The Owners - Strata Plan No 55468 v Silberstein (No 2)

1. On 15 May 2025, Ms Silberstein lodged an Application for miscellaneous matters in which she seeks the following orders (the Silberstein costs application):

"1. Order (5) of the the orders made by the Appeal Panel on 8 May 2025 be varied as follows:

"The first appellant is to pay 90% of the costs of the respondent of the appeal on an indemnity basis".

2.The Respondents to this application (the Appellants to the appeal) pay the Applicant's (the Respondent's of the appeal) costs of this application."

1. We have decided that the Silberstein costs application should be dismissed and Ms Silberstein should pay OSP55468's costs of the Silberstein costs application.

1. The history of the appeal up to 8 May 2025 is set out in the appeal decision at [56]-[64].
2. On 15 May 2025, Ms Silberstein lodged her submissions on the costs of the appeal as part of the Silberstein costs application (the Silberstein appeal costs submissions).
3. On 5 June 2025, OSP55468 lodged its submissions on the costs of the appeal in response to the Silberstein appeal costs submissions (the OSP55468 appeal costs submissions).
4. Ms Silberstein did not lodge any submissions in reply on the costs of the appeal.

(1) whether a hearing of the Silberstein costs application should be dispensed with;

(2) whether the appeal costs order should be varied;

(3) the costs of the Silberstein costs application.

Whether a hearing of the Silberstein costs application should be dispensed with

1. Ms Silberstein consents to an order dispensing with an oral hearing of the Silberstein costs application. OSP55468 has made no submission as to whether this order should be made.
2. We are satisfied that that the issues for determination in relation to the Silberstein costs application can be adequately determined in the absence of the parties by considering their submissions. Accordingly, we have decided pursuant to s 50(2) of the NCAT Act to make an order dispensing with a hearing in relation to the Silberstein costs application.

Whether the appeal costs order should be varied

1. Before considering this issue, we have summarised the submissions of the parties.

1. Ms Silberstein in the Silberstein appeal costs submissions has made the following submissions:

(1) under the heading "(Mr Adamo's) limited success":

(a) Mr Adamo was unsuccessful in respect of the third and fourth questions;

(b) Mr Adamo's limited success on the fifth question arose through the Appeal Panel's intervention;

(2) under the heading "(OSP55468's) lack of success":

(a) the upshot of the Appeal Panel's reasoning in relation to the first and second questions was that she needed not even be in attendance, let alone make submissions because, on their own concessions and their acceptance the absence of authority and evidence supporting the orders they sought, the appeal of OSP55468 failed;

(b) the appeal in respect of the first and second questions was always doomed to fail and should never have been brought;

(3) under the heading "Consequences as to costs":

(a) as to Mr Adamo's appeal, the Appeal Panel's finding that 20% of her costs of the appeal ought be attributable to his limited success (which came to be identified as the "second separable issue"), represents an unbalanced, or otherwise inappropriate, apportionment of her costs. An appropriate apportionment of her costs of his appeal should be 10%, or worst-case 15%;

(b) as to OSP55468's appeal, the appropriate order is for OSP55468 to bear her costs of its appeal on an indemnity basis.

1. OSP55468 in the OSP55468 appeal costs submissions has made the following submissions:

(1) under the heading "(Ms Silberstein's) Application for indemnity costs":

(a) it is not correct to say that the concessions underpinned the reason why the Appeal Panel did not summarise Ms Silberstein's submissions. Ordinarily, natural justice requires the submissions of a party who fails to be addressed so that party knows why it lost. The Appeal Panel took that approach throughout its reasons;

(b) as to the first and second questions, the fact that Ms Silberstein's submissions were not summarised did not amount to the Appeal Panel's endorsement of her submissions as actually formulated. That it did not establish the error for which it contended did not make that error unarguable. This did not put the first and second questions outside the ordinary run of cases in which contentions fail on appeal;

(2) under the heading "Apportionment of (Ms Silberstein's) costs":

(a) the Appeal Panel reduced Ms Silberstein's costs (to 80%) due to her lack of success on the second separable issue, rather than saying it apportioned costs against OSP55468;

(b) no error based on the approach permitted by Vella (No 3) has been established. The separation of the third and fifth questions and a proportionate reduction based upon matters of evaluation and impression was not erroneous. Further, the fact that neither party was awarded costs of the second separable issue reflects the fact that the Appeal Panel performed an analysis different from the contended by either party. The result that neither party was awarded the costs of the reduction on account of the second separable issue was not erroneous. Further, the amount of the reduction on account of the outcome of the second separable issue (20%) was also not erroneous based upon evaluation and impression as permitted by Vella (No 3).

