On 17 December 2018 Mr Zhi Jun Guo lodged an internal appeal under s 80 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) against a decision made in the Consumer and Commercial Division of the Tribunal on 16 November 2018 determining an application under s 237 of the Strata Schemes Management Act 2015 (the SSM Act) for the appointment of a strata managing agent for Strata Scheme SP70067.
On 23 January 2019, after the first call over of the appeal on 22 January 2019, Mr Guo withdrew his appeal. The Appeal Panel made orders on 25 January 2019 dismissing the appeal under s 55 (1) (a) of the NCAT Act.
The Owners Strata Plan 70067 (the OC) seeks an order that Mr Guo pay its costs of the appeal.
[2]
Background
There were two proceedings in the Consumer and Commercial Division. Proceedings SC 18/33005 were an application made under s 237 of the SSM Act on 26 July 2018 by Mr Samir Tejani, owner of a lot in SP 70067, for appointment of a strata managing agent. The respondents to that application were The Owners SP 70067, and Mr Guo who was joined as respondent pursuant to directions made on 31 August 2018. The applicant in those proceedings proposed that Premier Strata Management Pty Ltd (Premier) be appointed as compulsory manager.
Proceedings SC 18/14238 were an application made on 26 March 2018 by Mr Guo, as lot owner, under s 237 of the SSM Act. The respondent to that application was The Owners SP 70067. Mr Guo proposed the appointment of a different strata managing agent.
On 31 August 2018 the Tribunal directed that both proceedings be heard together. On 16 November 2018 the Tribunal was provided with consent orders in SC 18/33005 that Premier be appointed as compulsory managing agent for 12 months in accordance with a resolution made at an Extraordinary General Meeting on 1 May 2018. Mr Guo had not signed the consent orders, and he remained opposed to the appointment of Premier.
The Tribunal was satisfied that the scheme required the appointment of a strata manager under s 237(3)(a) of the SSM Act. The issue to be decided was whether to appoint Premier, or a different agent. The Tribunal considered the evidence as to the decision by majority to place the scheme under the compulsory appointment of Premier, and Premier's previous appointment and knowledge of the scheme; and Mr Guo's evidence and submissions opposing the appointment of Premier, the evidence as to the two alternative agents he proposed, and the allegations made by Mr Guo about employees of Premier and others involved in the management of the scheme and the litigation; and the need for complex and costly remedial building work.
The Tribunal dismissed the application SC 18/14238, and in SC 18/33005 appointed Premier as strata manager for SP 70067 for 12 months, to exercise all the functions of the owners corporation and the chairperson, Secretary, Treasurer and strata committee.
[3]
The Appeal
Mr Guo appealed against the decision in SC 18/33005, naming Samir Tejani as respondent. Mr Guo applied for a stay of the decision pending the appeal. Directions were made for submissions on the stay application and the matter was listed for 22 January 2019.
In his submissions opposing the grant of a stay Mr Tejani raised the question of whether the Owners Corporation should be included in the appeal. Rule 29(b) of the Civil and Administrative Tribunal Rules 2014 (the NCAT Rules) provides that any person or body who was a party to the first instance proceedings is a party to an internal appeal. On 22 January 2019 The Owners Strata Plan 70076 was joined as second respondent. Directions were made for the parties to provide their evidence and submissions on the appeal, which was listed for hearing on 20 March 2019. The parties agreed to an order that the OC not enter any contract to conduct repair works for the OC other than investigative works, prototype works or urgent works for a price of less than $25,000, until 20 March 2019.
On 23 January 2019 Mr Guo notified the Tribunal that he wanted to withdraw his appeal against SC 18/33005. The appeal was dismissed on 25 January 2019, and directions were made for exchange of written submissions in relation to costs, including submissions on whether a hearing should be dispensed with. Submissions have been received from the OC in support of its application for costs, and from Mr Guo in opposition.
There is no appeal against the decision in proceedings SC 18/14238.
[4]
Hearing on the papers
Neither Mr Guo nor the OC sought an oral hearing. The Appeal Panel is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the parties' written submissions and accordingly we make an order pursuant to s 50(2) dispensing with a hearing.
[5]
Costs application
The application for costs was made on the basis that there are special circumstances warranting an award of costs. Whilst these are appeal proceedings arising from proceedings in the Consumer and Commercial Division of the Tribunal, they are not proceedings to which r 38 of the NCAT Rules applies. As r 38 does not apply, this application is governed by the provisions of s 60 of the NCAT Act which provides for costs only in special circumstances.
Section 60 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.
(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.
(5) In this section:
costs includes:
(a) the costs of, or incidental to, proceedings in the Tribunal, and
(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.
[6]
The OC's submissions
The OC relies on s 60(3) (a), (c) and (e) in support of its contention that there are special circumstances warranting an order for costs. The OC submits:
1. The appellant chose not to appeal in the proceedings he brought against the OC (SC18/14238) even though the reasons he took issue with were made in those proceedings as well;
2. The OC was a party to both related proceedings before the Tribunal (SC18/33005 and SC18/14238) but Mr Guo did not identify the OC as a respondent to any appeal, and as a result it was not notified until Mr Tejani did so;
3. At the first call-over Mr Guo objected to the OC being joined to the appeal, even after his attention had been drawn to r 29 of the NCAT Rules. His arguments had nothing to do with whether the OC was a relevant party, but that he did not want to provide the OC with certain documents he wanted to provide the Tribunal;
4. In the past two and a half years Mr Guo has made multiple applications to the Tribunal, both in the Division and on appeal, against the OC, all of which were unsuccessful, and he is aware of the law and procedure relating to the Tribunal;
5. Mr Guo withdrew his appeal the day after the OC was identified as a party to the appeal, supporting a finding that he deliberately failed to identify the OC as a party to avoid a rigorous defence of the appeal and subvert the rules of procedural fairness. His conduct was calculated to unnecessarily disadvantage the OC;
6. The OC had expended considerable time and legal costs in preparing for the stay application and preparing and responding to lengthy submissions, including addressing the serious allegations made to the Appeal Panel at call-over which were a re-run of the allegations found to be without substance; and
7. The fact that Mr Guo withdrew his appeal immediately after the call over and stay application, despite the seriousness of his allegations, demonstrates that the appeal and the application for stay were frivolous and vexatious.
[7]
Mr Guo's submissions
Mr Guo contends that there are no special circumstances warranting an order for costs and each party should pay its own costs. He submits:
1. The appeal was reasonably arguable;
2. He was previously unaware of rule 29 of the NCAT Rules;
3. He is not legally trained and as such was unaware of the requirements (such as rule 29) and other matters relating to how he should conduct the appeal;
4. The OC should have been joined as an appellant and not respondent to the appeal, as the objective of the appeal is to remove the compulsory management and restore the powers and rights of the owners in the management of the scheme, and so the appeal is for the benefit of the owners;
5. He had withdrawn his appeal for reasons unrelated to the Appeal Panel's joinder of the OC to the appeal, for example his assertion that one of the experts engaged by Premier had lied could be better prosecuted in a separate appeal; and
6. The OC and its lawyers had received and read copies of his supporting documents in the proceedings before the appeal and the OC did not file submissions before the withdrawal of the appeal. All parties would have incurred very little cost.
[8]
Consideration
In Pines Resort Management Pty Ltd t/as Gateway Lifestyle the Pines v Marsh [2019] NSWCATAP 12 the Appeal Panel considered a costs application in similar circumstances where an appeal had been withdrawn and dismissed, stating:
18. As accepted by the respondent, it is generally inappropriate for the Tribunal to embark on a theoretical examination of the appeal to determine questions of costs where the appeal has been withdrawn prior to a final hearing.
We agree with that approach, especially in circumstances where not all parties had engaged in any substantive work addressing the appeal. In the current matter the OC had not yet filed a Reply to the Appeal and had only had to consider and respond to Mr Guo's lengthy oral submissions at call-over.
