Makowska v St George Community Housing Ltd

Judgment

1. THE COURT: The applicant, Ms Zofia Makowska, is a tenant of premises operated by the first respondent, St George Community Housing Ltd, pursuant to an arrangement with the owner, the Land and Housing Corporation, under s 13A of the Housing Act 2001 (NSW). It is common ground that the applicant's lease falls within the Residential Tenancies Act 2010 (NSW), and the first respondent is a landlord within the meaning of that Act.
2. On 29 May 2019, the applicant commenced proceedings in the Consumer and Commercial Division of the NSW Civil and Administrative Tribunal (the Tribunal), seeking compensation from the first respondent as landlord for breach of her right to quiet enjoyment under the lease pursuant to s 50 of the Residential Tenancies Act 2010 (NSW). The applicant alleged the first respondent failed to repair drains in the common area which resulted in stormwater blocking convenient access to the car park and causing deterioration of the lawn in a recreational area, which she helped to maintain and enjoyed.
3. On 13 February 2020, the Tribunal upheld the applicant's claim in part: Makowska v St George Community Housing Ltd (NSWCATCD, 13 February 2020, unrep). The Tribunal made an order under s 44(3) of the Residential Tenancies Act to reduce the applicant's rent for a period of 12 months from 1 April 2019 to 31 March 2020 and dismissed the balance of her claim for compensation.
4. On 26 February 2020, the applicant appealed the Tribunal's decision to the Appeal Panel, pursuant to s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) under which an appeal is available as of right on any question of law or with leave of the Appeal Panel on any other ground. On 29 July 2020, the Appeal Panel dismissed the appeal with respect to the one ground which raised an error of law and otherwise refused leave to appeal: Makowska v St George Community Housing Ltd [2020] NSWCATAP 159 (Dr R Dubler SC and D Robertson).
5. The applicant did not seek to appeal the decision of the Appeal Panel. Such an appeal could have been brought with the leave of the Supreme Court on any question of law: Civil and Administrative Tribunal Act, s 83(1). Any application for leave to appeal was required to be filed within 28 days after the material date (being the date of the decision of the Appeal Panel): Uniform Civil Procedure Rules 2005 (NSW), r 50.12(1). That time for filing a summons seeking leave to appeal expired on 26 August 2020, and no extension to that time limit was sought.
6. On 2 October 2020, a little over two months after the decision of the Appeal Panel, the applicant commenced proceedings in the supervisory jurisdiction of the Supreme Court under s 69 of the Supreme Court Act 1970 (NSW). The summons for judicial review contained one ground alleging a "jurisdictional error of law". The matter came before Basten JA, sitting at first instance in the Common Law Division.
7. On 26 March 2021, Basten JA dismissed the summons seeking judicial review of the Appeal Panel's decision: Makowska v St George Community Housing Ltd [2021] NSWSC 287. His Honour determined that there was no error of law on the face of the record (the record including the reasons of the Appeal Panel) and no arguable jurisdictional error: at [49]. Further, even if error of either kind had been established, it is apparent from what his Honour said at [48] that the primary judge would in any event have refused relief on discretionary grounds, as the applicant had failed without justifiable reason to challenge the decision of the Appeal Panel through the statutory appeal process provided by the Civil and Administrative Tribunal Act.

Application for leave to appeal

1. On 25 June 2021, the applicant filed a summons seeking leave to appeal from the decision of Basten JA. The appeal is purportedly brought under s 101(1)(a) of the Supreme Court Act 1970 (NSW). The draft notice of appeal accompanying the summons contains the following two grounds of appeal: "1 It was not open to the Court to have dismissed my summons on the basis that, as a matter of discretion, no relief should have been provided in circumstances where a justifiable reason existed to challenge the decision of the Appeal Panel by way of a timely application for leave to appeal, subject to the Court not failing (i) to attend the first respondent's written objection having arisen before the Court, and/or (ii) inquiring of me whether I intended to read my related Makowska Affidavit of 6 March 2021. 2 The Court failed to adhere to the proper rules of court in requiring the first respondent an application for leave to amend its Response to Summons after the first respondent altered entirely its defence during the hearing and in circumstances where it unjustly affected the costs decision being entered against me as the unsuccessful party."

