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[2009] FCA 682
respondent. 1. The Appellant's application for leave to appeal out of time is refused. 2. Costs applications to be determined on the papers if made within specified times.
Ull was late filing its appeal against a Tribunal decision that made it pay higher rent and outgoings. Its first paperwork was incomplete and the full grounds arrived weeks later. The Appeal Panel looked at why it was late, how it had handled the case before, whether the other side would be unfairly affected, and whether the appeal had any real chance of success. Because the excuses were weak, the appeal looked unlikely to succeed on the law, and Adwell had a right to think the case was finished, leave to continue the late appeal was refused.
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Ull Pty Ltd was the tenant of two adjoining retail shops at West Gosford Shopping Centre under successive leases granted by Adwell Holdings Pty Ltd. In separate applications under the Retail Leases Act 1994 (RL Act), Adwell sought recovery of outgoings of $4,089 under the first lease while Ull sought a declaration of unconscionable conduct, variation of the rent stipulated in the second lease from $96,000 per annum plus GST to current market rent, damages for overpaid rent, and other relief. The hearing before the Tribunal occupied several days in late 2007 and early 2008; submissions closed on 8 May 2008. Written reasons were not delivered until 24 September 2009 ([6]).
The Tribunal dismissed Ull's application in its entirety. It found that Adwell had not engaged in unconscionable conduct within the meaning of s 62B of the RL Act, that the agreed rent of $96,000 was not inappropriate or unconscionable, and that Ull remained liable for outgoings of $3,237.88 plus interest under the first lease ([7]). The financial consequence for Ull was an obligation to pay approximately $50,000 more rent over five years than it contended was fair, together with the modest outgoings sum ([46]-[47]).
Ull's director, Mr Hunter, lodged a notice of appeal on 27 October 2009, five days after expiry of the 28-day period prescribed by s 113(3)(a) of the Administrative Decisions Tribunal Act 1997 (ADT Act) ([2], [9]). The notice stated that the appeal was on a question of law but left the space for identifying the question blank, left the space for reasons to extend the appeal to the merits blank, and left the space for an explanation of the delay blank ([12]). The notice was therefore not "duly completed" within Rule 39(2)(b) of the Administrative Decisions Tribunal Rules 1998. The Registry declined to seal and serve the notice on Adwell's solicitor and did not send the usual letter advising of the appeal ([15]).
Mr Spring, Ull's experienced agent, was instructed on 29 October 2009 but took no immediate steps to regularise the appeal. Files had been archived after the long delay between submissions and judgment; an important file was missing for a further week; Mr Spring was on annual leave from 18 to 29 November 2009 ([20]). On 26 November he told the Registry he would file grounds by 4 December. A letter from the Registrar on 27 November warned that the matter was listed for dismissal on 15 December unless the deficiencies were cured ([18]). Grounds of appeal running to 22 pages plus 136 pages of attachments were filed and served on Adwell's solicitor on 14 December 2009; an amended notice in the approved form (annexing Mr Spring's earlier letter as the explanation for delay) was filed on 17 December 2009 ([21]-[24]). This was the first occasion on which Adwell became aware that an appeal had been instituted ([22]).
The hearing of the leave application occurred on 18 January 2010 before Deputy President Chesterman sitting alone in exercise of the interlocutory function conferred by s 24A(2)(a) of the ADT Act ([4]). Adwell opposed leave. After considering the well-known Lupevo factors and the interests of justice, the Appeal Panel refused leave and made directions for any costs applications to be determined on the papers under s 76 ([81]-[82]).
The Deputy President structured his reasons around the Lupevo factors first articulated in Lupevo Pty Ltd t/a Ampol Nabiac v Bree [2002] NSWADTAP 9 at [6]-[7] and subsequently applied in Ministry of Transport v Kharbanda (GD) [2006] NSWADTAP 61, NZ v Commissioner of Police, New South Wales Police (GD) [2008] NSWADTAP 23 and BE v University of Technology Sydney (GD) [2009] NSWADTAP 22 ([27]). He noted that the first five factors essentially collapse into the question whether the appellant has a reasonable explanation for the entirety of the delay when measured against the statutory 28-day benchmark ([28]).
No explanation whatever was offered for the initial five-day (three working-day) lateness of the original notice ([36]). The explanation for the further seven-week delay until the amended notice and grounds were filed was contained in Mr Spring's letter of 9 December 2009. That letter cited archiving, a missing file, annual leave and the need to consult further advisers ([20]). The Deputy President accepted that the archiving consequence of the 16-month gap between submissions and judgment was reasonable ([42]), but found the overall explanation "weak" and inadequate in a critical respect. Mr Spring, although not a legal practitioner, had significant experience in RL Act proceedings. He had failed to appreciate, or to inform himself by reference to the ADT Act, Rules or Practice Note No 5, that the defective notice had not been served and that Adwell had been denied the opportunity to file a reply within the 21 days contemplated by Rule 40 ([40]). The assumption that "the filing of the grounds of appeal could be out of time, but can be filed with leave" betrayed a lack of the careful attitude reasonably expected of an experienced advocate ([41]).
The Panel also weighed the prejudice to Adwell. From late October 2009 Adwell was entitled to regard the litigation as final. The sudden service of 158 pages of material in mid-December upset that legitimate expectation. The Panel quoted BE v University of Technology Sydney at [23] for the proposition that time limits exist to enable parties and institutions "to close the files and move on" ([50]).
On the merits, the appeal was said to raise only questions of law. The Deputy President analysed four asserted errors. The first two concerned the Tribunal's treatment of unconscionable conduct. The Panel held that the Tribunal had correctly applied the high threshold of "highly unethical" conduct requiring "a high degree of moral obloquy" stated by Spigelman CJ in Attorney General v World Best Holdings Ltd (2005) 63 NSWLR 557 at [121]. It was not open to the Tribunal to dilute that test by reference to extrinsic materials under s 34 of the Interpretation Act 1987 in the absence of ambiguity in s 62B, nor to depart from Court of Appeal authority in favour of the Federal Court's approach in Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682 ([58]). In any event the Tribunal had expressly considered relative bargaining strengths at [53] and had made detailed findings rejecting the "ultimatum" characterisation ([65]-[66]). Challenges to those findings were challenges to fact, not law, and therefore outside the scope of the appeal as framed ([67]).
