The Owners - Strata Plan No 38308 v Gelder - [2024] NSWCATAP 61 - NSWCATAP 2024 case summary

NCAT Appeal Panel|2024-03-01

N/A Date of Decision: 20 September 2023 Before: D Bluth, Senior Member File Number(s): SC 22/52121 / SC 22/54495

Introduction

The Appellant commenced these proceedings below against the Respondent seeking an order under s 149 of the Strata Schemes Management Act 2015 (NSW) (SSM Act) that special By-law 1 of the Strata Plan No 38308 be amended in the form attached to the application.
It was alleged that the Respondent (a Lot owner) had unreasonably refused to consent to the amendments.
The proceedings below were withdrawn by the Appellant and consequently dismissed by the Tribunal after the Respondent provided consent to the amendment to the By-law sought. This came after the proceedings were advanced and being ready for hearing and after the Appellant incurred legal costs.
The Appellant applied for an order for costs.
The Appellant argued that there were special circumstances that warranted an order that the Respondent pay its costs under s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).
The Respondent in turn applied for an order that the Appellant pay her costs.
On 20 September 2023, the Tribunal handed down its decision (the Decision) and made the following orders: 1. The application for costs by the Applicant is dismissed. 2. The application for costs by the Respondent is dismissed. 3. The Applicant is directed to exempt the Respondent from any costs Imposition relating to these proceedings.

Decision of the Tribunal in relation to the cost application

The relevant provision is s 60 of the NCAT Act: 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.
The Tribunal set out some of the procedural background of the cost application and summarised the Appellant's costs application at [8]: "The Applicant makes the submission that the Respondent was unco-operative, did not provide the requisite consent in respect of the proposed amendment to the By-law then providing consent withdrawing that consent and providing it again, constitutes special circumstances under s60(3). There is no doubt that the proceedings were actively fought and the Respondent put forward her defence (purported reasons for not consenting) and put the Applicant to the expense of meeting these challenges."
The Tribunal noted that the Respondent in her submissions rebutted the claim for costs by pointing out that she ultimately provided consent not because of any weakness in her position but rather because she was selling the apartment: at [9].
The reasons provided by the Tribunal for dismissing the costs application were as follows (at [11]-[12]): "[11] Having considered the submissions and reviewed the circumstances of the proceedings I can find no substantiation of special circumstances warranting a costs order in favour of the Applicant. There is no conduct by the applicant pursuant to s60(3) (a) or (b) or (c) that the Applicant can specifically point to, other than by generalities. I find s60(3)(d) not to be relevant at all. And there is nothing that the Respondent did, on my review of the proceedings that indicates any breach pursuant to s60(3)(f). Being uncooperative is not a breach of s36(3) of the NCAT Act. [12] The Applicant brought the proceedings and in the end achieved its goal. I dismiss the application for costs subject to the below."
The Tribunal then dealt with the Respondent's application for costs and dismissed that application.
In relation to order 3, the Decision relevantly stated (at [10], [13], [33]): "[10] She also points out that she is liable for 16% of the Applicant's costs in any event as an owner in the Strata scheme. … [13] The Respondent has brought her own application for costs. The Respondent submits that the proceedings brought by the Applicant were in essence unnecessary as s149(1) of the SSMA states that either the owners corporation or a lot owner can bring proceedings for the enforcement of the amended by-law and that it should have been the owners affected to have issued the proceedings (presumably bearing the costs themselves and not for the strata scheme). Ss 60(3)(e) and (g) are the subsections upon which the Respondent seeks to make out special circumstances. … [33] However, the Respondent's submission regarding the application pursuant to s149(1) of the SSMA has a costs consequence to the Respondent, which I accept. Accordingly, I direct that the Respondent be exempt from any impost of costs by the Applicant in relation to these proceedings."

An appeal commenced out of time

The appeal was not commenced within time.
The Notice of Appeal was lodged with the Tribunal on 18 December 2023, approximately two months beyond the 28 days allowed for filing the notice under rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW). We may, though, extend time for filing the Notice of Appeal pursuant to s 41 of the NCAT Act.
The discretionary power to grant an extension of time under s 41 of the NCAT Act is unfettered but it must be exercised judicially and having regard, amongst other things, to s 36 of the NCAT Act and the need 'to facilitate the just quick and cheap resolution of the real issue in the proceedings'. In Kelly v Szatow [2020] NSWSC 407 at [28]-[32], the Court summarised the principles that apply to an extension of time to appeal.
Relevant considerations include the length of the delay, any associated reason for such delay, the strength of the appellant's case and consideration as to whether the Respondent would be prejudiced by granting the extension: see also Jackson v Land and Housing Corporation (NSW) [2014] NSWCATAP 22 at [22].
The Appellant bears the onus of demonstrating that strict compliance with the time frame would work an injustice: see Gallo v Dawson (1990) 93 ALR 479; [1990] HCA 30.
The Respondent opposed the extension of time application. She was not able to point to any specific prejudice caused by the late filing of the Notice of Appeal. Otherwise, no submission of substance was made by the Respondent in respect of the application.

