Strata Titles Act 1985 (WA) - Two-lot scheme - Commercial premises - Application for costs by strata company - Onus on party seeking costs - Offers to settle - Whether offers made comply with State Administrative Tribunal Rules 2004 (WA) - Nature of dispute - Conduct of parties - Whether fair and reasonable to award costs - Objectives of Tribunal - How costs are to be considered in the exercise of discretion conferred on Tribunal - Broad brush approach as a matter of impression and without attempt at mathematical precision

Legal Profession (State Administrative Tribunal) Determination 2024 (WA)

Legal Profession (State Administrative Tribunal) Determination 2022 (WA)

State Administrative Tribunal Act 2004 (WA), s 9, s 60(2), s 87, s 87(1), s 87(2), s 87(5)

State Administrative Tribunal Rules 2004 (WA), r 40, r 40(4), r 41, r 41(2), r 42, r 42(1)(d)

Strata Titles Act 1985 (WA), s 197(2), s 197(4), s 198(1), Sch 5, cl 30(1)

Strata Titles Amendment Act 2018 (WA)

Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S)

Calderbank v Calderbank [1976] Fam Law 93, [1975] 3 All ER 333

Evans and Gumtown Pty Ltd (trading as Imperial Pools) [2020] WASAT 113

Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115

Giabeni Pty Limited and The Owners of 30 Coode Street Mount Lawley Strata Plan 11321 [2024] WASAT 105 (S)

McLerie and Koleszko [2014] WASAT 160 (S)

The Owners of 875 Wellington Street, Strata Plan 13599 v Kamil also known as Ahmed Kamil [2025] WASAT 19 (S)

Zhao and Packer [2025] WASAT 88

Zhao and The Owners of 5 Wimbledon Street Beckenham Strata Scheme 40695 [2025] WASAT 87

1. The decision in Zhao and The Owners of 5 Wimbledon Street Beckenham Strata Scheme 40695 [2025] WASAT 87 (the substantive decision) was reported by the Tribunal on 26 August 2025. It concerns a scheme dispute under s 197(4) of the Strata Titles Act 1985 (WA) (ST Act). The applicants, Mr Zhao and Ms Fan were unsuccessful in their application against The Owners of 5 Wimbledon Street Beckenham Strata Scheme 40695 (strata company).
2. On 4 September 2025, the strata company applied for costs of $20,240.
3. Mr Zhao and Ms Fan, following a request for an extension of time to file written submissions opposing the strata company's application for costs, on 9 November 2025, filed their written submissions. In short, Mr Zhao and Ms Fan reject the strata company's claim for costs. Mr Zhao and Ms Fan put it this way:[1]

[The strata company] has not met the burden of proof to overcome s 87(1) and that no costs orders should be made and each party shall bear their own costs.

1. The sole issue for determination is whether, in the particular circumstances or realities of this case, it fair and reasonable that the party claiming its costs, the strata company, should be reimbursed for the costs it has incurred, and if so, in what amount? The strata company has the burden or onus of establishing that it is fair and reasonable in the circumstances of the case for it to be awarded its costs.
2. As Mr Zhao and Ms Fan commenced the proceeding under the ST Act in the Tribunal on 6 September 2023, that is after the major amendments to the ST Act,[2] the provisions of the ST Act apply to the determination of the strata company's application for costs (cl 30(1) of Sch 5 of the ST Act).
3. For the reasons set out below, it is fair and reasonable in all of the particular circumstances or realities of this case to make a final order under s 87(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) that requires Mr Zhao and Ms Fan to pay a contribution to the strata company's costs fixed in the amount of $11,000 within 30 days of the order, or some other timeframe as agreed in writing by the parties. The orders are set out later in these reasons (see below following [129]).

1. The parties are a long way apart in respect of the appropriate orders as to costs.

1. The strata company submits that the Tribunal should exercise its discretion to award costs against Mr Zhao and Ms Fan fixed at $20,240 (for legal costs including disbursements). The reasons for this are, in summary:

(a) the Tribunal generally determined all the issues in favour of the strata company in the substantive decision;

(b) the offers made by the strata company on 26 August 2024 (August offer) and 9 October 2024 (October offer) (together the offers) constitute a significant compromise of the issues. Further, the offers were made significantly prior to the final hearing on 7 and 8 April 2025 thereby affording Mr Zhao and Ms Fan sufficient opportunity to give due consideration to each of the offers;

(c) Mr Zhao and Ms Fan did not seek any extension of time to consider the offers nor did they seek any clarification of the terms of the offers;

(d) the offers were unreasonably rejected by Mr Zhao and Ms Fan based on the factors set out in Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115 (Lo Presti) at [16] and [23]; and

(e) the offers are matters that the Tribunal should take into consideration in the exercise of the broad discretion conferred on the Tribunal by s 87 of the SAT Act.

