Huo v The Owners – Strata Plan 44652

1. The appeal was listed for call over on 18 December 2024. Procedural directions were made for the filing and serving of documents and the appeal was fixed for hearing on 3 April 2025 at 10:15 am. Both parties appeared at the call over by audio-visual link, the matter not requiring attendance in person, as it was not a substantive hearing.
2. In mid-March 2025 the appellant filed an Application for miscellaneous matters seeking leave to issue summons and for the electronic lodgement of documents. On 24 March 2025 Principal Member Blake dismissed the appellant's miscellaneous matters application and provided written reasons.
3. On 27 March 2024 the appellant applied to vacate the hearing date which was scheduled for the following week and to have the appeal adjourned for a later hearing. The grounds given for the adjournment were that the appellant still required time to issue summons to produce documents in the appeal. On 1 April 2025 Principal Member Blake dismissed the summons application and refused the adjournment application, providing written reasons.
4. On 1 April 2025 the appellant emailed the Tribunal Registry seeking leave to attend the substantive appeal hearing (of 3 April 2025) by telephone or audio-visual link. The appellant included with that email communication a copy of an airline flight record for a flight from Sydney to Melbourne on the evening of 2 April 2025. The email set out a position that the appellant was returning to her city of residence on the evening of 2 April 2025 and that it was 'impossible to have the flight rescheduled and impossible for the appellant to appear in person without "incurring additional accommodation and travel costs".
5. On 2 April 2025 Principal Member Blake refused the appellant's application to appear by telephone or audiovisual link and provided written reasons. On 3 April 2025 at 10:15am the Appeal Panel of the Tribunal commenced to hear the appeal in Hearing Room 9.2 of the Tribunal premises on level 9 of John Maddison Tower, being the location indicated in the published Tribunal list. At 10:15am there was an appearance for the respondent but no appearance for the appellant. The Appeal Panel adjourned briefly and reconvened some five minutes later. At 10:30am there was still no appearance from the respondent and she was not in the waiting area outside of the hearing room.
6. The Appeal Panel, noting on record that there was no appearance by the appellant, and being satisfied that she had received appropriate notice of the hearing of the appeal and that the refusal of her request to appear by telephone or audio visual link had been communicated to her, determined to dismiss the appeal due to the non-appearance of the appellant. An order dismissing the appeal was made pursuant to s 55(1)(c) of the NCAT Act.

1. Following the dismissal order the respondent made an oral application for costs of the appeal. As a result, in issuing the formal orders of the Appeal Panel on 4 April 2025 concerning the disposition of the appeal on 3 April 2025, the following additional orders on the issue of costs were included:

...

2. The Respondent is to file and serve submissions re: costs of the Appeal and whether the question can be determined by the Appeal Panel without a hearing by the 10th of April 2025.

3. The Appellant to file and serve submissions in reply to the cost application and submissions on whether the matter can be determined without a hearing on or before 24 April 2025.

