Crusty Devil Bakehouses Pty Ltd v W.A.W. Developments Pty Ltd [2013] QCAT 159

CITATION: Crusty Devil Bakehouses Pty Ltd v W.A.W. Developments Pty Ltd [2013] QCAT 159 PARTIES: Crusty Devil Bakehouses Pty Ltd t/as Crusty Devil Bakery Carina (Applicant) V W.A.W. Developments Pty Ltd (Respondent) APPLICATION NUMBER: RSL088-12 MATTER TYPE: Retail shop leases matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Sandra G Deane, Member DELIVERED ON: 26 March 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. The application is dismissed 2. The application for costs is dismissed CATCHWORDS: RETAIL SHOP LEASE DISPUTE – application for miscellaneous matters – discontinuance where landlord sold the premises before determination of dispute - application for costs - whether unnecessary disadvantage – whether actions prior to commencement of proceedings can be relied upon Queensland Civil and Administrative Tribunal Act 2009 ss 48, 100,102 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No2) [2010] QCAT 412 Robertson and Robertson v Airstrike Industrial Pty Ltd [2011] QCAT 120 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). -- 1 of 5 -- 2 REASONS FOR DECISION [1] Crusty Devil operates on a boutique bakery business in leased premises at Carina. W.A.W was the landlord of those premises until 28 September 2012, when it completed a contract of sale. [2] The parties resolved a previous Tribunal proceeding under the Retail Shop Leases Act 1994 (the Act) by entering into a deed dated 18 November 2011 (the Deed). [3] Crusty Devil claimed in the current proceeding that W.A.W did not comply with the terms of the Deed and brought this action to enforce the terms of the Deed and sought costs. The parties agree that the sale of the premises means that there is no utility in having the substantive issues decided. [4] Crusty Devil filed a miscellaneous matters application seeking orders to discontinue the proceedings and for its costs. W.A.W denies that it failed to comply with the Deed. It has disputed non-compliance since at least 9 March 20121 but only put in material to support its position in these proceedings in response to the application for costs. W.A.W. contends that the appropriate order is no order as to costs. [5] The QCAT Act provides “Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceedings”.2 The Act does not provide for the award of costs. The application is therefore to be decided under the QCAT Act. [6] The Tribunal may make an order for costs if the interests of justice require it.3 The Tribunal may have regard to various factors.4 These include whether a party acted in a way that unnecessarily disadvantaged another; the nature and complexity of the dispute; the relative strengths of the claims; the financial circumstances of the parties and anything else the tribunal considers relevant. [7] Costs may be awarded where the circumstances point compellingly that the award of costs is in the interests of justice so as to overcome the contrary starting position.5 [8] Crusty Devil contends that W.A.W has acted in a way that unnecessarily disadvantaged it, in that it failed to comply with: a) the Deed and it was therefore necessary to commence this proceeding to enforce the terms of the Deed. Consequently Crusty Devil incurred expense it would otherwise not have incurred. 1 Affidavit Benjamin James Sindel sworn 30July 2012 BJS1 page 4. 2 Section 100 QCAT Act. 3 Section 102(1) QCAT Act. 4 Section 102(3) QCAT Act. 5 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No2) [2010] QCAT 412. -- 2 of 5 -- 3 b) the Tribunal directions dated 20 August 2012 to file its response and material upon which it intended to rely by 24 September 2012. [9] Crusty Devil has not referred me to any decided cases which support the proposition that the disadvantage referred to in section 48 of the QCAT Act which may found an award of costs relates to conduct prior to the proceedings having been commenced. I have not been able to locate any such decided cases. [10] The Tribunal has previously noted that all of the examples set out in section 48(1) of QCAT Act are things that may occur during a proceeding.6 [11] I am not satisfied that conduct which occurred prior to the proceedings commencing can found a claim for costs under section 48 of the QCAT Act. [12] I also have regard to the fact that the merits of Crusty Devil‟s application have not been determined because the premises were sold. Crusty Devil‟s application for costs in this respect is predicated on its view of its prospects. W.A.W. filed material in response to the miscellaneous matters application which raised a factual dispute in relation to whether W.A.W had complied with the Deed. In the circumstances where there have been no findings in relation to whether W.A.W was in breach of the Deed I am not satisfied that Crusty Devil has proven its claim, on the balance of probabilities, that W.A.W‟s conduct unnecessarily disadvantaged Crusty Devil within the