Rodny v Stricke

NCAT Consumer and Commercial|2019-07-05

Background

The Application lodged with the Tribunal on 20 October 2017 was, on 24 May 2019, withdrawn by the Applicants and dismissed pursuant to s55(1)(a) of the Civil and Administrative Tribunal Act 2013 (the Act).
The day before, 23 May 2019, the Tribunal received a letter from the Applicants solicitors advising that they were instructed to withdraw the Application and that they would be filing, that day, a fresh Application in identical terms to the one being withdrawn, with the exception of four items noted in the letter.

Application

The Respondents seek an order for their costs of the dismissed proceedings on an indemnity basis; the Tribunal having directed on 24 May, following dismissal of the Application, that if the Respondents sought costs they were to file and serve submissions in support within fourteen (14) days. At the same time the Tribunal ordered that the Applicants were to file and serve any submissions opposing an order for costs within fourteen (14) days thereafter; further, that each party submissions must address whether costs can be decided on the papers without a hearing pursuant to s50 of the Act.
The Respondents lodged with the Tribunal submissions on 6 June 2019 in support of their costs application. The submissions recorded no objection to the issue of costs being decided without a hearing.

Dispensing with Hearing

The costs application was listed for hearing on 5 July 2019 and scheduled to commence at 1:15 pm. There was no appearance by, or on behalf of, any of the parties.
Section 50 of the Act provides: "50. When Hearings are Required. 1. A hearing is required for proceedings in the Tribunal except: 1. In proceedings for the granting of leave for an external or internal Appeal, or 2. In connection with the use of any resolution processes in the proceedings, or 3. If the Tribunal makes an order under this Section dispensing with the hearing, or 4. In such other circumstances as may be prescribed by the procedural rules. 1. The Tribunal may make an order dispensing with the 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 materials lodged with, or provided to, the Tribunal. 2. The Tribunal may not make an order dispensing with the hearing unless the Tribunal has first: 1. afforded the parties an opportunity to make submissions about the proposed order, and 2. taken any such submissions into account. 1. The Tribunal may determine proceedings in which a hearing is not required based on the written submissions or any other documents or materials that have been lodged with or provided to the Tribunal in accordance with the requirements of this Act, enabling legislation and the procedural rules. 2. This Section does not prevent the Tribunal from holding a hearing even if it is not required."
The Tribunal has afforded the parties the opportunity to make submissions as to whether or not the issue of costs can be decided on the papers without a hearing, by order 4 made by the Tribunal on 24 May 2019.
Having received and considered the submissions of each of the parties, and there being no appearance by or on behalf of the Applicants on 5 July despite their written submissions requiring a hearing, I order a hearing of the costs application be dispensed with.

Jurisdiction

Section 60 of the Act permits the Tribunal to order to costs. That section provides: "60. Costs. 1. Each party to proceedings in the Tribunal is to pay the parties own costs. 2. The Tribunal may award costs in relation to proceedings before it only if it is satisfied 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: 1. whether a party has conducted the proceedings in a way that unnecessarily disadvantaged the other party to the proceedings. 2. whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings. 3. 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. 4. the nature and complexity of the proceedings. 5. whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance. 6. whether a party has refused or failed to comply with the duty imposed by s36(3). 7. any other matter that the Tribunal considers relevant. 1. If costs are to be awarded by the Tribunal, the Tribunal may: 1. determine by whom and to what extent costs are to be paid, and 2. order costs to be assessed on the basis set out in the legal costs legislation (as defined by s3A of the Legal Professional Uniform Law Application Act (2014) or on any other basis. 1. In this Section: "Costs" includes: 1. the costs of, or incidental to, proceedings in the Tribunal, and 2. 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."

