Rahman v Zeaiter

Supreme Court of NSW|2024-07-11

Solicitors: Muhammad Iqbal Chaudhry (Plaintiff) Self-represented (Defendant) File Number(s): 2023/00440298-1 Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Appeal Panel Date of Decision: 21 June 2023 Before: G Sarginson, Senior Member D Ziegler, Senior Member File Number(s): 2023/00125502

Judgment

HER HONOUR: This is an appeal from a decision of NSW Civil and Administrative Tribunal ('NCAT') involving the termination of a residential tenancy agreement.
The plaintiff is Fahmid Rahman ('Rahman'). He entered into a tenancy agreement with the landlord, Charlie Zeaiter ('Zeaiter'). Rahman seeks to appeal a previous decision made by the New South Wales Civil and Administrative Tribunal Appeal Panel ('the Appeal Panel') that refused to grant leave to Rahman to extend time to file an appeal. His appeal was dismissed.
Rahman is self-represented. Zeaiter is represented by F.G. Di Lizia. Zeaiter prepared the court book (Ex 1).

Background

On or around 20 February 2022, Rahman alleged that he entered into a tenancy agreement with Zeaiter. The property is located at X/XX Rawson Street, Wiley Park ('the property'). Rahman alleges the property was not suitable for occupation, so he did not move into the premises. Rahman was in contact with Zeaiter's agent. Rahman alleges that he made an agreement with Zeaiter's agent to waive the rent until the required rectifications to the unit were made. The agent denied these allegations.
At the hearing of NCAT before the Tribunal Member on 30 March 2023, orders were made to terminate the residential tenancy agreement and for immediate possession of the property. An order was also made finding that the tenant had frequently failed to pay rent, pursuant to s 89(5) of the Residential Tenancies Act 2010 (NSW). The tribunal found that Rahman was $9321.43 for rent in arrears.
Although in the summons dated 5 December 2023 Rahman seeks to appeal a decision of NCAT dated 30 March 2023, there is no copy of this decision before me. There is a copy of the ex-tempore decision of the NCAT Appeal Panel comprising of Senior Members Sarginson and Ziegler dated 21 June 2023. In the court book there are no transcripts of either hearing. As previously stated, on 21 June 2023, the Appeal Panel delivered ex-tempore reasons. The Appeal Panel made orders refusing leave to extend time to file an appeal by Rahman and then dismissed the appeal.

Rahman's submissions

Rahman, at the hearing before this Court made wide-ranging oral and written submissions that bore little resemblance to what was set out in the summons. I shall confine myself to the two appeal grounds that have been raised. The first ground of appeal only related to factual matters without any questions of law. Rahman did not address the reasons why leave to appeal should be granted in this Court.
Rahman's written submissions appear to have been drafted by a legal practitioner who provided pro bono advice to Rahman.
The parties entered into a residential tenancy agreement on January 20 2022, in good faith. The tenancy agreement ended on or about April 4, 2023. Rahman never lived or stayed at the rental premises due to unliveable and unsafe conditions.
There was a verbal agreement between Rahman and the leasing consultant, Mr. Thomas Saroukos of Raine & Horne (thomas@xxx.com.au), excusing Rahman from rental payments until Zeaiter had carried out repairs to make the unit liveable and safe. This agreement is supported by several text messages and a witness. The leasing consultant, Mr. Saroukos, did not give any statement or submissions, did not attend, and was not cross-examined before the Tribunal.
Mr. Saroukos's colleague, Mr. Horozakis, gave evidence that no such agreement was reached, but Mr. Horozakis was not present during the making of the agreement.
Rahman's friend, Bobby Syed, is a witness to the conversations. He made a statutory declaration before the Tribunal. As per the parties' agreement, Rahman left some furniture and personal belongings in the apartment storage/laundry, which is located outside the apartment. The agent did not object to the witness statement nor seek to cross-examine the witness at the Tribunal hearing. During the rental period, Rahman and his three children became 'co-tenants' of Bobby Syed and paid him $50 a day for rent.
Rahman also allegedly agreed with Mr. Saroukos to pay the bond after the completion of repairs and before the incoming inspection report. Hence, the rental bond and inspection report were not completed during the entire rental period. These are mandatory requirements at the start of any lease. Rahman requested an inspection report before he moved in.
The Tribunal Member noted that Rahman had filed his own proceedings in matter RT 23/14386 (23/377789), where Rahman sought compensation for Zeaiter's alleged failure to keep the residential premises in a reasonable state of repair and also sought that Zeaiter perform repairs to the premises. The Tribunal Member noted that there was a conciliation hearing on 15 September 2022, in respect of the compensation and repair proceedings, during which the parties had agreed that Zeaiter would perform repairs to various parts of the property upon payment of rent to him.
Rahman's rent, in the amount of $7,340, was paid to the Tribunal as a security bond on 31 August 2022. Rahman alleges that Zeaiter still failed to make the repairs, notwithstanding payment of the rent. Zeaiter claimed repair/cleaning costs without the tenant's knowledge, and the Tribunal made orders for the sum of $949.50 on 20 June 2023. The Tribunal stayed these orders on 15 December 2023 after Rahman's complaint.
On 15 January 2024, the Tribunal ordered that Zeaiter pay Rahman, the sum of $3,000 immediately as compensation. To date, no such payment has been made. Zeaiter did not appear or make submissions before the Tribunal on 10 November 2023 or 15 January 2024.
Senior Members Sarginson and Ziegler delivered their decision for the internal appeal on 21 June 2023. The NCAT appeal decision was short and erred to grant leave to extend time to file the appeal. The appeal was dismissed.

