Bischoff v Sahade & Owners Corporation SP 62022 [2015] NSWCATAP 196 | Case summary

Bischoff v Sahade & Owners Corporation SP 62022 [2015] NSWCATAP 196 | Case summary | Zoe

Submissions

The appellants submitted that the Appeal Panel had power to award costs pursuant to s 60 of the Civil and Administrative Tribunal Act, 2013 (NCAT Act) where the Appeal Panel is satisfied there are special circumstances.
The appellants referred to the decision of the Court of Appeal in Cripps and Another v G & M Dawson Pty Ltd and Another [2006] NSWCA 81 and said that the expression "special circumstances means circumstances that are out of the ordinary, not extra ordinary or exceptional: per Santow JA at [60].
The appellants said that matters to be considered in determining whether there exists special circumstances are set out in s 60(3) of the NCAT Act. In the present case the relevant factors were: 1. whether a party had been responsible for prolonging unreasonably the time taken to complete the proceedings; 2. the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law; and 3. any other matter the Tribunal considers relevant.
The appellants pointed to the history of the proceedings, which originally involved two appeals, the second appeal being dismissed by consent on day two of the hearing on 25 February 2015.
It is relevant to note that the order dismissing the appeal was on the basis there by no order as to costs.
In relation to the present appeal, the appellants say there were three issues which the Appeal Panel identified, namely the joinder of Ms Gilster as an appellant, the jurisdiction of the Appeal Panel and whether there had been an error or law, and that the appellant succeeded on all of these issues.
The appellants submit that they were entirely successful in appeal and therefore justified in commencing and maintaining the appeal. They submit that success in relation to the outcome of an appeal is a matter which is relevant in considering whether special circumstances exist and an order for costs should be made. In this regard the appellants reply on the decision of the Appeal Panel in Hammond v Ozzys Cheapest Car Pty Ltd t/as Ozzy Car sales [2015] NSWCATAP 65 at [105].
The appellants submit that in relation to the issues of joinder and jurisdiction that a great deal of time was spent in dealing with these matters at the hearing and that "but for the misguided pursuit of these issues by the first respondent, the hearing of the appeal would have easily concluded in one day, which was the estimated hearing time allocated by the Appeal Panel".
The appellants submitted that respondent advanced submissions that were misconceived and had "no tenable basis" and in relation to the issue concerning the joinder of Ms Gilster had no practical purpose in relation to the determination or outcome of the appeal.
Finally, the appellants say that the ground of appeal upheld as an error of law by the Appeal Panel was "virtually unarguable, yet was not conceded".
Consequently, there are special circumstances which warrant an order for costs.
The submissions of the first respondent can be summarised as follows: 1. there are no special circumstances that would warrant the making of an order for costs in the present case; 2. while the appeal was heard over two days, the majority of the hearing time of the first day was taken up by submissions of the appellant including in relation to the appeal AP 14/46346 that was ultimately dismissed by consent; and 3. but for the other appeal, the hearing would only have taken one day and the first respondent says that little time was taken up by her on the first day of the appeal in making any submissions at all, that time being in respect of the jurisdictional issue.
Consequently, the first respondent says that it did not unreasonably prolong the hearing and that any prolongation arose by reason of the appeal which was subsequently dismissed by consent.
In relation to the appellant's submissions that they were successful on all issues, the first respondent says that the primary issue, as identified by the Appeal Panel is paragraph [106] was whether or not the Tribunal was in error in making an order to appoint a strata managing agent. On this issue the first respondent says the appellant was unsuccessful. In this regard the first respondent refers to the Appeal Panel's findings rejecting the appellant's submission that there was no evidence to support the conclusion that the strata scheme was not functioning or was not functioning satisfactorily.
The first respondent also submits the appellants were unsuccessful on the issue of whether or not the proposed strata managers consent was invalid and also failed on the issue of whether or not the "strata scheme was not functioning satisfactorily because of the rights afforded to the first respondent under clause 11(2) of schedule 3 of the SSMA".
In relation to the issue of jurisdiction, the first respondent says that was an issue that had originally been raised by the Tribunal and which had not previously been the subject of any judicial interpretation. Consequently, the first respondent says it "should not be penalised for the happenstance that she was the first to be presented with the point to argue and upon invitation of the Principal Registrar".

[3]

Consideration

Both parties have agreed that the Appeal Panel should determine the question of costs "on the papers".
Accordingly, the Appeal Panel will make an order dispensing with a hearing in accordance with s 50(2) of the NCAT Act.
The Appeal Panel notes the Second Respondent, the Owners Corporation, made no submissions in relation to costs. This is because it had, in effect, made a submitting appearance. No order for costs is sought against the Owners Corporation.
The power to make an order for costs is regulated by s 60 of the NCAT Act which requires the Appeal Panel to be satisfied there are special circumstances. This means there must be circumstances which are out of the ordinary but not necessarily extraordinary or exceptional: see Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120. The appellants point to various criteria in s 60(3) of the NCAT Act and say that those circumstances exist in the present proceedings. In particular that the proceedings have been unnecessarily prolonged, the first respondent was unsuccessful in relation to a number of issues raised on appeal (some of which were said to have no tenable basis) and that in all the circumstances this appeal was out of the ordinary.
In the opinion of the Appeal Panel, the proceedings were not unnecessarily protracted by the conduct of the respondent. The appellants lodged two appeals, one of which was dismissed by consent with no order as for costs. The other appeal and the directions made by the Appeal Panel in relation to that appeal took up a considerable period of the time spent in resolving the two matters.
This factor, when considered in the context of the whole time taken to resolve both appeals leads the Appeal Panel to conclude that the respondent has not been responsible for unreasonably prolonging the time taken to complete the present appeal.
In relation to the relative strength of the parties' claims, in the opinion of the Appeal Panel, the following factors are relevant.
The jurisdiction of the Appeal Panel to hear appeals in relation to matters referred under s 184 of the Strata Schemes Management Act (SSMA) had not previously been considered.
The Appeal Panel itself raised the need for the parties to make submissions on this aspect and there was some complexity and novelty in relation to this issue which might make the present case out of the ordinary.
On the other hand, this was not the only issue in the case as noted by the appellants. Other issues included what constituted the management structure of the strata scheme and whether or not there was some evidence sufficient to justify the appointment of the strata managing agent under s 162 of the SSMA because the management structure was not functioning or was not functioning satisfactorily. In relation to these matters the appellants were unsuccessful.
When considering these circumstances as a whole, while some of the matters identified by reference to the criteria in s 60(3) of the NCAT Act may be considered as out of the ordinary, in the opinion of the Appeal Panel they are not collectively special circumstances which warrant an award of costs in the present case.
Further, even if we were satisfied that special circumstances were established, in our view the appropriate order would be that each party should be ordered to pay their own costs.
This is because the appellants have failed on some issues and the novelty of the question of whether the Appeal Panel had jurisdiction was a matter which the parties were required to address by reason of the Appeal Panels directions.
Consequently, the Appeal Panel will make no order as to costs.

Bischoff v Sahade & Owners Corporation SP 62022

At a glance

Court

Decision date

Before

Source

Judgment (6 paragraphs)

Parties

Cases Cited (3)

Cited By (9)