The Owners – Strata Plan No 72250 v Nugent (No2)

1. Pursuant to the 5 August 2025 Orders, on 7 August 2025 the Nugent parties filed submissions seeking a costs order in their favour and ancillary orders. The Nugent parties also submitted that, in determining the question of costs, it was appropriate for the Appeal Panel to dispense with a further hearing pursuant to section 50(2) of the Civil and Administrative Tribunal Act 2013 NSW (CAT Act).
2. On 13 August 2025 the OC filed submissions opposing the costs orders sought by the Nugent parties. The OC did not state its position as to the appropriateness of dispensing with a further hearing.
3. In light of the parties' written submissions, we are satisfied that the issue of costs can be fairly and adequately determined without a further hearing. Accordingly, we will make an order pursuant to s 50(2) of the CAT Act dispensing with a further hearing.
4. Regulations 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (the Rules) provide 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.

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 amount in dispute in these proceedings, whether at first instance or on appeal, exceeded $170,000.00. Consequently, regulation 38A(2) is engaged and an order for costs may be made notwithstanding the absence of special circumstances.
2. In BNT Constructions Pty Ltd v Allen [2017] NSWCATAP 186, the Appeal Panel set out at [67] the principles to be applied to the exercise of the discretion under regulation 38A as follows:

[67] The parties did not disagree as to the relevant principles to be applied. They include:

(1) the starting point is that a successful party should be entitled to an order for costs in his favour;

(2) an award of costs is by way of an indemnity and not as punishment;

(3) there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party;

(4) the factors to be considered are not to be confined as to do so would constrain the general discretion;

(5) the relative success of the parties on different issues and the time taken to determine them may be relevant;

(6) the nature of the proceedings is relevant;

(7) the proper exercise of the discretion requires a decision maker to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary and capricious.

1. In Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen [2015] NSWCATAP 264 (Nyugen) the Appeal Panel said at [94] - [95]:

[94] Rule 38 gives the Tribunal (or the Appeal Panel when making a decision in substitution for the decision under appeal), a discretion to award costs. While unfettered that discretion must be exercised judicially.

[95] While the discretion to award costs under rule 38 is unfettered, in our view costs should generally "follow the event", recognising however that factors may exist that militate against the successful party recovering all of its costs: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [134]. Fairness dictates that the unsuccessful party typically bears the liability for costs unless it is demonstrated that some other order is appropriate: Currabubula and Paola v State Bank NSW; Currabubula v State Bank NSW [2000] NSWSC 232. We find no reason to depart from the "usual rule" in this case.

1. The relevant event is the dismissal of the appeal proceedings brought by the OC. The "starting point" in relation to the question of costs in this appeal is that the Nugent parties were the successful parties because the OC's appeal was dismissed. We are persuaded that fairness dictates that the unsuccessful party, the OC, should bear the liability for costs, unless it is demonstrated that some other order is appropriate: see Nguyen at [95].
2. The OC contends, in substance, that the Appeal Panel's observations at [88] and [89] of the Appeal Decision were a vindication of the OC's position. We do not accept that contention. The observations at [88] and [89] are equally consistent with the proposition that the OC proceeded on an incorrect basis, both at first instance and in the appeal proceedings. That incorrect basis included seeking orders as to the Nugent parties' strata levy balances that were fundamentally inconsistent with earlier final orders of the Tribunal which were binding on both the OC and the Nugent parties. Further, the Appeal Panel's observations at [88] and [89] do not foretell any result in relation to the strata levy balances of lot owners.
3. Having regard to the above, we are persuaded that it is appropriate that the OC pay the Nugent parties' costs on the ordinary basis.
4. Section 90 of the Strata Schemes Management Act 2015 (SSMA) is in the following terms:

90 Contributions for legal costs awarded in proceedings between owners and owners corporation

(1) This section applies to proceedings brought by one or more owners of lots against an owners corporation or by an owners corporation against one or more owners of lots (including one or more owners joined in third party proceedings).

(2) The court may order in the proceedings that any money (including costs) payable by an owners corporation under an order made in the proceedings must be paid from contributions levied only in relation to the lots and in the proportions that are specified in the order.

(3) The owners corporation must, for the purpose of paying the money ordered to be paid by it, levy contributions in accordance with the terms of the order and must pay the money out of the contributions paid in accordance with that levy.

(4) This Division (other than provisions relating to the amount of contributions) applies to and in respect of contributions levied under this section in the same way as it applies to other contributions levied under this Division.

1. The Tribunal is not a "court" for the purposes of s 90(2): The Owners - Strata Plan No 62713 v Liberant [2022] NSWCATAP 80 at [102] - [103]. Consequently, the Tribunal cannot make an order pursuant to section 90(2).
2. However, in The Owners - Strata Plan No 62713 v Liberant [2022] NSWCATAP 80 the Appeal Panel said at [132]:

[132] In light of the decision of the Court of Appeal in Vickery and the observations of the Court to which we have referred, insofar as the statement in Vickery No 2 suggests that s 232(1) does not confer an order making power on the Tribunal like that available to a court under s 90(2) of the SSMA, we disagree. More correctly, while there is no express power in terms of s 90(2), the general power in s 232(1) is sufficiently broad to permit the Tribunal to make an order of the type set out in s 90(2).

1. The purpose of s 90 of the SSMA is to ensure that a successful party in whose favour a costs order is to be made does not indirectly fund, through their contributions, the payment of that costs order. Orders consistent with the purpose of s 90 of the SSMA are sought by the Nugent parties in respect of the appeal proceedings. Such orders are appropriate because the Nugent parties have been successful in these appeal proceedings.

(1) Order pursuant to section 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) dispensing with a further hearing.

(2) Order that that Appellant pay the First, Second and Fourth Respondent's costs of and incidental to these proceedings on the ordinary basis, as agreed or assessed.

(3) Order that the costs payable by the Appellant pursuant to order (2) are not to be paid from any contributions levied on the owners of lots 4, 5 and/or 6.

(4) Order that the costs payable by the Appellant pursuant to order (2) are not to be paid from the Appellant's administrative fund or capital works fund, but the Appellant may strike a levy, other than on lots 4, 5 and/or 6, for the purpose of paying those costs.

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.