CITATION: Protogeros -v- Fouzas [2004] NSWADT 62 DIVISION: Retail Leases Division APPLICANT John Protogeros PARTIES: RESPONDENTS Bill Fouzas Sylvia Fouzas FILE NUMBER: 035109 HEARING DATES: 01/03/2004 SUBMISSIONS CLOSED: 03/15/2004 DATE OF DECISION: 03/31/2004 BEFORE: Montgomery S - Judicial Member APPLICATION: Claim for payment of money MATTER FOR DECISION: Preliminary matter LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994 Aspromonte Pty. Limited v Zagari (1999) NSWSC 831 Randi Wixs Pty Limited -v- Pokana Pty Limited (No. 2) [2003] NSWADT 4 CASES CITED: Matheson v Matheson [1952] VLR 27 Watson v Watson [1968] 2 NSWR 647 Sarip Investment Pty Ltd v Uno Uno Pty Ltd [2004] NSWADT 27 APPLICANTS REPRESENTATION: J Trebeck, barrister RESPONDENT P James, solicitor ORDERS: 1. The Lessees' application for a stay of these proceedings is refused; 2. The Lessees are liable to pay the Lessor the full amount of the rent arrears. The parties are I invited to provide further material to clarify the amount of the rent arrears. This material is to be filed within 14 days of the date when this decision is published; 3. The Lessees are to pay the Lessor's costs in relation to the aborted hearing on 19 December 2003, and the directions hearing on 2 December 2003. REASONS FOR DECISION 1 This is an application brought by Mr John Protogeros ("the Lessor") in relation to a retail shop lease ("the Lease") for premises located at 69 Kendall Street, Cowra ("the Premises"). Mr Protogeros is the registered proprietor of the Premises. Mr Bill Fouzas and Ms Sylvia Fouzas ("the Lessees") are the lessees of the Premises. At the Premises, the Lessees operated a shop known as the Golden Key Café ("the Café"). It is common ground that the Lease is governed by the Retail Leases Act 1994 ("the Act"). Background 2 Some time prior to August 1997 the Lessees entered into a partnership agreement with Zizis Papaioannou and Irene Papaioannou ("the Papaioannous") for the purpose of the operation of the Café. On 11 August 1997 the purchase of the Café business was settled. By letter dated 11 August 1997 the Lessees' solicitor, Mr Jim Kartsounis of Kartsounis & Co Solicitors, wrote to the Lessor's solicitors, Garden & Montgomerie Solicitors, and requested the inclusion of the Papaioannous as lessees. That consent was given by letter also dated 11 August 1997. On 13 August 1997 the Lessees and the Papaioannous took possession of the Premises and commenced renovations. 3 An undated document headed "Lease - Real Property Act 1900" in the standard Law Society "07L Lease" format ("the Lease document") was signed by each of the Lessees on 11 August 1997. The Papaioannous also signed the Lease document. Stamp duty was paid on the Lease document on 19 August 1997. The Lessor has not signed the copy of the Lease document before the Tribunal and there is doubt about whether he ever signed a copy of the Lease document. The Lease document has not been registered. 4 The Lease document expressed the arrangement to be for a term of 4 years from August 1997 to August 2001 with provision for options to renew. Rent was stated to be payable at the rate of $2600 per month with provision for annual adjustments. 5 The partnership agreement between the Lessees and the Papaioannous was subsequently terminated and the Papaioannous returned to Sydney on about 27 September 1997. It seems that the Lessees raised with the Lessor the possibility of removing the Papaioannous as parties to the Lease. The Lessor's solicitors wrote to the Lessee's solicitors and outlined their instructions as to the Lessor's views. On 29 October 1997 the Lessor's solicitors wrote: "We refer to your recent facsimile and have today received the following instructions from our client: 1. That an option to purchase is to be no longer included in the Lease. 2. That rental payments are to commence on the 1st February, 1998. 3. The annual rent is to increase by 6% a year commencing on the first anniversary of the Lease and to extend throughout the term of the Lease and the option periods. 4. Our client is happy to either amend the Lease or transfer the Lease to Mr & Mrs Fouzas." 6 It appears that the parties were never able to reach agreement with respect to the proposed amendments to the lease. The Lessor has asserted that the terms of the Lease had been varied and that rent was payable at the rate of $700 per week. On the Lessees' evidence, the Lessor has also asserted that the Lessees did not have a registered lease and that they could not exercise any option under the Lease. The Lessees maintained that they had signed the Lease document, that this document reflects the terms of the Lease and that they would not agree to any changes. 7 In approximately March 1999 the Lessees decided to list the Café for Sale at an asking price of $260,000 plus stock. In July 1999, they received an offer from Fanimra Pty Limited ("the purchaser") to purchase the business for the sum of $260,000 including stock. Garden & Montgomerie Solicitors were also solicitors for the purchaser. The Lessees assert that as a consequence of the dual role played by Garden & Montgomerie Solicitors, issues relating to the terms of the Lease affected negotiations in relation to the sale of the business. The purchaser withdrew from negotiations in September 1999 and the sale fell through. The business has not yet been sold however Mr James, on behalf of the Lessees, advised that a prospective purchaser has offered to buy the business at a price of $70,000. 