4. The Respondent to file and serve any reply submissions on or before the 1st of May 2025.

1. The respondent filed submissions on 10 April 2025 in accordance with order (2) and the appellant filed submissions in response on 24 April 2025 in accordance with order (3). No further submissions on costs were received in the Appeal.
2. By their written submissions/application of 10 April 2025, the respondent seeks an order for indemnity costs in relation to the dismissed appeal and, in the alternative, costs on the ordinary basis.
3. No submissions were received from the respondent concerning the issue of whether the question of costs of the Appeal could be determined by the Appeal Panel without a hearing.
4. The appellant filed her submissions on 24 April 2025. At the conclusion of detailed written submissions from the appellant, some of which sought to reopen and re-ventilate the litigation and underlying dispute, reference is made to the question of dispensing with a hearing (pages 11 and 12 of those submissions, specifically paragraphs [20] and [21]).
5. The appellant submitted that the Tribunal could not dispense with an oral hearing ostensibly because the issues in dispute and facts were not agreed between the parties.
6. The Appeal Panel may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal - s 50(2) of the NCAT Act.
7. Before doing so the Appeal Panel must first afford the parties an opportunity to make submissions about the proposed order and must take any such submissions into account.
8. The opportunity to make submissions on the order dispensing with a hearing was given on 4 April 2025 when the 3 April 2025 orders issued. We have taken the appellant's submissions into account. As noted above, no submissions on this issue were received from the respondent.
9. We are satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions provided to the Appeal Panel. The issues around costs in circumstances where the appeal has been dismissed without proceeding to the merits concern the conduct of the proceedings and matters arising under s 60 of the NCAT Act. That aspects of the merits apparently remain in dispute between the parties is not relevant to our determination. Having given the parties the opportunity to make submissions on costs and having received and considered those written submissions, we are satisfied that we can adequately determine the costs issue without a hearing. Accordingly, we will make an order pursuant to s 50 of the NCAT Act dispensing with a hearing on the question of the costs of the appeal.
10. As we have mentioned above, the appeal has been dismissed due to the non-appearance of the appellant.
11. Section 60 of the NCAT Act 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.

1. Rules 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) provide an exception to the requirement for special circumstances in respect of certain appeals from the Consumer and Commercial Division of the Tribunal. Neither party suggested that rr 38 and 38A were applicable in this case.

1. As noted above, the respondent sought indemnity costs of the proceedings. They referred in submissions to an offer to resolve proceedings made in early February 2025 which had indicated that should the offer not be accepted and the appeal fail, they would rely on the offer in seeking indemnity costs. The offer included a note that the appellant should seek legal advice concerning the prospects of her appeal.
2. The respondents submitted that the appeal did not (on their assessment) identify or otherwise demonstrate any errors of law and this was conveyed in their written submissions served on the appellant. They submitted that in this context the appellant had pursued her appeal, requiring the respondent to incur costs preparing submissions in response to the appeal, responding to and engaging in various miscellaneous applications brought by the appellant in her appeal which were not relevant to the appeal, and preparing for and attending the hearing on 3 April 2025.
3. The respondents also submitted that 'without warning to both the Appeal Panel and the Respondent, the Applicant [sic] did not bother attending the final hearing and the proceedings were dismissed'. They submitted that, consistent with observations in Bruce v Knight (No 4) [2021] NSWCATAP 472, they should be entitled to indemnity costs because (a) the appellant should have known that she had no chance of success (b) the appellant had unduly prolonged the proceedings by filing multiple miscellaneous matters applications and then ran the proceedings to final hearing, (c) the appellant engaged in time-wasting by not attending the hearing but necessitating the presence of the respondent and the Appeal Panel, and (d) the rejection of the offer of compromise was unreasonable.
4. Reliance was also placed on the observations of the High Court in Oshlack v Richmond City Council (1998) 193 CLR 72; [1998] HCA 11 at [44]:

44. It may be true in a general sense that costs orders are not made to punish an unsuccessful party. However, in the particular circumstance of a case involving some relevant delinquency on the part of the unsuccessful party, an order is made not for party and party costs but for costs on a "solicitor and client" basis [74] or on an indemnity basis [75]. The result is more fully or adequately to compensate the successful party to the disadvantage of what otherwise would have been the position of the unsuccessful party in the absence of such delinquency on its part.

