Allsopp v Owners Corporation SP6006 [2024] NSWCATAP 93 | Case summary

Allsopp v Owners Corporation SP6006 [2024] NSWCATAP 93 | Case summary | Zoe

Submissions

As said, both parties filed written costs submissions. It was not in contest that the respondent was required to demonstrate special circumstances under s 60 of the NCAT Act in order to obtain a costs order.
The respondent relies on five grounds said to constitute special circumstances warranting an order for costs.
First, the respondent says the appellant conducted the proceedings in a way that unnecessarily disadvantaged the respondent. Two matters were identified: 1. the appellant's failure to prepare documents and engage in correspondence in relation to the conduct of the proceedings: reference was made to an email from the appellant requesting that the respondent not correspond "to offer unhelpful advice or assistance or clarification of any nature". 2. the appellant's failure to file documents by due dates and correspondence with the strata manager, who was a witness for the respondent, in a manner which expressed "dissatisfaction with the strata manager and animosity towards Richard Lim" (a member of the strata committee). 3. Reliance was placed on the decision of Ellis v The Owners - Strata Plan 80605 [2018] NSWCATAP 174 at [34].
Secondly, the respondent submits the appellant's contentions were "weak and untenable" with reference being made to paragraphs 23, 25, 31, 35, 39, 41 and 45 of the respondent's submissions dated 19 February 2024. These submissions related to the appellant's grounds of appeal that the Tribunal had an implied responsibility to inform him of the consequences of declining to cross-examine witnesses and the failure of the Member to recuse herself.
Inter alia, the respondent says the appellant did not take the opportunity to cross-examine the respondent's witnesses having been made aware of possible consequences, failed to prove evidence of the respondent's witnesses was misleading and did not make any application for the Member to recuse herself following the Tribunal making "full and frank disclosure of [her] potential involvement in other proceedings involving the Appellant".
Thirdly, referring to the Notice of Appeal, the respondent says that the appeal "raise[d] questions of law which are too complex for someone without legal training to understand". Reference was made to paragraphs 12-18 of the respondent's submissions dated 19 February 2024. These paragraphs concern the legal principles applicable in connection with affording procedural fairness, the circumstances in which such denial will result in orders being set aside and the question of what constitutes a substantial miscarriage of justice for the purpose of the grant of leave to appeal.
Fourthly, the respondent says that the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance.
The respondent relies on a letter (Annexure B to the costs submissions) which the respondent says the appellant "sent instead of serving documents in support of the appeal" and which "indicates dissatisfaction with the Strata manager and a disliking of the strata committee which were not matters relevant to the original application or the issues on appeal". The respondent then continues that "the Appellant's primary motive to file the Notice of Appeal is clear from the sentiment of the correspondence … and not consistent with the matters asserted in the Notice of Appeal."
On this ground the respondent also relies on its submissions dated 19 February 2024, again referencing paragraphs 23, 25, 31, 35, 39, 41 and 45.
Fifthly, the respondent says the appellant failed to comply with his duty imposed by s 36(3) of the NCAT Act. Reliance was placed upon "the Appellant's failure to engage with Mr Saifullah on the day of the hearing to at least make further enquiries into the matter was uncooperative and not in accordance with the guiding principle".
As to fixing a lump sum amount for costs, the respondent said this would "avoid the delay in additional costs arising out of an assessment should the parties not reach agreement". Submissions were also made concerning the discount which should be applied, referring to the decisions of Barrett J (as he then was) in Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2011] NSWSC 11 and Beech-Jones J in Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863.
The appellant filed submissions in reply on 2 May 2024.
First, the appellant said the application for costs should not be dealt with on the papers. This was because the appellant says the respondent's solicitor, Mr Williamson, "takes liberties with his factual statements". These liberties are said to be that Mr Williamson: "a) Has assumed the role of Respondent, intercepts correspondence addressed to the Strata manager and attempts to direct the [appellant]. b) Embellishes information and to demonise the [appellant]. c) presents witness statements that a rationalist would refuse credibility".
Secondly, the appellant criticises the involvement of lawyers and says the strata manager "failed to address issues arising in NCAT [and] now seeks to clawback the unnecessary expense of legal services foolishly deployed to resolve issues which were within the competence of any person providing agreed services".
As to costs, the appellant refers to an order made by the Tribunal in different proceedings in which legal representation was granted to the respondent (the applicant in the different proceedings) on condition that it did not seek any order for costs against the appellant (the respondent in those proceedings). We note: 1. such an order was not made by the Appeal Panel when the Appeal Panel granted leave to the respondent to be legally represented on 20 December 2023; and 2. the order made in the unrelated proceedings does not regulate costs in these proceedings. 3. In making this submission, the appellant refers to his "31 years experience at the CTTT and NCAT".
Next, the appellant made submissions concerning events which occurred in 2023, prior to these proceedings being commenced, apparently relating to access being sought to the appellant's property and the disposal of a fire detection system. It is unclear what is the relevance of these matters to the proceedings to which this appeal relates, namely, the appellant's application for the appointment of a compulsory strata managing agent pursuant to s 237 of the Strata Schemes Management Act 2015 (NSW) (SSMA) and, more particularly, the respondent's application for costs.
The appellant then continues that: 1. he "had no say in the engagement of legal services"; and 2. by reference to a letter from the respondent's solicitor dated 16 April 2024, "costs are being used as a weapon".
In conclusion, the appellant says costs of a lawyer are not justified where the respondent had secured the services of an experienced strata manager. There were no "technicalities or complex issues" warranting an award of costs in this case.
The respondent's submissions in reply can be summarised as follows: 1. The costs application should be determined on the papers without a hearing. The parties had an opportunity to provide written submissions. A further hearing will incur more costs. 2. The submissions made concerning historical events are "matters of substance which were determined in the original proceedings which were not raised in the notice of appeal … nor were these matters raised at the time during the course of these appeal proceedings …". 3. The reference by the appellant to his experience in Tribunal proceedings is a fact from which "the Appeal Panel should infer that the Appellant knew he was required to appear on 12 March 2024 but chose not to for strategic reasons, as it was not in his best interest to appear". 4. The respondent's solicitor challenges comments made by the appellant concerning his conduct as "unsubstantiated" and "outrageous and entirely inappropriate". 5. The respondent reiterates submissions earlier made. In doing so the respondent notes the proceedings were dismissed for non-appearance and that the appellant's issues, to the extent relevant to these proceedings, otherwise relate to the substantive dispute.
Lastly, the respondent accepts the purpose of costs order is not punitive; rather, it seeks recovery of costs legitimately incurred "in responding to the proceedings and subsequently in these proceedings".

