The Owners-Strata Plan No 102171 v Ceerose Pty Ltd; Zone Q Milsons Point Development Pty Ltd v Ceerose Pty Ltd; Ceerose Pty Ltd v Southern Cross Climate Control Pty Ltd (No 3)

Catchwords: COSTS – s 60 Civil and Administrative Tribunal Act 2013 (NSW) – r 38 Civil and Administrative Tribunal Rules 2014 (NSW) – multiple related proceedings heard together – special circumstances established

Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW)
Civil and Administrative Tribunal Rules 2014 (NSW)
Civil Procedure Act 2005 (NSW)
Design and Building Practitioners Act 2020 (NSW)
Home Building Act 1989 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited: Abdelmessiah v Lifestyle Marketing Pty Limited [2023] NSWCATAP 152
Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25
FZK v Secretary, Department of Communities and Justice (No 4) [2025] NSWCATAP 278
Hanave Pty Ltd v Wine Nomad Pty Ltd; Wine Nomad Pty Ltd v Hanave Pty Ltd (No 2) [2022] NSWCATAP 362
Hoare v Taylormade Residential Pty Ltd [2022] NSWSC 1359
Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186
Owers-Brown v The Owners-Strata Plan No 92562; Nakkan v The Owners-Strata Plan No 92562 (No 2) [2026] NSWCATCD 11
Taylormade Residential Pty Ltd v Hoare [2021] NSWCATAP 182
The Owners – Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273
The Owners – Strata Plan no 67608 v The Owners – Strata Plan no 67607; PINN 386 Pty Ltd v The Owners – Strata Plan no 67607; The Owners Strata Plan 67607 v The Owners – Strata Plan no 67608 and PINN 386 Pty Ltd (No 2) [2026] NSWCATAP 30
The Owners-Strata Plan No 102171 v Ceerose Pty Ltd; Zone Q Milsons Point Development Pty Ltd v Ceerose Pty Ltd; Ceerose Pty Ltd v Southern Cross Climate Control Pty Ltd [2025] NSWCATCD 137
The Owners-Strata Plan No 102171 v Ceerose Pty Ltd; Zone Q Milsons Point Development Pty Ltd v Ceerose Pty Ltd; Ceerose Pty Ltd v Southern Cross Climate Control Pty Ltd (No 2) [2026] NSWCATCD 1
The Owners-Strata Plan No 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256
The Owners-Strata Plan No 77109 v Gokani-Robins Pty Ltd (No 2) [2023] NSWCATAP 165
Thornton v Desire Constructions Pty Ltd [2020] NSWCATAP 116
Vella v Mir (No 3) [2020] NSWCATAP 17
White House Developments Pty Ltd v The Owners - Strata Plan No 70276 (No 2) [2025] NSWCATAP 92

Texts Cited: None cited

Category: Costs

Parties: Case Number 2022/00400982
The Owners-Strata Plan No 102171 (Applicant)
Ceerose Pty Ltd (First Respondent)
Zone Q Milsons Point Development Pty Ltd (Second Respondent)
Case Number 2023/00385628
Ceerose Pty Ltd (Applicant)
Southern Cross Climate Control Pty Ltd (Respondent)
Case Number 2023/00414656
Zone Q Milsons Point Development Pty Ltd (Applicant)
Ceerose Pty Ltd (Respondent)

Representation: Counsel:
Case Number 2022/00400982
P Bambagiotti (Applicant)
R Wathukarage (Second Respondent)
Case Number 2023/00385628
D Woods (Respondent)
Case Number 2022/00414656
R Wathukarage (Applicant)
Solicitors:
Case Number 2022/00400982
Bannermans Lawyers (Applicant)
J Cameron Lawyers (First Respondent)
HFW Australia (Second Respondent)
Case Number 2023/00385628
J Cameron Lawyers (Applicant)
Barry Nilsson Lawyers (Respondent)
Case Number 2023/00414 656
HFW Australia (Applicant)
J Cameron Lawyers (Respondent)

File Number(s): Case Number 2022/00400982; Case Number 2023/00385628; Case Number 2023/00414656

Publication restriction: Nil

REASONS FOR DECISION

1. This is a costs application arising from the decision in the substantive proceedings dated 20 November 2025 (The Owners-Strata Plan No 102171 v Ceerose Pty Ltd; Zone Q Milsons Point Development Pty Ltd v Ceerose Pty Ltd; Ceerose Pty Ltd v Southern Cross Climate Control Pty Ltd [2025] NSWCATCD 137). That decision included a procedural timetable to deal with the issue of costs.

