Shah v The Owners- Strata Plan No. 7655 ( No. 2)

The application for costs by the Owners Corporation

1. The Owners Corporation relied on section 60(2) and (3) of the NCAT Act, submitting that there were special circumstances warranting an award of costs in its favour. The Owners Corporation relied on three matters which it said constituted special circumstances. It submitted that:

(a) None of the twelve grounds of appeal relied on by Ms Shah was successful. Ms Shah only succeeded on the basis of a different ground first raised by the Appeal Panel during the hearing of the appeal;

(b) Ms Shah's oral submissions were " a re-hash and waste of time". The appeal could have been determined on the papers; and

(c) The appeal was otiose, that is, unnecessary

1. At [14] of the Reasons we set out the twelve grounds of appeal. At [15]-[16] of the Reasons we expressed some criticism of the way in which the grounds of appeal had been framed and at [17] of the Reasons we reframed the grounds of appeal into four contentions. The second contention was that Special By-Law 19 was harsh, unconscionable or oppressive because it imposed an absolute prohibition and did not give a lot owner the opportunity to demonstrate that the relevant proposal would not have an adverse impact on other lot owners. This reframed appeal grounds 4,5,6 and 12.
2. At [49] of the Reasons we concluded that Special By- Law 19 was harsh , unconscionable or oppressive because it did not require the Owners Corporation to give consideration to the individual circumstances of a lot owner's proposal, which might demonstrate that the proposal was atypical and did not affect other lot owners. This upheld those grounds of appeal encapsulated in what is described above as the second contention.
3. Whilst certain integers in our reasoning in reaching this conclusion developed from our own analysis of the decision in Cooper v The Owners- Strata Plan No. 58068 [2020] NSWCA 250 and from exchanges with the legal representatives during the course of argument on the hearing of the appeal, it is incorrect to claim that none of the twelve grounds of appeal was successful. This submission by the Owners Corporation is not accepted.

1. The oral submissions of both parties were of significant value to us in reaching our determination. Oral exchanges with the representatives of both parties concerning the implications to be drawn from the wording of Special By-Law 19 assisted us greatly in refining the issues.
2. Concessions made by the representative for Ms Shah during the course of the argument were made correctly and were of assistance to us in narrowing the issues. As submitted by Ms Shah, appropriate concessions and reframing of arguments by legal representatives in the course of oral argument are to encouraged rather than censured. In this case they are certainly do not amount to special circumstances warranting an adverse costs order. This submission by the Owners Corporation is not accepted.

