Recent cases on costs under the Retail Leases Act 2003 – Part II

In Burd & Cooper Pty Ltd (ACN 119 808 034) v C & P Cooper Pty Ltd (ACN 119 813 133) and Ors (Retail Tenancies) [2011] VCAT 1416, the tenant filed a counterclaim based on an alleged payment to the landlord of $210,000, then withdrew the counterclaim at the 11th hour before trial.

The landlord sought an order for costs on the grounds that the counterclaim was patently hopeless, and therefore was vexatious, enlivening the Tribunal’s jurisdiction to award costs under s 92 of the RLA 2003.

The Tribunal declined to award costs on the grounds that:

• the tenant withdrew on the basis that she could not prove the payment of $210,000;  and
• there was no evidence that she had any subjective knowledge that her case was hopeless.

Practitioners faced with what appears to be a hopeless case should consider serving a Calderbank-style letter that points out the weaknesses of the opposing case.  This would at least provide some evidence that the other side was or should have been aware of the problems with their case.

Thanks to Mark Schramm for providing a copy of this case to me, and to Peter Nugent for discussing it with me.