The reason for the delay

The reason for the delay is somewhat complex. The Appellant had filed a Notice of Appeal on 18 October 2023, which referred to the Decision of the Tribunal of 20 September 2023.
This appeal was filed within time on 18 October 2023. The correct file number for the proceedings in question was SC 22/52121.
The solicitor who appeared for the Appellant, Mr Atkins, explained that the difficulty arose because the Notice of Order in SC 22/52121 of 20 September 2023 also referred to the related matter of SC 22/54495. In the Notice of Appeal filed 18 October 2023, the Decision and order of 20 September was stated wrongly to be in proceedings SC 22/54495 rather SC 22/52121, the right proceedings number.
Nextly, in the appeal of 18 October 2023, by consent the appeal was withdrawn and dismissed, and orders were made on 22 November 2024 for the setting aside of the impugned costs orders of 20 September 2023 stated to be in SC 22/54495, the wrong proceedings number, and for the matter to be referred back to the Tribunal for reconsideration.
When the error in the file number was discovered, an application was made to the Appeal Panel to amend the Notice of Appeal and the order made on 22 November 2023 to refer to the correct proceedings number.
That application was dealt with by the Tribunal and was dismissed, principally on the basis that as the previous orders had been made by consent and given that the Respondent did not consent to those consent orders being amended or corrected or to the Notice of Appeal being amended, the Appellant's application would have to be dismissed.
The order dismissing the application for correction of the orders of the Appeal Panel in the initial appeal and to amend that Notice of Appeal was made on 15 December 2023.
As recorded above, the Notice of Appeal before us was lodged three days later on 18 December 2023. We note that the Appellant at the hearing of the application to correct the orders of 22 November 2023 referred to the inevitable result that a fresh appeal naming the correct file number would have to be lodged if the orders were not corrected or amended and the Appeal Panel noted that this might be the result.
It should be noted that the Appellant before us expressly stated that the Appellant was not in any way seeking to hold the Respondent to the position she adopted in the initial appeal of 18 October 2023 to consent to the setting aside of the costs orders in question.
We are of the view that the above explanation for the delay in filing the Notice of Appeal before us is reasonable.
The mishap of the solicitor for the Appellant was innocent and inadvertent. Further, the Notice of Appeal before us could have been avoided if the Respondent had agreed to have the orders of 22 November 2023 set aside, the Notice of Appeal amended, and the underlying merits of the case considered by the Appeal Panel in the initial appeal.
Accordingly, we place great weight on the satisfactory explanation for the delay provided by the Appellant.

Likelihood of success

In our view the appeal enjoys reasonable prospects of success.
Accordingly, for the reasons advanced above, we have decided to extend the time for the filing of the appeal to 18 December 2023, the time that the Notice of Appeal was lodged with the Tribunal.

The nature and competency of this appeal

The appeal is an internal appeal brought under s 80 of the NCAT Act. The orders, being in respect of costs, constitute ancillary decisions under subsection (a) of the definition of 'ancillary decision' in section 4 of the NCAT Act.
Accordingly, under s 80(2)(b) of the NCAT Act, orders 1 and 3 can be appealed as of right on a question of law or with leave of the Appeal Panel on any other grounds.
The Notice of Appeal only seeks to rely on questions of law and the Appellant before us at the oral hearing confirmed that it was only pursuing questions of law and that therefore the appeal should be treated as one of right and that no application for leave to appeal is brought.
In Hermes Nominees Pty Ltd v Shepherd [2024] NSWCATAP 36, the Appeal Panel said at [9]: "Since the questions of law become the subject matter of the appeal, it is incumbent on the appellant to identify with precision the questions of law: Ferella & Anor v Chief Commissioner of State Revenue [2014] NSWCA 378 at [22]."
Further, in Orr v Cobar (2020) 103 NSWLR 36; [2020] NSWCCA 220 at [109] it was said by Bathurst CJ and Bell P (as the Chief Justice then was) with Garling, Johnson and Lonergan JJ agreeing: "Those questions of law should be, in our opinion, what are sometimes described as 'pure questions of law'. They should not draw the Court of Criminal Appeal into questions of fact. Moreover, they must be questions whose character as a question of law can be recognised on the face of the question, and not depend upon the answer given to the question. This does not include a question which may ultimately disclose an error of law depending on an analysis of the facts but where this cannot be known without scrutiny of the facts. The construction accords with the cases we have referred to at [48] and [70] above."
The Appellant in its written submissions grouped together its grounds and we have followed this approach.
We note that ground 1.2 has been withdrawn.