2. It is appropriate to dispense with a hearing under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). No party who has provided costs submissions has sought a hearing on the issue of costs. Parties have been given a reasonable opportunity to make costs submissions, and it is consistent with s 36(1) of the NCAT Act to determine the issue of costs based on the written submissions and documents provided by the parties.

3. In this decision, any reference to “the owners corporation” is a reference to The Owners-Strata Plan No 102171; any reference to “the builder” is a reference to Ceerose Pty Ltd; any reference to “the developer” is a reference to Zone Q Milsons Point Development Pty Ltd; and any reference to “the sub-contractor” is a reference to Southern Cross Climate Control Pty Ltd.

4. There was also an unsuccessful application by the owners corporation to re-open its case, with the decision published on 19 January 2026 (The Owners-Strata Plan No 102171 v Ceerose Pty Ltd; Zone Q Milsons Point Development Pty Ltd v Ceerose Pty Ltd; Ceerose Pty Ltd v Southern Cross Climate Control Pty Ltd (No 2) [2026] NSWCATCD 1). In that application, the Tribunal reserved the issue of costs and varied the procedural directions dealing with the disposition of the issue of costs in the substantive proceedings to incorporate further costs submissions.

5. This costs decision is predicated on knowledge of the decisions dated 20 November 2025 and 19 January 2026. Both of those decisions contain extensive detail. The contents of those decisions will only be referred to as necessary to explain determination of the issue of costs.

6. The proceedings involved an application by the owners corporation against the builder and developer seeking work orders under s 48O of the Home Building Act 1989 (NSW) (HB Act) for breach of the statutory warranties under s 18B of the HB Act. The developer brought its own proceedings against the builder seeking a contractual indemnity from any liability to the owners corporation. The builder brought its own proceedings against the sub-contractor for breach of the statutory warranties under s 18B of the HB Act; and for breach of contract.

7. After the proceedings were determined in the decision of 20 November 2025, the owners corporation brought an application to re-open the proceedings against the builder and the developer. In the course of that application, the builder argued that if the owners corporation was granted leave to re-open, the builder should also be granted leave to re-open against the sub-contractor.

8. There has been an internal appeal made to the Appeal Panel in respect of the Tribunal proceedings. In that context, the parties seek the issue of costs be determined prior to the disposition of the appeal, so that leave to amend the appeal, or bring a further appeal, can be considered by the parties (White House Developments Pty Ltd v The Owners - Strata Plan No 70276 (No 2) [2025] NSWCATAP 92 at [37]-[47]).

9. In summary:

10. The owners corporation succeeded in proving breach of statutory warranties against the builder and developer in respect of some defect items; but failed to establish that a work order should be made in respect of other defect items due to the failure of the owners corporation to adduce sufficient evidence to determine an appropriate scope of works to rectify. That failure involved the interaction between the provisions of the Design and Building Practitioners Act 2020 (NSW) (DBP Act) and the evidence of the owners corporation’s expert on the appropriate scope of works to rectify. The scope of works for some defect items did not require a design under the DBP Act, and the owners corporation was successful in obtaining a work order in respect of those defect items.

11. There were some defect items the owners corporation failed to establish a breach of the statutory warranties under s 18B of the HB Act.

12. The owners corporation failed in the application to re-open the proceedings under s 38(1) of the NCAT Act.

13. The developer failed in its proceedings against the builder.

14. The builder failed in its proceedings against the sub-contractor.

Costs Submissions and Documents

10. The costs submissions and documents of the parties are as follows:

11. Owners corporation dated 2 February 2026.

12. Developer dated 16 February 2026.

13. Sub-contractor dated 2 February 2026 (submissions) and affidavit of Ms C. Sainsbury, Solicitor dated 2 February 2026.

