Appeal Panel - Internal CITATION: (1) Prasad and Walker -v- Fairfield City Council; (2) Fairfield City Council -v- Prasad and Walker [2003] NSWADTAP 1 APPELLANTS (1) Daniel Prasad and Stephen Walker PARTIES: (2) Fairfield City Council RESPONDENTS (1) Fairfield City Council (2) Daniel Prasad and Stephen Walker FILE NUMBER: (1) 029024; (2) 029033 HEARING DATES: 08/08/2002 SUBMISSIONS CLOSED: 08/08/2002 DATE OF DECISION: 08/08/2002 Prasad and Anor -v- Fairfield City Council [2001] NSWADT DECISION UNDER APPEAL: BEFORE: O'Connor K - DCJ (President); Donald BG - Judicial Member; O'Neill A - Member CATCHWORDS: costs MATTER FOR DECISION: Principal matter FILE NUMBER UNDER APPEAL: 005020 DATE OF DECISION UNDER APPEAL: 05/02/2002 LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994 Prasad and anor v Fairfield City Council [2002] NSWADTAP 2 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 CASES CITED: Woodside & anor v Director-General, Department of Community Services [2000] NSWADTAP 8 House -v- The King (1936) 55 CLR 499 Citadin Pty Ltd -v- Eddie Azzi Australia & anor (No. 2) [2001] NSWADTAP 31 Alessa Pty Ltd -v- Total & Universal Pty Ltd [2001] NSWADT 150; on appeal [2002] NSWADTAP 16 APPELLANTS (1) L Steer, solicitor REPRESENTATION: (2) M Jenkins, barrister RESPONDENTS (1) M Jenkins, barrister (2) L Steer, solicitor ORDERS: Both appeals as to costs are dismissed. DELIVERED EX TEMPORE 1 Messrs Prasad and Walker were, at the material times, co-lessees of premises owned and let to them by the Fairfield Council. They applied to the Tribunal for orders under the Retail Leases Act 1994 against the Council. The Council in turn applied for orders against them. Thus there are two applications before the Tribunal, in the nature of a claim and a cross-claim. The applications were dealt with together in the year 2000 before Judicial Member Fox, giving rise to decision issued 21 February 2001 as to liability [2001] NSWADT 28; and a further un-numbered decision [2001] NSWADT (19 April 2001) on costs. 2 Messrs Prasad and Walker appealed against the costs decision issued on 19 April 2001. The appeal was upheld (see Prasad and anor v Fairfield City Council [2002] NSWADTAP 2) and the matter remitted to Judicial Member Fox for a fresh determination. 3 The general rule is that no orders for costs are made in retail leases proceedings unless 'special circumstances' can be shown (Administrative Decisions Tribunal Act 1997, s 88). The Appeal Panel decision included observations on the way the 'special circumstances' issue should be approached in this case. 4 In contrast to the previous determination where no order for costs was made, the new determination issued 2 May 2002 (taking account of the errors noted by the Appeal Panel) made an order in favour of the applicants Prasad and Walker directing the respondent Council to pay the applicants' 'costs of hearings on 29 May 2000, 9 June 2000 and 7 July 2000 and all work reasonably necessary to prepare therefor; then if the amount cannot be agreed, as assessed pursuant to the Legal Profession Act.' 5 Those were days on which preliminary points had been considered. As on the previous occasion, there was no order in favour of the applicants (who had some success at hearing) in respect of the trial itself. 6 This decision is now the subject of the present appeal. The applicants, in effect, contends that the Tribunal again erred in law in the exercise of its discretion in not making a wider costs order in its favour, in particular as to the four days of trial. The respondent Council contends that the Tribunal erred in law in going so far as to make the order that it did. 7 At the conclusion of the appeal hearing, the Appeal Panel dismissed both appeals, with the following reasons given by the President. The reasons have been edited. 8 We have considered the two appeals and we are in a position, we believe, to give decisions and to provide short oral reasons. I will not deal at length with the history of the matter. It is apparent that the matter has had a long history. 9 Mr Fox's further determination on costs is dated 2 May 2002 and now we have an appeal from both parties as to that decision. The net effect of that decision was that the respondent Council was ordered to pay the applicant's costs of the hearings of 29 May 2000, 9 June 2000 and 7 July 2000, that probably should be read more precisely as 5 July 2000 (though the reasons for decision were handed down on 7 July 2000). 10 So the applicants, as against the position they found themselves in originally, now had an order in their favour in respect of three days of hearing. The appeal on the applicants' part (Prasad and Walker) is essentially directed to the judicial member's failure, as they see it, to deal properly with the costs issues as they related to the principal hearing which commenced initially on 7 July 2000 and then recommenced for four days commencing 28 August 2000. 