Appeal Panel - Internal CITATION: Singh v Solomon & Ors (No 2) (RLD) [2005] NSWADTAP 58 APPELLANT PARTIES: Raghubir Singh RESPONDENT Isaac Solomon, Sarah Cooper and Elizabeth Oxman FILE NUMBER: 049050 HEARING DATES: On the papers SUBMISSIONS CLOSED: 10/21/2005 DATE OF DECISION: 11/15/2005 Solomon & Ors v Singh & Anor [2004] NSWADT 264 DECISION UNDER APPEAL: BEFORE: Chesterman M - ADCJ (Deputy President); Boyce P - Judicial Member; Weule B - Non Judicial Member CATCHWORDS: costs MATTER FOR DECISION: Costs FILE NUMBER UNDER APPEAL: 035094 DATE OF DECISION UNDER APPEAL: 11/18/2004 LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994 Calderbank v Calderbank [1975] 3 All ER 333 Gizah Pty Ltd v AXA Trustees Ltd (No. 2) [2001] NSWADT 164 CASES CITED: Singh v Solomon & Ors (RLD) [2005] NSWADTAP 27 Solomon & Ors v Singh & Anor [2004] NSWADT 264 Sotiropoulos v Mattana Coiffure Pty Ltd (No 2) (RLD) [2004] NSWADTAP 43 APPELLANT REPRESENTATION: W A Boulton, solicitor RESPONDENT S Bell, barrister ORDERS: The costs of this appeal (including the costs of this application) are to be determined at an appropriate time by the Tribunal, along with the other matters remitted to it by Order No. 3 in our decision of 16 June 2005. REASONS FOR DECISION The events leading up to this costs application 1 This decision deals with a costs application made by the Respondents to an unsuccessful appeal. 2 The Respondents, Isaac Solomon, Sarah Cooper and Elizabeth Oxman, were the lessors of retail premises at Eagle Vale under a lease governed by the Retail Leases Act 1994. They instituted proceedings as Applicants in the Tribunal against two guarantors, claiming money due to them under a deed of guarantee covering the obligations of the two lessees under the lease. The lessees had defaulted in the payment of rent. 3 The Respondents subsequently settled the proceedings against one of the guarantors, Dr Suman Sood, releasing her from all claims arising under the deed so long as she made monthly payments of specified amounts to them. They continued the proceedings against the present Appellant, Dr Raghubir Singh, who was the other guarantor. 4 The sole substantive question arising for determination in this appeal was whether the Tribunal was correct in deciding that the deed of guarantee, properly interpreted, excluded the normal rule of law that a release granted to one co-guarantor has the effect of extinguishing the liability of other co-guarantors. 5 The Tribunal, constituted by Ms S Higgins, Judicial Member, had reached this conclusion in a judgment delivered on 18 November 2004 (Solomon & Ors v Singh & Anor [2004] NSWADT 264). It accordingly rejected an application by the Appellant for the proceedings against him to be dismissed on account of the release of Dr Sood. 6 In a decision delivered on 16 June 2005 (Singh v Solomon & Ors (RLD) [2005] NSWADTAP 27), we dismissed the appeal and remitted the proceedings to the Tribunal, constituted by Ms Higgins, for determination in accordance with our reasons. 7 We also made the following order:- Unless an application, with supporting submissions, is filed and served within 28 days, there will be no order for the costs of the appeal. If any such application is made, submissions by the opposing party must be filed and served within a further 28 days. The matter will be resolved 'on the papers', unless reasons are advanced for holding a hearing. 8 On 14 July 2005, the Respondents filed an application, with supporting submissions, for an order that their costs in the appeal proceedings should be Applicants' costs in the cause in the continuing Tribunal proceedings. 9 It appears that the Appellant's solicitors did not receive a copy of this application and supporting submissions until the Registry contacted them on 7 October 2005, sent them a copy and advised them that any submissions in response should be filed within 14 days. 10 The Appellants' submissions on the issue of costs were duly filed on 21 October 2005. Principles governing costs 11 If costs are to be awarded in relation to the appeal, the requirement of 'special circumstances warranting an award of costs' set out in s 88(1) of the Administrative Decisions Tribunal Act 1997 must be satisfied. Section 77A of the Retail Leases Act makes this provision applicable in retail tenancy proceedings conducted in the Tribunal. 12 According to the case-law on s 88(1) in its application to proceedings under the Retail Leases Act, (see eg Gizah Pty Ltd v AXA Trustees Ltd (No. 2) [2001] NSWADT 164 and Sotiropoulos v Mattana Coiffure Pty Ltd (No 2) (RLD) [2004] NSWADTAP 43), this requirement of 'special circumstances' applies both to decisions made by the Tribunal at first instance and to Appeal Panel decisions. 