Tennent v Moukhlina [2007] QCA 302 | Case summary

REASONS FOR DECISION 1 In December 2008 the Appeal Panel allowed the substantive appeal in these proceedings, ones brought under the Retail Leases Act 1994 (RL Act): see Tennent & ors v Moukhlina & ors (RLD) [2008] NSWADTAP 83 (17 December 2008). It ruled that the lease had been effectively renewed, even though one of the two named co-tenants had not been involved in the giving of the notice of renewal. 2 In the final orders, the Appeal Panel set a timetable for the making of any submissions as to the costs of the proceedings before the Tribunal at first instance and before the Appeal Panel. 3 The directions also provided that the decision as to costs would be made without holding a hearing, as permitted by s 76 of the Administrative Decisions Tribunal Act 1997 (the ADT Act), subject to leave being granted to the parties to indicate in their submissions if they object to the Appeal Panel proceeding under s 76. 4 The appellants lodged their written submissions on costs on 4 February 2009. On 12 March 2009 the respondent lessors' solicitor notified the Registrar that a Summons commencing an Appeal (Part 50) had been lodged by her clients with the Supreme Court. The respondents lodged their written submissions on costs on 26 May 2009. The appellants lodged a reply to those submissions on 29 May 2009. 5 The appellants' application is for the costs of and incidental to the appeal proceedings and of the proceedings below. 6 The respondents' application is: (a) that the respondents' costs of the appeal in respect of the issues abandoned at the appeal hearing by the appellant, be paid by the appellant; (b) that each party bears its own costs for the remainder of the appeal and the hearing below. 7 The Appeal Panel decided to defer dealing with the submissions pending the outcome of the appeal to the Supreme Court. 8 On 7 October 2009 the solicitors for the lessee parties (the successful appellants in these proceedings) informed the Registrar as follows: 'On 3 September 2009, the Court of Appeal dismissed the Plaintiffs' (Lessors) appeal under Rule 12.7 of the Uniform Civil Procedure Rules , and ordered that the Plaintiffs' (Lessors) pay our clients' costs.' 9 UCPR 12.7 provides: ' 12.7 Dismissal of proceedings etc for want of due despatch (1) If a plaintiff does not prosecute the proceedings with due despatch, the court may order that the proceedings be dismissed or make such other order as the court thinks fit. (2) If the defendant does not conduct the defence with due despatch, the court may strike out the defence, either in whole or in part, or make such other order as the court thinks fit.' 10 The solicitor for the lessees asked the Appeal Panel to resume dealing with his clients' costs application. The request was copied to the solicitor on the record for the lessors. There has been no response to it. This decision now deals with the matter. Constitution of the Appeal Panel 11 Mr Roger Fairweather, non-judicial member of the Appeal Panel that heard the substantive appeal, died in July 2009. The parties have given their consent, in accordance with s 79(1) of the ADT Act to the reconstitution of the Appeal Panel with a new non-judicial member. The replacement member is Ms Betty Weule. As required by s 79(2), the reconstituted Panel has had regard to the evidence and decisions in relation to the matter that were given or made before it was reconstituted. The Rule 12 The Tribunal does not follow the Court practice of ordinarily awarding costs to the successful party. 13 At the time these proceedings were before the Retail Leases Division and the Appeal Panel, the operative costs provision was the unamended form of s 88 of the ADT Act. This provision is applicable to retail leases disputes by virtue of s 77A of the RL Act. It provides relevantly: '(1) … the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs.' 14 An amendment to the costs power was made by the Administrative Decisions Tribunal Amendment Act 2008, No 77 (enacted 28 October 2008). The new rule is found in a new sub-section (1) and (1A) which provide relevantly: '(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 series of factors are set out].' 15 The factors listed in the amended provision are similar to those that appeared in the Tribunal's old Practice Note 12 that provided guidance in relation to what might be considered to be 'special circumstances' under the previous provision. 16 These amendments took effect on 1 January 2009 (see s 2(1), as to Sch 1 [33], see further Govt Gaz No 147, 14.11.2008, p 10928; Govt Gaz No 158, 19.12.2008). 17 Schedule 5 to the ADT Act is headed 'Savings and transitional provisions', and provides relevantly (emphasis added): ' 43 Application of amendments (1) Except to the extent that a provision of this Part provides otherwise, a substantive amendment does not apply to or otherwise affect: (a) any applications (including applications for internal reviews) that were made, but not finally determined, before the commencement of the amendment, or (b) any proceedings that were commenced, but not finally determined, before the commencement of the amendment. (2) The following substantive amendments extend to applications and proceedings that were made or commenced, but not finally determined, before the commencement of the substantive amendment concerned : … (i) the amendment made to section 88, … (7) If a substantive amendment does not apply or extend to, or otherwise affect, an application, objection or proceedings, the application, objection or proceedings are to be determined or dealt with under this Act as if the substantive amendment had not been enacted.' 