Xabregas v The Owners - Strata Plan No. 79205; Moallem v Consumer, Trader and Tenancy Tribunal & Ors

Judgment 1HIS HONOUR: This judgment deals with what costs orders should be made in relation to the notice of motion filed by Ms Moallem on 8 November 2013 and the notice of motion filed by Dr Xabregas on 13 November 2013, which themselves concerned issues arising under earlier costs orders. These reasons are to be read with my reasons in Moallem v Consumer, Trader and Tenancy Tribunal & Ors [2013] NSWSC 1700 and Xabregas v The Owners - Strata Plan 79205 and Moallem v Consumer, Trader and Tenancy Tribunal & Ors (No. 2) [2014] NSWSC 1027. 2In the latter judgment I set out at [108] my prima facie view as to what costs orders should be made in respect of the notices of motion of 8 and 13 November 2013. I directed that if any party sought any different or further costs orders I would deal with those questions on written submissions and made directions for the service of written submissions. The opportunity to provide submissions on costs of the notices of motion did not extend to re-opening the issues decided by either of my two previous judgments, or by earlier orders of the Court. 3Both Dr Xabregas and Ms Moallem provided written submissions that sought different costs orders from those I had indicated I was prima facie disposed to make in respect of the two notices of motion in question. Neither the Owners Corporation, Progressive Strata, nor Grace Lawyers sought any different order. I received written submissions from Progressive Strata and the Owners Corporation in response to the submissions of Ms Moallem. Dr Xabregas provided further submissions described as being in response to the submissions made by the other parties, but in fact raising additional matters outside the leave given for the filing of submissions. Ms Moallem also served further submissions, both in response to the replies given by Progressive Strata and the Owners Corporation and in relation to the further submissions of Dr Xabregas. 4I will deal first with the submissions of Dr Xabregas. It appears that she interpreted the leave I gave in para [109] of my second judgment as extending to entitling her to seek different orders in relation to the costs of the notices of motion of 18 October 2013 in the 2011 proceedings and the summons in the 2013 proceedings that I dealt with in my second judgment. The leave given related only to the order for costs that should be made in relation to the notices of motion of 8 and 13 November 2013. The costs of the earlier proceedings that were dealt with by my second judgment are not to be revisited. To do so would be contrary to the principle of finality of judgments. 5Relevantly for present purposes, Dr Xabregas submitted that no costs orders should be made against her in respect of Ms Moallem's notice of motion of 18 (scil. 8) November 2013, or that the costs of Ms Moallem's notice of motion of 8 November 2013 and Dr Xabregas' notice of motion of 13 November 2013 should be in the same terms as the costs orders made in respect of the Owners Corporation's notice of motion of 29 August 2013 dealt with in my reasons of 31 July 2014. (See second judgment at [94] and [107].) Dr Xabgregas raised as a third alternative: "Costs against the successful party in the above proceedings and/or in the interests of justice and not just the affirmation of Bergin CJ's orders of 2012, that an order be made that any costs against Benvinda Xabregas in the above proceedings be as assessed and capped by the Court, and that the Court use its discretion to set off the costs as against the amended cross-summons which is awaiting allocation of a hearing date." 6I made costs orders against Dr Xabregas on 4 November 2013 and I made costs orders adverse to her concerning the burden of the costs payable by and incurred by the Owners Corporation on 31 July 2014. Those costs orders are not the subject of the present leave to make submissions in relation to the costs of the two notices of motion with which I dealt. I infer that Dr Xabregas is seeking an order in respect of the earlier costs orders, including the orders I made on 31 July 2014 that the costs she is liable to pay be "as assessed and capped by the Court". No evidence has been led and no submission has been made to justify a lump sum costs order nor an order capping costs that Dr Xabregas is liable to pay. Unless she makes an agreement with the parties entitled to costs, her liability to pay costs will be in an amount to be assessed. There is no basis to set off costs yet to be assessed against the relief sought by Dr Xabregas in her amended cross-summons. 