This decision concerns whether the Appellant should pay the costs of the appeal incurred by the Respondents in circumstances where the Appellant has withdrawn the appeal and, as a consequence, the Appeal Panel has dismissed the appeal under s 55(1)(a) of the Civil and Administrative Tribunal Act, 2013 (NSW) (the NCAT Act). The relevant background is explained in the following paragraphs.
The Appellant is a lot owner in the Owners Corporation constituted by the Third Respondent and is a legal practitioner. The First and Second Respondents are also lot owners in the Owners Corporation. They brought an application in the Tribunal for the appointment of a compulsory manager and an order to that effect was made by the Tribunal on 19 April 2022. The Appellant had participated in the first instance proceedings as the Secretary of the respondent Owners Corporation. The Appellant had opposed the appointment of the proposed compulsory manager and after publication of the decision he filed a Notice of Appeal on behalf of the Owners Corporation. That appeal was subsequently withdrawn and dismissed, as the appellant had no standing to bring the appeal. The respondents sought their costs, but the application was refused: The Owners - Strata Plan No 79749 v Dunstan [2022] NSWCATAP 262.
On 27 May 2022 the Appellant made an application to the Tribunal using the form headed "Application to set aside or vary Tribunal decision" under clause 9 of the Civil & Administrative Tribunal Regulation 2013 (the Regulation). Although the application was made using that form the Appellant, as applicant included the statement that he made the application pursuant to s 237 of the Strata Schemes Management Act 2015 (NSW) (the Strata Act).
On 7 June 2022 the Tribunal made directions for the parties to make submissions with respect to the Appellant's application, including a direction that the submissions must address the basis upon which the application was said to be brought under cl 9 of the Regulation.
On 19 July 2022 the Tribunal dismissed the application upon the basis that the Appellant, as applicant, was not a party to the original proceedings and therefore had no standing to make an application under cl 9.
Subsequently, there was an application by the respondents for costs and on 23 September 2022 the Tribunal refused the application of the First and Second Respondents for an order for costs against the Appellant.
On 24 October 2022 the Appellant lodged the Notice of Appeal. The appeal was in respect of the decision made on 19 July dismissing the Appellant's application to set aside the decision made on 19 April 2022.
The appeal came before us for hearing on 24 January 2023 at which time the Appellant withdrew the appeal. As a consequence, we made the order referred to above, dismissing the appeal. The Respondents then made an application for their costs of the appeal to be paid by the Appellant. As stated at the outset, this decision concerns whether the Respondents should have an order that their costs of the appeal be paid by the Appellant.
The submissions of the parties with respect to the costs applications are set out in the following paragraphs.
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The Respondents' Applications
The First and Second Respondents submit that there are special circumstances warranting an award of costs and rely upon s 60(3)(e) of the NCAT Act. Section 60 is set out below:
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.
Counsel for the First and Second Respondents submitted that the application brought by the Appellant on 27 May 2022 was clearly based upon the provisions of cl 9. It is clear that the Appellant withdrew the appeal because he has conceded that the appeal had no merit. The appeal was clearly misconceived and/or lacking in substance. The Appellant conceded as much during the course of the hearing of the appeal. The Respondents have been put to expense in addressing the issues raised in the appeal and in engaging legal representation.
The Third Respondent adopted the submissions of the First and Second Respondents and, in addition, relied upon s 60(3)(b). The Third Respondent submitted that the proceedings have been unreasonably prolonged by the conduct of the Appellant in lodging the application to set aside in May last and thereafter lodging an appeal against the dismissal order made on 19 July 2022. Further, the appeal was lodged well out of the time required for the lodgement of an appeal.
[3]
The Appellant's Submissions
During the course of the hearing of the appeal the Appellant conceded that the appeal has no utility and that it would be necessary for him to lodge a separate application were he to exercise his apparent rights under s 237 of the Strata Act (by which a lot owner may apply for an order revoking or varying an order appointing a compulsory manager). The Appellant also conceded that he had misconceived the nature of a cl 9 application and that he had at all times intended to lodge an application under s 237. He submitted that the application he lodged was arguably an application under s 237. However this submission was made after he had withdrawn the appeal and the order for dismissal of the appeal was made, and accordingly the issue of whether he had included an application under s237 does not arise for our determination.
The Appellant also conceded that the appeal was lodged "months" out of time.
[4]
Consideration
The appeal was lodged approximately three months after the relevant deadline for the lodgement of an appeal against the dismissal decision made on 19 July 2022. There has been no adequate explanation given for the Appellant waiting so long.
Given the Appellant's concession that the appeal should be withdrawn after the issues referred to above were canvassed in argument at the outset of the hearing, the withdrawal of the appeal can properly be viewed as a capitulation, and an acknowledgment that the appeal was misconceived and lacking in substance.
We are further of the opinion that the Appellant's conduct in bringing the appeal well after the relevant deadline has unreasonably prolonged the final determination of the proceedings.
An order for costs is made not for the purposes of punishing the unsuccessful party but rather for the purpose of providing a part indemnity to the successful party for the costs incurred by that party: see Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72. In the Tribunal, the regime provided for by s 60 is that each party pays its own costs unless there are special circumstances warranting an award for costs.
In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the matters set out in s 60(3) of the NCAT Act.
In D Constructions Pty Ltd v Walsh [2020] NSAWCATAP 91 the Appeal Panel determined that where one party effectively capitulates or surrenders during the course of a proceeding such that the proceedings are brought to an end without the merits of the proceeding being determined, that may, depending upon the specific circumstances, qualify as special circumstances warranting an award for costs.
Here, the Appellant has capitulated on the basis that the appeal was misconceived. That concession was made only at the latest possible opportunity. As the solicitor for the Third Respondent submitted, the result has been to prolong unreasonably the time taken to complete the appeal proceedings.
In our view, the circumstances of this appeal, specifically its lodgement out of time and its conceded lack of substance, lead to the conclusion that there are special circumstances warranting an award of costs.
Accordingly, we make the following order:
1. The Appellant is to pay the costs of the First, Second and Third Respondents incurred in the appeal on the ordinary basis in an amount agreed or as assessed.
[5]
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: 10 February 2023
Parties
Applicant/Plaintiff:
McCrudden
Respondent/Defendant:
Dunstan
Legislation Cited (3)
Civil and Administrative Tribunal Regulation 2013(NSW)