Appeal Panel - Internal CITATION: Skiwing Pty Ltd v Trust Company Ltd (RLD) [2010] NSWADTAP 73 APPELLANT Skiwing Pty Ltd PARTIES: RESPONDENT Trust Company Ltd FILE NUMBER: 109023 HEARING DATES: 17 August 2010 SUBMISSIONS CLOSED: 17 August 2010 DATE OF DECISION: 10 November 2010 BEFORE: Chesterman M - Deputy President; Rickards K - Judicial Member; Griffiths G - Non-Judicial Member CATCHWORDS: Retail Leases Act 1994 – retail shopping centre – outgoings – whether reasonably and properly incurred – calculation of lessee's contributions Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Retail Leases Act 1994 Retail Shop Leases Act 1994 (Qld)Trade Practices Act 1974 (Cth) Davies v Lyndhurst Developments Pty Ltd [2001] NSWADT 9 Fluor Daniel Properties Ltd v Shortlands Investments Ltd [2001] 2 EGLR 103 Nicholls and Nicholls v Director General, Department of Education (No 2) [2009] NSWADTAP 20 O'Sullivan v Medical Council of NSW [2010] NSWADTAP 64 CASES CITED: Scudamore v Perpetual Trustee Australia Ltd (Unreported, Retail Shop Lease Tribunal, Queensland, Decision A/96, 1 March 1996) Skiwing Pty Ltd v Trust Company of Australia Ltd [2004] NSWADT 169 Skiwing Pty Ltd v Trust Company of Australia Ltd [2010] NSWADT 64 Skiwing Pty Ltd v Trust Company of Australia Ltd (No 3) [2004] NSWADT 94 Skiwing Pty Ltd v Trust Company of Australia (trading as Stockland Property Management) [2006] NSWCA 276 Telstra Corporation Ltd v Australian Competition and Consumer Commission [2008] FCA 1436Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 68 NSWLR 366; [2006] NSWCA 387 APPELLANT Z Stojanoski, agent REPRESENTATION: RESPONDENT M Allars, barrister ORDERS: 1 The appeal is dismissed 2 (a) Unless within 21 days of the date of this decision the Appellant files and serves submissions arguing to the contrary, it should then be required to pay the Respondent's costs of the appeal, as agreed or assessed.(b) If the Appellant files and serves such submissions within the stipulated period of 21 days, the Respondent is to file and serve within a further 21 days its submissions in support of its application for costs. (c) The question of costs will in that event be determined 'on the papers', pursuant to section 76 of the Administrative Decisions Tribunal Act 1997. REASONS FOR DECISION Introduction 1 Between 2000 and 2005, the Appellant, Skiwing Pty Ltd ('Skiwing'), occupied premises in a retail shopping centre as the lessee under a retail shop lease ('the Lease') stipulated to run for seven years commencing on 1 May 2000. The lessor and owner of the building containing the shopping centre was the Respondent, Trust Company of Australia Ltd ('the Trust Company'). It now bears the name Trust Company Ltd. 2 Skiwing operated a café, called Café Tiffany, in the premises. The shopping centre was called the Stockland Imperial Arcade ('the Arcade'). The building in which it was located also contained premises that were subject to commercial leases. 3 Skiwing's appeal is against a decision of the Tribunal (Skiwing Pty Ltd v Trust Company of Australia Ltd [2010] NSWADT 64 – hereafter 'the decision under appeal') dismissing an application that it made initially in 2004. This application was for a refund of contributions that it had made towards the outgoings incurred by the Trust Company with respect to the retail shops in the Arcade during the financial years 2000 to 2005. The Trust Company filed a cross application seeking contributions to outgoings and promotion levies that it claimed to be due but unpaid by Skiwing. 4 In circumstances outlined in paragraph [6 – 8] of the decision under appeal, Skiwing's application and the Trust Company's cross application were the subject of two decisions by the Tribunal (in 2004 and 2005), two decisions by an Appeal Panel (both in 2005) and a decision of the Court of Appeal. 5 It is sufficient to note at this stage the following aspects of these decisions:- 1. In what we will call 'the Tribunal's first decision' ( Skiwing Pty Ltd v Trust Company of Australia Ltd [2004] NSWADT 169), the Tribunal allowed the cross application by the Trust Company and dismissed Skiwing's application. 2. The outcome of the Tribunal's second decision and the two decisions by the Appeal Panel was however that Skiwing was held to be liable to pay outgoings only within six specified categories. The Appeal Panel's decision to set aside the orders made in the Tribunal's first decision stemmed from a ruling by it that the other categories of outgoing for which the Trust Company claimed contributions were properly categorised as 'services' within section 12 of the Retail Leases Act 1994 ('the RL Act'). The Panel held that because the Trust Company had not disclosed the costs of these categories of outgoing in any lessor's disclosure statement given to Skiwing before the Lease commenced, section 12 precluded it from claiming any contribution to those costs. 3. The Trust Company appealed to the Court of Appeal against the Appeal Panel's second decision. Skiwing cross-appealed. 4. In its decision ( Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 68 NSWLR 366; [2006] NSWCA 387), the Court held that the Appeal Panel had attributed an incorrect meaning to the term 'services' in section 12 and that Trust Company was entitled under the Lease and the RL Act to recover contributions with respect to every category of outgoings for which it had claimed contributions. 5. The Court of Appeal held also that the Tribunal and the Appeal Panel had erred in ruling that the Lease contained no requirement that the outgoings in respect of which the Trust Company claimed contributions must be 'reasonable'. The Court based this conclusion on the wording of a clause (clause 1.16) in the Lease and on sections 7 and 29(b) of the RL Act. Basten JA, delivering the principal judgment, stated at [65] that 'Skiwing was correct to say that its ultimate obligation with respect to outgoings was to make contribution only in relation to those "properly and reasonably incurred"'. 6. The Court of Appeal set aside the order made by the Appeal Panel in its second decision and ordered that Skiwing's application and the Trust Company's cross application should be remitted to the Tribunal to be determined according to law. 6 The Tribunal's rehearing of the application and cross application took place on 16 – 18 March and 22 May 2009. On the final day, the Trust Company withdrew the cross application. Accordingly, the only matter to be dealt with in the decision under appeal was Skiwing's application for a refund of the contributions that it had paid. 7 The decision under appeal was delivered on 9 March 2010. The principal order made was that Skiwing's application should be dismissed. 8 Skiwing filed a Notice of Appeal on 7 April 2010. Before the appeal was heard, the parties filed written submissions. At the hearing on 17 August 2010, Mr Stojanoski appeared as agent for Skiwing and Ms Allars of counsel appeared for the Trust Company. Relevant legislation 9 Before outlining the salient features of the decision under appeal, we will set out the legislative provisions of direct relevance to this appeal. These are drawn from both the RL Act, in the form that it took between 2000 and 2005, and the Administrative Decisions Tribunal Act 1997 ('the ADT Act'). 10 Section 5(a) of the RL Act stated:- This Act does not apply to any of the following retail shops: (a) shops that have a lettable area of 1,000 square metres or more,… 11 Section 7 stated: 'This Act operates despite the provisions of a lease. A provision of a lease is void to the extent that the provision is inconsistent with a provision of this Act…' 12 Sections 22, 27, 28, 29, 30 and 78 stated, so far as relevant:- 22 Recovery of outgoings from lessee (1) The lessee under a retail shop lease is not liable to pay any amount to the lessor in respect of any outgoings except in accordance with provisions of the lease that specify: (a) the outgoings that are to be regarded as recoverable, and (b) how the amount of those outgoings will be determined and how they will be apportioned to the lessee, and (c) how those outgoings or any part of them may be recovered by the lessor from the lessee. (2) In this Part, the expression outgoings to which the lessee contributes refers to any outgoings in respect of which the lessee is liable under the lease to make any payment to the lessor. (3)… 27 Estimates and expenditure statement of outgoings to be provided by lessor 27 A retail shop lease is taken to include provision to the following effect: (a) The lessor must give the lessee a written estimate of the outgoings to which the lessee contributes under the lease, itemising those outgoings under the item descriptions used in the list of outgoings in the form of disclosure statement set out in Part 1 of the form contained in Schedule 2. (b) The estimate of outgoings must be given to the lessee in respect of each accounting period of the lessor during the term of the lease and must be given before the lease is entered into and thereafter during the term of the lease at least 1 month before the commencement of the accounting period concerned. (c) The lessor must make a written expenditure statement available for examination by the lessee detailing all expenditure by the lessor on account of outgoings to which the lessee contributes, itemising those outgoings under the item descriptions used in the list of outgoings in the form of disclosure statement set out in Part 1 of the form contained in Schedule 2. (d) The expenditure statement must be made available at least twice in each of the lessor's accounting periods during the term of the lease (once in relation to expenditure during the first 6 months of each such accounting period and once in relation to expenditure during the second 6 months of each such accounting period), and in each case must be made available within 1 month after the end of the 6 month period to which it relates. 