El-Saeidy v NSW Land and Housing Corporation (No 8)

[2014] NSWSC 191

Supreme Court

New South Wales

Medium Neutral Citation:

El-Saeidy v NSW Land & Housing Corporation (No 8) [2014] NSWSC 191

Hearing dates:

On written submissions

Decision date:

07 March 2014

Jurisdiction:

Common Law

Before:

Harrison AsJ

Decision:

The Court orders that:

(1) No additional orders in relation to the payment of costs be made.

Catchwords:

COSTS - set off - whether costs in other proceedings may be set off - whether costs and damages in other proceedings may be set off

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 90, 98
Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.1

Cases Cited:

Bank of NSW v Preston (1894) 20 VLR 1
Bruce Maples v Siteberg [2012] NSWSC 435
Cat Media Pty Ltd v Allianz Australian Insurance Ltd [2006] NSWSC 790
Corbett v Nguyen (No 2) [2012] NSWSC 673
Fawzi El-Saeidy v New South Wales Land & Housing Corporation [2011] NSWSC 820
El-Saeidy v New South Wales Land and Housing Corporation [2009] NSWSC 1059
El-Saeidy v NSW Land and Housing Corporation [2011] NSWSC 447
Fawzi El-Saeidy v New South Wales Land & Housing Corporation [2011] NSWSC 1247
El-Saeidy v NSW Land & Housing Corporation (No 4) [2013] NSWSC 1554
Leichhardt Municipal Council v Green [2004] NSWCA 341
Mainteck Services Pty Limited v Stein Heurtey SA and Stein Heurtey Australia Pty Ltd [2013] NSWSC 1165
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336
Ryan v South Sydney Junior Rugby League Club Ltd [1975] 2 NSWLR 660
State of New South Wales v Hamod [2011] NSWCA 376
Wentworth v Wentworth (NSWSC, Young J, 3748/89, 12 December 1994, unreported)
Wentworth v Wentworth (NSWCA, Priestley, Clarke JJA and Grove AJA 21 February 1996, unreported)

Category:

Costs

Parties:

Fawzi El-Saeidy (Plaintiff)
NSW Land & Housing Corporation (Defendant)

Representation:

Counsel:
D Hawkins (Plaintiff)
E Elbourne (Defendant
Solicitors:
JK Solicitors (Plaintiff)
McCabes Lawyers (Defendant)

File Number(s):

2009/294748

Publication restriction:

Nil

Judgment

1. HER HONOUR: These proceedings involve the same subject matter and have a protracted history. This judgment concerns costs and whether an order for a set off should be made. In these proceedings New South Wales Land & Housing Corporation ("Housing") seeks additional orders that it be permitted to set off any amounts payable by it to Mr El-Saeidy, against any amounts payable by Mr El-Saeidy to it, in the form of costs, damages, and costs in other proceedings between the same parties; and that Mr El-Saeidy pay Housing's costs of the motions referred to in my judgment dated 28 October 2013 on an indemnity basis from 24 September 2013 to 28 October 2013.

1. Mr El-Saeidy submitted that the costs awarded in his favour to date far outweigh the costs owed to Housing by him and opposes the orders sought. To date should be the date I delivered judgment in relation to the notices of motion namely 28 October 2013.

1. This issue of costs has been dealt with by way of written submissions.

Prior proceedings

1. There have been two sets of prior proceedings between the parties where Housing seeks to set off costs. They are 2009/14426 El-Saeidy v New South Wales Land and Housing Corporation and 2009/297217 El-Saeidy v NSW Land and Housing Corporation. I shall give a brief history of both.

(1) 2009/14426 El-Saeidy v NSW Land and Housing Corporation

1. On 18 September 2009, in El-Saeidy v New South Wales Land and Housing Corporation [2009] NSWSC 1059, Rothman J dismissed the proceedings and entered judgment in favour of Housing. His Honour ordered Mr El-Saeidy to pay Housing's costs of and incidental to the proceedings as agreed or assessed.

1. In summary, Mr El-Saeidy was ordered to pay all of the costs in proceedings 2009/14426.

(2) 2009/297217 El-Saeidy v NSW Land and Housing Corporation

1. On 19 May 2011, in El-Saeidy v NSW Land and Housing Corporation [2011] NSWSC 447, Hislop J ordered that each party is to bear his or its own costs of the summons save for the costs in respect of 15 February 2010 which were to be paid by Mr El-Saeidy.