14. No costs submissions were lodged and served by the owners corporation that post-date its costs submissions made in the context of opposing the owners corporation’s application to re-open. However, the builder had previously asserted in pleadings that the owners corporation should pay its costs of the proceedings in which it was sued by the owners corporation; and the sub-contractor should pay its costs in the proceedings in which it sued the sub-contractor.

Owners Corporation

11. The owners corporation’s submissions are summarised as follows:

12. The owners corporation seeks an order that the builder and developer jointly and severally pay the owners corporation’s costs of the proceedings from 15 March 2024 onwards on the ordinary basis, as agreed or assessed.

13. By reason of r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules), the Tribunal may make a costs order without engagement of the provisions of ss 60(1)-(3) of the NCAT Act (which require “special circumstances” to make a costs order in favour of a party) because the amount claimed or in dispute in the owners corporation’s proceedings exceeded $30,000.

14. There are “conflicting authorities” as to what the amount “claimed or in dispute” in s 38(2)(b) of the NCAT Act means.

15. In Taylormade Residential Pty Ltd v Hoare [2021] NSWCATAP 182 (Taylormade) at [43], the test was not the actual monetary amount claimed, but an “assessment of whether the amount truly in issue, or put another way, the true value of the work in issue, is more than $30,000” based on the “available evidence” in the proceedings.

16. In Thornton v Desire Constructions Pty Ltd [2020] NSWCATAP 116 (Desire C**onstructions) at [89] the Appeal Panel held that r 38(2)(b) was determined by either (a) the amount claimed in the application; or (b) the amount claimed at the commencement of the proceedings. The Appeal Panel should follow the approach in Desire Constructions as it is consistent with the approach taken n Abdelmessiah v Lifestyle Marketing Pty Limited [2023] NSWCATAP 152 at [57].

17. Taylormade was appealed to the Supreme Court, including a ground of appeal that the Appeal Panel misapplied the principles in The Owners-Strata Plan No 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256 (Malachite). The Supreme Court dismissed that ground of appeal without detailed consideration because it did not identify a question of law (Hoare v Taylormade Residential Pty Ltd [2022] NSWSC 1359 at [38] and [59]).

18. The owners corporation cited Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 (TriCare) at [57](3) that the amount “in dispute” involved “whether there is a realistic prospect that…the wealth of the…party would be changed by more than $30,000…” or whether the “right claimed by the party will prejudice the other party to an amount in excess of $30,000” and asserted that this was inconsistent with the Appeal Panel decisions in Malachite at [95]; [97]; [109]-[110]; Hanave Pty Ltd v Wine Nomad Pty Ltd; Wine Nomad Pty Ltd v Hanave Pty Ltd (No 2) [2022] NSWCATAP 362 at [40]; and The Owners-Strata Plan No 77109 v Gokani-Robins Pty Ltd (No 2) [2023] NSWCATAP 165 at [23].

19. The submissions refer to other decisions, and assert there is no clear line of authority in respect of whether the amount “in dispute” means a realistic prospect of change in wealth/value of the rights affected; or the narrower approach identified in Malachite (and the subsequent authorities referring to Malachite).

20. It is “common ground” that the cost of rectifying the mechanical air-conditioning defects sought pursuant to the work orders sought greatly exceeds $30,000. The cost of the rectification works exceeds $500,000, notwithstanding that an award of damages was not sought. However, the submission does not refer to any evidentiary basis for concluding that the cost of the rectification works sought (or ordered) exceeds $30,000, such as a question answered by experts during evidence, or any statement by an expert in expert evidence; or any pleading; or any oral concession by the legal representatives of the other parties at the hearing or in written submissions. Rather, it appears the owners corporation invites the Tribunal to draw its own conclusion based on the nature and extent of the works.

21. The owners corporation was the “substantially successful” party in its proceedings against the builder and the developer. It proved the existence of most of the defects and obtained significant work orders in its favour.

22. The submissions are silent on the unsuccessful application by the owners corporation to re-open its case.

Developer

23. The developer’s submissions are summarised as follows:

24. Rule 38(2)(b) of the NCAT Rules does not apply to the proceedings, because there was no amount “claimed” in respect of damages; and the amount “in dispute” did not satisfy the test in Malachite at [95], [97] [99] and [111].There was no evidence as to the cost or value of the work orders sought, and the Tribunal cannot “assume” or undertake an “evaluative process” to make the necessary finding to invoke r 38 of the NCAT Rules.

