Hoblos v Marchese [1999] NSWADT 127

CITATION: Hoblos v Marchese [1999] NSWADT 127

DIVISION: Retail Leases

APPLICANT: Mark Hoblos

RESPONDENT: Caterina Marchese

FILE NUMBER: 995007

HEARING DATES: 10/08/1999

SUBMISSIONS CLOSED: 10/06/1999

DATE OF DECISION: 8 October 1999

G M M Hoeben - Judicial Member BEFORE:

PRIMARY LEGISLATION: Retail Leases Act 1994

APPLICATION: Retail tenancy claim -

MATTER FOR DECISION: Application for costs

Applicant: K Williams, agent/solicitor, Birch Partners REPRESENTATION: Respondent: N R Diamond, solicitor, Landerer & Co

ORDERS: 1. No order as to costs.

Delivered Ex-Tempore 1 This matter first came before the Tribunal on 8 June 1999, at which time Mr Hoblos ("the applicant") made his appearance. The respondent also made an appearance. Both parties were given directions. Those directions had compliance dates which were to be met by both the applicant and respondent. It was made clear to the applicant on that occasion that if there was non-compliance by him of the timetable, then it would be impossible for the respondent to make his reply or answer. 2 The applicant also indicated to the Tribunal on that occasion that he had engaged a solicitor who he stated he had instructed to appear, but for some reason, known only to the applicant, the solicitor made no appearance. 3 On 10 August 1999, to which the matter had been relisted, the applicant appeared again on his own behalf. On that occasion he could give no reason why there was non-compliance with the timetable, apart from the fact that he had expected his solicitor to be present and represent him. From the Bar table he stated that there had been a death in the solicitor's family and he assumed that was the reason for the non-appearance of the solicitor. 4 On 10 August 1999 a revised timetable was set which included, inter alia, the following order: "In the event of non-compliance by the claimant of the revised timetable, the Tribunal will be prepared to entertain a dismissal application and any associated matters, including costs, on the next directions hearing date." 5 Time passed. As there had been non-compliance with the revised timetable, the respondent requested that the matter be relisted early to 23 September 1999 at 2.00pm. 6 On this date there was no appearance by the applicant. The Tribunal noted a copy of an affidavit of service of Ms Wendy Elder, Deputy Registrar of the Tribunal, with attached letter which was sent to the applicant by pre-paid post on 14 September 1999 and marked as annexure A. The letter stated that should the applicant not attend at the next directions hearing, then his application could be dealt with in his absence. 7 On 23 September 1999, there was no appearance by the applicant at the directions hearing. The orders on that date included, inter alia, that the claim be struck out. Further orders were made as follows: submissions on costs to be filed with the Tribunal by 12 midday on 6 October 1999; authorities in relation to costs be filed with the Tribunal by 12 midday, 6 October 1999; and the matter listed for hearing on the issue of costs at 2pm on 8 October 1999. 8 On this date the Tribunal noted another letter addressed to the applicant, covered again under affidavit of service by Ms Wendy Elder, posted by pre-paid post on 24 September 1999, and indicating, inter alia, that the matter had been relisted to determine costs. It also stated that in the event of the applicant's non-attendance it could be dealt with in his absence. On 8 October 1999, the applicant was represented by an agent solicitor. The agent had limited instructions and made no submissions. 9 There are two relevant sections which relate to costs. The first is s88 of the Administrative Decisions Tribunal Act 1997 ("the Act"), and s77A of the Retail Leases Amendment Act 1998 ("the RLA"), which gives jurisdiction over retail leases matters from 1 March 1999, to this Tribunal. The relevant sections are, therefore, as follows; "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 from an original decision, unless the enactment under the Tribunal has jurisdiction to make the decision providing 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 cost of or incidental to the application." And under the RLA: "77A Tribunal may award costs The Tribunal may award costs under section 88 of the Administrative Decisions Act 1997 in respect of proceedings commenced by an application made under this part." 10 By s77A of the RLA the Tribunal has jurisdiction to deal with any issues arising under the RLA. While the enabling Act clearly states that the Tribunal has such jurisdiction, nevertheless, there is a restriction on the Tribunal's power to award costs. Section 77 must be read together within the regulatory framework of the Act. This is set out in subsection 1 of s88 of the Act. In this regard costs should only be made if "special circumstances" exist. 11 In relation to "special circumstances", some guidance can be found in the growing body of jurisprudence which relate to a number of judicial decisions which have considered "special circumstances", including also "exceptional circumstances". There is, for example, in relation to the District Court Rules 1973, Part 39A, Rule 25, certain considerations to take into account in exercising an "exceptional case" discretion. This relates to penalties that apply to offers of compromise in motor vehicle accidents and the penalties that follow in relation to non-acceptance of an offer, when they come within a certain quantum range in the court's ultimate determination. 