18 There has been a difference in view in Retail Leases decisions at first instance as to whether the old costs provision or the new costs provision applies to proceedings that have been the subject of final orders, with only any application as to costs remaining to be considered. In Zeaiter Corporate Holdings Pty Ltd v Satchithanantham (No 2) [2009] NSWADT 70 (2 April 2009) ('Zeaiter'), the Tribunal (presiding member, Chesterman DP) held at [33] ff that the old provision applied where there had been final orders other than as to costs. The Deputy President referred to the transitional provision, and said: '35 In the Tribunal's opinion, however, the costs application to which this decision relates is governed by section 88 in the form that it took before the amendment. The reason is that the principal decision and the filing of the application and the submissions on costs all preceded the commencement of the amendment. Accordingly, the requirement of 'special circumstances', not the new criterion of 'fairness', must be satisfied.' 19 On the other hand, in Salon Today Pty Limited v. M.M.I.R. Pty Limited [2009] NSWADT 71 (Molloy JM), delivered the same day, 2 April 2009, the Judicial Member said at [55]: '55 As I read the 2008 Amendment Act the new Section 88(1) and (1A) applies to the instant case simply because the proceedings have been "not finally determined" before 1 January 2009 in that although the substantive issues between the parties had been determined there remained outstanding the issue of costs such that it cannot be suggested that the application and proceedings have been "finally determined". 56 I invited both parties to make further submissions as a result of the coming into effect of the 2008 Amendment Act. Both parties took advantage of that invitation but no party submitted that the amendments to section 88 do not have full force and effect in relation to the matter now before me.' (This Appeal Panel includes in its membership Judicial Member Molloy.) 20 As noted above, in Salon Today the parties approached the issue of costs on the basis that the 1 January 2009 amendments applied and the Tribunal adopted that approach, no party asserting otherwise. Because the two decisions were delivered the same day, neither presiding member had the benefit of the other member's opinion. 21 In addition, our research has now discovered two other decisions in conflict on the point, both at Appeal Panel level. In Building Professionals Board v Ball (No 2) [2009] NSWADTAP 8 (23 February 2009, Chesterman DP presiding) at [56], the old rule was applied where the substantive hearing had been held in 2008, whereas another Appeal Panel in GN v Public Guardian [2009] NSWADTAP 6 (19 February 2009, Handley DP presiding) applied the new rule to the same situation. (GN is another case where the parties appeared to have taken the view without dispute that the post 1 January 2009 amendments applied.) 22 In Zeaiter, Salon Today and this case, there had been orders finally disposing of the substantive applications prior to 1 January 2009. Had the ordinary costs rules in litigation been applicable, a usual costs order (based on the principle, costs follow the event) would, most likely, have been incorporated into those orders. Because of the different position that applies to this Tribunal, most proceedings are completed without any reference to the question of costs. In Zeaiter, Salon Today and this case, there had been orders finally disposing of the substantive applications prior to 1 January 2009. 23 Had the ordinary costs rules in litigation been applicable, the usual costs order would have been incorporated into those orders. Because of the different position that applies to this Tribunal, a costs application must be agitated by an exceptional application. The outcome of the litigation will be a factor, but not a conclusive factor, relevant to the determination of such an application. Therefore, it is usually necessary for the Tribunal to deal with the costs application as a separate, ancillary application following the substantive determination of the proceedings. 24 The transitional provision is directed to the situation where the proceedings, substantively, remained live before the Tribunal at the date of commencement. If they are live, the new rule applies even if they have reached an advanced stage. The transitional provision, in the President's opinion, is not directed to a situation where the proceedings, substantively, are no longer live. 25 The transitional provision would have no work to do if it was enough that the existence of an unresolved costs application at the transition date was enough to mean that proceedings were not 'finally determined'. The term 'finally determined' should be understood as a reference to the entry of final orders in respect of the substantive application. Ordinarily they will be final orders entered after a substantive hearing but may, depending on the statutory regime, be by way of a default procedure without a substantive hearing (as to which see Re Essendon Travel (Vic) Pty Ltd, Fed Ct (Olney J), VG 3439 of 1993 (2 March 1994)). 