Podolsky v New South Wales Land and Housing Corporation

By summons filed on 27 February 2020, the plaintiff, Ivan Podolsky, seeks leave to appeal against the decision made by McIntyre LCM on 30 January 2020 to dismiss his application to have the defences of the New South Wales Land and Housing Corporation, the first defendant (the Corporation), and St George Community Housing Limited, the second defendant (St George) struck out.

This Court’s jurisdiction derives from s 40(2)(a) of the Local Court Act 2007 (NSW), which relevantly provides that a party to proceedings in the Local Court’s General Division may appeal by leave against an interlocutory judgment or order.

The matter was listed for hearing on 27 April 2020. Mr Podolsky sought an adjournment on the basis that he was sleep-deprived by reason of the conduct of a tenant in the same housing block as he resides. There does not appear to be any basis for considering that the conduct of the other tenant will alter in the immediate future. For this reason, I proposed that I determine the matter on the papers. All parties agreed with this course. The court book and the tender bundle prepared by St George have been provided to the court and are an exhibit in these proceedings. In addition, I have, with the consent of all parties, had regard to further submissions filed by the plaintiff on 27 April 2020.

Mr Podolsky lives in residential accommodation owned by the Corporation and managed by St George. His residence is a unit in an apartment building in Wollstonecraft. Mr Podolsky commenced proceedings in the Local Court on 29 October 2019 by filing a statement of claim against the Corporation and St George.

It appears to be common ground that the Corporation was the landlord under a residential tenancy agreement with Mr Podolsky which was entered into on 11 January 2016. On 1 April 2019, St George took over management of the property and obtained a right to receive the rent. St George accepted that it was, on and from 1 April 2019, subject to the obligations imposed on landlords pursuant to the Residential Tenancies Act 2010 (NSW). The plaintiff alleged that the Corporation was his landlord from 11 January 2016 until 1 April 2019 and that St George was his landlord thereafter.

The plaintiff relied on s 50(3) and s 52(3) of the Residential Tenancies Act. Section 50 provides:

Section 52(3) of the Residential Tenacies Act provides that a landlord must comply with the landlord’s statutory obligations relating to the health or safety of the residential premises.

The basis of the plaintiff’s claim is the allegation that a tenant whose unit is underneath his (and who also is a public housing tenant) is causing disturbance to his quiet enjoyment of his premises and that the Corporation and St George are liable for this breach. The relief which he claims is, in substance, full or partial refund of rent paid for his unit, damages for non-economic loss, the provision of alternative accommodation or damages for the costs of such alternative accommodation.

The plaintiff alleges, as against the Corporation, that he was party to a residential tenancy agreement with the Corporation and that the Corporation was in breach of the agreement and had also engaged in misleading and deceptive conduct. Similar allegations have been made against St George.

The plaintiff alleges that the tenant of unit 12, who was accepted to be subject to a similar rental agreement as the plaintiff “has been exhibiting the signs common with psychotic behaviours and effects of methamphetamine use”. The plaintiff alleges that the other tenant damaged the front door to the plaintiff’s unit.

On 28 November 2019, St George filed its defence to the statement of claim. It answered each of the paragraphs in the statement of claim, either by an admission, a non-admission, a denial or a statement that the allegation was not pleaded to as it did not make any allegation against it. In respect of some of the non-admissions, St George alleged that it did not know and could not admit the paragraph.

On 29 November 2019, the Corporation filed its defence to the statement of claim. It pleaded to each of the paragraphs of the statement of claim which contained an allegation against it. It alleged that the relevant door had been replaced although it was not damaged and did not require repair. The Corporation also denied that it was in breach of s 50(3) or 52(3) of the Residential Tenancies Act and denied that it was guilty of misleading or deceptive conduct.

On 6 January 2020, the plaintiff filed a notice of motion in the Local Court, seeking that the Corporation’s defence be struck out. On 17 January 2020, the plaintiff filed a notice of motion in the Local Court, seeking that St George’s defence be struck out.

The motions came on for hearing before Magistrate McIntyre on 30 January 2020. After hearing from the parties, her Honour gave ex tempore reasons as follows:

Her Honour also ordered the plaintiff to pay St George’s costs of the notice of motion but declined to make an order pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW) that they be paid in a gross sum. The Corporation did not seek its costs of the notice of motion.

The plaintiff sought leave to appeal on the following grounds:

It is necessary to consider the merits of the appeal as part of the consideration of whether leave ought be granted.

The function of a defence is to indicate to the plaintiff the matters that are in issue: see the discussion as to the purpose of pleadings in Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286 (Mason CJ and Gaudron J); [1990] HCA 11. One of the purposes of a defence is to inform the plaintiff what must be proved and what is admitted. A defendant is expected, consistently with the requirements of Part 6 of the Civil Procedure Act to make appropriate admissions and not to contest that which is not bona fide in dispute. However, there is no obligation on a defendant to make an admission where it does not know a particular matter. A defendant is entitled to have the plaintiff prove the case to the requisite standard.