28 Outgoings statements (1) A retail shop lease is taken to include provision to the following effect: (a) The lessor must give the lessee a written statement (an "outgoings statement") that details all expenditure by the lessor in each accounting period of the lessor during the term of the lease on account of outgoings to which the lessee is required to contribute. (b) If the shop is in a retail shopping centre, the outgoings statement must include a statement of the current gross lettable area of the shopping centre and details of any material change in that gross lettable area during the period to which the outgoings statement relates. (c) The outgoings statement is to be prepared in accordance with relevant principles and disclosure requirements of applicable accounting standards made by the Australian Accounting Standards Board, as in force from time to time. (d) ... (e) The outgoings statement is to be accompanied by a report (an "auditor's report") on the statement prepared by a registered company auditor (within the meaning of the Corporations Act 2001 of the Commonwealth). (f) The auditor's report is to include a statement by the auditor as to whether or not the outgoings statement correctly states the expenditure by the lessor during the accounting period concerned in respect of outgoings to which the lessee is required to contribute, and as to whether or not the total amount of estimated outgoings for that period (as shown in the estimate of outgoings given to the lessee) exceeded the total actual expenditure by the lessor in respect of those outgoings during that period. (g) The outgoings statement may be a composite statement (that is, it may relate to more than one lessee) so long as each lessee to which it relates is able to ascertain from the statement the information required by paragraph (a) that is relevant to that lessee. (h) The outgoings statement need not be accompanied by an auditor's report if the statement does not relate to any outgoings other than land tax, water, sewerage and drainage rates and charges, local council rates and charges, insurance and strata levies, and it is accompanied by copies of assessments, invoices, receipts or other proof of payment in respect of all expenditure by the lessor as referred to in paragraph (a). 29 Adjustment of contributions to outgoings based on actual expenditure properly and reasonably incurred A retail shop lease is taken to include provision to the following effect: (a) There is to be an adjustment between the lessor and the lessee for each accounting period of the lessor to take account of any under-payment or over-payment by the lessee in respect of outgoings in the period. .... (b) The adjustment is to be calculated on the basis of the difference between the total amount of outgoings in respect to which the lessee contributed (that is the estimated total expenditure by the lessor on outgoings during the period concerned) and the total amount actually expended by the lessor in respect of these outgoings during that period, but taking into account only expenditure properly and reasonably incurred by the lessor in payment of these outgoings. (c)… 30 Non-specific outgoings contribution limited by ratio of lettable area (1) A lessee under a retail shop lease in a retail shopping centre is not liable to contribute towards a non-specific outgoing of the lessor (that is, an outgoing not specifically referable to any particular shop in the retail shopping centre) unless the shop is one of the shops to which the outgoing is referable, and is not liable to contribute an amount in excess of an amount calculated by multiplying the total amount of that outgoing by the ratio of the lettable area of the shop to the total of the lettable areas of all the retail shops to which the outgoing is referable. (2) An outgoing is referable to a retail shop if the shop is one of the shops that enjoys or shares the benefit resulting from the outgoing. (3)… Note . This section prevents a lessee being required to make up for any shortfall in outgoings recouped by the lessor that is attributable to vacant shops or concessions allowed to other lessees. 78 Interpretation based on industry practice In the interpretation of this Act a court (as defined for the purposes of Part 8) is to have regard to accepted practices and interpretations within the industry concerning the leasing of retail shops. 13 Section 73 of the ADT Act contains the following provisions:- Procedure of the Tribunal generally (1) The Tribunal may, subject to this Act and the rules of the Tribunal, determine its own procedure. (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. (3) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. (4) …. (5) The Tribunal: (a) … (b) is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings,… 14 The provisions of Part 1 of Chapter 7 of the ADT Act, regulating what the Act calls 'internal appeals', are made applicable to Tribunal proceedings under the RL Act by section 77 of the latter Act. An important provision within Part 1 of Chapter 7 of the ADT Act is section 113. It states, in subsections (1), (2) and (2A):- 113 Right to appeal against appealable decisions of the Tribunal (1) A party to proceedings in which an appealable decision of the Tribunal is made may appeal to the Tribunal constituted by an Appeal Panel. (2) An appeal under this Part: (a) may be made on any question of law, and (b) with the leave of the Appeal Panel, may extend to a review of the merits of the appealable decision. (2A) Despite subsections (1) and (2), an appeal does not lie to an Appeal Panel of the Tribunal against the exercise of an interlocutory function (within the meaning of section 24A) by of the Tribunal except by leave of the Appeal Panel. The decision under appeal 15 The principal order made in the decision under appeal was that Skiwing's application for a refund of contributions that it had paid should be dismissed. The route taken by the Tribunal in reaching this decision was as follows. 16 At [21 – 23], it outlined the evidence on which the decision was based:- 21 For the purpose of this hearing on remittal, Mr Stojanoski, director of Skiwing, relied on evidence filed in the proceedings before the first Tribunal (e.g. the lease, affidavit of Zoran Stojanoski (filed on 10 June 2004), the affidavits of Paul Doherty, Centre Manager of the Imperial Arcade and Stuart J Marshall, Partner of KPMG (filed on 11 June 2004) and the transcript of the proceedings before the first Tribunal. 22 In her written submissions filed on 10 October 2008, Ms Allars, counsel for the Trust Company, said that the Trust Company relied on the lease, the outgoing statements for the relevant years and the statements of evidence of Gregory Preston, director of PRP Valuers and Consultants dated 20 August 2008 and Campbell Holmes a' Court, General Manager of Retail Commercial Property for Stockland, dated 2 October 2008. Subsequently, an affidavit sworn by Mr Holmes a' Court on 20 November 2008 was also filed and relied upon. Mr Preston and Mr Holmes a' Court also gave oral evidence and were cross-examined by Mr Stojanoski at the hearing. A further statement of Mr Steven Dransfield (see paragraph [13] above) was filed on 22 May 2009 and relied upon by the Trust Company. Mr Stojanoski said he did not wish to cross-examine this witness. 23 During the hearing Mr Stojanoski tendered into evidence a number of documents, including extracts from the 2000 to 2005 'Australian Construction Handbook' of Rawlingsons, Construction Cost Consultants and Quality Surveyors. The extracts were those relating to operating costs of buildings in each of the relevant years. 17 At [24], the Tribunal referred to the fact that at Skiwing's request the Tribunal had issued summonses to certain persons to produce documents but 'limited, if any' documents were produced in response. 18 The Tribunal then discussed the question whether, and if so in what circumstances, it might be necessary to go behind the outgoings statements and the auditor's report required by section 28 of the RL Act in order to determine whether the outgoings in respect of which a lessor claimed contributions were 'reasonably and properly incurred' as required by section 29(b). It quoted or referred to a number of passages in the Court of Appeal's judgment and in the first decisions of the Tribunal and of the Appeal Panel. 19 In particular, the Tribunal pointed out at [27] that the Court of Appeal, having noted in its judgment at [54] that the powers conferred by section 73 of the ADT Act 1997 were broad and discretionary and imposed 'few constraints', went on to say at [58] that these powers did not ... impose on the Tribunal an obligation to put another party to the expense of obtaining evidence to support an applicant's case, if not persuaded that there is a substantial basis for so doing. As the Tribunal recognised, there is a need to measure cost against likely benefit, in order to ensure that investigative powers are not used oppressively. 