26 It would be odd if a case fought and decided as to its merits under one costs regime were then to fall to be addressed by reference to a new costs regime. This could not have been the intent of Parliament. Our preferred approach seeks to give a purposive construction to the transition provision as it applies to situations like those that have arisen in Zeaiter, Salon Today and in this case. 27 Such an approach is, it is considered, in line with the way the Court of Appeal's analysis of a different kind of transitional issue (changes to appeal rights under the ADT Act) in Lloyd v Veterinary Surgeons Investigating Committee [2005] NSWCA 456: see, especially, [23] per Handley JA. Similar thinking is seen in the 'accrued rights' cases that pay heed to the usual provision in Acts Interpretation Acts going to the effect of amendment or repeal (in NSW see Interpretation Act 1987, s 30): see, for example, Australand Corporation (Qld) Pty Ltd v Johnson [2007] QCA 302 at [111] per Keane JA. Considerations of fairness and the interests of justice also support such an approach. In that regard, see the discussion in Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council [2007] NSWCA 300 at [127] ff per Spigelman CJ. 28 In our view, therefore, the old rule should apply. (Mr Molloy has indicated that, having further considered the arguments, he respectfully agrees with the views put above and by Chesterman DP in Zeaiter.) 29 We will proceed to deal with the costs application on the basis of the old provision. Exercise of Discretion under the old s 88 30 The Tribunal, both at first instance and at Appeal Panel level, has published many decisions responding to 'special circumstances' submissions made under the old s 88. There is a useful synopsis in the reasons in Zeaiter, which we adopt: '36 The case law on the requirement of 'special circumstances', in its application to proceedings under the RL Act, includes one Court of Appeal decision ( Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81) and a considerable number of Tribunal decisions, both at first instance and in appellate proceedings (see for example Alessa Pty Ltd v Total & Universal Pty Ltd [2001] NSWADT 150, Gizah Pty Ltd v AXA Trustees Ltd (No 2) [2001] NSWADT 164, Citadin Pty Ltd (No 2) v Eddie Azzi Australia Pty Ltd & General Pants Pty Ltd (RLD) [2001] NSWADTAP 31, Wood & Anor v Bergman (No 2) [2003] NSWADT 175 and Sotiropoulos v Mattana Coiffure Pty Ltd (No 2) (RLD) [2004] NSWADTAP 43). 37 'Special circumstances' are defined in this case law as 'circumstances that are out of the ordinary, but without having to be extraordinary or exceptional'. It is not enough that the circumstances are 'special': they must also 'warrant' an order for costs. On account of the 'commerciality' of the Retail Leases Division, the interpretation of 'special circumstances' differs significantly from the interpretation that might be adopted in any other Division of the Tribunal. While various categories of 'special circumstances' have been identified in the case law, these categories are not closed.' 31 In broad terms, the Tribunal has been disinclined to award costs in proceedings at first instance, acknowledging the access objectives which had led Parliaments to give jurisdiction to a tribunal to deal with certain classes of legal disputes in the community and to modify the exposure of unsuccessful parties to costs. On the other hand, Appeal Panels of the Tribunal have been more inclined to award costs against appellants whose appeals have failed in retail leases matters. Appellants' Submissions 32 As to the relevant provisions, the appellants put their submissions in the alternative, and addressed both the old s 88 and the new s 88. Many of the factors enumerated as relevant considerations for the purpose of the new s 88(1A) are very similar to those to which the Tribunal had regard under the old s 88(1), as amplified by Practice Note 12 which provided a fuller explanation of how the Tribunal might apply the old s 88(1). 33 The appellants' basic submission is that they should not, in the circumstances, have been put to the expense and inconvenience of suing to vindicate their rights. They referred to key aspects of the history of the dispute. They draw on the observations of the Court of Appeal in Cripps v G & M Dawson P/L: 'While determination of costs is a discretionary matter and moreover a matter of practice and procedure … unreasonable conduct that is out of the ordinary and conduct which is grossly unreasonable can attract the exercise of the Tribunal's power under section 88.' 34 In the appellants' submission, the lease was deficient in that it did not name clearly who was to receive any notice of exercise of the option. They said that they had given notice by letter in due time to the solicitor for the lessors. Whether such a letter had been sent was contested before the Tribunal. The solicitor's evidence was that he had no record or knowledge of such a notice being received. The Tribunal found in favour of the lessees' case. However, the Tribunal found that the letter did not constitute a legally effective notice, because one of the two signatories to it was not a named lessee though he was the manager of the business day to day. This issue was seen as important because the other named lessee had ceased to have any active involvement in the business. 35 In the appellants' submission, the appellants had succeeded at first instance on all the matters of disputed evidence. Their case had come unstuck before the Tribunal on a legal point not an evidentiary issue. The legal point had, in their submission, been properly corrected by the Appeal Panel. 