1. In summary, the strata company submits that there is a sufficient basis to depart from the usual position in the Tribunal that the parties bear their own costs, the circumstances in this case are such that there is a legitimate basis for the Tribunal to exercise its discretion and it is fair and reasonable in the circumstances of this case for the strata company to be awarded costs of $20,240.

1. Mr Zhao and Ms Fan oppose any costs order. The main reasons for this are, in summary:[3]

(a) following Giabeni Pty Limited and The Owners of 30 Coode Street Mount Lawley Strata Plan 11321 [2024] WASAT 105 (S) (Giabeni) at [75] and Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32 (Questdale) at [50], the mere fact that the Tribunal ruled in the strata company's favour has no bearing on whether to award costs;

(b) the August offer is not an offer that is capable of acceptance as it does not comply with the requirements of r 40(4), r 41(2) and r 42(1)(d) of the State Administrative Tribunal Rules 2004 (WA) (SAT Rules). Further, the strata company has no power to make the offer that its strata manager, Strata Administration Services (SAS) will resign as the strata manager;

(c) the October offer is not an offer to settle the matter, rather it merely confirms certain things which happened at a meeting on 9 October 2024;

(d) the strata company appears to be seeking an indemnity costs order as the principles in Calderbank v Calderbank [1976] Fam Law 93, [1975] 3 All ER 333 only apply insofar as to allow a decision-maker to order indemnity costs against a party as compared to party-to-party costs;

(e) following The Owners of 875 Wellington Street, Strata Plan 13599 v Kamil also known as Ahmed Kamil [2025] WASAT 19 (S) at [21], an award of costs is not intended to be a full indemnity or reimbursement of the actual expenses incurred by a party to the proceeding;

(f) it was not unreasonable for them to reject the offers;

(g) their claims were entirely appropriate and reasonable and with reasonable prospects of success;

(h) despite being self-represented litigants they did not unduly delay the proceeding nor act in such a manner to cause unnecessary costs to the strata company; and

(i) the amount claimed for costs by the strata company is excessive when the Cost Agreement provides an estimate for legal costs of $8,000.

1. In summary, Mr Zhao and Ms Fan submit that it is not fair and reasonable in the circumstances of this case for the strata company to be awarded any amount for its costs and therefore they say that the strata company's application for costs should be dismissed.

1. Before turning to the additional material relied upon by the parties in relation to costs, it is useful to start by setting out by reference to Giabeni at [16] to [32] how costs are to be considered in the exercise of the discretion conferred upon the Tribunal. I adopt and have applied the following in my consideration of the issues in this case:

1. As a starting point, each party should expect to pay their own costs in the proceeding before the Tribunal in circumstances where there is a genuine dispute under the ST Act. However, that does not exclude the possibility of an award of costs by the Tribunal: s 87(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act). For example, where a party conducts itself in such a way to unnecessarily prolong the hearing or acts unreasonably or inappropriately, the Tribunal may decide that the justice of the case supports moving away from the starting point (see for example Chew and Director General of the Department of Education and Training [2006] WASAT 248 at [85] and Medical Board of Western Australia and Kyi [2009] WASAT 22 at [73] to [74]).
2. The term 'costs of a proceeding' is defined in s 88(1) of the SAT Act to mean the costs of, or incidental to, a proceeding of the Tribunal, other than costs of a party. Section 88(2) of the SAT Act provides that the Tribunal may order all or any of the costs of a proceeding be paid by a party.
3. The power for the Tribunal to make an order for one party to pay all or any of another party's costs which includes an amount to compensate the other party for any expenses, loss, inconvenience or embarrassment resulting from the proceeding or the matter because of which the proceeding was brought is found in s 87(2) and 87(3) of the SAT Act, subject to the contrary in the relevant enabling Act. In this case, the enabling Act is the ST Act and it does not limit the Tribunal's powers to award costs[.]
4. If the Tribunal makes an order for the payment of costs and does not fix the amount of costs, that amount is to be assessed or settled in accordance with the rules (s 89 of the SAT Act).
5. The leading authority on the exercise of the discretion conferred upon the Tribunal to make orders for the payment of the costs is the decision of the Court of Appeal in Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32 (Questdale).
6. In considering the exercise of the discretion conferred upon the Tribunal under the SAT Act, Murphy JA made the following observations in Questdale at [49] to [62]:
   1. Although s 87(2) does not in terms say that the discretion is to be exercised if it is fair and reasonable in all the circumstances of the case to do so, the judicial nature of the exercise and the scheme of the SAT Act indicates that, broadly speaking, that is the legislative intention.
   2. ... the 'important principle commonly referred to as the "usual order as to costs", under which the successful party is prima facie entitled to his or her costs, has no application given the presumptive position or starting point under s 87(1) of the SAT Act that each party is to bear its own costs'.
   3. Section 87(2) is to be construed in the context that the legal rationale for an order for costs is not to punish the person against whom the order is made, but to compensate or reimburse the person in whose favour it is made. That rationale is evident in s 87(3) of the SAT Act. Accordingly, even in a statutory context where the presumptive position is that no costs will be ordered, generally speaking, the question is whether, in the particular circumstances of the case, it is fair and reasonable that a party should be reimbursed for the costs it incurred. The onus is on the party seeking an order in its favour.

1. ... the nature of the dispute, ... is a relevant consideration.
2. ... every party to proceedings before the Tribunal is, ... taken to be cognisant of the Tribunal's objectives in s 9 of the SAT Act. ... [I]t will be relevant to consider whether and to what extent the [party] can establish that the [other party's] conduct in connection with the proceedings has impaired the attainment of the Tribunal's objectives to have the proceedings determined fairly and in accordance with the substantial merits, with as little formality and technicality as possible, and in a way which minimises the costs to the parties.
3. Nevertheless, the mere fact that a [party] ultimately fails on some contention or contentions advanced at [the hearing] would not, in itself, signify that it has acted inconsistently with the objectives in s 9. That is particularly so in the context that under s 46, s 47 and s 48 of the SAT Act, plainly unmeritorious claims, or claims made or pursued in circumstances which, broadly speaking, may be characterised as involving misconduct, may be screened out before the final hearing. The Tribunal in such circumstances may act on its own volition or on the application of a party.

1. The nature of the dispute for determination, ... will be a factor in the exercise of discretion under s 87(2) ... That is not in recognition of a rule that costs follow the event. Rather, it is a recognition that, generally speaking, the legislative purpose will be served by 'the claimant ... [receiving] his reasonable costs of obtaining the compensation that is, ex hypothesi, his due'. Even there, however, it would remain relevant to consider whether it would be fair and reasonable for the 'successful' [party] to be deprived of its costs, or part of its costs, in all the circumstances of the case, including having regard to the matters referred to earlier.
2. The above observations proceed on the basis that there is no offer that the Tribunal is obliged to consider pursuant to s 87(5) of the SAT Act and r 42 of the SAT Rules. Where r 42 applies, the weight to be given to that mandatory consideration will be a matter for the Tribunal in each case. On the one hand, its importance as a factor is informed by the evident legislative intent that, where possible, parties to proceedings should endeavour to consider settlement ...

1. The above observations are not intended to provide an exhaustive statement of the considerations which should, or may or may not, be taken into account under s 87(2) of the SAT Act in proceedings[.]
2. It is well understood that costs do not follow the event in the proceeding in the Tribunal and that the broad discretion conferred on the Tribunal is to be properly exercised.
3. Finally, in the recent decision of The Owners of 52 Mill Point Road Strata Plan 62152 and Hanssen Pty Ltd [2021] WASAT 102 at [21] to [28] the Tribunal summarised the applicable principles in considering an application for costs referring to Questdale and other relevant cases.