The decision of the Appeal Panel dated 21 June 2023

On 30 March 2023, the Appeal Panel made a finding that Rahman's rent was $9,321.43 in arrears. The Appeal Panel stated the following: The Tribunal ordered Rahman to pay that amount to Zeaiter immediately and found that the tenant had only paid rent up to 18 August 2022 and the period of rent in arrears was from 18 August 2022 to 30 March 2023. The Appeal Panel stated that the Tribunal Member gave comprehensive and detailed written reasons for his decision. Rahman sought orders that the decision of the Appeal Panel of NCAT dated 30 March 2023 be set aside.
The Appeal Panel noted that the Tribunal Member rejected the adjournment application on the basis of the landlord's obligation to keep the premises in a reasonable state of repair and nay remedies that flowed from any alleged breach, was a separate and distinct obligation from the tenant's requirement to pay rent. The Tribunal set out the evidence in the application for termination by Zeaiter and the evidence of Rahman. The Appeal Panel recounted in detail the reasons for the Tribunal Member's decision that are unnecessary to repeat here (Appeal Panel's decision at pp 2-3).
In the appeal to the Appeal Panel neither party provided it with a sound recording or a transcript of what occurred at the Tribunal hearing. Hence both Rahman and Zeaiter's agent at the appeal hearing gave a version of what the Appeal Panel understood to be their evidence that was given to the Tribunal. This is because, the Appeal Panel did not have a transcript nor a sound recording of the hearing to verify precisely what was said and what was raised by the parties.
At the hearing before the Appeal Panel, Rahman sought leave to adduce fresh evidence. The fresh evidence was in two forms. Firstly, there were text messages. Rahman informed the Appeal Panel that those text messages were not before the Tribunal hearing. His explanation was that his phone had been locked or there had otherwise been some technical difficulties with his phone leading prior to the Tribunal hearing. He said that he was only able to access his phone subsequent to the hearing. When the phone was accessed, he was able to print out the text messages.
The Appeal Panel considered those text messages. Rahman asserted that the text messages evidenced an agreement between Zeaiter and himself that he did not have to pay any rent until repairs to the premises were completed. The Appeal Panel did not accept that those text messages proved conclusively that there was such an agreement, nor did it consider that the text messages would have made any difference to the Tribunal's decision. At their very highest, the text messages only contained assertions by Rahman that there was such an agreement. The messages did not depict any acknowledgement by Zeaiter's agent that there was an agreement to abate the rent.
Also at the appeal hearing, Rahman made an application to telephone Mr Syed and ask him questions and that he essentially be granted leave to give evidence at the appeal hearing. The Appeal Panel was not satisfied that Mr Syed's evidence was substantial new evidence that was not reasonably available at the hearing. On this basis, it declined to grant leave.
The Appeal Panel stated that the Tribunal Member took into account Mr Syed's statutory declaration and gave it some evidentiary weight. Rahman asserted in his appeal submissions that the Tribunal had erred by not contacting Mr Syed at the date of the hearing. The Appeal Panel pointed out that the Tribunal is not under an obligation to contact a party's witnesses, nor is the other party under an obligation to ask that witnesses be available for questioning and take measures to question those witnesses at a hearing. It concluded that there was no error of law or other error in respect of the Tribunal Member's decision not to contact Mr Syed in circumstances where it was not under an obligation to do so and nor was the Appeal Panel under any such obligation.
During the appeal hearing, Rahman raised with Zeaiter that he had not provided evidence from the person known as 'Thomas'. Rahman claimed that he had a conversation with 'Thomas', during which the two reached an oral agreement to vary the lease. The Appeal Panel stated that Zeaiter was not under an obligation, in its view, to call evidence from Thomas. The Tribunal Member clearly took into account Rahman's evidence about his conversation with a person referred to as Thomas, together with the evidence of the managing agent of the property Mr Horozakis, who had conducted the managing of the tenancy for a considerable period of time. The Appeal Panel was of the view that no such agreement had been reached and, in its view, there was certainly no appealable error by reason of the Tribunal's findings about whether or not there had been a variation of the lease.
The Appeal Panel then turned to consider the relevant legal principles concerning appeals in the Tribunal. It stated that internal appeals may be made as of right under a question and otherwise with leave, that is permission, of the Appeal Panel. That is set out in s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW). Internal appeals involve consideration of whether there has been any error of law or any error other than an error of law sufficient to grant leave to appeal under cl 12 of sch 4 of the Civil and Administrative Tribunal Act 2013 (NSW). An appeal is not simply an opportunity for a dissatisfied or an aggrieved party to reargue the case they put at first instance before the Tribunal. Authority for that principle comes from the appeal panel decision in Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10].
Circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of sch 4 of the Civil and Administrative Tribunal Act 2013 (NSW). "In such cases the appeal panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that; (i) the decision of the tribunal under appeal was not fair and equitable or (ii) the decision under appeal was against the weight of evidence or (iii) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)."
The Appeal Panel then referred to Collins v Urban [2014] NSWCATAP 17 ('Collins'). It noted that, even if the appellant establishes that it may have suffered a substantial miscarriage of justice in the sense explained, the Appeal Panel retains discretion whether to grant leave to appeal. The appellant must demonstrate something more than that the Tribunal was arguably wrong. Authority for that proposition comes from Pholi v Wearne [2014] NSWCATAP 78 at [32]. Ordinarily, it is only appropriate to grant leave to appeal in matters involving issues of principle or questions of public importance which might have general application or an injustice which is reasonably clear in the sense of going beyond what is merely arguable or an error which is plain and readily apparent which is central to the Tribunal's decision. Those principles are discussed in Collins.
In respect of a self-represented non-legally trained appellant, grounds of appeal should be considered generally, subject to procedural fairness considerations. It is up to the Appeal Panel to determine whether a question of law has been raised. That principle is set out in the Appeal Panel decision of Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12] and the Appeal Panel decision of Cominos v Di Rico [2016] NSWCATAP 5 at [13].
The Appeal Panel set out the legal principles that relate to extensions of time. As discussed previously, the Appeal Panel made a factual finding that the appeal had been filed out of time on the basis that the appeal had been filed six days late. Principles applicable to an extension of time are well established and are set out in the Appeal Panel decision of Jackson v New South Wales Land and Housing Corporation [2014] NSWCATAP 22 at [22]. However, more importantly, as the Appeal Panel concluded, Rahman had no reasonable prospects of success in the appeal either on the basis of establishing error of law or an error of a type that leave to appeal would be granted under cl 12 of sch 4 of the Civil and Administrative Tribunal Act 2013 (NSW) applying the principles that are expressed in Collins.
It is also well established that a tenant bringing proceedings in the Tribunal to claim compensation or a rent reduction by reason of the landlord's alleged breach of the landlord's obligation to keep premises in a reasonable state of repair, is not of itself a basis to adjourn the landlord's termination applications so that both sets of proceedings can be heard together. Those matters do not involve different legal principles and different obligations under the Residential Tenancies Act 2010 and the residential tenancy agreement.
The Appeal Panel concluded that there was no legal error in the Tribunal's decision not to adjourn Zeaiter's termination application to be heard with Rahman's proceedings. There is also no legal error in the Tribunal's finding that there had not been an agreement to abate the rent. The Tribunal heard evidence at the hearing from both parties on this issue and the factual findings that were made by the Tribunal were open to it on the evidence before it. Its findings were consistent with the principles expressed by the Appeal Panel in the decision of Lewis and Smyth v Rejko Pty Ltd [2021] NSWCATAP 186 ('Lewis'). In Lewis the Appeal Panel set out the principles applicable as to whether a tenant establishes that there has been a variation of the lease and the evidence, even taking into account the matters that were raised by Rahman at this Appeal Panel hearing, including fresh matters, had they been considered and the evidence that was before the Tribunal, is clearly insufficient to establish that there was a variation of the lease in such a manner that Rahman was completely relieved of any obligation to pay rent until repairs were performed to the premises.
Finally, none of the findings set out by the Tribunal in its reasons display any arguable error of law or would satisfy us to grant leave to appeal for an error that falls within the principles under cl 12 of sch 4 of the NCAT Act 2013.
But rather in substance, what Rahman purports to do in this appeal is to reargue the matters that were raised in the Tribunal hearing. As the Appeal Panel have previously set out, dissatisfaction with the decision or seeking a further opportunity to reargue matters that were unsuccessfully argued before the Tribunal, is not a basis for a successful appeal.
The Appeal Panel concluded that, because Rahman failed to establish any arguable case in the appeal, it was unnecessary for it to consider the other criteria that is set out Jackson v New South Wales Land and Housing Corporation [2014] NSWCATAP 22. Failure to establish an arguable case in the appeal is sufficient of itself not to grant an extension of time.