1. I will regard the overall costs position in relation to proceedings 2009/297217 as equal, except for the costs of one day that falls in Housing's favour.

(3) Current proceedings - 2009/294748 El-Saeidy v NSW Land and Housing Corporation

1. On 11 June 2010, Davies J ordered Mr El-Saeidy to pay the costs thrown away by the vacation of the hearing date.

1. On 15 November 2010, Davies J ordered Mr El-Saeidy to pay Housing's costs of and associated with Mr El-Saeidy's notice of motion of 22 June 2010.

1. On 9 August 2011, in these current proceedings 2009/294748 Fawzi El-Saeidy v New South Wales Land & Housing Corporation [2011] NSWSC 820 (the substantive decision), this Court ordered Housing to pay Mr El-Saeidy the sum of $4000 in damages and costs were reserved.

1. On 24 October 2011, Fawzi El-Saeidy v New South Wales Land & Housing Corporation [2011] NSWSC 1247, this Court ordered Housing to pay Mr El-Saeidy's costs of the proceedings.

1. On 28 October 2013, in El-Saeidy v NSW Land & Housing Corporation (No 4) [2013] NSWSC 1554, Housing's notice of motion filed 13 August 2013 was partially successful, and Mr El-Saeidy's motions filed 31 July 2013 and 17 October 2013 were dismissed. Mr El-Saeidy was ordered to pay Housing's costs as agreed or assessed.

1. Mr El-Saeidy refused to vacate the temporary premises and move back into the Villawood premises. At [73] of my judgment dated 28 October 2013, I made a finding that while this situation continued Housing was sustaining an ongoing financial loss each day as it was not receiving rent for one property and at [76] I concluded:

"In my view Mr El-Saeidy's sense of entitlement has caused both Housing and this court's limited resources to be used unmeritoriously. His numerous notices of motion have taken a disproportionate amount of court time."

1. On 25 November 2013, this Court refused Mr El-Saeidy's application for a stay of proceedings. Mr El-Saeidy was ordered to pay Housing's costs.

1. Overall, it is in these current proceedings where the most substantial amount of costs have been incurred, Mr El-Saeidy received a costs order in his favour and damages assessed at $4000 in the substantive decision. That hearing occupied three days of hearing time. Since the substantive was made decision Housing has had costs orders awarded in its favour, on 17 October 2013, 28 October 2013 and 25 November 2013.

1. On 25 November 2013, Mr El-Saeidy filed a notice of intention to appeal. On 28 January 2014, Mr El-Saeidy filed a summons seeking leave to appeal (2013/354817).

1. On 23 January 2014, Mr El-Saeidy filed a further notice of motion. To date it has not been finalised.

Costs generally

1. Section 98 of the Civil Procedure Act 2005 (NSW) ("CPA") relevantly reads:

"98 Courts powers as to costs

(cf Act No 52 1970, section 76; SCR Part 52A, rules 5, 6, 7 and 8; Act No 9 1973, section 148B; Act No 11 1970, section 34)

(1) Subject to rules of court and to this or any other Act:

(a) costs are in the discretion of the court, and

(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

..."

1. Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") reads:

"42.1 General rule that costs follow the event

(cf SCR Part 52A, rule 11)

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs."

1. Hence, s 98 of the CPA and UCPR 42.1 grants this Court a broad discretion in relation respect to costs.

Set off

1. Section 90 of the CPA relevantly reads:

"90 Judgments generally

(cf Act No 52 1970, section 91; Act No 9 1973, section 81)

(1) The court is, at or after trial or otherwise as the nature of the case requires, to give such judgment or make such order as the nature of the case requires.

(2) If there is a claim by a plaintiff and a cross-claim by a defendant, the court:

(a) may give judgment for the balance only of the sums of money awarded on the respective claims, or

(b) may give judgment in respect of each claim,

and may give judgment similarly where several claims arise between plaintiffs, defendants and other parties."

1. Counsel for Housing submitted that in the absence of a specific provision, the Court has power to order that one judgment be set off against another. In support of this proposition counsel referred to Ryan v South Sydney Junior Rugby League Club Ltd [1975] 2 NSWLR 660; Bank of NSW v Preston (1894) 20 VLR 1; Wentworth v Wentworth (NSWCA, Clarke JA 21 February 1996, unreported), approving Wentworth v Wentworth (NSWSC, Young J, 3748/89, 12 December 1994, unreported). The source of the Courts power is s 90(2) or the Court's power over its own procedures: also see State of New South Wales v Hamod [2011] NSWCA 376.

