The Owners - Strata Plan No 87265 v Saaib

Facts

1. By summons filed on 20 December 2016, the Owners Corporation commenced the Saaib proceedings against Mr Saaib and two other defendants.
2. By letter dated 5 June 2017 from his solicitor to the solicitor for the Owners Corporation, Mr Saaib made a without prejudice offer to settle the Saaib proceedings (5 June offer). The terms of the 5 June offer were to settle the dispute between the parties on the basis of mutual releases as to the carrying out of works for the development of the 11 residential dwellings and the Marrickville property and consent orders in the Saaib proceedings that provided for the following: 1. the Owners Corporation to discontinue the proceedings against Mr Saaib; and 2. each party to bear their own costs.
3. The 5 June offer was open for acceptance for 28 days from the date of the letter and expressed to have been made in accordance with r 20.26 of UCPR and Division 4 of Part 20 of the UCPR. The letter also stated that if the offer did not take effect as an offer of compromise under the Rules it would be relied on as a Calderbank offer in accordance with the principles articulated in Calderbank v Calderbank [1975] 3 WLR 586.
4. The letter which contained the 5 June offer provided reasons for Mr Saaib's view that the claims made against him in the Saaib proceedings were unsustainable. It was asserted that Mr Saaib had never signed any construction contract with Transformer Group or any construction contract relating to the construction project or the Marrickville property, that the purported signatures on the 4 October Contact were not made by Mr Saaib and were fraudulent, and that the offer was a reasonable compromise given Mr Saaib had incurred considerable costs by being joined to the proceedings on the basis of an "invalid and fraudulent contract to which he was never a party".
5. No response was received to the 5 June offer. At the time of the 5 June offer, Mr Saaib had not filed a list response, neither party had served any evidence and Mr Saaib had incurred costs of $9,802.35 including disbursements and "unbilled WIP".
6. Mr Saaib filed a list response to the amended list statement on 26 July 2017.
7. By letter dated 11 September 2018 from his solicitors, Mr Saaib made another offer to settle the Saaib proceedings (11 September offer). The letter in which the 11 September offer was made asserts that Mr Saaib was not the builder of the Marrickville project (either by direct engagement or through some form of alleged agency), there was no documentary evidence or witness placing Mr Saaib as the builder of the project, and the Owners Corporation should be suing William Zaatini. The letter also asserts that Mr Saaib's costs, which to date had been limited to legal and handwriting expert costs, were about to "balloon" as he will soon start to engage building experts to conduct inspections and report findings.
8. The 11 September offer is not relied on by Mr Saaib for indemnity costs.
9. Under cover of a letter dated 30 July 2019 from his solicitor, Mr Saaib made an offer of compromise of the same date (30 July offer). The 30 July offer was in the following terms: 1. The first defendant offers to compromise the whole of the plaintiff's claim against him in the proceedings on the following terms: Judgment for the first defendant, with no order as to costs. 1. The offer is made in accordance with r 20.26 of the UCPR. 2. The offer is open for acceptance until 5pm on Friday, 30 August 2019.
10. The cover letter to the 30 July offer provided reasons for Mr Saaib's view that the Owners Corporation's case against him was untenable and refers to documents obtained on subpoena and discovery which were identified as another forged construction contract, a forged Builder's Deed, further forged statutory declarations, and an email from Mr Zaatini denying Mr Saaib's involvement in the project.
11. No response was received to the 30 July offer.
12. At the time the 30 July offer was made: 1. Mr Saaib had incurred costs of $181,318.47 including disbursements and "unbilled WIP"; 2. Mr Saaib had filed a list response to the Owners Corporation's amended list statement; 3. Mr Saaib and the Owners Corporation had served lay and expert evidence. Mr Saaib's evidence at that time included an affidavit from Mr Saaib sworn 28 February 2019, the affidavit from Steve Valtas dated 29 May 2019, two expert reports from Steve Dubedat dated 13 September 2017 and 18 April 2019, and an expert report from John Worthington dated 20 February 2019 responding to the Owners Corporation's defects claim evidence. The Owners Corporation's evidence at the time included an affidavit from Wajiha Ahmed dated 9 November 2018 (which was not read at the hearing) and ten expert reports relating to its defects claim; and 4. the Saaib proceedings had already been listed for a hearing that was scheduled to commence on 23 September 2019.
13. The related proceedings against Ms Alexandrova were commenced by the Owners Corporation on 30 July 2019. The hearing of the Saaib proceedings on 23 September 2019 was subsequently vacated to enable the related proceedings against Ms Alexandrova to run together and be heard at the same time as the Saaib proceedings. Further lay evidence was served by Mr Saaib in the Saaib proceedings after 30 July 2019, including lay affidavits responding to two affidavits served by Ms Alexandrova in the related proceedings.