[3]

Consideration

In our view an order should be made dispensing with a hearing of the costs application pursuant to s 50(2) of the NCAT Act. The parties had an opportunity to provide written submissions and none of the matters raised by the appellant requires a hearing. Further, and in any event, the appellant failed to attend the original hearing either in person or by audiovisual/telephone link which had been made available to him. In these circumstances a hearing would unnecessarily add to the costs of the proceedings.
The respondent seeks an order that the appellant pay its costs of the appeal fixed in an amount of $8,569.53. This amount represents a 30% discount to the sum of $12,242.19.
The amount of $12,242.19 is made up of six invoices (Invoices) issued by the respondent's lawyer (excluding GST) as follows: 1. invoice 1199 dated 29 December 2023: $2,291.95 excluding GST. 2. Invoice 1209 dated 3 February 2024: $480 excluding GST. 3. Invoice 1221 dated 18 February 2024: $4,301.09 excluding GST. 4. Invoice 1228 dated 4 March 2024: $868.15 excluding GST. 5. Invoice 1248 dated 12 March 2024: $2,720.00 excluding GST. 6. Invoice 1250 dated 17 March 2024: $1,581.00 excluding GST.
The application is made under s 60 of the NCAT Act. This section provides that each party is to pay their own costs. However, the Tribunal may award costs of proceedings before it but only if satisfied there are special circumstances warranting an award of costs. Special circumstances means circumstances which are out of the ordinary, but not necessarily extraordinary or exceptional: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].
Section 60(3) sets out the factors to which the Tribunal may have regard in determining whether there are special circumstances warranting an award of costs.
The power to award costs under s 60 includes a power to fix the amount of costs and award a lump sum.
The principles applicable in awarding a lump sum were considered in 203 Castlereagh Street Pty Ltd v Skybloo Holdings Pty Ltd [2017] NSWCATAP 29 (Skybloo). Referring to the decisions of eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422, Hamod v State of New South Wales [2011] NSWCA 375 (Hamod) and Kostov v Zhang (No 2) [2016] NSWCA 279, the Appeal Panel in Skybloo said at [37]: 37 These principles, relevantly adapted to the circumstances of the Tribunal, include: (1) A fixed sum costs order involves a departure from the usual process by which costs are assessed in accordance with the statutory procedures now relevantly found in the Legal Profession Uniform Law Application Act 2014 (NSW) (especially Pt 7 dealing with "ordered costs") and the Legal Profession Uniform Law (NSW), eInduct Systems at [8]; (2) A fixed sum costs order may be appropriate where: (a) the sum of costs in question is relatively modest, eInduct Systems at [30]; (b) a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment, Hamod at [813], [816] and [817], eInduct Systems at [30]; (c) the assessment of costs would be protracted and expensive, Hamod at [813] and [817]; and/or (d) the case was complex, Hamod at [815]-[817]; (3) Sections 36(1) and (4) of the NCAT Act (which can be seen as equivalent to those in ss 56(1), 57(1)(d) and 60 of the CP Act) suggest that the following factors merit particular consideration: (a) the relative responsibility of the parties for the costs incurred; (b) the degree of any disproportion between the issue litigated and the costs claimed; (c) the complexity of the proceedings in relation to their cost; and (d) the capacity of the unsuccessful party to satisfy any costs liabiltity, Hamod at [816], Kostov at [22]. (4) An order for fixed sum costs should be based on an informed assessment of the actual costs, having regard to the information before the Tribunal. Furthermore, the approach taken to estimate the costs must be logical, fair and reasonable. This may involve an impressionistic discount of the costs actually incurred in order to take into account the contingencies that would be relevant in any formal costs assessment, Hamod at [820]; (5) The power to make a fixed sum costs order should only be exercised when the Tribunal considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available, Hamod at [813], Kostov at [23];
To like effect were decisions of the Appeal Panel in Commissioner of Police v Robinson (No 2) [2022] NSWCATAP 280 and ZXJ v ZXK [No 2] [2023] NSWCATAP 76 at [11] et seq.
