Russo v The Owners - Strata Plan No 53188 (No 2)

64 By considering the authorities of Lai Qin and Ibrahim v PERI Australia Pty Limited in the context of whether there were special circumstances and not in the context of determining the costs application in accordance with rule 38, we are satisfied that the Senior Member made an error on a question of law. Ground 3 is upheld. Having allowed the appeal on the basis of an error on a question of law, there is no need for us to consider the other grounds.

1. Sections 60(1) and (2) of the NCAT Act provide that each party to proceedings in the Tribunal is to pay its own costs unless there are "special circumstances" warranting an award of costs. However, in proceedings in the Consumer and Commercial Division of the Tribunal, s 60 of the NCAT Act is subject to rules 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (NSW). Rule 38 provides:

Costs in Consumer and Commercial Division of the Tribunal

(1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal.

(2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if-

(a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10(2) of Schedule 4 to the Act in relation to the proceedings, or

(b) the amount claimed or in dispute in the proceedings is more than $30,000.

38A Costs in internal appeals

(1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of-

(a) enabling legislation, or

(b) the Division Schedule for the Division of the Tribunal concerned, or

(c) the procedural rules.

(2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.

1. There was no issue in the appeal that the dispute before the Tribunal at first instance involved a claim in excess of $30,000. As such r 38 was the applicable costs regime, not s 60 of the NCAT Act.
2. It follows that pursuant to r 38A(2) of the NCAT Rules, we must apply the first instance costs provisions when deciding whether to award costs in relation to the appeal.
3. The appellant's submissions did not address whether its claim for a costs order was made on the basis that special circumstances apply or, alternatively, was made upon the basis that the Appeal Panel may award costs in the absence of special circumstances.
4. Accordingly, we issued directions requiring the appellant to file and serve written submissions setting out whether s 60 of the NCAT Act or rr 38 and 38A of the Rules apply to the appellant's application and, if so, whether the amount in dispute in the appeal is more than $30,000. The directions required the appellant to address prior Appeal Panel authorities such as Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 and RBV Builders Pty Ltd v Chedra (No 2) [2021] NSWCATAP 393. The directions also required the respondent to file any submissions in reply thereafter. The last date for the filing of the respondent's submissions was 30 January 2026. Neither the appellant nor the respondent has filed any submissions in response to the Appeal Panel's directions. The directions stated that if either party disputes that a hearing can be dispensed with and an order made under s50(2) of the NCAT Act then they should address that issue in their submissions.
5. An explanation of the operation of rr 38 and 38A was set out in the Appeal Panel decision in Allen v TriCare (cited above). It is helpful to set out what the Appeal Panel held in that case.
6. Allen v TriCare concerned a dispute between residents of a residential park regulated by the Residential Parks Act 1998 and the owners of the park. At first instance, the owner was successful in obtaining orders for the termination of the residential site agreements and orders for possession. The residents appealed and the appeals were dismissed. The owner made application for an order that its costs of the appeal be paid by the residents ([5] of the Allen v TriCare decision). The appeals were filed after 1 January 2016 and the Appeal Panel held that r 38A applied to the appeals [22].
7. At [23], the Appeal Panel stated that in the appeals, r 38A(2) requires the Appeal Panel to apply the first instance costs provisions which is s 60 as relevantly modified by r 38(2) when deciding whether to award costs of the appeals. At [24], the Appeal Panel held that r 38(2) "allows the Appeal Panel to award costs in the absence of special circumstances warranting such an award if either of the requirements in (a) or (b) of that subrule is satisfied. Rule 38(2)(a) was not relevant. At [26] the Appeal Panel held that:

(1) Under r 38(2)(b) the Appeal Panel can award costs even in the absence of special circumstances for any of the appeals if "the amount claimed or in dispute in the proceedings is more than $30,000"; or

(2) Under s 60(2) the Appeal Panel can award costs for any of the appeals if the amount claimed or in dispute is $30,000 or less, but only if it is satisfied that there are special circumstances warranting such an award.