Chronology

The Application the subject of dismissal on 24 May 2019, was first lodged with the Tribunal on 20 October 2017, and was summarised by the Appeal Panel in its 31 May 2018 decision at [2] - [4]. The Applicants are lot owners in a strata scheme known as SP56911 in Kent Street, Sydney. The Sixth Respondent named in the Application is the Owners Corporation of the strata scheme and the First to Fifth Respondents are members of the Strata Committee of the Owners Corporation. By their Application the Applicants sought orders against the Respondents under various sections of the Strata Schemes Management Act 2015 (NSW) including an order under s238 of that Act which deals with the removal of Strata Committee members and officers. Consistent with the position adopted by the Appeal Panel, I do not consider it necessary to detail all complaints which have been made by the Applicants. It is sufficient to record that the complaints include: 1. That the members of the Strata Committee have held private meetings or exchanged correspondence without notice being given to owners and without keeping proper minutes of meetings. 2. That decisions have been made by the Strata Committee that have conferred "unauthorised or undisclosed benefits upon a member of the Committee, or have been made to ratify such benefits", and 3. That members of the Strata Committee have "given instructions to third parties, to confer advantages on them, without reference to the Committee, the Strata Manager or the general meeting".
The Application also sought an order to appoint a Strata Managing Agent for the Owners Corporation pursuant to s238 of the Act.
Following the filing of the Application, the Applicants were, on 29 November 2017 ordered to lodge with the Tribunal and serve on the Respondents the documents on which they intended to rely by 19 January 2018. That date was, by consent of the parties on 29 January 2018, extended to 20 February 2018.
Also on 29 January 2018 the Tribunal granted leave to each of the parties to be represented by an Australian legal practitioner, however in relation to the Applicants that leave was conditional on the representative being an Australian legal practitioner other than Mr David Le Page or members of his firm. Prior to that condition being imposed the Respondents had submitted that Mr Le Page and his law firm had previously acted for the Owners Corporation and that there was a conflict or interests, or, alternatively, Mr Le Page had confidential information of the Owners Corporation which he had acquired as part of his retainer.
The Applicants appealed the 29 January 2018 order referrable to representation by Mr Le Page; the Notice of Appeal being filed on 19 February 2018. That Appeal was dismissed by the Appeal Panel on 31 May 2018.
On 6 July 2018 the time for the lodging of the Applicants documents and evidence was extended to 2 August 2018. On 11 September 2018 there was a further extension to 13 September, and on 20 September a further extension to that date. On 20 September a number of volumes of evidence were served by the Applicants.
On 29 October 2018 the Tribunal set out, at length, the procedural history of the matter to that point and made a number of orders including: 1. vacating hearing dates that had been fixed for 7 and 8 November. 2. adjourning the hearing to a date to be fixed by the Registrar. 3. for the Respondents to provide the Tribunal and the Applicants copies of all documents on which they intended to rely by 26 November 2018. 4. for Applicants to provide to the Respondents and to the Tribunal copies of all documents in reply (the Applicants having served their evidence in chief on 20 September 2018) by 24 December 2018.
In making the 29 October 2018 orders the Tribunal noted the long history of the matter; that the Application was filed over a year earlier and that there had been occasion during the procedural history of the matter for a Principal Member to remind the parties and their representatives of their obligation to assist the Tribunal to resolve matters in a quick, just and cheap fashion.
It was further noted that directions had been made on 29 November 2017 to prepare the matter for final hearing, and that those directions were extended on 29 January 2018, again on 6 July 2018 and again on 11 and 20 September 2018. The Tribunal records: "It is an extraordinary thing that the Applicants, who should know their case before filing, took almost twelve (12) months from lodgement to provide its evidence and ready the matter for final hearing."
The substantive proceedings were then fixed for Hearing on 27 and 28 March 2019, however those dates were vacated due to the mother of the Applicants Senior Counsel passing away. The Hearing was rescheduled for 28-30 May 2019.
The Applicants solicitors wrote to the Tribunal on 6 May 2019 requesting that the proceedings be listed on dates alternate to those fixed by the Tribunal on 3 May, namely the 29-30 May dates. The Respondents solicitors wrote to the Tribunal on 7 May opposing any alteration to the dates and asking that the dates allocated remain.
On 9 May 2019 the Tribunal confirmed its decision to maintain the 28-30 May 2019 dates. The Applicants, on 21 May, sought a stay and lodged a Notice of Appeal. Leave to Appeal was refused by Deputy President Westgarth on 23 May and on the same day the Applicants solicitors forwarded the letter referred to earlier in these Reasons, being the letter of 23 May 2019 advising of instructions to withdraw the Application and advising that a fresh Application would be filed. Following, and consequent upon, the withdrawal of the Application, it was dismissed by the Deputy President pursuant to s55(1)(a) of the Act on 24 May.