11 The objection of the Council in its appeal is to the new costs order which now subjects it to a new liability. As they have not been published elsewhere, for convenience, we set out the text of the decision now under appeal (issued 2 May 2002): '1 Pursuant to the direction of the Appeal Panel, (Prasad & anor -v- Fairfield City Council (RLD) [2002] NSWADTAP 2) and having now fully considered the reasons given by judicial member Davidson on 19 May, 29 May, 7 June and 9 June, and having fully reconsidered my reasons for decision of 21 February, I make the following observations. 2 Section 88 of the Administrative Decisions Act is quite clear - costs do not simply follow the event. "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." I now note that Section 109 of the Victorian Legislation gives a useful checklist of matters which may be relevant to establishing special circumstances. 3 The Applicants do not , in relation to the actual hearing conducted before me, meet the requirement of special circumstances, either by the standard of our legislation, or by the standard of the Victorian legislation. I say this because the Applicants did not prove the damages which they claimed, nor did they prove the conspiracy pleaded. 4 It is the conspiracy allegation which led me to make the comments of 19 April:- "even had I been free from legislative restriction and been obliged to consider the matter on a "costs follow the result " basis, I am not at all satisfied that I would not have substantially reduced the costs awarded in favor of the ultimately successful Applicants". I was satisfied that on any reasonable view of the evidence propounded by the Applicant, it never amounted to a provable case of conspiracy and the Applicants should not have brought that issue to trial. In this regard it should also be borne in mind that once such an allegation is raised against a public body such as a local Council (as opposed to a private individual) their lawyers have little choice but to raise the full armory of the law in response. 5 Further, in relation to the conspiracy allegation, it is appropriate to consider the first of the skirmishes in this matter- the "production" hearing of 19 May. Mr. Davidson observed that the Applicants' Counsel admitted that, in relation to shops other than 1 and 5 , the Summons for Production was a fishing expedition to gain evidence of inappropriate differences in the Council's attitude towards the Applicants as opposed to the other shops. Once the production of those documents was not allowed, it should have been obvious that the conspiracy allegation was most unlikely to be made out, and it would have been a prudent course of action for the Applicants to have abandoned it at that stage. 6 The Council's refusal to make the documents for shops 1 and 5 available, was, of course, insupportable, and had that issue been the only issue before Mr. Davidson on that day, the Applicants would have been entitled to claim special circumstances. But that was not the case. The Applicants, very properly sought disclosure of a wider range of documents, and, just as properly , were refused that. I stress that I am satisfied that the Applicants' very wide application was properly made and I am just as satisfied that the Respondent's refusal, as regards shops 2 and 3, was just as proper. Thus, all things considered, at the end of that day's hearing, where the Applicants had only been successful on part of their claim, and the Respondent's defence was partly successful, I am not satisfied that the Applicants would be able to establish that there were special circumstances. 7 The matter had been set for hearing of the substantial issue on 29 May, but the Applicants by letter of 25 May sought consent from the Respondent to "re-schedule" because there had been insufficient time after 19 May to prepare the matter for trial. The Respondent refused by letter of 26 May, and that aspect was then argued on 29 May. Mr. Davidson found that neither party was ready to go to trial a mere 10 days after the "production" hearing. The Respondents should have granted the Applicants' request for consent to a vacation of the date, albeit that the request was very late in the day, because it should have been plainly obvious that neither party was ready for trial. The Respondent should not have put the Applicants to the trouble and expense of arguing that matter and so the costs wasted in that day's hearing do amount to special circumstances in favor of the Applicants. 