Should indemnity costs be ordered?

1. Mr Saaib claims indemnity costs on the basis that the 5 July offer or, alternatively, the 30 July offer comply with r 20.26 of the UCPR, they were not accepted by the Owners Corporation and, thus, r 42.15A of the UCPR was engaged.
2. Rule 42.15A of the UCPR provides: 42.15A Where offer not accepted and judgment no less favourable to defendant (1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer. (2) Unless the court orders otherwise - (a) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and (b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis - (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and (ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.
3. The Owners Corporation does not dispute that Mr Saaib obtained a judgment no less favourable than the terms of the 5 June and 30 July offers.
4. The Owners Corporation also does not dispute, correctly in my view, that the 30 July offer complies with the formal requirements of r 20.26 of the UCPR.
5. Thus, the issues raised by the submissions are: 1. in relation to the 5 June offer, whether the offer satisfies the requirements of r 20.26 of the UCPR and, if so, whether the Court should, in the circumstances of this case, order otherwise under r 45.15A of the UCPR. Mr Saaib does not rely on the 5 June offer as a Calderbank offer if it is not valid under the Rules; and 2. in relation to the 30 July offer, whether the Court should, in the circumstances of this case, order otherwise under r 42.15A of the UCPR.
6. For the reasons that follow, I have concluded that the appropriate exercise of the discretion as to costs is that Mr Saaib should be entitled to indemnity costs from 31 July 2019, based on the 30 July offer.