Submissions

In support of their application for costs in the proceedings, the Respondents rely on four (4) grounds. They are: 1. That the proceedings have been characterised by delay (and consequential increased costs) caused by the Applicants. 2. That a "comfortable majority" of the 6000 odd pages of evidence served by the Applicants in September 2018 concern issues that "for the most part" were irrelevant to the issues in dispute. 3. The Application, and the material served in support of it, did not establish grounds for any orders under s237 or 238 of the Strata Schemes Management Act 2015 (NSW). 4. The Applicants have withdrawn the proceedings in circumstances where they have unsuccessfully sought to have the hearing dates vacated, and have filed identical proceedings in order to circumvent the orders made by the Tribunal.
It is convenient, in these Reasons, to deal with each of the Respondents submissions on each of the four grounds, and the submissions raised by the Applicants in reply.

Ground 1 - Delay Caused by Applicants

The Respondents submit that evidence of delay, and consequential increase in costs on each of the four grounds, includes: 1. An Appeal and an Application to Reopen in respect of the Tribunal's decision to deny the Applicants leave to be represented by Mr LePage due to conflict of interests. 2. Multiple applications by the Applicants for extensions of time for service of evidence, which was eventually served on 20 September 2018, eleven (11) months after the proceedings were commenced. The evidence was voluminous, comprising nine (9) volumes of material and over 6000 pages. It's service - so the Respondents contend - necessitated the vacation of hearing dates scheduled for 7 and 8 November 2018 so as to allow the Respondents to prepare comprehensive evidence in response. 3. The vacation of the second set of hearing dates on 27 and 28 March was due to the death of the Applicants Senior Counsel's mother. The Respondents contend that the Applicants failed to properly and appropriately instruct the Junior Counsel who had been retained so that he could progress with the hearing. 4. The failure of the Applicants solicitors to engage with the Respondents solicitors in relation to agreeing upon mutually convenient dates in respect of the third set of hearing dates. 5. The Applicants delayed their Appeal of the Tribunal's decision to list the matter for hearing on 28-30 May 2019. They contend the Application was filed on 21 May 2019. They also rely on the failure by the Applicants to instruct alternate legal representation to appear. 6. The decision by the Applicants to withdraw their Application the day after the Appeal in (e) above was dismissed, and to file a fresh Application on 23 May 2019, was to circumvent the effect of the Tribunal's orders made on 23 May. This - the Respondents submit - has resulted in the parties now being in the same position that they were in when the matter was first commenced in 2017.
The Applicants, by their written submissions, contend in response: 1. The Respondents have provided no evidence of any alleged increase in costs incurred by them as a consequence of any fault of the Applicants. 2. In terms of characterising the conduct of the parties, at the outset the Applicants had sought to mediate with the Respondents before the proceedings were commenced. They say that the Respondents consented to that course and requested the delay of the mediation for four (4) months because one of the Respondents was travelling. The Applicants contend they agreed to delay the mediation but the Respondents subsequently withdrew. 3. So far as the Appeal concerning legal representation is concerned, there were two (2) applications; each side objecting to the other being represented by particular legal practitioners. If there has been any delay in the determination of the proceedings because of an application the Applicants made concerning the opposing legal representative, then the Respondents must - they say - be found to have similarly delayed because of a similar application they made. The Applicants further point out that the Appeal Panel, in its 31 May 2018 decision, dismissed the Appeal in relation to the limitation of legal representation of the Applicants, but allowed the Appeal, in part, in relation to the representation of the Respondents. 4. The Applicants reject the Respondents contention that applications for multiple extensions of time for service of evidence has delayed the determination of the proceedings. They point to the fact that, prior to 20 September 2018 when their evidence was served, the parties were engaged in a contested interlocutory application, and thereafter Appeal Panel proceedings, concerning legal representation. 5. There is no rule or requirement for any Applicant to file and serve their evidence with an Application. It is contended that instructions were taken from the Applicants prior to the filing of the Application, and evidence prepared following the Applicants change of lawyers after the Appeal Panel determination. They further contend that it was reasonable, in circumstances where the engagement of the Applicants solicitor was being challenged by the Respondents, that no further action was taken by them to prepare their evidence while the Appeal Panel determined the Appeal. 