The appeal in this Court

While Rahman did not seek leave to appeal, leave to appeal is required pursuant to s 83(1) NCAT Act 2013. The first issue to be determined is is whether leave to appeal should be granted in this Court.
Section 83(1) of the NCAT Act 2013 reads: "A party to an external or internal appeal may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings."
In BHP Billiton Ltd v Dunning [2013] NSWCA 421 ('BHP Billiton') the Court of Appeal set out the following principles with respect to a grant to leave to appeal; "Principles relevant to leave applications [19] In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary judge was arguably wrong in the conclusion arrived at: Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69 per Sheller JA; Zelden v Sewell [2011] NSWCA 56 at [22] per Campbell JA (Young JA agreeing). [20] Ordinarily it is appropriate to grant leave to appeal only in matters that involve issues of principle, questions of public importance or an injustice which is reasonably clear, in the sense of going beyond merely what is arguable: Carolan per Kirby P; Jaycar Pty Ltd v Lombardo [2011] NSWCAS 284, Campbell JA (Young and Meagher JJA agreeing) at [46]. See also Lee v New South Wales Crime Commission [2012] NSWCA 276 per Bathurst CJ (Macfarlan and Barrett JJA agreeing)."
The test for leave to extend time in NCAT has textual similarity to the test in BHP Billiton. The Appeal Panel referred to Collins at [84]: "Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand…"
The appeal raises no issues of principle, nor does it raise any questions of public importance, matters of administration or policy which might have general application.
In Rahman's submissions to this Court Rahman set out two grounds of appeal. They are as follows, 1. The learned trial member erred in fact by finding that the agreement between Rahman and the managing agent named Thomas (thomas@xxx.com.au) excusing Rahman from rental payments until Zeaiter had carried out repairs to make the unit in liveable conditions and that was supported by several text messages and witness. 2. The learned members' discretion miscarried in relation to the leave to extend time to file the appeal is refused where there was no leave for extend time or no delay to file internal appeal to NCAT.