12 In relation to these motor vehicle cases, the leading cases include Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721; New South Wales Insurance Ministerial Corporation v Reeve (1993) 42, NSWLR 100; Hillier v Sheather (1995) 36 NSWLR 414; Quach v Mustafa (Court of Appeal, unreported, 15 June 1995); and Houatchanthara v Bednarczyk (Court of Appeal, unreported, 14 October 1996). From these cases the following principles can be extracted: (1) The purpose of this rule is to encourage a proper compromise of litigation, in the private interests of individual litigants and the public interest of the prompt and economical disposal of litigation: Maitland Hospital at 72506; Hillier at 421, (2) The aim is to oblige the referee to give serious thought to the risk involved in non-acceptance; Maitland Hospital at 724. (3) The prima facie consequence of non-acceptance will be that the rule being forced against the non-accepting party: Reeve at 102; Hillier at 422. This is because, from the time of non-acceptance "notionally the real cause and occasion of the litigation is the attitude adopted by [the party] which has rejected the compromise": Maitland Hospital at 724; see also Hillier at 420. (4) Lying behind the rule is the common knowledge that "litigation is inescapably chancy": Maitland Hospital at 725. For this reason the ordinary provision is expected to apply in the ordinary case: ibid; Reeve at 102-3. The mere fact that it was reasonable for the litigant to take the view that he or she did in rejecting the offer is not enough to displace the rule: Reeve at 102. As Clarke JA expressed it in Houatchanthara at page 4: "The rule lays down the general principle that should be applied and the order provided for in that rule should be only departed from the proper reasons which, in general, only arise in an exceptional case. It is clear that if the rule operates, the plaintiff will be significantly disadvantaged, but that disadvantage flows naturally from the risks of litigation. The idea behind the rule is to encourage settlement or compromise of proceedings, and more specifically, to encourage litigants to give serious consideration of the settlement of proceedings ..." (5) The discretion to displace the rule is a judicial one, requiring the private and public purposes of the rule to be borne in mind: Maitland Hospital 725-to 6. 13 For the more general principles of "special circumstances" the Tribunal has also had regard to Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 223 per Sheppard J; Australian Electoral Commission v Tourney [2] 54 SCR 383, per Foster J, at 388; R v Moffitt (1990) 20 NSWLR 114; Re Whale and Department of Community Services (1990) 13 AAR 100. 14 In Holpitt Pty Ltd v Varimu Pty Ltd &Others (1991) 103 ALR 684, the Federal Court of Australia was asked to determine whether the applicant could demonstrate "special circumstances" which would allow the court to exercise its discretion to have documents produced available for use in other proceedings. This was to be a departure from the implied undertaking not to use, nor to allow, the use of the documents in any other proceedings: "As far as the expression `special circumstances' is concerned, it is an expression which is liable to be misunderstood unless care is taken to ask and answer the question, special in relation to what? "Special", is one of the words which derive almost all their meaning from the context. In relation to animals generally, any man is special; but when you are speaking of poets, he may need to be a Milton ... In my opinion, the court's duty in an application of this kind is to consider whether the applicant has shown some circumstances which takes the matter out of the ordinary course ..." His Honour also considered the meaning of the phrase "special reasons" in Jess v Scott (1986) 12 FCR 187 70 ALR 185: "An expression "describing a flexible discretionary power but one requiring a case to be made upon grounds sufficient to justify a departure in the particular circumstances from the ordinary rule ..." (See also R v Astill (No 2) (1992) 64 ACRIMR 289)." 15 A similar approach was taken in Domest Building and Design Pty Ltd v Building Services Corporation ; Alan Douglas Bernauer v Building Services Corporation (1994) 1 NSWBLR 171. In this case the Tribunal considered the application of "special circumstances" under s56 of the Building Services Corporation Act 1989 and was required to determine what was a substantial commencement date for the making of a complaint against certain residential building work where there was a limitation period and an application out of time. 16 The Tribunal in Domest, supra at page 174 considered the context of "special circumstances" within a regulatory consumer protection regime and concluded that "circumstances which are not ordinary must exist" (see also Puccini v Director-General of Social Security (1984) 1 AAR 113. Indeed, what must be done in the whole of the circumstances must be taken into account. 17 Subsection 2 of s88 of the Act states that regard must be had to Pt 11 of the Legal Profession Act 1987 ("LPA"). The LPA Act relates to payment of costs, not only to solicitors and barristers, but also clients. 