statement(s) or admission(s) made in the course of the mediation" and as such is rendered inadmissible by section 69. Particular 3 fails, in my opinion, for that reason alone."
24Nevertheless, Westfield submits that Attachment B (and Westfield's assertions relating to it in its submissions) is admissible under s131(2)(h) of the Evidence Act 1995 because it is relevant to determining liability for costs. So far as is relevant s131 of the Evidence Act provides as follows:
"(1) Evidence is not to be adduced of:
(a)a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or
(b)a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute.
(2) Subsection (1) does not apply if:
...
(h)the communication or document is relevant to determining liability for costs; or ..."
25The Appeal Panel decision in this Tribunal in Wallis Lake Fisherman's Co-operative Ltd v ACN 079830595 Pty Ltd t/as Jolly Joe's Fish'n Chips (No.2) (RLD) [2011] NSWADTAP 29 is against that proposition. The Tribunal there considered a number of decisions, including the Valentino decision, dealing with s69 of the RLA and held that:
"58 We know of no cases decided in the Tribunal or elsewhere contradicting the proposition of importance emerging from these decisions: namely, that the prohibition imposed by section 69 of the RL Act applies to the determination of applications for costs orders in Tribunal proceedings instituted under this Act.
59 We have given careful consideration to the argument by Jolly Joe's that section 13(2)(h) of the Evidence Act renders evidence of its settlement offer admissible. We are satisfied, however, that this provision is not applicable, for two reasons.
60 Our first reason is that this provision of the Evidence Act, along with other provisions bearing on the admissibility of evidence, does not apply to proceedings under the RL Act in the Tribunal.
61 In so ruling, we take into account the following matters that might indicate the contrary. Section 4 of the Evidence Act states that it applies to 'all proceedings in a NSW court'. In the Dictionary to this Act, "NSW Court' is defined as including the Supreme Court and 'any other court created by Parliament'. In Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 66 NSWLR 77; [2006] NSWCA 185, Spigelman CJ stated at [29] that '[f]or many statutory purposes, the Tribunal would have sufficient of the characteristics of a court to answer a statutory provision relating to 'courts'. Furthermore, in O'Sullivan v Central Sydney Area Health Service (No.2) [2005] NSWADT 136 at [13-17], it was held in Equal Opportunity Division of the Tribunal that this Division, which like the Retail Leases Division hears civil disputes involving private parties, was a 'court' for the purposes of a provision of the Evidence Act (section 15) relating to the compellability of witnesses.
62 In our opinion, the determining provision in this context is however section 73(2) of the ADT Act. This commences as follows: 'The Tribunal is no bound by the rules of evidence...' On a day-to-day basis, as is well known to practitioners involved in proceedings under the RL Act, the Tribunal does not apply the provisions of the Evidence Act in determining the admissibility of evidence. There is accordingly no reason for thinking that it should treat section 131 of that Act as applicable to such proceedings.
63 Secondly, it has been held in a number of cases that a statutory provision expressly rendering inadmissible any statements made during a mediation will override the provision in section 131(2)(h) that statements made during settlement negotiations may be admissible when determining liability for costs. ..."
The decision then refers to, and repeats passages from, Azzi and Ors v Volvo Car Australia Pty Ltd (Costs) [2007] NSWSC 375 and Rajski v Tectran Corporation Pty Ltd [2003] NSWSC 476 as examples of the cases referred to in [63] of the decision.
26Accordingly, my view is that Attachment B to Westfield's submissions and what those submissions say in relation to it are not proper to be considered on the application for costs and should be rejected.