There is no dispute that s 60 of the NCAT Act regulates costs of the appeal proceedings. The issues to be determined are: 1. whether there are special circumstances warranting an order for costs; 2. if so, should a costs order be made and on what terms.
Having dismissed the proceedings under s 55(1)(c) of the NCAT Act and rejected the respondent's application to dismiss the proceedings on the merits, it seems to us inappropriate to adjudicate on the substantive appeal. However, for the purpose of determining this costs application, it is appropriate to make some observations about the decision of the Tribunal at first instance and its reasons dated 30 November 2023.
Those reasons noted there had been a degree of dysfunction in the management of the strata scheme. In part, the Tribunal commented that dysfunction may have arisen "under the [appellant's] sole leadership (sole member of the committee for many years)". The Tribunal found "past dysfunction has improved". However, the Tribunal also noted that orders of the Tribunal had not been complied with but indicated it would not exercise a discretion to appoint a strata manager under s 237 of the SSMA.
The matters identified by the Tribunal were all relevant matters the Tribunal was required to consider in determining whether to exercise any power of appointment: s 237(3) SSMA.
On the one hand, the fact the Tribunal found some matters proved, for example non-compliance with Tribunal orders (s 237(3)(b), counts against a conclusion that the appeal against the Tribunal's refusal to appoint a compulsory strata manager had no tenable basis at fact or law or was frivolous or vexatious or otherwise misconceived or lacking in substance. The respondent's submission that the appeal raised questions of law which would too complex for someone without legal training to understand also counts against such a conclusion.
On the other hand, it is difficult to see how this matter was legally complex. There was a challenge raised in the appeal on procedural fairness grounds (including in relation to the usual cross-examination of witnesses) and there was a challenge to the Tribunal's exercise of discretion not to appoint a compulsory strata manager in circumstances where some of the matters in s 237(3)(b) of the SSMA were established. These types of challenges raise common questions which regularly confront the Appeal Panel, including whether leave to appeal should be granted where challenges are made to factual findings. The law in relation to these matters is well settled. As such, an appeal on these bases could not be said to be out of the ordinary. There is otherwise no inherently complex factual dispute identified.
As to the appellant conducting the matter in a manner which caused disadvantage, the matters identified by the respondent are not such that the Tribunal should find disadvantage has been caused. An unrepresented party's statement that they do not wish to receive "unhelpful advice or assistance or clarification of any nature" from the opposing party could not be said to cause any relevant disadvantage. While the late filing of documents could cause disadvantage, the fact is the appeal was lodged on 6 December 2023 and the matter was listed for final hearing on 12 March 2024. This appears to be within the usual timeframes in which an appeal might be expected to come on for a hearing for a matter such as this appeal. Accordingly, no disadvantage is established.
The final matter to deal with is s 60(3)(f) of the NCAT Act. This section provides: In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following - … (f) whether a party has refused or failed to comply with the duty imposed by section 36(3), …
Relevantly, s 36 of the NCAT Act provides: 36 Guiding principle to be applied to practice and procedure (1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. ... (3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal - (a) a party to proceedings in the Tribunal,
As we noted in our oral reasons dismissing the appeal under s 55(1)(c) of the NCAT Act, in his Notice of Appeal dated 4 December 2023, the appellant said at section 5C (which deals with the orders sought on appeal): 3. The Appeal Panel, if so empowered, call for written submissions and a decision made on papers if appropriate.
However, the appellant subsequently changed his position and required a hearing. Arrangements were made for this to occur, the respondent appearing at the hearing on 12 March 2024 by its solicitor in person and the appellant being given "leave to appear by AVL should he wish to".
