The Owners - Strata Plan No 80412 v Vickery

Preliminary view and parties' submissions

1. In the substantive Appeal Panel decision, we expressed a preliminary view that, in the absence of any disentitling conduct by the successful party, the Tribunal's costs order should be reversed. Mr Vickery should pay the owners corporation's costs: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [69].
2. In relation to the costs of the appeal, we expressed the preliminary view that, as the same costs rule applies on appeal, Mr Vickery should pay the owners corporation's costs. We gave the parties the opportunity to make written submissions on these proposed orders. Following consultation with the parties, we also made an order that, "Final costs orders will be determined on the papers": NCAT Act, s 50.
3. The owners corporation supported both the Appeal Panel's proposed costs orders. As the owners corporation has paid Mr Vickery $97,000, it also asked for an order that Mr Vickery repay that amount immediately. Mr Vickery stated that he intends to repay the full amount and expects to be in a position to do so within 14 days of 29 January 2020. Under s 81(1) of the NCAT Act, the Appeal Panel has power, when determining an internal appeal, to make "such orders as it considers appropriate in light of its decision on the appeal" including that "the decision under appeal be … set aside and for another decision be substituted for it." We have set aside the Tribunal's order that the owners corporation pay Mr Vickery damages. We have power to make an order in substitution for that decision. Given that the owners corporation has paid Mr Vickery $97,000, we make the following order: Mr Vickery is to pay The Owners - Strata Plan No 80412 $97,000 immediately.
4. The owners corporation sought an additional order that we reverse a costs order made against it by a differently constituted Appeal Panel in proceedings between the same parties: The Owners - Strata Plan No 80412 v Vickery (No 2) [2019] NSWCATAP 97. Alternatively, the owners corporation submitted that we should order that each party pay its own costs in those proceedings.
5. Mr Vickery submitted that the Tribunal's costs decision in his favour should not be reversed and that each party should pay its own costs on appeal. He also submitted that the Appeal Panel should not disturb the costs order made by a differently constituted Appeal Panel.
6. Nothing either party has submitted has changed our preliminary view. We have decided to reverse the Tribunal's costs order and order that Mr Vickery pay the owners corporation's costs on appeal. We do not have power to set aside orders made by a differently constituted Appeal Panel in separate interlocutory proceedings.

Who should pay the costs of the Appeal Panel proceedings?

The costs rule

1. 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 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: NCAT Rules, cl 38A.
2. 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].
3. Mr Vickery made three main points in support of his submission that each party should pay its own costs on appeal. First, he submitted that the Owners Corporation only succeeded on appeal because of a change in the law occurring after the first instance decision. Secondly, he submitted that the public importance of the question on appeal justified a departure from the usual order as to costs. Finally, Mr Vickery said that it was relevant that he was ineligible for a payment from the Suitors Fund. For the reasons which we give below, we do not accept that, either alone or in combination, any of these factors justify departing from the usual costs rule.

Change in the law

1. The so-called "change in the law" refers to the fact that the Appeal Panel's decision was inconsistent with another Appeal Panel decision - ­The Owners Strata Plan No 30621 v Shum [2018] NSWCATAP 15 (Shum). In that case, the Appeal Panel decided that the Tribunal did have power to order damages for breach of the statutory duty in s 106(1) of the Strata Schemes Management Act. After the Appeal Panel delivered the decision in Shum, a differently constituted Appeal Panel decided that the Tribunal did not have power to award damages for breach of the statutory duty: Shih v The Owners - Strata Plan No 87879 [2019] NSWCATAP 263 (Shih). The Appeal Panel in Shih also expressed the tentative view that, even though the Tribunal cannot order damages, it may have power to order compensation for the same kinds of losses.
2. We accept that, in general, the issues in any appeal must be determined in accordance with the law in force at the date of the hearing: Luther v James Sagor & Co [1921] 3 KB 532. In that case, an unsuccessful respondent on appeal was awarded costs in the proceedings at first instance because that decision had been correct on the facts at the time. However, this is not a case where the law has changed after the first instance decision. Rather, a differently constituted Appeal Panel has expressed a view of the law that is entirely or partly inconsistent with a view of the law expressed in Shum and Shih.
3. When the current proceedings came before the Appeal Panel, there was a divergence of authority as to whether the Tribunal had power to award damages and/or compensation for breach of the statutory duty. However, it is a mischaracterisation to say that the owners corporation has only succeeded because of a change in the law occurring after the first instance decision. There has been no change in the relevant legislation. The Appeal Panel has merely declared that those provisions do not confer jurisdiction on the Tribunal to award damages.
4. Mr Vickery did not have a reasonable expectation of succeeding based on the principle of comity. The Appeal Panel is not bound by the doctrine of precedent and may depart from the rulings of an earlier Tribunal or Appeal Panel where it is considers it to be "plainly wrong": Ku-Ring-Gai Council v NSW Department of Premier and Cabinet [2016] NSWCATAD 181 at [15] - [17]. Because NCAT is not bound by the doctrine of precedent, in theory, none of the conflicting decisions takes precedence. However, as we noted at [9] of the substantive decision, the current appeal is constituted by three members including two presidential members who are judicial officers. Considerations of consistency and maintaining public confidence in the legal process weigh heavily in favour of tribunals at first instance and on appeal following this Appeal Panel's substantive decision.