27In basing its claim for costs on s88(1A)(c) Westfield summarises its submissions in a statement that the Principal Decision "establishes that every element of Spuds Surf's claims lacked a tenable basis in fact or law". The Principal Decision did find that no element of Spuds Surf's claims was established. Nevertheless to ascribe to that situation the comment that it was found that the claims "lacked a tenable basis in fact or law" is not necessarily appropriate. When an assertion of baselessness is put up in respect of a claim, there are brought to mind the epithets used by Barwick CJ in General Steel Industries Inc. v Commissioner for Railways (1964) 112 CLR 125 at 128-9 in respect of a pleading warranting the exercise of the Court's power of summary dismissal: "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow (the pleading) to stand would involve useless expense". Given in particular the complexity of the case propounded by Spuds Surf and the earnestness with which it was pursued, it would have been difficult to assess short of a full hearing that the claims were so untenable as to warrant their summary dismissal; indeed, in the 20 June 2007 decision, it was found (at [46]) on a contested interlocutory basis that a reasonably arguable case had been established by Spuds Surf. Similar considerations are involved now. With the exception of the pre-lease misrepresentation claim, I am not satisfied that the claims were relevantly "lacking a tenable basis in fact or law". It also should be borne in mind in relation to s34 of the RLA and the covenant for quiet enjoyment claim that while neither of those claims was ultimately found to have been made out, a measure of fault on Westfield's part in 2002-2003, was found to have existed: Principal Decision at [208] to [211] and [233]. The abandonment by Spuds Surf of the pre-lease misrepresentation does suggest that, and accordingly I have formed the opinion, that claim had "no tenable basis in fact or law".
28In relation to s88(1A)(d) the nature and complexity of the proceedings were unusually substantial, even in the Retail Leases Division, as may be apparent from what was said in the Proceedings and Issues sections of the Principal Decision at [6] to [21]. I have already in this Decision referred to an earnestness with which Spuds Surf pursued its claims and that approach by Spuds Surf is, for example, apparent in the letter which Ms Mimis-Weeks wrote on 24 October 2006 to the Westfield board of directors with copies to among others, Chairman of the ACCC and the Australian Financial Review: Principal Decision at [101] and [163].
29In respect of s88(1A)(e), Westfield in its submissions relies on a number of offers made between 2005 and 2007 to Spuds Surf to assist Spuds Surf or to settle the proceedings. Westfield points outs various offers of assistance, particularly as covered in the Principal Decision at [67], [68], [99], [100], [102], [103], [135] to [136], [157(d)], [159] and [162]. In addition Westfield relies on what it asserts to be a Calderbank offer constituted by a letter from its solicitors to Spuds Surf's solicitors dated 4 June 2007; that letter was marked "without prejudice save as to costs" and was in the following terms:
"We refer to our open letter of today's date.
We note that in recent direct discussions between our clients, your client has raised the matter of its lack of financial resources as well as certain personal family issues relating to Mrs Mimis-Weeks.
In addition, we note your client has recently sought to involve in the resolution of these proceedings the possibility of a sale of its business to a third party.
In light of these matters, we have been instructed to submit on behalf of our client, without admission of liability, the following proposal:
1.Our client is prepared to offer to a buyer of your client's business, subject to that buyer being an acceptable tenant to our client, a new lease with a term of five (5) years. As you are aware, your client's current lease expires in August of 2008.
2.The commencement rent payable under the lease described in 1 is to be the same as the current rent payable under your client's lease.
3.Our client will waive the arrears of rent currently due and payable by your client, including the rent for June of 2007. This represents a benefit to your client with a total value of $215,966.02.
4.The proceedings currently before the Administrative Decisions Tribunal are to be dismissed with no order as to costs.
5.These terms are to be kept confidential by your client.
6.The parties are to enter into a formal deed of settlement by which the above terms are recorded and pursuant to which they release one another from any and all further claims or liability.
The proposal set forth herein will remain open for acceptance until 5.00 pm on 8 June 2007, at which time it will lapse.
We put you on notice that having regard to the matters recorded herein, in the event the outcome of the proceedings in the Tribunal is less favourable to your client than the proposal referred to above, our client intends to rely on this letter to support a submission that a failure by your client to accept the above proposal constitutes 'special circumstances' within the meaning of Section 88 of the Administrative Decisions Tribunal Act 1997, such that your client should be ordered to pay our client's costs from the date by which this offer is to be accepted."