'Special circumstances' have been defined as 'circumstances that are out of the ordinary, but without having to be extraordinary or exceptional'. It is not enough that the circumstances are 'special': they must also 'warrant' an order for costs. They may include factors connected with the nature of Appeal Panel proceedings. On account of the 'commerciality' of the Retail Leases Division, the interpretation of 'special circumstances' differs significantly from the interpretation that might be adopted in any other Division of the Tribunal. 13 Amongst the various types of situation that have been held to constitute 'special circumstances' in retail leases cases, one is of direct relevance to this case. This where (a) the successful party in the proceedings has made an offer of compromise of the dispute before the conclusion of the proceedings; (b) the unsuccessful party has unreasonably rejected the offer; and (c) the terms of the offer were more favourable to the unsuccessful party than the orders made by the Tribunal. The Tribunal has held this situation to constitute 'special circumstances warranting an award of costs' by way of analogy with costs rules in the Supreme and District Courts and the principles laid down in Calderbank v Calderbank [1975] 3 All ER 333. The Respondents' contentions 14 The Respondents annexed to their submissions a copy of a letter written by them on 24 May 2004 to the Appellant's solicitors and to Dr Sood. It was headed 'Without Prejudice Save as to Costs' and conveyed an offer by the Respondents to settle the proceedings on payment by the Appellant and Dr Sood of a stipulated sum. It stated that this offer was based on the principles of Calderbank v Calderbank, that it would be relied on with respect to costs and that it remained open for acceptance until a specified date and time. 15 Although the Respondents' submissions did not state this explicitly, it was implicit that this offer was not accepted. 16 The Respondents pointed out that when the proceedings which we have remitted to the Tribunal are finally determined, they might make well an application for costs relying, in part at least, on this offer based on Calderbank principles. They contended that if any such application was granted, the costs order in their favour should include their costs of the appeal, since in the appeal they had been the successful parties. 17 As stated above, the order that they requested in this application to us was that their costs in the appeal proceedings should be Applicants' costs in the cause in the continuing Tribunal proceedings. Our decision 18 We agree with the Appellant, however, that it would be premature to make any costs order in favour of the Respondents based on the rejected offer of settlement. As the Appellant's submissions pointed out, this offer was for settlement of the whole proceedings, not of the first instance and appellate hearings in which the preliminary issues outlined above have been resolved. 19 Furthermore, the Respondents did not advance any evidence or argument to support a finding that the rejection of this offer was unreasonable. As we said above at [13], this is a recognised ingredient of any claim that 'special circumstances' exist by virtue of rejection of an offer of settlement. 20 We have some sympathy, however, for the Respondents' contention that if (a) they are ultimately successful against the Appellant in the proceedings as a whole and (b) they can establish 'special circumstances' warranting an order in their favour of the costs of the proceedings, it might well be appropriate to include in such an order the costs of the appeal, in which they were the successful parties. 21 We would add that if, on the other hand, the Appellant proved successful both in the proceedings and in an application for a costs order, it is not impossible (though it is unlikely) that even though he failed in the appeal he might have a legitimate basis for claiming that the costs of the appeal should be included in this order. 22 To deal with these possibilities, our decision is that the issue of the costs of this appeal (including the costs of the application now before us) should be determined by the Tribunal, along with the other matters remitted to it by our decision of 16 June 2005. We make an order to this effect. 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.