Rodny v Stricke (No 2)

1. [1]

   HER HONOUR: By amended notice of motion filed 16 June 2020, the first, second, third, fifth and sixth defendants seek firstly, an order that the Court determine the plaintiff’s application for an extension of time under r 50.12 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) separately to the substantive appeal; secondly, that the application for an extension of time to file the summons be refused pursuant to UCPR 50.12; thirdly, that the plaintiff’s application for leave to appeal under s 83 of the Civil and Administrative Tribunal Act 2013 (NSW) (“the CAT Act”) be heard separately to the substantive appeal; and finally, that the Court refuse the plaintiff’s application for leave to appeal pursuant to s 83 of the CAT Act. The plaintiff opposes the orders sought. It is the defendants’ notice of motion that is the subject of the hearing before this Court.

2. [2]

   By summons filed 30 April 2020, the plaintiff seeks firstly, an order that time to apply for leave be extended; secondly, that leave be granted to appeal from the whole of the decision below; thirdly, that the appeal be allowed; fourthly, that order 3 made in the Tribunal be set aside; fifthly, that the determination of costs in the proceedings below be listed to be heard and determined by the Tribunal; and finally, in the alternative, that the matter be remitted to the Tribunal to be determined in accordance with the reasons of this Court.

3. [3]

   The first plaintiff is Laurence Rodny. The second plaintiff is Communications Power Incorporation (Aust) Pty Ltd. The first defendant is Angela Stricke. The second defendant is Helen Meddings. The third defendant is Natalie Stoianoff. The fourth defendant is David Kallaway. The fifth defendant is Vlad Sofreski, and the sixth defendant is the Owners - Strata Plan No 56911. For convenience, I will refer to the plaintiff as Mr Rodny and the defendants (with, it appears, the exception of the fourth) as the Owners Corporation. The parties relied upon their joint court book.

4. [4]

   The litigation between the parties has been protracted. The appeal to this Court concerns a decision of an appeal panel of the NSW Civil and Administrative Tribunal (“NCAT”) in relation to the issue of costs. Costs were awarded against Mr Rodny, which the Owners Corporation assesses at $225,558.81.

The proceedings in the Tribunal

1. [5]

   Mr Rodny brought an application in the Tribunal under the Strata Schemes Management Act 2015 (NSW) against the Owners Corporation and members of the strata committee for a multi-storied luxury apartment building in Kent Street, Sydney (“the strata scheme”) of which Mr Rodny was a lot owner. Mr Rodny contended that the committee should be removed. It is unnecessary for present purposes to address the nature of the substantive proceedings in further detail.

2. [6]

   On 5 July 2019, having made an order dispensing with a hearing, the Tribunal Member determined that Mr Rodny should pay the Owners Corporation’s costs (including the costs of the application for costs), but declined to order that those costs be payable on an indemnity basis.

3. [7]

   Mr Rodny’s appeal from the Tribunal Member’s decision was heard by an NCAT appeal panel constituted by Senior Members Robertson and McAteer (“the Appeal Panel”) in Rodny v Stricke [2020] NSWCATAP 20. The Appeal Panel awarded costs in relation to Mr Rodny’s proceedings in the Tribunal against the Owners Corporation.

4. [8]

   I will set out the decision of the Appeal Panel later in this judgment. For present purposes, I note that on 10 February 2020, the Appeal Panel made orders (1) granting leave to appeal; (2) that the appeal be dealt with by way of a new hearing pursuant to s 80(3) of the CAT Act; and (3) confirming the order made on 2 August 2019 in application SC17/45456 and dismissing the appeal.

5. [9]

   I shall now turn to the proceedings in this Court. I will deal firstly with whether the application for an extension of time to file the summons should be refused. I will then turn to consider whether leave to appeal should be refused, or whether the issue of leave to appeal is so intertwined with the appeal that the two should be heard together.

Extension of time to appeal

1. [10]

   Rule 50.3 of the UCPR sets out the time for appeal. It states:

2. [11]

   On 10 February 2020, the Appeal Panel handed down its decision and granted leave to appeal. On 9 March 2020, the 28 day time limit to commence an appeal to this Court under UCPR 50.3 expired.

3. [12]

   On 30 April 2020, Mr Rodny filed a summons seeking an extension of time, leave to appeal and the appeal itself. As his application is 7 weeks out of time, Mr Rodny bears the onus of demonstrating that strict compliance with the timeframe would work an injustice upon him: see Gallo v Dawson (1990) HCA 30; 93 ALR 479 (“Gallo”).