8 Next followed the hearing of 9 June which was an application by the Respondent to be released from an undertaking which it had given in relation to the proposal for the lease of Shop 5. I note Mr. Davidson's observation at the end of paragraph 6 of his reasons, given ex tempore, "that simply means, if it is released, that a lease of the shop next door can be executed, and these proceedings in my view are futile and the Applicants have lost the fruits of any success in the litigation." Clearly, the application should not have been brought, and that means that the Applicants, in relation to this day, do cross the special circumstances threshold and are entitled to their costs of that day. 9 The next event was the hearing of 7 July, which was to be the full hearing of the matter, but nothing of substance was heard that day, the Respondent having, instead, objected to the jurisdiction of the Tribunal. I note that Mr. Davidson observes "the Applicants have pointed out that there is a letter from the Solicitors for the Respondent which gives the clear indication that the matter is to proceed without any objection to jurisdiction" and in the immediately proceeding paragraph he observes that the Applicants asserted that the Respondents had "only taken an objection to jurisdiction upon the day of the hearing itself." That appears not to be quite accurate because the Applicants' Statement of Issues filed three days previously acknowledges that one of the issues raised by the Defense was :- "that the Tribunal does not have jurisdiction". Be that as it may, it does appear to be clear that this particular issue was raised very late. 10 I am satisfied that Mr. Davidson's reasons for deciding that there was jurisdiction, clearly establish that the Respondent 's application was only marginally arguable, and that, in any event, two of the three issues which were raised could only be properly considered after all the evidence was "in" and so should not have been raised in the manner which the Respondent brought them forth, but should have been raised during the substantive hearing. The device of raising these matters as a preliminary point meant that yet another day, which should have been devoted to the actual issue to be tried, was wasted in preliminaries at the behest of the Respondent. In view of all of that, the Applicant has demonstrated special circumstances for that day. 11 My order is that as regards the hearings of 29 May, 9 June and 7 July and all work reasonably necessary to prepare there for, the Applicants are entitled to costs, and if the amount cannot be agreed, then they are to be assessed pursuant to the Legal Profession Act.' 12 Dealing first of all with the appeal by Prasad and Walker. The position, as we understood it to be put in the appeal today, was that Mr Fox had undue regard to the effect or otherwise of the conspiracy/collusion allegation on the length of the ultimate proceedings; and that, as we understood the submissions, he perhaps did not give enough weight to the extent of success of Prasad and Walker at the hearing. 13 The way in which Mr Fox dealt with the direction that came from the Appeal Panel, and as both parties noted, is essentially to have regard to the observations made in paragraph [56] of the Appeal Panel's decision. In para [56] the Appeal Panel said: '56 Grounds 2 and 4 succeed. There was a failure on the part of the Tribunal to assess with adequate reasons the question of whether the parties had reasonably conducted themselves in the litigation, in particular the respondent. That led in turn to a failure to consider matters which the appellant wished to canvass, in particular whether the lessor met the 'reasonable conduct' standard in relation to the preliminary hearings, what the position was in relation to pre-hearing settlement offers, the alleged collusion allegation and the lessor's overall conduct of its defence.' The approach adopted by Judicial Member Fox on the present occasion was not, possibly, as didactic as the Appeal Panel had contemplated. 14 The primary criticism, as I understood it, from Prasad and Walker in this appeal was directed to the extent or otherwise to which Mr Fox in the reasons now under appeal addressed the lessor's overall conduct of its defence. 