The 5 June offer

1. The Owners Corporation contended that the 5 June offer is not a valid offer of compromise under r 20.26 of the UCPR as it provided for an order to discontinue the proceedings rather than "orders for the disposal of the claim" as required by r 20.26(2)(a)(ii). It submitted that discontinuance does not dispose of a claim. It also submitted that the authorities cited by Mr Saaib in support of the proposition that an offer for discontinuance may still be a valid offer, namely, YWCA Australia v Chief Commissioner of State Revenue (No 2) [2021] NSWSC 102 (YWCA) at [21] and Zhou v Xie [2020] NSWSC 1367 (Zhou) at [22]-[23], do not squarely consider the issue of discontinuance and disposal under r 20.26.
2. Filing a notice of discontinuance in proceedings may not finally do away with a plaintiff's claim as the Rules provide that discontinuance does not prevent a plaintiff from claiming the same relief in fresh proceedings: UCPR, r 12.3(1). I also accept that Payne JA in YWCA and Stevenson J in Zhou did not directly address whether an offer that provides for discontinuance of proceedings would render invalid an offer of compromise which otherwise complied with r 20.26.
3. That said, I am inclined to the view that an offer of compromise by a defendant that provides for a plaintiff to consent to an order that proceedings be discontinued with each party to pay their own costs can be characterised as an offer that provides for disposal of the claim in the proceedings. This is because, for all intents and purposes, the practical effect of filing a notice of discontinuance in those terms would be to bring to an end the proceedings in which the claim is made. While not directly dealing with this distinction, in my view, the approaches in YWCA and Zhou support this view as the decision to not make indemnity costs orders in each case was based on an "order otherwise" pursuant to r 42.15A and premised on each offer of compromise that provided for a discontinuance engaging and being otherwise valid under r 20.26.
4. In any event, in addition to proposing a discontinuance of the proceedings, the 5 June offer was also expressed to be made "in full and final settlement of the dispute…on the basis of mutual releases as to the Project and the Property". The requirement of a "release" from the Owners Corporation in relation to the Marrickville project would, in my view, have been understood to mean that Mr Saaib required the Owners Corporation to fully and finally give up its claim against him. The giving of a release together with filing a consent order providing for discontinuance of the proceedings would have had the effect of disposing of the claim against Mr Saaib in the Saaib proceedings as it would finally do away with and prevent the Owners Corporation from being able to bring and continue the same claim against him in fresh proceedings. Had the Owners Corporation responded to the 5 June offer, the parties could also have agreed to wording which reflected this, including as part of an order to discontinue the proceedings, noting that r 12.3(1) of the UCPR is subject to the terms of any consent to the discontinuance or any leave to discontinue proceedings: UCPR, r 12.3(2).
5. To treat the rules governing offers of compromise in an overly technical fashion undermines the values underlying them and the statutory mandate of giving effect to the overriding purpose of the Civil Procedure Act 2005 (NSW), which is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: Civil Procedure Act, ss 56(1)-(2). Those principles also support a purposive construction of the Rules: Ziliotto v Hakim [2013] NSWCA 359 at [12].
6. As McColl JA stated in Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 (Leach), whether non-compliance with the requirements of r 20.26 of the UCPR as to the form of an offer invalidates the offer turns on whether it was a purpose of the legislation that an offer in breach of the provision should be invalid, having regard to the language of the relevant rule and the scope and object of the UCPR: at [37], citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [91]-[93] (McHugh, Gummow, Kirby and Hayne JJ). Her Honour went on to observe that the fact that r 20.26 does not sanction non-compliance with the otherwise apparently obligatory requirements as to form suggests that the legislature did not intend for an offer which otherwise complied with its requirements to be rendered inefficacious: at [38].
7. Accordingly, I am not persuaded by the Owners Corporation's submission that the 5 June offer is not a valid offer of compromise under r 20.26 because Mr Saaib proposed an order for discontinuance rather than an order for dismissal of the proceedings or judgment in favour of Mr Saaib. I do, however, accept the Owners Corporation's submissions that Mr Saaib should not be entitled to indemnity costs from 6 June 2017 based on the 5 June offer.