1. We accept that it is appropriate to exercise the discretion afresh under r 38A(2) of the NCAT Rules in determining the costs of the appeal after taking into account the submissions of the parties.
2. The principles concerning the award of indemnity costs were relevantly considered by the Appeal Panel in Ashton v Stevenson; Stevenson v Ashton (No 2) [2019] NSWCATAP 238 (Ashton (No 2)) at [28]:

"[28] The following from Paraskevopoulos v Bajic (No. 2) [2018] NSWCATCD 40 at [17] - [19] ... is relevant to the question of indemnity costs:

As the Appeal Panel has observed, the Tribunal's discretion to award indemnity costs is exercised in limited circumstances and it must be the subject of careful reasoning: see Mendonca v Tonna [2017] NSWCATAP 176 at [59] - [60], [62] - [64] and the cases cited therein by the Appeal Panel.

When costs follow the event, as I have decided they should in the three proceedings, then usually they are awarded on the ordinary basis. In Oshlack at [44], Gaudron and Gummow JJ stated that before the Court can order indemnity costs, it is necessary to find what their Honours described as: "some relevant delinquency on the part of the unsuccessful party". As McHugh J explained in the same case at [67], the indemnity costs order is made not to punish the unsuccessful party but because "[a]s between the parties, fairness dictates that the unsuccessful party" should bear those additional costs.

Where Indemnity costs are ordered based upon a "relevant delinquency" it is normally a case of misleading a court or tribunal, or bringing proceedings for collateral or ulterior purposes and not for the purposes of having a court or tribunal adjudicate on the issues to which they give rise, or if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless: Wentworth v Rogers [1999] NSWCA 403; Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401; Cultus Petroleum v OMV Australia [1999] NSWSC 435.

...

1. Having regard to the principles in Ashton (No 2) at [28], we are not satisfied that the submissions of OSP55468 on the first and second questions were so obviously untenable or manifestly groundless as to be utterly hopeless. It follows that Ms Silberstein has not established an entitlement to costs on an indemnity basis.
2. In Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 (Bostik) at [38], the New South Wales Court of Appeal (Beazley, Ipp and Basten JJA) summarised the principles governing the making of an order as to costs so as to reflect the time taken in dealing with a particular issue in which the successful party in the proceedings or on the appeal did not succeed:

"[38] The principles governing the making of an order as to costs so as to reflect the time taken in dealing with a particular issue in which the successful party in the proceedings or on the appeal did not succeed were reviewed by this Court in Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373. Those principles may be summarised as follows:

• Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).
• In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal.
• If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27].
• Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed).
• A separable issue can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34].
• Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261 at 272.

These principles were applied in City of Canada Bay Council v Bonaccorso Pty Ltd (No 3) [2008] NSWCA 57 at [22] and most recently in Turkmani v Visvalingham (No 2) [2009] NSWCA 279."

1. In Oikos Constructions Pty Limited t/as Lars Fischer Construction v Ostin & Anor (No 2) [2021] NSWCA 98 (Oikos Constructions), the New South Wales Court of Appeal after quoting at [14] the summary of principles in Bostik at [38] made the following observations at [15]-[16] (White JA with Basten JA at [1] and Macfarlan JA at [2] agreeing):

[15] A successful party may be denied the whole of its costs or may be required to pay costs in respect of its failure on particular issues, even though that party did not act unreasonably in raising or defending the issues on which it failed (Permanent Trustee Australia v FAI General Insurance Co (Supreme Court of NSW, Hodgson CJ in Eq 3 June 1998 unrep at 10-11); Short v Crawley (No 40) [2008] NSWSC 1302 at [32]; Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd [2008] NSWSC 1423 at [31]).

[16] In Bowen Investments v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107, Finkelstein and Gordon JJ said (at [5]) that if an issue by issue approach produces a result that is fairer than giving the successful party all of his or her costs, notwithstanding his or her failure on particular issues, then the issue by issue approach should be adopted."

1. Having regard to the principles in Bostik at [38], Oikos Constructions at [15]-[16] and Vella (No 3) at [28]-[33], we are satisfied that 80% of the appeal was referrable to the first separable issue, while 20% of the appeal was referrable to the second separable issue. As Ms Silberstein was successful on the first separable issue, we are further satisfied that OSP55468 should pay 80% of her costs of the appeal pursuant to rr 38(1) and (2)(b) and 38A(2) of the NCAT Rules.
2. It follows that the Silberstein costs application should otherwise be dismissed.

1. Consequent upon its dismissal, Ms Silberstein should pay OSP55468's costs of the Silberstein costs application.

(1) A hearing of the application of the respondent to vary order (5) made on 8 May 2025 is dispensed with.

(2) The application of the respondent to vary order (5) made on 8 May 2025 is dismissed and the respondent is to pay the first appellant's costs of the application.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.

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.