7Dr Xabregas' second written submission again sought to re-open the costs orders that have already been made. She submitted that the costs orders that have already been made against her were made not by the Supreme Court, but by individual judges and did not have the status of orders of the Court. She sought to draw support for this submission from paras [57]-[60] of my reasons in the first judgment. I there said that a strata schemes adjudicator was not the Consumer, Trader and Tenancy Tribunal and hence s 65 of the Consumer, Trader and Tenancy Tribunal Act 2001 that limited a Court's jurisdiction to grant relief in respect of the matter that had been heard and determined by the Tribunal did not apply to the determination of the strata scheme adjudicator. Section 25 of the Supreme Court Act 1970 provides that the Supreme Court is composed of the Chief Justice, a President of the Court of Appeal, and such other Judges of Appeal, Judges and associate Judges as the Governor may from time to time appoint. Section 40(1) provides: "40 Single Judge to constitute the Court (1) All proceedings in any Division and all business arising out of proceedings in a Division shall be heard and disposed of before a Judge, who shall constitute the Court." Accordingly, orders made by Judges of the Division are orders of the Supreme Court. For the reasons I gave in the first judgment, strata scheme adjudicators, when acting in that role, were not acting as the Consumer Trader and Tenancy Tribunal. By contrast, where a Judge of the Supreme Court acts in that capacity, he or she acts as the Court. 8Dr Xabregas' second written submissions made an accusation of apprehended bias against Bergin CJ in Eq, Windeyer AJ and me, although no application was made that I should recuse myself. No basis for any such application was identified in Dr Xabregas' submissions. 9Dr Xabregas' second written submissions again sought to dispute the merits of the orders made on 31 July 2014. For example, she submitted that "... the judgments finding in favour of Ms Moallem make a mockery of the legal principles of Contract Law and Dr Xabregas' and Mr Marcos' rights pursuant to the deed of agreement between the parties ...", and that "White J's judgment does not consider evidence adduced by Dr Xabregas which also confirmed Dr Xabregas' allegation that not all of the OC's lawyer's costs were coverable under deed as Ms Moallem had received personal representation by the OC's lawyers. ...". These are not matters to be re-ventilated. I am only dealing with the costs of the notices of motion that were dealt with by my reasons and orders of 31 July 2014. 10Counsel for Ms Moallem submitted that I ought to entirely disregard Dr Xabregas' second written submissions because they constituted a contempt of court because they contain scandalous allegations. I do not think it appropriate to determine whether any of the comments made by Dr Xabregas amount to a contempt of court. It is enough that her second written submission does not deal with the issues on which she was entitled to make written submissions. 11Ms Moallem's notice of motion of 8 November 2013 was dismissed, but I confirmed Windeyer AJ's order that the costs payable by the Owners Corporation to her be levied against Lot 2. I ordered that the Owners Corporation's own costs in relation to her notice of motion filed on 18 October 2013 in the 2011 proceeding and in respect of her summons in the 2013 proceedings not be levied against Lot 2, but that Dr Xabregas and Mr Marcos indemnify the Owners Corporation in respect of such costs. I expressed the prima facie view that having regard to that mixed success, there should be no order as to costs between Ms Moallem and Dr Xabregas on their respective notices of motion. 12Ms Moallem submits, in substance, that although she did not receive the precise orders she sought in her notice of motion of 8 November 2013, she was substantially successful on that notice of motion. The notice of motion was brought to deal with what was called the "lacuna" in the orders of Windeyer AJ of 25 October 2013. Windeyer AJ ordered that costs of the Owners Corporation in the proceedings not be levied against Lot 1. The lacuna was as to how costs of the Owners Corporation might be raised if they could not be levied against Lot 1, particularly in the light of s 78(2) of the Strata Schemes Management Act 1996. The ultimate concern of Ms Moallem would be that if the Owners Corporation did not pay its solicitors because it could not make a levy against Lot 1 owing to the orders of Windeyer AJ and could not make a levy only against Lot 2 because of s 78(2) of the Strata Schemes Management Act, it might apply for the termination of the strata scheme pursuant to s 51 of the Strata Schemes (Freehold Development) Act 1973. 13Ms Moallem submits that it would be unjust if she were required to bear her own costs of her notice of motion of 8 November 2013 and her appearance on 22 November 2013 which concerned also Dr Xabregas' notice of motion of 13 November 2013. She was the innocent party in relation to the transactions and proceedings arising from the orders of Bergin CJ in Eq of 5 December 2012. That was recognised in the costs orders of Windeyer AJ of 25 October 2013 and in my orders of 4 November 2013. Although the orders she sought were not made, Ms Moallem submitted that she was throughout the successful party in the proceeding. Although she was not successful in obtaining the particular order that the costs payable by the Owners Corporation be levied against Lot 2, she obtained an order that the costs of the Owners Corporation be recovered against the current owners of Lot 2. To that extent she was successful in her application. She was also successful in resisting Dr Xabregas' application in paras 4-7 of her notice of motion of 13 November 2013. 