This is a costs application from a decision of the Tribunal on 4 June 2021 dismissing an application for interim orders under s 231 of the Strata Schemes Management Act 2015 (NSW) ('the SSMA').
Mr Zhang is a Lot owner in a strata scheme located in Lansvale NSW. Mr Theo Trigas is another Lot owner in the strata scheme.
On 21 August 2020 the owners corporation held an Annual General Meeting ('AGM')
At the time of the 2021 AGM, Ms Carroll of Len Robinson Strata & Community Management was the strata managing agent of the owners corporation.
At the 2020 AGM a strata committee was elected. The Minutes of the AGM state that Mr Zhang and Mr Theo Trigas were elected to the strata committee along with 5 other persons.
The Minutes state that in respect of the appointment of a strata manager (Motion 18):
"IT WAS RESOLVED that the Owners Corporation defer the appointment of Len Robinson Strata Management and that the strata committee will determine"
The Minutes of the AGM further state that a strata committee meeting was held immediately following the AGM. The Minutes state that Mr Theo Trigas was elected as Secretary; Mr R. Stambolis was elected as Chairperson; and Mr J. Baba was elected as Treasurer.
On 22 October 2020, Mr Theo Trigas sent out an email to other strata committee members with the heading "General Meeting". The email stated that there were 3 items on the Agenda as follows:
1. Motion 1-Terminate the strata managing agency agreement with Len Robinson Strata & Community Management.
2. Motion 2-The owners corporation resolve to appoint a new strata managing agent.
3. Motion 3-The owners corporation write to the "new strata agent" (sic) and request collection of "strata books" (sic).
Mr Zhang sent a text to Mr Trigas on the same date stating the "Notice of meeting should be reissued to be valid".
The meeting of the strata committee occurred on 27 October 2020. Prior to that meeting, Mr Zhang sent a written document signed by various Lot owners to Mr Trigas. The document stated that the Lot owners identified "opposed" the "decisions may make by the Strata Committee on the move of the…Motions" (sic).
Mr Zhang attended the meeting along with other strata committee members. The minutes of the meeting comprised of handwritten notes (it is unclear from the evidence as to who took the notes). The notes indicate that in addition to the strata committee "resolving" to terminate the managing agency agreement of Len Robinson Strata & Community Management, it was resolved to appoint Australian Strata Management (Mr Chehade being the relevant strata manager) as the new strata managing agent.
Mr Trigas, in a statutory declaration dated 25 May 2021, asserts that the strata committee meeting of 27 October 2020, asserts that Australian Strata Management was validly appointed at the meeting, and Ms Carroll had previously made oral comments at the Annual General Meeting on 21 August 2020 that the strata committee had the "delegated power" to appoint a strata managing agent.
On 28 October 2020, a strata managing agency agreement was purportedly entered into by the owners corporation with Strata and Building Management Pty Ltd t/as Australian Strata Management. The common seal of the owners corporation was applied to the document. The document was signed by Mr Trigas (Secretary); Mr Stambolis (Chairperson) and Mr Chehade.
In the period of 29-30 October 2020, there was an email exchange between Mr Trigas and Ms Carroll. In essence, Mr Trigas stated that a new strata manager had been appointed and requested return of strata records. Ms Carroll stated that the managing agency agreement with Len Robinson expired on 19 October 2020, and that the only power the strata committee had under s 49 of the Strata Schemes Management Act 2015 (NSW) ('the SSMA') was to extend the appointment of Len Robinson for a further 3 months. Ms Carroll requested a copy of minutes of a meeting of the owners corporation showing that a Motion had been passed to appoint a new strata manager; or a Motion passed at such a meeting not to extend the appointment of Len Robinson as strata manager. Mr Trigas stated that the strata committee had the power to make such a decision.
On 4 November 2020, Mr Zhang sent a written "request for a General Meeting" under s 19 of the SSMA to Mr Trigas. The document was purported signed by 9 Lot owners. The request identifies "7 matters/motions" including the appointment of a strata managing agent; the "termination" of the current strata committee; and the election of a new strata committee.
An agenda was sent to Lot owners for an Extraordinary General Meeting of the owners corporation on 23 December 2020, The agenda is dated 9 November 2020. Included in the Motions were Motions to appoint a strata manager (with proposals received from Len Robinson Strata; and Australian Strata Management to be considered); to vacated the appointment of the current strata committee members; and elect a new strata committee.