4. [13]

   Mr Rodny referred to the decision of the Court of Appeal in Maitland v Nationwide News Pty Ltd [2004] NSWCA 155 (“Maitland”) (McColl JA, Davies AJA in agreement), which also concerned an approximately 7 week delay in the bringing of an application. In Maitland, the Court of Appeal set out the principles to be applied in considering whether an extension of time to appeal should be granted. At [16] and [17], the Court of Appeal stated:

5. [14]

   Mr Rodny’s solicitor, Colin Cunio, provided the following explanation for Mr Rodny’s delay in his affidavit dated 13 February 2020 (Aff, 30 April 2020 [3]-[13]).

6. [15]

   On 13 February 2020, after returning from this Court, Mr Cunio instructed his assistant to enter the relevant date for the filing of Mr Rodny’s application in his electronic diary. She failed to do so.

7. [16]

   On 17 February 2020, Mr Cunio prepared a brief for senior counsel to advise and appear on behalf of Mr Rodny in relation to this appeal. Due to an administrative oversight in his office, and because had had to relocate his office to his home due to COVID-19 restrictions, the brief to senior counsel was not delivered until 3 April 2020.

8. [17]

   On 25 February 2020, Mr Cunio ordered a transcript of both proceedings in NCAT. On 30 March 2020, the transcripts were emailed to him.

9. [18]

   On 1 April 2020, the solicitor for the Owners Corporation emailed Mr Cunio, noting that the time to appeal in these proceedings had lapsed and demanding payment of its costs.

10. [19]

    Following receipt of the email from the Owners Corporation’s solicitor, Mr Cunio checked the documents he held in his home and office. He discovered that the brief was never sent to senior counsel, and was sitting at a desk of one of his support staff. Mr Cunio then called senior counsel, who said he would need three to four weeks to draft a summons commencing an appeal, and settle an affidavit and another in support of the appeal. Mr Cunio then personally delivered the brief to senior counsel.

11. [20]

    On 3 April 2020, Mr Cunio advised the Owner’s Corporation by email that Mr Rodny intended to lodge an appeal and setting out a time frame of three to four weeks. Mr Cunio also stated that he would address the delay when lodging the appeal in an affidavit that he would serve on the solicitor prior to the next directions hearing.

12. [21]

    On 29 April 2020, Mr Cunio received a draft summons commencing an appeal from senior counsel, who informed Mr Cunio that he would need until 8 May 2020 to file and serve submissions in support of the appeal. On 30 April 2020, the summons was filed.

13. [22]

    For completeness I note that Mr Rodny brought two appeals to this Court. The other has already been heard and judgment was handed down on 25 June 2020: Rodny v Stricke [2020] NSWSC 800. Leave to appeal was refused. The amended summons filed 19 June 2020 was dismissed.

14. [23]

    I accept that the delay in complying with the orders of the Court is due to Mr Cunio’s practice management, and to a lesser extent the effects of the COVID-19 restrictions, which caused him to move most of his office into his home. Mr Cunio’s less helpful explanation is that he has been “extremely busy” since the beginning of the year, in part because he has been preparing for and attending the hearing of Mr Rodny’s application against some of the Owners Corporation in NCAT. The hearing resumed part-heard on 14 February 2020. Mr Cunio had to prepare extensive submissions in chief and reply, which he filed on 13 March 2020 and 14 April 2020.

15. [24]

    Mr Cunio says that he will consent to a personal costs order in favour of the Owners Corporation for any costs thrown away by reasons of the delay in complying with the orders of the Court on 13 February 2020.

16. [25]

    The Owners Corporation does not accept Mr Rodny’s explanation as being satisfactory. In an affidavit of its solicitor, Kristyn Glanville (Aff, 2 June 2020 [27]-[29]), the Owners Corporation says that there is a pattern in these proceedings of Mr Rodny’s solicitors failing to diarise or otherwise abide by timetables. She says that the dispute now spans 3 years, with both parties incurring legal costs, ongoing disruption and inconvenience. Ms Glanville attributes the protraction of the proceedings in part to the proliferation of appeals brought by Mr Rodny.

17. [26]

    Ms Glanville expressed her view that allowing the summons to be filed out of time further prolongs the Owners Corporation’s costs and inconvenience, and diverts time and energy away from its other duties.

18. [27]

    According to the Owners Corporation, Mr Rodny’s vague reference to an “administrative oversight” is also unsatisfactory. As for his excuses related to COVID-19, Ms Glanville pointed out that no relevant restrictions were legislated until 31 March 2020, well after the expiry of the appeal period.