20 Paragraph [28] of the decision under appeal is as follows:- As I have already mentioned, in this application, Skiwing, was provided with audited outgoing statements that were accompanied with a report of the auditor. The procedure adopted by the Tribunal in its first decision was to call for the auditor, Mr Marshall a partner of KPMG, to attend the hearing and give oral evidence answering questions from both the Tribunal and the applicant, Skiwing. To go behind the audited statements and auditor's reports and scrutinise all expenses, the Tribunal explained would be 'out of all proportion given that Skiwing share is 2.3% such that even a 10% error in the total outgoings, which is not at all likely, would result in only a small increase to Skiwing': see at [26] of the decision of the first Tribunal. The Court of Appeal cited this reasoning at [46] in its decision. Implicit in the abovementioned remarks of the Court is that this was an inappropriate procedure to adopt, depending on the circumstances of each case. 21 At [29 – 32], the Tribunal pointed out that in Davies v Lyndhurst Developments Pty Ltd [2001] NSWADT 9 a lessor had been ordered to make 'all dockets and records' available to the lessee, but expressed the opinion that because there was an issue as to whether any audited outgoings statement had been prepared the case may well have fell within section 28(1)(h) of the RL Act. 22 The Tribunal summed up its conclusions on these aspects of the case at [33] and [35 – 36]:- 33 In my opinion the legislative intent to be inferred from the requirements as set out in sections 27 and 28 of the RLA, is that where a lessor has complied with the requirements of section 27 and then provided the lessee with an audited outgoings statement, prepared by an independent auditor in accordance with paragraphs 28(1)(e) and (f) of the RLA, that audited statement should be presumed to be a correct statement of all outgoing expenses 'properly and reasonably incurred' by the lessor for the relevant year. It is of course a presumption that can be rebutted, but the onus is on the lessee to establish, on objective material, a reasonable basis for the Tribunal to go behind an audited outgoings statement in whole or in part. In this application, Skiwing bore that onus. 35 For the purpose of these proceedings, as I have mentioned, on application by Skiwing the Tribunal issued a number of summonses. These having failed to result in production of documents Skiwing had hoped would support its contentions the question remained whether the Tribunal should exercise its discretion and direct the Trust Company to produce all documents that underlay the outgoing statements for the relevant years: see subsection 73(3) and paragraph 73(5)(b) of the Administrative Decisions Tribunal Act 1997. 36 In my opinion, having regard to the legislative intent of the outgoing provisions in the RLA, in particular paragraphs 28(1)(e) and (f), and the requirements of section 73 of the Administrative Decisions Tribunal Act 1997 a direction of this nature was inappropriate. In the absence of Skiwing establishing, on reasonable grounds, a basis to go behind the audited outgoing statements, there was no justification in requiring the Trust Company to provide this documentation. As pointed out by the Tribunal in its first decision any scrutiny of the invoices etc that underlay the audited outgoing statements would be costly, time consuming and of limited benefit to the matters in issue. 23 In the decision under appeal at [38 – 42], the Tribunal then discussed the terms 'properly' and 'reasonably'. It pointed out that they were not defined in the RL Act, referred to two dictionary definition, cited two English cases dealing with the meaning of an implied contractual term that a lessor could only recover outgoings that were 'reasonable' and concluded by stating, at [42], that 'the test as to whether an item of outgoing fails to meet the requirement of 'properly and reasonably' incurred is a question of fact that must be objectively assessed'. 24 The Tribunal then made the following observations at [43 – 45] regarding the evidence of Mr Marshall, who had audited the outgoings statements:- 43 It was the evidence of Mr Marshall that the audits of the Trust Company's outgoings were conducted in accordance with the Australian Auditing Standards. In conducting the audit it was acknowledged that the auditor did not review 100% of all expenditure in carrying out the audit. His approach relied on the 'testing of internal controls over the preparation of budgets, approval of expenditure and review of actual costs compared with budget' and selecting a sample of transactions to 'verify the effectiveness of the internal control procedure': see attachment B to the affidavit of Mr Dransfield. In the absence of any objection I have assumed this to reflect what is required under the Australian Auditing Standards. 44 In this application each report of the auditor that accompanied the audited outgoing statement for the relevant year contained a statement as to the auditor's opinion. That statement was to the following effect: 'In our opinion the attached Schedule presents fairly the recoverable outgoings, amounting to $ [the total amount expended for the year], of Stockland Imperial Arcade Retail Centre for the year ended [year].' 45 I accept this stated opinion to be reflective of the auditor having formed the view, from the material he/she received and examined, that the amounts identified in the outgoings statement of that year, were all recoverable outings of the Trust Company and they were expenditures that were 'properly and reasonably incurred'. 25 The Tribunal then stated:- 46 This does not mean that Skiwing is prevented from challenging these amounts in whole or in part. However, as I have said, the onus is on Skiwing to establish its claim and in doing so it must place material before the Tribunal which puts into question the conclusion reached by the auditor that an expense as itemised in the outgoings statement is properly and reasonably incurred. That material cannot be based on personal feelings – it must be material of an objective nature. 26 The Tribunal then referred to evidence from Mr Preston, a consultant engaged by the Trust Company, that the rate of outgoings per square metre being charged by it to its lessees was below benchmarks published by the Property Council of Australia, and to different benchmarks that Mr Stojanoski, when cross-examining Mr Preston, had quoted from Rawlinsons 2006 Australian Construction Handbook. The Tribunal commented at [49] that these benchmarks provided little assistance because they 'vary depending on the purpose for which they are prepared'. 27 The Tribunal then stated at [50]:- 50 It is noted that the total amounts of outgoings for the relevant years ranged between $1.5 and $1.9 million. As I have mentioned, of these Skiwing was required to a proportion that equated with the ratio of the lettable are of its leased premises to that of the entire retail lettable area in the Arcade. In a handwritten document Mr Stojanoski tendered into evidence he stated that Skiwing's contribution to outgoings was 2.29%. This was not disputed and there was no issue about Skiwing's portion of contribution to the outgoings having been calculated incorrectly. 28 The Tribunal then dealt, at paragraphs [52] to [92] and [96], with the expenditures within a number of categories of outgoings about which Skiwing had raised particular objections. It is convenient for us to describe this segment of the decision under appeal when discussing the parties' submissions that relate specifically to each of these categories. 29 The remaining matter discussed in the decision under appeal (at [93 – 95]) was a claim by Skiwing based on the fact that some of the leases of retail shops in the Arcade did not require the lessee to contribute towards outgoings. Skiwing argued that the total amount of outgoings to which it should have been treated as liable to contribute its agreed proportion (2.29%) should have excluded the outgoings referable to these leases. This would have had the effect of reducing its liability. 30 The Tribunal, referring to section 30 of the RL Act, rejected this argument. It said, at [95]:- 95 The fact that the Trust Company may have entered leases, which did not provide for contributions to outgoings was a matter entirely for the Trust Company. The amount that the Trust Company paid in outgoings nevertheless remained the same. Skiwing's lease required it to contribute to these outgoings and section 30 of the RLA limited the proportion it was required to pay. If the Trust Company does not receive any contribution from those lessees who are not required to contribute to outgoings then, that portion of the costs these lessees would have paid (i.e. the lettable area percentage of these leased premises to use Mr Stojanoski's word), will need to be met by the Trust Company. 31 At [97], the Tribunal held that because Skiwing had failed to establish its claim for a refund of the outgoings it paid, pursuant to its lease, during the years 2000 to 2005, the appropriate order was to dismiss its application. 32 We will now deal in turn with each of the matters raised in the appeal, outlining the parties' submissions and explaining how we think the matter should be resolved. The nature of internal appeals under the ADT Act 33 As stated above at [13], the provisions governing this appeal include section 113 of the ADT Act. The effect of subsection (2) of that section is that while appeals may be brought as of right on questions of law, it is only with the leave of the Appeal Panel, granted under section 113(2)(b), that an appeal may extend to a review of the merits of the appealable decision. 34 A consistent theme in the submissions made by Ms Allars on behalf of the Trust Company was that many of the questions raised by Mr Stojanoski on behalf of Skiwing were only questions of fact and accordingly could not be the subject of appeal unless we granted leave under section 113(2)(b). She argued that the criteria established in the case law for granting such leave were not satisfied even if we did discern some factual errors in the decision under appeal, because (as she expressed it in her written submissions) the Appeal Panel was 'not intended to provide a second trial level of the Tribunal'. 35 In its Notice of Appeal, Skiwing applied for leave for the appeal to extend to the merits. In his submissions, Mr Stojanoski argued that leave should indeed be granted on the ground that the decision under appeal contained factual errors and omissions. He relied, as did Ms Allars, on the Appeal Panel's decision in Nicholls and Nicholls v Director General, Department of Education (No 2) [2009] NSWADTAP 20. 