25. There are no “special circumstances” sufficient to cause the Tribunal to depart from the usual principle under s 60(1) of the NCAT Act that each party bear its own costs. Of the 19 defect items sought by the owners corporation, the owners corporation only made work orders for 6 items. This was due to the owners corporation providing insufficient evidence (s 60(3)(c) of the NCAT Act).

26. The developer was a “passive participant” in the proceedings, and did not cause delay or procedural disadvantage to any other party (s 60(3)(a) of the NCAT Act).

27. The proceedings were not complex. They did not involve “major defects.” The proceedings involved “routine defect claims” (s 60(3)(d) NCAT Act).

28. The developer’s liability was “purely statutory” and the owners corporation’s claim was primarily against the builder.

29. The owners corporation’s “own submissions seek costs only from 15 March 2024 onwards”. 15 March 2024 is the date the parties entered into a Deed resolving many of the defect issues.

30. According to the developer: “The fact that the parties were able to resolve multiple items without Tribunal intervention reinforces the conclusion that Zone Q was a model litigant and that the remaining litigation was driven by the OC’s refusal to accept the technical limitations of its remaining evidence.”

31. The owners corporation “unnecessarily disadvantaged” the developer by persisting with proceedings despite the flaws in its expert evidence.

32. The owners corporation failed in its re-opening application and should, in any event, pay the developer’s costs of that application.

33. If the Tribunal awards some costs to the owners corporation against the developer, that should be “set off” by the costs order in favour of the developer in the application to re-open. The mechanism of “apportionment” or “set off” is set out at [29] and [35].

Sub-Contractor

34. The sub-contractor’s submissions are summarised as follows:

35. The proceedings had a complex history. In the original Tribunal proceedings, the owners corporation sought damages in the amount of $500,000, or in the alternative, a work order, for rectification of building defect items against the builder and the developer. The developer then brought its indemnity proceedings against the builder; and the builder its proceedings against the sub-contractor. The builder had, during the course of the proceedings, made an unsuccessful application to transfer the builder’s proceedings against the sub-contractor to a court, by reason of court proceedings brought by the sub-contractor for debt recovery.

36. Rule 38 of the NCAT Rules applies to the proceedings, because when the owners corporation brought the original proceedings, it was seeking (as an alternative order) $500,000 in damages. The fact that by the time the hearing proceeded before the Tribunal the owners corporation was only seeking a work order under s 48O of the NCAT Act, and no longer pressed a claim for damages, was immaterial. The Tribunal should apply the principles in Malachite at [86] and [91]-[92] and find that, by reason of r 38 of the NCAT Act, common law costs principles applied such that costs follow the event.

37. The sub-contractor was entirely successful in defending the proceedings by the builder. There is no disentitling conduct, and the builder should pay the sub-contractor’s costs of the proceedings, including the preparation of costs submissions. The sub-contractor relied on the affidavit of Ms Sainsbury to support its submission that the sub-contractor had attempted to obtain agreement that costs of the builder’s proceedings should follow the event, but the builder did not agree.

38. In respect of the re-opening application, the owners corporation should pay the sub-contractor’s costs, as the sub-contractor had a right to be heard on the re-opening application notwithstanding the owners corporation sought to re-open its proceedings against the builder and developer. If such an order was not made, it is appropriate for the builder to pay the sub-contractor’s costs, because the builder was arguing that if the owners corporation was granted leave to re-open, that should extend to the builder being able to re-open against the sub-contractor. The sub-contractor had to respond to these applications, and should obtain its costs.

Costs Principles

39. Section 60 of the NCAT Act states as follows:

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.

40. Rule 38 of the NCAT Rules states as follows:

38 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.

41. Where r 38 of the NCAT Rules apply, the Tribunal has a discretion to award costs under s 60(4) of the NCAT Act that is not constrained by s 60(1)-(3). Rule 38 of the NCAT Act, when applicable, “displaces” ss 60(1)-(3) of the NCAT Act (Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186 at [201], or “modifies the application of” ss 60(1)-(3) (Vella v Mir (No 3) [2020] NSWCATAP 17 at [26])).