8 On 12 March 2003 the Lessor filed a Statement of Liquidated Claim in the District Court of New South Wales at Orange, claiming an amount of $72,600 from the Lessees as unpaid rent. The Lessor also sought interest on the unpaid rent at the rates prescribed by the District Court Act plus costs. The Lessor obtained a default judgement on the Claim, however, on a Motion by the Lessees heard on 5 August 2003 the default judgement was set aside and the matter was transferred to this Tribunal. 9 The Lessees' filed a defence to the Lessor's Statement of Liquidated Claim in which they relied on the Lease document as providing for the terms of the Lease. They say that under the Lease document rent was $600 per week and the commencement date for payment of rent was 22 February 1998. The Lessees asserted that they were induced to make an agreement to pay rent in the amount of $700 per week by duress and for undue influence on the part of the Lessor. In the Defence the Lessees stated: "From about late September 1997, the plaintiff personally and through his legal representatives asserted to the defendants that: a) The defendants did not have a lease; b) The plaintiff would not sign and register the lease unless the defendants complied with the plaintiff's demands; c) The defendants' interest in the premises would not be recognised unless the defendants' complied with the plaintiff's demands; d) The plaintiff would not give the defendants any security for the lease, in relation to the defendants' sale of the business unless the defendants' complied with the plaintiff's demands; and e) Unless the defendants complied with the plaintiff's demands (inter alia) to increase the rent by $100.00 per week the plaintiff could and may summarily evict the defendants from the premises. In response to the above representations and threats the defendants paid rent in the sum of $700.00 per week when the lease provided for rent in the sum of $600.00 per week." 10 After its transfer from the District Court, the matter came before this Tribunal's Deputy President Acting Judge Chesterman for a Directions Hearing on Thursday 16 October 2003 at which time the Deputy President set a timetable for the filing of documents and listed the matter for a further Directions Hearing on 20 January 2004. 11 By letter dated 21 November 2003, the Lessor's solicitors advised the Tribunal that they had received no documents from the Lessees and requested that the matter be restored to the list. The matter was listed for Directions on 2 December 2003. At that time the Deputy President set a new timetable for the filing of documents and listed the matter for Hearing on 19 December 2004. 12 The Lessees failed to comply with the Deputy President's timetable and by fax from their solicitors dated 17 December 2003 to the Tribunal they advised that they wished to withdraw the proceedings. This is an unusual approach given that the Lessor commenced the proceedings. The Lessor was not advised and did not consent to the vacation of the hearing. 13 In late January 2004 the Lessees commenced fresh District Court proceedings alleging the loss of the opportunity to sell their business. On 29 January 2004, the Tribunal matter was mentioned before Judicial Member Fox. A new timetable was set and the matter was set down for hearing on 1 March 2004 for hearing on the following: (i) Whether there should be a stay of proceedings; (ii) Whether there should be an interim order for costs; (iii) Whether there should be an order for the payment of money in favour of the Lessor in the event that the stay is refused. 14 On 16 February 2004 the Lessees filed an application for an urgent interim order seeking a stay on the hearing of the Lessor's application for rent. The reasons provided for seeking the order were: "Sydney District Court proceedings 290 of 2004 make claim under the Section 42 of the Fair Trading Act (NSW) arising out of the same facts and circumstances giving rise to damages in excess of any rent outstanding." 15 Mr James stated that as the District Court proceedings arise from the same facts, the Tribunal proceedings should be stayed until those proceedings are finalised. The Lessor opposes the stay and seeks orders for unpaid rent and costs thrown away because the Hearing did not proceed on 19 December 2003 and the costs incurred in attending a directions hearing that would not have been required had the Lessees complied with the Directions made by the Deputy President. 16 The application for a stay of proceedings was heard on 1 March 2004. The Lessees' case 17 The Lessees seek a stay of these proceedings until the District Court proceedings are finalised. The basis for the application is that the matters arise out of the same facts and circumstances giving rise to damages in excess of any rent outstanding. Essentially the argument is that the District Court claim is for a greater amount than the amount sought by the Lessor. 