meaning of the QCAT Act. [13] The Tribunal may make an order against a party causing disadvantage by not complying with a Tribunal order without reasonable excuse to compensate another for any reasonable costs incurred unnecessarily. The Tribunal must consider the extent to which the party causing disadvantage is familiar with its practices; the capacity of the party causing disadvantage to act on the tribunal‟s orders and directions; and whether the party is acting deliberately.7 [14] A matter which must be established is whether any disadvantage was „unnecessary‟ as distinct from a disadvantage experienced in the usual course of a dispute proceeding. Despite the best efforts of the Tribunal delays and non-compliances sometimes occur. [15] In relation to the failure to comply with the direction of 20 August 2012 to file its response and material upon which it intended to rely by 24 September 2012, I note that W.A.W: a) by miscellaneous application filed 21 September 2012 W.A.W. applied to have the directions vacated. 6 Robertson and Robertson v Airstrike Industrial Pty Ltd [2011] QCAT 120. 7 Section 48(1) and 48(3) QCAT Act. -- 3 of 5 -- 4 b) by the time of the directions hearing on 2 October 2012 the sale had completed and other directions to progress the substantive dispute were vacated. c) on 18 September 2012 W.A.W. informed Crusty Devil of the unconditional contract of sale scheduled to complete on 2 October 2012. d) on 18 July 2012 W.A.W. informed Crusty Devil that the „sale is progressing‟. e) by email dated 17 May 2012 W.A.W. informed Crusty Devil that it had advertised in the Financial Review for expressions of interest closing 30 May 2012 and that the Centre would be sold. [16] In circumstances where the sale was due to complete shortly after the date for filing material and an application to vacate the direction was filed before the date for compliance with the direction I am not satisfied that the failure to comply with the direction of 20 August 2012 caused unnecessary disadvantage or that the non-compliance was without reasonable excuse. There was no real prospect of the matter being resolved by the Tribunal prior to the sale completing even if the material had been filed on 24 September. This is not a factor in favour of an award of costs. [17] In relation to the nature and complexity of the dispute I have regard to the fact that both parties elected to be legally represented, which suggests that the parties felt it was somewhat complex. This is not determinative. The dispute related to whether the Deed had been complied with in 2 respects. They were in relation to cleaning and maintenance of the Centre and in relation to issues and concerns with respect to the Centre car park. The dispute was somewhat but not overly complex. This is not a factor in favour of an award of costs. [18] The relative strengths of the respective claims are often a highly persuasive factor. As stated earlier in my reasons the merits of Crusty Devil‟s application have not been determined. In these circumstances it is not appropriate to regard this as a factor in favour of an award and therefore I place no weight on this factor. [19] There is no evidence before me in relation to the financial circumstances of the parties and therefore I place no weight on this factor. [20] I am entitled to consider anything else I consider relevant. [21] It is evident from the material that Crusty Devil was of the view that the terms of the Deed had not been complied with and had been seeking to secure compliance for some time. By email dated 13 March 2012 Crusty Devil put W.A.W. on notice that it was preparing a further Tribunal application and reserved its rights to seek costs if such an application was necessary. -- 4 of 5 -- 5 [22] From an early time8 Crusty Devil was put on notice that if it commenced proceedings that the premises may be sold prior to the matter being resolved through the Tribunal. [23] On 18 July 2012 prior to filing these proceedings on 31 July 2012 Crusty Devil was informed that “the sale is proceeding”. I accept that little detail was provided in that advice and therefore it may have given little comfort to Crusty Devil that matters were in fact progressing. I also accept that it may have felt no option other than to commence proceedings in view of its concerns that there had been non-compliance with the Deed and it had little detailed knowledge of whether a sale would in fact complete. However in commencing proceedings it did so aware that the premises may be sold prior to the matter being resolved through the Tribunal. [24] Having regard to all of these factors I find that the circumstances do not point so compellingly to a decision that an award of costs is in the interests of justice so as to overcome the contrary starting position. [25] It is appropriate to dismiss the substantive action and to make no order as to costs by dismissing the application for costs. 8 Email 17 May 2012. -- 5 of 5 --