The third asserted error concerned the rent finding at [45]. The Tribunal had preferred aspects of the tenant's valuer's methodology yet still concluded that $96,000 was not unconscionable. The Panel held that this was a quintessential evaluative exercise; the Tribunal was not bound to accept only specialist retail valuers' evidence and was entitled to inform itself under s 73(2) of the ADT Act ([73]). No legal error was shown.
The fourth ground concerned s 23 of the RL Act and outgoings. The Panel accepted that the Tribunal had arguably failed to address the capital-costs prohibition or to give reasons on the point ([78]). However the sum involved was only about $750. When viewed in the context of the entire appeal, this single point of possible merit could not outweigh the cumulative deficiencies in explanation, delay, prejudice and overall weakness ([79]).
Balancing all factors, the appellant had not discharged its onus. The interests of justice did not favour reopening a decision that Adwell was entitled to treat as final ([80]-[81]).
Prior to this decision the principles governing leave to appeal out of time in the ADT were already settled. Lupevo had listed the relevant factors; NZ v Commissioner of Police had emphasised that the "governing consideration is the interests of justice" and that a cogent explanation is required, coupled with assessment of prejudice and merit. This decision did not change the law. It applied those principles to a factual matrix involving an incomplete notice, an experienced agent, a substantial further delay, and an appeal of limited legal merit. It reinforced that experienced advocates (even non-lawyers who regularly appear) are expected to know and comply with basic time limits and service obligations ([41]).
The decision also confirmed the hierarchical relationship between the Tribunal and the Court of Appeal on questions of legal principle. The Tribunal cannot treat itself as free to develop a "sovereign, independent" construction of s 62B that departs from World Best Holdings merely because it is not a court ([56]). Extrinsic materials cannot be used to soften the statutory test absent textual ambiguity. These propositions were not new but were applied with clarity to reject an invitation to give special weight to the vulnerability of "sitting tenants" beyond the factors already listed in s 62B(3).
After the decision the same Lupevo/NZ framework continued to be cited in subsequent ADT Appeal Panel decisions. The case stands as a relatively routine application rather than a landmark, but it illustrates the strictness with which the Panel will scrutinise explanations that reveal a failure to appreciate the finality interest of the successful party and the importance of prompt service.
Paragraph [30] quotes and adopts the President's statement from NZ v Commissioner of Police: "the governing consideration is the interests of justice in the circumstances. Time lines are a usual feature of any organised system of administration, including the administration of justice. The party who secures a positive order at first instance should be able to expect, once the appeal period has passed, that the order is now final and not contestable." In plain English: once the 28 days are up, the winner should be able to treat the case as finished unless the loser has a very good reason for being late.
Paragraph [40] criticises Mr Spring for assuming that late filing of grounds could always be cured by leave: "he simply assumed, to quote his own words, that 'the filing of the grounds of appeal could be out of time, but can be filed with leave'." Translation: an experienced representative cannot treat the appeal rules as flexible by default; the rules exist to protect the other side and the Tribunal's processes.
At [58] the Panel states there is "no merit in the suggestion that the Tribunal, in exercising its jurisdiction under the RL Act, can apply legal principles at variance with those stated in the Court of Appeal." Translation: the Tribunal must follow the Court of Appeal on what "unconscionable" means; it cannot invent a softer test based on parliamentary speeches.
Paragraph [67] holds that challenges to the Tribunal's rejection of the "ultimatum" claim "fail since no question of law is involved. Unless an appellant who challenges a finding of fact can show that there was no evidence at all on which the disputed finding could have been based, no question of law is involved." Translation: merely arguing that the Tribunal got the facts wrong is not enough on a question-of-law appeal.
This decision is routinely relevant whenever an appellant in the ADT (now NCAT) seeks leave to proceed with an internal appeal lodged after the 28-day period in s 113(3). It is especially pertinent where:
The decision is also cited in cases involving RL Act disputes where a tenant alleges unconscionable conduct by a landlord at lease renewal and attempts to argue that World Best Holdings sets the bar too high. The Panel's firm rejection of that approach, and its insistence that s 62B(3) already requires regard to bargaining power, narrows the scope for such arguments on appeal.
Subsequent decisions have treated Ull v Adwell as a standard application of the Lupevo/NZ framework rather than a case that altered doctrine. It has been cited for the propositions that (a) an incomplete notice may not constitute the "making" of an appeal, (b) experienced agents are held to a standard of familiarity with time limits, and (c) prejudice arising from the disruption of a successful party's expectation of finality carries significant weight. The case has been followed in numerous unreported NCAT Appeal Panel decisions concerning late appeals in consumer, tenancy and administrative review matters.
On the substantive RL Act points, later decisions have continued to apply the World Best Holdings formulation of unconscionable conduct and have cited Ull for the proposition that extrinsic materials cannot be used to dilute the statutory test. No court has overruled or criticised the reasoning. The decision is generally regarded as orthodox and uncontroversial.
The decision leaves open the precise status of a notice that is accepted by the Registry and attracts a filing fee but is not "duly completed" because it contains no grounds. The Deputy President found it unnecessary to resolve whether such a document constitutes the "making" of an appeal within s 113(3) because the other factors were decisive ([35]). Future panels may need to decide whether lodgement of a wholly deficient notice stops time or merely indicates an intention to appeal.
A further open question concerns the interaction between s 23 of the RL Act (prohibition on capital costs) and the Tribunal's obligation to give reasons. The Panel accepted there may have been error but characterised it as minor given the quantum. It remains unclear what level of detail is required when a tenant raises a discrete statutory prohibition that, if upheld, would reduce a claimed outgoing by a modest sum.
Finally, the decision assumes that an agent with "significant experience" in RL Act matters is subject to the same expectation of statutory familiarity as a legal practitioner. The precise threshold of experience that triggers that expectation in non-lawyer advocates has not been further elaborated in later cases and may require refinement.