6. Each application by the Applicants for an extension of time did not have the effect of delaying the proceedings. Each was made before the relevant time provided in the orders for the filing and serving of evidence. There was no breach of any orders made by the Tribunal. The Respondents did not object to any extension sought by the Applicants. This submission further points out that the Respondents, on 29 October 2018, made an application for extension of time to comply with the Tribunal's orders. 7. As to the vacation of the 27 and 28 March 2019 Hearing dates due to the death of the mother of the Applicants Senior Counsel the Applicants contend - not unexpectedly - that that was an unfortunate and extraordinary event for which no blame could be attributed to a party. The Applicants submit that the Tribunal and the Respondents solicitors were immediately notified with a request made for an adjournment; an application that was denied by the Tribunal. 8. The Applicants reject the Respondents submission concerning Junior Counsel conducting the 27 and 28 March hearing. They submit that Junior Counsel was briefed to be led by Senior Counsel and ". . . . . was not in a position to step into the shoes of . . . . .Senior Counsel with less than 24 hours notice." The Applicants say that Junior Counsel was not prepared to cross examine various witnesses ". . . . . as he was attending to other matters at the request of Senior Counsel . . . . .". The engagement of Senior Counsel by them - they say - was reasonable and necessary. 9. The Applicants further submit that it is unlikely, in any event, that the matter would have been resolved in the two (2) days allocated by the Tribunal. They say that had the matter proceeded on 27 March it would have been part heard and it would have gone onto another date. 10. In answer to the Respondents assertion of failure by the Applicants solicitors to engage in agreeing upon mutually convenient dates in respect of the third set of hearing dates, the Applicants point out in their submissions that there was no such order or requirement; the Tribunal on 27 March ordering the parties to advise the Tribunal and each other by 4 pm on 10 April 2019 of unavailable dates for hearing of their witnesses and representatives. The Applicants contend that this order only required them to inform the Tribunal and each other of unavailable dates; there was no requirement for one party to liaise with the other party as to available dates. 11. The Applicants further submit that even if the parties had liaised with each other it would not have changed the outcome of the available dates. 12. The Applicants reject the Respondents submission that the Applicants delayed the Appeal of the Tribunal's decision to list the matter for hearing commencing 28 May, and that their failure to instruct alternate legal representation has caused delay. They point to the appeal application having been filed on 21 May 2019 following receipt of advice from Senior Counsel. The submissions record that the Appeal was filed reluctantly after determining that it was ". . . . . not possible to replace both the instructing solicitor and Counsel within the time allowed by the Tribunal." The submissions contend that advice was sought from Senior Counsel on 15 May and that the Applicants had attempted to obtain the services of another lawyer but ". . . . . they were either not available or not willing to take the matter on such short notice". 13. The Applicants submit that it was unreasonable for the Tribunal to impose upon them a requirement to engage new legal representation for a three (3) day hearing with just over three (3) weeks notice, having regard to the nature of the claims made in the Application. 14. In answer to the Respondents submission concerning withdrawal of the Application the day after the Appeal of the Tribunal's decision to list the matter for hearing on 28-30 May 2019 was dismissed, the Applicant contends that the withdrawal of the Application has no relation to the alleged delay in the determination of the proceedings. They submit that none of the Applicants instructing solicitor, Junior Counsel or Senior Counsel were available to attend the hearing commencing 28 May. 15. The Applicants submit that the parties are in the same position as they were in on 23 May 2019 when the new Application - referred to earlier in these Reasons - was filed. They say that all evidence has been filed and served and the Tribunal only needs to list the new matter for hearing. The submissions contend that the decision to withdraw the Application and to recommence was made in order for the Applicants to have their dispute determined by the Tribunal on a date available to the Applicants and their legal representatives. They suggest that if the Applicants could have replaced their legal team costs would have been prohibitive.