42. The costs discretion must be exercised judicially, which involves the application of principles that are well established at common law, and analogous principles applied by courts involving the provisions of the Civil Procedure Act 2005 (NSW) and Uniform Civil Procedure Rules 2005 (NSW) (other than principles that are inapplicable by reason of the different statutory regimes in NCAT and courts, such as the UCPR provisions that apply to Offers of Compromise where the NCAT Rules contain no equivalent provisions).

43. Applicable principles are that costs follow the event and the successful party is entitled to be awarded costs to compensate it for the costs it has incurred, subject to well established exceptions such as disentitling conduct, or proportionate costs by reason of mixed success, or the unreasonable rejection of a Calderbank offer. The discretion must be exercised judicially (Vella v Mir (No 3) [2020] NSWCATAP 17 at [28]-[29]; Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186 at [206]). Rule 38 of the NCAT Rules is the exception to s 60(1)-(3) of the NCAT Act.

44. If Rule 38 of the NCAT Rules does not apply, but rather ss 60(1)-(3) applies, the principles summarised in FZK v Secretary, Department of Communities and Justice (No 4) [2025] NSWCATAP 278 at [31]-[41] and The Owners – Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273 at [6]-[15] are invoked.

45. Briefly, the usual order is each party is to bear its own costs, unless the party seeking costs persuades the Tribunal that (a) there are “special circumstances” (which involve circumstances that are unusual, or out of the ordinary, but not necessarily to the extent of being extraordinary) by reason of one or more the matters in s 60(3) of the NCAT Act; and (b) that, additionally, the “special circumstances” are sufficient to cause the Tribunal to exercise its discretion to depart from the usual principle under s 60(1) of the NCAT Act that each party bear its own costs.

Does Rule 38 of the NCAT Rules Apply?

46. The owners corporation submits that there are conflicting lines of authority in the Appeal Panel as to what the amount “in dispute” means under r 38(2)(b) of the NCAT Act. I note that in TriCare and Malachite there was no discernible difference between the interpretation of what the amount “claimed” was (TriCare at [43]; Malachite at [61], although in Malachite it was stated that there was “no dispute” there was no amount “claimed”). Rather, any differences were focussed upon the interpretation of “in dispute.” Under r 38(2)(b) of the NCAT Act, the phrase “the amount claimed or in dispute” is disjunctive, and either the amount “claimed” or the amount “in dispute” in the proceedings is sufficient to engage r 38(2)(b) of the NCAT Rules.

47. There has been recent discussion of the purported differences between TriCare and Malachite in The Owners – Strata Plan no 67608 v The Owners – Strata Plan no 67607; PINN 386 Pty Ltd v The Owners – Strata Plan no 67607; The Owners Strata Plan 67607 v The Owners – Strata Plan no 67608 and PINN 386 Pty Ltd (No 2) [2026] NSWCATAP 30 at [43].

48. It is unnecessary for me to express a view in this decision as to whether the approach in TriCare or Malachite should be preferred under r 38(2)(b) of the NCAT Act, or to explore where there are similarities and differences between the decisions. That issue that will likely arise again in future Appeal Panel decisions. However, I note that in both TriCare and Malachite, uncertainty or lack of evidence to determine the value of the rights affected in the proceedings is an important issue (Malachite at [92]-[93]; TriCare at [58] and [64]).

49. I am satisfied that, in all of the proceedings in this matter, there are “special circumstances” sufficient to exercise my discretion to make a costs order in favour of the successful parties under ss 60(2)-(3) of the NCAT Act. It is unnecessary to determine whether r 38(2)(b) of the NCAT Rules is engaged, because the outcome is the same in any event (i.e. lead to an outcome were a costs order is made in favour of the successful party).

50. The proceedings in this matter involved:

51. 19 disputed defect items in a large strata building.

52. Extensive expert evidence.

53. Multiple hearing days.

54. All parties being legally represented.

55. Multiple related proceedings that were heard together.

56. Extensive written submissions from the parties.

57. An interlocutory dispute regarding transfer of proceedings; and a post-decision dispute as to whether the proceedings should be re-opened.