18 The Lessees have been unable to quantify their claim in the District Court but Mr. James asserts that the current sale price of the business is approximately $70,000 and given that the purchaser had previously offered an amount of $260,000 it can be assumed that the Lessees would be asserting a loss of some $190,000. 19 The Lessees admit rent arrears however there is dispute as to the amount of those arrears. The dispute arises because of an assertion by the Lessor that rent was payable at the rate of $700 per week whereas the Lessees argue that rent was payable at the rate of $600 per week. The Lessor's case 20 The Lessor accepts that the Tribunal proceedings and the District Court proceedings arise from the same facts in that they are both concerned with the Lessees' occupation of the Premises however he argues that the proceedings are otherwise unrelated. The District Court proceedings are not related to the option or the other amendments that were sought by the Lessor except to the extent that the claim that the Lessees lost the opportunity to sell their business because of the Lessor's conduct. With respect to that claim, the Lessor asserts that the purchaser withdrew from the negotiations for reasons unrelated to the Lessor's conduct. 21 The Lessor relies on an affidavit of his solicitor, Geoffrey John Casey, sworn on 26 February 2004. In his affidavit Mr Casey recounts a telephone conversation he had with from Emmanuel Delavaris, Director of the purchaser, in which Mr Delavaris referred to other factors that influenced his decision to withdraw from the negotiations. These factors included "a development close to the Golden Key in Kendal Street involved with the refurbishment of Bi-Lo", that he learned "that McDonalds were coming to Cowra" and that he had trouble getting accommodation in Cowra. 22 Mr Trebeck argued that the issues relating to the lost sale of the business are therefore unrelated to the rent arrears and therefore the stay of these proceedings is not justified. 23 Mr Trebeck said that the Lessor seeks an order for rent arrears based on the Lessees' admission that rent was payable at the rate of $600.00 per week. Mr Trebeck referred to the Defence that the Lessees filed in the District Court. Paragraph 7 of that Defence states: "The defendants say the rent to be paid pursuant to the lease or the agreement for lease was $600.00 per week." 24 The Lessor also seeks an order for costs thrown away because the Hearing did not proceed on 19 December 2003 and the costs incurred in attending an additional directions hearing required because of the Lessees' failure to comply with the Directions made by the Deputy President. 25 Mr Trebeck stated that he had appeared in the District Court proceedings and had argued against the transfer of the proceedings to the Tribunal because of the lack of jurisdiction to deal with matters under the Fair Trading Act. He said that he would have expected the matters now before the District Court to be raised as a cross-claim in the District Court or raised as a defence to the Tribunal proceedings. Notwithstanding Mr Trebeck's argument regarding the limited jurisdiction in the Tribunal, the Lessees' solicitors had persisted in the application for transfer of proceedings. However, after the transfer of proceedings to the Tribunal, the Lessees' solicitor also formed the view that Mr Trebeck had originally proffered. Consequently, the Lessees advised the Tribunal that they wished to withdraw the application and the Hearing did not proceed on 19 December 2003. Mr James conceded that the transfer of proceedings was the result of an error by the Lessees' solicitors. Mr Trebeck argued that the Lessor now finds himself stranded in the Tribunal without a cross-claim to meet and unable to have the matter returned to the District Court. The Lessor has incurred additional costs as a consequence of that error and therefore should be able to recover those costs. Submissions 26 At the hearing on 1 March 2004 it was agreed that I should make a decision based on the material available at that time and any written submissions. Mr Trebeck provided written submissions at the hearing. Mr James was invited to make written submissions in reply and a timetable was set for the filing of those submissions and any additional submissions that Mr Trebeck wished to provide. Mr James did not provide any submissions in reply in response to that invitation. Mr Trebeck made the following submissions "1. This matter has been listed for hearing in relation to the following issues: a. Whether there should be a stay of these proceedings pending resolution of the lessee' claim in District Court proceedings 290 of 1994. b. In the event the application for a stay in refused, whether there should be a money judgment for the lessor. c. Whether there should be an interim order for costs. Application for stay 2. There is no articulation of the basis of the application for the stay, other than the references referred to in the next paragraph, or any identification of the principles which are invoked by the lessee. 3. The facts said to give rise to the basis of the application for a stay are to be found in: a. Mrs Fouzas' affidavit sworn 13 February 2004, par 31; and b. Mr James' affidavit sworn 12 February 2004, pars 17 - 18. c. Application filed 16 February 2004 (item 4: "arising out of the same facts and circumstances giving rise to damages in excess of any rent outstanding"). 