Makowska v St George Community Housing Limited

Texts Cited: NSW Government – Model Litigant Policy for Civil Litigation issued 29 June 2016 and reviewed 30 July 2024

Category: Principal judgment

Parties: Zofia Makowska (Applicant)
St George Community Housing Ltd (Respondent)

Representation: Counsel:
Litigant in person (Applicant)
M Klooster (Respondent)
Solicitors:
St George Community Housing Limited (Respondent)

File Number(s): 2024/441298

Publication restriction: Nil

JUDGMENT

1. THE COURT: This is an application for leave to appeal on a question of costs only against orders made on 8 October 2024 in Makowska v St George Community Housing Limited [2024] NSWSC 1243 dismissing the applicant’s summons for leave to appeal on a point of law against a decision of the Appeal Panel (Appeal Panel) of the NSW Civil and Administrative Tribunal (NCAT) of 1 November 2023, and ordering that she pay the respondent’s costs. The Court was not told the amount of those costs.

2. By way of background, since 1991 the applicant has been a tenant in an apartment block (the Apartment Block) that is now managed by the respondent pursuant to an arrangement with the owner, the Land and Housing Corporation. There is a long history of the applicant litigating against the respondent and the owner of the Apartment Block. The applicant tendered evidence that there are costs orders against her in the sum of $37,637.70 for proceedings prior to those now before the Court.

3. The decision of the Appeal Panel that the applicant was seeking to appeal before the primary judge was a refusal of an application by the applicant for an extension of time for the filing of an appeal. The proceedings before the Appeal Panel, in turn, arose out of an unsuccessful application by the applicant before Member de Jersey for a 10% rent reduction for the period 1 April 2022 to 31 March 2023 pursuant to s 44(1)(b) of the Residential Tenancies Act 2010 (NSW) on the basis that the common property gardens and grassy areas at the Apartment Block had deteriorated and an order under s 187(1)(b) of the Residential Tenancies Act that the lawns that form part of the common property at the Apartment Block be remediated. This application to NCAT was dismissed, including having regard to a horticultural report and photographs relied upon by the respondent.

4. The principles to be applied in considering a grant of leave to appeal are well known: see eg Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 (“Be Financial”) at [32]-[37] (Basten JA, Tobias AJA agreeing). Where, as in the present case, the amounts in issue are small, there is a particular interest in early finality so that the costs of litigation do not swamp the money sum in dispute: Cheng v Motor Yacht Sales Australia Pty Ltd t/as The Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118 at [16], [20] (Bell CJ, Ward P and Basten AJA agreeing).

5. It is also well established that:

“costs fall within the category of matters of practice and procedure and hence there is the ‘added restraint’ and ‘particular caution’ which an appellate court should exercise in reviewing a judgment on such matters: Re Will of F B Gilbert (dec’d) (1946) 46 SR (NSW) 318 at 323 (Jordan CJ); Wentworth v Rogers (No 3) (1986) 6 NSWLR 642 at 644 (Kirby P), 651–652 (Priestley JA, Glass JA agreeing)”: McInnes v Rheem Australia Pty Ltd [2021] NSWCA 89 at [23] (Gleeson JA, Bell P and Payne JA agreeing).

6. As has also been recognised, trial judges are generally best placed to weigh up the interests involved in awarding costs: John Anthony Arena Pty Ltd v Franpina Developments Pty Ltd [2022] NSWCA 139 at [18] (Kirk JA, Macfarlan JA agreeing).

7. This application for leave to appeal must thus be approached by reference not only to the principle that leave will ordinarily only be granted when the proposed appeal raises an issue of principle, a question of public importance, or seeks to address a reasonably clear injustice going beyond something that is merely arguable: Be Financial at [32]-[38]; Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28], but also with “added restraint”.

8. In seeking leave to appeal to this Court against the primary judge’s decision as to costs, the applicant contends that the respondent should have been ordered to pay her costs notwithstanding that she was wholly unsuccessful before the primary judge, and that all three of the proposed grounds of appeal that she pressed were rejected. She accepts that ordinarily costs would follow the event. However, she contends that in rejecting a non-financial settlement proposal from the applicant, the respondent breached the Model Litigant Rules for Civil Litigation (which we assume is intended to be a reference to the Model Litigant Policy for Civil Litigation issued 29 June 2016 and reviewed 30 July 2024 (the Model Litigant Policy)) which she alleges bound the respondent, engaged in “barratry” and occasioned unnecessary litigation and expense.

9. There are a number of difficulties facing the applicant in advancing this contention.

10. First, the Model Litigant Policy at [1.2] provides that it applies to litigation involving the State or its agencies. That would not include the respondent, which is an independent entity.

11. Second, the applicant’s contention as to breach of the Model Litigant Policy by the respondent in rejecting an offer made by the applicant to Ms Susi, Compliance and Legal Manager at the respondent, on 29 November 2023 to settle the proceedings is in any event misconceived.

12. On 29 November 2023, the applicant wrote to Ms Susi proposing a settlement in advance of the applicant filing a summons seeking leave to appeal against the decision of the Appeal Panel on 1 November 2023. The applicant referred to an enclosed “Settlement Agreement”, which would remain open for 36 hours between 9 am on 29 November and 12.30 pm on 30 November 2023, “to finalise the matter over the lawns on a once, and for all, basis”.

