Appeal Panel - Internal CITATION: Ull Pty Ltd v Adwell Holdings Pty Ltd (No 2) [2010] NSWADTAP 49 APPELLANT Ull Pty Ltd PARTIES: RESPONDENT Adwell Holdings Pty Ltd FILE NUMBER: 099063 HEARING DATES: On the papers SUBMISSIONS CLOSED: 13 April 2010 DATE OF DECISION: 1 July 2010 BEFORE: Chesterman M - Deputy President CATCHWORDS: Costs of appeal – unsuccessful application for leave to proceed – notice of appeal lodged out of time DECISION UNDER APPEAL: Ull Pty Ltd v Adwell Holdings Pty Ltd and Adwell Holdings Pty Ltd v Ull Pty Ltd [2009] NSWADT 246 FILE NUMBER UNDER APPEAL: 065045, 065130 LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994 AT v Commissioner of Police [2010] NSWCA 131 Dykes and Wildie v Heatherway Pty Ltd (No 2) (RLD) [2007] NSWADTAP 46 Gizah Pty Ltd v AXA Trustees Ltd (No 2) [2001] NSWADT 164 CASES CITED: Jonamill Pty Ltd v Alramon Pty Ltd (No 2) (RLD) [2010] NSWADTAP 3 Rucom Pty Ltd and Anor v Multiplex & Ors [2010] NSWADT 1 Ull Pty Ltd v Adwell Holdings Pty Ltd (RLD) [2010] NSWADTAP 15 Ull Pty Ltd v Adwell Holdings Pty Ltd and Adwell Holdings Pty Ltd v Ull Pty Ltd [2009] NSWADT 246 APPELLANT S Spring, agent REPRESENTATION: RESPONDENT M Finlay solicitor ORDERS: The Appellant is to pay the Respondent's costs of and incidental to these appeal proceedings, as agreed or assessed. These costs are to include the Respondent's costs of and incidental to its attendances at the Tribunal on 15 December 2009 and 18 January 2010 and its costs of this application for costs. REASONS FOR DECISION 1 This decision relates to the costs of an unsuccessful application for leave to proceed with an appeal that was lodged outside the prescribed time limit. An appeal against an 'appealable decision' of the Tribunal at first instance 'must be made … within 28 days after the Tribunal furnishes the party with written reasons': Administrative Decisions Tribunal Act 1997 ('ADT Act'), section 113(3)(a). But an appeal lodged out of time may proceed if leave is granted by the Appeal Panel: section 113(3)(b). 2 On 24 September 2009, the Tribunal handed down its decision in Ull Pty Ltd v Adwell Holdings Pty Ltd and Adwell Holdings Pty Ltd v Ull Pty Ltd [2009] NSWADT 246 ('the Tribunal's decision'). The decision related to aspects of two successive leases of premises between the Respondent to this appeal, Adwell Pty Ltd ('Adwell'), as lessor and the Appellant, Ull Pty Ltd ('Ull'), as lessee. The lease was governed by the Retail Leases Act 1994 ('the RL Act'). 3 The Tribunal's decision was in favour of Adwell. It upheld an application by Adwell, ordering that Ull was liable to pay $3,237.88 plus interest to it on account of outgoings due under the first lease. This amount was about $850 less than the amount ($4,089) that Adwell had claimed. The Tribunal also dismissed an application by Ull, in which Ull had claimed that Adwell had engaged in unconscionable conduct and that the rent stipulated in the second lease should be reduced. 4 The time prescribed for lodging an appeal against the Tribunal's decision expired on 22 October 2009. Ull filed its Notice of Appeal five days later, on 27 October 2009. It accordingly required leave under section 113(3)(b) in order to prosecute the appeal. 5 The hearing of an application by Ull for leave to proceed took place before me on 18 January 2010. Adwell opposed this application. 6 In a decision given on 15 March 2010 (Ull Pty Ltd v Adwell Holdings Pty Ltd (RLD) [2010] NSWADTAP 15 – 'the leave decision'), I dismissed Ull's application for leave. This order had the effect of dismissing the appeal. 7 This decision includes an account, at paragraphs [9 – 26], of relevant events occurring between the filing of Ull's Notice of Appeal and the hearing of the application for leave. At [27 – 31], it gave a summary of the principal factors to be taken into consideration in determining applications for leave to file a notice of appeal out of time. In the ensuing paragraphs, the facts and circumstances of Ull's application for leave and the submissions made by the parties were discussed by reference to these factors, under the following headings: (a) the reasonableness of Ull's explanation for its failure to lodge the appeal within the prescribed time ([32 – 43]); (b) the nature of the decision below and the consequences of the decision upon the appellant's rights ([44 – 48]); (c) the possible prejudice to the respondent ([49 – 50]); and (d) the merits of the appeal ([51 – 79]). 8 In my reasons set out below, I will not quote at length from the leave decision, but will generally confine myself to referring to passages that are of particular relevance to the question of the costs of the appeal. 