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)

The Owners - Strata Plan No 67608 (First Respondent in the third appeal)

PINN 386 Pty Ltd ( Second Respondent in third appeal)

1. We published our substantive decision in respect of these appeals on 14 October 2025. The orders we then made were:

(1) The appeal lodged by Strata Scheme 67608 was dismissed.

(2) The appeal lodged by PINN 386 Pty Ltd was dismissed.

(3) The appeal lodged by Strata Scheme 67607 was upheld.

(4) Orders in the nature of determinations pursuant to s 162(3) of the Strata Schemes Management Act 2015 (the Strata Act) that the replacement value of the building, the subject of the proceedings for the period 2022-2023 and 2023-2024 is $37,052,400 and that the proportion of the insurance premiums payable by Strata Scheme 67607 is 81% and the proportion payable by Strata Scheme 67608 is 19%.

(5) That if Strata Scheme 67607 seeks further or other orders in its appeal it is directed to file and serve an application within 21 days, noting that such an application is limited to orders sought in the appeal by Strata Scheme 67607 but not made by the Appeal Panel.

(6) If Strata Scheme 67607 seeks an order for costs of the appeals it must file and serve its submissions and evidence in support within 21 days.

(7) If Strata Scheme 67608 and/or PINN oppose the application for costs lodged by Strata Scheme 67607 they must file and serve submissions and evidence in reply within 14 days thereafter.

(8) Submissions on costs should include a submission as to whether the Appeal Panel may determine costs on the papers and, in doing so, dispense with a further hearing.

1. Since then written submissions have been received by each of the three Appellants. We summarise the effect of those submissions in the following paragraphs.

1. Strata Scheme 67607 seeks an additional order from the Appeal Panel to this effect:

(1) Pursuant to s 162(4) of the Strata Act the Tribunal determines that:

(i) for the year 2022-2023 the proportion of the insurance premium payable by Strata Scheme 67607 is adjusted to $54,445.74; and

(ii) for the year 2023-2024 the proportion of the insurance premium payable by Strata Scheme 67607 is adjusted to $61,734.38.

1. The background to this application for the additional order was referred to and foreshadowed in our substantive decision - see from paragraph 140 to 146.
2. Essentially, what happened is that we made the determinations as to replacement value and proportions payable by each strata scheme as authorised by s162(3) but did not make an order to adjust the premium to reflect the use to which part of the building has been put as authorised by s162(4).It would follow from the making of the above proposed order that orders 1 and 2 made at first instance on 10 January 2025 should be set aside.
3. We note that the written submissions received from Strata Scheme 67608 contain the heading "Submissions as to additional orders and costs" but in fact the submissions only deal with costs. We also note that the submissions received from PINN state that PINN does not seek to be heard as regards the additional order sought. PINN's submissions concern costs only.
4. Although the directions we made on 14 October 2025 cater only for Strata Scheme 67608 and PINN to oppose the application for costs and do not expressly give leave for either Strata Scheme 67608 or PINN to make submissions on the additional order sought it is clear that both those parties have had the opportunity to make submissions on the additional order sought by Strata Scheme 67607 and have not sought to do so. Indeed, as stated before PINN has expressly stated that it does not wish to be heard on the question of the additional order sought.
5. Accordingly, we are content to proceed to deal with the application for the additional order. We are of the opinion that the additional order sought flows logically from the findings made in our substantive decision and we propose to make that order.

1. As stated above, each of the parties has filed submissions concerning costs of the appeals and we will set out in summary form those submissions in the following paragraphs.

Cost submissions lodged by Strata Schemes 67607

1. Strata Scheme 67607 submits that r 38A of the Civil and Administrative Tribunal Rules 2014 (the Rules) applies to the present appeals. Rule 38A provides:

38A Costs in internal appeals

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

(a) enabling legislation, or

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

(c) the procedural rules.

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

1. The submissions of Strata Scheme 67607 state that r 38A applies because:

(1) The present appeals were lodged after 1 January 2016.

(2) The first instance cost provisions differ from those set out in s 60 because of the operation of the procedural rules in that:

(i) the proceedings at first instance were for the exercise of functions under the Strata Act;

(ii) schedule 4, cl 3 of the NCAT Act allocate such proceedings to the Consumer and Commercial Division; and

(iii) thus, in those proceedings "the first instance costs provisions" included r 38 of the Rules, which provides that despite s 60, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if the amount claimed or in dispute in the proceedings is more than $30,000: r 38(2)(b), which modifies the operation of s 60.

