Landel Pty Ltd v Nzeakor[2021] QCAT 261

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   Landel Pty Ltd (‘the Lessor’) lodged a Notice of Dispute with the chief executive under the Retail Shop Leases Act 1994 (Qld) (‘the RSL Act’) on 17 February 2020.^[1] The Notice of Dispute sought orders against Okezie Nzeakor (‘the Lessee’), in relation whether the Lessor was entitled to be repaid a portion of a lease incentive.
2. [2]
   The chief executive nominated a mediator.^[2]  On 21 July 2020 the mediator referred the dispute to the Tribunal.^[3]   Subsequent to referral, the Tribunal made directions on 31 August 2020 that the Lessee file and serve a Response by 6 October 2020 and the application was listed for a Compulsory Conference. 
3. [3]
   On 7 September 2020 the Tribunal received a Notice of withdrawal from the Lessor.  Shortly thereafter. on 9 September 2020 the Lessee filed a statement responding to the Notice of Dispute.  On 21 September 2020 the Tribunal processed the Notice of withdrawal and sent both parties a copy.
4. [4]
   Leave of the Tribunal was not required for the Lessor to withdraw.^[4] 
5. [5]
   The Lessee filed an Application for miscellaneous matters seeking costs.^[5]  Directions were made for the filing and serving of submissions and evidence and for the application to be determined on the papers.^[6]  I now determine that application.
6. [6]
   The Lessee seeks an order that the Lessor pay costs fixed in the amount of $17,340.  The Tribunal may award costs at any stage of a proceeding or after the proceeding has ended.^[7]
7. [7]
   All of the costs appear to have been incurred prior to the Notice of dispute being lodged with the chief executive and relate to related District Court proceedings and the negotiation of a deed to resolve those proceedings.  None of the costs claimed have been incurred after the Notice of Dispute was referred to the Tribunal.
8. [8]
   Whilst I accept that those costs are related to the issue that was in dispute in these proceedings, I am not satisfied that the Tribunal has power to make such an award of costs.  If the costs of the District Court proceedings were to be sought the proper venue for such orders is the District Court.
9. [9]
   In relation to the Tribunal proceedings, I am not satisfied that I should exercise my discretion to award costs.
10. [10]
    The QCAT Act provides, ‘[o]ther 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.’^[8] The starting point may be displaced, if the Tribunal considers it is in the interests of justice to do so.^[9]  There is no contention by the Lessee that the RSL Act, the relevant enabling Act, provides for the awarding of costs in these circumstances.
11. [11]
    The then President, Justice Wilson in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)^[10] stated at [4]:

This presumption may, however, be displaced if the Tribunal considers it is in the interests of justice to order a party to pay all or part of the costs of another party: s 102(1). The phrase “in the interests of justice” is not defined in the Act but is to be construed according to its ordinary and plain meaning, which obviously confers a broad discretionary power on the decision-maker.

12. [12]
    The then Deputy President, Judge Kingham in Ascot v Nursing & Midwifery Board of Australia^[11] stated at [9]:

The public policy intent of the provisions in the QCAT Act is plain. The tribunal was established as a no costs jurisdiction. That may be departed from where the interests of justice require it. The considerations identified in s102(3) are not grounds for awarding costs. They are factors that may be taken into account in determining whether, in a particular case, the interests of justice require the tribunal to make a costs order.

13. [13]
    The Appeal Tribunal in Barnett & Anor v Pirrone & Anor ^[12] considered the issue of costs on a withdrawal and concluded that the question is whether the party withdrawing the matter acted reasonably in commencing and maintaining the proceeding. 
14. [14]
    In Barnett the withdrawal was made at a very late stage of the proceeding and after repeated warnings at directions hearings that the Tribunal lacked jurisdiction in respect of part of the claim, which ultimately was the reason for withdrawal.  Costs on an indemnity basis were awarded from the date when it should have been clear that the application was misconceived, being a date approximately 18 months after commencement. 
15. [15]
    The Appeal Tribunal relied upon Booth v Helensvale Golf Club Ltd^[13] in which Mackenzie J set out relevant principles upon a withdrawal, which included whether the respondent acted reasonably in defending the proceeding and in some circumstances whether the respondent’s conduct prior to commencement may have precipitated the action.^[14] 
16. [16]
    I am not satisfied that the Lessor could be regarded as having acted unreasonably in lodging a Notice of dispute with the chief executive, which was subsequently referred to the Tribunal, given that the parties had been in dispute for some time in relation to the Lessor’s entitlement or otherwise to be repaid a portion of the lease incentive.   Importantly, in my view, the Lessor withdrew the proceedings at an early time after referral to the Tribunal and prior to the parties being required to attend, either in person or by telephone, any directions hearings or the compulsory conference.
17. [17]
    I also consider the factors referred to in section 102(3) of the QCAT Act, to the extent they are relevant, to determine if the interests of justice point to a costs award.^[15] Those considerations are largely in the nature of what may be regarded as ‘entitling’ or ‘disentitling’ factors.
18. [18]
    If an order is made, the Tribunal should fix the costs if possible.^[16]

Whether a party acts in a way that unnecessarily disadvantages another party^[17]

19. [19]
    I am not satisfied that the Lessor acted in a way which unnecessarily disadvantaged the Lessee in the proceedings.  This is not a factor in favour of an award of costs.
20. [20]
    This factor refers to disadvantage to the person in their capacity as a party to the tribunal proceeding, rather than disadvantage generally.^[18]
21. [21]
    The proceedings were withdrawn at quite an early stage after referral.

The nature and complexity of the dispute^[19]

22. [22]
    I am not satisfied that this is a factor in favour of an award of costs.
23. [23]
    The Lessor relied upon a clause in the lease.  The Lessee claimed that the clause was unenforceable pursuant to the RSL Act. 
24. [24]
    Prior to withdrawal no leave to be legally represented in the proceedings had been sought or granted, which indicates that the parties considered that the claim was not overly complex.

The relative strengths of the claims^[20]

25. [25]
    I am not satisfied that this is a factor in favour of an award of costs.
26. [26]
    As the substantive dispute has been withdrawn there are no findings as to facts or law in respect of the substantive dispute. 
27. [27]
    The Appeal Tribunal in Barnett confirmed that ‘the issue of prospects of success is not central’ where the proceeding was withdrawn.^[21] When deciding costs, the tribunal is not obliged to decide what the outcome of a dispute would have been if it had been finally determined in the proceedings.^[22]
28. [28]
    I accept that although the Tribunal is not to try a hypothetical action between the parties, it may order costs if one of the parties has acted so unreasonably as to justify it e.g. where it is patent that there were no prospects of success.^[23]  As referred to earlier in these reasons, I am not satisfied that the Lessor could be regarded as having acted unreasonably in lodging a Notice of dispute with the chief executive, which was subsequently referred to the Tribunal.

The financial circumstances of the parties^[24]

29. [29]
    I am not satisfied, due to the lack of evidence in relation to it, that this is a factor in favour of an award of costs.

Anything else the Tribunal considers relevant^[25]

30. [30]
    I am not satisfied that any of the costs claimed could be regarded as costs of the proceeding and recoverable as such. 
31. [31]
    A relevant factor is often whether a settlement offer was made, and that the decision of the Tribunal is not more favourable to the other party than the offer.^[26]  Clearly there is no decision of the Tribunal with which to compare any offer. 

Summary

32. [32]
    On balance, I consider that it is not in the interests of justice for an award of costs to be made.  Each party should bear their own costs of the proceedings.