36 In that decision at [71], the Appeal Panel made the following observations about the granting of leave under section 113(2)(b):- 71… Mr and Ms Nicholls [the appellants] also applied for leave for the appeal to be extended to the merits of the Tribunal's entire decision because of alleged factual errors and omissions they said the Tribunal had made. In making this application, there is no need for the Nicholls to first identify an error of law: Lloyd v Veterinary Surgeons Investigating Committee [2005] NSWCA 456. The ADT Act provides no guidance as to the circumstances in which the Appeal Panel should grant leave. In Lloyd v TCN Channel Nine Pty Ltd & Anor [1999] NSWADTAP 3 the Appeal Panel gave some examples of where it may be appropriate to do so. At [151] the Tribunal said that where 'an appellant could point to some blatant and important error of fact which called for remedy by an Appeal Panel in the interests of justice', or where the appeal 'could be shortly and conveniently disposed of by turning directly to the merits of the decision under appeal, without having to address the frustrating technical distinction between error of fact and error of law' it may be appropriate to give leave. Further guidance can be found in the decision of K v K [2000] NSWSC 1052 where Young J at [15] said that where a tribunal has gone about the fact-finding process in 'such an unorthodox manner or in a way which is likely to produce an unfair result' it may be in the interests of justice for the appellate body to review those findings. 37 In O'Sullivan v Medical Council of NSW [2010] NSWADTAP 64 at [24], the Appeal Panel made these further comments about grants of leave under section 113(2)(b):- 24 … The onus of proof lies on the party applying for leave and the standard of proof is on the balance of probabilities: World Best Holdings Ltd v Sarker & Anor [2004] NSWSC 935 at [25] per Sully J. The discretion is open and unfettered but must be exercised in a fair and just manner having regard to the purpose of the relevant legislation: Jones v Ekermawi [2009] NSWSC 143 at [13]. Certain inferences can be drawn from the fact that leave is required. They include the fact that the need for leave is a 'control filter' designed, among other things, to protect respondents from the cost of a full hearing of appeals which should not properly be entertained: World Best Holdings Ltd v Sarker & Anor , per Sully J at [25]… However, "merely to suggest that there is a bona fide challenge to a decision of fact is not enough to require the Appeal Panel to grant leave to appeal": Abdul-Karim v the Council of the New South Wales Bar Association [2005] NSWCA 93 at [34] per Mason P (Ipp JA and Hunt AJA agreeing). 38 These authorities make it clear that if we were to conclude that the decision under appeal did or might contain one or more errors of fact, that would not of itself provide grounds for granting leave to extend the appeal to the merits. Granting such leave would only be justified if the errors identified were so significant and so 'blatant' that it would be unjust to let the decision stand, or were serious for other comparable reasons. 39 We would add that the Court of Appeal, in a decision forming part of other proceedings between Skiwing and the Trust Company arising out of the Lease, has made it clear that the appellant in an internal appeal cannot establish that the Tribunal has committed an error of law (so as to bring this part of the appeal under section 113(2)(a)) merely by showing that it has made a finding of fact that is contrary to the weight of the evidence. In Skiwing Pty Ltd v Trust Company of Australia (trading as Stockland Property Management) [2006] NSWCA 276, the Court held that only if there is no evidence, or more accurately no 'probative' evidence, to support such a finding will the error be treated as one of law. The Court stated that 'even perverse findings of fact do not give rise to a "question of law" under a statutory formulation limiting an appeal to such questions' (see the judgment of Spigelman CJ at [52]) and that equally it was not sufficient that there was no 'evidence of significance' (see [55]). The evidence admitted regarding the outgoings claimed to have been incurred 40 Mr Stojanoski maintained that the Tribunal failed to adopt appropriate measures for ensuring that the Trust Company furnished all the evidence necessary for determining (a) whether or not all the outgoings that it claimed to have incurred were in fact incurred and (b) whether or not the outgoings incurred were 'properly and reasonably' incurred. 41 In support of these allegations, Mr Stojanoski referred to the following sequence of events:- 1. On 28 November 2008, the Tribunal, at Skiwing's request, issued a summons to Mr Holmes a' Court requiring him to produce documents for different years between 2000 and 2005, relating to (a) the expenses of different kinds incurred by the Trust Company with respect to both the Arcade and the building in which it was situated; (b) the floor areas of all the shops in the Arcade whose lease did not require contributions to outgoings; and (c) the gross rent collected from all the lessees, retail or commercial, within the building. 2. As indicated in the decision under appeal at [24], only 'limited, if any' documents were produced in response to this and other summonses issued by the Tribunal at Skiwing's request. 3. On 18 March 2009, which was the third day of the hearing, the Tribunal directed that on or before 3 April 2009 the Trust Company should file and serve (a) a schedule showing the amount that it then claimed from Skiwing; (b) evidence of break-up costs of repairs, maintenance and air-conditioning for 1999-2001; (c) evidence of break-up costs of insurance for 2001-2005; (d) evidence of the total lettable area for which outgoings were not levied together with the total rent paid by the tenants in regard to these areas for 2000-2005. 4. It would appear that the Trust Company complied with these directions, though not until a date on or about 13 May 2009. This prompted claims by Skiwing, in letters dated 11 and 12 May 2009 to the Registry, that its excuses for this lateness were unconvincing and that it had deliberately failed to comply with the timetable set by the Tribunal. In addition, Mr Stojanoski asserted in his submissions that the Trust Company failed to produce documents relating to item (d) in the foregoing list, even though the testimony of one of its officers at the first Tribunal hearing demonstrated that these documents were readily available to it. 5. As indicated in the decision under appeal at [35 – 36], the Tribunal was not prepared to direct the Trust Company to produce 'all documents that underlay the outgoing statements for the relevant years'. Nor, according to Mr Stojanoski's submissions, was it prepared to compel the Trust Company to comply with the direction relating to item (d). 42 Mr Stojanoski argued that the Tribunal was obliged to direct that all documents relating to the claimed outgoings should be produced and that its failure to give such a direction denied procedural fairness to Skiwing. He emphasised that section 73(5)(b) of the ADT Act did not confer a 'discretion' on the Tribunal to seek such evidence (as indicated in the decision under appeal at [35]), but stated that it was to 'ensure' that 'all relevant material' was disclosed to it 'so as to enable it to determine all of the relevant facts in issue'. 43 The further material on which Mr Stojanoski relied in making this argument comprised (a) the decision of the Queensland Retail Shop Lease Tribunal in Scudamore v Perpetual Trustee Australia Ltd (Unreported, Decision A/96, 1 March 1996) containing a discussion of the powers available to the Tribunal under sections 109 and 110 of the Retail Shop Leases Act 1994 (Qld) in determining whether outgoings charged under a retail shop lease were 'reasonable'; (b) extracts from a report of the Productivity Commission (Cth), The Market for Retail Tenancy Leases in Australia (2008), at 133-134, referring to claims by tenants that there should be greater 'transparency and accountability in claims for costs by shopping centre landlords'; and (c) extracts from a report of the House of Representatives Committee on Industry, Science and Resources, Finding a Balance: Towards Fair Trading in Australia, paras 2.174 – 2.187, reporting concerns of a similar nature conveyed to it by retail tenants and expressing agreement with some of these concerns. 44 In our judgment, these arguments by Mr Stojanoski must be rejected, on grounds that broadly speaking formed part of the submissions put to us by Ms Allars. 45 The reasoning adopted in the decision under appeal was as follows: (a) the Tribunal should treat the material provided by the Trust Company in compliance with section 27 of the RL Act, coupled with the auditor's statement complying with section 28, as prima facie evidence that it had in fact incurred, 'properly and reasonably', the outgoings identified in these documents; (b) it was open to Skiwing to rebut this presumption, but the onus lay on it to establish, by appropriate evidence, a reasonable basis to 'go behind' the audited outgoings statements; (c) the auditor had been made available for cross-examination at the first Tribunal hearing and had indeed been cross-examined; (d) the Tribunal's conclusion, reached in its first decision, that a scrutiny of all of the Trust Company's expenses would have been unduly costly, time-consuming and of limited benefit in verifying the outgoings, had been endorsed by the Court of Appeal, which referred also to the potential for investigative powers to be used oppressively; and (e) accordingly it would have been inappropriate, even allowing for the breadth of the Tribunal's powers under section 73 of the ADT Act, to direct the Trust Company to produce 'all documents that underlay the outgoings statements for the relevant years'. 46 There is, in our opinion, no error of law in this reasoning. Significantly, it relies in large measure on rulings made by the Court of Appeal, which this Tribunal is bound to follow. 