1. Rule 38A(2) requires the Appeal Panel to apply the first instance costs provisions, which is s 60 as relevantly modified by r 38(2) when deciding whether to award costs of the appeals: see Allen v Tricare (Hastings) Ltd [2017] NSWCATAP 25 at [23].
2. At first instance the Tribunal found that the amount claimed or in dispute in the proceedings exceeded $30,000. That decision was not appealed.
3. The submissions of Strata Scheme 67607 go on to state that if r 38(2)(b) of the Rules applies, the starting point is that a successful party should be entitled to an order for costs in his favour: DeMarco v Macey [2025] NSWCATAP131 at [182], unconstrained by the need to establish special circumstances. In that case, the usual costs position applies such that costs follow the event: Culina v Timilty Constructions Pty Ltd [2022] NSWCATCD 109 at [91]. In the present case, there is no reason why the Appeal Panel would not make the usual order that costs follow the event given the success of Strata Scheme 67607.
4. The submissions of Strata Scheme 67607 go on to identify divergent decisions of the Appeal Panel as to the operation of r 38A(2)(b) and the submissions address the doctrine of precedent, and include a submission as to which authorities the Appeal Panel should follow.
5. The submissions are concerned with the meaning of the terms "amount claimed" and "amount in dispute" in r 38. In Allen the Appeal Panel stated that the inclusion of the words "or in dispute" indicates that amounts may be a dispute in proceedings, even if they are not the subject of a specific claim for an order for payment [48]. In addition, at [57] the Appeal Panel stated that whether the amount in dispute is more than $30,000 depends on whether there is a realistic prospect that the wealth of the appealing party would be changed by more than $30,000.
6. However, the submissions referred to a contrary view as recorded The Owners Corporation Strata Plan No 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256 where the Appeal Panel stated that r 38(2)(b) does not apply to proceedings where a claim for relief in the proceedings (not being a claim for an order to be paid or be relieved from paying a specific sum) may, as a consequence of that relief being granted, result in the loss of any property or other civil right to a value of more than $30,000, or where there is a matter at issue amounting to or of a value of more than $30,000 but no direct relief is sought and no order could be made in the proceedings requiring payment or relief from payment of an amount more than $30,000.
7. The submissions of Strata Scheme 67607 state that there is a clear inconsistency between Allen v Tricare and Malachite but submit that the decision of Allen v Tricare should be followed and is to be preferred. It was both a decision of the then President of the Tribunal and is not plainly wrong. The submissions state that Allen v Tricare more closely reflects the position enunciated in the Supreme Court in Kaye v The Owners Strata Plan No 4350 [2022] NSWSC 1386 at [79] where the court stated in relation to r 38 that what was in dispute was not an amount of money but involved a valuable property right which was worth well in excess of $30,000. The court held that r 38 was engaged in that case.
8. The submissions state that Strata Scheme 67607 sought orders for the adjustment of insurance premiums (over two years) such that the amount payable by Strata Scheme 67607 would be $54,445.74 for one year and $61,734.38 for the second year. The practical effect of such adjustment would be that the wealth of Strata Scheme 676707 would be improved by a total in the order of $410,000 by shifting the burden in respect of the responsibility of the insurance premiums to Strata Scheme 67608.
9. In addition, Strata Scheme 67608 and PINN were seeking orders challenging the determination sought by Strata Scheme 67607 and that if such a challenge had been successful there would have been a change of wealth valued well in excess of $30,000 as a consequence of the orders sought.
10. In the alternative, Strata Scheme 67607 submits that if special circumstances are required to be established, then the appeals involve special circumstances in that they concerned complex questions as to the proper construction of a number of sections of the Strata Act.

1. In the following paragraphs we summarise the submissions concerning costs lodged by Strata Scheme 67608.
2. Strata Scheme 67608 concedes that the amount claimed or in dispute in the proceedings was over $30,000 and that therefore in terms of r 38(2)(b) the Tribunal awarded costs in favour of Strata Scheme 67607 at first instance. The submissions acknowledged that the Appeal Panel must apply "the first instance cost provisions when deciding to award costs in relation to the appeal: r 38(2).
3. However, Strata Scheme 67608 contends that there should be no order as to costs with the intent that each party should bear their own costs. The submissions state that although the general rule is that costs should follow the event, an order contrary to the general rule is not uncommon. Whether such an order, contrary to the general rule that costs follow the event should be made depends on the circumstances of the case when viewed against the very wide discretionary powers of the court.
4. The submissions state that Strata Scheme 67608 should not be ordered to pay costs because the opposition to the application lodged by Strata Scheme 67607 and the appeals were reasonably arguable, had merit and were not hopeless or weak. The nature of the proceedings are relevant to determining the question of costs. The contentions made by Strata Scheme 67608, although not accepted, called for careful consideration and could not have been easily put aside or said to have no tenable basis in law or fact or never had any real chance of success. This should be taken into account by the Appeal Panel in considering an order for costs.
5. Strata Scheme 67608 concludes its submissions by stating that the fair and most appropriate order for costs is that there be no such order as to costs.