Despite being given leave to appear by AVL, the appellant failed to do so. He also failed to engage with the Appeal Panel when, during the hearing, we ask the respondent to have somebody attend the appellant's property to advise him that the hearing was underway and to ascertain whether he would be attending.
Whether or not the appeal ultimately has any substance, its commencement, maintenance and the appellant's ultimate failure to appear at the hearing that was expressly requested leads us to the conclusion that the appellant has failed to participate in the processes of the Tribunal. If he did not wish to pursue his appeal, it could have been withdrawn (with leave). Instead, the respondent has been required to reply to the Notice of Appeal, incur costs in doing so and, ultimately, attend a hearing which did not proceed to a decision on the merits.
No information has been provided by the appellant as to any circumstances which might justify or explain his non-attendance.
It follows we are satisfied that special circumstances within the meaning of s 60 have been established and, having regard to the fact the appellant did not pursue his appeal to conclusion or withdraw the appeal, that an order should be made that he pay the respondent's costs of the appeal.
The next question is whether a lump-sum order should be made and, if so, how much.
A review of the Invoices reveals they all relate to costs incurred in respect of the appeal proceedings, not the proceedings at first instance. Having regard to the amount of costs in issue, which are, with the discount applied below, not disproportionate to the preparation and attendance required and the likely additional expense and time which would be incurred through an assessment process, we are satisfied that an order should be made to award a fixed sum for costs.
As to assessment of amount, the Invoices show that a charge rate of $400 per hour has been applied. This includes in relation to relatively simple administrative tasks such as making an application for the sound recording (see invoice 1199 - work done 20/12/2023) and printing and collating the documents for appeal (invoice 1228 - work done 18/02/2024 and 20/02/2024). In addition, printing costs for these items are charged at $0.10 per page. Travel time has also been claimed at this rate. Invoice 1250 shows that 3.2 hours were spent on drafting the submissions on costs.
In relation to the costs application and the preparation of costs submissions, we have rejected a number of grounds raised in those submissions.
Clearly, a discount factor should be applied to the assessment of costs to account for these matters.
The authorities referred to by the respondent identifying particular discount rates provide only marginal guidance on what discount should be applied. Rather, the task for us is to assess the material placed before us and then make an informed assessment. As Beazley JA (Giles and Whealy JJA agreeing) said in Hamod at [820]: The costs ordered should be based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills): Beach Petroleum NL v Johnson (No 2) ; Leary v Leary ; Harrison v Schipp at 743 ; Sparnon v Apand Pty Ltd (FCA, 4 March 1998, unreported) . The approach taken to estimate the costs to be ordered must be logical, fair and reasonable: Beach Petroleum NL v Johnson at 164-165 ; Hadid v Lenfest Communications Inc at [27]; Harrison v Schipp at 743 . This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment: Leary v Leary at WLR 76 per Purchas LJ; Beach Petroleum NL v Johnson (No 2) at 123; Auspine Ltd v Australian Newsprint Mills Ltd at 164-165.
Applying those principles, the discount should take into consideration the matters we have raised above as well as an overall assessment of the rates charged and the amount sought in connection with the costs of the appeal.
Mathematical precision is not possible. However, we have formed the view that a discount of 40% should be made in order to make an appropriate adjustment for the lump-sum award. That is, the appellant should pay the respondent's costs of this appeal fixed in an amount of $7,345.00 (rounded down the nearest dollar).

Allsopp v Owners Corporation SP6006

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Judgment (5 paragraphs)

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Legislation Cited (3)

Cases Cited (10)