The Tribunal took into account irrelevant considerations and/or erred in not providing adequate reasons

Appellant's submissions

The Appellant commenced with the legal principles underlying the Tribunal's duty to provide adequate reasons quoting in support Collins v Urban [2014] NSWCATAP 17 at [47]-[57] and Hagh v Cong [2014] NSWCATAP 47 at [20].
The Appellant then referred to the lengthy submissions and evidence in support of its costs application and contrasted it with the very brief reasons provided, in particular paragraphs [8]-[12] of the reasons as follows: "[8] The Applicant makes the submission that the Respondent was unco-operative, did not provide the requisite consent in respect of the proposed amendment to the By-law then providing consent withdrawing that consent and providing it again, constitutes special circumstances under s60(3). There is no doubt that the proceedings were actively fought and the Respondent put forward her defence (purported reasons for not consenting) and put the Applicant to the expense of meeting these challenges. [9] The Respondent in her submissions rebutting the claim for coats by the Applicant points out that she ultimately provided consent not because of any weakness in her position but rather because she was selling the apartment. [10] She also points out that she is liable for 16% of the Applicant's cost in any event as an owner in the Strata scheme. [11] Having considered the submissions and reviewed the circumstances of the proceedings I can find no substantiation of special circumstances warranting a costs order in favour of the Applicant. There is no conduct by the applicant pursuant to s60(3) (a) or (b) or (c) that the Applicant can specifically point to, other than by generalities. I find s60 (3)(d) not to be relevant at all. And there is nothing that the Respondent did, on my review of the proceedings that indicates any breach pursuant to s60(3)(f). Being uncooperative is not a breach of s36(3) of the NCAT Act. [12] The Applicant brought the proceedings and in the end achieved its goal. I dismiss the application for costs subject to the below".
The Appellant submitted that the stark contrast between the brevity of the reasons and the extent of the submissions made was enough to demonstrate that the reasons were 'simply not adequate (in a legal sense) to completely deal with the submissions and evidence'.
The Appellant referred to its evidence and submissions to the effect that the Appellant went to great lengths prior to issuing the proceedings to attempt to obtain the Respondent's consent to the relevant By-law. The Appellant contended that the Respondent was being obstructive and disingenuous in not consenting to the By-law prior to the proceedings being instituted and that conduct prior to the proceedings was relevant on the questions of costs (citing Taylormade Residential Pty Ltd v Hoare [2021] NSWCATAP 182 at [62]) and that the Tribunal ought to have considered this and dealt with this expressly in its reasons.
The Appellant accepted that it does not follow that simply because there was an error arising from inadequate reasons that the judgment should be set aside or replaced with a judgment of a different result. However, the Appellant contended that in respect of the inadequacies referred to above the result should be that the Appeal is allowed and the Decision overturned and replaced with a costs order in favour of the Appellant.
Similarly, and relatedly, the Appellant submits that the Tribunal failed to take into account, or properly take into account, the fact that the Appellant should not have been forced to bring proceedings to achieve its goal due to the unreasonable conduct of the Respondent.
Alternatively, the Appellant put that the Tribunal erred in failing to take into account relevant considerations namely the conduct of the Respondent prior to and during the proceedings. In this regard the Appellant pointed to the fact that there was a failure expressly to advert to pre-litigation conduct of the Respondent.
Submissions were put by the Respondent, who was unrepresented and replied to by the Appellant; but the substance of the Appellant's contentions remained the same.