9 The leave decision contained the following directions regarding these costs:- Any application for costs in these appellate proceedings must be filed and served, with supporting submissions, within 28 days of the date of this decision. The opposing party or parties must file and serve submissions in reply within a further 28 days. Unless reasons are advanced for a hearing to be conducted, the matter will be resolved 'on the papers', pursuant to section 76 of the Administrative Decisions Tribunal Act 1997 . 10 On 26 March 2010, Adwell filed an application, with supporting submissions, for an order that Ull should pay its costs of the appellate proceedings. It indicated at the outset that it raised no objection to my deciding this question 'on the papers'. 11 On 13 April 2010, Ull filed submissions relating to the costs of both the appellate proceedings and the proceedings at first instance. The costs of the first instance proceedings are being determined by the Tribunal as constituted for the purpose of those proceedings. In so far as Ull's submissions bear upon the issue of those costs, they will not be given consideration in these reasons. Legal principles regarding the costs of these appeal proceedings 12 By virtue of section 77A of the RL Act, awards of costs in Tribunal proceedings under this Act are governed by section 88 of the ADT Act. So far as is relevant here, section 88 provides:- (1) Each party to proceedings before the Tribunal is to bear the party's own costs in the proceedings, except as provided by this section. (1A) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that it is fair to do so having regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as: (i) failing to comply with an order or direction of the Tribunal without reasonable excuse, or (ii) failing to comply with this Act, the regulations, the rules of the Tribunal or any relevant provision of the enactment under which the Tribunal has jurisdiction in relation to the proceedings, or (iii) asking for an adjournment as a result of a failure referred to in subparagraph (i) or (ii), or (iv) causing an adjournment, or… (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) 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, (d) the nature and complexity of the proceedings, (e) any other matter that the Tribunal considers relevant. 13 In a recent decision of the Court of Appeal, AT v Commissioner of Police [2010] NSWCA 131, Basten JA, delivering the judgment of the Court, referred at [33] to 'the force of the general principle that each party should bear its own costs in the Tribunal, a principle applicable at both first instance and before the Appeal Panel'. He then said:- Although an order varying the general rule may be made "only if" the relevant criterion is satisfied in a particular way, there is a relatively low hurdle for an applicant seeking an order. The criterion of "fairness" will take into account the compensatory purpose of an award of costs, which will generally favour the successful party. The circumstances in which fairness may be identified are indicated by the specific attributes listed in sub-s (1A), but subject to the generality of paragraph (e), read in its context. Other considerations will no doubt include the nature of the jurisdiction of the Tribunal which is invoked and the objects identified in s 3(b)-(g) of the [ADT Act]. 14 The current version of section 88, in which the criterion of 'fairness' stated in subsection (1A) has replaced a rule that in the absence of 'special circumstances' no costs might be awarded, became operative on 1 January 2009. 15 Subparagraph (d) of subsection (1A) of section 88 requires the Tribunal to take account of the 'nature' of the relevant proceedings. In cases applying the earlier criterion of 'special circumstances' (see for example Gizah Pty Ltd v AXA Trustees Ltd (No 2) [2001] NSWADT 164), it was consistently held that because of the 'commerciality' of proceedings in the Retail Leases Division the interpretation of the phrase 'special circumstances' should differ significantly from the interpretation that might be adopted in any other Division of the Tribunal. 16 In Rucom Pty Ltd and Anor v Multiplex & Ors [2010] NSWADT 1, a recent Tribunal decision on the costs of proceedings under the RL Act, the Tribunal said (at [37]):- So, it is plain to me that, not only is this Division a commercial division dealing with commercial issues between lessors and lessees in a retail lease environment, but, in addition, proceedings should only be commenced in this Tribunal after very careful consideration of the merits of the case:… After all, commencing proceedings without such consideration inevitably results in considerable expense being incurred by the other party and one might not unreasonably ask: "why should the other party have to bear those expenses when the proceedings should not have been commenced in the first place?" 