CITATION: Ull Pty Ltd v Adwell Holdings Pty Ltd [2010] NSWADTAP 15
APPLICANT PARTIES: Ull Pty Ltd RESPONDENT Adwell Holdings Pty Ltd
BEFORE: Chesterman M - Deputy President
CATCHWORDS: Appeal - application for leave to proceed - notice of appeal lodged out of time
DECISION UNDER APPEAL: Ull Pty Ltd v Adwell Holdings Pty Ltd and Adwell Holdings Pty Ltd v Ull Pty Ltd [2009] NSWADT 246
Administrative Decisions Tribunal Act 1997 Administrative Decisions Tribunal Rules 1998 LEGISLATION CITED : Interpretation Act 1987 Retail Leases Act 1994 Trade Practices Act 1975 (Cth)
Attorney General v World Best Holdings Ltd (2005) 63 NSWLR 557 Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] CASES CITED: FCA 682BE v University of Technology Sydney (GD) [2009] NSWADTAP 22 Lupevo Pty Ltd t/a Ampol Nabiac v Bree [2002] NSWADTAP 9 Ministry of Transport v Kharbanda (GD) [2006] NSWADTAP 61 NZ v Commissioner of Police, New South Wales Police (GD) [2008] NSWADTAP 23 Ull Pty Ltd v Adwell Holdings Pty Ltd and Adwell Holdings Pty Ltd v Ull Pty Ltd [2009] NSWADT 246
APPELLANT S Spring, agent REPRESENTATION: RESPONDENT M Finlay, solicitor
ORDERS: 1. The Appellant's application for leave to appeal out of time is refused. 2. Any application for costs in these appellate proceedings must be filed and served, with supporting submissions, within 28 days of the date of this decision. The opposing party or parties must file and serve submissions in reply within a further 28 days. Unless reasons are advanced for a hearing to be conducted, the matter will be resolved 'on the papers', pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.
1 This decision relates to an application for leave to proceed with an appeal that has been lodged outside the prescribed time limit. An appeal against an 'appealable decision' of the Tribunal at first instance 'must be made … within 28 days after the Tribunal furnishes the party with written reasons': Administrative Decisions Tribunal Act 1997 ('ADT Act'), section 113(3)(a). But an appeal lodged out of time may proceed if leave is granted by the Appeal Panel: section 113(3)(b).
2 The Tribunal's decision (with written reasons) in Ull Pty Ltd v Adwell Holdings Pty Ltd and Adwell Holdings Pty Ltd v Ull Pty Ltd [2009] NSWADT 246 ('the Tribunal's decision') was published on Thursday 24 September 2009. Since there was no evidence of any delay in furnishing the reasons to the parties, the time prescribed for an appeal expired on Thursday 22 October 2009. The Appellant, Ull Pty Ltd ('Ull') filed a Notice of Appeal on Tuesday 27 October 2009. It accordingly required leave under section 113(3)(b) in order to prosecute its appeal.
3 The hearing of Ull's application for leave to proceed took place on 18 January 2010. The Respondent, Adwell Pty Ltd ('Adwell'), opposed this application.
4 The decision whether to allow an appeal to proceed out of time involves the exercise of an 'interlocutory function' of the Tribunal: ADT Act, section 24A(1)(d)). The Appeal Panel may be constituted for the purpose of exercising an interlocutory function by one presidential judicial member: section 24A(2)(a). Accordingly, the Panel is constituted for the present purpose by myself, sitting alone.
5 The Tribunal's decision dealt with two applications filed by the parties against each other, in each case seeking relief under the Retail Leases Act 1994 ('the RL Act'). In the earlier application (file 065045), Adwell claimed from Ull the amount of $4,089.00 as outgoings due to it under a retail shop lease ('the first lease') of premises at Shop 27, West Gosford Shopping Centre. In the amended version of the later application (file 065130), which was lodged by Ull, the principal orders sought against Adwell were as follows: (a) an order substituting the current market rent, as appropriately determined, for the rent stated to be payable by it to Adwell under a later lease ('the second lease') of premises combining Shop 27 with an adjoining shop (Shop 26B); (b) an award of damages to Ull representing the amount by which it had overpaid rent under the second lease; (c) a declaration that Adwell and its agents had acted unconscionably and/or had contravened sections 23, 25, 27, 28, 29, 53 and 55 of the RL Act; (d) interest; and (e) costs.
6 The hearing before the Tribunal took place on 6 and 7 December 2007 and 4 February 2008. Submissions closed on 8 May 2008. As already stated, the Tribunal's decision was delivered on 24 September 2009.
7 In its decision, the Tribunal dismissed Ull's application. It held that Adwell had not engaged in unconscionable conduct and that no grounds existed for varying the rent stipulated in the second lease. Its order on Adwell's application was that Ull was liable to pay $3,237.88 plus interest to Adwell on account of outgoings due under the first lease.
8 Further aspects of the Tribunal's decision are outlined below.
9 As stated above, Ull filed a Notice of Appeal on Tuesday 27 October 2009. There was no evidence to suggest that there had been any delay in furnishing it with the written reasons for the Tribunal's decision. This Notice was therefore filed five days (three working days) after the expiry of the prescribed period on Thursday 22 October.
10 The Notice did not, however, comply with section 113(4) of the ADT Act and Rule 39 of the Administrative Decisions Tribunal Rules 1998 ('the ADT Rules'). Section 113(4) states: 'An appeal under this Part is to be made in the manner prescribed by the rules of the Tribunal.' The Part mentioned here, Part 1 of Chapter 7, deals with internal appeals. So far as relevant for present purposes, Rule 39 states:- 39 Manner of making an internal appeal or an external appeal
(1) For the purposes of section 113 (4) of the Act, an internal appeal may be made by lodging a notice of appeal with the Tribunal.
(c) accompanied by the applicable fee (if any) for the lodgment of the appeal.
(3) An appellant who lodges a notice of appeal must serve on each respondent a sealed copy of the notice as soon as practicable after lodging the notice.
11 It is convenient at this point to refer also to Rule 40(1). This provision requires respondents to an internal appeal to file a notice in reply, setting out their response to the notice of appeal, within 21 days after being served with the notice of appeal.