4. It seems that the application is founded on the proposition that the lessees have a cross-claim against the lessor, said to be greater than the lessor's claim for rent, and nothing more. There are two answers to this: a. There is no power contained in Part 8 Division 3 of the Retail Leases Act to adjourn the lessor's application pending the resolution of other proceedings in another Court, or to enter judgment but stay the judgment. There is a power to adjourn proceedings in the ADT Act (s 73(5)(f)), but it is submitted that this power should not be exercised when what is really sought is a restraint upon the lessor's right to have his case heard for an indefinite period. b. Alternatively, if there is a power, the power should not be exercised as a matter of discretion, for the following reasons: i. The existence of a cross-claim does not at law give rise to a defence of set-off. The lessees are free to pursue their cross-claims in the District Court and nothing in these proceedings can affect their right to litigate their claim there. Conversely, a right to litigate a claim elsewhere does not carry with it a right to have all other claims stayed. Had they left the matter in the Orange District Court (where it would have been by now finalised) they could have litigated their cross-claim there. In this regard, the cross-claim does not "arise out of the same facts and circumstances", as claimed in the application. ii. The cross-claim pivots on the proposition that the lessees lost a purchaser because the lessor refused to execute and register the lease. However, the evidence is that the proposed sale of the business was on the footing that the new tenant would receive a new lease, not an assignment of the existing lease, and the lessor's conduct in this regard could therefore not have caused the loss claimed. iii. Moreover, the evidence from the proposed purchaser is to the effect that he withdrew from the purchase for reasons unconnected with the fact of non-registration of the lease, for reasons which had nothing to do with any leasing question. Those reasons were the proposed nearby Crown Plaza development, the news that McDonalds were coming and the purchaser's difficulty in getting accommodation in Cowra (Casey, 26.2.04). This is a case which will depend on the evidence of the purchaser, not the evidence of the lessees. iv. The lack of any evidence of quantum to support the assertion that the cross-claim would exceed the rent outstanding, even though this cross-claim was under consideration in July 2003 and the lessees' solicitor felt he was able to swear in an affidavit that he believed the lessees had reasonable prospects of success in a cross-claim for damages for breach of lease that he estimated to be approximately $250,000 (James, 11.6.03, par 22). v. The delay in bringing the proceedings. Some of the causes of action alleged are statute barred, and others alleged accrued in 1999. vi. The conduct of the lessees since the commencement of proceedings. They persisted with the application before O'Reilly DCJ to transfer the proceedings from the District Court to the ADT even when it was submitted that the unconscionable conduct claim could not be maintained. Having had the application transferred, they then breached directions of this tribunal in an outrageous manner. The inference to be drawn from this conduct is that they are intent on delay. Rent 5. Arrears of rent, and interest as at 28 February 2004 are $64,269.49 (Casey, 26.2.04). Arrears of rent have never been disputed. Costs 6. The lessor seeks an order for costs in relation to the aborted hearing on 19 December 2003, and the directions hearing on 2 December 2003. The ADT has power to make an order for costs in special circumstances (s. 88; cf s. 77A of the Retail Leases Act). 7. The special circumstances are set out in Casey, 26.2.04. It is respectfully submitted that the circumstances set out are clearly "special". It is suggested that they are in fact extraordinary and exceptional, even though to establish the requirement in s. 88 they need to be such; they need only be out of the ordinary (Randi Wicks v Pokana [2003] NSW ADTAP 27; Sarip Investment v Uno Uno [2004] NSWADT 27 at [25]. DETERMINATION The Lease 27 In order to determine the issue under consideration it is useful to ascertain, as a preliminary point, the nature of the Lease that exists between the parties. I do not understand there to be any dispute that each of the Lessees signed the Lease document on 11 August 1997 or that the Lessees entered into possession of the Premises on about 13 August 1997. 28 The expression "lease" is defined in section 3 of the Act as follows: ""retail shop lease" or "lease" means any agreement under which a person grants or agrees to grant to another person for value a right of occupation of premises for the purpose of the use of the premises as a retail shop: (a) whether or not the right is a right of exclusive occupation, and (b) whether the agreement is express or implied, and (c) whether the agreement is oral or in writing, or partly oral and partly in writing." 