1. Parties to a proceeding before the Tribunal may try to resolve their dispute by way of a written proposal in which an offer of settlement in precise, clear and unambiguous terms is made, that demonstrates a genuine compromise of the offeror's position and provides a summary of the reasons why the offer should be accepted, the terms of which are not disclosed to the Tribunal except in the event of a costs application. This is often referred to as a Calderbank[4] offer. The State Administrative Tribunal Rules 2004 (WA) (SAT Rules) at r 40 deals with such offers to settle. Rule 41 of the SAT Rules concerns acceptance of an offer to settle the proceeding. Finally, r 42 of the SAT Rules concerns orders for costs where an offer to settle the proceeding is rejected.
2. The SAT Rules encourage parties to settle their differences without the need for a final hearing before the Tribunal. The is reflected in Clifford and Shire of Busselton [2007] WASAT 89 (S) at [48] (Clifford) as follows:
   1. The SAT Act, therefore, through s 87(5) and the rules referred to, reveals parliamentary support for the idea that, where possible, parties to proceedings should endeavour to consider settlement. This intent is evident elsewhere in the SAT Act. For example, s 9(b) makes it one of the main objectives of the Tribunal to act as speedily and with as little formality and technicality as is practicable, and minimise the cost to parties. Section 52 encourages the use of compulsory conference as an alternative to a final adversarial hearing. Section 54 encourages mediation as an alternative to a final adversarial hearing. Importantly, s 56 expressly deals with settlement and enables the Tribunal to make an order giving effect to a written settlement of the parties. In this statutory context then, the rules providing for the making and acceptance of the settlement offers and for the making of an order for costs in the event that a settlement offer is rejected, or at least settling out factors to be considered in relation to an application for an order for costs in some circumstances, are important.
3. However, there is no particular format that an offer to settle must be put. This is reflected in Gill & Ors and Wildnight Pty Ltd [2008] WASAT 135 where the Tribunal noted at [40]:
   1. There is no format in the SAT Act with which the settlement offer must comply. There is also no need for the settlement offer to refer to the SAT Rules. The offer must, however, be drafted in a way that, if accepted, an agreement comes into being. It must therefore be specific enough to settle issues in dispute if it is accepted.
4. In its original jurisdiction, which is the case here, the Tribunal is required to take into account if a party did not accept an offer of settlement made in compliance with r 40 and r 41 of the SAT Rules which is more favourable than the Tribunal's orders: s 87(5) of the SAT Act. However, it does not follow that a costs order will be made. This is because the SAT Rules do not provide that a party who makes an offer more favourable to a party than the result achieved in the Tribunal, is by reason of that, entitled to an order for costs. Rather, as stated by Martin CJ in Questdale at [10], r 42 of the SAT Rules merely provides, perhaps superfluously, that the Tribunal must take such matters into account. This is the same as stated by the Tribunal in the earlier decision of Clifford at [49] to [50].
5. If an offer to settle the proceeding does not comply with the SAT Rules, the Tribunal held in Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S) (Ampezzo) at [37] that it is in the public interest that such offers of settlement be given careful consideration, so that settlement of disputes is encouraged. This reflects the position in Clifford at [65]. Similarly, if a settlement offer is made a very short time before a hearing is due to commence, the fact that a party is not properly able to take advice and consider the offer may also lead to the view that a rejection of the offer will not have consequences in costs for that party: Clifford at [66]. Otherwise, in considering whether to make a costs order, the factors the Tribunal must consider (mandatory considerations) and those which it must not consider (irrelevant considerations) arise from the subject matter, scope, and purpose of the SAT Act properly construed.
6. In considering the offer of settlement in Ampezzo, the Tribunal at [38] by reference to Seaman P, Civil Procedure Western Australia, LexisNexis, Butterworths, 1990 at [24A.O.5A] held that in deciding whether the rejection of a Calderbank offer was unreasonable, regard should be had to, at least the following:[5]

(a) the stage of the proceeding at which the offer was received;

(b) the time allowed for the offeree to consider the offer;

(d) the offeree's prospects of success, assessed at the date of the offer;

(e) the clarity with which the terms of the offer was expressed;

(f) whether the offer foreshadowed an application for costs in the event of the offerees rejecting it [.]

1. Finally, in order for the Tribunal to assess a party's claim as to costs, in Panegyres v Medical Board of Australia [2020] WASCA 58 Vaughan JA stated at [415]:

... that the Tribunal be appropriately informed as to the work done and time taken as is claimed for and the rates which are said to apply to that work. The detail required in this respect is a matter for the Tribunal. It may take the form of an affidavit attaching the tax invoices as charged. Alternatively, the Tribunal may consider it appropriate to require a short form bill of costs[.]