58. A decision in the substantive proceedings dated 20 November 2025 that is 580 paragraphs in length that deals with complex factual and legal issues.

59. A decision on the application for re-opening that comprises of 139 paragraphs that deals with complex legal issues.

60. I am satisfied that the nature and complexity of the proceedings (s 60(3)(d) of the NCAT Act) is “unusual” or “out of the ordinary” and that those special circumstances are sufficient for the discretion to be exercised to depart from the usual principle under s 60(1) of the NCAT Act that each party pay its own costs. Rather, it is appropriate that costs orders be made in favour of the successful parties.

61. In the owners corporation’s claim against the builder and the developer, the initial application lodged with the Tribunal sought damages of $500,000 in the alternative to a work order. It was only during the course of the proceedings that the owners corporation withdrew (or did not press) the claim for damages. If it was necessary to apply the principles in Thornton v Desire Constructions Pty Ltd [2020] NSWCATAP 116, that would be sufficient for the amount “claimed” in the owners corporation’s proceedings to exceed $30,000 under r 38(2)(b) of the NCAT Act. However, as discussed previously, it is unnecessary to apply r 38(2)(b).

62. The finding of “special circumstances” that are sufficient to exercise the discretion to make a costs order applies to each of the proceedings assessed individually. The proceedings were heard together and there were related issues that affected each proceeding (e.g. if the owners corporation failed to prove any breach of statutory warranties, there would be (other than, potentially, legal costs) for the builder to indemnity the builder for (if the contractual indemnity provisions were found to apply to give rise to an indemnity); and the builder’ claim against the sub-contractor was predicated upon the findings of defects in the owners corporation’s claim against the sub-contractor).

63. I acknowledge that the proceedings are separate proceedings, albeit heard together and involving interrelated issues. The fact that the proceedings were heard together and are interrelated is a matter that is relevant for consideration under s 60(3)(d) and (e) of the NCAT Act. However, even if assessed as individual proceedings, the nature and complexity of each of the proceedings was sufficiently unusual or out of the ordinary that I am satisfied that both (a) there are “special circumstances” under s 60(2) of the NCAT Act; and (b) those special circumstances are sufficient to depart from the usual principle in s 60(1) of the NCAT Act that each party bear its own costs.

Costs In The Owners Corporation’s Proceedings Against the Builder and the Developer Other Than The Application to Re-Open Proceedings

55. Costs principles were recently summarised in Owers-Brown v The Owners-Strata Plan No 92562; Nakkan v The Owners-Strata Plan No 92562 (No 2) [2026] NSWCATCD 11 at [85]-[93]. It is unnecessary to repeat those principles.

56. I am satisfied that the owners corporation was the successful party.

57. In 6 of the 19 defect items, the owners corporation was completely successful in providing defect and method of rectification. That is not minor or insignificant success in the full context the defect items.

58. In 8 defect items, the owners corporation failed to establish a defect.

59. In 5 defect items, the owners corporation established the defect, but failed to establish the method of rectification.

60. The degree of success on the issues in dispute is sufficient for the owners corporation to be considered the successful party in the proceedings.

61. In respect of the defect items where the owners corporation failed to establish either defect, or the method of rectification, it is open to the Tribunal to make a proportionate costs order. However, a proportional costs order (i.e. an order that a party is only paid a percentage of its costs to reflect its lack of success on some issues) is usually only made if an issue is clearly dominant or separable.

62. I do not regard the legal issues pertaining to method of rectification to be clearly dominant or severable. The expert evidence dealt with the issues of defect and method of rectification. The Tribunal’s findings that the owners corporation had failed to establish an appropriate scope of works to make a costs order involved the application of legal principles to factual findings. The hearing time or evidence was not extended by reason of a distinction between the expert evidence on defect and method of rectification. The experts addressed both issues, and it was necessary for the Tribunal to address both issues in its decision.

63. As acknowledged in Owers-Brown v The Owners-Strata Plan No 92562; Nakkan v The Owners-Strata Plan No 92562 (No 2) [2026] NSWCATCD 11 (Owers-Brown), there are circumstances where, because each party has had substantial success against the other party, the appropriate order is that each party bear its own costs of the proceedings, even if the circumstances do not warrant a proportionate costs order.