36 On appeal, the Appeal Panel held that it was not determinative that the other named lessee had had no involvement in the giving of the notice, having regard to the circumstances of the case. The manager had been armed with ostensible if not actual authority to manage the business by the other named lessee, and that authority extended to giving notices of renewal of the lease. The other named lessee's involvement as a claimant in the litigation was also an indication of the other named lessee's acceptance of the manager's conduct. Accordingly the notice had been effective, and the lessors were bound to give the lessees a further term, subject to settlement of such matters as rent and the like. 37 They contend that it was the conduct of the respondents that necessitated the commencement of the proceedings, being their failure to recognise that the manager had the requisite authority. As the Tribunal's reasons record, and likewise the reasons of the Appeal Panel, the practical relationship between the named lessees and the named lessors had from the outset of the negotiations that led to the lease, and during the term of the lease, been conducted between the manager, Djordjevic, and one of the named lessors, Guinzbourg (except when Guinzbourg was away from Australia on business in Russia). When that situation arose, Djordjevic would deal with the other named lessors, i.e. the couple Chevtchenko and Moukhlina. The Tribunal's reasons noted the difficulties that often arose for Djordjevic in those times, with Chevtchenko often failing to make decisions but instead referring to Guinzbourg or delaying until Guinzbourg was back in Australia. 38 The closing general submission of the appellants is as follows: 'Put another way, the Respondents took a particular technical point (despite it being factually inconsistent with what they knew, or ought to have known as being the true course of dealings between the parties and the authority of Djordjevic) and by doing so presented to the Appellants a considerable task in proving … all the essential elements of the valid exercise of the Option, which the Appellants ultimately did do successfully. By the Respondents putting the Appellants to such proof, it grossly increased the costs in these proceedings. It is fair and reasonable that the Appellants now be compensated for those costs.' 39 The Appellants' submissions refer to the following additional circumstances: '(i) success in the proceedings, and the strength of the Appeal Panel's comments at [106]-[108] referring to the conduct of Mr Guinzbourg on the occasions he returned to Australia in August 2006 and March 2007, and its possible implications (ii) the nature and complexity of the proceedings - especially the extent of evidence that was required to prove the giving of notice of the option (iii) prolonging the proceedings by requiring special proofs in relation to the conduct of Djordjevic when he was the person with whom the lessors had routinely dealt in relation to the affairs of the business and the performance of the lease; and (iv) causing the unnecessary adjournment of the hearing set down for two days (13-14 September 2007), resulting from the very late service and filing of evidence in connection with the hearing at first instance, and the consequent very late identification of the need for the lessors' solicitor to cease acting in the matter as he was to give evidence in the proceedings. - In regard to point (iv), the Appellants have submitted that, in addition or in the alternative, there should be a costs order against Mr Fung personally, and refer to various authorities in the Tribunal where there has been a personal costs order made against a non-party. There is no indication in the material that Mr Fung has been given notice of this application, and the Appeal Panel, in the interest of disposing of the matter, is not inclined to consider it any further. (v) attempts to settle the matter, referring to the appellants' solicitor's letter of demand dated 17 May 2007 requesting the respondents to recognise that the option was validly exercised, and bringing the proceedings to an end; and the further letter dated 11 September 2007, shortly prior to the dates set for the main hearing; Respondents' Submissions 40 The submissions commenced by referring to the number of grounds in the notice of appeal that were abandoned, 11 out of 25. 41 The submissions refer to Court rulings that recognise the possibility that costs may be increased by a party raising grounds of appeal which are lost or abandoned, even though that party may in the ultimate have been successful (see, for example, Cracknall v Jansen (1879) 11 Ch D 1 at 23 per Jessel MR; and Williams v Stanley-Jones & Co Ltd [1926] 2 KB 37 at 46). 42 In cases where neither party has been completely successful, the submissions note that in the ordinary courts sometimes no order for costs is made, leaving the parties to carry the loss (for example, Laws v Australian Broadcasting Tribunal (1989) 85 ALR 659 at 677). 43 The submissions refer to the context in which these proceedings arose. 44 It is said that their origin lies in an application to the Tribunal for the fixing of market rental for the subject premises. At that point, it is said, a dispute arose as to whether or not the appellants (as tenants) had exercised the option to obtain a new lease. The exercise of the option, it is noted, was integral to the appellants' asserted entitlement to have the market rental fixed by the Tribunal. The submissions note that this application has yet to be resolved, and remains pending before the Tribunal. 