Griffinchuk No 1 Pty Ltd ATF Griffinchuk Family Trust v The Owners – Strata Plan No 92745 (No 2)

1. Neither party opposed us determining costs on the papers. As we are satisfied that the issue of costs can be adequately determined in the absence of the parties by considering their written submissions, we dispense with a hearing: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 50(2).

1. The respondent seeks its costs pursuant to rr 38(2)(b) and 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules), alternatively under s 60 of the NCAT Act.
2. The respondent's primary submission is that, as the amount of the appellant's claim in the Tribunal was at least $276,015.40, and as the respondent had been entirely successful, costs should follow the event and the respondent ought to be compensated for its costs in defending the appeal.
3. If, contrary to that submission, we find that r 38(2) does not apply, the respondent then makes lengthy submissions as to how it is entitled to a costs order pursuant to s 60 of the NCAT Act, that is, because special circumstances are established.
4. In summary, the respondent submits that the special circumstance warranting an award of costs are the weakness of the appeal, (NCAT Act, ss 60(3)(c)) and (g) and the appellant unreasonably prolonging proceedings (NCAT Act, s 60(3)(b)).

1. As noted, the appellant did not file any submissions

1. The following issues fall to be determined. We state a summary of our conclusion in italics.

(1) What is the relevant costs rule? Rules 38 and 38A of the NCAT Rules.

(2) Is the respondent entitled to costs? Yes.

(3) Should costs be awarded? Yes.

1. The starting point is s 60 of the NCAT Act which relevantly provides:

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.

...

38 Costs in Consumer and Commercial Division of the Tribunal

(1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal.

(2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if--

(a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10(2) of Schedule 4 to the Act in relation to the proceedings, or

(b) the amount claimed or in dispute in the proceedings is more than $30,000.

1. That means that the relevant costs rule in the proceedings at first instance was that found in r 38.
2. Rule 38A then provides:

38A Costs in internal appeals

(1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the "first instance costs provisions" ) differed from those set out in section 60 of the Act because of the operation of--

(a) enabling legislation, or

(b) the Division Schedule for the Division of the Tribunal concerned, or

(c) the procedural rules.

(2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.

1. As the Appeal Panel stated in Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [57], in applying r 38(2)(b) in relation to the appeal, as required by r 38A, the "amount claimed or in dispute" is the amount in dispute on appeal, not the amount in dispute in the proceedings at first instance.
2. What is the "amount claimed or in dispute" in dispute in this appeal? The order appealed against was the Tribunal's decision to dismiss the appellant's application. The Tribunal found it had no jurisdiction to hear and determine the matter, as the appellant did not meet the relevant definition of "interested person" in s 232 of the Strata Schemes Management Act 2015 (NSW) : Appeal Decision, at [4].
3. We think the better view, as submitted, at least implicitly by the respondent, is that the amount in dispute on appeal is the original amount claimed, being at least $276,015.40 for compensation for water ingress including compensation for inconvenience and economic losses suffered. The Primary Decision eliminated that claim entirely. The effect of the appeal, if successful, would have been to restore that claim.
4. Accordingly, we accept the respondent's submission that the relevant costs rule is that found in the NCAT Rules, not in s 60 of the NCAT Act.

1. As the Appeal Panel noted recently in Leo and Fang v Conrad Homes Pty Ltd (No 2) [2025] NSWCATAP 302 (Leo and Fang):

14 Rules 38 and 38A have been interpreted in numerous cases as constituting an exception to s 60.

15 Where they apply, costs orders can be made on the ordinary basis in the absence of special circumstances justifying a costs order, as otherwise required by s 60.

16 The starting position is that costs follow the event so that a successful party is entitled to an order for costs in their favour (Thompson v Chapman [2016] NSWCATAP 6) on the ordinary basis.

1. Accordingly, the starting point is that the respondent is entitled to its costs.

1. Any award of costs is discretionary. As the Appeal Panel stated in eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94:

[37] It must be remembered that where a court or a tribunal is conferred with the discretion to award costs, such a discretion must be exercised judicially and not capriciously (Oshlack v Richmond River City Council [1998] HCA 11; (1998) 193 CLR 72 at 81). It must also be remembered that the fundamental rationale for the awarding of costs is that such an award is compensatory, not punitive: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543; Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 97.

[48] ... Further, 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. Each situation must, of course, be assessed on a case by case basis ...

1. And, as the Tribunal stated in Beecraft Pty Ltd v Tudor;Tudor v Beecraft Pty Ltd [2021] NSWCATCD 119:

127 When rule 38 applies there is a general discretion to award costs and it is well established, by decisions such as News v Cotes [2019] NSWCATAP 186, Bonita v Shen [2016] NSWCATAP 159 and Thompson v Chapman [2016] NSWCATAP 6, that: (1) the starting point is that the usual order for costs should be in favour of the successful party, (2) the award is not to punish the unsuccessful party but to compensate the successful party for the costs incurred in the proceedings, and (3) departure from the usual order is permissible if the circumstances favour that course of action.

128 Simply stated, when rule 38 applies it is not necessary to establish special circumstances and the usual order is that costs follow the event (ie: follow the outcome of the case) unless there is disentitling behaviour by the successful party: Latoudis v Casey [1990] HCA 59, Oshlak v Richmond River Council [1998] HCA 11. When rule 38 applies, as was observed in Tom v Jenkins [2018] NSWCATCD 24 at [12], the successful party can be said to have a reasonable expectation of being awarded costs.

1. Where the usual course is not followed, the reasons for doing so ought to be clearly explained: Leo and Fang at [17].
2. The following paragraphs of Leo and Fang apply equally to this decision on the costs of this appeal:

18 Mindful of rules 38 and 38A of the NCAT Rules we are satisfied that the amount in dispute in the proceedings before the Tribunal was more than $30,000.00 and that the Appeal Panel therefore has a general discretion in respect of costs and that the starting position is that costs should follow the event of the appeal being dismissed.

19 The respondent was successful on the appeal.

20 The appellant has not filed submissions identifying why the usual course should not be followed and we can see no reason why costs should not follow the event of the appeal being dismissed.

1. In the circumstances, we consider that it is appropriate to order the appellant to pay the respondent's costs as agreed or as assessed.

1. In the event there is an appeal on the basis that the applicable costs rule is not found in rr 38 and 38A of the NCAT Rules, but in s 60 of the NCAT, we would, nevertheless, have ordered the appellant to pay the respondent's costs.
2. That is because, of the three grounds of appeal, two were manifestly weak: NCAT Act, ss 60(3)(c) and (e).
3. The second ground of appeal was whether the Registrar's decision to reject the lodgement of the appellant's claim on 9 November 2023 was void at law for jurisdictional error.
4. We found this submission to be misconceived: Appeal Decision, at [72], [92]. The issue was whether the Appeal Panel could directly review the decisions of the Registrar for their lawfulness as part of the Appeal Panel's power under s 80 of the NCAT Act. We found that we had no power to do so: Appeal Decision, at [72].
5. The third ground of appeal was that the Tribunal otherwise fell into error of law. We found that this ground simply reagitated the matters set out in the second ground of appeal, and that the appellant's submission on the issue misconceived as the Registrar's decision was not reviewable by the Appeal Panel.

(1) A hearing is dispensed with.

(2) The appellant is to pay the respondent's costs as agreed or as assessed in accordance with the applicable costs legislation.

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.