CITATION: Savona v Chapple (No 2) [2010] NSWADT 235 DIVISION: Retail Leases Division APPLICANT Paul Savona and Suzanna Gizella Savona PARTIES: RESPONDENT Colin George Chapple and Pauline Chapple FILE NUMBER: 095102 HEARING DATES: On the papers DATE OF DECISION: 5 October 2010 BEFORE: Rickards K - Judicial Member CATCHWORDS: Costs LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994 CASES CITED: O'Neill–v-Henry (No.2) [2010]NSWADTAP 54 APPLICANT K Pearce, solicitor REPRESENTATION: RESPONDENT In person ORDERS: 1. The Respondents are to pay 80% of the Applicants' costs as are agreed or assessed REASONS FOR DECISION 1 In the original decision made in these proceedings on 30 July 2010, orders were made that the Respondents were to pay the sum of $46,696.36 to the Applicants and that there would be no order as to costs unless the Applicants filed and served submissions in support of an application for costs. In the event that such submissions were filed and served, the Respondents were given 21 days in which to file and serve any submissions in response. 2 Very short submissions as to costs were filed and served by the Applicants on 4 August 2010. The Respondents have not provided any submissions in response. 3 The Applicants contend that costs should be awarded in their favour because:- a)The Respondents failed to follow directions of the Tribunal as to filing and service of documentary evidence. b)The Respondents conducted the hearing in such a way that time and costs were wasted. c)The Respondents misled the Applicants and the Tribunal in asserting that their partnership had ceased to trade as at 1 July 2007, when in fact this was shown not to be the case. d)The Respondents failed to participate in mediation prior to commencement of proceedings. 4 Of course, the above assertions are unanswered. What does emerge from a review of the evidence and the reasons for the decision, is that a major plank of the Respondents' position was their contention that they were not personally obliged to pay or do anything pursuant to the subject retail lease agreement because they had subsequently incorporated a company as and from 1 July 2007. Further, the Respondents argued that a significant proportion of the items left by them at the premises were of such commercial value or utility to the Applicants that the Respondents should be relieved of their contractual obligation to return the premises to the Applicants at the expiration of the lease in a clean state and clear of fixtures, fittings or other items. 5 These contentions made by the Respondents were clearly untenable in fact or law. 6 Section 88 of the Administrative Decisions Tribunal Act sets out a number of factors which may be taken into account by the Tribunal in deciding whether it is "fair" to make a costs order in favour of one party, rather than follow the usual course that each party bears its own costs. The relative strengths of the claims made by each of the parties, and the conduct of the parties during the course of the proceedings, are contained amongst the factors which may be considered. Furthermore, section 88(1A)(e) enables the Tribunal to consider any other relevant matter in determining whether it is "fair" to make a costs order. This provision allows the Tribunal to take into account the commerciality of the proceedings and the relationship between the parties and also gives wide discretion to the Tribunal to consider not only events occurring during the course of litigation but also events which have preceded the commencement of litigation. 7 The Applicants point to the fact that the Respondents failed to participate in mediation. There is no apparent explanation for this failure. Pursuant to section 68(1) of the Retail Leases Act 1994, a dispute can only proceed in the Tribunal if the Registrar has certified that mediation has failed to resolve the matter or if the Tribunal is "otherwise satisfied that mediation ... is unlikely to resolve the dispute or matter". Section 68(2) provides that one of the grounds for issuing a certificate is that a party has refused to take part in, or has withdrawn from mediation. In these circumstances, the comments of the Appeal Panel in O'Neill v Henry (No 2) RLD [2010] NSWADTAP54 are appropriate: "[9] Section 88 of the ADT Act sets out several considerations that may be taken into account in deciding whether it is "fair" to override the ordinary rule that each party bear its own costs and make a costs order. They give emphasis to the importance of fair conduct of litigation. The ADT Act provisions do not focus so much on the events that precede the commencement of litigation. The Court of Appeal in Cripps gave weight to those events. We agree with the Appellant's submissions that the pre-litigation events are relevant to this case. The Respondent behaved in a way that ignored the central place of mediation in the resolution of retail lease disputes, and in effect forced the appellant to litigate." 8 The Applicants failed in their claim for payment for costs of repainting the premises and for repairing windows which had been damaged. The Respondents had argued in a general way that the painting costs were excessive, and that they were not responsible for the repair to windows because the damage had been caused by the Applicants' lawn mowing activities outside the premises. The Respondents' arguments, which in general outline were that the Respondents were not personally liable for any unpaid rent or expenses for the removal of rubbish and fittings from the premises because they had notified the Applicants that they had chosen to incorporate, were clearly untenable, as I have outlined above. While a degree of latitude should be allowed to the self-represented Respondents when considering the unusually long time spent in hearing these proceedings, a significant amount of time was wasted by the way in which the Respondents' case was conducted which included a degree of irrelevant questioning and tendering of evidence, as well as submissions which lacked merit. 9 The Applicants have succeeded with the majority of their claim, and were ready and willing to undertake mediation prior to the commencement of these proceedings. The Respondents did not participate in mediation for reasons which are not known, and conducted a largely unmeritorious response to the Applicants' claims, occupying an excessive amount of hearing time. In the circumstances, it is fair to make an award of costs in favour of the Applicants, but to reduce same to reflect the failure of their claims for repainting of the premises and for repair of windows. An appropriate discount is 20%, given the totality of factors outlined above and the proportion of the Applicants' claim which did not succeed. ORDERS The Respondents are to pay 80% of the Applicants' costs as are agreed or assessed. 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.