1. PINN's submissions state that there is no issue that r 38A applies and that under r 38A(2), the Appeal Panel must apply the first instance costs provisions when deciding whether to award costs in relation to the appeal. Further, there is no issue that the first instance costs provisions are to be found in r 38 and that the Tribunal may award costs in the absence of special circumstances warranting such an award if either of the requirements in (a) or (b) of that subrule is satisfied.
2. PINN's submissions state that the requirement in r 38(2)(a) has not been satisfied since the Appeal Panel has not made an order under cl 10(2) of sch 4. Clause 10(2) of sch 4 (of the NCAT Act) confers power on the Tribunal to make certain orders if the Tribunal is satisfied that a party conducted the proceedings in such a way that another party was unreasonably disadvantaged.
3. Additionally, the submissions of PINN state that whilst under r 38(2)(b) costs may be awarded even in the absence of special circumstances for an appeal if the amount claimed or in dispute in the proceedings is more than $30,000, the Appeal Panel made no order under r 38(2)(b). The reasons for this view are summarised below.
4. Order 4 made by the Appeal Panel was concerned with the replacement value of the building, the subject of the proceedings being in the amount of $37,052,400. There was no dispute between the parties regarding the replacement value of the building either at first instance or on appeal: refer to [44] of the Appeal Panel's decision and at [61] of the decision at first instance. Further, no order was sought concerning the replacement value of the building, the subject of the proceeding.
5. Pursuant to order 5 made by the Appeal Panel, Strata Scheme 67607 was required to file and serve within 21 days an application limited to orders sought in the appeal and, in its written submissions lodged 3 November 2025, Strata Scheme 67607 sought orders for adjustment of the premium (see above). The submissions of PINN state that, critically, no orders were (nor capable of being) sought for Strata Scheme 67607 to recover any proportion of the insurance premiums paid by it for either of the two years in question being any amount over the amounts referred to in the submissions lodged by Strata Scheme 67607. Further, no orders were sought by any party for PINN to pay any amount to any other party in these proceedings.
6. Before the Appeal Panel, PINN sought orders that orders 1 and 2 made by the Tribunal at first instance, these being:

(1) The portion of the insurance premium for the building payable by Strata Scheme 67607) be set aside, and contended that s 162(4) of the Strata Act had no application to the proceedings.

(2) That the subject insurance policies did not comply with the relevant provisions of the Strata Act and applicable regulations.

1. PINN's appeal was concerned with the interpretation of legislation and its relevance to the proceedings, not a claim or dispute in the proceedings that was more than $30,000.
2. Before the Appeal Panel, Strata Scheme 67608 sought orders that orders 1 and 2 made by the Tribunal at first instance, these being the proportion of the insurance premium for the building payable by Strata Scheme 67607 be set aside and contended that s 162(4) of the Strata Act had no application to the subject proceedings.
3. Strata Scheme 67608's submission was therefore a threshold submission unconcerned with the "proportion" of the insurance premium payable and more concerned with the principal application of the legislation. Strata Scheme 67608's argument was also concerned with the interpretation of legislation and its relevance to the proceedings. It was not an argument concerned with the "proportion" (or amount) of the insurance premium payable that could be said to give rise to a claim or dispute in the proceedings that was more than $30,000.
4. Accordingly, the submissions of PINN state that in the circumstances where the successful party (Strata Scheme 67607) did not obtain, nor seek, orders (directly or indirectly) from any party to the appeal for an amount that was more than $30,000 and the unsuccessful parties (PINN and Strata Scheme 67608) did not seek orders from any party to the appeal proceedings for an amount that was more than $30,000, the threshold requirement under r 38(2)(b) is not satisfied. Accordingly, there should be no order as to costs in the appeal.