12 The approved form of a notice of appeal requires appellants to indicate, amongst other things, whether the appeal is made on a question of law. The Notice of Appeal filed by Ull gave an affirmative answer to this question. But in a space on the same page where appellants are required to state 'the question of law arising from the Tribunal's decision', Ull's Notice said 'To be advised'. A space where appellants seeking leave for their appeal to extend to the merits are required to state their reasons for seeking this leave was left blank. On the next page, a space where appellants lodging an appeal outside the prescribed time limit are required to provide 'a reasonable explanation for the delay' was also left blank.
13 For these reasons - most importantly, by virtue of the failure to state any grounds for its appeal - it is evident that Ull's Notice of Appeal was not 'duly completed' as required by Rule 39(2)(b).
14 The Notice stated that Ull's legal representative was Mr Stephen Spring, who had appeared as its agent in the first instance proceedings before the Tribunal and who also represented it in this appeal. But the Notice was in fact filed by Mr Robert Hunter, who is a director of Ull. He paid the prescribed filing fee.
15 On account of these deficiencies in the Notice of Appeal, the Registry did not provide Mr Hunter or Mr Spring with a sealed copy of the Notice in order that it might be served on Adwell or its solicitor (Mr Gary Cleary) under Rule 39(3). In addition, the Registry's normal practice of sending a letter to the respondent advising that an appeal had been lodged was not followed. It is to be inferred from a letter written by the Registry to Mr Spring (the text of this letter is set out below) that the Registry told Mr Hunter at the time of filing that the former of these steps would not be taken until the question(s) of law raised in the appeal and/or the reasons advanced for extending the appeal to the merits had been furnished to the Registry.
16 On 29 October 2009, according to a letter from Mr Spring to the Registrar described below, Mr Hunter advised Mr Spring that he had filed the Notice of Appeal and instructed Mr Spring to conduct the appeal.
17 On 26 November 2009, Mr Spring telephoned the Registry and advised that he would be filing a notice of appeal setting out the grounds of appeal by the end of the following week (i.e., by Friday 4 December 2009).
18 In a letter to Mr Spring dated 27 November 2009 the Registrar stated:- I refer to the Notice of Appeal received in this office on 27 October 2009. No question of law or reasons for asking the Tribunal to extend the appeal to the merits was provided. Registry staff have advised you this was to be provided immediately to allow the usual procedure to follow whereby a sealed copy of the Notice of Appeal is served on the Respondent who is then required to file a Notice of Reply within 21 days. You are advised that the matter is now listed for Dismissal on Tuesday 15 December 2009 at 9.30 a.m…
19 On 4 December 2009, Mr Spring spoke on the telephone to Mr Mark Primrose, a member of the Registry staff, and advised that he would be filing the grounds of appeal during the following week, together with a letter requesting that the appeal should not be dismissed on 15 December.
20 In a letter faxed to the Registrar on 9 December 2009, Mr Spring stated first that he had received the Registrar's letter of 27 November 2009 on 2 December. The letter continued:- This letter explains a delay in finalising the appeal submissions. I have contacted your Mark ( sic ) to inform him that the appeal paperwork is imminent, but I am still awaiting the final draft for filing. He suggested I write to the Registrar to inform the Tribunal. The history of this matter is that my client filed a Notice of Appeal and paid the fee direct, informing the Tribunal that the appeal documentation is "to be advised". On 29 October 2009, I received an email notice from my client that he was to instruct me to file an appeal. The trial to be appealed was first heard on 8 May 2008 and the date of the decision was 24 September 2009. In the meantime, all documents had been securely archived which took a little more than a week to arrive. When they arrived, an important file was missing and that took a further week to locate. I was on annual leave from 18 November 2009 to 29 November 2009. I understand that under these circumstances, the filing of the grounds of appeal could be out of time, but can be filed with leave. The draft of the appeal is currently with my client and further legal advisors prior to its intended filing prior to Tuesday 15 December 2009 at 9.30.
21 On 14 December 2009, Mr Spring filed a substantial document entitled 'Ull Pty Limited's Grounds of Appeal from an Original Decision'. It contained a 22-page outline of submissions (together with a further 136 pages of attachments) in support of Ull's appeal. It did not address the question whether leave to proceed with the appeal should be granted.
22 Also on 14 December 2009, Mr Spring served a copy of these submissions on Adwell's solicitor, Mr Cleary. This was the first time that either Mr Cleary or Adwell was made aware that an appeal had been instituted.
23 The hearing of Ull's application for leave on 15 December 2009 was vacated. Mr Finlay, who represented Adwell in these appeal proceedings, attended the Tribunal on that day, since he had not received notice that the hearing had been vacated. A new hearing date, 18 January 2010, was subsequently fixed by the Registry.
24 On 17 December 2009, Mr Spring filed an Amended Notice of Appeal, using the approved form. This Amended Notice set out the questions of law that Ull wished to raise in the appeal. By way of response to the requirement in the form that appellants lodging an appeal outside the prescribed time limit should provide 'a reasonable explanation for the delay', a copy of Mr Spring's letter of 9 December 2009 to the Registrar was annexed.
25 At the hearing on 18 January 2010, Mr Finlay handed up Adwell's Notice of Reply to Appeal. It contained responses opposing both the merits of the appeal and Ull's application for leave for the appeal to proceed.
26 Mr Finlay also stated at the hearing that the Amended Notice of Appeal had not been served on him at the time when it was filed and that he obtained a copy of it for the first time from the Registry, shortly before the hearing. Mr Spring did not deny these assertions.
27 In a number of Appeal Panel decisions (see for example Ministry of Transport v Kharbanda (GD) [2006] NSWADTAP 61; NZ v Commissioner of Police, New South Wales Police (GD) [2008] NSWADTAP 23 and BE v University of Technology Sydney (GD) [2009] NSWADTAP 22), the following factors, listed initially in Lupevo Pty Ltd t/a Ampol Nabiac v Bree [2002] NSWADTAP 9 at [6 - 7], have been held to bear upon the exercise of the Panel's discretion to grant leave for an appeal to proceed:-
-The reason for the failure to lodge the appeal within the prescribed time.