A form of a meeting occurred on 23 December 2020. Mr Trigas asserts the meeting was not validly held, because he had written to Lot owners on 21 December 2020 stating the meeting should not proceed due to COVID-19 "special restrictions" on public gatherings between 22 and 23 December 2020 and "advice" given from NSW Police.
Mr Zhang asserts the meeting was validly held and proceeded, with Mr Stambolis (Chairperson) presiding at the meeting.
Minutes of the meeting were taken. Those minutes purport to show that Motions were passed vacating the existing strata committee; electing a new strata committee (which again included Mr Zhang) and appointing Len Robinson Strata as the strata managing agent. A strata committee meeting was purportedly held immediately after the General Meeting on 23 December 2020, at which a 'new' strata committee was purported elected including Mr Zhang as Secretary.
Mr Trigas asserts the meetings on 23 December 2020 were not validly held, and the validly appointed strata committee is the strata committee appointed on 21 August 2020. Mr Zhang asserts the meeting on 23 December 2020 was validly held, and the validly appointed strata committee is the strata committee appointed on 23 December 2020.
Since 23 December 2020 the strata scheme has been in the invidious position where there are two separate groups (referred to, for ease of reference, as the 'Trigas group' and the 'Zhang group') who purport to be the validly elected strata committee; and a dispute as to whether Len Carroll Strata Management or Australian Strata Management is the validly appointed strata manager.
Since 23 December 2020 both groups have held meetings. For the purpose of this costs application it's unnecessary to further detail the meetings or the disputes about whether or not such meetings were validly held and whether Motions were validly passed.
[2]
TRIBUNAL PROCEEDINGS
Mr Zhang commenced proceedings in the Tribunal on 20 April 2021. The proceedings identified Mr Zhang as the applicant rather than the owners corporation, but he signed the application as "Secretary for the owners corporation".
Mr Zhang sought interim orders that Australian Strata Management immediate cease purporting to act as the strata manager for the owners corporation. In the substantive proceedings, Mr Zhang sought orders "under s 72 and s 181" of the SSMA.
Section 72 of the SSMA involves an application by an owners corporation to the Tribunal for an order terminating the managing agency agreement of a duly appointed strata manager to that strata scheme. Section 181 of the SSMA involves a strata committee of an owners corporation giving notice to a person who has control or possession of property and records to return such records.
Mr Zhang's applications were listed in the Tribunal before Charles SM on 11 May 2021. Charles SM adjourned the hearing of the application for interim orders and the directions hearing in the substantive proceedings, and made various procedural directions.
On 25 May 2021, Mr Trigas filed proceedings in the Tribunal. As with Mr Zhang's application, the owners corporation was not identified in the application filed as the applicant. Mr Trigas sought an order under s 24 of the SSMA declaring that the purported General Meeting of the owners corporation was not validly held.
On 4 June 2021, Mr Zhang's application for interim orders was listed for hearing. Mr Zhang's application for substantive orders was listed for directions hearing. The application by Mr Trigas was listed for directions hearing.
The Tribunal was allocated 90 minutes to deal with directions in Matters SC 21/17250 (Mr Zhang's application for substantive orders) and Matter SC 21/23339 (Mr Trigas' application for substantive orders) and hear the Mr Zhang's application for interim orders (Matter SC 21/17244).
In the days prior to 4 June 2021, Mr Weinberger, Solicitor, wrote to the Tribunal stating that he was acting for the owners corporation. Mr Weinberger was instructed by the Trigas group.
On 4 June 2021, Mr Weinberger was granted leave to appear, but with the Tribunal noting that there was a dispute regarding who was the duly elected strata committee.
In the substantive proceedings of both parties, the Tribunal made extensive case management directions.
Importantly, a direction made by the Tribunal was that in the substantive proceedings, the Tribunal would consider the appointment of a compulsory strata manager under s 237 (1) of the SSMA. The Tribunal made procedural directions that parties provide details of proposed compulsory strata managers. It is self-evident from the nature of the disputes about the validity of meetings and who was the duly elected strata committee as to why the Tribunal, of its own motion, identified that it was appropriate to consider whether compulsory appointment of a strata manager was an appropriate course of action.
The Tribunal also granted both Mr Zhang and Mr Trigas leave to amend their respective applications and file Points of Claim in their respective applications. The owners corporation was joined as an "other party" to both sets of proceedings. All parties were granted leave to be legally represented, but without any determination at that directions hearing as to who represented the owners corporation in the proceedings.
Both Mr Zhang's substantive application and Mr Trigas' substantive application were set down for a final hearing.