Appeal Ground One

The first ground of appeal is that on 30 March 2023 the Tribunal Member erred in fact by finding that Rahman and the managing agent named Thomas excused Rahman from rental payments until Zeaiter had carried out repairs to make the unit liveable, that was supported by several text messages and witnesses. On this ground of appeal, the complaints made involve factual findings and cannot be appealed in this Court as s 83 of the NCAT Act 2013.
Rahman has sought to appeal the actual decision of the Tribunal Member dated 30 March 2023. It is incompetent. For the reasons identified by Fagan J in Liang v University of Technology Sydney (No 3) [2019] NSWSC 1705 ('Liang') at [9], in similar circumstances where a plaintiff sought to appeal a first instance decision of NCAT, such purported appeal is incompetent as there is no appeal to the Supreme Court from a first instance decision of a single member of NCAT, by leave or otherwise.
Also, as identified by Fagan J in Liang, even if Rahman here purported to rely on s 69 of the Supreme Court Act 1970 in making such an appeal by way of judicial review, relief would be refused on a discretionary basis as there was a wider avenue of appeal available to the Appeal Panel pursuant to s 80 of the NCAT Act 2013.
Therefore, there can be no appeal from the Tribunal Member's decision dated 30 March 2023 to this court.
Nevertheless, the Appeal Panel did address these issues when it stated, that when the text messages are considered in their full context, and they commence in January 2022 and continue over a period of several months, it is clear that Zeaiter's agent was texting the tenant asking that rent be paid and pointing out that Rahman's rent was in arrears. That is not consistent with there being an agreement between Zeaiter and Rahman that rent would be abated. The Appeal Panel was not satisfied that these text messages constituted substantial new evidence that was not reasonably available at the date of the hearing and did not grant leave for those text messages to be admitted into evidence in the Appeal Panel hearing. Even if the text messages were admitted, in the Appeal Panel's view they are not material that would lead it to form a view that the Tribunal's decision was in error or that leave to appeal should be granted under cl 12 of sch 4 of the NCAT Act 2013.
When the Appeal Panel considered the different versions of events between Rahman and Zeaiter's agent about whether there had been an agreement to vary the terms of the residential tenancy agreement by way of a rent abatement, the Appeal Panel agreed with the Tribunal Member who found that it was not persuaded that there was such an agreement to vary the terms of the lease. Consequently, the tenant remained liable to pay rent in accordance with the terms of the residential tenancy agreement and the statutory obligations that are contained in the Residential Tenancies Act 2010, relevantly s 33 of that Act.
The Appeal Panel stated that the Tribunal Member's written record of reason dated 30 March 2023 are clear, logical and rational when it said, "The tribunal's reasons that are contained in the written record of reasons of the tribunal dated 30 March 2023 are clear, logical and rational. The tribunal correctly applied well established legal principles that a tenant's complaint that a landlord has failed to comply with its obligations under s 63 and 65 of the Residential Tenancies Act 2010 to keep premises in a reasonable state of repair, is not a justification for the tenant withholding rent payments. That principle has been discussed in a number of appeal panel decisions including Seymour v Wu [2021] NJSWCATAP 289, David v Langham [2021] NSWCATAP 360 and McKerlie v Leeser [2023] NSWCATAP 112."
In the circumstances, it is my view that Rahman has failed to demonstrate something more other than the Appeal Panel was arguably wrong.

Appeal Ground Two - Member's discretion miscarried in relation to refuse leave to appeal when the appeal was filed in time.

The Second Ground of Appeal- Extension of Time by the Appeal Panel

Rahman emailed the NCAT appeal to ap@ncat.nsw.gov.au on 3 July 2023 and 10 July 2023 stating that, he intends to appeal the attached orders dated 21 June 2023. The NCAT appeal responded on 12 July 2023 as follows: "Thank you for your email. I[n] regards to your enquiry, I refer you to our website, link provided below. https://www.ncat.nsw.gov.au/how-ncat.works/appeal-an-ncat-decisjon.h Please be advised you cannot appeal an appeal decision, you need to refer your application to the Supreme Court. Appeal against an Appeal Panel decision You cannot lodge an appeal against a decision of the Appeal Panel with NCAT. If you have a right of appeal to the NSW Supreme Court, the appeal must be lodged with the NSW Supreme Court- external sitelaunch. If you are not sure of your appeal rights you should seek legal advice."