14Ms Moallem submitted that a costs order should be made in her favour either against Dr Xabregas, or against the Owners Corporation, or against Progressive Strata. She submitted that whilst Dr Xabregas had the ultimate responsibility for the costs that had been incurred in the litigation, both Progressive Strata and the Owners Corporation had caused her to incur costs and Progressive Strata had acted in a manner that was wholly inappropriate and improper. 15Ms Moallem submitted that the circumstances in which she decided on 4 November 2013 not to press her claim for indemnity costs against Progressive Strata should not prevent a costs order being made against Progressive Strata in her favour in respect of the two notices of motion. She had made a reasonable decision on 4 November 2013 not to press her claim against Progressive Strata because to do so would have resulted in the incurring of further substantial costs in the proceedings when she hoped that the matter would be concluded following the hearing on 4 November 2013 so that further costs would be avoided. If she had pursued her notice of motion against Progressive Strata it was inevitable that further costs would be incurred. In the event further costs were incurred in connection with the hearing on 22 November 2013, but that was not due to any steps taken by Ms Moallem. Rather, it was due to the Court's raising the question of Progressive Strata's liability for costs and to Dr Xabregas' deciding to make a claim for costs against Progressive Strata. 16I do not consider that Ms Moallem is entitled to an order for costs against either Progressive Strata or the Owners Corporation. Ms Moallem had brought a claim against Progressive Strata but had consented to an order for that claim to be dismissed. Had she pursued the claim, or had she sought to revive it when Dr Xabregas filed a notice of motion seeking costs orders against Progressive Strata, Ms Moallem would have been exposed to the risk of paying Progressive Strata's costs. She avoided that risk. She obtained no relief against Progressive Strata. As Ms Moallem elected to take that course it would not be just if Progressive Strata were now required to pay her costs. 17Counsel for Ms Moallem submitted that it was not the intention of paragraph 1 of Ms Moallem's 8 November 2013 notice of motion to seek to vary the substance of the orders made by Windeyer AJ on 25 October 2013. Counsel submitted that Windeyer AJ's order of 25 October 2013 that, "the notice of motion is dismissed with costs" (referring to the notice of motion of the Owners Corporation filed on 29 August 2013) was not understood to mean that the Owners Corporation was to pay the costs of Dr Xabregas. Counsel submitted that Dr Xabregas had supported the application of the Owners Corporation at the hearing before Windeyer AJ and his Honour's order was intended to apply only to the costs of Ms Moallem. 18That is not how I construed the orders made by Windeyer AJ on 25 October 2013 when I gave my second judgment. Nor do I read them that way today. But this is irrelevant. It is not open to Ms Moallem, just as it is not open to Dr Xabregas, to use the opportunity to make submissions about the costs of the notices of motion to seek to reventilate the merits of the orders made on 31 July 2014. 19Nonetheless, the failure of Ms Moallem to obtain an order varying the orders made by Windeyer AJ that the Owners Corporation pay the costs of both Ms Moallem and Dr Xabregas in relation to its notice of motion of 29 August 2013 is not a significant matter. Dr Xabregas represented herself and accordingly there would be no significant amount payable by the Owners Corporation pursuant to that order. Having regard to my orders of 31 July 2014 the burden of the costs order against the Owners Corporation will be borne by Progressive Strata and not by the owners of either lot. 20The significant matter raised by Ms Moallem's notice of motion of 8 November 2013 was her seeking an order that the costs payable by the Owners Corporation in respect of the Owners Corporation's notice of motion of 29 August 2013 and the Owners Corporations own costs in respect of that notice of motion be levied only in relation to lot 2. I did not make the orders sought. Rather, I ordered that Progressive Strata indemnify the Owners Corporation in respect of its liability to pay costs of the Owners Corporation's notice of motion of 29 August 2013 and in respect of the costs incurred by the Owners Corporation. The costs orders I made in respect of Ms Moallem's notice of motion filed on 18 October 2013 in the 2011 proceedings and in respect of her summons filed in the 2013 proceedings were not the subject of Ms Moallem's notice of motion of 8 November 2013. That notice of motion related only to the costs of the Owners Corporation's notice of motion of 29 August 2013. 