19. [28]

    Ms Glanville further submitted that a senior and competent solicitor like Mr Cunio would be aware that his responsibility for the matter was not absolved merely because he had prepared a brief to senior counsel.

20. [29]

    She also says that while Mr Cunio may have informed the Owners Corporation’ solicitors of the likelihood of an appeal on 13 February 2020, once the appeal period had expired, the Owners Corporation was entitled to conclude that an appeal would not proceed. This is no small matter in the context of litigation between parties that has been ongoing since October 2017.

21. [30]

    By 1 April 2020, the Owners Corporation’ solicitors had advised Mr Cunio of the expiry of the appeal period. Mr Rodny delayed a further month before filing the summons. In these circumstances, the Owners Corporation submitted that an extension of time should be refused.

22. [31]

    Mr Rodny’s solicitor has admitted that it was his fault that this appeal was not lodged in time, and explained why. He says that he will pay for the costs occasioned by the delay of 7 weeks. As to prejudice, the Owners Corporation submitted that allowing the summons to be filed out of time increases its costs and inconvenience, and diverts time and energy away from its primary functions within the building. This disruption extends not only to the individual defendants, but also to the harmony of the Owners Corporation as a whole.

23. [32]

    Nonetheless, it is my view that the delay in complying with court orders has been satisfactorily explained. It was not Mr Rodny’s fault that the summons was not filed in time. What must be borne in mind is that Mr Rodny should not be penalised for his solicitor’s mistakes. While this is a borderline case, in the exercise of my discretion, it is my view that an extension of time to file the summons should be granted on the basis that Mr Rodny’s solicitor will personally pay the Owners Corporation’s costs thrown away by reasons of delay. I grant the extension of time to file the summons up to 30 April 2020. I also make an order that Mr Rodny’s solicitor is to personally pay the costs thrown away by reason of delay in complying with the orders of the Court on 13 February 2020.

Leave to appeal to this Court

1. [33]

   Mr Rodny seeks leave to appeal pursuant to s 83(1) of the CAT Act. Section 83 relevantly reads:

2. [34]

   The balance of UCPR 50.12 relating to leave to appeal reads:

3. [35]

   Mr Rodny’s summons does not contain the statement that is required as to why leave to appeal should be given pursuant to UCPR 50.12(4).

4. [36]

   In Lee v New South Wales Crime Commission (2012) 224 A Crim R 94; [2012] NSWCA 262 (“Lee”), Bathurst CJ at [12] outlined the principles relevant to the granting of leave as follows:

5. [37]

   The decision of the Appeal Panel relates to s 60 of the CAT Act, which concerns costs. It reads:

6. [38]

   The Appeal Panel commenced its decision by setting out the background to the appeal, including the relevant timetables, some of which were complied with and other of which were not. At [53], the Appeal Panel set out the decision of the Tribunal Member. At [94], the Appeal Panel held that the decision of the Tribunal Member to dispense with the requirement for a hearing miscarried, and concluded that it should, pursuant to s 80(3) of the CAT Act, deal with the appeal by way of a new hearing.

7. [39]

   Under the heading “Consideration of the Respondents’ Application for Costs” the Appeal Panel stated at [102]:

8. [40]

   At the hearing before the Appeal Panel, the Owners Corporation was unsuccessful in relation to two of the four matters it argued constituted special circumstances. The two remaining matters, delay and the last-minute withdrawal of Mr Rodny’s application, formed the basis of the Appeal Panel determination that there were special circumstances to award costs in favour of the Owners Corporation.

9. [41]

   So far as delay is concerned, the Appeal Panel stated at [104]-[107]:

10. [42]

    As to the withdrawal of the application, the Appeal Panel stated at [110], [112], [114], [116] to [127]:

11. [43]

    The grounds of appeal are as follows.

    1. (1)

       The Appeal Panel erred in law in finding that the delays that had occurred in Mr Rodny preparing and filing his evidence before the Tribunal at first instance constituted special circumstances such as to warrant the making of a costs order against Mr Rodny pursuant to s 60(2) of the CAT Act, and in particular that:

    2. (2)

       The Appeal Panel erred in law in concluding that Mr Rodney’s withdrawal of his application just before the fixed hearing date constituted special circumstances under s 60(2) of the CAT Act, and in particular that:

12. [44]

    The award of costs is a discretionary decision. The principles for an appeal against a discretionary decision are set out in House v King (1936) 55 CLR 499 at 504-505, where the High Court stated:

13. [45]

    The Owners Corporation submitted that leave to appeal should not be granted for essentially the same reasons as set out under the application for extension of time. The Owners Corporation submitted that the appeal grounds do not raise a question of law. Rather, they take issue with factual findings in relation to a discretionary decision. Moreover, Mr Rodny did not provide a statement as required by UCPR 50.12(4).