1. The Owners Corporation submission on this issue involved a number of elements. First, the Owners Corporation recounted that a by-law proposed by Ms Shah to approve her proposed renovations was rejected by the Owners Corporation ; the Tribunal rejected an application by Ms Shah for an order under section 149 of the Strata Schemes Management Act 2015 (SSMA) that her proposed by-law was unreasonably refused; and Ms Shah had not appealed that decision. These are matters of record and are referred to at [4],[6] and [7] of the Reasons.
2. Secondly, the Owners Corporation submitted that the Tribunal's reasons for rejecting Ms Shah's proposed by-law therefore still stand and cannot be re-litigated because of an issue estoppel.
3. Thirdly, the Owners Corporation asserted that the proposed renovations including a second bathroom were nevertheless carried out by Ms Shah without the approval of the Owners Corporation. This does not wholly accord with the Tribunal's reasons at [170], to which we referred to at [6] of the Reasons. At [6] of the Reasons we stated that the Tribunal had noted at [170] that there was a degree of artificiality in adjudicating on Ms Shah's application under section 149 of the SSMA because on 18 May 2024 the Owners Corporation had passed a different by-law proposed by Ms Shah which permitted a revised proposal for only one bathroom in place of the existing kitchen and that at the time the Tribunal hearing the works agreed to by the Owners Corporation on 18 May 2024 were partially completed. The Tribunal had made certain findings of fact about the revised proposal at [72]-[73] and [77]-[86].
4. Fourthly, the Owners Corporation stated that as the works were carried out by Ms Shah without the required approval, they may be subject to a reinstatement application by the Owners Corporation. The Owners Corporation asserted that Ms Shah still required retrospective approval for her unauthorised works and if that approval was refused for the same merit reasons as its original refusal, Ms Shah could not challenge that refusal , despite winning the appeal. The Owners Corporation claimed that " to the extent the Appellant commenced this appeal in order to have illegally carried out works approved or ratified at some point in the future, this whole appeal has been a waste of both parties' time and money".
5. Ms Shah did not address the submissions by the Owners Corporation to the effect that the appeal was otiose. In its submissions in reply the Owners Corporation noted this and submitted that "it can be inferred that [Ms Shah] does not dispute, and accepts, the submissions made by the [Owners Corporation]".
6. Whatever the reasons may have been for Ms Shah not to respond in terms to these submissions by the Owners Corporation, we cannot accept them. Insofar as the Owners Corporation made submissions about the nature of the renovations in fact carried out by Ms Shah, they do not accord with the findings made by the Tribunal to which we have referred and there was no evidence put before us to establish those factual matters. Insofar as the submissions by the Owners Corporation made predictions about future action it may take or speculated as to Ms Shah's intentions in bringing the appeal, again this was not the subject of any evidence put before us which would justify us making findings of this nature.
7. Even if all the factual assertions and predictions made by the Owners Corporation in relation in these submissions could be accepted, they would not in our view warrant a conclusion that the appeal successfully challenging the legality of Special By-Law 19 adopted by the Owners Corporation was unnecessary. Absent a successful appeal, Special By-Law 19 would have stood as an unlawful impediment to potential renovations by Ms Shah.
8. In our view none of the matters raised by the Owners Corporation constitute special circumstances which would justify us making an order for costs in favour of the Owners Corporation as the unsuccessful party to the appeal. We propose to dismiss the application for costs by the Owners Corporation.

1. Ms Shah has not sought an order for the costs of the appeal. but has sought an order for costs in relation to the costs application brought by the Owners Corporation.
2. A preliminary issue in respect of this application has been raised by the Owners Corporation. It has submitted in reply that the Tribunal has no power to make an order for costs in respect of its costs application. It submits that this is because the Tribunal doers not have power to make a costs order for part of the proceedings, only " in relation to proceedings" under section 60 (2) of the NCAT Act. The Owners Corporation did not cite any authority in support of this submission.
3. We very much doubt the correctness of this submission by the Owners Corporation and strongly consider the better view to be that the Tribunal has power to make an order for costs in respect of a costs application brought before it for determination. This is supported by the terms of section 60(2) of the NCAT Act, which refer to the "proceedings before it". "Proceedings" is not a defined term in the NCAT Act. However the expression is used in various places in the Act to indicate that a broad interpretation is appropriate, e.g. section 50 of the Act, which deals with when a hearing is required and when it may be dispensed with in proceedings. We consider the better view to be that the only proceedings currently before us are the costs applications, the substantive appeal having been determined.
4. The view which we prefer is also emphasised by section 60(5)(b) of the NCAT Act which defines "costs" to include "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". The second limb of this definition supports the view that costs may be awarded in respect of an application for costs.
5. It is however, not appropriate nor necessary to express a final view on this submission by the Owners Corporation. It is not appropriate because the issue has only arisen in reply by the Owners Corporation so we have not had the benefit of submissions on the issue from Ms Shah. It is not necessary because we have determined that even if we have power to make an order in favour of Ms Shah in respect of the costs application, we would not exercise our discretion to do so.
6. Whilst we consider the application for the costs of the appeal by the Owners Corporation, as the unsuccessful party to the appeal, to have been weak, we do not consider that the application unreasonably prolonged the proceedings. Nor do we consider the application to have been frivolous or misconceived, particularly in circumstances where the submissions by Ms Shah did not address one of the bases on which the Owners Corporation sought an order for costs.
7. In these circumstances we will dismiss the application by Ms Shah for the costs of the costs application.

(1) Order pursuant to section 50 (2) of the Civil and Administrative Tribunal Act 2013 dispensing with an oral hearing on the question of costs.

(2) The respondent's application for the costs of the appeal is dismissed.

(3) The appellant's application for the costs of the costs application by the respondent 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.