Consideration regarding adequate reasons

We are prepared to accept that the question of whether or not the reasons were inadequate and whether or not the Tribunal erred in failing to take into account a mandatory relevant requirement raise questions of law: see Commissioner of Police, NSW Police Force v DYD [2023] NSWCATAP 244 at [11]-[18]; Starr v Johnston [2023] NSWCATAP 190 at [37]-[40].
General principles applicable to the requirement of a decision-maker to provide an adequate statement of reasons has been explained in recent decisions, including New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 at [65]-[77]; Rice Marketing Board for the State of New South Wales v Forbidden Foods Pty Limited [2020] NSWCATAP 182 at [217]-[219] and Volkswagen Group Australia Pty Ltd v Saad [2022] NSWCATAP 133 at [58]; and see too Nu-Stone Building Pty Ltd v McInerney [2023] NSWSC 67 at [23]-[24], where an application under s 62 of the NCAT Act for a statement of reasons had not been formally sought, but a written statement of reasons was in any event provided.
In Gautam v Health Complaints Commission [2021] NSWCA 85, Leeming JA with who Payne JA and Simpson AJA agreed, stated at [18]: "It will, generally speaking, be necessary for the Tribunal to apprehend the gravamen of each side's case, to attend to the central aspects of those cases, and the evidence bearing upon them, and to give reasons for the critical findings of fact and the evidence upon which they turn."
In our view, applying these principles to the reasons for decision were not inadequate. They dealt with the gravamen of each side's case and identified the reasoning for the conclusion.
Further, the Tribunal cannot be said to have failed to appreciate or take into account the evidence of the pre-litigation conduct of the Respondent. First, whether a factor is a 'relevant factor' in the sense contemplated in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 (Mason J) at 39-40; [1986] HCA 40 (Peko-Wallsend) requires a process of statutory construction. Having regard to the factors set out in s 60 of the NCAT Act, conduct prior to the commencement of the proceedings is not a 'mandatory' factor; albeit we accept it would not be a prohibited or 'irrelevant' consideration. There was no obligation on the Tribunal expressly to refer to the conduct prior to the commencement of the proceedings. Second, a reading of the Decision indicates that the Tribunal had not ignored this critical submission of the appellant; and no issue as to a breach of procedural fairness arises.
We are not persuaded that the Tribunal's reasons in this regard were inadequate, by virtue of the lack of reference to this aspect of the submissions.
The question before the Tribunal was whether or not special circumstances had been made out where there was no hearing on the merits of the case of the Appellant but where the Respondent did consent eventually to the orders sought by the Appellant.
The Respondent says that her defence was reasonable and her conduct prior to the litigation in refusing consent to the relevant By-law was reasonable but what changed was that as she was selling her unit so there was no point going through the time, trouble and costs of defending the matter.
The Appellant accepted that one of the leading statements of principle in the area of costs where there has been no hearing on the merit involves the comments of McHugh J in Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia, ex parte v Lai Qin (1997) 186 CLR 622; [1997] HCA 6 (Lai Qin).
In that case the Prosecutor achieved success by extra curial means and the issue was whether or not the Respondents should pay the Applicant's costs of the Court proceedings in light of the success achieved other than as a result of Court orders by the Prosecutor.
McHugh J stated in Lai Qin at [6]-[10]: "[6] In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. [7] In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans. [8] Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in The South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare. [9] If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases. [10] The critical question in this case then is whether or not the prosecutrix acted reasonably in bringing these proceedings and whether the respondents acted so unreasonably in not informing the prosecutor that an application to review the decision to refuse a visa was being considered that it would be proper for the Minister to pay the whole or part of the cost of the proceedings. In determining whether or not the prosecutor acted reasonably, it is necessary to mention some further facts in the matter."
The above principles also need to be considered in the light of the regime under s 60 of the NCAT Act where the Tribunal must be satisfied that there are special circumstances warranting the order of costs rather than the jurisdiction in which McHugh J was speaking where costs ordinarily follow the event. The Appellant bears the onus of demonstrating special circumstances.
In our view, it is clear that the Tribunal fully understood that the essence or gravamen of the submission being put by the Appellant was that the Respondent both before the proceedings and during the proceedings was acting unreasonably or was 'unreasonably uncooperative' in failing to provide consent to the proposed By-law. The reasons make plain that the Tribunal could not be satisfied that the Respondent's refusal to consent to the By-law proposal prior to the date she actually did change her position was unreasonable.
There was no finding on the merits in this regard and in our view it was open to the Tribunal not to be persuaded that there was an unreasonable lack of cooperation on the part of the Respondent.
In other words, the Tribunal was not convinced or satisfied that the Respondent was simply abandoning an unreasonable course of action or an unreasonable defence both before and after the litigation commenced.
Given that this conclusion was open to the Tribunal, the conclusion that none of the provision of s 60(3) applied and the finding that there was a lack of satisfaction of special circumstances were open to the Tribunal.
Accordingly, we reject these grounds of appeal.

The Tribunal erred in taking into account irrelevant considerations

Appellant's submissions

The Appellant submitted, firstly, that the proposition that she provided her consent because of her decision to sell her property should have not been referred to at all as there was no evidence to support this. The Appellant submitted that the Respondent made such an assertion in an email submission, and it ought not to have been accepted.
In our view, this does not raise a question of law. The Tribunal is not bound by the rules of evidence and can inform itself in such manner as it considers appropriate. It was not submitted that the Appellant objected to the email submission or the submission to this effect being made at the time.
Accordingly, it was open to the Tribunal to accept the proposition that the Respondent provided consent because she was selling her property.
We decline to grant leave to the Appellant to seek to overturn this finding of fact.
Nextly, the Appellant submitted that in any event, whether or not she was selling her property was essentially irrelevant to the question of whether or not in effect the Respondent capitulated or abandoned the proceedings. As we understood it the submission is that the Tribunal allowed itself to be diverted from the real question of whether or not the Respondent was justified in her position prior to abandoning her defence by considering the assertion she was only abandoning the position previously adopted because she was selling her property.
To the extent this raises a question of law as to whether the Tribunal misdirected itself as to its proper statutory task as contemplated by Craig v South Australia (1995) 184 CLR 163 at 177-178; [1995] HCA 58 (Craig) at [12], in our view, the Tribunal did not err in the way suggested by the Appellant. In the context of the chronology as a whole we do not see the Tribunal erred in noting and considering the position of the Respondent that she was abandoning what was regarded by her as a good defence because she was selling her property.
As explained above, the Tribunal plainly took the view that it could not be satisfied that the conduct of the Respondent overall was unreasonable or that she was, in effect, capitulating or surrendering based upon the weakness of her case.
As explained above, this conclusion was open to the Tribunal and hence we reject this ground of appeal.