1. While it is clear that this Court has power to set off costs orders in the same proceedings, counsel for Mr El-Saeidy disputes whether, firstly, the costs orders in other proceedings in the Supreme Court can be set off; and secondly, whether an award of damages against costs in the same proceedings can be set off.

1. In support of the second proposition that costs orders made in other proceedings in this Court can be set off against each other, Housing referred to Bruce Maples v Siteberg [2012] NSWSC 435; Corbett v Nguyen (No 2) [2012] NSWSC 673; and Mainteck Services Pty Limited v Stein Heurtey SA and Stein Heurtey Australia Pty Ltd [2013] NSWSC 1165.

1. In Mainteck Services Pty Ltd v Stein Heurtey SA, the defendants sought that the 31 May 2013 judgment amount in favour of the plaintiff should be set off against the defendants' costs entitlement under that judgment. The plaintiff contended that there was no authority permitting a set off of costs and damages ordered in the same proceedings, and that in any event, until such time as the costs were quantified no set off should be allowed. Sackar J at [48] stated that there is authority for the view that a court has power to set off costs entitlements against damages ordered in the same proceedings and quoted from Corbett v Nguyen (No 2) [2012] NSWSC 673, where Windeyer AJ said:

"[13] The final claim of the defendants is that the costs judgment should be set off against the judgment in favour of the plaintiff of $24,281.26. I consider the general equitable principles of set off allow such an order. The case generally relied upon to support such orders was decided in 1772 namely Thrustout d.Barnes v Crafter (1772) 2 Wm Bl 826; 96 ER 487 but the general principle was followed in Goldsbrough Mort & Co Ltd v Quinn (1910) 10 CLR 674 when in an appeal on a claim for specific performance which succeeded an order was made that the costs of the trial and appeal be set off against the purchase price payable under the contract."

1. In Mainteck Services Pty Ltd v Stein Heurtey SA, Sackar J concluded that as the costs incurred by the parties (whether the defendants or the plaintiff) would far exceed the 31 May 2013 judgment amount, he ordered the set off, but stayed the pending quantification of the costs, and then permitted the set off of the quantified amounts.

1. Counsel for Mr El-Saeidy submitted that Mainteck Services Pty Ltd v Stein Heurtey SA does not apply and there can only be set off against the purchase price payable under a contract. I disagree. The circumstances where a judgment amount can be set off against a costs order are not so limited. In Corbett v Nguyen (No 2), Windeyer AJ held that the equitable principle of set off allowed a costs order be set off against a judgment. It is my view that the Court can set off costs entitlements against damages ordered in the same proceedings.

1. Counsel for Mr El-Saeidy further submitted that this application is premature because an appeal has been lodged. On 25 November 2013, Mr El-Saeidy filed a notice of intention to appeal. On 28 January 2014, Mr El-Saeidy filed a summons seeking leave to appeal (2013/354817). The fact that Mr El-Saeidy has lodged an appeal, does not of itself preclude me from determining costs orders.

1. Contrary to the plaintiff's submissions, I am satisfied that I have the power to order set off in all of the three situations outlined by Housing.

1. The next issue is whether I should exercise that discretion. There is an outstanding motion that has not yet been determined. Mr El-Saeidy's notice of motion filed 23 January 2014, raises serious issues, such as whether Housing is in contempt of court orders. The result of that motion may effect the exercise of my discretion in relation to whether orders for set off should be made. It is my view that I should not make any orders in relation setting off costs until the outstanding motion has been dealt with and these proceedings have been finalised.

1. Hence, I decline to make any orders regarding a set off.

Calderbank offer

1. Housing seeks the costs of its notice of motion dated 13 August 2013 and Mr El-Saeidy's motions filed 31 July 2013 and 17 October 2013 be paid on an indemnity basis as from 24 September 2013 to 28 October 2013 (the date that judgment was handed down dismissing Mr El-Saeidy's motions).

1. On 24 September 2013, Housing offered to bear its own costs of these proceedings, if Mr El-Saeidy agreed to the dismissal of the outstanding motions and moved back into the Villawood property. Housing relies upon this offer.