To enliven the "special circumstances" under s 60 the circumstances may be out of the ordinary, but they need not be extraordinary or exceptional: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11], applying Cripps v G & M Mawson [2006] NSWCA 84 at [60].
[9]
Whether the OC was unnecessarily disadvantaged by the manner in which Mr Guo conducted the proceedings (s 60(3)(a))
On the material before the Appeal Panel, it appears that the OC only became aware of the appeal around 18 January 2019 when Mr Tejani provided his submission to the Tribunal.
The OC appeared before the Appeal Panel on 22 January 2019, and was joined and given leave to be legally represented. A letter confirming an address for service of the OC's legal representatives was prepared on 22 January 2019 and emailed to the Tribunal the following day.
The matter was withdrawn and dismissed prior to the lodging of any Reply to the Appeal or the other material as ordered in directions at the call-over of 22 January 2019. Other than the Reply the next active date concerning the OC receiving the appellant's material was four weeks later, with their material and submissions not due for a further two weeks.
Bearing in mind that the OC was on notice of the proposed withdrawal and dismissal of the appeal on 24 January 2019, and the subsequent dismissal the following day, it is difficult to see how it was unnecessarily disadvantaged by Mr Guo's conduct of the proceedings.
[10]
Whether any other provisions of s 60(3) apply
We are not satisfied that the other provisions of s 60(3) apply to the circumstances of this appeal.
It is clear that the matter was disposed of in short form once the OC became involved in the proceedings. The OC may have only had involvement and knowledge of the appeal for a week or less. In such circumstances we are not satisfied that Mr Guo might have caused prejudice by unnecessarily prolonging the proceedings (s 60(3)(b)).
The OC's submission that the proceedings were "frivolous or vexatious or otherwise misconceived or lacking in substance" (s 60(3)(e)) appears to be based on its argument that Mr Guo deliberately failed to identify the OC as a party to avoid a rigorous defence of the appeal; that based on his previous applications in the Tribunal he is aware of the Tribunal law and procedure; and that he withdrew the appeal immediately after the call over and stay application despite the seriousness of his allegations.
The Appeal Panel accepts that while not legally qualified, Mr Guo may have through his experience of Tribunal proceedings acquired some understanding of Tribunal law and procedure. Other than the timing, there is no basis on which the Appeal Panel could comfortably accept the submission that the failure to identify the OC as a relevant party was deliberate. Even if it were deliberate, given the timing of the withdrawal and the limited engagement of the OC and its legal representatives by that stage it is difficult to see that that would be so out of the ordinary as to constitute special circumstances.
It is not clear how the allegations made in the appeal and in oral submissions at the call over against strata committee members, employees of Premier and a solicitor for the OC could be said to constitute special circumstances. The Tribunal's reasons indicate that Mr Guo made similar, and other, allegations in the course of the first instance hearing, which were unsubstantiated. The OC points to the 23 pages of appeal submissions and 100 pages of documents in support of the stay application. The documents on file for the appeal confirm what the Tribunal had noted about the extremely lengthy documentary evidence and submissions at first instance. However, it is not surprising, or unusual, that Mr Guo as a self represented litigant does not fully understand the process, or what documents or arguments are relevant to the issues in dispute in the proceedings. Neither of these factors in our view is such as to take this matter out of the ordinary so as to constitute special circumstances.
The Appeal Panel is not persuaded that there is anything out of the ordinary such as to conclude that there are special circumstances warranting an order for costs in favour of the OC. The appropriate order is, as required by s 60(1), that each party pay its own costs.
[11]
Orders
The Appeal Panel makes the following orders:
1. A hearing on costs is dispensed with under s 50(2) of the Civil and Administrative Tribunal Act 2013.
2. The application by the second respondent The Owners Strata Plan 70067 for an order that the appellant Mr Guo pays its costs of the appeal is dismissed, and each party is to pay its own costs.
[12]
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: 06 March 2019