47 We consider also that, as Ms Allars submitted, the decision in the Scudamore decision provides no significant assistance because the provisions of the Queensland legislation on which it was based have no counterpart in the RL Act. Likewise, while the material from the Productivity Commission and the House of Representatives Committee that Mt Stojanoski put before us is valuable in drawing various policy issues to our attention, it does not provide grounds for us to rule that the reasoning that we have just outlined was erroneous in law. 48 We agree with Mr Stojanoski that section 73(5)(b) of the ADT Act confers a duty on the Tribunal, not merely a power or a discretion, to 'ensure' that 'all relevant material' is disclosed to it. But the impact of those parts of the Court of Appeal's decision on which the Tribunal relied (these are identified in the decision under appeal at [26 – 28]) is that in determining the scope of this duty the Tribunal must consider whether compliance with summonses or directions requiring production of all documents that might be relevant to an issue might be unduly costly, time-consuming, oppressive and/or of limited benefit. The Tribunal in its first decision that took account of these considerations. The Court of Appeal endorsed this aspect of the Tribunal's first decision. Nothing in the evidence or arguments put before the Tribunal when the case was reheard provides grounds for thinking that it erred in adopting a similar approach. 49 In addition, we agree in general terms with a submission by Ms Allars that section 73 of the ADT Act is of a character for which Lindgren J in Telstra Corporation Ltd v Australian Competition and Consumer Commission [2008] FCA 1436 used the label 'exhortatory'. At [164], he applied this term to section 152DB(1) of the Trade Practices Act 1974 (Cth), providing the following explanation:- 164 I regard s 152DB(1) as a general exhortatory provision: it exhorts ACCC to strive to achieve broad objectives. Some of those broad objectives, at least if regarded in isolation, are antithetical to one another. The notions of "speed", "proper consideration of the dispute", "careful inquiry and investigation", "quick inquiry and investigation", "inquiry into and investigation of ... all matters affecting the merits" (my emphasis) and "fairness" pull in different directions. 50 We differ, however, from a further submission put by Ms Allars. This was that in so far as Skiwing's appeal was based on the Tribunal's refusal, before the remitted hearing, to require further production of documents by the Trust Company, it was an appeal against an interlocutory decision, for which leave was required under section 113(2A) of the ADT Act. As we view the matter, however, if we had held that the Tribunal's ruling on this matter had amounted to a breach of section 73(5)(b), this would or might have provided a ground on which Skiwing's appeal against the Tribunal's decision dismissing its application could be upheld. Characterised as one of a number of grounds advanced in an appeal against a final decision, not as a separate and independent appeal, this particular claim put forward by Skiwing does not fall within section 113(2A). The conclusion that the claimed outgoings were 'properly and reasonably incurred' 51 In addition to challenging the contributions claimed by the Trust Company towards its outgoings in a number of specific categories, Mr Stojanoski argued that the Tribunal had erred in interpreting the evidence given by the auditor, Mr Marshall, as conveying the opinion that the outgoings set out in the audited statement were 'properly and reasonably incurred'. The relevant paragraphs of the decision under appeal are [43] to [45] (these are quoted in full at [24] above). 52 The main point made by Mr Stojanoski was that in the relevant passage in his report on the audited statements, Mr Marshall said only that 'the attached Schedule presents fairly the recoverable outgoings'. Mr Stojanoski relied also on an answer given by Mr Marshall during examination-in-chief at the first hearing in the Tribunal. When asked what factors he had taken into account in concluding, in relation to the management expenses, that there had been 'a proper and reasonable allocation of expenses to the Imperial Arcade retail', Mr Marshall replied: 'None, other than to recheck the calculation on percentage of turnover.' (Transcript, 1 July 2004, p 18, lines 6 – 7). In answering the next question (at lines 13 – 17), he stated that on the basis of his experience as a partner in the property and construction group of KPMG, 3% of turnover was not an unreasonable charge for management expenses. 53 Mr Stojanoski also pointed out that under section 28(f) of the RL Act the report to be prepared by the auditor was required only to indicate whether 'the outgoings statement correctly states the expenditure by the lessor… in respect of outgoings to which the lessee is required to contribute'. Section 28(f) did not require an opinion from the auditor as to whether these outgoings were 'properly and reasonably incurred'. 54 A further argument made by Mr Stojanoski stemmed from dicta of the Queensland Retail Shop Lease Tribunal in Scudamore v Perpetual Trustee Australia Ltd (Unreported, Decision A/96, 1 March 1996). At pp 4 – 5, the Tribunal stated that in the exercise of its jurisdiction, conferred by sections 109(3)(c) and 110(3) of the Retail Shop Leases Act 1994 (Qld), to determine whether outgoings charged to a lessee were 'reasonable', it should consider not only 'the reasonableness of the work to be done', but also whether the expense claimed was 'reasonable in amount'. At p 11, it stated: '"Reasonableness" of expenses must be established by reference to competitive markets the cost of which is claimed as an outgoing.' Mr Stojanoski submitted that these principles should be treated by the NSW Tribunal as 'industry practices', within the scope of the general requirement in section 78 of the RL Act that this Tribunal (and any court hearing a dispute under this Act) must 'have regard to accepted practices and interpretations within the industry concerning the leasing of retail shops'. 55 In response to these arguments, Ms Allars pointed out that the statement by Mr Marshall on which Mr Stojanoski included the phrase 'recoverable outgoings'. She submitted that since the Court of Appeal had held in the present litigation (see [5] above) that outgoings were only 'recoverable' under the Lease and the RL Act if they had been 'reasonably and properly incurred', the Tribunal was justified in treating the statement as implying that Mr Marshall believed the outgoings to have indeed been 'reasonably and properly incurred'. 56 Ms Allars submitted also that the Tribunal had taken into account the evidence given by Mr Preston (see the decision under appeal at [47 – 49]), who was an independent expert and who in addressing the issue of reasonableness had given consideration to 'competitive markets' through deriving guidance from benchmarks published by the Property Council of Australia. 57 Ms Allars' response to Mr Stojanoski's argument stemming from the Scudamore decision was as follows: (a) this decision was based on materially different legislative provisions to those found in the RL Act; and (b) the question whether specific outgoings by a lessor were 'reasonably and properly incurred' did not involve any 'industry practice' within the scope of section 78 of this Act. 58 In our judgment, an important consideration to bear in mind when assessing the Tribunal's determination of this matter is that, as the Tribunal stated at [33] and repeated at [46], the presumption arising from the auditor's report was that the outgoings identified in the audited statement had been 'properly and reasonably incurred' by the Trust Company. This presumption, it stated, was rebuttable, but the onus lay on Skiwing to 'establish, on objective material, a reasonable basis for the Tribunal to go behind' the statement. Skiwing did not adduce any evidence – for example, evidence demonstrating a flawed approach to the calculation of outgoings – tending to challenge on general grounds the Trust Company's claim that the outgoings listed in the audited statement were reasonably and properly incurred. The evidence to which the Tribunal referred in the passages that we have been considering ([43 – 45] and [47 – 49]) included some expert opinions (those of Mr Marshall and Mr Preston) providing a degree of support for this claim by the Trust Company. 59 The issue to be resolved by the Tribunal was not whether the evidence before it showed affirmatively that the outgoings claimed were 'reasonably and properly incurred'. It was whether this evidence satisfied the onus placed on Skiwing to displace a presumption to this effect. In formulating the question in this way and in answering it in the Trust Company's favour, the Tribunal, in our opinion, committed no error of law. 60 It remains only to add here that we agree with Ms Allars' submissions to the effect that neither the Scudamore decision nor section 78 of the RL Act was relevant to the determination of these matters. 61 We turn now to a series of arguments put forward by Mr Stojanoski relating to specific categories of outgoings claimed by the Trust Company. Each of these categories was included in clause 1.16 of the Lease as a recoverable outgoing. Gardens and grounds 62 In the decision under appeal at [53 – 55], the Tribunal stated as follows: (a) the total outgoings claimed to have been incurred under this head fluctuated considerably during the relevant period (notably, from $30 in 2000 to $6,676 in 2001 and $13,307.54 in 2004, then down to zero in 2005); (b) since there always were plants in the Arcade, Mr Stojanoski therefore claimed to have been 'suspicious' and to have smelled 'something fishy'; (c) in the Tribunal's opinion, this suspicion was 'subjective, based on hindsight and not supported by any objective evidence'; (d) overall, the expenditure on these items was very small, with Skiwing's annual contribution ranging from 72 cents to $305.37; (e) no complaint was made that these costs exceeded what had been estimated; and (f) the reason why no claim was made under this head in 2005 may have been that it was accounted for under a different item. 63 For these reasons, the Tribunal held at [56] that Skiwing had 'failed to establish its claim that the garden and grounds expenses were not properly and reasonably incurred'. 