Zioukin v Lang

Summary

This decision concerns whether the respondent should have an order for her costs of the now withdrawn and dismissed appeal to be paid by the appellant.
Relevantly: 1. The appellant and respondent were tenant and landlord in respect of a residential tenancy agreement terminated by the Tribunal on 25 October 2021. 2. The appellant appealed from that decision. His appeal was dismissed on 10 January 2022. That decision is unreported. 3. During the conduct of that appeal, the order for possession made on 25 October 2021 was stayed, meaning the respondent was unable to apply for a warrant for possession. 4. The respondent applied for a warrant for possession on 14 January 2022. 5. On 12 February 2022, the appellant lodged an appeal from the decision of the Appeal Panel to the Supreme Court and obtained a stay on the warrant for possession from the Court. 6. On 1 March 2022, the Court declined to further stay the order for possession. Subsequently, leave to appeal to the Court was refused: Zioukin v Lang [2022] NSWSC 823. 7. On 9 March 2022, the respondent applied for an extension of time for a warrant for possession under s 121 of the Residential Tenancies Act 2010 (NSW). Directions were made in respect of that application, and it was initially listed for determination on 5 April 2022. On that day, the Tribunal made orders adjourning the hearing and extending time for the parties to lodge and serve submissions on the application. 8. From that decision, the appellant lodged the appeal to which this application relates, on 19 April 2022. He also sought a stay of the operation of the decision. 9. The hearing of the stay application was listed for determination on 27 April 2022, with a directions hearing in respect of the substantive appeal. The parties were given directions from chambers in respect of lodgement and service of documents in respect of the application for a stay. The Appeal Panel declined to order an ex parte stay, for reasons it gave including that the issue of the appellant's challenge to the orders would appear to best be determined after the proceedings at first instance had been finalised. 10. In the intervening period, the application at first instance was determined on 22 April 2022 and the respondent was granted an extension of time for a warrant to issue. 11. Neither the appellant nor respondent lodged further documents in respect of the application for a stay. 12. The respondent did not file a Reply to Appeal. 13. At the hearing before the Appeal Panel on 27 April 2022, the appellant withdrew the appeal. The Appeal Panel's order notes that the appeal was withdrawn on the basis that the appellant intended to appeal from the orders made granting the extension of time for a warrant to issue, in lieu of the interlocutory orders made 5 April 2022. There is no indication that the respondent objected to withdrawal of the appeal or raised an application for costs at that time. Nor does the Tribunal's record indicate that the respondent sought or was granted leave to be legally represented in the appeal before it was withdrawn. 14. The respondent subsequently made an application for costs of the appeal, fixed in the sum of $3,547.50. 15. The Appeal Panel made directions for the parties to exchange evidence and submissions on costs. 16. The respondent complied with the directions. The appellant did not do so within the time directed but did so late and sought an extension of time. He cited medical grounds for his non-compliance. The extension was opposed by the respondent.