1. The respondent submitted that the failure to appear at the hearing demonstrated the delinquency referred to by the High Court in Oshlack.
2. The respondent also applied for costs on the ordinary basis should their indemnity application fail. They submitted that pars 60(3)(a), (c), (e) and (g) of the NCAT Act applied.
3. They submitted that special circumstances does not mean extraordinary or exceptional as noted in Grasso v Owners of Strata Plan No 52399 [2022[ NSWCATAP 91. In the context of the appellant's conduct of the appeal the respondents submitted that special circumstances applied as the appeal was frivolous and had no tenable basis in fact or law as there were no credible grounds submitted by the appellant in the appeal.
4. The respondents also submitted that the conduct of the appeal by the appellant led to time wasting and putting the other party (and the Appeal Panel) to unnecessary effort. Reference to summonsing material was made in the Notice of Appeal lodged 26 November 2024 but an application for leave to issue summons was not made until 19 March 2025 two weeks prior to the hearing. Further it was submitted that on 27 March 2025, one week prior to hearing, the appellant sought to file a miscellaneous matters application to adjourn the hearing and issue fresh summons. The respondent maintained that they had not been advised by the appellant of that application to the Appeal Panel.
5. The respondent then referred to communications within a week of the hearing date, from a third party ostensibly acting for the appellant without any formal notice, concerning issues around communication conditions and requirements. Whilst the respondent did not consent to an adjournment of the hearing date and the issuance of summons at the late stage, in any event the Appeal Panel dismissed those applications of the appellant on 1 April 2025. A further request to appear remotely was also refused by the Appeal Panel the day prior to the hearing.
6. The respondent in closing submitted they had been disadvantaged by the appellant by the manner in which she conducted her proceedings by filing three miscellaneous applications in the short life of the Appeal, authorising a person (third party) who was claiming to act for the appellant then refusing to accept service or clarify on what basis they were acting, wasting a great deal of time of the respondent (and the Appeal Panel) and then not appearing at the final hearing.

1. The appellant's submission on the cost application is lengthy and focusses on an overly legal analysis of the ordinary orders and terms utilised in the respondent's submission. The early part of her submission records a protest at procedural requirements to file hard copies with the Appeal Panel but also refers to the respondent serving soft copy material on the appellant as evidence of the poor manner in which the respondent met the appeal.
2. The appellant also refers to the respondent's conduct before the Tribunal below and appears to conflate the costs issue in the Tribunal proceedings with the costs application to the Appeal Panel.
3. References are made to the Appeal Panel being a 'Chapter III court' (which it manifestly is not). Further references address the nature of the proceeding (civil or criminal) when submitting that the cases relied upon by the respondent in their cost submissions are not on point. An analysis of some of those cases is made in respect of the jurisdiction being applied but the submissions did not engage specifically on the costs precedent if any, that such cases might illustrate.
4. Reference is also made to the respondent not quantifying any costs in their submissions. Rejection of the offer of compromise is referred to as the case having merit and it is suggested that the case below only failed due to the 'biasedness of (the) Member'. Further reference is made to the respondent not filing a dismissal (strike out) application as foreshadowed, presenting this 'failure' as the respondent delaying the proceedings.
5. The appellant maintained in submissions that if her appeal was only on a question of law then her appeal would ultimately succeed 'in a court of inherent jurisdiction'. The appellant asserted that the fact that, at a Call-over of the appeal, the appellant was asked to articulate a ground other than a question of law demonstrated that her appeal had merit.
6. Further criticisms of the respondent not engaging on certain issues despite being timetabled and the refusal of the Appeal Panel to make orders adjusting the time for compliance were all referred to in the appellant's submissions. Reference was also made to what the appellant referred to as 'the standard procedure for the Tribunal', being to wait thirty minutes and to look outside of the hearing room for the missing party.
7. Criticisms were made of the Solicitor appearing for the respondent. Final submissions referred to cases where the Courts had made findings of 'special circumstances' where significant factual issues (death of a witness) citing Mild v Meduri [2023] NSWSC 113 or a 'failure to act ethically and in the best interests of ..(a party)', citing Cargill Australia Ltd v Viterra Mall Pty Ltd (No 2) [2022] VSC 13 enlivened such considerations. It was submitted that no such considerations were enlivened in these appeal proceedings.
8. It was also submitted that being unsuccessful did not justify a finding that there were special circumstances. Further reference was made to the disposition of the issue without a hearing where the facts were not agreed with reference made to the now repealed s 76 of the Administrative Decisions Tribunal Act 1997 (NSW) (now the Administrative Decisions Review Act 1997), which was in similar terms to s 50(2) of the NCAT Act.

1. We observe that s 60 of the NCAT Act does not require that all the paragraphs of subs (3) need to be enlivened to establish special circumstances.
2. To constitute "special circumstances" under s 60 the circumstances must 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 Dawson Pty Ltd [2006] NSWCA 81 at [60].
3. In Sunaust Properties Pty Ltd v The Owners Strata Plan No 64807 (Costs) [2023] NSWCATAP 43, at [48], the Appeal Panel addressed the issue of whether to award indemnity costs or costs on an ordinary basis. The Appeal Panel observed by reference to Mendonca v Tonna [2017] NSWCATAP 176 when such matters might be enlivened.

48. The next question is whether the costs orders should be an order for costs on the ordinary basis or costs on the indemnity basis. Indemnity costs are awarded only in limited circumstances. The discretion to do so must be the subject of careful reasoning, and caution should be exercised in making such an award: see Mendonca v Tonna [2017] NSWCATAP 176. That decision described circumstances that may justify an indemnity costs order. One such circumstance is where a party has engaged in unreasonable conduct. The decision in Ashton v Stevenson; Stevenson v Ashton (No 2) [2019] NSWCATAP 238 dealt with the principles relevant to offers of settlement. Indemnity costs may be ordered if the offer contains a real element of compromise and its refusal can be found to have been unreasonable.

1. In Bruce v Knight (No 4) [2021] NSWCATAP 412 the Appeal Panel awarded indemnity costs. The basis of that award is set out at [19] and [33]-[36] of that decision.

19. The appellants justify a costs order on the indemnity basis because the Section 63 Application:

15. ... had no tenable basis in fact or law and was plainly misconceived. The application had no chance of success. It was unnecessary and without merit. The application unnecessarily wasted the time of the Appeal Panel and the Appellants and, in respect of the Appellants, forced them to incur unnecessary costs. These costs have been completely wasted. The appeal to the Supreme Court that was brought at the same time demonstrates that the [Section] 63 Application was not genuine - ...

16. The Appellants submit that these matters amount to "relevant delinquency". Properly advised, the respondents should not have made the application. It is appropriate therefore that the Appellants be fully compensated for the costs they have incurred in successfully opposing the [Section] 63 Application.

........

33. In our view the appellants' submissions are entirely correct. The Section 63 Application was misconceived, as we found in the Section 63 Decision for the reasons we gave and which we will not repeat here.

34. Accordingly, we may make an order for costs. We see no reason why the respondents should not pay the appellants' costs on (at least) the ordinary basis.

35. As the appellants submit, the discretion to award indemnity costs was recently considered by Justice Ward CJ in Eq in Fisk v Gold [2021] NSWSC 1465. At [26], her Honour stated:

26 As to a claim for indemnity costs, again, the discretion to award indemnity costs must be exercised judicially (see Mead v Watson (2005) 23 ACLC 718; [2005] NSWCA 133 at (8]) and with caution (see Leichhardt Municipal Council v Green [2004] NSWCA 341 at[47];Ng v Chong [2005] NSWSC 385 at (13]). There is no fixed rule or rationale as to when an indemnity order might be made, except that it requires a "sufficient or unusual feature" (Harrison v Schipp [2001] NSWCA 13 at [139] referring to Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 at 232-234). Such an order may be appropriate where a party wantonly or recklessly causes the other party to incur costs. It is recognised that this will often be the case where the party liable is guilty of some "relevant delinquency"(see [Oshlack v Richmond City Council (1998) 193 CLR 72; [1998] HCA 11] at [44] per Gaudron and Gummow JJ.