Ground 2 - Relevance of Evidence

The Respondents contend that a "comfortable majority" of the "6000 odd" pages of evidence served by the Applicants on 20 December 2018 comprises complaints about historical decisions taken by the Owners Corporation to either carry out or not carry out work on the common property. The Respondents say that these matters were, for the most part, irrelevant to the issues in dispute and were therefore productive of little more than delay and increased cost. The Applicants, by way of response, contend that the Respondents have misconceived the basis upon which the Applicants sought Orders in their Application and that the historical decisions of the Owners Corporation in relation to the repair and maintenance of common law property was relevant to the determination of whether the Owners Corporation was functioning satisfactorily and whether it had complied with the duty imposed upon it under the Strata Schemes Management Act. That issue, they say, goes to the heart of the issues in dispute in the Application. They further say that historical decisions of the Owners Corporation, and in particular its Strata Committee, was relevant to the determination of whether the then Strata Committee members - who they say were involved in the decisions - should be removed from the Strata Committee.
The Applicants further submit that the Tribunal cannot determine this question without a hearing on its merits. They cite Dehsabzi v The Owners - Strata Plan number 83556 which I will refer to later in these Reasons.
The Applicants submit that the reasoning in Dehsabzi should be applied here, and that the Tribunal should not embark upon a determination of the issues or a determination of any issue in the proceedings giving rise to the question of costs. The Applicants say the Tribunal has not determined the substantive Application yet, and accordingly no determination should be made as to which party would have been successful.

Ground 3 - Material Served Supporting Orders Sought

The Respondents contend that the Application that had been filed, and the material served in support of it, would not establish any grounds for orders under s237 or 238 of the Strata Schemes Management Act 2015. They contend that the material served amounts to a complaint that the Strata Committee had a difficult relationship with the former Strata Manager of the Scheme; that the Strata Manager of the Scheme has since been replaced and that it would in any event be inappropriate to address difficulties caused by a Strata Manager by granting the benefit of a compulsory appointment. It follows, the Respondents submit, that the Application had no tenable basis or was otherwise misconceived or lacking in substance.
The Applicants contend that the Respondents submissions are misconceived. They again point to the fact that the Tribunal has not determined the Application on its merits and again say that the Respondents have misconstrued the basis upon which the Applicants have sought orders. The Applicants contend that they were alleging in their Application that the actions and inactions of the Strata Committee made the functioning of the Strata Managers role untenable and caused the Strata Scheme to not function satisfactorily. They refute the suggestion that the Application was misconceived.

Ground 4 - Withdrawal of Proceedings to Circumvent Orders

The Respondents contend that the Applicants have withdrawn the proceedings in circumstances where they had unsuccessfully sought to have the hearing dates vacated, and have filed identical proceedings in order to circumvent those orders. Accordingly, they say, the Respondents and their witnesses have incurred costs thrown away preparing for the proceedings.
The Applicants submit by way of response that no costs have been thrown away given that no hearing took place on 28 May as the Application was withdrawn on 23 May and was dismissed on 24 May. They point to the fact that the refiled Application is yet to be determined. They submit that any costs incurred up to 23 May are costs that are likely to be incurred in respect of the refiled Application.
The Applicants further submit that the Respondents have not provided any evidence of costs thrown away by reason of the withdrawal.

Idemnity Costs

In their written submissions the Respondents say that ". . . . .the Court has a discretion to order Indemnity Costs . . . . ." against a party in circumstances where that party has engaged in misconduct, unreasonable action or "some relevant delinquency" in connection with the conduct of proceedings. They cite Oshlack v Richmond River Council [1998] 193CLR72 and Rosniak v GIO [1997] 41NSWLR608.
The Respondents contend that the circumstances in which indemnity costs may be ordered on this basis are many but include circumstances where a hopeless claim in maintained, or where a party has conducted proceedings in a way that has caused unreasonable delay and expense. They submit that such reasons exist here and that those reasons enliven the discretion to order that costs be paid on an indemnity basis.
The Applicants, by way of reply, contend that each of the Respondents arguments should be rejected for reasons earlier submitted.

Section 60(3)(g) - Any Other Matter Considered Relevant

The Applicants submit that in determining whether special circumstances exist the Tribunal should have regard to s60(3)(g) of the Act, namely any other matter the Tribunal considers relevant. They contend that all costs incurred by the parties to date are costs in the cause of the fresh application filed 23 May 2019, described as the "refiled" Application. They submit that they rely upon the same evidence in the refiled Application as in the dismissed Application and therefore all costs in this Application will be the same as costs incurred by the parties in the refiled Application. They say that to order the Applicants to pay the Respondents costs of the dismissed proceedings in circumstances where ". . . . . an overwhelming majority, if not all . . . . ." costs incurred by the parties in the dismissed proceedings would have had to be incurred in the refiled proceedings, will be manifestly unreasonable and unjust.