8. Mr Saaib contended that the 5 June offer involved a genuine compromise because he had incurred costs and disbursements by that time and had offered to forgo any entitlement to recover them from the Owners Corporation. He submitted that this was a real concession as he was an individual litigant defending himself with no insurance and out of his own pocket against multi-million dollar claims based on a forged contract.
9. Mr Saaib submitted that if the Court accepted that the 5 June offer was a valid offer under the Rules, r 42.15A was engaged with the consequence that Mr Saaib should be entitled to indemnity costs from 6 June 2017 unless the Court orders otherwise. Mr Saaib submitted that, generally, exceptional circumstances are required in the sense that there must at least be circumstances that are outside the ordinary to justify departure from the general rule, referring to Consolidated Lawyers Ltd v Abu-Mahmoud [2016] NSWCA 4 (Consolidated Lawyers) at [65], South Eastern Sydney Area Health Service v King [2006] NSWCA 2 (South Eastern Sydney Area Health Service) at [83], Macquarie Radio Network Pty Ltd v Dent (No 2) [2007] NSWCA 339 at [15], and Nominal Defendant v Hawkins [2011] NSWCA 93 at [56]. He submitted that there is nothing that takes the 5 June offer out of the ordinary so as to warrant a departure from the consequence imposed by r 42.15A.
10. Mr Saaib's submissions emphasised that the Owners Corporation has served no evidence and did not even respond to the 5 June offer at the time it was made. He submitted that, in the absence of such evidence, the Court should not order otherwise, referring to the comments of Hunt AJA in South Eastern Sydney Health Service, with whom Mason P and McColl JA agreed, where his Honour said (at [83]) that an offeree must establish that they "had given serious thought to the risk involved in non-acceptance of the offer, and that he had assessed the plaintiff's case properly" and similar comments by McColl JA in Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109 at [35]-[36], with whom Mason P and McClellan CJ at CL agreed.
11. I do not accept Mr Saaib's submission that the Court should not order otherwise in the absence of evidence from the Owners Corporation. Evidence of a party's state of mind and reasoning may assist in resolving an application for an indemnity costs order but is unnecessary where the Court is able to reach a relevant conclusion based upon the proceeding's objective features: Consolidated Lawyers at [68].
12. The authorities recognise that for an offer of compromise made under the UCPR to attract an indemnity costs order, it must involve some element of compromise and not merely be made so as to trigger the costs consequences under the Rules: Leach at [41], citing Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 (Regency Media) at [16]. Walk away offers are capable of triggering the indemnity costs provisions of the UCPR although the degree of compromise, which is to be determined objectively according to the circumstances of the particular case at the time the offer is made, is a relevant matter to take into account: Taheri v Vitek (No 2) [2014] NSWCA 344 (Taheri) at [9]-[14]; Leach at [42].
13. The compromise made in the 5 June offer was giving up those costs which Mr Saaib was likely to recover on an ordinary basis if the offer was not accepted and the Owners Corporation was not successful which, at the time the offer was made, would have been less than $9,800. To offer to forgo party/party costs of that amount does not, in my view, involve the requisite element of compromise such that the offer could be said to have constituted a real concession or commercial compromise, even in the context where Mr Saaib was an individual litigant who may have had to bear some or all of those costs personally: Zhou at [25]; cf Leach at [43] and Clark v Commissioner of Taxation (2010) 222 FCR 102; [2010] FCA 415 (Clark) at [90]-[92].
14. Further, at the time the 5 June offer was made, the proceedings were at an early stage of preparation. In the absence of a list response having been filed and any lay or expert evidence served on behalf of Mr Saaib, the objective features of the case make clear that the Owners Corporation was not in any position to test the assertions made in the letter containing the 5 June offer, including that Mr Saaib had not signed the 4 October Contract, or make any realistic assessment of the likely outcome of the proceedings.
15. In my view, there was no real element of compromise such that it could be said that the 5 June offer did not attract the operation of r 42.15A of the UCPR. Even if it did, the lack of compromise together with the timing of the offer prior to the filing of the list response and any evidence are, in my view, sufficient reasons and constitute circumstances out of the ordinary which justify departure from the general rule to order otherwise under r 42.15A: Consolidated Lawyers at [65]. Such an offer does little to serve the purpose of encouraging settlement: Taheri at [10].