During the directions hearing, Mr Weinberger submitted that Mr Zhang's substantive proceedings should be dismissed on the basis it was manifestly hopeless (I.e. that it should be summarily dismissed). The Tribunal refused to dismiss Mr Zhang's substantive proceedings.
The Tribunal then heard oral argument and evidence in respect of Mr Zhang's application for interim orders. The Tribunal dismissed Mr Zhang's application for interim orders. The Tribunal gave oral reasons.
Mr Weinberger subsequently made a written costs application in respect of the decision of the Tribunal to dismiss Mr Zhang's application for interim orders.
The Tribunal, after receipt of the costs application, made directions regarding the filing and serving of written submissions on the issue of costs.
Although neither party requested written reasons from the Tribunal of the oral reasons on 4 June 2021 dismissing Mr Zhang's application for interim orders, the submissions of Mr Weinberger contain a copy of the transcript.
Both parties have filed and served written submissions. Mr Zhang filed and served further submissions beyond the scope of the procedural directions made. Mr Weinberger wrote to the Tribunal asserting that such submissions should not be considered.
Mr Weinberger seeks that Mr Zhang pay the legal cost of the "owners corporation" (in respect of which Mr Weinberger submits he has been validly engaged to act for) in a lump sum amount of $21,385.09, which includes the fees of the predecessor Solicitors to Mr Weinberger, Wilson Lawyers Pty Ltd).
The Tribunal has read and considered the submissions on costs of both parties. The Tribunal has only taken into account the submissions and documents that have been filed and served in accordance with Tribunal procedural directions.
[3]
CONSIDERATION OF THE COSTS APPLICATION IN MATTER SC 21/17244
The written submissions of Mr Weinberger are lengthy. It is unnecessary to repeat them in detail. However, the substance of the submission is that Mr Zhang's application for interim orders was doomed to fail for reasons that include that he had no standing to make an application for orders under ss 72 and 181 of the SSMA in a personal capacity.
The written submissions of Mr Weinberger contain a number of references to the phrase "jurisdictional fact". The submissions assert that it was not in dispute that the Annual General Meeting of the owners corporation was validly held on 21 August 2020 and that the strata committee elected at that meeting was duly elected. Mr Weinberger submitted that it was abundantly clear no valid meeting had been held on 23 December 2020.
Section 60 of the NCAT Act states:
60 Costs
(1) Each party to proceedings in the Tribunal is to pay the party's own costs.
(2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.
(3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following -
(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,
(d) the nature and complexity of the proceedings,
(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
(f) whether a party has refused or failed to comply with the duty imposed by section 36(3),
(g) any other matter that the Tribunal considers relevant.
(4) If costs are to be awarded by the Tribunal, the Tribunal may -
(a) determine by whom and to what extent costs are to be paid, and
(b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis.
(5) In this section -
costs includes -
(a) the costs of, or incidental to, proceedings in the Tribunal, and
(b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.
The Appeal Panel of the Tribunal has considered on many occasions the applicable principles in respect of whether or not "special circumstances" apply to depart from the usual position under s 60 (1) of the NCAT Act that each party bears its own costs.
Such principles were summarised in The Owners-Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273 at [6]-[15] (B & G Trading (No 2) as follows:
"6. The general rule set out in s 60(1) was (citing Youssef v NSW Legal Services Commissioner (Costs) [2020] NSWCATOD 115 at [107]):
'… designed to promote access to justice generally and to minimise the overall level of costs in tribunal proceedings as far as is practicable: Choi v University of Technology Sydney [2020] NSWCATAP 18 at [41].'
7. In Feng v OzWood (Australia) Pty Ltd [2020] NSWCATAP 42 the Appeal Panel said, at [8], that the discretion to award costs had to be exercised judicially:
'...having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. (See eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]-[31]; Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (No 2) [2016] NSWCATAP 168 at [16].)'
8. Section 60(2) says that the Appeal Panel may award costs to a party 'only if' satisfied there are special circumstances warranting an award of costs.
9. Section 60(3) sets out a non-exclusionary list of factors to which an Appeal Panel may have regard in determining whether special circumstances warranting an award of costs exist.
10. 'Special circumstances' are circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary: Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] (Santow J); Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32]; Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8]; Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 at [9]; Youssef v NSW Legal Services Commissioner (Costs) [2020] NSWCATOD 115 at [107].
11. However, it does not follow that a costs order should be made simply because one or more of the factors in s 60(3) are made out.