Findings and Reasoning

The jurisdiction to award costs is only enlivened if the Tribunal is satisfied that there are special circumstances warranting an award of costs [s60(2)]. Section 60(3) lists the matters that the Tribunal may have regard to in determining whether there are special circumstances warranting an award of costs.
Although not expressly stated in their written submissions, the first ground relied upon by the Respondents, namely that the proceedings have been characterised by delay caused by the Applicants, is most closely aligned with s60(3)(b) - "whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings".
Section 36 of the Act clearly states that the guiding principle to be applied to the practice and procedure of matters before the Tribunal is the facilitation of the quick, just and cheap resolution of the real issues in the proceedings. Parties to proceedings before the Tribunal, and their legal representatives, have an obligation under s36(3) to co-operate with the Tribunal to give effect to this guiding principle and, and for that purpose, to participate in the processes of the Tribunal and to comply with its directions and orders.
Persons or corporations who lodge Applications in the Tribunal, especially if the nature of the relief sought involves extensive evidence gathering, ought ensure that such evidence is available and obtained, or at least capable of being obtained and finalised within a short period of time, prior to their Application being filed. Parties appearing before this Tribunal need to recognise that, in giving effect to the "guiding principle" referred to in s36, when proceedings are first listed for directions in the absence of resolution orders will be made - as they were here - for the parties to provide to the Tribunal, and to the opposing party, copies of all documents on which they intend to rely. For Applicants, that date is usually within a few weeks of the date of the making of the orders.
Australian Legal Practitioners who, on the instructions of their clients, seek leave to represent a party in proceedings before this Tribunal should, before doing so: 1. be aware of the "guiding principle" referred to in s36 of the Act, 2. be aware of their obligation under s36(3) to co-operate with the Tribunal to give effect to the guiding principle, 3. advise their client of the "guiding principle" and the clients obligation under subsection (3) to co-operate with the Tribunal to give effect to it, 4. ensure that evidence and documents in support of that parties case is either immediately available or will shortly be available in the knowledge that the Tribunal will - usually at the first directions hearing - make orders for the exchange of evidence and documents. If there is likely to be any material delay in the gathering of documentation in support of a case, or in the obtaining of evidence, it is incumbent on the party or - if represented - the legal representative to inform the Tribunal member at the directions hearing of such issues so that a realistic timetable can be set.
In their submissions in respect of the first ground the Respondents do not provide authority in support of their contention that the occasions of delay that they rely upon constitutes special circumstances as prescribed in s60(2). "Special circumstances" has been described as meaning circumstances which are out of the ordinary Megerditch v Kurmond Homes Pty Limited [2014] NSWCATAP120. Proceedings which are commenced in late November 2017 ought, in usual circumstances, be finalised within two (2) to four (4) months if procedural directions are complied with. It is, I find, out of the ordinary and hence an occasion of special circumstances where the Applicants were in proceedings they instituted ordered to provide their evidence by 19 January 2018 yet sought, and were granted, extensions on 29 January, 6 July, 11 September and 20 September 2018 for the provision of such evidence.
I do not consider the Applicants submissions concerning mediation prior to the commencement of the proceedings to be relevant; the issues for determination concentrating on the conduct of the parties after proceedings are commenced, not attempts at mediation beforehand. In any event, there is no evidence before the Tribunal as to the mediation referred to by the Applicants such as to allow any findings to be made on that aspect.
I reject the Applicants submission that the Appeal process in respect of Mr LePage's representation has not caused delay. There is no evidence before the Tribunal as to why the preparation of the Applicants case should in effect have been put "on hold" pending the Appeal process. In their written submissions the Applicants at [9(b) and (c)] say that evidence was prepared following the Applicants change of lawyers after the Appeal panel's decision of 31 May 2018; further that it was reasonable in circumstances where the engagement of the Applicants solicitor was being challenged by the Respondents that no further action was taken by them to prepare their evidence while the Appeal Panel determined the Appeal. Both contentions are rejected. As indicated earlier in these Reasons, Applicants who wish to commence proceedings in this Tribunal ought already have, or be close to having, their evidence available prior to the filing of an Application. That obligation is heightened if an Applicant has sought the assistance of an Australian Legal Practitioner