Rahman's submissions

Rahman submitted that he actually filed the application to appeal from the Tribunal Member's decision to the Appeal Panel by email (Ex C formerly MFI 1). The email was dated 12 April 2023 at 4.38pm. It was addressed to ap@ncat.nsw.gov.au and attached was a pdf file (not identified) and an 'AP form Notice of Appeal' and a 'statutory declaration Bobby'. It read, "Dear Registrar please find attached notice of appeal and email me a sealed copy, regards, Fahmid Rahman".
The appeal was filed on the day 13, so it was filed within the 14-day time period. At the hearing before me in oral submissions, Rahman said he had paid the $60 fee at service NSW Roselands.

Zeaiter's submissions

Although difficult to discern and understand, it is apparent that the gist of the complaint embodied in the second ground of appeal is that the Appeal Panel erred in refusing to extend time to file the appeal because there was no delay in filing.
The Appeal Panel's findings of fact are that Rahman filed his application for internal appeal on 19 April 2023 in respect of orders made by NCAT at first instance on 30 March 2023. This finding of fact cannot be challenged in light of s 83(1) of the NCAT Act 2013. However, the decision of NCAT at first instance was within the definition of residential proceedings as defined in r 3 of the NCAT rules. This is because Zeaiter (landlord) had brought the application at first instance under s 89(5) of the Residential Tenancies Act 2010. The NCAT Rules r 3 define residential proceedings as including those brought under ...(d) the Residential Tenancies Act 2010.
R 25(4)(b) of the NCAT rules specifically states that in the case of an internal appeal against a decision made in residential proceedings, it must be lodged within 14 days unless an extension of time is granted under s 41 of the NCAT Act 2013. In those premises, it was plainly the case that the NCAT Rules required the plaintiff to have obtained an extension of time to file his internal appeal to the Appeal Panel. It follows the second ground of appeal in the summons is not made out.

Resolution

While it is not clear, it appears that Rahman lodged the notice of appeal by email within the 14-day period.
NCAT direction 6, effective on 9 November 2022, deals with the filings of documents during the Covid-19 pandemic (and applies until further notice) (Ex B). So far as it relates to the Appeal Panel, it states, "Appeal Panel Notice of Appeal Notices of Appeal should be lodged by post, at Service NSW or at an NCAT Registry. Appeals will only be accepted by email if they are urgent and cannot be lodged using one of the above methods. Submissions and evidence Submissions and evidence and other secondary material should be lodged by post or delivered personally to an NCAT Registry and placed in the box provided. If a party has been directed by the Appeal Panel to file electronically, documents should be sent to ap@ncat.nsw.gov.au." (https://ncat.nsw.gov.au/documents/procedural-directions/archive/ncat_pd6_2020_nov_superseded.pdf)
Rahman did not lodge the appeal to the Appeal Panel in person and did not explain why his appeal was urgent and lodged by email. While the Appeal Panel refused leave to appeal, in doing so it considered Rahman's grounds of appeal and considered that the Tribunal Member's reasons are clear, logical, rational and correctly applied well established principles. Therefore, in these circumstances Rahman has failed to demonstrate something more other than that the Appeal Panel was arguably wrong.

Should leave to appeal be granted in this court?

This appeal does not involve any issues of principle, question of public importance or an injustice which is reasonably clear, in the sense of going beyond merely what is arguable. In the circumstances, leave to appeal is refused.
There was no utility in Zeaiter filing a notice of motion as the orders sought covered the same grounds that I had to analyse when deciding whether I should grant leave to proceed. Therefore, I dismiss Zeaiter's motion dated 15 December 2023, with no order as to costs.