The 30 July offer

1. As noted above, there is no dispute that the 30 July offer complies with the technical requirements of r 20.26 of the UCPR. Accordingly, pursuant to r 42.15A, Mr Saaib is presumptively entitled to an order for indemnity costs from 31 July 2019 unless the Court orders otherwise.
2. Mr Saaib relied on the submissions made in relation to the 5 June offer as to why the court should not order otherwise in relation to the 30 July offer. He noted that by the time the 30 July offer was made, the proceedings had been on foot for two and a half years and Mr Saaib had incurred substantial legal costs. Mr Saaib also submitted that the absence of evidence of the Owners Corporation's consideration of the 30 July offer should be fatal to their challenge to his claim for indemnity costs based on that offer. Pausing here, for the reasons referred to at [36] and [37], I do not accept this submission.
3. Mr Saaib also submitted that the Owners Corporation's failure to accept the 30 July offer was unreasonable as, by that time, the Owners Corporation knew or should have known of the difficulties with its case.
4. The Owners Corporation submitted that the Court should exercise its discretion and not order indemnity costs based on the 30 July offer because this was an all or nothing case and for a walk away offer to trigger the indemnity costs mechanisms under the Rules, "the claim or defence would have to approach something of the character of being frivolous or vexatious", relying on Regency Media at [31] and Leach at [51].
5. The Owners Corporation submitted that its claim did not have a degree of hopelessness, was not frivolous or vexatious and the result was "far from a foregone conclusion" such that it was reasonable for the Owners Corporation not to have surrendered or capitulated by accepting the 30 July offer. It referred to the length of the judgment and the complex issues of fact and law as important factors going to the reasonableness of the Owners Corporation's non-acceptance of the offer, which it contended is not an irrelevant consideration to the Court's discretion as to whether to order indemnity costs.
6. The Owners Corporation also submitted that the 30 July offer offered nothing by way of damages and that it is not relevant that Mr Saaib contended that he was not liable for any of the Owners Corporation's claim.
7. As was pointed out in the submissions, there is some conflict in the authorities about whether "exceptional circumstances" are required for the Court to "otherwise order": see Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [32]-[38]; Regency Media at [15]; Leach at [46]-[47]. I have approached the issue on the basis that there must circumstances in the case that are out of the ordinary to justify departure from the prima facie position provided under the Rules, noting that it is not possible to state all of the circumstances in which the Court's discretion to "otherwise order" might be exercised: Consolidated Lawyers at [65]; Leach at [48].
8. It has been observed that the statement in Regency Media relied on by the Owners Corporation (as referred to at [44] above) needs to be considered in context. The offer in Regency Media of $10,000 was made under a previous form of the UCPR at an early stage of the proceedings before a defence was filed in an all or nothing case that turned on an issue of contractual construction: Hungry Jack's Pty Ltd v Fourtounas (No 2) [2021] NSWCA 26 at [9]-[10] (Basten and White JJA); Loulach Developments Pty Ltd v Roads and Maritime Services (No 2) [2019] NSWSC 601 at [11] (Leeming JA).
9. Ward JA (with whom Beazley P and Leeming JA agreed) also stated in Prospect Resources Ltd v Molyneux [2015] NSWCA 171 at [94] that Regency Media does not lay down a rigid rule in this regard and that what amounts to a derisory offer as opposed to an offer containing a sufficient element of compromise is to a large extent a matter of impression.
10. In Leach, a personal injury case, the Court of Appeal upheld the trial judge's decision not to award indemnity costs in circumstances where the plaintiff had suffered serious injuries and there was uncertainty as to the application of the statutory test to the established facts in the case, including in light of the success of plaintiffs in other cases. McColl JA (with whom Gleeson JA and Sackville AJA agreed) concluded that the "liability case cannot be said to have been frivolous or vexatious so as to trigger the indemnity costs mechanisms": at [53]. Her Honour observed that the case was difficult and, to a certain extent, novel, and took into account the serious injuries suffered by the plaintiff and the substantial claim for damages as factors that led her to conclude that it was not unreasonable for the plaintiff not to have accepted the offer such that the presumptive entitlement to indemnity costs under r 42.15A of the UCPR was displaced: at [53]-[56].
11. The 30 July "walk-away" offer was made late in the proceedings, at a point where a hearing date had been set and Mr Saaib had incurred legal costs of over $180,000. While not told of the amount, it must have been apparent to the Owners Corporation that Mr Saaib's costs were not inconsiderable by that time given the extent of the pre-trial preparation, including the expert evidence that had been served by Mr Saaib to date, and the indication in the letter from Mr Saaib enclosing the 11 September offer that his costs were going to "balloon".
12. In my view, an offer made by an individual litigant to forgo costs of $180,000 in those circumstances, even assessed on a party-party basis, could not be characterised as contemptuous or derisory. It represented an offer to forgo a valuable entitlement and involved a real element of compromise. There are cases where, on the facts, a walk away offer to forgo costs has been sufficient to satisfy the element of compromise for the purposes of the Rules: see, for example, Leach at [43]-[44], [50]-[51]; Taheri at [12]-[13]; South Western Sydney Local Health District v Gould (No 2) [2018] NSWCA 160 at [6]-[7].