13. The enclosed Settlement Agreement contained the following two clauses:

"Clause 1

The Tenant agrees to abide by the representations made in her letter of 29 November 2023 to Miss Sussi [Ms Susi] and to which this Settlement Agreement is attached; so as to resolve to withdraw the enforcement of her appeal rights on 30 November 2023 at the Supreme Court arising out of the NCAT Appeal Panel proceedings with the file number: 2023/00285167.

Clause 2

In acknowledgement of the cornerstone at the Residential Premises laid on 11 November 1952 by the former Minister for Housing, the Hon. Clive R. Evatt QC., builder Peter Cussell, and the architects R,V. Minnett and Cullis-Hill, the Landlord agrees with the Tenant to, by no later than 1 April 2024, undertake commencement of remediation works on all the lawns so as to maintain fidelity with the assurances the Landlord gave the Sutherland Tribunal to re-landscape throughout the Residential Premises."

14. The "representations" in clause 1 seem to direct attention to the following paragraph in the 29 November 2023 letter:

"In conclusion, a renegotiation of the Schedule of Letting is evidently required in order to remedy the parties' relationship, which is consistent with Member Wilson's advice at the appeal hearing. Consequently, I am willing to yield on compensation: The 10% of my total rental payments (as per the rental ledger) for the relevant period (1 April 2022 - 31 March 2023) of $10,977.47 or $1,097.74 dollars. Additionally, I am willing to yield on filing another application next year over the same matter of the lawns for the period 1 April 2023 - 31 March 2024 (approx. $950.00). Also, I am willing to yield on the outstanding $522.37 dollars of the second of the two George Tribunal compensation orders that has still not been paid. Taken together, this amounts to a total compensation amount of: $2,570.11 (approx.) that I am willing to abandon so as to avoid litigating at the Supreme Court upon the expiry of the Settlement Agreement proposal."

15. As is clear, the applicant was here representing that she would forego the rental reduction of 10% for the period 1 April 2022 – 31 March 2023 that she had unsuccessfully sought before NCAT, and in respect of which the Appeal Panel had declined to extend time to permit her to appeal. She also was representing that she would refrain from filing an application as regards a future period, and offering to forego an amount she said was owing to her by reason of earlier proceedings before NCAT.

16. By letter of 30 November 2023, Ms Susi communicated to the applicant that the respondent did not accept this settlement offer. She wrote:

"We unequivocally support the Tribunal's decision made in the Appeal and disagree that there are grounds for further appeal. We accordingly do not accept that there is any matter to settle and do not accept the settlement offer comprised in your correspondence.”

17. There is no proper basis to suggest that the respondent failed to comply with the Model Litigant Policy in declining to accept the applicant’s offer of 29 November 2023 (even if that policy did apply). The offer was effectively predicated upon the applicant succeeding in her appeal against the decision of the Appeal Panel of 1 November 2023, and the Appeal Panel then, on remittal, allowing her appeal against the decision of Member de Jersey. The respondent’s response to the applicant’s offer was entirely consistent with the obligation under [3.1] of that policy to “act with complete propriety, fairly and in accordance with the highest professional standards”.

18. Nor was there any breach of the Model Litigant Policy in Ms Susi indicating in the letter of 30 November 2023 that the respondent reserved its rights to enforce existing costs orders in its favour and that:

“We also reserve our rights to seek to recover further costs in the event you institute further Supreme Court appeal proceedings."

19. In circumstances where the applicant was indicating an intention to issue further proceedings against the respondent, it was not improper or unethical for the respondent to remind the applicant that there were outstanding costs orders which the respondent had a right to enforce against her and that future costs orders may be enforced. No person should litigate on the assumption that they will not be required to meet the costs of litigation if unsuccessful.

20. Third, there is nothing in the applicant’s contention that the respondent engaged in barratry in rejecting her offer of settlement. The respondent was in no sense acting as a vexatious litigant, or inciting litigation, by refusing to compromise the applicant’s proposed summons for leave to appeal on the terms proposed by the applicant. There is nothing to support the applicant’s oral submission that the respondent was improperly seeking to deplete the applicant’s resources.

21. Fourth, and in any event, none of the matters relied upon by the applicant suggest that the primary judge arguably erred in ordering that the applicant pay the respondent’s costs of the proceedings before her Honour. The applicant was wholly unsuccessful. She did not achieve an outcome in any sense better than the settlement offer she put to the respondent on 29 November 2023.

22. Finally, the applicant sought to rely upon correspondence which post-dates the decision of the primary judge in this application for leave to appeal. It is not open to her to do so. None of this correspondence is of any relevance to the questions arising on this application.

23. In light of the matters set out above, the applicant’s submission that this application raises matters of public significance must be rejected. As the primary judge observed in her Honour’s judgment at [124], it is apparent that the applicant genuinely believes that she has a responsibility to hold the respondent to account for what she perceives to be failings. In this case that does not, however, weigh in favour of a grant of leave to appeal.

24. It follows that this application should be dismissed with costs.

25. The orders of the Court are:

26. Dismiss the summons seeking leave to appeal filed on 4 November 2024.

27. The applicant pay the respondent’s costs of the summons.

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