29 Section 8 of the Act provides: "8 When the lease is entered into (1) For the purposes of this Act, a retail shop lease is considered to have been entered into when a person enters into possession of the retail shop as lessee under the lease or begins to pay rent as lessee under the lease (whichever happens first). (2) However, if both parties execute the lease before the lessee enters into possession under the lease or begins to pay rent under the lease, the lease is considered to have been entered into as soon as both parties have executed the lease. Note: Therefore, if the lessee starts to pay rent as lessee or enters into possession as lessee, the lease is considered to have been entered into even if neither party has executed the lease at that time. Money paid in advance (purportedly as rent) as a deposit to secure premises for a proposed lease does not constitute rent paid as lessee under the lease." 30 Section 16 of the Act provides: "16 Minimum 5 year term (1) The term for which a retail shop lease is entered into, together with any further term or terms provided for by any agreement or option for the acquisition by the lessee of a further term as an extension or renewal of the lease, must not be less than 5 years. An agreement or option is not taken into account if it was entered into or conferred after the lease was entered into. (2) If a lease is entered into in contravention of this section, the validity of the lease is not thereby affected but the term of the lease is extended by such period as may be necessary to prevent the lease contravening this section. Note. For example, if a lease is entered into for a term of 3 years, its term is extended by 2 years to 5 years. If a lease is entered into for a term of 2 years with an option for a further 1 year after that initial 2 years, the term of the lease is extended to 4 years (with the option for a further 1 year after that initial 4 years). (3) This section does not apply to a lease if a lawyer, or a licensed conveyancer, not acting for the lessor certifies in writing that he or she has, at the request of the prospective lessee, explained the effect of subsections (1) and (2) to the prospective lessee and that the giving of the certificate will result in this section not applying to the lease. (4) This section does not apply to a lease that results from the renewal of an earlier lease pursuant to an option conferred on the lessee, so long as there was no break in the entitlement of the lessee to possession of the retail shop and the option was granted by that earlier lease or by an agreement entered into before or at the same time as that earlier lease was entered into. Note. Because of subsection (4), a lease will not be required to be for 5 years if it is a renewal of an earlier lease (because the minimum 5 year term requirement applied to the earlier lease and the availability of the renewal will have been taken into account in determining the term of that earlier lease). (5) This section does not apply to a lease to the extent that its application would be inconsistent with the terms of any head lease under which the lessor holds the retail shop." 31 These provisions have been considered in numerous matters before this Tribunal and in other forums. 32 In the matter of Aspromonte Pty. Limited v Zagari (1999) NSWSC 831 Hodgson CJ in Eq states at paragraphs 48-52 of the decision: "In my opinion the entry into possession of the shop on the payment of rent, meant that there was some kind of lease in existence ... This in my opinion, would be so at general law, and it would be confirmed by S.8 of the Act. … I remain of the view that s.8(1) discloses an intention that there can be entry into a retail shop as lessee and payment of rent as lessee under a lease, where these events occur at a time when there is consensus as to the terms of such a lease, but not yet any written lease entered into." 33 In Randi Wixs Pty Limited -v- Pokana Pty Limited (No. 2) [2003] NSWADT 4 Judicial Member Molloy observed: "28 So, it seems to me, there is no requirement for the operation of Section 8 that there be at some stage or other after the lessee has entered into possession and paid rent the execution of a lease document. Hodgson CJ in Eq in Aspromonte appears to be of the view that there must be 'consensus as to the terms of such a lease'. This must be the case because the definition of 'lease' means 'any agreement', whether express or implied, oral or in writing or partly oral and partly in writing. It is predicated on there being an "agreement" – once it is established that there is an agreement and otherwise the terms of Section 8(1) are satisfied then there is created a statutory lease for the minimum term under section 16. The real question is always: "Is there an agreement; if so what are the terms of the agreement; and has the lessee entered into possession of the retail shop as lessee under the agreement or has the lessee began to pay rent as lessee under the agreement (whichever happens first)?" 