13. The Owners Corporation's case against Mr Saaib involved a claim for several million dollars worth of damages for breach of warranties implied by the Home Building Act 1989 (NSW). The defects part of the Owners Corporation's claim was mostly agreed and the proceedings were, in essence, run as an "all or nothing case". The key legal and factual issues on which the claim was fought were whether Mr Saaib entered into and was a party to the 4 October Contract, either because he signed the contract himself or authorised his nephew, Mr Zaatini, to sign and enter into it on his behalf, and whether Mr Saaib undertook any building work at the Marrickville property. On those matters, the Owners Corporation did not succeed.
14. The 30 July offer was made at a time when the Owners Corporation had had an opportunity to properly assess the strengths and weaknesses of its case and test the assertions made by Mr Saaib in the cover letter to the offer, as well as in Mr Saaib's earlier offers and the list response. By that time, Mr Saaib had deposed that he did not sign the 4 October Contract and a range of other project-related documents, including the falsified statutory declarations. There was corroborative evidence from Mr Dubedat and Mr Valtas of those matters, in addition to a lack of project-related documentation linking Mr Saaib to the Marrickville project in the material made available through subpoenas and discovery.
15. In my view, the lay and expert evidence from Mr Saaib raised significant difficulties for the Owners Corporation's claim. That part of the claim based on the allegation that Mr Saaib signed the 4 October Contract had no real prospects and was rightly abandoned at the hearing. The Owners Corporation's allegation that Mr Saaib undertook the building works by himself or by supervising others was also weak given the lack of project-related documentation and direct lay evidence linking Mr Saaib to undertaking the construction of the Marrickville project.
16. There was, of course, the evidence from Ms Alexandrova, the nature of which was known to the Owners Corporation when it received the 30 July offer, though it had not yet been served on Mr Saaib other than in a hearsay form in the affidavit from Ms Ahmed. Mr Saaib's response to the matters raised in Ms Ahmed's affidavit, which referred to differing accounts of what was alleged to have been discussed between Mr Saaib and Ms Alexandrova, was known at the time of the 30 July offer. In my view, that evidence highlighted further difficulties and uncertainty as to the outcome of the Owners Corporation's agency case based on Ms Alexandrova's evidence.
17. In view of the information provided by Ms Alexandrova, I accept that the Owners Corporation's case against Mr Saaib based on the agency allegation could not be said to have been hopeless and lacking in any merit or that it was unreasonable for the Owners Corporation to take the view that it could pursue the case on that basis and not accept the offer. But, the mere fact that it may have been reasonable for the Owners Corporation to take the view that it did in rejecting the 30 July offer is not enough to displace the operation of r 42.15A of the UCPR: Leach at [48]; Walker v Harwood [2017] NSWCA 228 at [17], [59].
18. While it involved a large damages claim, the Owners Corporation's case was founded on a forged contract. The nature of Mr Saaib's all or nothing defence and the lack of other defendants meant that the opportunity to offer any significant compromise was, in reality, limited to costs. The Owners Corporation's agency case could not be described as vexatious or frivolous in the sense that it was not liable to be dismissed, but it did not raise any novel question of law and was a case based largely on inferences. In the circumstances of this case, it is not assessing on the basis of hindsight to conclude that it must have been known to the Owners Corporation at the time of the 30 July offer that there were weaknesses with its case, Mr Saaib's position was supported by the expert evidence from Mr Dubedat and other documentary evidence, and there was a risk of indemnity costs in not accepting an offer of compromise made according to the Rules.
19. The Rules expressly provide for an offer in the terms of the 30 July offer made by Mr Saaib and that offer involved a real and significant compromise on his part. By the time of the 30 July offer, the Owners Corporation had received and not accepted two earlier offers and the difficulties with the case it advanced had repeatedly been drawn to its attention. I also do not consider there to have been anything out of the ordinary in what occurred in the conduct of the Saaib proceedings.
20. In the above circumstances, I have concluded that the Owners Corporation has not demonstrated that there is good reason for me to exercise my discretion and depart from the presumption set out in r 42.15A of the UCPR and order otherwise that Mr Saaib is not entitled to indemnity costs based on the 30 July offer. Accordingly, the costs order made in the judgment will be varied to provide that Mr Saaib is entitled to indemnity costs from the day following the 30 July offer being made, that is, from 31 July 2019. The varied order will also clarify that it is subject to any other costs orders made in favour of the Owners Corporation.
21. As there is no dispute that the 30 July offer was valid under the Rules, it is unnecessary to consider Mr Saaib's alternative claim that the 30 July offer operated as a Calderbank offer.

