GS & CS Holdings Pty Ltd v The Owners - Strata Plan No. 63227 - [2022] NSWCATAP 254 - NSWCATAP 2022 case summary

NCAT Appeal Panel|2022-08-04

REASONS FOR DECISION

On 22 June we dismissed an appeal by the appellant lot owner against a decision of the Tribunal to dismiss an application under s 149 of the Strata Schemes Management Act 2015 (NSW) (SSMA) that the Tribunal prescribe a by-law concerning works carried out by six lot owners to enclose roof top areas associated with their particular lots. We published reasons for decision: GS & CS Holdings Pty Ltd v The Owners - Strata Plan No. 63227 [2022] NSWCATAP 206 (primary reasons).
Orders were made permitting the parties to make any application for costs. The respondent owners corporation has applied order for costs in its favour. The order sought is as follows: That the Appellant pay the Respondent's costs, of and incidental to the Appeal as agreed or assessed.
There is no dispute that s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) applies. That is, the respondent must establish special circumstances in order to obtain a costs order in its favour. Special circumstances means out of the ordinary but not necessarily extraordinary or exceptional: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].
Factors relevant to determining whether there are special circumstances are set out in s 60(3) of the NCAT Act. The respondent relies on three matters: 1. 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: s 60(3)(c); 2. the nature and complexity of the proceedings: (s60(3)(d); and 3. whether the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance: s 60(3)(e).
The parties agreed that the application for costs could be dealt with on the papers, without hearing. Consequently, we will make an order under s 50(2) of the NCAT Act, dispensing with a hearing.

Consideration

The respondent made submissions under two headings.

The nature and complexity of the proceedings

The respondent said that the issues litigated in the present proceedings were sufficiently complex and important to the parties. Reliance is placed on the decision of the Appeal Panel in Gelder v The Owners - Strata Plan No 38308 [2021] NSWCATAP 109 and the fact that leave was sought and obtained to have legal representation.
Reliance is also placed on the decision of the Appeal Panel in eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 (eMove). There, at [48], the Appeal Panel said: The authorities considering the meaning of the expression "special circumstances" were recently reviewed in CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]-[31]. From those authorities, it can be seen that "special circumstances" are circumstances that are out of the ordinary, they do not have to be extraordinary or exceptional. 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 to see whether or not special circumstances exist so as to warrant the award of costs.
The respondent says this case is analogous to the circumstances which the Tribunal dealt with in Bruce v Knight (No 2) [2021] NSWCATAP 254.
The respondent submits complexity arose from the need to construe the SSMA and the interaction between s 143 and s 149 of that Act and various Supreme Court authorities on these matters. This complexity may be appropriate for legal representation and because the Appeal was run on a technical point that is a question of law, such distinguished it from the "ordinary" case.
In reply, the appellant says that the various cases referred to by the respondent can be distinguished and/or do not support the propositions put forward. Reference was made to the passage from eMove at [48] which we have set out above. Relying on Macey's Group Pty Ltd v The Owners - Strata Plan No 33591 [2021] NSWCATAP 88, the appellant said that the mere fact that the parties are granted leave to be legally represented does not make the proceedings out of the ordinary.
The appellant says that the issues were not sufficiently complex or otherwise sufficient to enliven the discretion.
Further, even if the proceedings could be considered complex, the discretion to award costs should not be exercised in the present case.
In our view, the reference to numerous decisions of the Appeal Panel reflects the fact that disputes concerning applications under s 149 of the SSMA could not be regarded, of themselves, as out of the ordinary.
Any complexity in the present proceedings arose from earlier related proceedings concerning the absence of consent by certain lot owners to the proposed amendment of the by-law in question, to which we referred in the primary reasons: e.g. at [55], with the resulting necessity to consider various Supreme Court authorities and the interaction of s 143 and 149.
In those circumstances it was appropriate for us to provide some clarity concerning how these sections operated and whether the language in the SSMA was sufficiently different from similar sections in the Strata Schemes Management Act 1996 (NSW) (repealed) (1996 Management Act) to warrant departure from decisions of the Supreme Court interpreting the 1996 Management Act. However, at the end of the day, the matter involved a question of which lot owners were required to consent and whether a by-law could be passed by the appellant in the absence of consent of relevant lot owners, the earlier proceedings with individual lot owners not dealing with the absence of consent, and whether an order should be made based on a finding under s 149(1)(b).
While these matters might not be described as simple or straightforward, in our view the matters identified by the respondent do not, in the present case, warrant a finding of special circumstances. The present proceedings concern the types of matters frequently dealt with by the Appeal Panel and the exercise of appeal rights having regard to the differences between the parties did not make the proceedings out of the ordinary. Further, even if special circumstances were established, for the same reasons the present case does not warrant an order for costs to displace the usual position that parties should pay their own costs as provided by s 60(1) of the NCAT Act.

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 whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance.

On the issue of relative strengths whether the proceedings were lacking in substance, the respondent says the appellant's appeal was "doomed to fail before one even turned to the question of whether any bases for refusal was unreasonable". Consequently, the respondent says there was no tenable basis in law for the Appeal to succeed given the decisions of the Supreme Court to which we referred at [29] and following the primary decision.
The respondent says it relied on those decisions in the proceedings at first instance. In these circumstances the appellant was aware that its arguments on appeal were contrary to those authorities. Further, even though the proceedings were determined on a narrow issue, the respondent says it was required to meet a case put in relation to numerous reasons for refusal and the appellant brought proceedings "where basically statutory prerequisites have not been established and there is no basis for the Tribunal to entertain the merits of the Application".
The respondent says that the appellant had a complete lack of success and this constitutes circumstances which are out of the ordinary. Reference is made to the decision of the Appeal Panel in The Owners - Strata Plan No 54026 v UniLodge Australia Pty Ltd (No 2) [2020] NSWCATAP 80 (Unilodge).
The appellant says that these submissions are inconsistent with the submission that the proceedings are complex and warrant an order for costs. Further, whose consent was required, that is the owners of lots 20-25 or the owners of lots 38-40 as well, was plainly arguable.
As to the authorities on costs relied upon by the respondent, the appellant submits these can be distinguished.
As indicated by the respondent, the appeal was dealt with on a relatively narrow point. Resolution involved the proper construction of the sections of the SSMA to which we have referred and a consideration of which lot owners had consented to the proposed amendment to by-law 29 compared with which lot owners were required to consent.
In our view the position adopted by the appellant was not untenable either on the statutory construction point or the other grounds. In this regard, as we have said above, there does not appear previously to have been any statement by the Appeal Panel or a court about how s 149 operates in circumstances where there is no consent of relevant lot owners and where an owners corporation refuses to pass a by-law. Further, there was always a live issue between the parties about who was required to consent.
In circumstances where there is a right of appeal against a final decision on a question of law and having regard to the issues that were raised, some of which were unnecessary to resolve but which themselves were arguable, it could not be said that the proceedings were out of the ordinary when considering the factors in s 60(3)(c) and (e).
For these reasons, the application for costs is dismissed.

Orders

The Appeal Panel makes the following orders: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal act 2013, the Appeal Panel dispenses with a hearing of the application for costs. 2. The respondent's application for costs is dismissed.

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 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: 04 August 2022

Strata Schemes Management Act 1996(NSW)

GS & CS Holdings Pty Ltd v The Owners - Strata Plan No. 63227

At a glance

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Judgment (6 paragraphs)

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Legislation Cited (3)

Cases Cited (8)