21Ms Moallem's success in the proceedings taken as a whole is reflected in the costs orders previously made. As she did not obtain the relief sought in her notice of motion of 8 November 2013, did not seek orders that Progressive Strata pay costs or indemnify the Owners Corporation in respect of costs incurred by it, and was unsuccessful in her alternative argument that costs orders be made against Grace Lawyers or that that firm not be entitled to recover costs against the Owners Corporation, Ms Moallem cannot be regarded as the successful party in respect of her own notice of motion. However, she was successful in opposing the relief sought by Dr Xabregas in paragraphs 4, 5, 6 and 7 of Dr Xabregas' notice of motion of 13 November 2013. Moreover, she had been successful in obtaining costs orders on 4 November 2013, including orders that none of the costs payable or incurred by the Owners Corporation was to be levied against her. Although she had no direct interest in the question of whether the costs payable or incurred by the Owners Corporation should be borne by Progressive Strata or by Lot 2, or by Dr Xabregas and Mr Marcos personally, it was appropriate that she attend through counsel on the further hearing in relation to that question when the matters raised by her notice of motion and Dr Xabregas' notice of motion were also dealt with. To that extent her participation in the hearing on 22 November 2013 was incidental to the final determination of the matters arising from my reasons of 4 and 20 November 2013. 22I remain of the view that there should be no order as to costs between Ms Moallem and Dr Xabregas on Ms Moallem's notice of motion of 8 November 2013. But on further consideration I think Ms Moallem should be entitled to a portion of her costs incurred on 22 November 2013 to reflect her success in opposing Dr Xabregas' notice of motion of 13 November 2013 to the extent it sought relief adverse to her and to reflect the extent to which her attendance on 22 November 2013 was incidental to the finalisation of the matters arising under the orders of 4 November 2013. A substantial part of the hearing on 22 November 2013 related to the position of Progressive Strata and the Owners Corporation, but a substantial part was also taken by Dr Xabregas' endeavour to re-open a variety of previous orders adverse to her. I think it appropriate to make no order as to the costs of Ms Moallem's notice of motion of 8 November 2013, but to order that Dr Xabregas pay half of Ms Moallem's costs of the hearing on 22 November 2013. 23In my second judgment I said (at [108(e)]) that it was my prima facie view that the Owners Corporation's costs of both notices of motion should follow the general orders. Progressive Strata should pay the Owners Corporation's costs of the notices of motion in so far as those costs concerned the costs of the Owners Corporation's costs of its notice of motion of 29 August 2013, but in so far as the costs of both notices of motion related to the costs of Ms Moallem's notice of motion of 18 October 2013 in the 2011 proceeding and to her summons in the 2013 proceeding, the costs of the Owners Corporation should primarily be borne by Dr Xabregas and Mr Marcos in accordance with orders 7 and 8 in para [107] of my reasons for the second judgment. 24No submission has been made that persuades me to depart from the prima facie view I previously expressed. But I do not think I should leave that apportionment to a costs assessor. I am better placed to determine how the apportionment should be made. That apportionment should not be made by using the reasons for my second judgment as the measure of how much time was spent on each matter. Most of those reasons concerned the liability of Progressive Strata and Grace Lawyers to an adverse costs order in respect of the Owners Corporation's notice of motion of 29 August 2013. But a long time was spent at the hearing on 22 November 2013 (which extended well beyond usual court hours) in relation to Dr Xabregas' application to re-open earlier costs orders. I was able to deal with that part of Dr Xabregas' application summarily in my reasons for my second judgment. 25The present question of apportionment is different from that deal with at [22] above. I think the relevant apportionment of the burden of the costs of the Owners Corporation in respect of both notices of motion should be 60 per cent in respect of the costs arguments relating to its notice of motion of 29 August 2013 and 40 per cent in respect of the balance. 26For these reasons I make the following orders: 1.Progressive Strata pay Dr Xabregas' costs of Dr Xabregas' notice of motion filed on 13 November 2013. 2.Progressive Strata pay 60 per cent of the costs incurred by the Owners Corporation in respect of Ms Moallem's notice of motion filed on 8 November 2013 and Dr Xabregas' notice of motion filed on 13 November 2013. 3.Forty per cent of the costs incurred by the Owners Corporation in respect of the notices of motion of 8 and 13 November 2013 be paid in accordance with orders 7 and 8 made on 31 July 2014. 4.Dr Xabregas pay half of Ms Moallem's costs of the hearing on 22 November 2013. 5.Otherwise no order as to costs of Ms Moallem's notice of motion filed on 8 November 2013 or Dr Xabregas' notice of motion filed on 13 November 2013. 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: 30 September 2014