1. The parties have had an opportunity to make submissions as to whether the issues, the subject of this decision, may be determined on the papers and whether, by doing so, the Tribunal may make an order dispensing with a further hearing. No submissions have been made opposing that course and we are of the view that the issues may be adequately determined on the papers. Accordingly, one of the orders we make is an order dispensing with a further hearing.
2. We are informed by the written submissions of the representatives of Strata Scheme 67607 that the Tribunal at first instance determined in a decision published to the parties (but unreported) on 29 April 2025 that the amount claimed or in dispute in the proceedings at first instance exceeded $30,000. We are further informed that that costs decision has not been appealed. The submissions from the other two parties do not dispute the submission of Strata Scheme 67607 in that respect.
3. Accordingly, by reason of r 38A(1) and (2) we must apply the first instance costs provisions when deciding whether to award costs in relation to the appeals. This was the substance of the written submissions lodged by Strata Scheme 67607 and we agree with those submissions.
4. In substance, the result is that we have the discretion to make an award for costs even in the absence of special circumstances. Generally the position is that a successful party should be entitled to an order for costs in its favour. In this case we are of the view that costs should be awarded given the complex nature of the issues involved and the significant financial consequences to the parties arising out of the dispute. It was reasonable for the parties to engage solicitors and counsel given the complex issues and the financial significance of the proceedings. The purpose of a costs order is not to punish the unsuccessful parties but rather to enable the successful party to be partially indemnified for costs reasonably incurred.
5. The debate in the submissions as to whether the appeals are concerned with amounts in excess of $30,000 is in our view irrelevant given the finding and determination ( referred to in paragraph 38 above) made by the Tribunal at first instance, the absence of an appeal from that decision and having regard to the provisions (referred to above) contained in rr 38 and 38A.
6. This view is consistent with the view of His Honour Basten AJ in Kaye v The Owners - Strata Plan number 4350. At [80] His Honour stated if r 38 were engaged "then it was to be applied by the Appeal Panel pursuant to r 38A(1)(c) and, accordingly, it would not be necessary to make a finding of special circumstances to support an order for costs".
7. In addition, we are also of the view that the present appeals involved amounts in dispute in excess of $30,000. As the submissions of Strata Scheme 67607 state the dispute between the parties involved an adjustment of insurance premiums and the effect of the adjustments is to change the wealth of the respective parties, by an amount of more than $30,000. This approach is consistent with the decision of the Appeal Panel in Allen v Tricare. To the extent that our approach and that of Tricare is inconsistent with the decision in Malachite we are of the view that Tricare should be preferred as it is in conformity with the judgment in Kaye: see [79] of that judgment, where His Honour stated that what was "in dispute was not an amount of money, but involved a valuable property right which, as the evidence showed, was worth well in excess of $30,000".
8. Strata Scheme 67608 submitted that no order for costs should be made because its position was reasonably arguable, had merit and the issues called for careful consideration. As stated above, an order for costs against Strata Scheme 67608 does not indicate that its conduct or submissions lacked merit but rather reflect the general position in cases of this kind that the successful party should be indemnified to a reasonable extent for its costs in prosecuting its appeal and defending the other two appeals.
9. We reject the submissions lodged by PINN to the effect that rr 38 and 38A are not engaged because the appeals did not involve an amount claimed or in dispute of more than $30,000. We do not agree because the appeals have involved issues concerning the respective proportions payable by the parties of the insurance premiums over two years, and the further issue of an adjustment required to be made on account of the use conducted by PINN. Relying upon Tricare and upon Kaye we are of the view, as stated above, that these issues involved an amount in dispute which was clearly and uncontroversially of an amount in excess of $30,000.
10. We add that even if we were held to be in error in the reasoning contained above to the effect that we may make an order for costs without the need for special circumstances we would, if required, be confident in forming the view that these proceedings have involved special circumstances. In other words, if it is the case that costs of the appeal can only be awarded under s 60 of the NCAT Act, then we would state that there are special circumstances warranting an award of costs having regard to the nature and complexity of the proceedings: see s 60(3)(b).
11. It follows that we should make orders for costs of the appeals to be made in favour of Strata Scheme 67607 and we should also make the orders for adjustment of the insurance premiums in accordance with the submissions lodged by Strata Scheme 67607. In doing so it is necessary to set aside orders (1) and (2) made at first instance.
12. The orders we make in these appeals are as follows:

(1) Orders (1) and (2) made on 10 January 2025 in proceedings 2023/00399926 are set aside.

(2) Pursuant to s 162(4) of the Strata Schemes Management Act 2015 (NSW) the Appeal Panel determines that:

(i) for year 2022-2023 the proportion of the insurance premium payable by Strata Schemes 67607 is adjusted to $54,445.74; and

(ii) for the year 2023-2024 the proportion of the insurance premium payable by Strata Scheme 67607 is adjusted to $61,734.38.

(3) Orders (1) to (4) made by the Appeal Panel on 14 October 2025 are affirmed.

(4) In appeal 2025/00048270 (lodged by Strata Scheme 67608), Strata Scheme 67608 is to pay the costs of the appeal incurred by Strata Scheme 67607 in an amount agreed or as assessed.

(5) In appeal 2025/00049917 (lodged by PINN 386 Pty Ltd) PINN is to pay the costs of the appeal incurred by Strata Scheme 67607 in an amount agreed or as assessed.

(6) In appeal 2025/00114465 (lodged by Strata Scheme 67607) Strata Scheme 67608 is to pay 50% of the costs incurred by Strata Scheme 67607 in an amount agreed or as assessed, and PINN is to pay 50% of the costs incurred by Strata Scheme 67607 in an amount agreed or as assessed.

(7) A hearing on the issues raised in this decision is dispensed with and the Appeal Panel determines that it may determine the issues on the papers.

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.