29 Hodgson CJ in Eq in Aspromote expressed the view that there must be "consensus as to the terms" of the lease. I am not entirely sure precisely what is meant by the use of the word "consensus". If it is intended to mean that there must be, as a pre-condition to the operation of Section 8, an agreement by the parties to each and every term of the lease, then I would respectfully differ from His Honour's view. The whole purpose of Section 8 is to create a statutory lease if the circumstances fall within the terms of the Section. After all, the terms of the Section are really quite simple and in my view there is a clear legislative intent that there will be created a statutory lease where a person enters into possession of a retail shop as lessee, or begins to pay rent as lessee, in circumstances where there is an agreement between that person and the person having the right to grant possession or receive rent whereby that person grants or agrees to grant to the other person for value a right of occupation of the premises for the purposes of the use of the premises as a retail shop. 30 There is nothing in the combination of Sections 3 and 8 that requires the person granting or agreeing to grant the right of occupation to agree with the occupier or proposed occupier to all the terms of the right of occupation. The definition of "lease" in Section 3 … is in very simple terms and the legislative intent of Section 8 is to create a statutory lease in the particular circumstances such that the occupant is protected by a statutory lease. Once that interpretation is accepted then there is no requirement for there to be "consensus" as to the terms of, or each and every term of, the right of occupancy simply because the statute creates the lease (Section 3). Once the statutory lease is created then the only question is: what are the terms of that lease? In order to answer that question one needs to look at the extrinsic evidence that is available in order to establish the other terms of the agreement between the parties. 31 It is not my understanding that the law requires there to be a concluded agreement between the parties before Section 8 applies. … I am of the view that the combination of Section 8 and the definition of "lease" in Section 3 is supportive of a different legislative regime designed to protect persons who enter into occupation or pay rent of defined premises such that the section "fills in the blanks" (so to speak) of contract law which would deny a concluded contract in circumstances where the evidence showed that there had not been agreement as to all the terms and in those circumstances would deny the occupant of retail shop premises the protection offered by Section 8." 34 I agree with these views. It is my view that a valid lease existed between the Lessor and the Lessees and the Papaioannous from 13 August 1997 when the Lessees and the Papaioannous took possession of the Premises. I am satisfied that there was "consensus as to the terms" of the Lease and those terms are reflected in the Lease document. I do not consider that the alleged discussions between the parties resulted in any variation of the Lease. 35 Accordingly, I find as a fact that for the purposes of these proceedings there was a valid Lease between the parties in the terms set out in the Lease document. 36 Pursuant to section 16 of the Act the Lease was for a minimum term of 5 years from August 1997 to August 2002. The Lease also had provision for options to renew to August 2009. Rent was payable at the rate of $2600 per month with annual adjustments as provided for by Item 15 of the Lease document. Stay 37 As noted above, the Lessees seek to have these proceedings stayed pending resolution of District Court proceedings where the Lessees have claimed for losses relating to the lost opportunity to sell their business. The Lessor argues that the Tribunal proceedings are concerned with the Lessees' failure to pay rent and that this issue is unrelated to whether the Lessor's conduct resulted in a loss of sale. 38 There is no specific provision in the Administrative Decisions Tribunal Act 1997 ("the ADT Act") that provides the Tribunal with power to stay an application under the Act. Section 73(5)(f) of the ADT Act provides that the Tribunal "may adjourn proceedings to any time and place (including for the purpose of enabling the parties to negotiate a settlement)". 39 Arguably this provision provides the power to grant the order that the Lessees seek. However, the Lessees seek an indefinite adjournment of the proceedings. As Herring CJ said in Matheson v Matheson [1952] VLR 27 at 30: "The adjourning of litigation … is very much a matter of discretion, and it is most undesirable that this discretion should be fettered in anyway. At the same time, this discretion is a judicial one and must be exercised in accordance with legal principle and upon relevant and not irrelevant considerations. I think it may also be said that there are adjournments and adjournments. In the ordinary course of events cases are adjourned from day to day, and sometimes it is necessary to put them over for longer periods or to the next sittings of the Court in a particular place. But the indefinite adjournment of proceedings may amount to much more than a mere postponement; it may amount to a refusal to hear and determine the particular application before the Court, and in these circumstances the adjournment may become a mere disguise for a refusal to exercise a jurisdiction committed to the Court." 