1. The Legal Profession (State Administrative Tribunal) Determination 2022 with erratum (1 July 2022 to 30 June 2024) (Prior Determination) and the Legal Profession (State Administrative Tribunal) Determination 2024 (1 July 2024 onwards) (Current Determination) provide the maximum hourly and daily rates to be used to calculate the dollar amount chargeable by a legal practitioner, clerk or paralegal in providing advice and services to clients in respect of proceedings and potential proceedings in the Tribunal.
2. In Edge Investments WA Pty Ltd and Q Group WA Pty Ltd [2024] WASAT 9 (S), the Tribunal stated at [62] that the limits for particular items of legal work that can be claimed by a party against another party in contentious proceedings, such as that set out in the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 and the Legal Profession (Magistrates Court) (Civil) Determination 2022, may also be instructive in assessing the reasonableness of the costs claimed in proceedings before the Tribunal.
3. In addition to the above summary, in McLerie and Koleszko [2014] WASAT 160 (S), the Tribunal set out additional factors that might contribute to the Tribunal making of a costs order as follows at [3]:

1. where a party conducts itself unreasonably, particularly where the conduct leads to unnecessary costs to the other party; 2. where a party has conducted itself inappropriately, particularly where the conduct leads to unnecessary costs to the other party;

1. where credibility of evidence is at the heart of the matter;

1. where the application undermines the integrity of proceedings under the relevant Act; 2. where the case is weak, being incredible or implausible or obviously unmeritorious; 3. where a party has to embark in proceedings to vindicate its clear contractual entitlement; 4. the circumstances of the case having regard to the above, or other factors, are such that the justice of the case supports moving away from the initial position that each party should bear their own costs[.]
2. The above summary from Giabeni and McLerie is a non-exhaustive range of factors and there may be other relevant factors which point to the justice of the case requiring an award of costs.
3. I now turn to set out the history of the proceeding in the Tribunal in some detail. Following that I will consider the offers and other matters in order to determine whether or not it is fair and reasonable in all of the circumstances or realities of this case to exercise the Tribunal's discretionary power under s 87(2) of the SAT Act to make an award for costs in favour of the strata company, and if so, in what amount.

1. Following the commencement of the proceeding by Mr Zhao and Ms Fan in the Tribunal on 6 September 2023, a directions hearing was held on 29 September 2023 where the Tribunal ordered Mr Zhao and Ms Fan to file by 13 October 2025 a written statement of the detailed grounds for each order they seek and to file any further documents by way of an indexed and paginated bundle on which they propose to rely.
2. Mr Zhao and Ms Fan filed a document (two pages) on 13 October 2023 and further documents (52 pages) which was not indexed on 30 October 2023, some 16 days after they were required to be filed with the Tribunal. Mr Zhao and Ms Fan provided no explanation for filing the further documents late and did not request an extension of time to file their documents.
3. At the directions hearing held on 29 September 2023, the strata company was ordered to file by 27 October 2023 its written response to Mr Zhao's and Ms Fan's application and to file copies of all documents on which the strata company proposes to rely. Even though Mr Zhao and Ms Fan only filed the documents on which they rely on 30 October 2023, the strata company managed to file its response and documents on 31 October 2023. In its written submission of 31 October 2025, the strata company stated that the documents filed by Mr Zhao and Ms Fan are: confusing, irrelevant to the application, misconceived and lacking in substance.
4. At the next directions hearing held on 7 November 2023, the Tribunal ordered Mr Zhao and Ms Fan to file by 5 December 2023:

(a) a written statement of detailed particulars of the basis on which each of the orders in their application are sought; and

(b) a book of documents (indexed and paginated) on which they propose to rely in the proceedings.

The order is essentially the same as the order made at the first directions hearing on 29 September 2023.