64 In his submissions to us, Mr Stojanoski repeated his argument that the substantial fluctuations in the amounts claimed gave grounds for suspecting their validity. Referring to a statement by Mr Doherty in the first Tribunal hearing that the plants within the building were 'hired plants', he argued that the hiring costs, along with costs incurred in relation to 'landscaping' should be treated as capital costs and for that reason not as recoverable outgoings. 65 In responding to these submissions, Ms Allars relied chiefly on a statement by Basten JA in the Court of Appeal's decision in these proceedings (Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 68 NSWLR 366; [2006] NSWCA 387 at [23]) to the effect that 'gardening' was an item 'in respect of which disclosure was required under the heading 'Outgoings' in a lessor's disclosure statement. 66 We agree with Mr Stojanoski that any expenditure by the Trust Company on an item of capital equipment could not be claimed as an outgoing to which Skiwing should be required to contribute. 67 In our opinion, however, having regard to the evidence that some of the plants were hired rather than purchased and to the simple fact that amounts paid out for the day-to-day maintenance of gardens and plants cannot be characterised as capital expenditure, there was evidence on which the Tribunal could reasonably base a finding that a significant proportion, if not all, of the amounts claimed fell within the description of outgoings in the Lease. Furthermore, we do not believe that the fluctuations within a relatively narrow range of expenditure, without more, constitute a basis for going behind the audited statements of outgoings. We would add that even if on this particular topic the Tribunal could be held to have made one or more erroneous findings of fact, those errors were not so blatant and their consequences so serious for Skiwing that it would be unjust to allow the Tribunal's decision to stand. 68 By virtue of these rulings, we conclude that the treatment of this matter in the decision under appeal contains no error of law and no ground on which leave might be granted for the appeal to extend to the merits. Security 69 In the decision under appeal at [58 – 61], the Tribunal stated as follows: (a) the total outgoings claimed to have been incurred under this head fluctuated considerably during the relevant period (notably, from $82,751.77 in 2001 to $109,025.63 in 2002 and $129,724.81 in 2003, then back in 2004 and 2005 to figures approximating to the 2001 amount); (b) Mr Holmes a' Court testified that the Trust Company was required to have extra security staff for extra hours during 2002 and 2003 because the Arcade at the Pitt Street level became 'the destination for youth' and consequently for 'youth security issues'; (c) he said also that after these youth related issues had been addressed the Trust Company was able to resume its previous security levels; (d) Mr Stojanoski contended that this did not explain the increase because there were many vacant shops at that time and even when renovations were being undertaken in 2000 the cost of security was significantly lower; (e) in the Tribunal's opinion, the existence of vacant shops might provide reasons for extra security staff 'to secure the Arcade as a whole'; (f) in any event, it accepted Mr Holmes a' Court's evidence , even though some of his assertions were 'misplaced or misstated'; (g) Mr Stojanoski did not question that there hade been a change of tenancy mix at the time or that the Pitt Street entry to the Arcade had become a destination for youth; and (h) accordingly, 'the need for extra security was a plausible explanation for the extra costs in the years in question'. 70 On these grounds, the Tribunals concluded at [62] that Skiwing had 'failed to establish its claim that the security expenses were not properly and reasonably incurred'. 71 In his submissions to us, Mr Stojanoski repeated his argument that the substantial fluctuations in the amounts claimed gave grounds for suspecting their validity. He claimed also that the 'youth destination program' never materialised (it never went beyond the planning stage) and that the Tribunal erred in stating that he had not made this assertion during the hearing. 72 In our opinion, there was evidence – notably the existence of vacant shops during 2002 and 2003 – on which the Tribunal could properly find that there was a 'need for extra security' and could treat this need as 'a plausible explanation for the extra costs in the years in question'. Accordingly, the fluctuations in the amounts claimed, without more, could not constitute a basis for going behind the audited statements of outgoings. Even if on this particular topic the Tribunal could be held to have made one or more erroneous findings of fact, those errors were not so blatant and their consequences so serious for Skiwing that it would be unjust to allow the Tribunal's decision to stand. 73 By virtue of these rulings, we conclude that the treatment of this matter in the decision under appeal contains no error of law and no ground on which leave might be granted for the appeal to extend to the merits. Wages 74 In the decision under appeal at [64 – 66], the Tribunal stated as follows: (a) once again, the total outgoings claimed to have been incurred under this head fluctuated considerably during the relevant period (notably, from amounts within the range between $201.013.87 and $230,865.01 during the period from 2000 to 2003, then up to $295,092 in 2004 and 'slightly higher' in 2005); (b) Mr Stojanoski contended that the number of staff in the Arcade did not change during this period; (c) in the Tribunal's opinion, this did not mean that there was no turnover in staff or that their salary and entitlements remained the same; (d) in any event, an increase of between $60,000 and $90,000 for wages relating to a building as large as the Arcade was not a variation of such significance as to require going behind the audited outgoing statements; (e) furthermore, since in 2004 there were fewer vacancies within the Arcade, this alone would suggest that an increase in wages would occur; and (f) the auditor's report did not state that the amount spent exceeded the amount included in the written estimates of outgoings for 2004 and 2005. 75 At [67], the Tribunal accordingly concluded that Skiwing had 'failed to establish its claim that the wages expenses were not properly and reasonably incurred'. 76 In his submissions to us, Mr Stojanoski repeated his argument that the fluctuations in the amounts claimed gave grounds for suspecting their validity, adding that in this instance the variations were particularly wide. He also repeated his claim that the number of staff in the Arcade did not change during the relevant period. 77 Ms Allars did not specifically address the question of wages in her submissions. 78 In our opinion, there was evidence – notably the increase in the number of occupied shops in 2004 – on which the Tribunal could properly find that the extra wages paid in 2004 and 2005 were explicable. Accordingly, the fluctuations in the amounts claimed, without more, could not constitute a basis for going behind the audited statements of outgoings. Even if on this particular topic the Tribunal could be held to have made one or more erroneous findings of fact, those errors were not so blatant and their consequences so serious for Skiwing that it would be unjust to allow the Tribunal's decision to stand. 79 By virtue of these rulings, we conclude that the treatment of this matter in the decision under appeal contains no error of law and no ground on which leave might be granted for the appeal to extend to the merits. Management expenses 80 In the decision under appeal at [69 – 71], the Tribunal stated as follows: (a) once again, the total outgoings claimed to have been incurred under this head varied during the relevant period (they amounted to $188,068.08 in 2000 and only slightly more in 2001 and 2002, then rose significantly in the next years reaching a figure of $289,247.00 in 2005); (b) as the Tribunal said in the first decision at [20 – 21], the management fee was calculated at 3% of the 'turnover of the total retail space' in the Arcade and was, in the Tribunal's opinion, not excessive having regard to the 'Rawlinsons cost estimates'; (c) Mr Stojanoski maintained that because there were vacancies in the Arcade, 'the expenditure should have gone down and not up'; (d) in support of his argument he referred to the decision of the Tribunal in Skiwing Pty Ltd v Trust Co of Australia Ltd (No 3) [2004] NSWADT 94, in particular paragraphs [65], [66], [68], [69], [82], [83] and [86]; (e) these paragraphs, however, supported the contrary contention, because they showed that the vacancies primarily occurred in 2001 and 2002 and that many of the vacant shops were re-leased in 2002 and 2003; and (f) according to the formula on which the management expenses were calculated, an increase in the management expenses would have occurred during those years and thereafter. 81 At [72], the Tribunal concluded that for these reasons Skiwing had 'failed to establish its claim that the management expenses were not properly and reasonably incurred'. 82 In his submissions to us, Mr Stojanoski argued that this explanation failed to take account of a number of rent concessions that had been granted, which should have had the effect of reducing the management fees. It also did not account, he said, for the fact that in 2000, when a comparatively small amount was claimed, the Arcade was fully tenanted. He submitted further that if the Tribunal had granted his application on 18 March 2009 for a direction to the Trust Company to produce evidence of the total lettable area for which outgoings were not levied, together with the total rent paid by the tenants in regard to these areas for 2000-2005 (see [41] above), the 'full picture' regarding management expenses would have been disclosed. 