The Owners - Strata Plan No 74835 v Pullicin - [2020] NSWCATAP 49 - NSWCATAP 2020 case summary — Zoe

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The Owners - Strata Plan No 74835 v Pullicin

[2020] NSWCATAP 49

NCAT Appeal Panel|2020-03-17|Before: Armstrong J

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At a glance

Source facts

Court

NCAT Appeal Panel

Decision date

2020-03-17

Before

Armstrong J

Catchwords

COSTS - costs on appeal - whether costs should be ordered in favour of successful party - whether public interest litigation

Source

Original judgment source is linked above.

Catchwords

COSTS - costs on appeal - whether costs should be ordered in favour of successful party - whether public interest litigation

Judgment (10 paragraphs)

[1]

Overview

These reasons are about who should pay the legal costs of proceedings between the Owners - Strata Plan No 74835 and Mr and Mrs Pullicin. Mr and Mrs Pullicin applied to the Tribunal for a 'work order' and an order for damages for breach of the statutory duty in s 106(1) of the Strata Schemes Management Act 2015 (NSW). The Tribunal made a 'work order' and awarded Mr and Mrs Pullicin $73,744.76 in damages. The costs rule in these kinds of proceedings is that "costs follow the event" - that is, the successful party is generally entitled to an award of costs. In this case, the Tribunal adjourned the proceedings part heard pending completion of the works. The Tribunal did not make a costs order before the owners corporation appealed to the Appeal Panel from the order to pay damages and from the work order.
The Appeal Panel allowed the appeal and set aside the Tribunal's order that the owners corporation pay Mr and Mrs Pullicin damages: The Owners - Strata Plan No 74835 v Pullicin [2020] NSWCATAP 5. We expressed the preliminary view in the substantive decision that, as the owners corporation had been successful on appeal, Mr and Mrs Pullicin should pay the owners corporation's costs. We also mentioned that the parties might agree as to the appropriate first instance costs orders and file consent orders. The parties have not reached an agreement. We gave the parties the opportunity to make written submissions on the proposed orders. We also invited the parties to make further submissions on the issue of whether each party should pay their own costs on appeal because this is an issue of public importance.
Following consultation with the parties, we ordered that, "Final costs orders will be determined on the papers": Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 50.

[2]

Does the Appeal Panel have power to make a costs order in the first instance Tribunal proceedings?

A party may appeal against an "internally appealable decision": NCAT Act, s 80(1). The Tribunal's internal appeal jurisdiction, so far as is relevant to these proceedings, is set out in s 32(1) of the NCAT Act: (1) The Tribunal has internal appeal jurisdiction over: (a) any decision made by the Tribunal in proceedings for a general decision or administrative review decision, and (b) any decision made by a registrar of a kind that is declared by this Act or the procedural rules to be internally appealable for the purposes of this section.
The owners corporation has appealed from the decision of the Tribunal to pay damages to Mr and Mrs Pullicin and sought leave to appeal from an aspect of the timing of the work order. The Tribunal has not made a "decision" about costs as described in s 32(1)(a) of the NCAT Act.
Section 32(2) gives the Tribunal "… the following jurisdiction in proceedings for the exercise of its internal appeal jurisdiction: (a) the jurisdiction to make ancillary and interlocutory decisions of the Tribunal in the proceedings, (b) the jurisdiction to exercise such other functions as are conferred or imposed on the Tribunal by or under this Act or enabling legislation in connection with the conduct or resolution of such proceedings."
Section 32(2)(a) gives the Appeal Panel power to make a costs order in the appeal proceedings because an ancillary decision is defined in s 4 of the NCAT Act to include "a decision concerning the awarding of costs in proceedings". Section 32(2)(b) gives the Appeal Panel the jurisdiction to exercise other functions "in connection with the conduct or resolution of such proceedings." The Appeal Panel is given a corresponding order making power in s 81(2). Under that provision, the Appeal Panel "may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal . . ."
These provisions give the Appeal Panel power to exercise functions, such as making a costs order, but only in relation to "the conduct or resolution of" the appeal proceedings. There was no decision about costs at first instance. The proceedings were adjourned, part heard. Consequently, despite our invitation for the parties to make submissions on the appropriate first instance costs order, the Appeal Panel does not have power to make such an order. Any outstanding issues relating to costs need to be determined by the Tribunal at first instance.

[3]

What legal principles apply to the awarding of costs on appeal?

