Coopes Pty Limited v Claitrack Pty Limited (No 2) [2007] NSWADT 255

CITATION: Coopes Pty Limited v Claitrack Pty Limited (No 2) [2007] NSWADT 255

DIVISION: Retail Leases Division

APPLICANT PARTIES: Coopes Pty Limited RESPONDENT Claitrack Pty Limited

FILE NUMBER: 065042

HEARING DATES: On the papers

SUBMISSIONS CLOSED: 3 August 2007

DATE OF DECISION: 19 October 2007

BEFORE: Fox R - Judicial Member

CATCHWORDS: Claim for payment of money

MATTER FOR DECISION: Costs

LEGISLATION CITED : Retail Leases Act 1994

Calderbank v Calderbank CASES CITED: Cripps & Anor v G & M Dawson Pty Limited [2006] NSWCA 81 Cronulla Newsagency Pty Limited v Pizzata & Ors [2002] NSWADT 212 Gizah Pty Limited v AXA Trustees Limited (2) [2001] NSWADT 164

APPLICANT T Bors, barrister REPRESENTATION: RESPONDENT J Lloyd, solicitor

ORDERS: 1. Respondent to pay Applicant's costs thrown away by the adjournment of 30 October.; 2. Applicant to pay 55% of the balance of the Respondents costs of claim and cross claim, including the costs of submissions as to costs, all on a party/party basis.

REASONS FOR DECISION 1 In the primary proceedings I granted the parties leave to seek an order for costs, although I did indicate in respect of the Applicant in particular, that I thought its behaviour may have fallen within the description given by Santow JA in Cripps & Anor v G & M Dawson Pty Limited [2006] NSWCA 81. I had in mind in particular:- Paragraph 60…. "In my view it suffices that the conduct of Cripps and Jones, in relying upon their status as the registered proprietors of the freehold and the doctrine of indefeasibility of title to wrongly deny registration and consequently assignment of the lease, so acted as by their conduct to give rise to special circumstances; that is, circumstances that were clearly out of the ordinary and grossly unreasonable so far as the respondent tenant was concerned. On the one hand, the Tribunal correctly concluded that the respondent, through no fault of its own, has been placed in the situation where it has been forced to pursue this litigation. Yet it still failed to find special circumstances. With respect, I consider that the Tribunal was in error in failing to conclude that special circumstances here applied. For this purpose, it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional. While a finding of "serious unfairness" is not prerequisite to determining that there are special circumstances, it is nonetheless a highly relevant consideration". 2 Mr Lloyd made submissions on behalf of the Respondents – nothing was heard from the Applicant. 3 Mr Lloyd claimed the necessary special circumstances arising out of:- a) The fact that the Applicant had not accepted an offer of settlement which was made either at or shortly after the failed mediation, and b) The actions of the Applicant in enforcing the lockout on very short notice, the details of which were fully canvassed in my reasons in the primary matter. The Offer of Settlement 4 Although this Tribunal has in at least one instance (Cronulla Newsagency Pty Limited v Pizzata & Ors [2002] NSWADT 212) ventured some way into the result of a failed mediation, I think that is a step to be taken with great diffidence, especially in view of the clear words of s69 of the Retail Leases Act:- "Any statement or admission made in the course of the mediation of a retail tenancy dispute or other dispute or matter referred to in s65(1)(a)(1) pursuant to arrangements made by the Registrar under this part is not admissible at a hearing of a claim under Division 3 or in any other legal proceedings." 5 If parties wish to use the fact of failure of the mediation to support a cost application, then I think the proper method is to openly record an offer of settlement, pursuant to the well established principles of Calderbank v Calderbank. That was not done in this instance, and I decline to rely on that aspect of Mr Lloyd's submissions. The Lockout 6 I have made it plain in my reasons in the primary matter that I was not satisfied that the time allowed the Respondent to "clear" the shop, being approximately 24 hours, was sufficient. The question I have now to answer is whether the Applicant's action in insisting on such a short time amounted to special circumstances according to the formula approved of in Cripps, first noted in Gizah Pty Limited v AXA Trustees Limited (2) [2001] NSWADT 164:- Are these "circumstances that are out of the ordinary, but without having to be extraordinary or exceptional." 7 Every matter must turn on its individual facts. In these circumstances, I am satisfied that the notice given was viciously short, even for a shoe shop which might be described as of normal or average size. This view is strengthened by the fact that I was given no evidence to indicate why so short of time was given, and the fact that the following day was the Australia Day public holiday. 8 I am satisfied that the shortness of the time, in the absence of reason for such expedition, amounts to special circumstances. In reaching this conclusion I take comfort from the fact that it was a reasonable inference on the evidence before me that the extra day (the Australia Day public holiday) would have been sufficient to fully clear the premises of all of the items which the Respondent wished to claim. The Cross Claim 9 Absent all other considerations, the Respondent would be entitled to an award of costs on a party/party basis (although not on an indemnity basis as claimed by Mr Lloyd). 10 I have already adverted to the fact that Mr Lloyd was given an adjournment at late notice, and that the Respondent must bear the cost of that. Furthermore, I must not lose sight of the fact that the Applicant was also successful and that its claim for outstanding rent was conceded at the commencement of the hearing. The best mathematical summary in that regard is found in paragraph 49 of my reasons. 11 Further I have to consider that the Tribunal Practice Note does indicate that the method of conducting the proceedings is a relevant consideration. I cannot ignore the fact that Mr Lloyd spent some time in, and led evidence towards unsuccessfully attempting to establish an acceptance by the Applicant of a repudiation of the Lease by the Respondent. Had that aspect not arisen I am satisfied that it would have been appropriate to simply "apportion" an order for costs in favour of the Respondent by awarding them 68% of their costs of conducting both claim and cross claim. Instead, I think the appropriate order is as follows:- 1. Respondent to pay Applicant's costs thrown away by the adjournment of 30 October 2006. 2. Applicant to pay 55% of the balance of the Respondents costs of claim and cross claim, including the costs of submissions as to costs, all on a party/party basis.