1. Counsel for Mr El-Saeidy disputes the offer as being a genuine one because Housing was aware at the time the offer was made that Mr El-Saeidy had been given until 28 September 2013 to file evidence in support of his motion filed 22 August 2013, and in response to issues raised in the meeting at court on that day, being a response to the report of Mr Clifton dated 3 September 2013.

1. Mr El-Saeidy's counsel says that the offer occurred after the 3 September 2013 Clifton report but before the report of 11 October 2013 by Mr De Silva. Therefore, Mr El-Saeidy says that was not a genuine offer of compromise because it was not clear whether asbestos was present at the Villawood property because all the evidence was not finalised, in particular a report rebutting Mr Clifton's report. Further, counsel submitted that it was not until 17 October 2013, that the motion seeking leave to file and serve the reports of Mr De Silva was dismissed and until such time that Mr El-Saeidy was in receipt of evidence that would have successfully rebutted the offer made on 24 September 2013.

1. Counsel for Mr El-Saiedy has submitted on numerous occasions that it was not unreasonable for him to wait until the latter report of Mr De Silva dated 11 October 2013 was available to decide whether to accept the offer. I disagree. So far as this submission is concerned, the Court timetable permitted Mr El-Saeidy to serve Mr De Silva's report by 28 September 2013 not by 11 October 2013. I do not propose to refer to this submission again.

1. In Cat Media Pty Ltd v Allianz Australian Insurance Ltd [2006] NSWSC 790, Bergin J (as her Honour then was) referred to Leichhardt Municipal Councilv Green [2004] NSWCA 341. In Cat Media, Bergin J stated (at [9]):

"[9] In Leichhardt Municipal Council v Green [2004] NSWCA 341, Santow JA, with whom Bryson JA and Stein AJA concurred, observed that Calderbank offers are allowed because they facilitate the public policy objective of providing an incentive for parties to end their litigation as soon as possible (at [14]). The principles gleaned from this decision relevant to this application are as follows:

- the cost consequences attendant under the general law upon an offer of compromise made in a Calderbank letter are in the Court's discretion, to be exercised having regard to all of the relevant circumstances of the case [19];

- there is not a prima facie presumption in favour of an award for indemnity costs if the Calderbank offer is not accepted and is not bettered [19];

- a Calderbank offer that has no real element of compromise in it, which is designed merely to trigger costs sanctions, will not be treated as a genuine offer of compromise [23]-[24];

- there is no rule that an optimistic offer is not a genuine offer. Whether or not it was reasonable to reject an offer is a question that may figure in the discretionary balance, but it is not a question which affects the genuineness of the offer [40];

- an applicant for an order for indemnity costs consequent upon an unaccepted Calderbank offer must show that the rejection of the offer was unreasonable [46]."

1. Counsel for Mr El-Saeidy submitted that the costs should not be granted on an indemnity basis from 24 September 2013 to 28 October 2013, as the offer did not comply with the mandatory provision of UCPR 20.26. The offer does not have to. It is a Calderbank offer not an offer of compromise to which UCPR 20.26 applies.

1. Housing says and I accept that Mr El-Saeidy had been in receipt of the latest of Mr Clifton's reports since 6 September 2013. I have taken this factor into account.

1. Counsel for Mr El-Saeidy submitted that other factors to be considered as to whether to award indemnity costs as a result of a Calderbank offer, are:

(a) the extent of the compromise offered was not substantive and was merely a rehashing of two orders sought on Housing's motion filed 13 August 2013.

(b) Mr El-Saeidy had good prospects for success at the time of the offer as the reports of Mr De Silva of 7 February 2013 stated there were various sites where asbestos was found in the yards, later confirmed in further testing for exact amounts of asbestos.

(c) The offer stated there is no reasonable basis for the plaintiff to refuse to accept that the premises are asbestos-free.

(d) The terms of the offer on two points was clear but the rest of Housing's motion was not dealt with and so this was unclear as to what Housing wished to achieve with those other points later abandoned in the hearing on 17 October 2013.

1. Counsel for Mr El-Saeidy referred to Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336 per Campbell JA (with whom McColl JA and Sackville AJA agreed) at [15] where it was held that a similar offer by a defendant was dismissed on appeal. Housing submitted that Mr El-Saeidy had access to the same evidence as the Court and that his situation is an entirely different factual situation to that in Refrigerated Roadways (No 2) where 15 folders of discovered documents were accessed late, but in sufficient time to consider them before the offer expired. Housing says that by the time the offer was made in this matter, Mr El-Saeidy had had access to the last report of Mr Clifton for 18 days and the rest of his reports for significantly longer.