17 A further relevant aspect of the 'nature' of these proceedings is that they are appeal proceedings. In Dykes and Wildie v Heatherway Pty Ltd (No 2) (RLD) [2007] NSWADTAP 46, another decision applying the former criterion of 'special circumstances', the Appeal Panel said at [23]: 'It is now accepted, we consider, that the making of an appeal without any reasonable prospect of success can provide a "special circumstance" sufficient to attract an adverse costs order.' At [29], it gave the following explanation of the reasons underlying this proposition:- Weak appeals should, we think, be discouraged. In the retail leases jurisdiction, particularly, the underlying circumstances (the 'factual matrix') are often complex. Often many points of law are raised. Trial level decisions are often long and detailed. An appeal will often involve the need to revisit all, or many, of the factual or legal elements of the underlying decision. The potential impact on the resources of the respondent is obvious. Adwell's submissions 18 In the ensuing references to events occurring between the delivery of the Tribunal's decision and the hearing of Ull's application for leave to appeal, all dates mentioned are within 2009 unless otherwise started. 19 Overall weaknesses in Ull's application for leave to appeal. Adwell's submissions were prepared by Mr Finlay, solicitor. Under the heading 'General Overview', he pointed out that the leave decision contained the following findings and observations on my part regarding Ull's application for leave:- 1. The Notice of Appeal filed on 27 October was defective, not only in failing to identify alleged errors of law in the Tribunal's decision, but also in providing no 'reasonable explanation' (as required by the form of Notice) for the delay in filing it (see the leave decision at [12]). 2. The reasons given by Ull for a delay of about six weeks between filing this Notice and filing an Amended Notice of Appeal (on 17 December) were 'weak' (see [43]). 3. Out of four grounds of appeal that I distilled from five grounds set out in the Amended Notice of Appeal, three were found to be without merit and the fourth related to an amount as low as $750. Furthermore, there was no finding that this ground, if determined on its merits, would necessarily have changed the outcome of the case. Consequently, I characterised the appeal overall as having 'very little merit' (see [58], [63], [67 – 68], [74] and [78 – 79]). 4. In summarising my reasons for dismissing the application for leave to appeal, I said at [80] that 'the Appellant has not persuaded me that it has a strong case with respect to any of the factors that are to be taken into account in the exercise of my discretion to grant leave'. 20 Mr Finlay also put forward submissions based on specific subparagraphs of section 88(1A) of the ADT Act. In brief, they were as follows. 21 Subparagraphs (a) and (b) of section 88(1A). These provisions within subsection (1A) are principally concerned with conduct by a party to proceedings that renders the proceedings unnecessarily protracted, or unnecessarily expensive for the opposing party or parties. 22 Mr Finlay argued that several instances of conduct by Ull had the effect of 'prolonging unreasonably' the appeal proceedings, within the meaning of section 88(1A)(b). These were as follows (see the leave decision at [12 – 25]):- 1. When Ull filed its original Notice of Appeal on 27 October, it was out of time. Ull did not provide any explanation for this delay. As already indicated, the Notice was defective. 2. Ull's director, Mr Hunter, delayed from 24 September until 29 October before instructing Mr Spring, Ull's legal representative, in relation to the appeal. Again, no explanation was provided. 3. Mr Spring then delayed for 28 days after receiving instructions (i.e., until 26 November) before advising the Registry by telephone that an Amended Notice of Appeal would be filed by 4 December. 4. Having advised the Registry by telephone on 4 December that the Amended Notice of Appeal would be filed on 11 December, Mr Spring filed and served instead a lengthy document containing submissions in support of the appeal. He did this on 14 December. This was the first occasion on which Adwell became aware of the appeal. 