Consideration

1. Section 101(2)(r)(i) of the Supreme Court Act provides that an appeal to the Court of Appeal from a final judgment or order in proceedings of the Supreme Court shall not lie, except by leave of the Court of Appeal, unless it is an "appeal that involves a matter at issue amounting to or of the value of $100,000 or more".
2. Ordinarily, leave to appeal to the Court of Appeal is limited to matters which involve issues of principle, questions of general public importance or an injustice which is reasonably clear: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[38]; The Age Company Ltd v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13].
3. The value of the claim in this case was comfortably below the statutory threshold. The total pecuniary relief sought by the applicant before the Appeal Panel amounted to little over $8,100 and consisted of: 1. An order under s 187(1)(d) of the Residential Tenancies Act for compensation in relation to a breach of the covenant of quiet enjoyment of the landlord's withdrawal of access to the lawns in the amount of $3,997.56; 2. An order under s 187(1)(d) for compensation in relation to a breach of the covenant of quiet enjoyment for the landlord's withdrawal of access to the south-west path during periods of heavy rainfall in the amount of $2,598.38; 3. An order under s 44 for a twelve (12) month rent reduction at 6.5% of the fortnightly rental amount for the landlord's withdrawal of the use of the south-west path during periods of heavy rain, being in the amount of $593.19; 4. An amendment of orders 1 and 2 of the Tribunal's Civil and Commercial Division that a refund for the equivalent amount of $912.60 is provided by the landlord as a credit to the rental account of the residential premises or a cash payment.
4. It may be inferred that the total of legal and other costs involved in the case before the Tribunal (both in the Consumer and Commercial Division and before the Appeal Panel), the appeal before the primary judge and the application to this Court already involve a sum considerably in excess of the amount in dispute.
5. Section 60 of the Civil Procedure Act 2005 (NSW) provides: 60 Proportionality of costs In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute.
6. As Basten JA pointed out in Be Financial Pty Ltd at [39]: "This direction has an important operation in respect of leave applications involving amounts below the statutory threshold. Where, as in the present case, the costs of the trial are disproportionate to the amount in dispute, the incurring of additional costs, for a potentially uncertain return, will be a factor weighing heavily against a grant of leave."
7. Accordingly, the applicant is required to demonstrate that her case involves some issue of principle, question of general public importance, or injustice, so as to warrant a grant of leave.