1. On 4 December 2023, Mr Zhao and Ms Fan sought an extension of two weeks to comply the orders of 7 November 2023. The strata company did not oppose the granting of an extension of two weeks. On 5 December 2023, the Tribunal made the order granting Mr Zhao and Ms Fan an extension of time to comply with the orders of 7 November 2023 to 19 December 2023.
2. On 29 December 2023, some 10 days after the documents were required to be filed, Mr Zhao and Ms Fan filed 168 pages without an index. No explanation was provided by Mr Zhao and Ms Fan for their lateness in complying with the orders of 5 December 2023.
3. On 12 January 2024, at the next directions hearing, Mr Zhao and Ms Fan were ordered to file by 16 January 2024, a written statement setting out the orders they seek and an index to the 168 pages filed on 29 December 2023. Orders were also made on 12 January 2024, referring the matter to mediation on 13 March 2024.
4. On 12 January 2024, Mr Zhao and Ms Fan filed a written statement setting out the orders they seek.
5. On 15 January 2024, Mr Zhao and Ms Fan requested 'some time' to comply with the orders of 12 January 2024. The strata company did not oppose the request and on 18 January 2024, the Tribunal made an order extending the time for compliance with the orders of 12 January 2024 to 30 January 2024.
6. On 29 January 2024, Mr Zhao and Ms Fan filed their index to the 168 pages filed on 29 December 2023 and another copy of the orders they seek from the Tribunal (which was filed on 12 January 2024).
7. On 13 March 2024, the parties went to mediation, but they were not able to resolve their dispute or to narrow down the issues in dispute. Following the mediation, the Tribunal ordered the strata company to file by 20 March 2024, the Balance Sheets, Profit and Loss Statements and Statement of detailed expenses for the strata company. Further, the Tribunal ordered Mr Zhao and Ms Fan to file by 10 April 2024, a statement of the issues, facts and contentions (SIFC) they say arise in the proceeding, copies of any other documents on which they rely and any expert accounting reports on which they rely. Finally, the Tribunal ordered the strata company to file by 24 April 2024 its SIFC, copies of any other documents on which it relies and any expert accounting report on which it relies.
8. On 22 March 2024, two days late, the strata company filed Balance Sheets, Profit and Loss Statements and Statement of details expenses. No explanation was provided for the delay.
9. On 9 April 2024, Mr Zhao and Ms Fan requested an extension of one week to comply with the orders of 13 March 2024. The strata company did not oppose the request and on 11 April 2024 the Tribunal granted the extension to 17 April 2024.
10. On 16 April 2024, Mr Zhao and Ms Fan filed their SIFC.
11. On 24 April 2024, the strata company filed its SIFC.
12. On 30 April 2024, at the next directions hearing, the Tribunal ordered the strata company, after discontinuing the five orders sought by Mr Zhao and Ms Fan and limiting the final hearing to the four issues raised in Mr Zhao's and Ms Fan's SIFC, to file by 15 May 2024, its amended SIFC. Further, the Tribunal ordered Mr Zhao and Ms Fan to file by 5 June 2024, a list of the persons who they propose to call to give evidence at the final hearing, together with a written statement of the evidence each witness will give. Also, the Tribunal ordered the strata company to file by 26 June 2024 a list of the persons proposed to be called to give evidence, together with a written statement of the evidence each witness will give. Finally, the Tribunal listed the matter for a final hearing to commence at 10.00 am on 15 August 2024 for a duration of one day.
13. On 14 May 2024, the strata company filed its amended SIFC.
14. On 15 May 2024, Mr Zhao and Ms Fan sought to have the strata manager re-joined as a respondent to the proceeding, when some seven months earlier, on 29 September 2023, the Tribunal made the order removing the strata manager as a respondent to the proceeding.
15. On 29 May 2024, Mr Zhao and Ms Fan filed with the Tribunal their concern that the strata company and/or strata manager have not provided the documents they requested nor allowed them to inspect the documents of the strata company.
16. On 4 June 2024, Mr Zhao and Ms Fan requested a two week extension to comply with the orders of 30 April 2024. The strata company did not oppose, and on 5 June 2024, the Tribunal extended the time for Mr Zhao and Ms Fan to comply with the orders of 30 April 2024, to 19 June 2024.
17. On 11 June 2024, at the next directions hearing, the Tribunal ordered Mr Zhao and Ms Fan to file by 19 July 2024, the particulars of every item of expenditure in dispute including the basis it is disputed, the evidence in support of the irregularity (including the reference of any document in the applicants' book of documents) and where practicable, set out the amount the applicants' say they owe in relation to each item and a book of documents (indexed and paginated) on which they rely.