Other relevant grounds

The Appellant nextly submitted that the reasons exposed a fundamental error at paragraph 12. The Appellant accepted that it was not irrelevant to take into account the fact that the party seeking costs was successful in the proceedings. The difficulty the Appellant had with the Decision was that the Tribunal appeared to rely upon the Appellant's success as a disentitling factor.
That is, the Tribunal purportedly took the view that because the Appellant was successful it should rest contented with that and should not seek costs.
The Appellant submitted that this misunderstood the fundamental point being made by the Appellant that the proceedings were only brought about because of the unreasonable conduct of the Respondent. This submission raises the question of law of whether there has been a breach of procedural fairness in that a critical submission of the Appellant was ignored: Kudrynski v Orange City Council [2024] NSWCA 33 at [52]; Haritos v Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92 at [202].
We reject this submission. As discussed above, the Tribunal was unable to be satisfied, the onus being on the Appellant, that the Respondent had indeed engaged in unreasonable conduct. There was no hearing on the merits and it was open to the Tribunal not to be satisfied on the limited materials available to it as to whether or not the Respondent engaged in unreasonable conduct.
Accordingly, we reject these grounds of appeal.
Similarly, the Appellant submitted that the Tribunal erred in failing to take into account a relevant considerations, namely the conduct of the Respondent prior to and during the proceedings. For reason already advanced, we reject this submission and ground of appeal.

The Tribunal erred in commenting that the proceedings could have been brought by the owners of lot 4 and/or lot 6 rather than by the Appellant

The Appellant submitted that the Tribunal erred in taking into account the fact that the Appellant took the proceedings rather than the individual lot owners.
We do not see that this rises to the point of raising a question of law whether a prohibited or irrelevant factor was taken into account.
The Tribunal referred to the fact that the lot owners could have brought the proceedings rather than the Appellant in the context of the Respondent's application for costs. The Tribunal at [31] stated the following: "Having considered the proceedings I do not believe that they fall within s 60(3)(e). While inconvenient to the Respondent, clearly s149(1) of the SSMA entitled the Applicant to be either the Owners Corporation or the individual lot owners. They are not misconceived nor a misunderstanding of legal principles."
The Tribunal plainly took it to be open to the Appellant rather than the lot owners to take the proceedings and that no costs would be ordered in favour of the Respondent as the Appellant's proceedings could not be regarded as lacking in substance or misconceived.
We see no error in this approach and note that the Respondent has not appealed against the dismissal of her application for costs.
Accordingly, we reject this ground of appeal.

The Tribunal erred in finding that being uncooperative is not a breach of s 36(3) of the NCAT Act

The Appellant criticised the Tribunal in its reasons at [8] where it stated in effect that being uncooperative is not a breach of s 36(3) of the NCAT Act. According, to the Appellant: "[b]eing uncooperative in proceedings as a litigant is antithetical to the just and cheap resolution of the real issues [in] dispute."
This raises a question of law as to whether the Tribunal misconstrued the statute or misdirected itself: Craig at [12].
The difficulty we have with this submission is that, in our view, when the Tribunal used the words 'uncooperative', it was signifying the strict position that the Respondent did not 'cooperate' with the Appellant's desire for her to consent to the relevant By-law amendment at an early stage including prior to the litigation.
As we have made clear previously, where consent orders are made in the absence of a hearing on the merits, the mere fact that one party previously may not have 'cooperated' with the eventual consent orders does not make out a case for costs. The real issue is whether or not the previous lack of cooperation can be regarded as unreasonable conduct based upon material or evidence that is available to the Tribunal in the absence of a hearing in the merits.
The Appellant accepted that the real issue was not simply whether or not the Respondent was 'merely' uncooperative, but whether or not the conduct of the Respondent was unreasonable so as to amount to failing to give effect to the guiding principle of bringing about the just quick and cheap resolution of the real issues in the proceedings.
For the reasons we have already explained, we see no error in the obvious conclusion reached by the Tribunal that it was not satisfied that the Respondent's lack of cooperation was unreasonable in all of the circumstances and evidence before the Tribunal.
Accordingly, we reject this ground of appeal.

