A significant issue in retail tenancy disputes is the impact of the no-cost rule and the leverage that it gives to an arguable but weak, or even a hopeless case.
In a recent case, discussed here, the Tribunal suggested that a letter to the other side setting out the reasons why their case is hopeless may support a subsequent application for costs at the end of the proceeding.
In the case of T.B.T (Victoria) Pty Ltd v Trombone Investments Pty Ltd (Retail Tenancies) [2014] VCAT 25, handed down earlier this year, the Tribunal considered an application for costs after a litigant in person made an untenable application.
Member Kincaid considered the following to be relevant to the decision to award costs:
- the nature of the application by the litigant in person and the grounds relied on to support it;
- whether the litigant has any evidence to support the application;
- whether the litigant, contrary to an opportunity provided to him by the Tribunal to base his application on an alternative ground or grounds, chose to rely on a ground that was hopeless;
- the extent to which the litigant is given notice by the respondent to the application of the submissions proposed to be relied on in opposition to the application; and
- whether and, if so, to what extent the litigant is put on notice by the respondent to the application of the hopelessness of the application.
The Tribunal was considering a costs order against an unrepresented litigant. However, the same consideration would also apply if the litigant has lawyers.
Costs were awarded on an indemnity basis, largely because the unrepresented respondent made baseless allegations of dishonesty against the applicant. The Tribunal acknowledged that allowances should be made for unrepresented litigants, but was willing to look past that for the purposes of this case.
Practitioners acting for litigants faced with an untenable application, and who want to maximise their client’s prospects of obtaining a costs order, should ensure that they:
- write to the other side at the earliest stage setting out why the application is hopeless and inviting its withdrawal;
- provide detailed submissions to the other side as early as possible; and
- so far as possible, ensure that each of the above is in the clearest terms, including extracts of authorities and legislation where appropriate, particularly if the other side is unrepresented.
It is also prudent to put the other side on notice of your intention to make an application for costs and to rely on the decision in TBT (Victoria) Pty Ltd v Trombone Investments Pty Ltd (Retail Tenancies) [2014] VCAT 25, providing a copy if possible.