14. [46]

    Mr Rodny submitted that the delay in preparing and filing his evidence did not automatically result in additional costs being incurred by the defendants. It is his position that there is no rational connection between that delay of 3.5 months, and the Appeal Panel’s order requiring him to pay the whole of the defendants’ costs, the majority of which involve the response to that evidence and the trial of the matter. Mr Rodny submitted that the Appeal Panel did not consider these matters, nor did it explain how a costs order for the whole of the costs was justified. In his view, the obvious costs caused by his conduct were the costs thrown away by reason of the fact that the hearing would no longer proceed, but not more.

15. [47]

    As to his conduct itself in withdrawing and reinstituting the proceedings, Mr Rodny submitted that the Appeal Panel did not accept the Owners Corporation’s submission that Mr Rodny was “seeking to circumvent the orders of the Tribunal”, noting at [111] that “[s]uch a characterisation is inappropriate when both Principal Member Rosser and the Deputy President explicitly acknowledged that that was a course open to the appellants”. That is, it was accepted that Mr Rodny was not engaged in some form of an abuse of process in that conduct.

16. [48]

    Mr Rodny also noted that the costs incurred by the Owners Corporation in preparing its evidence were unlikely to be wasted in circumstances where the second proceedings were “substantively identical” (Aff Kristyn Glanville, 2 June 2020 at [16]) and initiated immediately. He submitted that an order for those costs, in a jurisdiction that was ordinarily a “no costs” jurisdiction, is unreasonable, unjust, and an indication that the discretion miscarried.

17. [49]

    Secondly, the powers of the Tribunal to order costs are broad and include the power to award costs "incidental to" the proceedings in the Tribunal (s 60(5) NCAT Act). The Tribunal in the second proceedings may therefore well have had the ability to make a costs order that encompassed the preparation of the materials that were in effect simply re-filed with the Tribunal in the second proceedings.

18. [50]

    Even if that is incorrect, and in any event, the Appeal Panel plainly could and was invited to adjourn the costs proceedings so as to allow a costs determination at the conclusion of the second proceedings, which determination was clearly appropriate where the costs in the original proceedings were costs in the overall cause.

19. [51]

    However the Appeal Panel did not do so ostensibly on the basis that this “would create a perverse incentive to applicants who, for whatever reason, do not find it convenient to have their application heard on the dates fixed” (at [126]). While that course would clearly have been appropriate in circumstances where a party had engaged in an abuse of the Tribunal's processes to subvert the Tribunal's orders, this was not that case. Declining to adjourn the proceedings on the basis that it might have effects on other applicants, in the very specific and confined factual situation of this matter, was a miscarriage of the Tribunal's discretion.

20. [52]

    In oral submissions, counsel for Mr Rodny argued that so far as delay is concerned, what the Appeal Panel did was to say that it was a four month delay and that they were going to order the costs of the entirety of the proceedings (T 20.50; 21.1). Counsel for the Owners Corporation responded that it would be a mistake to view the two grounds which the Appeal Panel relied upon to make the costs orders in isolation. They were really part of the same spectrum of events where there had been procedural misconduct by Mr Rodny which culminated in him withdrawing an extremely expensive and complex application on the eve of the hearing and the costs orders were about compensating the Owners Corporation for having to deal with proceedings which had been conducted.

21. [53]

    In oral submissions, counsel for Mr Rodny further argued that the either as a matter of statutory construction in construing the term special circumstances or in the matter in which the Tribunal exercises the discretion, there must be a logical connection between what is said to be special and why costs follow as a result (T 20.1-4); there is a two-step process because there must be a factual finding as to special circumstances and then the discretion is exercised (T 20.12-13). It would have been logical for the Appeal Panel to connect the costs to the special circumstances but all that the Appeal Panel did was identify the special circumstances and then simply order all of the costs. It has, in effect, missed a step (T 21.9-13). In reply, the Owners Corporation submitted the logical connection ground has not been articulated in the summons and there is a threshold question as to whether it should be deal with (T 26.27-32).

22. [54]

    Finally, Mr Rodny says that his case is more than merely arguable, and demonstrates an injustice “which is reasonably clear”.

23. [55]

    Mr Rodny submitted that the application for leave to appeal raises an issue of principle and a question of public importance for the Court because it goes to when the discretion under s 60 of the NCAT Act should be exercised, and when there is a finding of special circumstances. I disagree. It is my view that the issues raised in these proceedings relating to an award of costs in NCAT do not raise any issues of principle or a question of public importance.