Consideration

The first issue I should record is that the starting point of my consideration is that each party should bear their own costs unless the respondent can satisfy me that there are special circumstances warranting an award in her favour.
Secondly, the appeal was withdrawn without an adjudication on the merits.
In Re The Minister for Immigration & Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin [1997] HCA 6, a decision of McHugh J, his Honour said: In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule, the successful party is entitled to his or her costs. Success in the action or on issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or not it will make a costs order. In an appropriate case, a court will make an order for costs, even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the cost of the litigated action which by settlement or extra curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action.
Later in the judgment, his Honour said: If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.
The principles in Lai Quin have been adopted as being apposite to decisions in the Appeal Panel.
However, one circumstance which may justify consideration of an order for costs is where a party, in effect, capitulates or surrenders to the other. In those circumstances, where the rules as to costs are not constrained as they are here by the terms of s 60 of the NCAT Act, the usual order is that the capitulating party pays the costs.
Capitulation can take different forms. Depending on the circumstances, withdrawing proceedings may be a form of capitulation.
In Khanna v Bond Realty Pty Ltd [2019] NSWCA 128, Bell P and Gleeson JA said at [31]: The 26 October notice of motion which was dismissed was a notice of motion which Mr Khanna sought to withdraw in the course of the hearing and it was reasonable that the First Respondent be awarded its costs in relation to that notice of motion. There was and is no good reason why a party that has prepared to meet a notice of motion should be deprived of its costs if a party that has filed it withdraws it in the course of argument. Whilst costs will not always be ordered in such circumstances (see Re Minister for Immigration & Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 624-625; see also Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84), that is not an invariable rule and there was no error of principle in the primary judge's decision to award costs in relation to the 26 October 2018 notice of motion."
Relevant principles were summarised in Kiama Council v Grant [2006] NSWLEC 96 at [80], a decision later approved by the Court of Appeal in Hunter Development Corporation v Save Our Rail NSW Incorporated (No 2) [2016] NSWCA 375 at [78], [81] and [82].
In Kiama, after a review of the authorities, Preston CJ said at [80]: The principles that emerge from these cases are that in a civil enforcement or judicial review case where there has been no hearing on the merits: (a) where one party effectively surrenders to the other party by: (i) discontinuing without the consent of the other party; or (ii) giving undertakings to the Court or submitting to the Court making orders against the party substantially in the terms or to the effect claimed by the other party; the proper exercise of the costs discretion will ordinarily be to make the usual order as to costs, unless there is disentitling conduct on the part of the other party; and (b) where some supervening event or settlement so removes or modifies the subject of the dispute that no issue remains except that of costs, the proper exercise of the costs discretion will ordinarily be to make no order as to costs unless: (i) one of the parties has acted so unreasonably that the other party should obtain the costs of the action; or (ii) even if both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried so that the party should obtain the costs of the action.
The grounds of appeal in this matter asserted that the Tribunal denied the appellant procedural fairness by allowing the respondent to rely on documents lodged outside a timetable set by earlier directions, including in respect of an application to be legally represented in the proceeding at first instance at the hearing on 5 April 2022, without the appellant being given an opportunity to respond.
As I indicated, no reply to appeal was lodged by the respondent. Nor was the issue canvassed in the respondent's submissions in respect of her application for costs. On that basis, I cannot even begin to examine the merits of that allegation.
Further, it is apparent that the Tribunal's order of 22 April 2022 determining the proceeding at first instance should be characterised as a supervening event that effectively removed or substantially modified the subject of the dispute between the parties over the interlocutory orders, which was the subject of the appeal.
I am also satisfied the appellant acted promptly, having regard to the timeline set out above, in withdrawing the appeal once the decision of 22 April 2022 was made.
These considerations are sufficient to deal with the respondent's allegations that the appeal had no relative merit and that the appellant unreasonably prolonged the proceedings. Submissions as to the second issue really went to the lengthy process the respondent has been forced to engage in with respect to the termination of the tenancy and obtaining possession, which are irrelevant to the conduct of this appeal. My considerations thus far also deal with the allegation that the proceedings were frivolous, vexations or lacking in substance, which I cannot determine for the reasons I have set out.
The respondent also relied upon s 60(3)(d) to indicate that the appellant has complicated the proceedings by his conduct, particularly by lodging prolix material in the appeal. I am not satisfied that would fall within the proper consideration of s 60(3)(d), which goes to the nature and complexity of the proceedings, not the conduct of the parties. In any event, the appellant lodged only three pages of submissions and a one-page statutory declaration with his application for a stay, and two pages to set out his grounds as an attachment to the Notice of Appeal. This allegation, which I infer is, again, really aimed at the other proceedings between the parties, is not made out.
Finally, I note that respondent had no leave to be represented in the appeal and lodged no documents in the appeal before it was withdrawn. The invoice relied upon to ground her application for costs in a fixed sum makes it clear that it relates substantially, if not solely, to work performed by her lawyer in other proceedings between the parties and not this appeal.
For the above reasons, the application for an award for costs is dismissed.
My orders will be: 1. A hearing on the question of whether there should be an order for costs of the appeal is dispensed with. 2. The application for an order for costs of the appeal is dismissed.

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Judgment (4 paragraphs)

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Legislation Cited (2)

Cases Cited (7)