12. Even if satisfied that there are special circumstances, the Appeal Panel must further be satisfied that they are circumstances 'warranting an award of costs' - Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103 at [21]; Youssef at [108].
13. The exercise of the discretion requires the Tribunal 'to weigh whether those circumstances are sufficient to amount to 'special' circumstances that justify departing from the general rule that each party bear their own costs': BPU v New South Wales Trustee and Guardian (Costs) [2016] NSWCATAP 87 at [9]; Obieta v Australian College of Professionals Pty Ltd (2014) NSWCATAP 38 at [81]; Khalaf v Commissioner of Police [2019] NSWCATOD 178 at [29]; Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 at [35].
14. He who asserts must prove, and so the party seeking the costs order bears the onus of proving that special circumstances exist - Styles v Wollondilly Shire Council [2017] NSWCATAP 108 at [5] under the heading 'Costs'.
15. Whether special circumstances exist is a question of fact and each case must be assessed according to its circumstances: Wynne Avenue Property Ltd v MJHQ Pty Ltd (No 2) [2019] NSWCATAP 68 at [57]; The Owners - Strata Plan 20211 v Rosenthal [2019J NSWCATAP 49 at [15]."
While the Tribunal accepts that Mr Zhang did not have standing to obtain orders under ss 72 and 181 of the SSMA in a personal capacity on an interim basis under s 231 of the SSMA, the Tribunal is dealing with an unrepresented litigant.
It is not unusual in strata disputes for an unrepresented litigant to file proceedings in the Tribunal seeking interim orders to deal with a genuine grievance about the operation of a strata scheme without clearly understanding the appropriate orders to be sought, or the applicable legal principles.
In such circumstances, the other party may, or may not, satisfy the Tribunal that a costs order should be made, applying the principles set out in B & G Trading.
However, the Tribunal must also consider the substance of the dispute, and not take an unnecessarily narrow and legalistic approach.
In the proceedings that were dealt with on 4 June 2021, there is clearly a genuine issue as to whether the strata scheme is complying with its legal obligations in the manner in which meetings are conducted; strata managing agents appointed; and also whether the strata scheme is dysfunctional. Under those circumstances, irrespective of the orders that were sought by Mr Zhang, the Tribunal of its own Motion determined that compulsory appointment of a strata manager was an issue to be considered.
Further, both parties were given the opportunity to amend their respective claims in their substantive proceedings, reflecting that there are potentially other orders and provisions of the SSMA that both parties may identify and rely upon to deal with the substance of their dispute.
Both parties have arguable cases, and the hearing of the substantive proceedings is the appropriate vehicle to make findings on the issues in dispute after consideration of all the claims of the respective parties and the evidence relied upon.
Although, as discussed previously, the Tribunal accepts that Mr Zhang sought orders in the application for interim orders that could not be made, his substantive proceedings raised issues that are genuine and clearly arguable.
The procedural history of the matter in the Tribunal prior to 4 June 2021 is not sufficiently unusual, or lengthy by reasons of the actions of Mr Zhang that "special circumstances" are established. There are no other matters that the Tribunal regards as constituting "special circumstances" under s 60 (2) of the NCAT Act, taking into consideration the relevant matters set out in s 60 (3) of the NCAT Act.
The Tribunal is not satisfied that, even if there are some "special circumstances" by reason of the provisions of the SSMA that Mr Zhang identified in his application for interim orders, that they are sufficient to warrant the award of costs in Matter SC 21/17244.
However, this costs decision only relates to Matter SC 21/17250. Any costs issues arising in Matters SC 21/17250 and SC 21/23339 are to be dealt with in those proceedings, and this costs decision has no bearing on what, if any, costs orders are made in those proceedings if there is ultimately a costs application.
Under such circumstances, it is unnecessary to consider whether, if costs were awarded, whether a lump sum costs order would be made (see Islam v Metricon Homes Pty Ltd [2018] NSWCATAP 116 at [46]-[52] for a discussion of applicable principles).
As "special circumstances" have not been established on the merits, It is also unnecessary to consider any other issue relating to who has standing to make the costs application in Matter SC 21/172444.
[4]
ORDERS
1. An oral hearing on the issue of costs is dispensed with under s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW).
2. The costs application in Matter SC 21/17244 is dismissed.
3. No order for costs is made in Matter SC 21/17244 on the basis that each party should bear its own costs of Matter SC 21/17244 in accordance with Section 60 (1) of the Civil and Administrative Tribunal Act 2013 (NSW).
[5]
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: 01 December 2021