Hong Ha Mascot Bakery Pty Ltd v G & J Drivas Pty Ltd and Telado Pty Limited (No 2) [2012] NSWADT 175

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Hong Ha Mascot Bakery Pty Ltd v G & J Drivas Pty Ltd and Telado Pty Limited (No 2) [2012] NSWADT 175 Hearing dates: On the papers Decision date: 28 August 2012 Jurisdiction: Retail Leases Division Before: Deputy President D Patten Decision: Respondents to pay Applicant's costs Catchwords: Retail lease dispute between businessmen - unreasonable conduct by Applicant - Respondent's failure to accept Calderbank offer - Applicant to pay respondent's costs. Legislation Cited: Conveyancing Act 1919 Administrative Decisions Tribunal Act 1997 Category: Costs Parties: Hong Ha Mascot Bakery Pty Ltd (Applicant) G & J Drivas Pty Ltd (Respondents) Telado Pty Ltd (Respondents) Representation: Counsel Mr M S Henry (Applicant) Mr M Sneddon (Respondent) Shephard and Shephard (Applicant) HWL Ebsworth (Respondent) File Number(s): 115090

REASONS FOR DECISION 1In this matter my decision and reasons were published on 14 June. The Applicant Hong Ha Mascot Bakery Pty Ltd (the Applicant) was substantially successful in its claim against G & J Drivas Pty Ltd and Telado Pty Ltd (the Respondents). 2At paragraph 101 of the reasons, I expressed the provisional view that the Respondents should pay the Applicant's costs and I ordered accordingly, subject to the right of the Applicant to make contrary submissions within 21 days. Such submissions were duly received within the appointed time and the Respondents replied to them. 3There is no need to repeat in these reasons the matters dealt with previously. The submissions of the Respondents point to the circumstance that the claim of unconscionable conduct was unsuccessful; that the challenge to a Notice served under s129 of the Conveyancing Act on 6 April 2011 was only partly successful; that on a number of matters decided against the Respondents there were tenable arguments to the contrary which required serious consideration; and that the Respondents, early in the proceedings, consented to interlocutory orders which permitted the Applicant to resume occupation of the premises pending the hearing. All these matters are true and relevant in my view to the costs issue. 4The power to award costs is contained in Section 88 of the Administrative Decisions Tribunal Act. The section provides that, except as provided in it, each party is to bear its own costs. Sub section (2) permits the Tribunal to award costs if it is satisfied that it is fair to do so, having regard to a number of listed factors. Most of these factors have no application here. I am, however, of the opinion that the strength of the Applicant's case substantially exceeded that of the Respondents and that the proceedings were sufficiently complex to fall within s 88 (1A)(d). Section 88 (1A)(e) enables the Tribunal to take account of any other matters it considers relevant and under that rubric I take into account that this was a commercial dispute between business men. 5One matter raised in the submissions, which I had not known of previously, was that a "Calderbank" offer was made by the Respondents. The offer, which is not disputed by the Applicant, was made on 21 October 2011 after an unsuccessful mediation. It was as follows: "(i) the Lease is reinstated; (ii)the applicant to be permitted to sell from the leased premises all of the food items in the menu attached to the letter dated 15 August 2011 from the applicant's solicitors and in the photograph which is Annexure L to the affidavit of Mr Hua dated 15 August 2011, other than spring rolls and dim sims: (iii) the applicant will not sell or offer to sell at the leased premises spring rolls or dim sims; (iv)subject to the consent of the respondents' insurer and mortgagee, the respondents will withdraw their requirement that the applicant complies with clauses E 1.5 and G 1.2 of the Building Code of Australia (BCA) as particularised in subparagraphs (h), (i), (j), and (k) of the Notice of Breach of Covenants under section 129 of the Conveyancing Act 1919 dated 7 July 2011; (v)the respondents will release the applicant from all claims arising out of the breaches of the Lease particularised in the Notice of Breach of Covenants under section 129 of the Conveyancing Act dated 7 April 2011 and 7 July 2011, including the claim for legal costs of $11,414.55 made in the letter dated 15 August 2011 from the respondents' solicitors to the applicant's solicitors (a claim for which was subsequently included in the separate proceedings commenced by the respondents against the applicant); (vi)the respondents to pay applicant the sum of $15,000.00 in full and final satisfaction of the claims made by the applicant in the proceedings for damages, compensation and costs; (vii)application by which proceedings commenced dismissed with no order as to costs; (viii)the above terms to be incorporated in a Deed between the parties containing appropriate mutual releases." 6In relation to this aspect of the case, the Applicant contends that this was not a reasonable offer for the reasons that time for acceptance was unreasonably short; it required the Applicant to cease selling spring rolls and dim sims; and it did not unconditionally withdraw the demands made in the second s 129 Notice, which was not relied on at the hearing. 7The Applicant, on the other hand, relies upon its own "Calderbank" offer made on 11 October 2011: "i. that the lease be reinstated; ii. that the Respondents pay the Applicant $13,714.54; iii.that the Applicant would cease selling spring rolls or dim sims; iv.that the Respondents pay the Applicant's costs; and v.that mutual releases be given." 8Neither offer was accepted, but in the task before me I regard the Applicant's offer as of more significance as it, in my opinion, achieved a result substantially better than the terms of its offer rejected by the Respondents. This, in light of my subsequent findings, was a reasonable opportunity given to the Respondents to put an end to the dispute at a time when costs were relatively low. All of the relevant facts were then known to the Respondents. 9Finally, I take into account on the question of costs what I regard as the rather unreasonable conduct generally of the Respondents towards the Applicant as identified in my previous reasons. In my opinion, it is fair and appropriate within s 88 of the Administrative Decisions Tribunal Act that the Respondents pay the Applicant's costs. 10I order that the Respondents pay the Applicant's costs of the proceedings on a party and party basis as agreed or in default of agreement as assessed.