The general rule in relation to costs in the Tribunal is that each party pays their own costs unless there are special circumstances warranting an award of costs: NCAT Act, s 60(1). However, that rule does not apply to these proceedings because the proceedings are in the Consumer and Commercial Division and the amount claimed or in dispute is more than $30,000. Clause 38(2)(a) of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) provides that in those kinds of proceedings, the Tribunal may award costs in the absence of special circumstances. The same costs rule applies to internal appeals from such proceedings: NCAT Rules, cl 38A.
Clause 38 of the NCAT Rules gives the Tribunal a wide discretion to make an order for costs. It does not specify the factors the Tribunal may take into account in exercising the discretion. When courts and tribunals have a discretion to award costs, in the absence of any disentitling conduct, costs are usually awarded in favour of the successful party. But that is not an absolute rule: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67] and [134].
Mr and Mrs Pullicin submitted that there should be no order as to the costs of the appeal. There were three bases for that submission. First, the owners corporation appealed from both the work order and the award of damages and advanced ten grounds of appeal. Only one of those grounds was that the Tribunal did not have jurisdiction to make an order for damages. Secondly, the jurisdiction issue was a new argument made for the first time on appeal. Thirdly, the appeal was listed for hearing concurrently with the appeal from the Tribunal's unreported decision in Vickery v The Owners - Strata Plan No 80412 (18 October 2019). At the hearing of the appeal, the owners corporation adopted the submissions of the owners corporation in relation to jurisdiction in that case. In all the circumstances, Mr and Mrs Pullicin submitted that it was 'manifestly unjust' to order them to pay the owners corporation's costs of the appeal.
The Appeal Panel also sought the parties' submissions on whether another possible basis for each party paying their own costs was that the appeal raised issues of public importance.

[4]

Appeal was from the work order, not just the jurisdiction to award damages

Mr and Mrs Pullicin's primary submission on costs was that the Appeal Panel has never determined the owners corporation's challenge to the work order. In those circumstances, there ought to be no order as to the costs of the appeal because it is not possible to properly apply the principles relevant to the exercise of the costs discretion.
We concluded, at [9] of the substantive decision, that the Tribunal does not have power to order damages or compensation for failure to comply with the duty in s 106(1) of the Strata Schemes Management Act. On that basis, we considered that it was unnecessary to consider any of the other grounds of appeal because those grounds depended on the Tribunal having jurisdiction to award damages.
Mr and Mrs Pullicin submitted that the owners corporation had, in grounds of appeal 2, 3, 8 and 9, appealed from the Tribunal's decision to make a work order. On our reading of the grounds of appeal, only ground 9 relates to the work order. That ground was that: The appellant seeks leave to appeal the Tribunal's decision to order the appellants to commence rectifications works at the earliest opportunity without regard to the progress of any claim by the appellant against Max Build.
We note that ground 9 does not relate to the making of the work order, just to the making of that order without regard to the progress of any claim against the builder. In its written submissions on costs, the owners corporation confirmed that it has never disputed the undertaking of the work the subject of the work order. The owners corporation did not address this ground in oral submissions except to say that it may be withdrawn.
In these circumstances, we do not accept Mr and Mrs Pullicin's submission that because the Appeal Panel has not determined the owners corporation's challenge to the work order, we cannot properly exercise the costs discretion. The owners corporation was entirely successful on appeal.

[7]

Public importance of the question

We invited the parties to make further submissions on the issue of whether each party should pay their own costs on appeal because this is an issue of public importance.
In Oshlack v Richmond River Council (1998) 193 CLR 72 an environmental activist unsuccessfully challenged a council's development approval. In the Land and Environment Court, Stein J decided not to order Mr Oshlack to pay the council's costs. The High Court upheld that decision. Among the factors Stein J took into account were that Mr Oshlack had nothing to gain from the litigation and that he was motivated to preserve the habitat of endangered fauna on the proposed development site.
In Attrill v Richmond River Shire Council (1995) 38 NSWLR 545 the appellants were owners of dairy farms. They sought injunctive relief and damages from the Council for the effects of flooding. There was a conflict of authority within the Equity Division of the Supreme Court as to the meaning of s 582A of the Local Government Act 1919 (NSW). It fell to the Court of Appeal to determine whether the Council was immune from liability under that provision. The Court concluded that the provision gives immunity to the Council and the appellants were therefore unsuccessful. In ordering that each party pay its own costs, Kirby P (Clarke JA agreeing) held that: The issue raised on appeal is one of importance to local government. There has been a division of opinion within the Supreme Court. The determination of that dispute in this Court is in the public interest.
These proceedings involve a commercial dispute between private entities - an owners corporation and a lot owner. Mr and Mrs Pullicin had a great deal to gain from a positive outcome. While owners corporations and lot owners have an interest in the law being settled and predictable, this is not public interest litigation in the sense that term is generally understood. Even if it could be characterised in that way, the discretion to award costs is a broad one and we do not consider that any element of public interest or significance to the State justifies departing from the usual costs rule.

The Owners - Strata Plan No 74835 v Pullicin

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Judgment (10 paragraphs)

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Legislation Cited (4)

Cases Cited (10)

Cited By (6)