Dent v The Owners - Strata Plan No. 69595

Respondent's submissions

1. It was contended that the claim for reimbursement was always doomed to fail because the grout was common property which the respondent had indicated would be neither authorised nor reimbursed, regardless of what was the substance removed, especially as the work carried out involved betterment. Further, that a note on a quote was not sufficient to displace the opinion of the respondent's expert and no expert report to the contrary was provided despite an opportunity for that having been provided.
2. As to ponding water, it was noted that (1) the applicant did not provide any expert evidence in response to that of the respondent, (2) there was no explanation for the failure to raise this issue for more than a decade prior to it being raised in a letter dated 5 October 2020, (3) there was no evidence of a defect at the time of construction, (4) there was unchallenged evidence that recent work complied with the Building Code of Australia (BCA), and (4) there was no evidence of any adverse consequence of water ponding.
3. At [10] it was submitted that paragraphs (b), (f) and (g) of s 60(3) applied in relation to the first claim, although reference was made to paragraphs (c) and (e) at [5]. It was contended that paragraphs (c) and (e) of that s 60(3) were satisfied in relation to the second claim.

Applicant's submissions

1. After referring to emails referable to the first claim, it was submitted that the assertion that the tiles formed part of the common property was not made until submissions served less than two weeks prior to the hearing. It was also submitted that neither paragraph (b) nor (f) applied to this claim.
2. As to the second claim, it was contended that the applicants feared that ponding would undermine a new waterproofing membrane and may cause a need to remove new decking they were installing. Reference was made to datasheets upon which the applicants relied as an alternative to incurring the cost of obtaining a report from an expert. Further, it was contended that the respondent's expert changed his position in relation to both rectification of ponding and as to whether there was efflorescence.
3. The applicants' case on costs was that the respondent had not demonstrated there were special circumstances, and they sought a decision in relation to costs by reference to each of the two claims.

Submissions in reply

1. It was suggested that the applicants had ample opportunity to provide expert evidence in relation to the first claim and that, absent such evidence, that claim was doomed to fail. Further points made were that the entire reflection pond was regrouted and that epoxy grout was used to replace cement grout. The emails to which reference was made were said to not indicate that the respondent considered the tiles to be lot property.
2. In relation to the second claim, it was suggested there was no basis for the asserted fear in relation to the strength of the waterproofing membrane which was said to be a newly advanced explanation. Any suggestion that the respondent's expert changed his position was disputed and it was submitted that expert had repeatedly maintained that no work was required to address the ponding.
3. Simply stated, the respondent's position was that: "By the date of hearing, the Applicants were pressing claims which had no tenable basis."

Consideration

1. By reference to s 60(3), the Tribunal does not consider that paragraphs (b) of (f) apply in this instance and, not being satisfied there is any matter falling within paragraph (g), considers this application by reference to paragraphs (c) and (e).
2. As to paragraph (c), which is directed to the claims that were made, there was a tenable basis in law for the second claim which was based on s 106 of the Strata Schemes Management Act 2015 (the SSMA) and that claim cannot be said to have been lacking in substance. It was open to the applicant to rely on datasheets rather than expert evidence and it was not disputed that water was ponding: the questions where whether steps should be taken to prevent such ponding and, if so, what steps.
3. The first claim could be said to have lacked substance in that the grout was common property, based on The Owners SP 35042 v Seiwa Australia Pty Ltd [2007] NSWCA 272, and the applicant was not entitled to reimbursement for work undertaken o common property, based on The Owners - Strata Plan 32735 v Lesley-Swan [2012] NSWSC 383. However, it was reasonable for the applicant to raise the question of the effect of by-law 24.
4. Turning to paragraph (e), which is directed to a consideration of the proceedings, neither of the claims made by the applicant can be said to have been frivolous or vexatious or misconceived and they can only be said to be lacking in substance with the benefit of hindsight, i.e. knowing the outcome of the proceedings.
5. While it is clear the tiles and grout in question formed part of the common property, the first claim was seeking reimbursement for work done on that grout. The second claim sought a work order in relation to ponding that was occurring. Both issues required an assessment of the evidence led by the parties. Neither claim was misconceived and cannot be said to have been lacking in substance in that the applicant raised an arguable case in support of both those claims.
6. The Tribunal is not persuaded that there were special circumstances in this case. Even if it could be said there were special circumstances, the Tribunal is not satisfied such circumstances warrant an order for costs for the following reasons.
7. While a work order was sought in relation to the second claim, the first claim was for an amount of $10,186. The lack of reference to cl 38 of the Civil and Administrative Tribunal Rules 2014 in the parties' submissions serves to indicate that the amount claimed or in dispute did not exceed $30,000.
8. The fact that a party chooses to retain solicitors and then decides to brief counsel does not serve to render the resulting costs recoverable. In the CATA, s 36(4) requires the Tribunal to seek a "resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings".
9. Using both solicitors and counsel to resolve a claim for $10,186 plus a claim for a simple work order, and to take a full hearing day to litigate those issues, is not proportionate to either the amount in issue or to the importance and complexity of the subject matter in these proceedings.
10. The Tribunal does not consider an order for costs should be made in such circumstances as that would involve moving towards a situation where not only solicitors but also counsel are used to contest simple, straightforward, or small cases with the result that the costs outweigh the amount in dispute. That is contrary to the Tribunal's fundamental goal of providing a low-cost forum, as reflected in the goals of "the just, quick and cheap" which are included in its guiding principle, established by s 36(1) of the CATA.

Orders

1. The Respondent's submissions accepted that costs should be determined on the papers, without the need for a further hearing. The Applicants' submissions overlooked that aspect, despite it being set out in order 5 made on 7 June 2020. However, the Tribunal is satisfied that there is no utility in conducting a further hearing, confined to the question of costs.
2. Accordingly, the Tribunal makes the following orders: 1. The Tribunal dispenses with a hearing on the question of costs, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013. 2. Each party is to bear their own costs.

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. Registrar

Amendments 25 September 2023 - Formatting amendments. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 September 2023