24. [56]

    The usual order for costs at the Tribunal is that each party pay its own costs: see s 60(1) of the CAT Act. The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting such an award: see s 60(2). Section 60(3) of the CAT Act relevantly provides that in determining whether there are special circumstances, the Tribunal may have regard to several considerations, including whether a party has been responsible for unreasonably prolonging the time to complete the proceedings, and the relative strengths of the claims made by each of the parties.

25. [57]

    In its reasons at [104]-[107], the Appeal Panel gave reasons for its view that the delay by Mr Rodny in preparing and filing his evidence was excessive and constituted special circumstances.

26. [58]

    So far as delay is concerned, the Appeal Panel accepted that it may not have been appropriate for Mr Le Page or his firm to be involved in the preparation of evidence while the question whether he would be given leave to represent the appellants remained a live issue. But that question was resolved against the appellants by the Appeal Panel decision on 31 May 2018. However, it then stated that there is no reason apparent on the material available to it why Mr Rodny then took until 20 September 2018 to prepare their evidence. Mr Rodny sought and obtained a further four extensions to the timetable for the filing of their evidence after 31 May 2018 and the delay in Mr Rodny filing his evidence between 31 May 2018 and 20 September 2018 resulted in the vacation of the hearing fixed for 7 and 8 November 2018.

27. [59]

    Similarly at [110], the Appeal Panel stated that it considered Mr Rodny’s withdrawal of his application less than a week before the hearing also constituted special circumstances warranting an order for costs. It explained its reasoning for this decision in paragraphs [112] t [124]. Mr Rodny submitted that what the Appeal Panel did was to say that it was a four month delay, and that they were going to order the costs of the entirety of the proceedings. According to Mr Rodny, because the Appeal Panel stated that the delay occurred after 31 May 2018, the exercise of discretion then miscarried, as Mr Rodny was ultimately ordered to bear the costs of delay prior to 31 May 2018. Mr Rodny submitted that the Appeal Panel should have exercised its discretion to order Mr Rodny to pay the costs only from 31 May 2018.

28. [60]

    Counsel for the Owners Corporation responded that the two grounds upon which the Appeal Panel relied in making its costs orders cannot be viewed in isolation. They were part of the same spectrum of events where there had been procedural misconduct by Mr Rodny which culminated in him withdrawing an extremely expensive and complex application on the eve of the hearing and the costs orders were about compensating the Owners Corporation for having to deal with proceedings which had been conducted.

29. [61]

    At [125], the Appeal Panel considered Mr Rodny’s submission that it would be the appropriate course to adjourn the costs application for determination after the resolution of the second application, but did not consider that it would be an appropriate course. This was because Mr Rodny had not raised this course at first instance. The Appeal Panel was not given information to enable it to assess within what time frame the subsequent proceedings might be determined, and for what length of time the costs application would be likely to remain adjourned.

30. [62]

    Further, the Appeal Panel explained at [126] that permitting applicants to withdraw their application just before the dates fixed for hearing, and adjourn the question of costs until after the resolution of fresh proceedings raising the same issues, would create a perverse incentive to applicants who do not find it convenient to have their application heard on the dates fixed. Therefore, the Appeal Panel did not consider it appropriate to adjourn the application for costs.

31. [63]

    The Appeal Panel concluded at [127] that the Senior Member’s decision to proceed without a hearing should be set aside, and it had reached the same conclusion on costs as the Senior Member and confirmed the orders made by the Tribunal on 2 August 2019.

32. [64]

    As can be seen from the Appeal Panel’s decision, Mr Rodny’s grounds of appeal seek to cavil with its findings of fact. The findings that the Appeal Panel made were well explained, and addressed the issues raised by both parties in their submissions. Further, the grounds raised by counsel for Mr Rodny at the hearing on the topic of “a two-step” process were not articulated in the grounds of appeal, nor did they appear in the statement in the summons, despite that under UCPR 50.12(4)(b), parties must give reasons as to why leave should be given.

33. [65]

    For the reasons I have given, it is my view that Mr Rodny’s grounds of appeal do not indicate that there has been an injustice in the sense of going beyond what is reasonably arguable that the Appeal Panel erred in awarding costs to the Owners Corporation.

34. [66]

    The grounds of appeal relating to the award of costs in NCAT also do not raise issues of principle or question of public importance. Hence, leave to appeal should be refused. The result is that the summons filed 30 April 2020 is dismissed.

35. [67]

    Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendants’ costs as agreed or assessed.