Costs

Costs are discretionary. Costs follow the event. Rahman is to pay Zeaiter's costs of the appeal. Zeaiter seeks a cost order on an indemnity basis from 15 March 2024 and upon a gross lump sum basis.
The starting point is s 98 of the Civil Procedure Act 2005 (NSW). It relevantly reads: "98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court. (3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings. (4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to: (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, or (d) such proportion of the assessed costs as does not exceed a specified amount." [My emphasis]
Rules 42.1 and 42.15A of the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR') are relevant. They read: "42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. …

Rahman's submissions on Costs

Rahman sought that each party pay for their own costs and referred to the Civil Procedure Act s 56(1) which states that the court in application of civil proceedings is required to facilitate a just, quick and cheap resolution. He referred to some cases which centred on the principles of fairness and equity and that had given orders for each party to pay its own costs.
On 11 March 2024, Zeaiter made a Calderbank offer to settle the proceedings on the following items: 1. Rahman to discontinue proceedings in this matter. 2. Each party pay their own costs in the matter.
The letter stated that this offer is genuine and represents a compromise in circumstances where Rahman's claim before the Supreme Court of NSW has little merit.
The offer remained open until 4pm, 14 March 2024. It was not accepted.
In Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790, Bergin J at [9] confirmed the relevant principles in relation to Calderbank offers by reference to Leichhardt Municipal Council v Green [2004] NSWCA 341, stating that the costs consequences attendant under the general law upon an offer of compromise made in a Calderbank letter are in the court's discretion, to be exercised having regard to all of the relevant circumstances of the case. Firstly, there is not a prima facie presumption in favour of an award for indemnity costs if the Calderbank offer is not accepted and is not bettered; secondly, a Calderbank offer that has no real element of compromise in it, which is designed merely to trigger costs sanctions, will not be treated as a genuine offer of compromise; thirdly, there is no rule that an optimistic offer is not a genuine offer. Whether or not it was reasonable to reject an offer is a question that may figure in the discretionary balance, but it is not a question which affects the genuineness of the offer; and fourthly, an applicant for an order for indemnity costs consequent upon an unaccepted Calderbank offer must show that the rejection of the offer was unreasonable. Thus, the questions for the court are (a) whether the offer was a genuine offer of compromise; and (b) whether it was unreasonable for the recipient of the offer not to accept the offer: see Miwa Pty Ltd v Siantan Properties Pty Ltd (No. 2) [2011] NSWCA 344 at [8].
The issue is whether the costs should be paid on an indemnity basis from the 15 March 2024 as Zeaiter made a Calderbank offer of compromise to settle the proceedings on the basis that Zeaiter discontinue the proceedings and each party is pay their own costs, Zeaiter did not accept the offer.