1. The Appeal Panel then went on to consider whether costs could be awarded under r 38(2)(b). This involved determining whether the amount claimed or in dispute in the proceedings was more than $30,000.
2. The Appeal Panel considered the meaning of the word "proceedings" and in this case a relevant issue was the fact that the residents had filed individual proceedings that had been heard together. The residents filed one Notice of Appeal but, at the request of the Tribunal's registry then filed individual Notices of Appeal. At [41] the Appeal Panel held that the appeals were to be treated as separate proceedings for the purposes of r 38. At [42] the Appeal Panel held that it followed that if r 38(2)(b) is to apply to any of the five appeals under consideration either the amount claimed or the amount in dispute under that appeal must be more than $30,000.
3. At [45] the Appeal Panel held that the proceedings did not involve a claim for any sum. What was sought was an order for termination and possession.
4. At [46], the Appeal Panel held that the amount "claimed" in the proceedings constituted by each appeal was not more than $30,000, and the Appeal Panel then went on to consider whether the amount "in dispute" was more than $30,000.
5. At [57], the Tribunal stated that in "the circumstances of the present appeals and having regard to the specific wording of r 38, it appears to us in applying r 38(2)(b)... the determinative factor is the amount in each appeal, not the amount in dispute in the proceedings at first instance".
6. The Appeal Panel decided that what was in dispute were rights of possession in respect of residential sites and that there was no evidence that such rights had a value of more than $30,000. Accordingly r38(2((b) did not apply.
7. Since the Allen v TriCare decision there have been many Appeal Panel decisions making it clear that in considering whether to make an order concerning costs of the appeal in the absence of special circumstances, the determinative factor is the amount in dispute in each appeal and not the amount in dispute in the proceedings at first instance.
8. One such decision is that of RBV Builders Pty Ltd v Chedra (No 2) NSWCATAP393. There the appeal panel referred to and applied the passages from Allen v Tricare referred to above . That case concerned an appeal from a decision made at first instance that the appellant pay the respondent's costs. The appeal panel held that "it is not practical to characterise [ those costs ] as an amount "claimed" or "in dispute" in the proceedings"[43]. The Appeal Panel held that r38 does not authorise the award of costs of the appeal in the absence of special circumstances.
9. In Prestige Homez Pty Ltd v Ghag (No 2) [2025] NSWCATAP 137, the Appeal Panel again considered the relationship between rr 38 and 38A. In that case the Tribunal at first instance had ordered the builder to pay the owner's costs of the proceedings. The Appeal Panel set aside the first instance costs order and made an order instead that there be no order as to costs (with the intent that each party would bear its own costs incurred at first instance). The builder then made an application for an order for costs of the appeal to be made in its favour. At [35], the Tribunal noted that the builder's submissions did not include any material as to how the amount claimed or in dispute in the decision under appeal exceeded $30,000. The Appeal Panel declined to find that r 38 applied and then went on to consider whether there were special circumstances warranting an award for costs.
10. In our view and applying the principle set out in Allen v TriCare, we are required by r 38A to apply r 38. However, there is no evidence or other material before us which would enable us to conclude that there is an amount claimed or in dispute in the appeal proceedings of more than $30,000. Even if there was such material before us there would be an issue as to whether costs should be awarded having regard to the reasoning of the Appeal Panel in RBV. In the absence of submissions from the parties , this is not an appropriate case to reconsider the Appeal Panel decision in RBV. Accordingly, our conclusion is that we should not accede to the appellant's application to make a costs order in the absence of special circumstances. As the appellant has made no submission that there are special circumstance warranting an award of costs we must dismiss the application and make no order as to costs of the appeal.
11. The Appeal Panel orders:

(1) The appellant's application for an order that costs of the appeal be paid by the respondent is dismissed;

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

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.