Baluri v The Owners – Strata Plan No 11258 (No 2)

"[3] Rule 38(2)(b) applies to the following proceedings:

(1) Where the relief claimed in the proceedings is for an order to pay a specific amount of money, or an order to be relieved from an obligation to pay a specific amount of money, and that amount is more than $30,000;

(2) Where an order is sought in the proceedings for the performance of an obligation (such as to do work), and the Tribunal has power make an order to pay a specific amount of money, even if not asked for by the claimant, provided that

(a) there is credible evidence relating to the amount the Tribunal could award; and

(b) that evidence, if accepted, would establish an entitlement to an order for an amount more than $30,000.

[4] Rule 38(2)(b) may also apply to proceedings where the orders sought in the proceedings depend upon the claimant proving there is a debt owed in order to establish an entitlement to the relief sought, and that amount is in dispute and is more than $30,000.

(1) Where a claim for relief in the proceedings (not being a claim for an order to be paid or be relieved from paying a specific sum) may, as a consequence of that relief being granted, result in the loss of any property or other civil right to a value of more than $30,000; or

(2) Where there is a matter at issue amounting to or of a value of more than $30,000 but:

(a) no direct relief is sought and no order could be made in the proceedings requiring payment or relief from payment of an amount more than $30,000; or

(b) the relief sought does not depend on there being a finding that a specific amount of money is owed."

1. In Hanave PL v Wine Nomad PL [2022] NSWCATAP 361 at [40]- [42] the Appeal Panel expounded aspects of the above summary which were not the subject of findings in the partly-successful appeal to the Supreme Court on aspects of the substantive decision [2023] NSWSC 265:

"[40] As made clear in Malachite at [75] and following, r 38 is not concerned with the value of rights that might be in issue or any change in wealth. Unlike s 101(2)(r) of the Supreme Court Act 1970 (NSW), r 38 does not require consideration of whether the proceedings:

(1) involve a matter at issue amounting to or of a value of $30,000 or more, or

(2) involve (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $30,000 or more.

[41] Rather, r 38(2)(b) applies where "the amount claimed or in dispute in the proceedings is more than $30,000".

[42] The questions to be determined are what is the amount "claimed", what is the amount "in dispute" and what are "the proceedings" in circumstances where there are two applications, the second in the nature of a cross-application ("cross application")".

1. Here it is clear that the threshold amount was exceeded on the test as explained in Allen, Malachite and Hanave. The cost or value of the kitchen works the subject of one of the owner's claims ($82,500) alone clearly exceeded $30,000: Kaye v Owners SP 4350 [2022] NSWSC 1386 at [79]; Redmyre Group PL v Stockman [No 2] [2023] NSWCATAP 342 at [25].
2. Relevant principles governing costs are authoritatively explored in Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 and Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 which have been followed and applied in the Tribunal, among many instances, in Thompson v Chapman [2016] NSWCATAP 6, Bonita v Shen [2016] NSWCATAP 159, citing earlier consistent authority, and in Vella v Mir [No 3] [2020] NSWCATAP 17 at [28]- [31].
3. In summary:

(1) The exercise of the discretion is principled but involves impression and evaluation.

(2) The starting point for the exercise of costs discretion on the usual principles is that costs are compensatory for having to contest the proceedings to achieve the outcome, and normally follow the event.

(3) "The event" is usually the overall outcome of the proceedings - did the successful party have to go to the court or tribunal to get what it achieved, rather than being offered at least that relief prior to commencement of the proceedings.

(4) If there are distinct, separate or dominant issues on which the party seeking relief did not succeed, that may be taken into account in the exercise of costs discretion, either as an award of costs of those issues to the party who had success on them or as a discount of the costs of the overall successful party, or some other appropriate exercise of principled discretion.

(5) There may be no order as to costs made (to the intent that each party pays its or their own costs) where there has been a measure of success on both sides_: Johnson t/as One Tree Constructions v Lukeman_ [2017] NSWCATAP 45 at [25]- [29]; applied in Oppidan Homes PL v Yang [2017] NSWCATAP 67.

(6) Costs are usually ordered on the ordinary basis as agreed or assessed, unless the parties tender material and/or make submissions that justify an award of costs on the indemnity basis as agreed or assessed, in whole or part.

(7) For an award of costs on other than the ordinary basis, a party's conduct of the proceedings themselves, or the nature of the proceedings themselves (for instance, misconceived), or unreasonable refusal of an offer (often when an outcome less favourable than an offer is achieved in the litigation), are considered.

1. The OC submitted that it had succeeded on every contested issue properly the subject of appeal, which was correct, and therefore succeeded on "the event" with no reason to depart from the usual outcome in that circumstance.
2. The appellant submitted the following reasons (in summary) that there should be no order as to costs despite the ordinary costs rules applying:

(1) She brought the appeal "in good faith to correct what I believed were errors about serious property damage caused by the [OC's] contractors. I have always acted honestly and co-operatively as a self-represented homeowner". Such a result "would be consistent with fairness, proportionality and the Tribunal's role in providing accessible justice to homeowners who act in good faith".

(2) The appellant repeated in substance her version of the chronology of events and the OC's alleged conduct which have relevantly been dealt with in our substantive decision.

(3) The appellant said that she "acted reasonably and the [OC's] own conduct caused much of the delay and confusion, fairness requires that each party bear its own costs". Again, the relevant facts were dealt with in our substantive decision.

(4) The appellant denied delaying the proceedings, said that any early disorganisation was corrected on appeal and that "imperfect presentation" did not equal unreasonable conduct.

(5) The appellant denied introducing new claims except for the alleged "improper conduct" of the strata liaison owner, which should in any event be treated as special circumstances "due to the ongoing stress and unsafe conditions that I am facing living within this strata".

(6) The appellant said that she raised arguable issues.

(7) The appellant said that no special circumstances under s 60(2) of the NCAT Act had been raised and that, for costs to be awarded, a case must be frivolous, vexatious or unreasonable. This sought to apply factors which apply where the ordinary costs rules do not apply.

(8) The appellant would be paying twice - through her levies and through the costs order. This failed to recognise that, if the OC was reimbursed by a costs order, any legal expenses that it had already paid from levies could be refunded or held against other OC expenses which otherwise would be the subject of a levy on lot owners.

(9) The OC had its legal expenses funded by levies when the appellant had relied on free community legal advice from Fair Trading, a private firm and a legal centre.

1. None of the foregoing reasons altered the operation of the rules governing the usual costs outcome. In particular, they did not acknowledge that the authorities cited above make it clear that costs awarded on the ordinary basis are a compensation to the party who obtains a costs order for having to conduct the proceedings, not a punishment.
2. The OC is accordingly entitled to its costs of the appeal against the appellant lot owner.

(1) Order that a further hearing on costs is dispensed with.

(2) Order that the appellant pay the respondent's costs of the appeal on the ordinary basis as agreed or assessed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.