Should the costs order be stayed?

1. In its written submissions on the issue of costs, the Owners Corporation submitted that the enforcement of any order as to costs should be stayed pending the earlier of: 1. its written confirmation to Mr Saaib's solicitors that it does not intend to proceed with an appeal; 2. the expiry of the time for it to file an appeal permitted by its notice of intention to appeal filed 25 March 2021, being 24 May 2021; and 3. entry of orders on an appeal where an appeal is commenced.
2. According to the Owners Corporation's written submissions, on 25 March 2021, it filed a notice of intention to appeal these proceedings, the catalyst for which was, in part, the indication by Ms Alexandrova that she intended to appeal the related proceedings. It is also asserted that, in addition, the Owners Corporation is "considering its position" about an appeal.
3. Mr Saaib submitted that the Court should not entertain the application for a stay in circumstances where it was made without notice to him and in written submissions that should have been confined to his application for a different costs order.
4. In my view, there is merit to that submission. As Mr Saaib submitted, one consequence of the approach adopted by the Owners Corporation is that he has not had the opportunity to file evidence in response to the application. While accepting that the Court has power of its own motion to order a stay of execution of judgment, including in relation to a costs order, an application for a stay is usually made by notice of motion supported by an affidavit. The Owners Corporation has adduced no evidence as to the factual matters on which it relies.
5. Nevertheless, I have approached the Owners Corporation's submissions as an application to me as the trial judge for a stay of the costs order on the grounds there stated. For the following reasons, I am not satisfied that the Owners Corporation has demonstrated that there is good reason or that this is an appropriate case to order that the enforcement of the costs order in favour of Mr Saaib be stayed and refuse the application.
6. While the Court has a broad discretion in making such orders, the onus is on the Owners Corporation, as the party seeking the stay, to demonstrate there is a reason or that this is an appropriate and proper case for a stay. The mere filing of an appeal or, in this case, a notice of intention to appeal will not, of itself, provide a reason or demonstrate an appropriate case, nor will it discharge the onus which the Owners Corporation bears: Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 (Alexander) at 694.
7. Even if I were to assume that an appeal will be pursued by the Owners Corporation, there is no evidence of any risk that Mr Saaib would not repay the costs awarded to him or there would be any difficulty or delay in him doing so if the appeal was successful: Bridges v Australian Consolidated Press Ltd (Court of Appeal (NSW), 16 June 1970, unrep); Woolworths Limited v Strong (No 2) (2011) 80 NSWLR 445; [2011] NSWCA 72 at [67]-[68]. The Owners Corporation has no automatic right to a stay of a primary decision, including an order for costs. A party in the position of Mr Saaib is prima facie entitled to the fruits of the judgment: Richardson v Lindsay [2019] NSWCA 30 (Richardson) at [8].
8. No evidence has been led or submissions made to the effect that the balance of convenience and the competing rights of the parties are such that the interests of justice require a stay to be granted, or there is a risk that an appeal will prove abortive if a stay is not granted: New South Wales Bar Association v Stevens [2003] NSWCA 95 at [83]; Richardson at [8]. Nor was any evidence led to the effect that the enforcement of the costs order would impose a significant financial burden on the Owners Corporation, a factor that may have been relevant if there was evidence that an appeal was on foot and was going to be prosecuted: Chen v Lym International Pty Ltd [2009] NSWCA 121 (Chen) at [40], [51].
9. Further, and as Mr Saaib submitted, as no grounds of appeal have yet been articulated, it is not possible for the Court to form a rational view as to whether the grounds of appeal would be reasonably arguable or undertake any preliminary assessment of the merits of any appeal. While there is no requirement that the court determine whether there is an arguable case on the appeal, it is a matter that may be relevant in determining whether it is appropriate to grant a stay: Alexander at 695; Chen at [15]; Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184 at 188-189.
10. Accordingly, the Owners Corporation's application for a stay of enforcement of the costs order in favour of Mr Saaib is refused.

Orders and costs

1. By his motion, Mr Saaib seeks his costs of the application for indemnity costs to be paid by the Owners Corporation on an ordinary basis. Given his success with the application, I see no reason why costs should not follow the event and will make such an order: UCPR, r 42.1.
2. For these reasons, the Court orders: 1. Order (2) made on 1 March 2021 be varied so as to provide: Subject to any costs orders already made in the proceedings, the Plaintiff to pay the First Defendant's costs: 1. up to and including 30 July 2019 as assessed or agreed on the ordinary basis; and 2. thereafter on an indemnity basis. 1. The Plaintiff to pay the First Defendant's costs of this application on the ordinary basis.

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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: 21 April 2021