83 Except in repeating a point already made, Ms Allars did not specifically address the question of management expenses in her submissions. 84 In our opinion, there was evidence – notably the evidence that the number of occupied shops rose from 2003 onwards – on which the Tribunal could properly find that the extra management fees charged in 2003, 2004 and 2005 were explicable. In response to Mr Stojanoski's argument that according to this approach the fees should have been on the high side in 2000, we would point out that under the new leases that commenced in 2003, 2004 or 2005, the general level of the rents charged might well have been higher than in 2000. Accordingly, the fluctuations in the amounts claimed, without more, could not constitute a basis for going behind the audited statements of outgoings. Even if on this particular topic the Tribunal could be held to have made one or more erroneous findings of fact, those errors were not so blatant and their consequences so serious for Skiwing that it would be unjust to allow the Tribunal's decision to stand. 85 By virtue of these rulings, we conclude that the treatment of this matter in the decision under appeal contains no error of law and no ground on which leave might be granted for the appeal to extend to the merits. Repairs and maintenance 86 With respect to this category of outgoing, and also the two further categories discussed below (air-conditioning and insurance), the Tribunal at the remitted hearing admitted new evidence from Mr Holmes a' Court and from Mr Dransfield. As mentioned above at [16], Mr Dransfield supplied an affidavit but was not required for cross-examination. Annexed to the affidavit was a schedule of expenditure by the Trust Company prepared by KPMG at Mr Dransfield's request. It appears that even though this affidavit was not served on Skiwing until the day preceding the final day of the hearing Skiwing raised no objection to its being tendered. 87 In the decision under appeal at [74 – 77], the Tribunal stated as follows: (a) once again, the total outgoings claimed to have been incurred under this head fluctuated considerably during the relevant period (they went down from $268,251.76 in 2000 to only $98,103.29 in 2001, but then increased to $133,245.52 in 2002, to larger amounts in the next two years and finally to $161,496.00 in 2005); (b) Mr Stojanoski contended that the only explanation for the high expenditure in 2000 could be that it included capital items such as lighting, which were not recoverable outgoings; (c) Mr Holmes a' Court testified that according to his understanding, the completion of substantial repairs and maintenance works at that time brought the condition of the Arcade up to an acceptable standard; (d) according to the schedule prepared by KPMG, during 2000 the Trust Company undertook a large project of repairs and maintenance in the Arcade, involving repairs to ceilings, escalators, lights, lifts etc; (e) this expenditure was consistent with 'budget'; and (f) this was the period of a number of vacancies within the Arcade. 88 The Tribunal then stated at [78 – 79]:- 78 In the absence of Skiwing providing any contrary material I find that the Trust Company has provided a sufficient explanation as to why the expenditure on repairs and maintenance was so high in 2000. It also provides an explanation as to why they were so low in the following year. 79 Accordingly, I find that Skiwing has failed to establish its claim that the management expenses were not properly and reasonably incurred. 89 In his submissions to us, Mr Stojanoski argued that the 'repairs' described in this part of the decision under appeal included replacement of ageing equipment – i.e. of items of capital. Citing appropriate authority (for example, Fluor Daniel Properties Ltd v Shortlands Investments Ltd [2001] 2 EGLR 103), he maintained that for this reason the Trust Company could not include the costs of these 'repairs' in its claimed outgoings. 90 In response, Ms Allars drew our attention to specific statements in the schedule prepared by KPMG (see [87] above) substantiating the Trust Company's claim that it had undertaken a major program of repairs during 2000 and also noting that the costs in 2001 were 'usual'. 91 As already indicated, we agree with the proposition, urged by Mr Stojanoski, that expenses incurred by a lessor on items of capital cannot be charged to lessees in the guise of outgoings. 92 There was, however, evidence – notably the relevant items in the schedule prepared by KPMG – on which the Tribunal could properly find that the unusually high figures quoted for repairs and maintenance during 2000 were in fact properly included in the claimed outgoings and did not involve the replacement of items of a capital nature. Accordingly, the fluctuations in the amounts claimed, without more, could not constitute a basis for going behind the audited statements of outgoings. Even if on this particular topic the Tribunal could be held to have made one or more erroneous findings of fact, those errors were not so blatant and their consequences so serious for Skiwing that it would be unjust to allow the Tribunal's decision to stand. 93 By virtue of these rulings, we conclude that the treatment of this matter in the decision under appeal contains no error of law and no ground on which leave might be granted for the appeal to extend to the merits. Air-conditioning of the common areas 94 In the decision under appeal at [81 – 84], the Tribunal stated as follows: (a) yet again, the total outgoings claimed to have been incurred under this head fluctuated considerably during the relevant period (they went down from $343,662.32 in 2000 to only $95,152 in 2001 and involved similar or lesser amounts in the succeeding years); (b) Mr Stojanoski contended that the only possible explanation for the high expenditure in 2000 was that it included capital expenditure; (c) in his evidence, Mr Holmes a' Court did indeed refer to substantial 'capital expenditure' during 2000-2001 'to address the aging air-conditioning plant', adding that after replacement of this plant the maintenance costs became considerably lower; (d) this evidence, if taken literally, 'would provide support for Mr Stojanoski's contentions'; (e) however, because Mr Holmes a' Court was not an accountant and had no direct knowledge of the work that was done, the only part of his explanation that should be accepted was his statement that the air-conditioning plant was old; (f) in the schedule prepared by KPMG, it was stated that during 2000 the Trust Company undertook a large project of repairs and maintenance to air-conditioning pipes that were old and required repair; (g) the working papers provided by KPMG show that an amount of $320,000 was budgeted for this work; and (h) this work was undertaken at a time when other maintenance and repair work was being undertaken at the Arcade. 95 The decision under appeal then stated at [85 – 86]:- 85 Once again, in the absence of Skiwing providing any contrary material to that which was provided by KPMG, I find that the Trust Company has provided a sufficient explanation as to why the expenditure on air-conditioning was so high in 2000. 86 Accordingly, I find that Skiwing has failed to establish its claim that the air-conditioning expenses were not properly and reasonably incurred. 96 In his submissions to us, Mr Stojanoski repeated his contention that the cost of replacement of an 'ageing air-conditioning system' was an item of capital expenditure, not a recoverable outgoing, and placed emphasis on the fact that Mr Holmes a' Court characterised it in this manner. As with the issue of repairs and maintenance, Ms Allars drew our attention to specific statements in the schedule prepared by KPMG substantiating the Trust Company's claim that what had been done in 2000 constituted 'repairs' to ageing equipment. 97 We have entertained some doubts on this matter, prompted in particular by the content of Mr Holmes a' Court's testimony. But we have concluded that there was evidence – notably the relevant items in the schedule prepared by KPMG – on which the Tribunal could properly find that the unusually high figure claimed for repairs to the air-conditioning system in 2000 did not involve the replacement of items of a capital nature. Accordingly, the fluctuations in the amounts claimed, without more, could not constitute a basis for going behind the audited statements of outgoings. 98 Even if on this particular topic the Tribunal could be held to have made one or more erroneous findings of fact, those errors were not so blatant and their consequences so serious for Skiwing that it would be unjust to allow the Tribunal's decision to stand. In so ruling, we take account of one matter that appears to have been overlooked by the parties and the Tribunal. This is that according to the affidavit by Mr Holmes a' Court that was admitted in the remitter proceedings, with respect to the year 2000, when the total amount claimed as outgoings on air-conditioning was the particularly high figure of $343,662.32, Skiwing was debited for only one-sixth of its normal proportion of 2.29%. The simple reason for this was that the Lease did not commence until 1 May 2000. On this basis, if an amount such as $250,000 (for example) should properly have been treated as capital expenditure, not outgoings, because an 'ageing air-conditioning plant' was being replaced, the amount by which Skiwing was overcharged was only $954. 