Ultraglen Pty Limited -v- Citdaden Pty Limited [2002] NSWADT 220

CITATION: Ultraglen Pty Limited -v- Citdaden Pty Limited [2002] NSWADT 220 DIVISION: Retail Leases Division APPLICANT PARTIES: Ultraglen Pty Limited RESPONDENT Citaden Pty Limited FILE NUMBER: 015118 HEARING DATES: 17/01/2002 SUBMISSIONS CLOSED: 02/07/2002 DATE OF DECISION: 11/01/2002

BEFORE: Fox R - Judicial Member APPLICATION: Costs MATTER FOR DECISION: Costs LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994 CASES CITED: Knight v. F.P Special Assets Ltd and Others (1992) 174 CLR Reg .v. Greene (1843) 4 QB 646 APPLICANT REPRESENTATION: A Kondos, agent RESPONDENT M Stewart, solicitor ORDERS: 1. Order that each of the Lease Police Pty Limited and Angelo Kondos pay the Respondent's costs of the matter from 17 December 2001, up to and including the costs of the appearance before me on the Directions Hearing of 17 January 2002, and the subsequent costs in making written submissions in relation to the question of costs.

1 I have, I fear, too long considered the written submissions of the parties in relation to the further costs order which the Respondent sought, namely that the director of the Applicant, Beth Hourigan, the Lease Police Pty Ltd, and a director of the Lease Police Pty Ltd, Angelo Kondos, each be held to be jointly and severally liable for the Respondent's costs which, in dismissing the application on 17 January of this year, I ordered to be paid by the Applicant Ultraglen Pty Ltd. No doubt relying on the conventional view of the law canvassed (but ultimately dismissed) in Knight v. F.P Special Assets Ltd and Others (1992) 174 CLR, I felt strong reservations about taking that course. The possible liability of Ms Hourigan, as director of the Applicant company, is clear. Had she been represented by solicitor who had ignored the requirement for approval of the Liquidator to commence litigation, then the possible liability of the solicitor, as an officer of the Court, also seemed to me to be clear. I was, however, not so satisfied in relation to the Lease Police Pty Ltd or Mr Kondos, neither of whom have any right of appearance other than as the authorised agent of the Applicant. 2 Having now re-read the High Court's reasons in Knight, I am of the view that this Tribunal has jurisdiction to make an order of personal liability for costs against entities such as the Lease Police Pty Ltd and Mr Kondos when they appear as agents of an Applicant. 3 In Knight, the Court considered the words of a Queensland costs rule; ".......the costs of an incident to all proceedings in the Court, ......., shall be in the discretion of the Court or Judge........." and at paragraph 14 held:- "According to their natural and ordinary meaning, the words of the rule are sufficiently expansive to enable the Court to make an order for costs against a person, whether that person is formally a party to the proceedings or not. The jurisdiction and the discretion thereby conferred are not limited". 4 The Court went on to say:- "[22] And it is artificial to attribute the orders for costs against solicitors to an exercise of the disciplinary power rather than to an exercise of the jurisdiction to award costs of the proceedings. [23] The cases awarding costs against non-parties are more readily explicable on the footing that there was no absence of jurisdiction to order costs against non-parties in the strict sense and that the jurisdiction could be exercised against persons who were considered to be the "real parties" to the litigation." 5 Referring to Lord Denman's expression of the rule in Reg .v. Greene (1843) 4 QB 646 their Honours said:- "[24] The person ordered to pay the cost in that case was a solicitor but that was not the ground on which the order for payment was made. It is plain from the Chief Justice's comments that it made no difference that the person ordered to pay the cost was the solicitor on the motion; the principle applied was of general application". 6 It should be noted that Gaudron J agreed with the majority judgment of Mason C J and Deane J from which the above are extracted. 7 The power of this Tribunal to make orders for costs comes from Section 88 of the Administrative Decisions Tribunal Act 1997. (1) 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 there are special circumstances warranting an award of costs. (2) The Tribunal may: (a) determine by whom and to what extent costs are to be paid, and ............ (3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs. 8 Section 77A of the Retail Leases Act 1994 only enlivens the operation of Section 88 of the Administrative Decisions Tribunal Act, and does not impose any other limit. 9 If it is clear that the words of the Queensland enactment which were being considered by the High Court in Knight were sufficiently wide according to their ordinary and usual meaning to encompass orders against any person and not just a party to the proceedings, then I take the words of Section 88C(2) "by whom and to what extent costs are to be paid" to have a similarly wide ambit of persons, a range which is not limited by the stricture requiring that there be special circumstances. 10 I had before me, at the time of the dismissal, a letter from Chalmers and Partners, Solicitors in Western Australia dated 14 December 2001, and addressed to "Angelo Kondos, the Lease Police Pty Ltd", containing the words:- "Ultraglen is in liquidation" and seeking a copy of the authority:- "pursuant to which you signed the application for and on behalf of Ultraglen Pty Ltd on 25 November 2001". 11 The response from the Lease Police, dated 18 December 2001 was; "we act for Beth Hourigan as guarantor to a former lease, please read Section 63(1) interpretation party, or former party, of the Retail Tenancies Act 1994 as this constitutes valid authority and we have clear instructions from Ms Hourigan, this matter will proceed". 