Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Fathullah v Varma (No.2) [2013] NSWADT 13 Hearing dates: On the papers Decision date: 23 January 2013 Jurisdiction: Retail Leases Division Before: K Rickards, Judicial Member Decision: Each party is to bear their own costs of these proceedings. Catchwords: Costs Legislation Cited: Administrative Decisions Tribunal Act 1997; Retail Leases Act 1994 Cases Cited: Behl v Hurstville Retail Pty Ltd (No 2) [2010] NSWADT 234; B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 6) [2012] NSWADTAP26 Category: Costs Parties: Nihad Fathullah (Applicant) Arun Deo Varma (1st Respondent) Kamlesh Deo Varma (2nd Respondent) Aronesh Deo Varma (3rd Respondent) Representation: H Soltan (Applicant, agent) No appearance (Respondents) File Number(s): 125118 REASONS FOR DECISION 1The original decision in these proceedings, made on 15 November 2012, ordered the Respondents to pay the sum of $9,656.38 to the Applicant. The decision provided that there would be no order in relation to costs unless the Applicant filed and served written submissions within 14 days of the date of the orders, following which the Respondent would be given the same period to file and serve any submissions in reply, and a decision as to costs would then be made upon the papers without further hearing. 2The Applicant has made an application for costs which is supported by written submissions. There has been no response or submissions made by or on behalf of the Respondents. 3In considering whether or not to make an order for costs, the Tribunal is directed by the terms of section 88 of the Administrative Decisions Tribunal Act 1997 ( the "ADT Act") which are as follows: 88 Costs (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 (v) attempting to deceive another party or the Tribunal, or (vi) vexatiously conducting the proceedings, (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. (2) The Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on a basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. (3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs. (4) In this section, "costs" includes: (a) costs of or incidental to proceedings in the Tribunal, and (b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application. 4It can be seen that section 88 provides a non exhaustive list of factors which the Tribunal may take into account in deciding whether there should be an order made for costs. 5The important starting point created by section 88 is the presumption that each party is to bear its own costs. 6For the Tribunal to move beyond this presumption and make a costs order, it must be satisfied that it is fair to do so, having regard to the factors specified in section 88 or, pursuant to section 88(1)(e) of the ADT Act, "any other matter that the Tribunal considers relevant". 7If the Tribunal identifies circumstances which may justify a costs order pursuant to section 88, the Tribunal has the discretion to make such an order, but is not obliged to do so. 8The Applicant's submissions correctly point to a number of decisions of this Tribunal which indicate that proceedings brought within the Retail Leases Division, as distinct from other divisions of the Tribunal, involve commercial dealings between parties usually engaged in commerce, and that this factor mitigates in favour of a costs order. This observation, and a brief summary of previous Tribunal decisions, was also made by Deputy President Olssen and the panel in Behl v Hurstville Retail Pty Ltd (No 2) [2010] NSWADT 234: (11) The proceedings are commercial in nature, arising from two parties who are acting in trade and commerce. One significant effect of the amendment to s.88 is that the notion of 'fairness' is to broaden the basis upon which costs might be awarded, particularly in a jurisdiction which is commercial in nature. In Salon Today Pty Ltd v MMIR Pty Ltd [2009] NSWADT 71, the Tribunal said: "What the Parliament has done...is to recognise that there is a need for this Tribunal to be more flexible and widen the scope of a litigant's entitlements to costs. This is a concept generally that is now accepted in this Division [Retail Leases Division]...." (paragraph [72]). That is not to say, by any means, that the usual principle in the Supreme and District Courts that "costs follow the event" is now to be adopted by this Tribunal. It is not. Costs can only be awarded under Section 88,but plainly the aspects of the litigation that need to be examined by the Tribunal to determine whether it is fair to award costs have been more than considerably expanded by the Parliament and ought, in fairness to the successful party, be embraced by this Tribunal. The test is, always, "relevance"." (12) The Tribunal considered the nature of the Retail Leases Division in the context of costs in Rucom Pty Ltd and Anor v Multiplex and Ors [2010] NSWADT 1. Having reviewed the authorities, Judicial Member Molloy said at paragraph 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, and in addition, proceedings should only be commenced in this Tribunal after very careful consideration of the merits of the case: see Trust Company of Australia Ltd v Craig [2005] MSWADT 65 at [44]. 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?" 9The Applicant's submissions also point to a number of authorities in support of the proposition that the compensatory purpose of an award of costs in favour of a successful party is another factor which should be taken into account when considering whether it is fair to make a costs order. This is correct, but only if there is shown to be a substantial lack of merit in the losing party's case as compared to that of the successful party. 10In support of the Applicant's position, these submissions which have been prepared by his agent Mr Soltan also draw attention to the decision of the Appeal Panel in B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 6) [2012] NSWADTAP 26 to award the successful party its incurred costs where it had been represented by an agent who was not an Australian legal practitioner. 11The proposition that a party may be represented by an agent and that the costs associated with the use of that agent may be ordered by the Tribunal to be paid by the other party is, of itself, correct. 12The provisions of section 71of the ADT Act and section 77C of the Retail Leases Act 1994 ( the "RL Act") deal with the issue of representation of parties in proceedings within the Retail Leases Division. 13Section 77C of the RL Act is as follows: 77C Right of appearance (1) In any proceedings before the Tribunal, the parties to the proceedings may appear in person or may be represented by a lawyer or other agent. (2) This section applies despite the provisions of section 71 of the Administrative Decisions Tribunal Act 1977. 