1. Housing drew to this Court's attention to the fact that Mr El-Saeidy is impecunious and in receipt of Centrelink benefits. He has received Legal Aid funding to bring his various proceedings. It is exceedingly unlikely Housing will recover much, if any, of the costs orders in its favour to date. Housing submitted that in those circumstances, it is not in the interests of justice that Housing should pay any amount to Mr El-Saeidy, when the costs orders in its favour will vastly exceed both the $4000 damages awarded and the costs order in Mr El-Saeidy's favour.

1. So far as the Calderbank offer is concerned, Housing had sought orders in its notice of motion dated 13 August 2013. On the first day of the hearing these orders were no longer pressed. These were:

"4 A declaration that the Defendant has made the following reasonable offers of properties to rent to the Plaintiff, being:

a. the property at XXX XXXX XXXX, Bankstown in which the plaintiff and his family currently reside, being the Bankstown property referred to at paragraphs 38-39 of the judgment of 6 August 2012; and

b. the property at X Urana Street, Villawood, being the Villawood unit referred to at paragraphs 40-41 of the judgment of 6 August 2012; and

c. the property at XX Lowana Street, Villawood at which the plaintiff and his family previously resided.

...

7 The plaintiff is to enter into a lease, in compliance with the Residential Tenancies Act 2010, of XXX XXXX XXXX, Bankstown from the Defendant within 14 days; and

8 Upon entry into the lease referred to in (7) above, the lease between the Plaintiff and Defendant with respect to XX Lowana Street, Villawood will at the same time terminate."

1. Housing was partially successful with its motion in that I made the following orders:

"The Court makes declarations that:

(2) The defendant has complied with the orders of the Court made on 9 August 2011.

(3) The defendant has complied with agreement referred to at paragraph 3 of the Judgment of 9 August 2011 at (b), (c) and (e).

The Court further orders that:

(4) The plaintiff and his family are to move back into XX XXXXX X XXXX, Villawood within 28 days; and

(5) In the event the plaintiff does not comply with (4) above, the defendant is relieved from compliance with Order 3 made on 12 December 2011 by consent, and Order 4 made on 28 August 2012 by consent."

1. On 24 September 2013, Housing offered to bear its own costs of these proceedings, if Mr El-Saeidy agreed to the dismissal of the outstanding motions and moved back into the Villawood property. This reflects the orders I made after the motions were heard.

1. While Mr El-Saeidy was unsuccessful in being granted the orders he sought, Housing was not fully successful in being granted all the orders it sought in its notice of motion filed 13 August 2013. I accept that Mr El-Saeidy in his motions raised matters that had already been decided and were res judicata: see El-Saeidy v NSW Land & Housing Corporation (No 4) [2013] NSWSC 1554 at [26]. While I stated (at [71] in my judgment dated 28 October 2013) that my main concern throughout these proceedings has always been the safety of Mr and Mrs El-Saeidy's children in the house and the yard, I accept that Mr El-Saeidy has always genuinely held the belief that the property at Villawood is contaminated with asbestos.

1. After reviewing the evidence, and concluded (at [71]):

"With the exception of one sample, all asbestos found in samples taken by Mr De Silva were in bonded form. Under both the old and new guidelines 0.01% is permitted. Bonded asbestos if present is considered safe if left alone. No asbestos was detected in the 10 sample soils taken by Mr Clifton from the areas where Mr De Silva indicated the presence of asbestos. I am satisfied that the soil in the yard is safe and does not pose a health risk to Mr El-Saeidy and his family."

1. In other words, it was my view that Mr El-Saeidy's belief is not borne out by the evidence.

1. I am satisfied that in the circumstances outlined above that the offer made by Housing had a real element of compromise in it. However, I am not satisfied that it was unreasonable for Mr El-Saeidy to not accept the offer: see Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8]. In the exercise of my discretion, I decline to make an order that Mr El-Saeidy pay Housing's costs on and from 24 September 2013 to 28 October 2013 on an indemnity basis.

1. The result is that I decline to make any additional orders in relation to costs.

The Court orders that:

(1) No additional orders in relation to the payment of costs be made.

**********

Decision last updated: 07 March 2014