Lump sum costs order

In Hamod v New South Wales [2011] NSWCA 375, where Beazley JA (with whom Giles and Whealy JJA agreed) stated at [816]: "[816] The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act, ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred (for example, Harrison v Schipp); the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability: Ritchie's Uniform Civil Procedure NSW at [s 98.45]."
In Ghougassian v Fairfax Community Newspapers Pty Ltd [2015] NSWCA 307, Emmett JA stated at [62]: "[62] Under s 98(4)(c) of the Civil Procedure Act, the court may make a costs order as a specified gross sum, rather than assessed costs. The discretion conferred by that provision may be exercised where the assessment of costs may be protracted and expensive and if it appears that a party obliged to pay the costs may not be able to meet a liability to do so. The power may also be exercised where a party's conduct contributes unnecessarily to the incurring of costs."
In Chaina v Presbyterian Church (NSW) Property Trust (No. 26) [2014] NSWSC 1009 at [50(c)] and [51], Davies J stated: "[50] I have taken into account the following matters in concluding that a specified gross sum for costs should be ordered: … (c) The fact that the Plaintiffs are unrepresented, and are likely to remain unrepresented through any costs assessment process. The difficulties that attended the hearing of the substantive proceedings when the Plaintiffs were unrepresented were significant. The position would be magnified in any costs assessment process, not the least reason for which would be that the Plaintiffs are unlikely to be able to engage any form of advisor to assist them through the process; … [51] When assessing the costs for the purpose of making a gross sum order a broad brush approach may be taken: Zepinic v Chateau Constructions (Aust) Ltd (No. 2) [2014] NSWCA 99 at [31] and [38]; Hamod v New South Wales (No 13) [2009] NSWSC 756 at [31]; see also Hamod at [819]-[820] and Young v Hones (No. 3) [2014] NSWSC 499 at [28]-[30]."
Zeaiter seeks that Rahman pay his costs and those costs to paid as a gross sum, on the basis that more costs will be incurred in having its bill of costs assessed in the circumstances where they may not be paid. He relies on two affidavits of Jospeh Trimachi ('Trimachi') his solicitor dated 1 July 2024 and 10 July 2024. In the affidavits he outlines the fees he has charged Zeaiter.
As of 10 July, Zeaiter's sole remaining step in relation to the proceedings which Zeaiter's solicitor anticipated would be required for Zeaiter is attendance at the final hearing. The proceedings had been set down for hearing on one day only, being 11 July 2024. Based on his hourly rate set out above, he anticipates that the costs of his attendance at the hearing will be $2,100.00 plus GST, which amounts to an attendance of six hours.
Based on his experience, the nature, complexity, and steps involved in the proceedings the hourly rates and amounts charged (and to be charged) as set out above are appropriate and reasonable in the circumstances of these proceedings.
The disbursements chiefly relate to fees for the attendances of counsel. Counsel who has been briefed on behalf of Zeaiter in these proceedings are: 1. Mr Di Lizia, who is approximately two years' call to the Bar. Mr Di Lizia's hourly rate charged in relation to these proceedings is $270 exclusive of GST per hour and $2,700 exclusive of GST per day. I observe that the total amount charged by Mr Di Lizia in relation to these proceedings to date is $6,474.60 including GST. 2. Mr Vertoudakis, who is approximately one month's call to the Bar. Mr Vertoudakis' hourly rate charged in relation to these proceedings is $230.00 exclusive of GST. I observe that the total amount charged by Mr Vertoudakis in relation to these proceedings to date is $885.50 including GST.
The invoice issued by his office on 19 December 2023 in the sum of $718.00 represents the filing fee paid on behalf of Zeaiter for the filing of the notice of motion before the Court.
On 4 July 2024 at 2pm, Zeaiter's solicitor appeared before Sweeney J, for a notice of motion brought by Rahman. In these proceedings Rahman, sought a referral for legal assistance under Pt 7 division 9 of the Uniform Civil Procedure Rules.
Sweeney J, ultimately found against Rahman and declined to make the orders sought in Rahman's notice of motion. Her honour ruled that the costs of the motion were to be costs in the cause. Zeaiter was the successful party, Rahman has to pay the costs of this matter. The hearing for the notice of motion concluded at approximately 3pm.
Zeaiter's solicitor quoted his hourly rate charged to Zeaiter in these proceedings at $350 plus GST. He observed the total amount to be charged to Zeaiter resulting from his attendance at the notice of motion to be $577.50 inclusive of GST. This sum is made up of thirty minutes of preparation time and one hour of time spent in Court.
He observed that the total amount to be charged to Zeaiter in relation to these proceedings as of the date of the affidavit, 1 July 2024 was $1,050.00 plus GST.
The total of the gross sum costs order, accepting that there is an indemnity costs order from 15 March 2024 and making a deduction of 20%, that is generous to Rahman, amounts to the following,
The costs submitted by Zeaiter are the addition of $6,474.60 (for the services of counsel), $1050.00 (for additional services of counsel) and $885.50 (solicitor's fees). The amounts of $718.00 and $577.50 which pertain to the notice of motion will not be included.
The final sum when applying the 20% discount is $6,728.08.

Resolution

Costs are discretionary, costs normally follow the event. Rahman is to pay Zeaiter's costs. It is my view that the costs should be ordered on an indemnity basis and assessed on a lump sum basis, Zeaiter's costs are assessed at $6,728.08.
The Court orders: 1. The leave to appeal is refused. 2. The summons dated 5 December 2023 is dismissed. 3. The decision of the Appeal Panel dated 21 June 2023 is affirmed. 4. Rahman is to pay Zeaiter's costs assessed as a gross sum $6,728.08 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 August 2024

Residential Tenancies Act 2010(NSW)ss 33, 63, 65, 89(5)

Uniform Civil Procedure Rules 2005(NSW)rr 42.1, 42.15A, 98.45

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