15 We acknowledge that Mr Fox gave more specific attention to some of the matters (referred to in para [6] of his decision - in particular the preliminary hearings and the collusion issues) than he did to the general conduct of the lessor. But he did observe that, on balance, including having regard to the failure of the applicants to establish their case for damages, that there were no sufficient 'special circumstances' revealed in the case. 16 There is always a question of judgment involved in the extent of scrutiny to which a trial judge's reasons for decision should be subjected. The texts will be familiar to both counsel here today in regard to the undesirability of appeal bodies and panels undertaking unduly close analysis of reasons for decision, even where some inadequacy has been identified: see generally Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Woodside & anor v Director-General, Department of Community Services [2000] NSWADTAP 8 at [65] & ff. 17 We should say here that we would have preferred that there was more expansion on the last point (the general conduct of the lessor) than is found in the decision. 18 We have, nevertheless, got to look at the matter from the point of view of whether any inadequacy amounts to an error sufficient to warrant interfering with the decision having regard to the principle expounded in House -v- The King (1936) 55 CLR 499. 19 We are satisfied, reviewing the matter as a whole and reviewing the reasons as a whole, especially in the context of the history of the matter, that the present reasons are adequate. The present reasons can not be read in isolation from his first set of reasons nor from the substantive decision. We note that the applicants did not itemise any issues from their previous submissions to the Tribunal, the submissions of late 2000, which it contended that on remittal the Tribunal had failed to consider. 20 In those circumstances we do not think that it has been demonstrated that the Tribunal has fallen into error in relation to reconsidering and rejecting the applicant's cost claim. So the first appeal is dismissed. 21 Moving onto the second appeal which is the Council's appeal. Here there were three grounds of appeal and those grounds of appeal are directed, as one might expect, to the decisions that have now fallen adversely to the Council, being Mr Fox's decisions in respect of the three particular hearing events to which he referred. The three grounds of appeal are set out in the Council's notice of appeal and we had detailed submissions today from Mr Jenkins in relation to them. 22 The matter that engaged I think the most attention of the Appeal Panel was ground 3, the costs decision as it related to the hearing that occurred on 5 July 2000 (giving rise to the decision handed down on 7 July 2000). It was the assessment of Mr Fox of the case put on that occasion by the respondent Council that it was 'marginally arguable'. We acknowledge that no words of that kind were used in the considered written decision handed down on that occasion by Mr Davidson. Mr Davidson gave a long and detailed decision in relation to the points that were raised. The Council objected to Mr Fox's characterisation of its case on that occasion. 23 Nonetheless, it was not the only consideration to which Mr Fox had regard. In paragraph [10], again in short reasons, he looked at the matter from his point of view, as a member experienced in disputes of this kind and generally experienced in commercial disputes. He expressed the view referred to; but equally importantly made observations as to the appropriateness of the Council bringing the point on separately from the main hearing. 24 It seems to us that his approach to the matter involved a proper application of the criteria as they have developed in this Tribunal around the subject of 'special circumstances.' We see those criteria as going somewhat further than the common law interpretations to which Mr Jenkins referred. 25 On the other hand, we have been at pains and remain at pains not to introduce - in a sense by the back door of 'special circumstances' - the old rule of costs following the event. So we acknowledge that there is a debate to be had as to the point at which - beyond the mere loss of a point in litigation - that a special circumstance may be said to arise. We see what Mr Fox did in respect of the event of 5 July 2000 as involving a proper exercise of the discretionary criteria as they have been enunciated in various decisions: see, e.g., Citadin Pty Ltd -v- Eddie Azzi Australia & anor (No. 2) [2001] NSWADTAP 31; Alessa Pty Ltd -v- Total & Universal Pty Ltd [2001] NSWADT 150; on appeal [2002] NSWADTAP 16. 26 As to the earlier two days, 29 May and 9 June, again we are satisfied that the way in which Mr Fox approached that task, albeit in brief terms, did not involve any misapplication of the criteria as we have sought to spell them out in respect of the exercise of the 'special circumstances' discretion. 27 So the conclusion is that both appeals as to costs are dismissed. 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