40 In Watson v Watson [1968] 2 NSWR 647 it was stated at 652 "The principle is that it is a matter for the discretion of the trial judge whether or not to grant an adjournment. Like all discretions it must be exercised judicially and not according to whim or fancy. Primarily a case should be heard when it comes into the list for hearing. When a case has been specially fixed for hearing at a date some months in the future then it cannot be said when both parties are present with their witnesses that a judge is wrong in law in exercising his discretion to refuse an adjournment at the request of one of the parties unless to refuse an adjournment would prejudice that party to a point that he has been denied justice". 41 In the circumstances I do not need to determine the issue of whether the Tribunal has the power to grant the order sought by the Lessees because I am satisfied that the issues in this matter are quite distinct from those of the District Court matter. This is not to say that the Lessees do not have an arguable case in relation to the loss of the sale of their business. That case is quite distinct from the issue of whether rent arrears are payable. Further, given the delay that has resulted from the conduct of this matter, I do not believe that it is appropriate that the issue should be delayed any further. 42 Accordingly, the Lessees' application for a stay of these proceedings is refused. Rent arrears 43 The Tribunal's powers in relation to a retail tenancy claim are pursuant to section 72 of the ADT Act which provides: "72 Powers of Tribunal relating to retail tenancy claims (1) In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate: (a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, (b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings, (c) an order that a party to the proceedings: (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of a lease, or (ii) surrender possession of specified premises to another person, or (iii) assign his or her or its rights under a lease to a specified person, or (iv) do or perform, or refrain from doing or performing, any specified act, matter or thing, (d) an order granting a party to the proceedings relief against forfeiture, (e) an order, by consent of the parties, requiring the parties to the proceedings to rectify a lease, (f) an order: (i) declaring any provision made by a lease to be void for being inconsistent with this Act or the regulations, or (ii) declaring that a lessor is not entitled to withhold consent to an assignment of the rights of a lessee, or (iii) declaring the rights and liabilities of the parties under law, whether any consequential relief is or could be claimed or not, (g) such other order, in the nature of an interlocutory order of a kind referred to in paragraphs (a)-(f), as the Tribunal considers proper to be made in order to resolve or assist resolution of the dispute between the parties. (2) The Tribunal may make such ancillary orders as it considers necessary for the purpose of enabling an order under this section to have full effect. (3) The Tribunal may impose such conditions as it considers appropriate when making an order under this section. (4) The Tribunal may make an interim order under this section pending final determination of a claim, if it appears to the Tribunal desirable to do so." 44 The Lessor seeks an order for arrears of rent, and interest, which he calculates at $64,269.49 as at 28 February 2004. The Lessees do not dispute that they owe money for arrears of rent however the amount owed is not agreed. As I have indicated above, it appears from the Lease document that rent was payable at the rate of $2600 per month with annual adjustments as provided for by Item 15 of the Lease document. If it is merely the case that the Lessor only seeks an order for the lower amount despite any entitlement to a higher amount, then I agree that orders should be made for the amount sought. 45 The Lessor has provided a schedule of rent payments made by the Lessees and a comparison of those payments with what he asserts should have been paid. Separate schedules are provided for calculations based on weekly rent of $700 and $600. I am unable to ascertain from the material before me why these two amounts have been considered rather than the amount referred to in Item 12 of the Lease document ie $2600 per month. 46 I have determined above that the Lessees and the Papaioannous are parties to the Lease. I note however that the Lessor has not included the Papaioannous as parties to this claim. This approach is authorised by clause 2.4 of the Lease document which states: "If a party consists of two or more persons, obligations of that party can be enforced against any one or more of them." 47 On the evidence before me I am satisfied that the Lessees are liable to pay the Lessor the full amount of the rent arrears. However, on the evidence it seems to me that the rent arrears should be calculated on the Item 12 amount. I invite the parties to provide further material to clarify this issue. If I am correct, and the applicable rent is that identified in Item 12 of the Lease document, the Lessor is invited to file an amended schedule with calculations based on that amount. This material is to be filed within 14 days of the date when this decision is published. Costs 48 The Lessor seeks an order for costs in relation to the aborted hearing on 19 December 2003, and the directions hearing on 2 December 2003. The Tribunal's power to award costs is pursuant to section 88 of the ADT Act which provides: "88 Costs (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 (b) order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on any other basis. (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. (4) In this section, costs includes: (a) costs of or incidental to proceedings in the Tribunal, and (b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application." 