-The extent of the appellant's knowledge of the relevant statutory provisions.
-The adequacy of the information conveyed to the appellant at the time the decision was notified to him or her, both as to the reasons for decision and of the appellant's entitlement to appeal.
-The diligence shown by the appellant in lodging the appeal after it came to his or her notice that there were circumstances justifying an appeal.
-The nature of the decision below and the consequences of the decision upon the appellant's rights.
28 It may be observed that the first five factors in this list are closely connected with each other. In different ways, they relate to the question whether, having regard to the extent to which the time taken to lodge the relevant appeal exceeded the stipulated period of 28 days, the appellant's explanation for the late lodgement of the appeal, in so far as one exists, is a reasonable explanation.
29 At [7], the Appeal Panel in Nabiac also held that 'prima facie, proceedings commenced outside the prescribed period will not be entertained'. A corollary to this is that an appellant seeking leave for an appeal filed out of time to proceed bears the onus of proof of any relevant factual matters.
30 In NZ v Commissioner of Police, New South Wales Police (GD) [2008] NSWADTAP 23, the Appeal Panel, constituted by the President of the Tribunal, said at [5 - 6]:- 5 In considering whether to grant leave to appeal out of time, the governing consideration is the interests of justice in the circumstances. Time lines are a usual feature of any organised system of administration, including the administration of justice. The party who secures a positive order at first instance should be able to expect, once the appeal period has passed, that the order is now final and not contestable. Sometimes there may be good reasons why the unsuccessful party did not file an appeal in time, and now seeks leave to have the appeal accepted out of time.
6 The party seeking leave should have a cogent explanation for failing to meet the time lines. If there is a cogent explanation, it is necessary to consider the prejudice that might be suffered by the successful party in reopening the matter. If the successful party has taken steps based on the decision, it may well be that it would be unfair on that basis alone to reopen the decision. Further, there is the issue of whether allowing the appeal to proceed would waste the (limited) resources of the Tribunal and be burdensome to the respondent because the appeal grounds are so weak that there are little or no prospects of the appeal being successful.
31 In proceeding now to discuss Ull's application, I will consider in turn what may be called the Lupevo factors, modified by me as indicated at [28] above.
The reasonableness of Ull's explanation for its failure to lodge the appeal within the prescribed time
32 In its Notice of Reply to Appeal, Adwell contended that because Ull's Notice of Appeal, filed on 27 October 2009, did not state any grounds of appeal, Ull should not be considered as having 'made' its appeal on that day, within the meaning of section 113(3) of the ADT Act. Instead, the appeal should be considered as having been duly 'made' on or around 17 December 2009, nearly two months after the end of the prescribed period.
33 At the hearing of the application for leave to proceed, Mr Finlay briefly referred to these contentions. Mr Spring's submissions did not respond to them.
34 As I have already indicated, it is clear that the Notice of Appeal was not 'duly completed'. There is in my opinion significant merit in Mr Finlay's argument that because no grounds of appeal were stated in it, the filing of it on 27 October 2009 did not constitute the 'making' of an appeal. On the other hand, the Notice of Appeal was received into the Registry and the prescribed filing fee was paid.
35 I do not think, however, that I need resolve this question. It is preferable instead to give consideration to the various factors listed in the Lupevo decision on the two alternative footings that (a) the appeal was 'made', albeit inadequately, on 27 October 2009 and (b) that it was 'made' on 17 December 2009. When all the factors bearing on the exercise of the discretion to grant leave are taken into account, it becomes apparent that the answer given to this technical question does not have a significant impact on the outcome.
36 No explanation at all was provided for the fact that even the first, inadequate Notice of Appeal was filed a few days outside the prescribed time limit. This topic was not addressed in the Amended Notice of Appeal, there was no affidavit or statement from Mr Hunter dealing with this or any other topic and Mr Spring did not refer to it in his submissions.
37 The standard procedure adopted by the Tribunal when conveying a reserved decision, with written reasons, to the parties is to send at the same time a notice advising them of their rights with regard to appeals. This notice incorporates the text of section 113 of the ADT Act, including the statement in subsection (3) that appeals must be made within 28 days after written reasons are given to the parties or within 'such further time as the Appeal Panel may allow'. There was no evidence in the present case to suggest that this procedure was not followed.
38 The explanation given for the delay between the filing of the Notice of Appeal on 27 October 2009 and the filing of a duly completed Amended Notice on 17 December 2009 was contained in Mr Spring's letter of 9 December 2009 to the Registrar. The text of this letter is set out above at [20]. At the hearing, Mr Spring suggested that during this period Mr Hunter could have obtained legal assistance for the appeal from someone other than himself, but that there would have been a comparable delay nonetheless.
39 Mr Finlay submitted that this explanation was 'weak'. He added that at a number of earlier stages of the proceedings between the parties Ull had failed to comply with deadlines set by the Tribunal for the filing of documents. In reply, Mr Spring claimed that some of these earlier delays by Ull were caused by factors beyond its control.
40 In my opinion, Mr Spring's explanation was inadequate in one important respect. It shows that after Mr Hunter told him on 29 October 2009 of the filing of the Notice of Appeal he took no account of the fact that it had been filed out of time or, more importantly, of the implications of delaying for a significant period the filing of the grounds of appeal. He simply assumed, to quote his own words, that 'the filing of the grounds of appeal could be out of time, but can be filed with leave'. Even if it is assumed in his favour that Mr Hunter did not tell him that the Registry had not followed its usual practice of providing a sealed copy for service on Adwell (see the Registrar's letter quoted at [18] above), he should have realised, either by consulting the ADT Act, the ADT Rules and/or the Tribunal's Practice Note No.5 (Internal Appeals: Appeal Panel Procedures) or by seeking advice from the Registry, that Adwell, if it in fact had been notified of the appeal at all, had certainly not received the material that it needed to prepare the notice of reply required by the Rules.