Ground 1: appeal against the substantive decision

1. Ground 1 of the proposed appeal proceeds on a misconception. The applicant submitted that the primary judge erred in refusing relief as a matter of discretion, on the basis that the applicant had failed, for no justifiable reason, to challenge the decision of the Appeal Panel by way of a timely application for leave to appeal.
2. The primary judge dismissed the applicant's summons on the basis that there was no error of law on the face of the record (the record including the reasons of the Appeal Panel) and no arguable jurisdictional error. The statements that relief would in any event have been denied on discretionary grounds were not dispositive. Success on ground 1, if leave were granted, would not lead to any different result. For that reason alone, leave to appeal on ground 1 should be refused.
3. Even absent this fundamental flaw, the applicant's proposed ground 1 does not involve any issue of principle, question of general public importance, or injustice, so as to warrant a grant of leave. The essence of ground 1 is that the primary judge should not have concluded that, by commencing proceedings for judicial review, the applicant was seeking to avoid a time limit and the need to obtain leave provided by the statutory right of appeal. Instead, the applicant submitted that she was seeking to avoid any need to invoke the jurisdiction of the Supreme Court by negotiating a settlement with the first respondent, whose failure to respond to the applicant's repeated correspondence caused the time within which the applicant was required to bring her appeal to lapse, so that the applicant's only remaining recourse was to seek judicial review.
4. Evidence of the applicant's "justifiable reason for not complying with the time limit" was said to be contained in an affidavit affirmed by the applicant on 6 March 2021 (Makowska Affidavit), which was filed but not read before the primary judge. The applicant submitted that the primary judge erred in failing specifically to inquire whether the applicant proposed to read the Makowska Affidavit. The applicant said that a principle derived from this Court's decision in Rajski v Scitec Corporation Pty Ltd (Court of Appeal (NSW), 16 June 1986, unrep) required the primary judge to inquire of the applicant whether she intended to read the affidavit.
5. We are unable to agree with the applicant's submission. The comments of Samuels JA in Rajski, cited by the applicant, must be read in context. Far from establishing any principle which assists the applicant here, Samuels JA was cautioning against conferring an unfair advantage on unrepresented litigants by reason of excessive curial assistance: "In my view, the advice and assistance which a litigant in person ought to receive from the court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which he or she will ordinarily suffer when faced by a lawyer, and to prevent destruction from the traps which our adversary procedure offers to the unwary and untutored. But the court should be astute to see that it does not extend its auxiliary role so as to confer upon a litigant in person a positive advantage over the represented opponent. In these days of reasonably available legal aid, a litigant in person is becoming increasingly uncommon. At all events, the absence of legal representation on one side ought not to induce a court to deprive the other side of one jot of its lawful entitlement. It may add weight on the unrepresented party's side of the scale; it must not lighten the other. An unrepresented party is as much subject to the rules as any other litigant. The court must be patient in explaining them and may be lenient in the standard of compliance which it exacts. But it must see that the rules are obeyed, subject to any proper exceptions. To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent."
6. The applicant's oral submissions focussed on what was asserted to be a failure by the primary judge to follow "usual" or "proper" procedure. There was no failure by the primary judge properly to address the applicant's affidavit. His Honour expressly stated in the course of oral argument that the affidavit had not been read by the applicant and that he therefore would not take it into account. There could not have been any misapprehension on the part of the applicant that the affidavit was part of the evidence. After his Honour's remarks, the applicant was given an extensive opportunity to make further oral and written submissions where the topic could have been, but was not, raised.
7. Secondly, even assuming that the primary judge should have enquired more thoroughly of the applicant whether she wished to read the Makowska Affidavit, no different outcome would have been achieved. The Makowska Affidavit annexed communications between the applicant and the first respondent in connection with the applicant's attempt to negotiate a settlement agreement. The first respondent did not consent to that evidence being presented in the primary proceeding. That evidence was likely inadmissible: s 131 of the Evidence Act 1995 (NSW). The applicant's reliance in oral address upon the decision of Austin J in Collins Thomson v Clayton [2002] NSWSC 366 about the evidence in that case not having "the character of an attempt to negotiate a settlement" does not avail the applicant here. At best this characterisation question raises a possible factual issue, and not an issue of principle, question of general public importance or an injustice.
8. Thirdly, even if the Makowska Affidavit had been adduced and admitted in evidence, it does not follow that the applicant thereby demonstrated a justifiable reason for not complying with the time limit fixed for the statutory appeal. We are unable to accept the suggestion that negotiations between the applicant and the first respondent about a settlement (assuming in favour of the applicant that this is what was shown by the Makowska Affidavit) necessarily provided a justifiable reason for failing to make a timely application for leave to appeal. The applicant's complaint about the Makowska Affidavit does not raise an issue of principle, question of general public importance, or injustice, so as to warrant a grant of leave.
9. Leave to appeal on ground 1 must be refused.

Ground 2: appeal against the costs order

1. The applicant accepted in written submissions that ordinarily costs follow the event and that she was the unsuccessful party in the primary proceedings. However, the applicant submitted that an exception to the general rule exists where it would create an injustice to the unsuccessful party. The applicant argued that such injustice arose as the first respondent had "altered entirely its defence at the hearing".
2. This submission is without merit. As we have explained, the primary judge dismissed the applicant's summons on the basis that there was no error of law on the face of the record and no jurisdictional error. Assuming, in the applicant's favour, that the argument about how the primary judge should exercise his discretion was only raised by the first respondent at the hearing, that finding by the primary judge was not dispositive.
3. Accordingly, even assuming the first respondent "changed its defence" at the hearing, the applicant suffered no arguable prejudice by reason of this change. The primary judge did not err in refusing to depart from the general rule that costs follow the event.
4. Finally, we note that despite being specifically invited to address the Court about ground 2 as part of her lengthier than usual oral submissions, the applicant failed to do so.
5. Leave to appeal on ground 2 must be refused.

Conclusion

1. For the foregoing reasons, we make the following orders: 1. The applicant's summons is dismissed; 2. The applicant must pay the first respondent's costs.

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