45 An open offer of settlement, it is said, was made by the respondents on the first day of trial at first instance (recorded in the transcript). That offer was for a new lease and a reduction in rent. The submissions also referred in broad terms to attempts at resolution by mediation. At the time the submissions were written (26 May 2009) the Supreme Court appeal was pending, and the author did not consider it appropriate to canvass any details of those matters. 46 The submissions dispute the appellants' version of the reasons for the late adjournment of the original trial dates. They say that the first hearing dates were aborted at the last minute by reason of the appellants raising a perceived conflict of interest on the part of the respondents' solicitor (Mr Fung). The submissions state the assertions were without foundation, and were not pursued by the appellants in cross-examination at the final trial or otherwise. To the contrary of the appellants' submission, the respondents' position is that they were unnecessarily disadvantaged, and they should be compensated for their costs thrown away. Appellants' Submissions in Reply 47 As to whether unnecessary cost was caused to the respondents by the abandonment of appeal grounds, the appellants submit that there is no evidence that any cost was generated. The appellants note that the respondents' written submissions only referred to matters that related to the appeal grounds that were maintained. 48 As to the market rent proceedings, the appellants note that it is the lessee's right to seek a determination (in the absence of agreement) from the Tribunal allowing the matter to be determined by a specialist retail valuer. The appellants dispute the significance of an offer made on the first day of hearing. They note that the reduced rent offered may still have been above the market rent which, had the matter got that far, would have been determined by the specialist valuer. They also note that the appellants wanted a renewed lease not a new lease. 49 As to the background to the adjournment of the first hearing, the appellants commence by referring to the time of service, 5.21 pm on Thursday evening, with the following day, Friday, not a business day (due to the APEC Conference). Consequently there were only three business days available before the case started the next Thursday, 13 September 2007. In its view, it was reasonable and proper for the appellants to point out that the solicitor acting for a party can not be a material witness in the party's case. There was an exchange of correspondence leading to the solicitor not acting. The result was that the hearing was put back to 27 and 28 September 2007. 50 The directions timetable (27 June 2007) had required all evidence to be filed by 27 July, and all submissions by 27 August. 51 The appellants' submission is that it was the late service of the solicitor's evidence that caused it to be an issue in preserving the hearing dates. Assessment 52 Like many pieces of commercial litigation, the costs incurred by each side in this dispute bear no sensible relationship to the scale of the monetary dispute. 53 The submissions refer to the immediate circumstance that gave rise to this dispute reaching the Tribunal, an application to the Tribunal for the appointment of a specialist retail valuer, with a view to settling a dispute about future rent. 54 At this point, Guinzbourg was dealing with Djordjevic on the basis that the lessors were happy for he and his associates to remain in business at the premises, and to have a lease (whoever the parties might be) to that end. There has never been any suggestion in this case that Djordjevic and his associates were in breach of the lease in respect of any fundamental obligations (rent, care of the premises, etc). 55 Viewed from a commercial perspective, the sticking point was the rent for the next period (whether that period was granted under a renewed lease or by way of a new lease). Djordjevic and his associates were of the opinion that the rent they had paid in the first three year term had been too high. They had data from local real estate agents suggesting that the market rent in the area for like premises was considerably less than what they were paying. Not surprisingly Djordjevic was pressing for a rent at the bottom end of the range as advised to him by agents. Guinzbourg himself was not pressing for the old rent or an upwardly adjusted amount. He counter-offered an amount that allowed for a ten per cent reduction. That involved, it seems to us, an acknowledgement by him that there had been some weakening of market rents in the area as against the expectations of 2004, and also perhaps the desirability from his perspective of losing a generally-reliable tenant and encountering a void period. 56 A dispute of this nature was eminently suited to negotiation and settlement. 57 Yet what has happened instead is that extended litigation has occurred, senior counsel of great experience and standing were engaged by both sides, copious evidence and submissions were filed. 