41 Although not a legal practitioner, Mr Spring has a significant amount of experience with Tribunal proceedings under the RL Act. It can reasonably be expected of him that he should adopt a more careful attitude to a matter such as this. Making due allowance for the fact that he is not a legal practitioner, the following observations of the Appeal Panel in Lupevo Pty Ltd t/a Ampol Nabiac v Bree [2002] NSWADTAP 9 at [16] are pertinent:- Whilst it appears that the Appellant was not expressly referred to the appeal provisions of the ADT Act at the time that the reasons for the decision were furnished, it is the view of the Panel that it is reasonable to expect a legal practitioner of some experience to acquaint him or herself with the statute governing the exercise of the jurisdiction in which he or she is appearing. A client's dissatisfaction with a result would ordinarily lead the practitioner to consider the option of an appeal, and would invariably raise the question of the applicable time limit for the filing of such an appeal. As noted above, such rules are basic to every jurisdiction.
42 Mr Spring also claimed that a delay of about a fortnight in preparing the grounds of appeal occurred because the delay of more than 16 months between the closure of submissions in the first instance proceedings and the Tribunal's decision meant that his files had been archived. This aspect of his explanation is reasonable in all the circumstances. But since he had represented Ull in the first instance proceedings, it may be asked whether he needed to take as long as he actually did to prepare the grounds of appeal. He in fact filed and served his lengthy submissions on the merits of the appeal before filing the Amended Notice of Appeal. These delays on his part illustrate that, as I have just held, he did not pay sufficient attention to the implications of the fact that the first Notice of Appeal had not only been filed out of time but was seriously defective.
43 To this extent, I endorse Mr Finlay's description of the reasons advanced for the delay between the filing of the two Notices as 'weak'. I do not, however, take into consideration the alleged failures by Ull to adhere to deadlines during the first instance proceedings. Insufficient evidence on this matter was put before me.
The nature of the decision below and the consequences of the decision upon the appellant's rights
44 The claims made by the two parties in their respective applications to the Tribunal are outlined above at [5]. They raised two quite distinct issues: (a) whether, in the light particularly of Ull's allegation of unconscionable conduct by Adwell, the rent stipulated in the second lease should be varied in Ull's favour; and (b) whether the amount of outgoings claimed by Adwell from Ull under the first lease was justifiable.
45 On the first of these issues, which was considerably more important than the second, the Tribunal's determination was wholly in Adwell's favour. On the second, it allowed Adwell's claim in part.
46 The consequences of the Tribunal's determination of the first issue for Ull (see its decision at [40 - 46]) can be summed up as follows. It confirmed as binding on Ull an obligation to pay a yearly rent of $96,000 plus GST (with annual CPI increases) for a five-year lease, which contained no option to renew. It rejected Ull's claim, supported by a specialist retail valuer whom it had engaged, that the appropriate gross market rental value of the premises at the relevant time was $86,853. It accordingly held Ull to be liable to pay over five years about $50,000 more in rent than Ull claimed to be justifiable.
47 The more modest consequence of the Tribunal's determination of the second issue was that Ull was held liable to pay outgoings under the first lease totalling $3,237.88. On grounds outlined below, Mr Spring claimed that this amount exceeded Adwell's proper entitlement by about $750.
48 It may accordingly be said that the consequences of the Tribunal's decision for Ull were financial only - they did not relate, for instance, to its entitlement to remain in possession of leased premises - but the amount of money at stake was reasonably substantial.
49 Neither Mr Finlay nor Mr Spring expressly dealt with this question in their submissions.
50 The only prejudice to Adwell that clearly derived from Ull's conduct in relation to this appeal is that its legitimate assumption, from about the end of October onwards, that this litigation had come to an end turned out to be unwarranted more than two months later. As an Appeal Panel constituted by the President of the Tribunal said in BE v University of Technology Sydney (GD) [2009] NSWADTAP 22 at [23], 'the time limits imposed on appeals seek to provide an end point to litigation, and to enable the institutions affected… to close the files and move on'.
51 As indicated above, the Amended Notice of Appeal did not seek leave for the appeal to extend to the merits. It stated that the appeal was based only on alleged errors of law vitiating the Tribunal's decision.
52 The errors of the Tribunal claimed by Mr Spring to be discernible in its decision can be discussed under four headings: (1) failure to apply correct criteria of unconscionable conduct as defined in section 62B of the RL Act; (2) failure to take account of all relevant aspects of Adwell's behaviour when dismissing Ull's unconscionable conduct claim; (3) errors in deciding that the rent stipulated in the second lease from Adwell to Ull was reasonable; and (4) failure to adjudicate Ull's claim that Adwell's calculation of outgoings due to it under the first lease involved a contravention of section 23 of the RL Act.
53 Incorrect criteria of unconscionable conduct. Mr Spring's submissions under this heading stemmed from the fact that the rent to be paid by Ull under the second lease was determined when Ull was in the 'vulnerable' situation of a tenant who, towards the end of an existing lease, was negotiating the terms of a new lease. He drew to my attention certain passages in chapter 2 of a Report by the House of Representatives Standing Committee on Industry, Science and Technology, 'Finding a Balance: Towards Fair Trading in Australia' (Commonwealth Parliament, May 1997) and in the Second Reading Speech for the Retail Leases Bill 1998 (Legislative Council, Hansard) at p 10,866 ff. Both this Report and the Second Reading Speech constituted material that Parliament took into account in inserting of Part 7A into the RL Act, whereby unconscionable conduct is defined and remedies for unconscionable conduct are established. According to Mr Spring, they therefore represented 'extrinsic material' that should have been taken into consideration by the Tribunal, pursuant to section 34 of the Interpretation Act 1987, in interpreting the definition of unconscionable conduct in section 62B.
54 The sections of this extrinsic material on which Mr Spring placed emphasis are sufficiently exemplified by the following passage in the Second Reading Speech. It formed part of a section of the speech explaining that the purpose of the unconscionable conduct provisions contained in the Bill was to provide protection for both lessees and lessors against 'the misuse of power in their business relationships':- One of the most crucial issues, and the most difficult to deal with, raised during consultations with merchants and property owners was the situation at the end of a lease. On the one hand, the merchants felt vulnerable, having invested their time and money in their business and having no certainty that the lease would be renewed. They may have invested tens of thousands of dollars in fitting out the store. There may be no other suitable location in a town or city and their goodwill may be tied up with the location. On the other hand, the property owners wanted to be able to apply their property rights, and rightly so….[I]f the property owner thought they could achieve a better return for the shop, which the current tenant was not prepared to meet, they wanted the ability to be able to respond.
