Galliott v The Owners �e" Strata Plan No 43251 [2026] NSWCATAP 119;

1. Strata scheme 43251 is a residential and commercial complex comprising 177 lots and common property at Surry Hills in New South Wales.

1. On 18 December 2024, Cathie Galliott (Ms Galliott) as the applicant commenced proceedings 2024/00470670 against OSP43251 as the respondent in the Consumer and Commercial Division of the Tribunal (the CCD proceedings) by lodging a strata and community schemes application in which she claimed an order under s 237 of the SSM Act for the appointment of a compulsory strata manager (the Galliott application).
2. On 22 April 2025, the Tribunal made an order joining Goldtex Pty Ltd (Goldtex) as a respondent.
3. On 4 June 2025, the Tribunal made an order joining Ms Eleman, Dr Galliot, Michelle Selwyn (Ms Selwyn) and William Doyle (Mr Doyle) as applicants.
4. On 2 February 2026, the Tribunal constituted by Senior Member J Rose, following a hearing on 16 and 17 October 2025, made a decision in which he relevantly made an order dismissing the Galliott application (the 2 February 2026 order).

1. On 6 February 2026, Dr Galliott and Ms Elelman as the appellants commenced this appeal against OSP43251 as the respondent by lodging a notice of appeal in which they:

(1) challenged the 2 February 2026 order;

(2) set out the following grounds of appeal:

"1) lnsufficient reasons; 2) Misapplication of statute/legal tests (s106, s237(3); Sch.1-11, Sch 2-4(2); 3) Incorrect application of RoE; 4) Demonstrated misunderstanding of the facts; 5) Denial of procedural fairness on submissions, witnesses & supplementary evidence post respondent-initiated delay, and not taking appropriate steps to counter witness tampering; 6) Made critical findings not made out on the BoP; 7) Order is so manifestly unreasonable its suggestive of an underlying error of law; 8) Failure to apply precedent; 9) new evidence."

(3) set out the following order the Appeal Panel should make:

"Substantive: Those sought in the originating application dated 18 December 2024 or any such variation of those orders deemed appropriate by the Tribunal.

Interim: That the First Respondent grant the Applicants and their experts unhindered access to all common property within SP43251 for the purposes of furthering the quick, cheap and just conduct of these proceedings."

(4) sought leave to appeal on the ground that significant new evidence has arisen (being evidence that was not reasonably available at the time the CCD proceedings were being dealt with).

1. On 26 February 2026, the Appeal Panel constituted by Deputy President G Sarginson made procedural orders for the hearing of the appeal including by order 1 that leave is given to OSP43251 to be legally represented, by order 2 that OSP43251 lodge and serve its reply to appeal by 11 March 2026, by order 3 that Dr Galliott and Ms Elelman lodge and serve their material in support of the appeal by 22 April 2026, by order 4 that OSP43251 lodge and serve its material in opposition to the appeal by 12 June 2026, by order 5 that Dr Galliott and Ms Elelman lodge and serve any submissions in reply by 24 June 2026, by order 7 listing the appeal for hearing on 2 July 2026 at 10.15 AM in Sydney for a half day, and by order 8 joining Ms Galliott, Ms Selwyn, Mr Doyle and Goldtex as respondents.
2. On 6 March 2026, OSP43251 lodged its reply to appeal in which it set out its reply to the grounds of appeal and reasons for opposing the grant of leave to appeal.
3. On 7 March 2026, Dr Galliott, Ms Elelman and Ms Galliott sent an email to the Appeal Registry in which they stated that they thereby withdrew the appeal.
4. On 12 March 2026, OSP43251 lodged "Owners Corporation's submissions RE Notice to Withdraw Appeal" which included the OSP43251 costs application (the OSP43251 costs submissions).
5. On 13 March 2026, the Appeal Panel constituted by myself made an order dismissing the appeal upon its withdrawal by Dr Galliott and Ms Elelman, and procedural orders for the determination of the OSP43251 costs application.
6. On 17 March 2026, Dr Galliott and Ms Elelman lodged "Appellants' Submissions on Costs" (the Galliott/Elelman costs submissions).
7. On 24 March 2026, OSP43251 lodged "Owners Corporation's submissions in reply on costs" (the OSP43251 costs submissions in reply).