The Tribunal erred in finding that references in an application under s 60 to s 60(3)(a), (b) or (c) in generalities precluded a finding of special circumstances

This appeal ground relates to the findings at [11] of the Decision that: "Having considered the submissions and reviewed the circumstances of the proceedings I can find no substantiation of special circumstances warranting a costs order in favour of the Applicant. There is no conduct by the applicant pursuant to s60(3) (a) or (b) or (c) that the Applicant can specifically point to, other than by generalities. I find s60 (3)(d) not to be relevant at all. And there is nothing that the Respondent did, on my review of the proceedings that indicates any breach pursuant to s60(3)(f). Being uncooperative is not a breach of s36(3) of the NCAT Act."
Again, we see that this purports to raise the question of law of whether the Tribunal misconstrued the statute or misdirected itself.
As we understand it, the substance of the submission of the Appellant in this regard was that the Tribunal discounted the Appellant's reliance upon s 63(3)(a), (b) or (c) because the Appellant did not choose specifically in its submissions to rely upon each paragraph individually but chose to characterise the conduct of the Respondent as falling within all or any of those provisions.
The Appellant submitted that choosing to frame the submissions in this way should not have been discounted as simply making submissions 'by generalities'.
Further, and relatedly, the Appellant submitted that the Tribunal erred in not also considering s 60(3)(g) which permits the Tribunal to have regards 'to any other matter the Tribunal considers relevant'.
We reject these submissions.
As already outlined above, it is plain that the Tribunal fully understood and appreciated the essence of the Appellant's submission on costs - namely, that the Respondent consented to the orders sought essentially by way of capitulation to the inevitable strength of the case of the Appellant's case or the weakness of her own case. According to the Appellant, the Tribunal should have found special circumstances, being the unreasonable conduct of the Respondent in not recognising the difficulty with her defence at an early stage.
Had the Tribunal agreed with this proposition there is no doubt that it could have relied upon s 60(3) and one of its paragraphs to find special circumstances. However, the Tribunal was not satisfied that this correctly characterised the position that the Respondent found herself in.
Absent acceptance of the Appellant's basic proposition, in our view there was no error in the way in which the Tribunal was not satisfied that any particular provision of s 60(3) including s 60(3)(a)-(c) and (g) applied. Further, read in context, this does not raise a question of law. It turns on the factual findings of the Tribunal.
Accordingly, we reject this submission.

The Tribunal erred in stating that s 60(3)(d) was not relevant at all

This ground relates to the finding by the Tribunal as follows: "I find s 60(3)(d) not to be relevant at all."
Again, this concerns a question of law, whether the Tribunal misconstrued the Act; or again raises the question of inadequate reasons.
According to the Appellant, s 60(3)(d) of the NCAT Act does not prescribe any particular nature or any level of complexity of the proceedings.
The submissions of the Appellant in this regard were brief and in written form as follows: "[142] SM Bluth effectively found that the nature and complexity of the Proceedings Below were not of the character contemplated in s. 60(3)(d). However, he made this finding without making findings about the actual nature and complexity of the Proceedings Below that would otherwise need to be assessed against s. 60(3)(d). Nor did he proffer any explanation as to what that assessment would entail and what characteristics of proceedings may be relevant under that subsection. [143] It is therefore also open to the Appeal Panel to find these reasons inadequate providing further support for Ground 1.1."
In our view, there was not a failure to provide adequate reasons in failing to make specific findings about the 'specific nature and complexity of the proceedings'.
As described above, the applicable legal principle is that it is not incumbent upon the Tribunal to deal with and respond in detail to every submission and point put to it. It is enough if it explains the essence and substance of the Tribunal's reasoning in respect of the gravamen of the submissions put to it.
The reasons exposed by the Tribunal make it plain that it came to the view that there was nothing 'special' or out of the ordinary in respect of the actual nature and complexity of the proceedings before it.
Having come to that view, it was not incumbent upon the Tribunal to make findings about what it regarded as being the actual 'nature and complexity of the proceedings'.
Accordingly, we reject this ground of appeal.

Order 3

Order 3 of the Tribunal's orders of 20 September 2023 is as follows: "The applicant is directed to exempt the Respondent from any cost imposition relating to these proceedings."
The Tribunal's reasons in this regard are contained at [33] as follows: "However, the Respondent's submission regarding the application pursuant to s149(1) of the SSMA has a costs consequence to the Respondent, which I accept. Accordingly I direct that the Respondent be exempt from any impost of costs by the Applicant in relation to these proceedings."

Was order 3 made without power?