Public importance of the question

1. Secondly, Mr Vickery submitted that the appeal determined an issue of importance to the State and its determination is in the public interest: Attrill v Richmond River Shire Council (1995) 38 NSWLR 545 at 556 (Kirby P and Clarke JA, Powell JA dissenting); Oshlack v Richmond River Council (1998) 193 CLR 72 at [137]. Mr Vickery noted that an increasing number of dwellings in NSW are governed by the strata schemes legislation. The issue of whether the Tribunal can award damages for breach of an owners corporation's fundamental duty to maintain and repair the common property was said to be one of significant importance in NSW.
2. 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.
3. Mr Vickery also referred to the Court of Appeal decision in Attrill v Richmond River Shire Council (1995) 38 NSWLR 545. In that case, 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.
4. These proceedings involve a commercial dispute between private entities - an owners corporation and a lot owner. Mr Vickery 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.

Ineligibility for payment from Suitors Fund

1. Thirdly, Mr Vickery submitted that he has no recourse to the Suitors Fund: Suitors Fund Act 1951 (NSW), s 6. Where recourse to that Fund is available, it provides a limited indemnity in respect of costs payable by the respondent to an appeal. It does not relieve the respondent from any liability to pay costs to the successful appellant. It follows that being ineligible for payment from the Fund is irrelevant to our consideration of the appropriate costs order.

Who should pay the costs of the Tribunal proceedings?

1. The Tribunal at first instance gave the following reasons for ordering that the owners corporation pay Mr Vickery's costs: The respondent (owners corporation) did not put forward any reason why the usual rule, that costs follow the event, should not apply. Accordingly, I will order that the Respondent (owners corporation) pay the Applicant's (Mr Vickery's) costs of the proceedings as agreed or assessed. (Words in brackets added.)
2. In the substantive appeal, we set aside order 1 made at first instance which was to the effect that the owners corporation pay Mr Vickery $97,000 immediately. On appeal, Mr Vickery made no submissions about the appropriate costs order at first instance.
3. In proceedings where the normal rule is that costs follow the event, the "event" is now that the owners corporation is the successful party. It follows that the first instance costs order should be reversed. Mr Vickery should pay the owners corporation's costs.

Does the Appeal Panel have jurisdiction over a decision of another Appeal Panel?

1. Before the Tribunal at first instance gave its decision, the owners corporation had applied for the proceedings to be summarily dismissed. The Tribunal refused the application and the owners corporation sought leave to appeal from that decision. A differently constituted Appeal Panel refused leave to appeal: The Owners - Strata Plan No. 80412 v Vickery [2019] NSWCATAP 71. The Appeal Panel ordered that the owners corporation pay Mr Vickery's costs of the application for leave to appeal as agreed or assessed on an ordinary basis: The Owners - Strata Plan No. 80412 v Vickery (No 2) [2019] NSWCATAP 97. The Owners Corporation has applied in the current proceedings for that order to be set aside and for Mr Vickery to pay the owners corporation's costs or for each party pay their own costs.
2. Section 81(1) of the NCAT Act provides, in part, that "[i]n determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on appeal…" The owners corporation relied on that provision to submit that the Appeal Panel, as presently constituted, has power to set aside the order of a differently constituted Appeal Panel.
3. The Appeal Panel's internal appeal jurisdiction is set out in s 32 of the NCAT Act. Under s 32(1)(a), the Appeal Panel has jurisdiction over "any decision made by the Tribunal in proceedings for a general decision". However, the internal appeal jurisdiction does not extend to "any decision of an Appeal Panel". The costs order that the owners corporation is applying to have set aside is a decision of an Appeal Panel. We have no jurisdiction over such a decision.

Orders 1. Mr Vickery is to pay The Owners - Strata Plan No 80412 $97,000 immediately. 2. Mr Vickery is to pay The Owners - Strata Plan No 80412's costs of these proceedings as agreed, or if not agreed, as assessed. 3. The Tribunal's order made on 18 October 2019 that The Owners - Strata Plan No 80412 pay Mr Vickery's costs of the proceedings as agreed or assessed, is set aside. In substitution for that order, the following order is made: Mr Vickery is to pay the Owners Strata Plan No 80412's costs as agreed or if not agreed, as assessed.

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: 17 March 2020