55 From this starting-point, Mr Spring developed the contention that the Tribunal, when explaining the concept of unconscionable conduct in its decision, should have explicitly recognised the 'special vulnerability' of 'sitting tenants', and that it erred in law through failing to do so.
56 In support of this contention, Mr Spring pointed out that the Tribunal's decision reproduced at [52] a much-quoted passage from the judgment of Spigelman CJ, presiding in the Court of Appeal, in Attorney General v World Best Holdings Ltd (2005) 63 NSWLR 557 at [121]. In that passage, the Chief Justice stated amongst other things that unconscionability requires 'a high degree of moral obloquy' and that the circumstances must be 'highly unethical'. Mr Spring pointed out also that during this part of his judgment, Spigelman CJ quoted the two paragraphs of the Second Reading Speech that come before and after the passage that I have just quoted, but omitted this passage. Mr Spring argued that for this reason the Tribunal should not treat Spigelman CJ's exposition as wholly authoritative. Taking account, he maintained, of the fact that the Tribunal is not a court but an 'independent Tribunal' with the power to make its 'sovereign, independent decisions', it should utilise the provisions of section 34 of the Interpretation Act in order to temper Spigelman CJ's account of the criteria governing unconscionable conduct with the strong concerns about 'sitting tenants' articulated in the Second Reading Speech and in chapter 2 of the Report, 'Finding a Balance: Towards Fair Trading in Australia'.
57 Alternatively, Mr Spring submitted that the Tribunal should follow the lead given by the Federal Court in Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682. In that case, the Court held that the conduct of a landlord towards a number of 'sitting tenants' was unconscionable under section 51AC of the Trade Practices Act 1975 (Cth) (this being the section on which section 62B of the RL Act is based). It did so on the basis of findings that, having regard to the capacity of the tenants to protect themselves and the relevance of pressures of time imposed on them, the landlord had not engaged in negotiation, but had simply imposed an ultimatum, and that deliberate conduct of this nature was irreconcilable with what is right or reasonable.
58 In my opinion, this line of argument falls short of demonstrating any error of law on the part of the Tribunal, for the following reasons. First, there is no merit in the suggestion that the Tribunal, in exercising its jurisdiction under the RL Act, can apply legal principles at variance with those stated in the Court of Appeal. The Tribunal committed no error in quoting and relying on the Chief Justice's statement of principle in the World Best case. Secondly, I agree with a submission by Mr Finlay that in the absence of any patent ambiguity in the provisions of section 62B, particular passages of extrinsic material such as Mr Spring relied on cannot be used under section 34 of the Interpretation Act as a means of supplementing the text of this section. Thirdly, it follows from these considerations that the Tribunal's exposition of the law regarding unconscionable conduct would, in my opinion, have been incorrect if it had included a statement that a landlord's treatment of 'sitting tenants' who are hoping to obtain a renewal of their lease may be 'unconscionable' even though it did not meet the criterion of 'highly unethical' conduct stated by Spigelman CJ in World Best.
59 In fact, section 62B(3) contains in paragraph (a) an injunction to the Tribunal to take account of the possibility that 'sitting tenants' in this particular situation may be 'specially vulnerable'. It states that one of the matters to which the Tribunal may have regard in determining whether a lessor has acted unconscionably is 'the relative bargaining strengths of the lessor and the lessee'. In its decision at [53], the Tribunal implicitly referred to this paragraph. It said:- Turning to the particular provisions of s.62B of the Act, it is true that Adwell was apparently in the stronger bargaining position in some respects in the sense that it was the lessor of a successful, fully tenanted shopping centre. On the other hand, Mr Whalan [who was employed by Adwell as the manager of the centre] acknowledged that Ull was a good tenant which always paid its rent on time and which ran a successful business. Plainly there were strengths in the positions of both parties.
60 Failure to take account of all relevant aspects of Adwell's behaviour. The broad thrust of Mr Spring's submissions under this heading was that the Tribunal, in deciding that Adwell's conduct of the negotiations with Ull regarding the rent for the second lease was not unconscionable, failed to take account of all aspects of this conduct that the 'objectives' of the RL Act and the principles governing unconscionability required to be taken into account.
61 The particular features of this conduct during the negotiations that, according to Mr Spring, were omitted from the Tribunal's consideration of this question were as follows: (a) Adwell refused to provide any detailed information as to how the rent initially required by it was determined; (b) it behaved in bad faith through threatening to evict Ull and build a wall between Shop 27 and Shop 26B while having no intention of carrying out this threat; (c) it refused to meet Mr Hunter until he had agreed with the rent demanded by it; and (d) the Tribunal attached undue weight to the fact that Mr Hunter never made a counter-offer indicating the amount of rent that Ull was prepared to pay.
62 Mr Spring argued that if the Tribunal had taken proper account of these matters it would have found that Adwell did not enter into genuine negotiations with Ull regarding the rent, but imposed an 'ultimatum'. Its conduct was therefore comparable to that of the lessor in the Dukemaster decision (see [57] above) and should, in line with the decision in that case, have been held to be unconscionable.
63 I agree, however, with Mr Finlay's submissions on this matter. These were to the following effect: (a) that Mr Spring was claiming little more than that the Tribunal had erred in making factual findings, as opposed to stating or applying the law; and (b) that the Tribunal had in fact considered but rejected the claim by Ull that Adwell had confronted it with an 'ultimatum'.
64 A paragraph in the Tribunal's decision that I have already quoted - paragraph [53] - demonstrates indeed that the Tribunal was concerned to take into account the relative bargaining strengths of the parties.
