Crothers v Canelord Pty Ltd [2003] RSLT 5

Decision Crothers –v- Canelord 1 27.6.03 [2003] RSLT 5 THE RETAIL SHOP LEASES ACT In the matter of Dispute No 53/02 WILLIAM JOHN CROTHERS - Claimant - and – CANELORD PTY LTD - Respondents DECISION ON RESPONDENT’S APPLICATION SEEKING AN ORDER FOR COSTS AGAINST THE CLAIMANT Given in Brisbane on 27 June, 2003. -- 1 of 4 -- Decision Crothers –v- Canelord 2 27.6.03 I have read and considered the respondent’s submissions submitted under cover of the respondent’s solicitor’s letter of 29 May, 2003 and the claimant’s submissions in reply. As both parties are aware, Section 91 of the Retail Shop Leases Act 1994 (“the Act”), so far as is relevant for present proceedings, reads as follows: - Costs 91.(1) This section applies to the costs of the tribunal’s hearing of a retail tenancy dispute. (2) Unless the tribunal makes an order for costs under subsection (3), each party to the dispute must bear the party’s own costs. (3) On application by a party, the tribunal may make an order for costs if it is satisfied – (a) the dispute is frivolous or vexatious; or (b) the party has incurred costs because another party – (i) sought an adjournment of the hearing without giving reasonable notice; or (ii) contravened a procedural requirement; or (iii) sought the inclusion of the party or another person as a party to the dispute. The first point with which I am concerned is the meaning to be given to the expression “The tribunal’s hearing of a retail tenancy dispute” in subsection 91.(1). I have given the matter further thought and have come to the conclusion that, for the purposes of Section 91 of the Act, the expression includes a Directions Hearing conducted by a tribunal legal member pursuant to Section 66 of the Act, in particular subsection (2) of that section. Certainly, the matters referred to in that subsection are part of the relevant retail tenancy dispute. If, as appears to be the case, the purpose of Section 91 of the Act is to protect lessors and lessees against costs of frivolous or vexatious disputes or Against costs incurred because either party has contravened a procedural requirement, -- 2 of 4 -- Decision Crothers –v- Canelord 3 27.6.03 that intent would be frustrated if the expression mentioned above in Section 91 excluded a Directions Hearing under Section 66. In short, I hold that Section 91 applies to a Directions Hearing. The respondent alleges that the claimant’s claim was “frivolous and vexatious” and then goes on to submit that the claim contravened procedural requirements. In my opinion, the original claim was not “frivolous and vexatious” within the meaning of Section 91. The claimant presented a notice of dispute alleging that the respondent landlord failed to honour an obligation imposed on it by the lease to replace a totally defective hot water system in circumstances where that system was essential to the conduct of the claimant lessee’s business. The landlord denied liability. Before filing the notice of dispute, the claimant lessee sold his business at a price which he claims was greatly reduced as a consequence of the events flowing from lack of the hot water system. However, the claimant’s initial claim was for loss of income, not in respect of capital loss. In relation to the claim about interference with the business caused by replacing floor tiles, I note that the claimant did withdraw that claim, but, in my view, it was a small and insignificant claim which was not intentionally vexatious. I am not satisfied that the claim was “frivolous and vexatious” in terms of Section 91.(3) of the Act and therefore, I , comprising the tribunal, refuse to make an order for payment by the claimant of the respondent’s costs in relation to the claim itself. There remains the question of contravention of a procedural requirement. Again, the precise meaning of the term where it appears in subparagraph (ii) of paragraph (b) of subsection 91.(3) is not really clear. However, in view of the procedure adopted by the tribunal in Directi9ons Hearings, in my opinion, an order made at a Directions Hearing concerning interlocutory steps is a “procedural requirement”. Although the claimant, I believe, acted in good faith, he did fail to comply with certain directions made at the initial Directions Hearing held on 21 November, 2002. The respondent applied to have the claim struck out. A further Directions Hearing was conducted. The claimant was given some time to apply with the original order. The respondent alleged that the claimant had not complied. Yet, one more directions Hearing was held. In my view, only the first Directions Hearing would have been necessary if the claimant had complied with the orders made then. His failure to comply did involve the -- 3 of 4 -- Decision Crothers –v- Canelord 4 27.6.03 respondent in incurring costs. The claimant, in his submissions, states: “Just because the respondent chose to engage a solicitor, which I consider goes against the intention of the dispute resolution process….” It is to be understood that the Act in no way prohibits or discourages obtaining legal advice. It does restrict legal appearances before a tribunal in the course of a hearing, but that is a different matter. The claimant’s point here is not a valid one. Although the claimant’s failure to comply with certain orders made at Directions Hearings did result in the respondent incurring costs, I have in mind that the amount claimed by the respondent is out of all proportion to the matters in dispute and to the amount of work required by reason of the claimant’s aforesaid failure. I have not taken account of the claimant’s application to amend his claim because, in my view, that application did not involve the respondent in any additional costs. Under the circumstances, I order: That the claimant pay to the respondent within 30 days from the date of the publication of this decision, the respondent’s costs of two (2) Directi9ons Hearings fixed for this purpose at the total sum of $300. A W Couper, Chairman. -- 4 of 4 --