30Offers of assistance by Westfield to Spuds Surf in 2005 and 2006, prior to commencement of the subject proceedings, are not to my mind relevant on the issue of costs in the proceedings. They reflect little more than commercial dealings between the parties in an ongoing lease arrangement, albeit one which was involving financial difficulties for Spuds Surf. In September and early October 2006 in a context of discussions involving Messrs Leslie, Papagiannis and Northern of Westfield and Ms Mimis-Weeks and Mr Weeks for Spuds Surf, Westfield approached four surf shop operators concerning a sale of Surf City ([157(d)], [158] and [159], also [99], of the Principal Decision), without success. Involved in these negotiations was the indication by Westfield of a preparedness to grant a new lease for Surf City after termination of the existing lease in August 2008. Those negotiations continued during October 2006 ([162] of the Principal Decision) until, probably, about the time when on 24 October 2006 when Ms Mimis-Weeks wrote her letter, copied to, among others, ACCC and the Financial Review, as referred to above. I add that in April-June 2007 Westfield also participated in negotiations with Rip Curl to acquire Surf City ([103] of the Principal Decision). That assistance by Westfield to Spuds Surf was directed more to helping Surf City resolve its financial difficulties than to settling the proceedings. As Spuds Surf notes in its submissions, the assistance was given or offered in an ongoing commercial context which involved multiple considerations and it was not given or offered on terms that directly related to disposition of the proceedings or to the costs aspect of the proceedings. I do not assess that this assistance is a matter of significance on the issue of the costs of the proceedings.
31In its submissions Spuds Surf refers to, among other decisions, Penrith Rugby League Club Ltd v Elliot (No.2) [2009] NSWSCA 356 holding at [11] that the factors to be taken into account where an offer or Calderbank offer has been made include whether the rejection of the compromise offer was reasonable in the circumstances; whether the time frame within which the offeree had to consider the offer was reasonable; and whether the letter of compromise explicitly stated that the offer was made in Calderbank terms and clearly specified the consequences of refusal. That and other relevant cases are noted in Ritchie at [42.13.26] and surrounding paragraphs. Clearly enough, given the marking on the letter of 4 June 2007 from Westfield's solicitors to Spuds Surf's solicitors that it was "without prejudice save as to costs" and what was set out in the concluding paragraph concerning costs consequences, that letter should be considered as a Calderbank offer (Calderbank v Calderbank [1975] 3 All ER 333). Nevertheless, there are factors which in my opinion tell against Spuds Surf's non-acceptance of the offer being assessed as unreasonable, notwithstanding Spuds Surf's ultimate loss in the proceedings:
(a)While the letter gave 5 days (which were working days, 4 June 2007 having been a Monday) for acceptance of the offer, that could be viewed as too short a period to permit sufficiently mature consideration of the offer. There was a most serious situation facing Spuds Surf at the time, as is apparent from the 20 June 2007 decision, for example at [47] to [51]. That decision was pending at the time of the letter, it having been the subject of a hearing on 21 May 2007.
(b)As is pointed out in Spuds Surf's submissions, the conditions of the offer included any purchaser agreeing to take on the new lease at the current rent. That was a questionable prospect: Principal Decision at [102] and [103].
(c)While Westfield offered to waive the current arrears of rent, there was no offer of any, even temporary, concession in respect of future rent, the quantum of which Spuds Surf was contesting in the proceedings and the payment of which was clearly an ongoing problem for Spuds Surf. The 20 June 2007 decision grappled with that situation, among others.
32My conclusions in relation to the letter of 4 June 2007 are that there was not involved the unreasonable rejection by Spuds Surf of the offer which it made but that it should have emphasised to Spuds Surf and its advisers that Spuds Surf was involving itself in significant commercial litigation with potentially serious costs consequences for Spuds Surf.
33Ultimately I have thus come to the view that it is fair that Westfield should have its costs of the proceedings but not on an indemnity basis. The principal reasons why it is fair that Westfield should have its costs are that the proceedings were of a commercial nature and complex, that Spuds Surf and its advisers should have been aware of the risk of an adverse costs order, that Spuds Surf ultimately lost on every issue in the proceedings, and that the proceedings included as a significant part the baseless pre-lease misrepresentation issue.
34Westfield's submissions include, as I have noted, a request that the costs order made on 12 April 2007 and modified on 20 June 2007 be vacated and replaced by an order that Spuds Surf pay Westfield's costs of the proceedings.