The Appellant submits that order 3 was made without power. The submission of the Appellant essentially was that the Tribunal had no power to make order 3 as it was contrary to s 104 of the SSM Act. This raises a question of law.
Section 104 of the SSM Act is as follows: 104 Restrictions on payment of expenses incurred in Tribunal proceedings (1) An owners corporation cannot, in respect of its costs and expenses in proceedings brought by or against it for an order by the Tribunal, levy a contribution on another party who is successful in the proceedings. (2) An owners corporation that is unsuccessful in proceedings brought by or against it for an order by the Tribunal cannot pay any part of its costs and expenses in the proceedings from its administrative fund or capital works fund, but may make a levy for the purpose. (3) In this section, a reference to proceedings includes a reference to proceedings on appeal from the Tribunal. (Emphasis added)
According to the Appellant, order 3 of the Tribunal is contrary to the specific regime provided for in s 104. The Appellant submits that it was wholly successful and the Respondent was unsuccessful. Accordingly, s 104 has no application as it provides for the opposite situation.
Further, the Appellant submits that by s 60 of the NCAT Act the Tribunal has power to 'award costs'. The Appellant submits that s 60 has not given the Tribunal power to alter the statutory regime for the payment of levies and the financial management of strata schemes under the SSM Act.
The Respondent disputed this proposition and submitted that section 60(4) of the NCAT Act gives the Tribunal power to make such orders. The Respondent disputed that order 3 was contrary to s 104 of the SSM Act. The Respondent submitted that s 104 only applies to matters where a lot owner is successful and the owners' corporation is unsuccessful. This does not apply here, according to the Respondent, where the matter was withdrawn by the Appellant so neither party could be found to be successful or unsuccessful.
In The Owners Strata Plan No 74698 v Jacinta Investments Pty Ltd [2021] NSWCATAP 387 (Jacinta Investments) at [159]-[207], the Appeal Panel considered the power of the Tribunal to make an order preventing an owners' corporation from levying a lot owner in connection with an award of money. In Keyworth v The Owners - Strata Plan No 45081 [2022] NSWCATCD 75 at [132], the Tribunal refers approvingly to this view expressed in Jacinta Investments about the operation of s 104 of the SSM Act.
First, the Appeal Panel found that s 90 of the SSM Act, which allows a Court to make orders for contributions for money (including costs) payable by an owners' corporation in proceedings between owners and owners' corporations does not confer any power on the Tribunal as the expression 'Court' does not include Tribunal: at [167].
Next, the Appeal Panel held that s 104 does not confer any power on the Tribunal to make what it described as a 'quarantining order', being an order to the effect that the owners' corporation are to levy all lot owners, other than the applicant, in respect of the Tribunal's order for damages in favour of the applicant: at [176].
Nextly, the Appeal Panel held that s 232(1) of SSM Act does permit the Tribunal to make a quarantining order, both in respect of levies for the purpose of paying an award for damages and an order of costs payable by the owners' corporation to a lot owner.
Relevantly, the Appeal Panel stated as follows: "[181] In our view this section does permit the Tribunal to make a quarantining order, both in respect of levies for the purpose of paying an award for damages and an award of costs payable by an owners corporation to a successful Lot owner. [182] Section 232 grants to the Tribunal power to 'make an order to settle a complaint or dispute'. What is required to enliven the order making power is a dispute within the specified categories in s 232(1) of the SSMA. That section provides: (1) Orders relating to complaints and disputes The Tribunal may, on application by an interested person, original owner or building manager, make an order to settle a complaint or dispute about any of the following - (a) the operation, administration or management of a strata scheme under this Act, (b) an agreement authorised or required to be entered into under this Act, (c) an agreement appointing a strata managing agent or a building manager, (d) an agreement between the owners corporation and an owner, mortgagee or covenant chargee of a lot in a strata scheme that relates to the scheme or a matter arising under the scheme, (e) an exercise of, or failure to exercise, a function conferred or imposed by or under this Act or the by-laws of a strata scheme, (f) an exercise of, or failure to exercise, a function conferred or imposed on an owners corporation under any other Act. [183] The types of orders that can be made are not specified, other than for the requirement that the order be one 'to settle a complaint or dispute'. There is no reason to construe such a grant in a limited way: Shin Kobe (above); Vickery per Basten JA at [26]-[28] and White JA at [167]. [184] Such an approach when construing a general order making power was also adopted by White J (as he then was) in construing the general order making power in s 21(1)(a) of the Agricultural Tenancies Act 1990 (NSW) which permits the Tribunal to make 'an order giving effect to a determination that may be made by the Tribunal under this Act': Steak Plains Olive Farm Pty Ltd v Australian Executor Trustees Limited [2015] NSWSC 289 at [79] and following. [185] The question is whether there is a relevant dispute which would attract jurisdiction and enliven the order making power and whether the SSMA otherwise specifies which lot owners are to be levied in funding any liability of an owners corporation to a lot owner in respect of such disputes. [186] At first blush, the claims raised in the present appeal, being against a body corporate, would suggest that the raising of funds to meet such obligations for which the owners corporation might be liable are internal to the owners corporation in the same way as would operate in circumstances where a shareholder sues a company. However, such an approach ignores the nature of an owners corporation and the manner in which funds are raised to meet its various financial obligations, both recurring and non-recurring. [187] The SSMA provides for an 'administrative fund' and a 'capital works fund' to be established into which levies are paid: ss 73 and 74 SSMA. Sections 79-81 of the SSMA deal with particular matters for which levies might be raised and the fund into which particular levies are to be paid. These provisions might be described as the mechanism for funding the ordinary operating expenses and capital works program of an owners corporation. They require the owners corporation to estimate expenses likely to be incurred and pass a resolution that amounts for those estimates should be levied against Lot owners. In respect of such levies, s 83 provides payments of the contributions fixed under the estimating process required by the SSMA are to be paid by individual lot owners 'in shares proportional to the unit entitlements of their respective lots'. This is subject to an exception in s 82 which is not presently relevant, that relates to levies in connection with insurance premiums. [188] Generally, these sections regulate the raising of funds to meet obligations to third parties in respect of expenses of an owners corporation incurred in performing its functions under the SSMA. [189] However, this regime does not operate, or at least not exclusively, in connection with the financial obligations of the owners corporation in respect of disputes with lot owners. … [201] Fifthly, there is nothing inconsistent with an interpretation of s 232(1) which permits the making of orders concerning who is to be levied in connection with an award for damages and/or costs made in favour of a successful owner so as to ensure that, where appropriate, the successful owner is not burdened with the obligation to pay themselves a portion of the award made in their favour. This interpretation is wholly consistent with ss 90 and 104 of the SSMA."
We find nothing clearly wrong in the reasoning of the Appeal Panel and have come to the view that we should follow it. Accordingly, we accept there is power in the Tribunal pursuant to s 232(1) of the SSM Act for the Tribunal to make an order to the effect of order 3 in the Tribunal's orders below in order to settle a complaint or dispute between the parties 'about' the Appellant's application to the Tribunal under s 149 of the SSM Act being a complaint or dispute within the meaning of ss 232(1)(a) or (f) of the SSM Act.