prior to the filing of an Application, or engages an Australian Legal Practitioner after the Application is filed. Continued preparation of the Applicants evidence whilst the Appeal was being determined could have been submitted to the Tribunal and served, and would have permitted the Respondent to obtain or finalise evidence by way of response well before 20 September 2018 - the date when the Applicants evidence was served. The Appeal did not involve a challenge to the nature of the relief sought in the Application. It was an Appeal limited to the question of representation. It's outcome had no bearing on what evidence the Applicants were required to produce in support of their claim. The failure to progress evidence preparation during the Appeal process, I find, prolonged unreasonably the time taken to complete the proceedings thereby constituting special circumstances warranting an order for costs.
The other relevant factor under ground 1 is the withdrawal of the Application by the Applicants on 23 May 2019 immediately after the Deputy President refused leave to appeal the Tribunal's confirmation of its decision to list the matter for hearing on 28-30 May 2019; those dates having been fixed on 3 May 2018. This is put as a particular of ground 1 but is also separately referred to, in different terms, as ground 4.
At the time of the fixing of the hearing for 28-30 May 2019 on 3 May 2019: 1. The Applicants evidence had been served; that having occurred seven months earlier in September 2018. 2. There is no evidence suggesting the Respondents evidence had not been served or of any submission by the Applicants on 3 May 2019 that they were not able to meet the Respondents evidence. 3. There is no evidence, or submission made, suggesting that the matter was not otherwise ready to proceed on 28-30 May 2019 or that any such matter had been put to the Tribunal on or prior to 3 May 2019 to the effect that the Applicants were not ready to proceed or that the dates were otherwise unsuitable.
After a long procedural history it ought to have been obvious to the Applicants, and those advising them, on 3 May 2019 that given the earlier occasions where hearing dates had been vacated, the extensions of time given to the Applicants for the submission of their evidence prior to September 2018, and the s36(3) obligations on the parties and their legal representatives as set out earlier in these Reasons: 1. the Tribunal was seeking to list the matter for final hearing and determination, and 2. as a matter of procedural fairness to the Respondents, who had been involved in the proceedings since the Application was first served in late 2017 and whose evidence had, I infer, been served, that a date for final hearing would be fixed, and 3. the Tribunal would list the matter for hearing and determination and would not readily consent to any further adjournment.
The withdrawal of the Application by the Applicants on 23 May 2019 when, at that point, the evidence of both parties had been submitted to the Tribunal and served on each other and the matter was otherwise ready to proceed - other than the issue of suitability of the dates to the Applicants legal practitioners and Counsel - were special circumstances warranting an award of costs. In making this finding I have had regard to s60(3)(b) and (g). There has been, I find, unreasonable prolonging by the Applicants of the time taken to complete the proceedings. I consider that the withdrawal of the proceedings on 23 May 2019 without explanation, other than the fact that the Deputy President had refused leave to appeal the Tribunal's confirmation of the 29-30 May 2019 hearing dates, is a matter I consider relevant under s60(3)(g).
Grounds 1 and 4 of the Application for Costs are established.
It is convenient to deal with grounds 2 and 3 together. The Tribunal does not accept the Respondents submissions that: 1. the "comfortable majority" of the "6000 odd" pages of evidence served by the Applicants on 20 September 2018 concern complaints about historical decisions taken by the Owners Corporation to either carry out or not carry out work on the common property and that such matters were, for the most part, irrelevant to the issues in dispute, and 2. that the Application, and material served in support of it, did not establish grounds for any order under s237 or 238 of the Strata Schemes Management Act 2015; resulting in the Application having no tenable basis or was otherwise misconceived or lacking in substance.
In respect of grounds 2 and 3 the Respondent relies upon s60(3)(a)(b)(c)(d)(e) and (f) of the Act.
This is an application for costs after proceedings have been dismissed. There has been no hearing on the merits and as such no consideration by the Tribunal of the considerable volume of evidence that was (eventually) exchanged between the parties but never admitted as evidence in the proceedings or the subject of cross-examination.
Whether the evidence of one or other of parties to Tribunal proceedings is found to be irrelevant to the issues in dispute, non-supportive of grounds for any of the orders sought, misconceived or had no tenable basis are issues that a Tribunal can make findings upon when a hearing of such issues has taken place, the Tribunal has considered the tendered evidence, listened to the oral evidence of witnesses, and received the parties submissions on the substantive issues. Those events have not occurred here and the Tribunal is therefore not, in determining the present costs application, in a position to make the findings sought in application grounds 2 and 3. Neither parties evidence has been tendered, nor been the subject of cross examination, because the proceedings were - on the application of the Applicants - withdrawn prior to the substantive hearing.