14The relevant parts of section 71of the ADT Act are as follows: 71 Representation of parties (1) A party to proceedings before the Tribunal may: (a) appear without representation, or (b) be represented by an Australian legal practitioner, or (b1) with the leave of the Tribunal given under subsection (2), be represented by an agent who is not an Australian legal practitioner, or (c) if the party is an incapacitated person - be represented by such other person as may be appointed by the Tribunal under subsection (4). (2) A person who is not an Australian legal practitioner may, with the consent of a party to proceedings, apply to the Tribunal for leave to represent the party as the party's agent in the proceedings or in part of the proceedings. (3) The Tribunal may: (a) grant or refuse leave on an application made under subsection (2), and (b) revoke any leave that has been granted. 15At the hearing of these proceedings, the Tribunal did not restrain the right of audience of Mr Soltan. However, material filed on behalf of the Applicant indicated that the Applicant was being represented by a business called "The Retail Leases Doctor" that was owned by an incorporated entity of which Mr Soltan was a director. At the commencement of the hearing, Mr Soltan confirmed to the Tribunal that he was appearing for the Applicant as the representative of the registered business "The Retail Leases Doctor"; Mr Soltan undertook to file a copy of the registration document for this business with the Tribunal within the ensuing week. It transpired from the document then later filed by Mr Soltan that no such registered business existed prior to or at the date of the hearing, and that this business name was registered by him some days afterward. 16The fact that the Tribunal was misled by Mr Soltan as to the registration of the business "The Retail Leases Doctor", when such business had been put forward as representing the Applicant in these proceedings, is another factor which may be taken into account when considering whether it is fair to make a costs order in favour of the Applicant pursuant to section 88 of the ADT Act. 17The Applicant's claim for costs is specified to be in the sum of $10,197; this amount is a relevant factor to take into account pursuant to section 88 when considering the Applicant's application for a costs order, particularly in these circumstances where the amount claimed for costs exceeds the amount of compensation which has been ordered in the original decision to be paid to the Applicant by the Respondents. 18The total costs amount is said to be based upon a costs agreement which has been filed with the Applicant's submissions. The relevant document recites that the parties entering into the agreement are the Applicant and a business referred to as "The Retail Leasing Doctor", which is a trade name different to the business name which was subsequently registered some weeks later by Mr Soltan on behalf of his company Wentworth Warehousing Pty Ltd. 19The costs agreement contains some provisions which are common in costs agreements entered into between lawyers and their clients, but also contains provisions which are uncommon in such agreements, are expressed in quite complex language, and include a purported disclaimer from liability on the part of Mr Soltan or the business "The Retail Leasing Doctor" for any negligent advice, a further limitation of liability on the part of Mr Soltan or the business set at such amount of costs as may be payable by the Applicant under the agreement, and a right of novation or assignment of rights under the agreement reserved to Mr Soltan or his business. 20It is clear to the Tribunal, having observed the Applicant giving evidence during the proceedings, that his knowledge of English is very poor; the written submissions filed upon his behalf also assert this to be the case. No material has been provided which can comfortably satisfy this Tribunal that the costs agreement is fair, or that it has been properly understood by the Applicant before he apparently signed the document on an unspecified date. For the reasons set out above in this and the preceding two paragraphs, the Tribunal is not satisfied that the costs agreement is enforceable against the Applicant; accordingly, neither the agreement nor the amount of costs claimed to be payable by the Applicant to his agent should be taken into account in deciding whether an order should be made that the Respondents pay the Applicant's costs. 21Turning to the Respondents' case, their claim against the Applicant for compensation certainly lacked legal foundation or real factual basis. The Respondents' defence against the Applicant's claim for a refund of the rent paid by him, was based upon their contentions that the Applicant had been properly notified of possible interference by the Respondents' mortgagee with possession of the retail premises and that the Applicant had received full and proper consideration for the rent paid by him; neither of these contentions were ultimately accepted. 22By way of comparison, the Applicant's claims for loss of fixtures and fittings and for loss of earnings also failed, due to a substantial lack of evidence. Within the submissions now made as to costs, the Applicant through Mr Soltan has sought to introduce further fresh evidence in support of these claims. This course of conduct is impermissible. In relation to the failure of these claims, there is a complaint made in the Applicant's submissions that he had insufficient time to prepare his case and that he would have been able to provide this better evidence if more time had been available, but no such contention was raised prior to or during the hearing. 23The conclusion reached by the Tribunal is that each of the parties succeeded to a degree in these proceedings, and that each of the parties also failed to establish a significant proportion of their respective claims against the other. The compensation claim brought by the Respondents was certainly the least meritorious of any of the claims brought by either of the parties, and this is a factor which may be balanced against the other factors considered within this decision. 24The Applicant submits that the Respondents caused unreasonable prolongation of the hearing because of their ultimately unsuccessful claims; however, the hearing of these proceedings was not unduly prolonged, nor were the Respondents any more guilty than the Applicant in this regard. 25The Applicant's contention that the Respondents engaged in misleading conduct during the proceedings is not accepted. There is no evidence which satisfies the Tribunal that this has occurred. 26The findings set out above in this decision lead the Tribunal to determine that it is not satisfied that it would be fair to depart from the statutory presumption that each party should bear its own costs. Orders 1. Each party is to bear their own costs of these proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 January 2013