99 By virtue of these rulings, we conclude that the treatment of this matter in the decision under appeal contains no error of law and no ground on which leave might be granted for the appeal to extend to the merits. Insurance 100 In the decision under appeal at [88 – 90], the Tribunal stated as follows: (a) yet again, the total outgoings claimed to have been incurred under this head fluctuated considerably during the relevant period (they increased from $48,485.75 in 2003 to $168,865.40 in 2004 and increased further by approximately $40,000 in 2005); (b) Mr Holmes a' Court said in his affidavit that in 2003 there was, according to his understanding, 'a rise in insurance premiums due to increased public liability incidents and the impact of world terrorism on the insurance market, and also suggested in oral evidence that the Trust Company 'self insured' during this period; (c) Mr Preston testified that 'self-insurance' was in effect 'no insurance'; (d) once again, the Tribunal placed little weight on what Mr Holmes a' Court said in his oral evidence, on the ground that he had no direct knowledge of or expertise in insurance; (e) the schedule prepared by KPMG contained a statement that during 2003 that 'increased insurance premiums were incurred for both ISR and Legal/Product Liability', as a result of 'domestic market conditions and world events'; (f) the schedule also stated that the insurance premiums for 2004 were below budgeted amounts; and (g) the inferences to be drawn from this material were that the written estimates of outgoings for 2003 contained an estimated expense for insurance that exceeded what was actually paid and that the amounts for which contribution was being sought were premiums paid by the Trust Company to commercial insurers. 101 The decision under appeal then stated at [91 – 92]:- 91 Again in the absence of Skiwing providing any contrary material or an analysis of the material provided by KPMG which would lead to a contrary conclusion, I find that the Trust Company has provided a sufficient explanation about the increased expenditure on insurance from 2003 and onwards. 92 Accordingly, I find that Skiwing has failed to establish its claim that the insurance expenses were not properly and reasonably incurred. 102 Mr Stojanoski's written submissions to us included claims that the 'self-insurance' mentioned by Mr Holmes a' Court must have included the cost of making investments on the share market in order to 'cover insurance events', that the Trust Company was 'insuring itself for loss of rent', and that insurance costs of this nature were excessive and should not have been charged to lessees. He did not explain these matters further in his oral submissions. 103 As with the issues of repairs and maintenance and air-conditioning, Ms Allars drew our attention to relevant statements in the schedule prepared by KPMG. She submitted that these supported the Tribunal's finding that, despite what Mr Holmes a' Court said, the Trust Company did not engage in 'self-insurance'. 104 In our opinion, there was evidence – notably the relevant passages in the schedule prepared by KPMG – on which the Tribunal could properly find that the amounts claimed in respect of insurance during 2004 and 2005 did in fact represent premiums paid to commercial insurers and that the increases from 2003 onwards were caused by general rises in premiums. Accordingly, the fluctuations in the amounts claimed, without more, could not constitute a basis for going behind the audited statements of outgoings. Even if on this particular topic the Tribunal could be held to have made one or more erroneous findings of fact, those errors were not so blatant and their consequences so serious for Skiwing that it would be unjust to allow the Tribunal's decision to stand. 105 By virtue of these rulings, we conclude that the treatment of this matter in the decision under appeal contains no error of law and no ground on which leave might be granted for the appeal to extend to the merits. The fact that some tenants in the Arcade did not contribute to outgoings 106 As indicated above at [29 – 30], the Tribunal, in the decision under appeal, rejected an argument by Skiwing that because some of the leases of retail shops in the Arcade did not require the lessee to contribute towards outgoings, the total amount of outgoings to which Skiwing should have been treated as liable to contribute its agreed proportion (2.29%) should have excluded the outgoings referable to these leases. This would have had the effect of reducing its liability. 107 In the appeal, Mr Stojanoski repeated this argument, which was primarily based on section 30 of the RL Act. He made the following submission as well: (a) the lettable area of the premises leased to one of the other lessees in the shopping centre exceeded 1,000 square metres; (b) the lease to this lessee was therefore not governed by the RL Act, by virtue of section 5 of that Act; and (c) the total amount of outgoings to which Skiwing should have been treated as liable to contribute its agreed proportion of 2.29% should have excluded the outgoings referable to this lease. He cited various provisions of retail tenancy legislation in other states of Australia, together with some authority interpreting these provisions, and he referred to an alternative formula for dealing with this question in the Casual Mall Leasing Code promulgated in South Australia. 108 In our opinion, this issue was conclusively resolved (as Ms Allars pointed out) by the following passage in the Court of Appeal's judgment in these proceedings ((Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 68 NSWLR 366; [2006] NSWCA 387) at [38]:- 38 During the course of the appeal, Mr Stojanoski, on behalf of Skiwing, was invited to file a further written submission explaining why he thought that the existence of such tenancies, or indeed of vacant premises within the building, led to the conclusion that there had been a breach of s 30. His submission asserted that if total outgoings remained constant, but only 40 out of 50 premises within the building contributed, the cost per contributor would be 25% higher than if all contributed. That is, fixed outgoings would be divided between a smaller number of tenants. As a fact that is undoubtedly true, if that is the way the outgoings are divided. However, if each tenant is required to pay that proportion of the outgoings which its floor space bears to the total floor space in the building (not just to the total occupied floor space in the building) then its payment will remain constant regardless of the level of vacancies, or the number of tenancies which are not paying a proportion of outgoings. In effect, the lessor must itself bear such expenses as it is unable or unwilling to pass on to its tenants. The fact that some premises are vacant or that some tenants do not make a contribution to outgoings, will not establish a breach of s 30 (our emphasis). 109 Mr Stojanoski's argument is to the effect that if a tenant in the retail area of the building either was not required under its lease to pay identified sums as contributions to outgoings, calculated as set out in section 30 (i.e. by reference to the proportion that its floor space bore to the total floor space of this area), or had a lease not governed by the RL Act, the amount of the contributions to which it would be assessed under the approach set out in section 30 should be deducted from the total outgoings before the contributions payable by the remaining tenants, including Skiwing, were calculated. But he claimed that this should be done even though the proportions of the outgoings chargeable to these tenants should continue to be calculated according to the proportion that their floor space bore – in Skiwing's case, 2.9% – to the total floor space of the retail area. 110 In our opinion, this argument is entirely misconceived, as was held both in the Court of Appeal (at [38]) and in the decision under appeal (at [94]). We are in any event bound by the Court of Appeal's ruling on the matter to reject this part of Skiwing's case in the appeal. Our conclusion regarding the appeal 111 Finally, Mr Stojanoski referred, in his written and oral submissions, to a statement in the affidavit of Mr Holmes a' Court to the effect that with respect to the year 2000 Skiwing had been 'overcharged $1,926 for outgoings'. He claimed that this amount had 'never been given back'. We can see no such statement in Mr Holmes a' Court's affidavit and can identify no other evidence (other than that mentioned above at [98], which is insufficient standing alone) to substantiate this assertion by Mr Stojanoski. 112 For the foregoing reasons, the appeal must be dismissed. Costs 113 At the hearing of the appeal, Ms Allars indicated that the Trust Company, if successful, would seek its costs of the appeal. By virtue of section 77A of the RL Act, the issue of costs falls to be determined under section 88 of the ADT Act. Following amendments to the latter section which became operative on 1 January 2009, the Tribunal may award costs if it is satisfied, having regard to a number of factors listed in subsection (1a), that it is 'fair' to do so. 114 One of the listed factors is formulated in paragraph (c) of subsection (1A) as follows: 'the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law'. 115 This was, in our opinion, a very weak appeal. In particular, two of the grounds given strong emphasis by Skiwing were the subject of contrary rulings by the Court of Appeal in the course of this litigation (see [46] and [110] above). We would add that it has been consistently recognised in decisions under section 88 (both before and after the recent amendments) that costs orders should normally be made against appellants whose appeals had no reasonable prospects of success. 116 For these reasons, our provisional conclusion on this matter is that the Trust Company should be awarded its costs. But we are bound to accord to Skiwing an opportunity to argue to the contrary. 117 We therefore order that, unless within 21 days of the date of this decision Skiwing files and serves submissions arguing to the contrary, it should then be required to pay the Trust Company's costs of the appeal, as agreed or assessed. If Skiwing files and serves such submissions within the stipulated period of 21 days, the Trust Company is to file and serve within a further 21 days its submissions in support of its application for costs. The question of costs will then be determined 'on the papers', pursuant to section 76 of the ADT Act. 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