1. The determination of the OSP43251 costs application will involve answering the following two questions:

(1) whether a hearing of the OSP43251 costs application should be dispensed with;

(2) whether a costs order, and if so what costs order, should be made in favour of OSP43251.

Whether a hearing of the OSP43251 costs application should be dispensed with

1. OSP43251 consents to an order that, and Dr Galliott and Ms Elelman make no submission as to whether, a hearing of the OSP43251 costs application should be dispensed with.
2. I am satisfied that the issues for determination in relation to the OSP43251 costs application can be adequately determined in the absence of the parties by considering their evidence and written submissions. Accordingly, I have decided pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) to make an order dispensing with a hearing in relation to the OSP43251 costs application.

Whether a costs order, and if so what costs order, should be made in favour of OSP43251

1. The OSP43251 costs application is pursuant to s 60(2) of the NCAT Act by reason of the existence of special circumstances for the following two reasons:

(1) the appeal had no tenable basis in fact or law and was misconceived;

(2) Dr Galliott and Ms Elelman withdrew the appeal without any explanation, effectively surrendering after putting the OSP43251 to the expense of defending the appeal by filing its reply to appeal and attending the lengthy call-over on 25 February 2026 incurring costs unnecessarily.

1. The determination of this application will involve answering the first and may involve answering the second and third of the following three questions:

(1) whether there are special circumstances warranting an award of costs in favour of OSP43251;

(2) if so, whether the discretion should be exercised to award costs;

(3) if so, what costs order should be made.

1. Before dealing with this issue, it is appropriate to make some general observations as to the submissions of the parties, set out the applicable provisions of the NCAT Act and legal principles, and to summarise the relevant submissions of the parties.

Some general observations as to the submissions of the parties

1. OSP43251, and Dr Galliott and Ms Elelman, have referred to various authorities in the Tribunal and courts in which an award of costs was made or not made in circumstances of the withdrawal of an appeal or an application. I have not found these authorities helpful in determining the OSP43251 costs application. While they illustrate the variety of circumstances in which an award of costs was made or not made, the relevant order was made in the context of specific findings applicable to particular proceedings that have no resemblance to this appeal.
2. As I have found that OSP43251 in the OSP43251 costs submissions has not established that there are special circumstances warranting an award of costs in its favour, it has been unnecessary to summarise the Galliott/Elelman costs submissions or the OSP43251 costs submissions in reply.

1. Part 4 Division 5 (ss 56-63) contains provisions dealing with participation in proceedings in the Tribunal. Section 60 deals with costs, and relevantly states:

60 Costs

(1) Each party to proceedings in the Tribunal is to pay the party's own costs.

(2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.

(3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following -

(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,

(c) 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,

(d) the nature and complexity of the proceedings,

(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,

(f) whether a party has refused or failed to comply with the duty imposed by section 36(3),

(g) any other matter that the Tribunal considers relevant.

(4) If costs are to be awarded by the Tribunal, the Tribunal may -

(a) determine by whom and to what extent costs are to be paid, and

(b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis.

costs includes -

(a) ...

(b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.

The applicable legal principles under s 60(2) of the NCAT Act

1. In FZK v Secretary, Department of Communities and Justice (No 4) [2025] NSWCATAP 278 (FZK (No 4)) at [31]-[41], [52], the Appeal Panel set out the general principles applicable to an award of costs under s 60(2) of the NCAT Act including:

(1) the usual rule is that a party is to pay their own costs of proceedings but, as the legislation makes clear, the Tribunal may make an order for costs if satisfied that there are "special circumstances";

(2) the following six leading principles are apposite:

(a) first, special circumstances are circumstances that are out of the ordinary. It is not necessary to establish extraordinary or exceptional circumstances;

(b) secondly, the onus is on the party seeking an order for costs to satisfy the Tribunal that there are special circumstances warranting an award of costs in its favour;

(c) thirdly, the Tribunal is to consider whether the circumstances are sufficient to amount to special circumstances that justify departing from the general rule that each party bear its own costs;

(d) fourthly, each case will depend on its own particular facts and circumstances;

(e) fifthly, mere success (or failure) of an application does not give rise to special circumstances;

(f) sixthly, the discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs;

(3) overall, what is required is for the Tribunal to exercise its discretion in a manner which is fair and reasonable having regard to the particular circumstances of a particular case;

(4) the decision to award costs pursuant to s 60(2) of the NCAT Act involves, in effect, two decisions. The first is the Tribunal's satisfaction that there are special circumstances warranting an award of costs. Satisfaction as to the existence of special circumstances merely enlivens the discretion to award costs rather than mandating an award of costs. This necessitates the making of a second decision as to whether in all the circumstances, an award for costs should be made;

(5) an award of costs is intended to be compensatory and not punitive.