I accept the written submissions of the Applicants at [20] that the Tribunal cannot determine, or make findings upon, the relevance of the Applicants evidence or whether or not such evidence establishes grounds for any of the orders sought without a hearing on the merits. I accept the Applicants submissions as to the applicability of Dehsabzi v The Owners Strata Plan number 83556 [2019] NSWCATAP65 where the Appeal Panel held, in relation to an application for costs of an abandoned appeal: "It is not appropriate for the Appeal Panel to embark upon a determination of the substantive issues in an Appeal which has been withdrawn for the purpose of determining costs. When a matter has been decided without a Hearing and there has been no Hearing on the merits, the factor that usually determines costs, being the success of one of the parties, is absent."
I further agree with the Appeal Panel's adoption of the comments of McHugh, J in The Minister for Immigration and Ethnic Affairs for the Commonwealth of Australia ex Parte Lai Qin [1997] HCA6 that the circumstances in which the discretion to make a costs order may be exercised in the absence of a hearing of the merits where a finding could be made that one party was almost certain to have succeeded, would be considered rare.
The final two (2) areas raised by the parties in their submissions relate to, firstly, the contention that as fresh proceedings have been brought costs incurred by the Respondents will be the same in the fresh proceedings as in the dismissed proceedings and are therefore not thrown away; secondly, the Respondents contention that costs ought be on an indemnity basis.
Dealing with the first submission, there is insufficient evidence before the Tribunal to justify resisting the costs application on the basis outlined. There is insufficient evidence as to the asserted fresh proceedings nor as to the progression of such proceedings. The Applicants in their letter of 23 May 2019 to the Tribunal advise that it was their intention to file a fresh Application in a substantially identical form to the dismissed Application subject to: 1. The removal of Mr Kallaway as a Respondent. 2. The removal of Order 5. 3. Updating the contact details from LePage Lawyers to Strata Specialist Lawyers, and 4. Updating the Strata Manager details from Result Property Group to Jamesons Strata Management.
The Applicants contend that although the refiled Application is yet to be determined, the costs incurred by the Respondents up until 23 May 2019 are costs that are likely to be incurred in respect of the refiled Application and that that is a special circumstance which, pursuant to s60(3)(g), the Tribunal ought have regard to. I reject that submission and do not consider it to be a matter that the Tribunal should consider relevant in its determination as to whether special circumstances exist that warrant an order for costs being made. This for the following reasons: 1. The proceedings in respect of which the costs application is made have been withdrawn then dismissed. 2. The application is not made in ongoing proceedings such as in circumstances where an Application is amended or a hearing is adjourned in circumstances where the party resisting a costs application argues that it is only the moving parties costs thrown away by reason of the amendment, or costs thrown away by reason of the adjournment, that ought be the subject of an order. 3. There is no evidence as to what orders have been made in respect of the refiled Application. 4. On the determination of the refiled Application the parties thereto will be at liberty to seek orders including - if s62(2) of the Act is satisfied - orders as to costs.
The Respondents submit that costs should be paid on an indemnity basis. Their written submissions refer, incorrectly, to "the Court" having a discretion to order indemnity costs. The submissions do not provide the Tribunal with authority as to the awarding of costs on an indemnity basis under s60 of the Act. The Authorities relied on in the Respondents written submissions refer to circumstances where a party has engaged in misconduct, unreasonable action, relevant delinquency in connection with the conduct of proceedings, the maintenance of a hopeless claim, or where proceedings were conducted in a way that has caused unreasonable delay and expense.
I do not, in these Reasons, make any finding that the Tribunal, when exercising the jurisdiction to award costs pursuant to s60 of the Act is entitled, by reason of subsection (4)(a) or (b), to order that such costs be paid - in whole or in part - on an indemnity or solicitor/client basis. Rather, I am not persuaded that there is sufficient evidence of conduct of the type referred to in the Respondents submissions to warrant costs being payable on an indemnity basis.

ORDERS

The Applicants are to pay the Respondents costs of the proceedings, such costs to include the costs of the present Application.

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: 29 March 2022

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