Mr Podolsky argued that the defences included “evasive denials” which were impermissible under Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 14.14(2), which requires a defendant to plead specifically any matter that, if not pleaded specifically, may take the opposite party by surprise, or that the party alleges makes any claim, defence or other case of the opposite party not maintainable, or that raises matters of fact not arising out of the preceding pleading. He also relied on UCPR, r 15.1, which requires all necessary particulars to be given. Mr Podolsky has also reproduced the rules of other courts which specify procedural rules relating to the pleading of defences. In addressing the matters raised on this application for leave to appeal, I have confined my consideration to the applicable rules in the UCPR, which are to be read in accordance with Part 6 of the Civil Procedure Act.

In the present case, as referred to above, Mr Podolsky principally relies on the conduct of a third party (another tenant in the complex) as constituting a breach of the residential tenancy agreement between him and the respective defendants. The Corporation and St George are entitled to put the plaintiff to proof of such matters. In other words, they are entitled to have the plaintiff put on evidence to support the allegation in the pleading and are not bound to admit the allegations of which they have no or insufficient knowledge. Such denials or non-admissions are not “evasive”. They are not capable, in these circumstances, of taking the plaintiff by surprise in the relevant sense in which that concept is used in UCPR, r 14.14(2). Their effect is to indicate to the plaintiff that he is obliged to prove such matters by evidence in due course. Where matters have been denied, as opposed to not being admitted, this informs the plaintiff that the defendants propose to adduce evidence to the contrary or to challenge the allegation in some other way. I am not persuaded that either defendant was in breach of the UCPR in filing its defence in the form in which each was filed.

In substance, Mr Podolsky alleges in the first ground that the magistrate gave too much weight to the stage of the proceedings and, by implication, too little weight to the rules of court which govern the form of a defence. In the second ground, Mr Podolsky alleges that the magistrate denied him procedural fairness by criticising the statement of claim, although there was no application by either of the defendants to strike it out and no objection taken by either defendant to its form. He also alleged that the magistrate was guilty of apprehended bias because her Honour did not require detailed submissions from the defendants’ representatives at the hearing of the notice of motion. Mr Podolsky also alleged that the magistrate’s reasons were insufficient to address his submissions.

I am not persuaded that it is appropriate to grant leave to appeal against the magistrate’s decision. The decision made by her Honour was purely procedural. The defences filed by the Corporation and St George complied with the UCPR. The defendants were not obliged to admit allegations when they cannot be taken to have been aware of the underlying facts, particularly when directions for evidence had not yet been made. The magistrate was not obliged to require lengthier submissions from the defendants than had been made. That her Honour only briefly called on the legal representatives for the defendants was an indication that she did not feel the need to hear from them because she was not persuaded that the relief sought by Mr Podolsky was warranted. The decision whether to strike out the defences pursuant to UCPR 14.28 was a discretionary one. The weight to be given to relevant factors was a matter for her Honour. The allegation that she gave too much, or too little, weight to a particular factor carries with it an acceptance that it was taken into account: R v Baker [2000] NSWCCA 85 at [11] (Spigelman CJ, Grove and Hidden JJ agreeing).

Nor do I consider that any of the magistrate’s conduct indicated an apprehension of bias. Although the form and content of the statement of claim was not the subject of any application by the defendants, her Honour was entitled to consider it in the course of assessing the defences and make allowance, as her Honour did, for the circumstance that Mr Podolsky is not a legal practitioner.

Although the magistrate’s reasons were not lengthy, they were sufficient to indicate the basis on which her Honour dismissed the notice of motion.

Mr Podolsky has also identified, in support of his application for leave, important legal principles such as equality before the law, the function and purpose of pleadings and the importance of procedural fairness and sufficiency of reasons. While these matters are undoubtedly fundamental, the principles are not in doubt. I am not persuaded that the magistrate has erred in their application. The authorities concerning the restraint to be exercised in determining whether a grant of leave is warranted (such as were outlined in Carolan v AMF Bowling Pty Ltd [1995] NSWCA 69 and followed consistently since) apply with even greater force to applications for leave to appeal from interlocutory orders of the Local Court.

Mr Podolsky also sought leave to appeal against the costs order made in favour of St George. This costs order was an unexceptional example of the general rule that costs follow the event. No grant of leave is warranted.

The parties agreed that there was no reason why the costs of these proceedings ought not follow the event. Accordingly, I will order the plaintiff to pay the defendants’ costs of the proceedings in this Court.

For the reasons given above, I make the following orders: