Huo v The Owners-Strata Plan No. 44652

1. The subject of the appeal was a lump sum costs order made by the Tribunal against the appellant. The appellant was a lot owner in a strata scheme. On 22 March 2024, the Tribunal (Titterton SM) ordered the lot owner to hand over books and records of the owners corporation to the owners corporation under s 188 of the Strata Schemes Management Act 2015 (NSW) (SSM Act).
2. The owners corporation, who was legally represented, made a costs application. The Tribunal awarded costs on a lump sum basis. The lot owner appealed that decision. The lot owner was successful in the appeal, because Titterton SM had overlooked certain costs submissions of the lot owner. The proceedings were remitted back to the Tribunal.
3. On 22 October 2024, in the remitted costs decision, Titterton SM found there were sufficient "special circumstances" under s 60(2)-(3) of the NCAT Act to exercise the discretion to make a costs order in favour of the owners corporation. Costs were awarded in the lump sum amount of $13,292.98. Written reasons were provided.
4. On 26 November 2024, the lot owner lodged a Notice of Appeal. The grounds of appeal involved both the substantive decision to order the return of documents and records to the owners corporation, and the costs order.
5. On 18 December 2024, the appeal was listed for a call over before Blake PM. The call over was conducted by audio-visual link. Ms Lau, who is not an admitted Australian Legal Practitioner but who had appeared (with leave granted) for the lot owner on a number of occasions, appeared for the lot owner.
6. The appeal was listed for hearing on 3 April 2025 at 10.15 am.
7. There were a number of unsuccessful interlocutory applications by the lot owner.
8. On 19 March 2025, the lot owner lodged a miscellaneous orders application seeking electronic lodgement and service of documents, as well as the issue of various Summons to produce documents. On 24 March 2025, Blake PM dismissed that application with written reasons.
9. On 27 March 2025, the lot owner made an adjournment application. The basis of the adjournment application was to issue Summons to produce documents. On 1 April 2025, Blake PM dismissed that application with written reasons provided.
10. On 1 April 2025, the lot owner made an application to appear at the hearing by audio-visual link or telephone. On 2 April 2025 Blake PM dismissed that application with written reasons, and the matter remained listed for an in person hearing on 3 April 2025.
11. On 3 April 2025, the appeal was dismissed by the Appeal Panel under s 55(1)(c) of the NCAT Act by reason of the lot owner's failure to appear. The owners corporation made a costs application in respect of the dismissed appeal proceedings.
12. The lot owner lodged a reinstatement application under s 55(2) of the NCAT Act. Procedural directions were made by Blake PM in respect of the parties lodging and serving submissions and documents in respect of the reinstatement application. Both parties did so.
13. The reinstatement application was listed for hearing on 30 May 2025. Ms Lau appeared for the lot owner. Mr Napoli, Solicitor, appeared for the owners corporation. Leave was granted for both parties to be represented on 30 May 202 for the purpose of determining the reinstatement application. Both parties made submissions.
14. On 2 June 2025, I dismissed the reinstatement application, with written (unpublished) reasons provided to the parties. The reinstatement application was dismissed applying the principles in Wallace v Price [2017] NSWCATAP 151 at [24]- [31] because:

(1) The lot owner had not provided a reasonable explanation for non-appearance. In that regard, it was submitted the lot owner was overseas, and Ms Lau could not appear because she had "practical legal training" commitments in Victoria on the hearing date. That explanation was deficient.

(2) In any event, there was no sufficient discretionary basis to reinstate the appeal. The appeal grounds were not obviously strong, or had good prospects of success.

1. At the reinstatement hearing, the owners corporation made clear that it would make a costs application if the application to reinstate the appeal was dismissed. The orders of the Appeal Panel dated 2 June 2025 provided a timetable for costs submissions of the parties, including for the parties to address whether a hearing on the issue of costs should be dispensed with.
2. On 25 June 2025, in Huo v The Owners-Strata Plan No 44652 [2025] NSWCATAP 151, the Appeal Panel ordered the lot owner pay the owners corporation's costs of the appeal proceedings as agreed or assessed.

1. The owners corporation's costs submission is dated 11 June 2025, and was lodged and served on 11 June 2025.
2. The owners corporation acknowledges that the costs submission was lodged and served 1 day outside the procedural timetable made by the Tribunal. However, it seeks an extension of time under s 41 of the NCAT Act, as a public holiday occurred during the relevant period, and no prejudice or unfairness to the lot owner is occasioned by the extension, because of the short period of delay.
3. The lot owner's submissions are dated 16 June 2025. They were lodged and served on 16 June 2025.
4. The owners corporation submits that "special circumstances" exist that are sufficient to make a costs order, because the reinstatement application was so weak it was untenable, or, in the alternative, vexatious.
5. The lot owner's submissions do not state whether they were prepared by the lot owner, or by Ms Lau, or by another person.
6. The lot owner's submissions are 9 pages in length (37 paragraphs). Regrettably, much of the submissions are unfocused and most of the submissions do not address the relevant legal issues pertaining to s 60 of the NCAT Act. The submissions are critical of the owners corporation's legal representatives, but there is no explanation as to how this subjective criticism is relevant to whether the owners corporation has established "special circumstances" under s 60(2)-(3) sufficient to warrant a costs order in the reinstatement application . There are also references to legal authorities that had no relevance to this costs application, such as Virk Pty Ltd (in liq) v Yum! Restaurants Australia Pty Ltd [2017] FCAFC 190, which involved alleged breach of contract, negligence, and unconscionable conduct in respect of a franchise agreement.

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 -

...

(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,

...

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

...

(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 -

...

(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.

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:

"[31] 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": s 60(2) NCAT Act.

[32] Six leading principles are apposite.

[33] First, special circumstances are circumstances that are out of the ordinary. It is not necessary to establish extraordinary or exceptional circumstances: see Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11] quoting Cripps v G&M Dawson Pty Ltd [2006] NSWCA 81 per Santow JA at [60]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32].

[34] 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: see McEwan v Port Stephens Council (No 2) [2022] NSWCATAP 386 at [38].

[35] 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: BPU v NSW Trustee and Guardian (Costs) [2016] NSWCATAP 87 at [9]. The mere existence of one of the enumerated factors in s 60 of the NCAT Act will not of itself be sufficient to warrant the conclusion that there are special circumstances.

[36] Fourthly, each case will depend on its own particular facts and circumstances: Brunsprop Pty Ltd v Joanne Hay and Wes Davies [2015] NSWCATAP 152 at [27].

[37] Fifthly, mere success (or failure) of an application does not give rise to special circumstances: The Owners - Strata Plan 5319 v Price [2020] NSWCATAP 245 at [46].

[38] 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: eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48].

[39] 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.

[40] 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. The satisfaction involves a degree of subjectivity and thus, in a broad sense, may be described as a discretionary decision (as described in respect of similar legislative provisions in a different statutory context in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; [2000] HCA 47 at [20] per Gleeson CJ, Gaudron and Hayne JJ). If the Tribunal has regard to any matters as set out in s 60(3) of the NCAT Act, the matters must be given due weight.

[41] As s 60(2) of the NCAT Act makes clear, if the requisite satisfaction is reached, the Tribunal "may" make the order. Satisfaction as to the existence of special circumstances merely enlivens the discretion to award costs rather than mandating an award of costs: Al-Aaraj v Commissioner of Police, NSW Police Force (No 2) [2025] NSWCATAP 166 at [40]; Brodyn Pty Ltd v Owners Corporation - Strata Plan 73019 (No 2) [2016] NSWCATAP 224 at [32]. This necessitates the making of a second decision (which we term the overall discretion) as to whether in all the circumstances, an award for costs should be made."

...

"[52] An award of costs is intended to be compensatory and not punitive: Latoudis v Casey (1990) 190 CLR 534 at 567; [1990] HCA 59; Grasso v The Owners - Strata Plan No. 52399 [2022] NSWCATAP 91 at [12(6)]."

1. Similar principles to FZK (No 4) were expressed by the Appeal Panel in The Owners - Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273 at [5]- [15].

1. In light of the very short period the owners corporation was late in the lodging and serving of its submissions, and the lack of prejudice or unfairness to the lot owner in granting an extension of time, it is appropriate to extend time under s 41 of the NCAT Act (Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [22]).
2. The written reasons of the Tribunal dated 2 June 2025 point out the weakness of the reinstatement application. I am not satisfied that it was untenable, being so weak it was unarguable (FZK (No 4) at [42]-[43]). I am not satisfied that it was frivolous, in the sense of lacking a legal foundation or that it was "not legally properly based." I am not satisfied that it was vexatious, in the sense of proceedings brought with the intention of annoying or embarrassing or harassing the other party, or for some collateral purpose other than having the court or tribunal adjudicate on the issues raised by the proceedings, or, irrespective of the motive of the litigant, if the proceedings are so obviously untenable or manifestly groundless as to be utterly hopeless (FZK (No 4) at [45]-[50]).
3. What remains is the issue is whether the reinstatement proceedings were so weak or lacking in substance or otherwise misconceived that "special circumstances" are established, and additionally that the owners corporation has established the "special circumstances" warrant departure from the usual principle under s 60(1) of the NCAT Act that each party bear its own costs. If "special circumstances" are established, whether they warrant a costs order in favour of the party seeking costs involves the exercise of discretion.
4. The authorities make clear each costs application depends on its own facts and circumstances.
5. The reinstatement application was weak and had limited prospects of success.
6. However, I am not persuaded that it was sufficiently weak to cause the Appeal Panel to exercise its discretion to depart from the usual principle that each party bears its own costs. The owners corporation submits that it should not have been made to incur the legal costs of opposing the reinstatement application. However, the costs principles are clear, and that is not a sufficient reason to make a costs order in favour of the owners corporation.
7. The submissions of the owners corporation do not raise any other matter relevant to the exercise of discretion, such as a detailed letter to the lot owner pointing out the limited prospects of success of the reinstatement application and providing a time period in which the lot owner could withdraw the reinstatement application with each party bearing its own costs (Juskey v The Owners - Strata Plan No 62732 [2025] NSWCATAP 95 at [41]- [46]).
8. I acknowledge that this outcome is different to Huo v The Owners - Strata Plan 44652 [2025] NSWCATAP 151. However, that decision was dealing with the appeal proceedings leading up to, and including, the dismissal of the appeal for non-appearance on 3 April 2025. This costs application deals with the reinstatement application, which was lodged after 3 April 2025. The circumstances are different, and the outcome is different.

(1) A hearing on costs is dispensed with under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).

(2) The costs application in the reinstatement proceedings 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.