36. As the appellants submit, the circumstances that might give rise to an indemnity costs order include the following: where a party, properly advised, should have known they had no chance of success; where unfounded allegations of fraud or improper conduct are made, such as where they have been made knowing them to be false; the undue prolongation of proceedings by groundless contentions; where there is particular evidence of misconduct that causes loss of time to the court or other parties; the commencement of proceedings for some ulterior motive; and the unreasonable rejection of an offer of compromise: see Kanjian Holdings No 1 Pty Ltd v Kanjian (No 4) [2021] NSWSC 1390 at [58] and the authorities there referred to.

1. Whilst we note that, as outlined at above, the respondent submitted, in reliance upon the decision in Bruce v Knight (No 4), that indemnity costs should be awarded because the appellant had no tenable case on appeal, we have decided that it is not appropriate to order indemnity costs.
2. The reason that we decline to award indemnity costs is that, unlike the case in Bruce v Knight (No 4), we have not heard the appeal. As we have dismissed the appeal under s 55(1)(c) of the NCAT Act, we have not and should not engage significantly with the respective merits of the parties' cases. In our view, in the circumstances of the disposition of the appeal, as set out above, it would be inappropriate to make an order for indemnity costs.
3. However, in respect of the application under s 60(2) of the NCAT Act, we are not persuaded by any of the submissions of the appellant. There has been a history of proceedings and appeals following the initial decision of the respondent to appoint strata managers which necessitated the delivery of the respondent's records by the appellant who had held custody of them up to that point. The Tribunal had found to the extent necessary that the decision to appoint managers was validly made and that, as the former custodian of the records under the legislation the appellant was required to provide the relevant records. It was her refusal to do so which brought about the initial proceedings in the Tribunal.
4. In Scott-Young v The Owners - Strata Plan 77303 [2022] NSWCATAP 289 the Appeal Panel considered whether there were special circumstances when ultimately determining not to make a costs order.

33. Under the general law, where proceedings are determined without a hearing on the merits, there is usually no order for costs made: Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 164 CLR 622) (Lai Qin). This rule may be displaced, where, amongst other circumstances, one party has in effect "surrendered" to the other: One Tel Pty Limited v Deputy Commissioner of Taxation [2000] FCA 270 at [6]. However, this rule must be considered in conjunction with the Tribunal's own specific cost rules which we have set out above.

34. The Costs Applicant's Submission was that the appeal had no tenable basis in fact or law and that it was frivolous, vexatious, or otherwise misconceived or lacking in substance. Whilst the Notice of Appeal is, in our view, a rather rambling and repetitive document, it nevertheless states clearly enough that the Costs Respondents believed that the Decision was against the weight of the evidence. Further, the Notice of Appeal sets out the evidence that the Costs Respondents say that the Tribunal should have had regard to, and for that reason, leave to appeal should be granted. We are not able to conclude from our consideration of this Notice, that the appeal has no tenable basis in fact or law.

35. We are also unable to conclude that the appeal was frivolous, vexatious or otherwise misconceived merely because the Notice of Appeal sought the same orders that the Costs Respondents had sought in the Tribunal proceedings. Notices of Appeal are commonly framed in this way.

36. The Decision makes it clear that the Member rejected the Costs Respondents' arguments except for two relatively minor matters. Nevertheless the Decision does not make any finding that any of the Costs Respondents' submissions were untenable or misconceived or lacking in substance. The Member simply made findings on the evidence before him.

37. In these circumstances, although the Costs Respondents' prospects of success in the appeal may not have been strong, we are not able to say that the appeal was doomed to fail. To adopt the words of McHugh J in Lai Qin:

Having read the Tribunal's decision in support of the application, ....it seems to me that although the prosecutrix had an arguable case, she did not have strong prospects of success. If I had to make a prediction, about the outcome of her application, I think it that it probably would have failed. However as I have said it is not the function of a court on a costs application - in most cases at all events - to make a prediction as to the outcome of a hypothetical case. It is enough that the applicant has acted reasonably.