5. Ull did not file a duly completed Notice of Appeal until 17 December. This was 84 days after the Tribunal's decision and 56 days out of time. 23 Mr Finlay's account of these events in his submissions referred to the following additional matters (see the leave decision at [18 – 23]). In a letter to Mr Spring dated 27 November, the Registrar stated that because the Notice of Appeal filed on 27 October did not identify any alleged errors of law or reasons for asking the Tribunal to extend the appeal to the merits, the Registry had not followed the usual procedure of serving a sealed copy of the Notice on the Respondent, who would be then required to file a Notice of Reply within 21 days. The Registrar further advised that the matter was listed for dismissal on Tuesday 15 December at 9.30 a.m. In response to a request made by Mr Spring to the Registry, this date was vacated. Along with Ull's submissions in support of the appeal, a notice of this listing, but no notice of its being vacated and no explanation of the surrounding circumstances, was served on Mr Finlay on 14 December. Mr Finlay accordingly attended the Tribunal on 15 December, only to discover that the listing had been vacated. 24 Through acting in this way, Mr Finlay submitted, Adwell through its agent Mr Spring engaged in conduct 'causing an adjournment', within the meaning of section 88(1A)(a)(iv). 25 Finally, Mr Finlay pointed out that despite being reminded in a letter from the Registrar that the Amended Notice of Appeal, filed on 17 December, was required to be served on Adwell's representative, Mr Spring failed to attend to this. The first time that Mr Finlay saw this document was when he obtained a copy from the Registry shortly before the hearing of Ull's application for leave to appeal on 18 January 2010 (see the leave decision at [26]). 26 According to Mr Finlay, this was an instance of 'failing to comply with an order or direction of the Tribunal without reasonable excuse', within the meaning of section 88(1A)(a)(i). 27 Subparagraph (c) of section 88(1A). This subparagraph explicitly draws attention to the extent to which the appeal in question was meritorious. 28 Mr Finlay's contention on the matter was simply that, as pointed out in the 'General Overview' section of his submissions, the leave decision, at [79], described Ull's appeal as having 'very little merit'. 29 Subparagraph (d) of section 88(1A). This subparagraph identifies as a relevant consideration the 'nature and complexity' of the appeal proceedings. 30 Mr Finlay submitted that in these proceedings an award of costs should be more readily made than would be the case in other kinds of Tribunal proceedings, because they were (a) proceedings under the RL Act and (b) appeal proceedings. He relied on two authorities to which I have already referred (see [16 – 17]): Rucom Pty Ltd and Anor v Multiplex & Ors [2010] NSWADT 1 and Dykes and Wildie v Heatherway Pty Ltd (No 2) (RLD) [2007] NSWADTAP 46. He added that the passage quoted above from Rucom was cited with approval by the Appeal Panel in Jonamill Pty Ltd v Alramon Pty Ltd (No 2) (RLD) [2010] NSWADTAP 3 at [28]. Ull's submissions 31 As stated above, the submissions filed by Ull related to the costs of both the appellate proceedings and the proceedings at first instance. They were prepared by Mr Spring. 32 These submissions provide little assistance to me because they were predominantly concerned with the first instance proceedings. So far as they related to the appeal proceedings, they made the following points: (a) Adwell did not file and serve a precise statement of its costs, as required by a Guideline on Costs recently published by the Tribunal; (b) although the merits of the appeal were described as 'weak' in the leave decision, it was nowhere said that the appeal had no tenable basis in fact or law or that Ull's claims were wholly without merit; and (c) Ull's case in fact 'partially succeeded'. My conclusions 33 In my judgment, the arguments put by Mr Finlay are wholly persuasive. By contrast, Mr Spring's submissions had nothing at all to say about the particular type of proceeding involved here – namely an application for leave to appeal, as opposed to an appeal made as of right – and made very little headway on other aspects of the question to be determined by me. 34 For the reasons that Mr Finlay advanced, based as they are on several of the detailed provisions within section 88(1A) of the ADT Act, I am satisfied that it is 'fair' to order that Ull pay the costs of and incidental to these appeal proceedings. 35 To avoid any doubt, my order is framed so as to include Adwell's costs of and incidental to attending the Tribunal on 15 December 2009 and on 18 January 2010, and its costs of this application for costs. 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