Did the Tribunal err in making order 3?

The Appellant submitted that there was no reason, given the Respondent's conduct prior and during the proceedings, for allowing the Respondent the benefit of order 3. That is, the Respondent behaved unreasonably and hence should be liable to incur part of the owners' corporations' legal costs. We have already dealt with this and rejected this submission. In any event, this raises a question of fact not law.
Otherwise, the only other ground of appeal raised in respect of order 3 was that the Appellant contended that it was an irrelevant consideration which the Tribunal took into account that the Respondent would be contributing 16% of the Appellant's costs and that the application of s149(1) of the SSM Act has cost consequence for the Respondent. This does not rise to the level of a prohibited consideration as contemplated by Peko-Wallsend and hence to the extent it raised a question of law is rejected.
The Respondent and the Tribunal (at [10]) referred to the fact that without order 3 the Respondent is liable to 16% of the legal costs incurred by the Appellant in respect of the Tribunal's proceedings and that this should not be allowed.
We are not satisfied that this was an irrelevant consideration to take into account when considering whether or not the Respondent, in all of the circumstances, should be burdened with any costs consequences of the Appellant's application. We are not satisfied that the Tribunal made any error of law in this regard.
Accordingly, we reject this ground of appeal.

Costs

The Appellant sought its costs of the appeal on an indemnity basis. The primary grounds relied upon by the Appellant were that: 1. The decision was so deficient and so infected by error, that it was unreasonable for the Respondent to seek to maintain it; and 2. The Respondent acted unreasonably in refusing to consent to the correction of the error in the order in the first appeal lodged on 18 October 2023 and, thereby, unreasonably precipitated this appeal.
For the reasons given above, we reject the first primary ground stated above.
In respect of the second ground, we make the following comments. First, had the Respondent consented to the correction of the error in the original order, the question of costs would have been remitted to the Tribunal for reconsideration with the possibility of a further appeal. The expense and trouble of that rehearing cannot, in our view, be regarded as being greater or less than the expense and trouble incurred in the hearing before us.
Further, as noted, the Appellant did not suggest the Respondent was bound by its previous agreement to the consent orders in the previous appeal matter.
Nextly, we note that the error of the solicitor for the Appellant, whilst inadvertent, was not the fault of the Respondent. We also take into account the fact that the Respondent at all times had been unrepresented and has dealt with the current appeal in an expeditious and efficient manner.
Finally, we note that the Appellant's appeal has been dismissed.
In conclusion, we are not satisfied that special circumstances exist warranting an order in favour of the Appellant in respect of the Appellant's costs of the appeal.
The Respondent sought her costs of the Appeal. The Respondent relied upon allegations that the Appellant has not complied with 'procedural directions' regarding seeking an extension of time. We take this submission to mean a complaint about the late filing of the current appeal. We do not think the conduct of the Appellant in filing its appeal out of time warrants an award of costs of the appeal in favour of the Respondent.
Nextly, the Respondent submits that the Appellant has made a number of false statements. We have considered these submissions and find there is no justification for the allegation that there have been a number of false statements made, certainly not such as to warrant a finding of special circumstances with the respect to costs.
Accordingly, we decline to make any order with respect to costs of the appeal.

Disposition

The orders of the Appeal Panel are: 1. Extend the time for the filing of the Notice of Appeal to 18 December 2023 pursuant to s 41 of the Civil and Administrative Tribunal Act 2013 (NSW). 2. Appeal dismissed. 3. No order as to costs of the appeal.

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: 11 April 2024

The Owners - Strata Plan No 38308 v Gelder

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