38. Thus we are not able to be satisfied that the matters to which we were directed to by the Costs Applicant, amount to special circumstances warranting us to make a costs order in its favour. We add that in relation to the general law position regarding costs applications in the absence of a hearing on the merits, we are also unable to conclude that the Costs Respondents' decision to withdraw their appeal because they could not afford legal representation, amounted to a surrender.

1. The current proceedings are somewhat different. Here there is, in effect, a failure to prosecute the appeal by the appellant, as well as a failure to appear. We determined to dismiss the matter under s 55(1)(c) rather than hear the matter ex parte and determine whether the matter had merit, or whether there had been a want of prosecution, or whether the proceedings were, as submitted by the respondent, misconceived or lacking in substance.
2. In T & S Nominees v Chief Commissioner of State Revenue (Costs) [2017] NSWCATAP 104 the Appeal Panel found special circumstances on appeal where the conduct of a party reflected aspects of the conduct before the Tribunal below. When referring to the reasons of the Tribunal the Appeal Panel noted at [17] - [18] that:

17. However, the Tribunal did make an order for costs for the remaining period, as previously noted, commencing 20 January 2016. As to that, the Tribunal said:

The Chief Commissioner submits that the Applicant's failure to attend the hearing answers the description in both paragraphs (a) and (b) of s 60(3). I agree.

Under paragraph (f) of s 60(3), the Tribunal may have regard to whether a party has refused or failed to comply with the duty imposed by s 36(3) of the NCAT Act. That duty is to co-operate with the Tribunal to give effect to the 'guiding principle' (to facilitate the just, quick and cheap resolution of the real issues in the proceedings) and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal. Plainly the Applicant, by continuing to fail to comply with the Tribunal's directions to file and serve evidence and submissions in reply, has not complied with that duty. The Applicant failed to notify the Tribunal and the Chief Commissioner in a timely fashion as to the reasons for that continuing non-compliance; it failed to respond adequately, and in a timely fashion, to the Chief Commissioner's correspondence in January 2016 seeking an indication as to whether the Applicant required the Chief Commissioner's witnesses for cross-examination, causing the Chief Commissioner to incur, unnecessarily, the expense of transport and accommodation for those witnesses; and it left it almost literally to the last minute to notify the Chief Commissioner and the Tribunal that its legal representative did not have instructions to appear at the hearing on 1 February 2016.

18. An appeal puts the successful party at first instance to the cost and administrative burden of another round of litigation. In circumstances where the unsuccessful party's proceedings have been dismissed summarily at first instance, accompanied by a costs order, and dismissed again summarily on appeal, there clearly are special circumstances of the strongest kind favouring the making of the same order on appeal. Accordingly, we will make the order sought by the Chief Commissioner.

1. Whilst we have not found the application for indemnity costs made out, in our view the conduct of the appellant in the appeal gives rise to special circumstances in accordance with s 60, in a manner comparable to that in T & S Nominees.
2. Whilst the position of the parties is not entirely analogous to the matter of T & S Nominees, the administrative burden of an appeal on a successful party at first instance is directly comparable. This is particularly so when the appellant has failed to properly advance their appeal and, significantly, failed to appear at the substantive hearing. As the Appeal Panel observed in T & S Nominees, where a costs order has been made at first instance and an appeal is dismissed without proceeding to the merits, it can be considered that 'there clearly are special circumstances of the strongest kind favouring the making of the same order on appeal'.
3. In those circumstances we determine to make an order under s 60 in respect of the respondent's costs of the appeal. We have not engaged directly on any of the appellant's submissions to the extent that they go to the merits of her appeal and seek to go behind the dismissal order made on 3 April 2025.

(1) Pursuant to s 50 of the Civil and Administrative Tribunal Act 2013 (NSW) a hearing on costs is dispensed with.

(2) The respondent's application for indemnity costs is refused.

(3) The appellant is to pay the respondents' costs of the appeal as agreed or assessed on the basis set out in the legal 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.