65 In a number of other passages in its decision, the Tribunal demonstrated that it took account of specific factual matters such as Mr Spring identified and was well aware of the need to inquire into whether Adwell had effectively coerced Ull into agreeing to pay an unfairly high rent. The following passages in the decision illustrate this:- 24. On 20 April Mr Hunter and Mr Whalan met. In evidence they gave slightly different accounts of what occurred and what was said at the meeting but the Tribunal accepts that the parties discussed in general terms a lease for two different shops at a lower rental starting in September 2005. Mr Hunter said Mr Whalan threatened him with an 'eviction notice'; Mr Whalan denied that he did so. It is not necessary to determine whether or not that threat was made because in one sense, a notice for vacant possession had already been given.
66 In support of this conclusion, the following further paragraphs in the decision may be cited: [31], [36] and [55 - 58]. In this last group of paragraphs, the Tribunal implicitly referred to individual factors that section 62B(3) identifies as relevant to a decision whether a lessor's conduct was unconscionable.
67 In so far as Ull, in this part of its appeal, claims that the Tribunal reached incorrect conclusions on questions of fact, its argument fails since no question of law is involved. Unless an appellant who challenges a finding of fact can show that there was no evidence at all on which the disputed finding could have been based, no question of law is involved. Ull's challenges to the Tribunal's findings were not of this nature.
68 I consider also that in so far as Ull, in this part of its appeal, claims that the Tribunal did not take into account matters that it should have taken into account, its argument fails. The Tribunal, in passages that I have quoted or mentioned above, showed that it was alert to all the considerations that are relevant in deciding whether a lessor has engaged in unconscionable conduct.
69 Concluding incorrectly that the rent stipulated in the second lease was reasonable. The basis of this conclusion by the Tribunal is set out in its decision at [40 - 46]. It referred to a yearly rent determination of $112,000 plus GST by a valuer (Mr Hickey) engaged by Adwell and a determination of $86,653 plus GST by a valuer (Mr Davis) engaged by Ull. It described Mr Hickey's methodology, observing that he was not a specialist retail valuer. It also described Mr Davis's methodology, labelling it 'more persuasive' and describing Mr Davis himself as 'a thorough and impressive witness'.
70 At [45], the Tribunal stated in the following terms its conclusion regarding the rent stipulated in the second lease:- The Tribunal is not empowered to be a valuer. Net of outgoings and GST, the rent agreed by the parties in the Second Lease was $96,000.00 (Exhibit 4). Thus it was on the high side of the mid-way point between the two experts' figures. In those circumstances, the Tribunal is not persuaded that it was an inappropriate or unconscionable figure.
71 Earlier in its decision, at [21], the Tribunal indicated that it accepted the truthfulness of evidence given by Mr Whalan that Adwell's initial assessment of the rent payable under the second lease was based by him on 'market rents in other comparable centres'.
72 Mr Spring argued that the Tribunal erred (a) in accepting this testimony by Mr Whalan and (b) in admitting into evidence a valuation provided by a valuer (Mr Hickey) who was not a specialist retail valuer as defined in section 3 of the RL Act.
73 In my judgment, neither of these submissions has merit. The first of them alleges no more than an error of fact, which is insufficient of itself to justify appellate intervention in an appeal confines to questions of law. The second is not supported by any authority. No doubt, the category of 'specialist retail valuer' is created by the RL Act as a means of identifying valuers whose skills and experience justify their being appointed by parties to a retail shop lease or by the Tribunal (under sections 19 or 31) to determine the current market rent when the parties are unable to agree on this. But it does not follow that the evidence of a valuer who is not within this category is for that reason inadmissible. As Mr Finlay pointed out, the Tribunal is authorised by section 73(2) of the ADT Act to 'inquire into and inform itself on any matter as it thinks fit'. The Tribunal in its decision took due account of the fact that Mr Hickey was not a specialist retail valuer.
74 For these reasons, the Tribunal's conclusion at [45] that the rent stipulated in the second lease was not 'inappropriate or unconscionable' is not open to impeachment on appeal (even though it did, incidentally, say incorrectly that this rent of $96,000 was 'on the high side of the midway point' between Mr Davis's figure of $86,653 and Mr Hickey's figure of $120,000).
75 Failing to take account of section 23 of the RL Act in assessing outgoings due under the first lease. Section 23 of the RL Act states that a retail shop lease may not require a lessee to pay to the lessor any amount in respect of the capital costs of the building or the retail shopping centre in which the leased premises are located.
76 Mr Spring argued that the figure awarded by the Tribunal to Adwell for outgoings due under the first lease had been calculated without regard to section 23, even though Ull had argued with good grounds that this section had been breached. He argued also that the Tribunal's decision made no reference to this section.
77 The only passage in the decision suggesting that the Tribunal may have taken account of section 23 is in paragraph [38]. The Tribunal observed that 'there was a suggestion in the evidence that audited reports of the outgoings were not in accordance with the Act…'
78 It appears that the Tribunal erred in law in this respect, though Mr Finlay submitted to the contrary. It either failed to consider whether section 23 was applicable or, having done so, failed to give reasons for its conclusion that the section was not applicable. But as mentioned above at [47], the amount at stake in this part of the appeal was said by Mr Spring to be only $750 or thereabouts.
79 Conclusion on the merits of the appeal. The above analysis shows that only in relation to one of the four grounds pressed, involving an amount as low as $750, does this appeal have merit. Overall, it must be characterised as an appeal with very little merit.
80 In this application for leave to proceed with an appeal filed out of time, the Appellant has not persuaded me that it has a strong case with respect to any of the factors that are to be taken into account in the exercise of my discretion to grant leave.
81 The application for leave must accordingly be refused.
82 Any application for costs in these appellate proceedings must be filed and served, with supporting submissions, within 28 days of the date of this decision. The opposing party or parties must file and serve submissions in reply within a further 28 days. Unless reasons are advanced for a hearing to be conducted, the matter will be resolved 'on the papers', pursuant to section 76 of the ADT Act.
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.
Ull Pty Ltd
Adwell Holdings Pty Ltd
(2005) 63 NSWLR 557
1. The Appellant's application for leave to appeal out of time is refused. 2. Costs applications to be determined on the papers if made within specified times.