18 Of particular significance to which a cost assessor must have regard in assessing a fair and reasonable amount of costs is s208G under the LPA, which includes, inter alia, the following considerations: (a) the skill, labour and responsibility displayed on the part of the barrister or solicitor responsible for the matter; (b) the complexity, novelty or difficulty of the matter; (c) the quality of the work done and whether the level of expertise was appropriate to the nature of the work done; (d) the place where the circumstances in which the legal services were provided; (e) the time within which the work was required to be done; and (f) the outcome of the matter. 19 Taking into account the assessment of whether or not costs should be awarded in any event, one must consider the legislative framework within which an application is confined. The Act, which is a creature of comparatively recent invention, is an Act which reflects, for the most part, informality, flexibility and the opportunity for a party to present a case within an inexpensive forum. The Act also provides for opportunities of alternate dispute resolution in the coming to settlement or final conclusion of any matter. 20 The Tribunal notes that s88 of the Act in no way allows for an unfettered discretion under any circumstances in relation to costs and, indeed, the general principle that costs naturally follow the event is not applicable in relation to this Tribunal: Clark v Building Services Corporation (1991) ASC 56-101. In any event, in the exercise of the discretion such as it is, the discretion must be exercised honestly and with the spirit of the particular provision and "according to the rules of reason and justice, not private opinion": Lee v Bude Railway Company (1871) LR 6CP 576. 21 Nevertheless, in coming to a conclusion, and in assessing the "special circumstances" of this particular case and in considering those aspects of Part 11 of the LPA relevant to the present events, one must take into account all the circumstances. For example, one must ask what were the issues? In relation to this case the issues were never articulated, the directions never having been complied with by the applicant. Consequently, no preparation or reply needed to be undertaken by the respondent. 22 In relation to complexity, therefore, the Tribunal cannot make any conclusion as it is unaware of the issues to be specifically determined. It follows, therefore, that quality of preparation work undertaken by the respondent's solicitor is irrelevant. Another consideration is the time that has been expended by the respondent's solicitor in relation to the matter. The Tribunal notes there have been, including today, some four appearances by the respondent's solicitor lasting no longer than ten to twenty minutes per appearance. Such appearances do not take this application out of the ordinary course of events as it is not unusual to have a number of directions hearings before a matter proceeds to substantive hearing. 23 As already indicated, the Tribunal can come to no conclusion as to the probable success or failure of the matter, it never having proceeded beyond the point of directions hearings. 24 The other aspect of this matter is that although there is an agent/solicitor present today representing the applicant, the applicant has been on each appearance before the Tribunal, an unrepresented litigant. 25 The respondent has, in relation to its application to costs, given the Tribunal some three letters and four file notes of telephone conversations. The telephone notes and letters for the most part are addressed to a real estate agent. The Tribunal does not see how these letters assist the respondent in this application as they do not relate to any matter now before the Tribunal. Indeed, it cannot be said that any expertise or skill on the part of the respondent has been displayed to any degree in either preparation of the matter or advocacy ability. 26 Among the orders made on the last occasion there was included the following: that submissions were to be filed and served in relation to "special circumstances" and that copies of authorities were to be filed with Tribunal by 6 October 1999. No submissions and no authorities were filed by either party except for a photocopy of one sheet of paper from the Government Gazette, tendered by the respondent, which indicates that the Retail Leases Amendment Act 1998 came into effect as of 1 March 1999. The Tribunal is unimpressed by the lack of assistance and responsibility displayed by the legal representatives of both parties. 27 Despite the absence of arguments, submissions or any authorities, the respondent presses that "special circumstances", have been made out because of his attendances, the letters and file notes. He concludes on these bases the Tribunal ought to award costs. 28 Under all the circumstances and following the principles set out earlier in this decision and the foregoing authorities, and in the absence of any submissions, arguments and evidence to the contrary, the Tribunal finds that this is not a case which justifies an award of costs, as the Tribunal is not satisfied that any aspect of "special circumstances" have been made out. 29 The applicant has also made an application today that the matter be "reinstated". No submissions have been made in relation to this matter and, indeed, the Tribunal is unsure what the applicant means by "reinstated." Nevertheless, the Tribunal invites the applicant to make his application in an appropriate form before the Tribunal. DETERMINATION AND ORDERS: 30 1. No order as to costs.