58 Guinzbourg and his associates stood to lose the equivalent of about $45,000 over the next three years in rental income as against the first three years if they had acceded to Djordjevic's lowest offer. They had conceded by their own offer a loss of about $5,000. The likelihood, we think, and this was reflected in Djordjevic's evidence, is that a rent cut that left the rent reduced by about 20-25% would have been agreed, with a loss to Guinzbourg and his associates as compared to the previous period of about $15,000. If the new negotiated rent corresponded to a fair market value, then Guinzbourg and his associates had little to complain about. 59 Now instead, costs many times the figures we have mentioned have, we expect, been incurred. 60 We agree with the thrust of the appellants' submissions that the option question was not at the heart of any difference between Guinzbourg and Djordjevic by March 2007. This was a rent dispute in respect of continuing tenancy, which turned into a case about the exercise of option rights and whether a non-lessee could effectively exercise an option right so as to bind the named lessees. 61 In our view, the need to litigate this relationship is attributable, primarily, to the conduct of Guinzbourg and his associates. Guinzbourg did not behave in the way to be expected of a responsible lessor. He did not put in place appropriate management arrangements for the increasingly long periods he was absent from Australia attending to his Russian business interests. When he was in Australia he dealt directly with Djordjevic. Guinzbourg was the dominant lessor, as reflected in the difficulties Djordjevic had in dealing with Chevtchenko/Moukhlina when he was out of the country. He was out of the country in the period leading up to the expiry of the lease, and left Djordjevic/Tennent with no practical means to get on with settling the issues about future rent and security of tenure (renewed lease or new lease). 62 The Tribunal found in favour of Djordjevic/Tennent on the key factual dispute in this case. If an option is exercised, the lessor ordinarily is bound to observe it. 63 On the other hand, Djordjevic's conduct in the period after he sent the option notice was less than satisfactory. He should have taken steps, we consider, once he had not heard anything in response to the notice, to find out whether it had come to the attention of Mr Fung and his clients. The evidence is that he was canvassing alternative locations in the period after the giving of the notice, raising doubts in our minds as to whether he would have honoured the option if he had got a new deal, especially if Mr Fung and the lessor never discovered the letter. Nonetheless he did inform Mr Guinzbourg soon after Mr Guinzbourg returned in August of the fact that he had sent an option notice. There is nothing in the evidence of these conversations that Mr Guinzbourg saw any difficulty in Djordjevic being a signatory to the option. Mr Guinzbourg's queries went to whether Mr Fung had received anything. 64 In our view, given the outcome at first instance, each side should bear its own costs of the proceedings at first instance with the following modification. The respondents, i.e. the lessors, should bear the costs thrown away by the lessees by reason of the vacation of the original hearing dates, 13 and 14 September 2007. It is plain that the lessors were in breach, significantly, of the filing timetable. It is no answer that Mr Guinzbourg was away, and that delayed filing. Mr Guinzbourg needed to have in place arrangements that overcame that difficulty so as to ensure reasonable adherence to the timetable. The lessees were entitled to have some reasonable time ahead of hearing to consider the entirety of the lessors' case. Moreover, the objection that was raised would have been an obvious one for an experienced solicitor. Mr Fung should, we think, have identified the possibility, and sought to ascertain his opponent's position at a much earlier point. 65 As to the appeal, our decision is that the respondents pay the appellants' costs of and incidental to the appeal. In our view, as previously indicated, this was a matter that should have been resolved by sensible negotiation. Guinzbourg was in the driver's seat in that regard. He encouraged Djordjevic to proceed to a process of external resolution of the rent dispute. When Djordjevic turned to the Tribunal for assistance, he frustrated the exercise by raising the issue of the enforceability of the option. 66 An appeal involves a second round of proceedings in the Tribunal. The liberality that is usually shown in not awarding costs at first instance in the Tribunal does not apply with equal force to the exercise of the right of appeal. Both sides are put to considerable further expense. 67 It so happens in this case that the respondents won at first instance and lost on appeal. We have sought to reflect that circumstance in the adjustment made to the costs order at first instance. Had the respondents been the losing party at first instance and proceeded to appeal, and lost, we would have been inclined to make a full costs order against the respondents at both levels. 68 As to the respondents' submission that the appellants added unnecessarily to the burden of the appeal by formulating numerous grounds of appeal, and then abandoning many of them, we are of the view that this did not make a significant practical difference to the conduct of the appeal.

Tennent v Moukhlina

At a glance

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Decision date

Before

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Judgment (11 paragraphs)

Parties

Cases Cited (4)

Cited By (1)