64. I am not satisfied that the circumstances of this matter enliven a principle that each party bear its own costs due to substantial success against the other party. In this matter, the owners corporation succeeded in obtaining work orders against the builder and developer that were not insignificant or insubstantial. Granted, the owners corporation did not succeed on all defect items. However, that is an entirely different situation to Owers-Brown, where the lot owner not only failed in obtaining the scope of works she sought, but also failed in a damages claim against the owners corporation.

65. I reject the submission of the developer that it should escape liability for a costs order because it was not the party who performed the residential building work, or that it was a passive party in the litigation. The developer owes the statutory warranties under s 18B of the HB Act, just as the builder does. It is a matter for any owners corporation as to whether it seeks to enforce the statutory warranties against the builder; or the developer; or both. In these proceedings, the developer made no admission that the owners corporation had proved any breach of statutory warranties. Any decision of the developer not to cross examine witnesses; or adduce its own lay evidence or expert evidence (as distinct from relying on evidence of other parties) was a strategic decision that does not relieve the developer from being jointly and severally liable with the builder to pay the owners corporation’s costs of the proceedings (other than in respect of the re-opening application).

66. Accordingly, I am satisfied that in the owners corporation’s proceedings against the builder and the developer, the appropriate order is for the builder and developer to pay the owners corporation’s costs of and incidental to the proceedings as agreed or assessed on the ordinary basis from 15 March 2024 onwards, with the exception of the application to re-open.

Costs in the Developer’s Proceedings Against the Builder

67. The developer was entirely unsuccessful in its claim that the builder should indemnity it. The builder has made clear in pleadings and submission that it sought costs against the developer in the event that the developer’s proceedings failed.

68. I am satisfied that the appropriate order is that the developer pay the builder’ costs as agreed or assessed.

Costs in the Builder’s Proceedings Against the Sub-Contractor

69. The builder was entirely unsuccessful in its claims against the sub-contractor. The sub-contractor has submitted that the builder should pay its costs as agreed or assessed. I am satisfied that is the appropriate order to make, in circumstances where the builder was the successful party. There is no appropriate reason not to order the builder pay the sub-contractor’s costs as agreed or assessed. This will also include the unsuccessful interlocutory application by the builder to transfer its proceedings against the sub-contractor to the Local Court.

Costs of the Application to Re-Open

70. The owners corporation was unsuccessful in its application to re-open. I am satisfied that it should pay the costs of the builder, the developer, and the sub-contractor in respect of this application. Although the application to re-open was against the builder and the developer, it its outcome clearly affected the sub-contractor. The sub-contractor had a right to be heard in respect of the re-opening application, and would not have incurred those costs if the owners corporation had not made the application to re-open. The fact that the builder, in its re-opening submissions, sought that if the re-opening was granted it should extend to the builder being granted leave to re-open against the sub-contractor does not cause me to take a different approach because it was the owners corporation who brought the re-opening application in the first place.

ORDERS

1. A hearing on the issue of costs is dispensed with under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).
2. In Case Number 2022/00400982 Ceerose Pty Ltd and Zone Q Milsons Point Development Pty Ltd are jointly and severally to pay the costs of The Owners-Strata Plan No 102171 from 15 March 2024 on the ordinary basis as agreed, or assessed, exclusive of the application to re-open.
3. In Case Number 2023/00385628 Ceerose Pty Ltd is to pay the costs of Southern Cross Climate Control Pty Ltd on the ordinary basis as agreed, or assessed, exclusive of the application to re-open.
4. In Case Number 2023/00414656 Zone Q Milsons Point Development Pty Ltd is to pay the costs of Ceerose Pty Ltd on the ordinary basis as agreed, or assessed, exclusive of the application to re-open.
5. In Case Number 2022/00400982, Case Number 2023/00385628, and Case Number 2023/00414656 The Owners-Strata Plan No 102171 is to pay the costs of Ceerose Pty Ltd, Zone Q Milsons Point Development Pty Ltd and Southern Cross Climate Control Pty Ltd of the application to re-open determined by the Tribunal on 19 January 2026 on the ordinary basis, as agreed or assessed.
6. The costs orders include the costs of, and incidental to, the proceedings.

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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