1. In FZK (No 4) at [42]-[43], the Appeal Panel considered the meaning of "no tenable basis" in s 60(3)(c) of the NCAT Act and held that it means something like so weak as to be unarguable, rather than merely weak.

1. In FZK (No 4) at [44]-[45], the Appeal Panel considered the meaning of "misconceived or lacking in substance" in s 60(3)(e) of the NCAT Act and held that each word or expression means not reasonably arguable.

1. In FZK (No 4) at [51], the Appeal Panel noted that a lack of representation can tip the balance against an award of costs.

1. The general principles concerning the awarding of costs where proceedings are discontinued or dismissed by consent were considered by McHugh J in Re Minister for Immigration & Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622 at 624-625; [1997] HCA 6 (Lai Qin):

"In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. ...

Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. ... But such cases are likely to be rare.

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases." (citations omitted)

1. The general principles concerning the awarding of costs where proceedings are discontinued or dismissed by consent as summarised in Lai Qin at 624-625 have been applied in the courts and the Tribunal: see for example Alijagic v Australian Bosnian-Hercegovina Cultural Association Incorporated [2025] NSWSC 393 at [52]- [59] (Kunc J); Karpinski v The Owners - Strata Plan No 1731 [2026] NSWCATAP 12 at [22].

1. OSP43251 in the OSP43251 costs submissions relevantly submits:

(1) as to whether the appeal had no tenable basis in fact or law and was misconceived:

(a) the grounds of appeal were not properly articulated, vague, opaque and difficult to understand;

(b) Dr Galliott and Ms Elelman did not demonstrate that any of the relevant criteria relating to the grant of leave had been satisfied;

(c) Dr Galliott, although he is not a lawyer, is an experienced litigant;

(2) as to whether it incurred unnecessary costs of defending the appeal and there was a surrender by Dr Galliott and Ms Elelman:

(a) it relies on the reasons set out in the reply to the appeal which demonstrate that the appeal, as formulated in the notice of appeal, had poor prospects of success and would be dismissed;

(b) Dr Galliott and Ms Elelman effectively surrendered by withdrawing the appeal without any explanation whatsoever.

Whether there are special circumstances warranting an award of costs in favour of OSP43251

1. I am not satisfied that OSP43251 has established that there are special circumstances warranting an award of costs in its favour for the following reasons:

(1) having regard to the principles in FZK (No 4) at [42]-[45], OSP43251 has not demonstrated that the appeal is so weak as to be unarguable, rather than merely weak, or not reasonably arguable;

(2) preparing a reply to appeal and appearing at a call over are not circumstances that are out of the ordinary;

(3) no inference as to a surrender can be drawn from the withdrawal of the appeal by Dr Galliott and Ms Elelman without any explanation.

1. As the precondition to the making of a costs order under s 60(2) of the NCAT Act has not been satisfied, I have decided to make orders dismissing the OSP43251 costs application and as provided by s 60(1) of the NCAT Act that each of Dr Galliott and Ms Elelman and OSP43251 should pay their costs of the appeal.

If there are special circumstances warranting an award of costs in favour of OSP43251, whether the discretion should be exercised to award costs

1. As I have decided there are no special circumstances warranting an award of costs in favour of OSP43251, these questions do not arise for consideration.
2. If I had decided that there are special circumstances warranting an award of costs in favour of OSP43251, then I would have found that, having regard to the principles in Lai Qin, OSP43251 has not demonstrated on clear and uncontested evidence in circumstances where there was no hearing of the appeal on its merits that Dr Galliott and Ms Elelman behaved unreasonably in commencing the appeal, or it was almost certain to succeed on the interconvertible facts, which was evidenced by their capitulation. On this basis I would not have exercised the discretion under s 60(2) of the NCAT Act to make an award of costs in favour of OSP43251.

(1) A hearing of the costs application of the first respondent is dispensed with.

(2) The costs application of the first respondent is dismissed.

(3) Each of the appellants and the first respondent is to pay their costs of the appeal.

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.