49 The Lessor argues that he has satisfied the special circumstances requirement in section 88(1). He relies on the sequence of events that lead to the vacating of the 19 December 2003 hearing as set out in an affidavit of Geoffrey Casey sworn 26 February 2004 and as referred to above. The Lessor submitted that the circumstances set out are in fact extraordinary and exceptional. 50 The issue of costs has been considered in numerous cases before this Tribunal, most recently by Judicial Member Molloy in Sarip Investment Pty Ltd v Uno Uno Pty Ltd [2004] NSWADT 27. I agree with Judicial Member Molloy's summary of the findings by the Appeal Panel decision in Randi Wiks Pty Limited v. Pokana Pty Limited [2003] NSW ADTAP 27 which make it clear that: "(a) The question whether the fact that have been proved constituted "special circumstances" was not a question of law but one of fact. (b) There is a significant difference between Section 109 of the Victorian Civil and Administrative Tribunal Act 1998 and Section 88 Administrative Decisions Tribunal Act 1997, the difference being that while Section 88 requires a finding of "special circumstances", Section 109 lays down a criteria of "fairness". This distinction is crucial and the Victorian Act does not give direct guidance to the interpretation of Section 88. (c) Arguments by an unsuccessful party that are put forward in good faith and have a reasonable basis do not of themselves entitle a successful party to an order for costs. It may well be different if the unsuccessful party had persisted with an unarguable case. (d) The fact that one of the objects of the Administrative Decisions Tribunal, as set out in Section 3(b), to the effect that this Tribunal should be "accessible", does not imply that costs should regularly follow the event in disputes between lessors and lessees. If this were the case this Tribunal "would be less, not more, accessible to tenants because if they were unsuccessful they would have to pay the costs of opposing landlords". (e) In order to award costs the Tribunal must be "satisfied" that there are "special circumstances warranting an award of costs " (Section 88) and "special circumstances" means circumstances that are "out of the ordinary, but without having to be extraordinary or exceptional". 51 Applying these principles to the present circumstances, it is necessary that I find circumstances that are out of the ordinary, but not necessarily extraordinary or exceptional, that would warrant an award of costs. It is for the Tribunal to determine what are special circumstances in the particular circumstances of a matter before it. The Tribunal has to be satisfied that the circumstances warrant an interference with the position that each party should bear their own costs. 52 The circumstances relevant to the vacation of the hearing of 19 December 2003 are not seriously contested. The Lessees requested the vacation of the date because they had commenced the District Court proceedings. These proceedings were necessitated by the Tribunal's limited jurisdiction. Mr. Trebeck had put the Lessees on notice of this limited jurisdiction when the matter of transfer of proceedings to the Tribunal was argued in the Orange District Court. Mr. James has conceded as much. If the matter had not been transferred from the District Court, the need to conduct the proceedings over two separate forums would not have been necessary. I agree with the Lessor that this amounts to circumstances that are out of the ordinary for the purposes of section 88 of the ADT Act. 53 In my view, the Lessor has incurred costs for the vacated 19 December 2003 hearing and the additional directions hearing date through the error on the part of the Lessees' solicitor. I am satisfied that there are special circumstances warranting an award of costs. It follows, in my view, that the Lessor should be entitled to recover the costs he seeks. Accordingly I order that the Lessees are to pay the Lessor's costs in relation to the aborted hearing on 19 December 2003, and the directions hearing on 2 December 2003. Orders 1. The Lessees' application for a stay of these proceedings is refused. 2. The Lessees are liable to pay the Lessor the full amount of the rent arrears. The parties are invited to provide further material to clarify the amount of the rent arrears. This material is to be filed within 14 days of the date when this decision is published. 3. The Lessees are to pay the Lessor's costs in relation to the aborted hearing on 19 December 2003, and the directions hearing on 2 December 2003. 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.