12 There is also a letter by the Liquidator dated 17 January 2002 which contained the words; "I note that I have not consented to the continuation of the above proceedings nor have I consented to Mr Angelo Kondos or the Lease Police Pty Ltd representing Ultraglen Pty Ltd". 13 In January all of this clearly established that the proceedings were commenced without the consent of the Liquidator. My note of the evidence is "Kondos says that he had written to the Liquidator for approval, but received nothing in writing in response". 14 This point was not taken further in the written submissions made by the Lease Police. 15 The Lease Police did, by a document headed "Amended Application" and dated 12 January 2002, which was filed on 16 January 2002, seek to amend the Applicant's details to change the Applicant to Elizabeth Joy Hourigan. That document was not before me at the Directions hearing of 17 January, but in any event, it would have made no difference, because such an amendment could not be made either without the consent of the Respondent, or alternatively, the specific leave of the Tribunal on the basis of satisfactory evidence. The document does, however, appear to be a clear concession by the Lease Police that its original Application was made on behalf of the Company, and not Ms Hourigan. I make this observation because Mr Kondos did suggest that the Application had been brought on behalf of Beth Hourigan, and not on behalf of the Company. This is clearly wrong. 16 The original Application in response to the opening question "who are you?" gives ticker box choices of "Ms", "Mr", "Mrs", "Company" or "other", and the box "Company" was crossed. Immediately thereunder appear the words Family name "Hourigan", Given Names "Beth guarantor to the lease" Company Name "Ultraglen Pty Ltd ACN 075 548 293" and on the second page, in response to your signature, or the signature of your representative appeared a signature "for and on behalf of Ultraglen Pty Ltd", print name.... ".."Angelo Kondos" in response to the question Has mediation been attempted? there is a reference to a previous mediation agreement and the following words; "a settlement deed was signed under duress at that time relating to those matters only and the applicant Ultraglen Pty Ltd was unrepresented" 17 The grounds for application are shown as "(a) The Lessee has right to compensation under Section 10 of the Retail Leases Act for pre-lease misrepresentation, (b) The Lessee was not given notices outlined in Section 33 of the Retail Leases Act 1994, (c) The Lessee was not compensated as outlined in Section 34 of the Retail Lease Act 1994, (d) The Lessor breached a quiet enjoyment provision of the lease". 18 I cannot understand how it could be suggested that the application was purported other than to be brought on behalf of the Lessee company Ultraglen Pty Ltd, and that is why I dismissed the application as being contrary to the Corporations Law. 19 At the time of my dismissal I gave both parties the opportunity to make written submissions. The Respondent in those submissions, relying on Knight, suggested that I hold the real party to the proceedings to be Elizabeth Joy Hourigan because she is the sole director of Ultraglen, and clearly had an interest in the outcome of the litigation. That may well be so, but I have no evidence, and no document of any kind to establish that Ms Hourigan was in any way involved. All I have, in that regard, is Mr Kondos' assertion that he had the relevant authority. 20 In its written submissions, the Lease Police suggest that the present proceedings were bought in anticipation of an action which the Respondent might eventually take against Beth Hourigan. That is no answer. 21 It also states:- "The spirit and success of this Tribunal rests with the accessibility it provides to the under resourced seeking justice and further provision it makes for agents and those with retail lease business acumen to bring cases before it for justice". 22 That may well be so, but the Tribunal is still bound by the law, and the law is that a company in liquidation cannot conduct litigation without the express fiat of the liquidator. If the Application was an attempt on behalf of Beth Hourigan to ventilate issues arising out of her guarantee, then (if that is a proper application) it should have been brought in her name. 23 In the absence of any evidence of any authority by Beth Hourigan to commence the proceedings in her name or on behalf of her company, I am not prepared to make an order against her personally. The same does not apply to the Lease Police and Angelo Kondos, it is clear that they are the parties who took the proceedings and without any evidence of Beth Hourigan's complicity, they are the "real parties" to the litigation, and they and each of them should be accountable. 24 My order is that each of the Lease Police Pty Limited and Angelo Kondos pay the Respondent's costs of the matter from 17 December 2001, up to and including the costs of the appearance before me on the Directions Hearing of 17 January 2002, and the subsequent costs in making written submissions in relation to the question of costs. The special circumstances justifying the order for costs are the fact that the persons purporting to commence proceedings on behalf of the company Ultraglen Pty Ltd never at any time had the authority of the Liquidator of the Company to commence those proceedings and so, whatever other description there might be for the conduct of the Lease Police and Angelo Kondos, it very clearly falls within the description of "vexatiously conducting the proceeding".