18. On 19 June 2024, Mr Zhao and Ms Fan filed their respective witness statements.
19. In view of the orders made by the Tribunal on 11 June 2024, on 2 July 2024, the strata company requested an extension of time to file its list of persons to be called to give evidence and a written statement of the evidence. Mr Zhao and Ms Fan did not oppose the request, and on 4 July 2024, the Tribunal granted an extension of time to the strata company to 2 August 2024.
20. On 18 July 2024, Mr Zhao and Ms Fan requested a one week extension to comply with the orders of 11 June 2024. The strata company did not oppose the request, and on 22 July 2024, the Tribunal granted an extension of time to Mr Zhao and Ms Fan to 25 July 2024.
21. On 26 July 2024, one day late, Mr Zhao and Ms Fan filed an unindexed bundle of documents (136 pages) along with spreadsheets (nine pages) and a covering letter (three pages).
22. On 30 July 2024, at the next directions hearing, the Tribunal vacated the final hearing (listed for 15 August 2024) and referred the matter back to mediation on 15 August 2024. The parties were, again, not able to resolve their dispute or to narrow down the issues in dispute.
23. On 5 August 2024, three days late, the strata company filed its list of witnesses and witness statements.
24. On 21 August 2024, Mr Zhao and Ms Fan, among other matters, again requested for the strata manager, SAS, to be re-joined as a respondent to the proceeding. The Tribunal refused to re-join SAS on the same basis as it had ordered back on 29 September 2023.
25. Following a further directions hearing on 8 October 2024 which was adjourned to 29 October 2024, Mr Zhao and Ms Fan, among other matters, again requested for the strata manager, SAS, to be re-joined as a respondent to the proceeding when the Tribunal had removed SAS as a respondent a year earlier, on 29 September 2023. The Tribunal again refused for the same reason as it had ordered back on 29 September 2023.
26. On 29 October 2024, the Tribunal ordered Mr Zhao and Ms Fan to file a supplementary bundle of document, indexed and paginated, by 19 November 2024 and for the strata company to file its amended SIFC by 10 December 2024. Finally, the Tribunal ordered for the final hearing to be listed on 15 January 2025 for the duration of one day.
27. On 18 November 2024, Mr Zhao and Ms Fan filed their indexed and paginated supplementary bundle of documents.
28. On 25 November 2024, the strata company filed its amended SIFC.
29. On 23 December 2024, the Tribunal vacated the hearing date of 15 January 2025 and relisted the matter to a final hearing on 7 April 2025 for the duration of three consecutive days.
30. On 15 January 2025, Mr Zhao and Ms Fan requested the Tribunal to intervene to require the annual general meeting scheduled for 28 January 2025 be stayed pending the outcome of this matter. The matter was listed for a further directions hearing on 11 February 2025.
31. Following the directions hearing on 11 February 2025, Mr Zhao and Ms Fan on 23 February 2025, among other matters, requested for this matter to be heard with matter CC 816 of 2024. That request was refused.
32. I heard the matter over two consecutive days - 7 and 8 April 2025 following which I made orders for the parties to file their closing written submissions. The final closing written submissions were received on 29 May 2025. I then reserved my decision.
33. The Tribunal reported the substantive decision on 26 August 2025 which included final orders. On or about the same date, the Tribunal reported its decision in Zhao and Packer [2025] WASAT 88 (Zhao and Packer) which concerns matter CC 816 of 2024. In that matter, the Tribunal dismissed Mr Zhao's and Ms Fan's application under s 198(1) of the ST Act that the strata company had unreasonably refused to make an application to have SAS removed as the strata manager.
34. On 4 September 2025, the strata company filed its application for costs. On 4 September 2025, I made orders requiring the strata company to file by 30 September 2025, a schedule of the costs it is seeking and written submissions. Further, Mr Zhao and Ms Fan were ordered to file by 27 October 2025 any written submissions opposing the application for costs by the strata company. Finally, I ordered that the Tribunal would determine the application for costs on the documents, pursuant to s 60(2) of the SAT Act, after 27 October 2025 and would fix the amount of any costs awarded.
35. On 25 September 2025, the strata company filed its schedule of costs and written submissions. Subsequently, on 3 October 2025, the strata company filed its amended costs submissions.
36. On 22 October 2025, Mr Zhao and Ms Fan requested an extension of two weeks to file their written submission opposing the strata company's application for costs.
37. On 23 October 2025, I extended the time for Mr Zhao and Ms Fan to file their written submissions opposing the strata company's application for costs to 10 November 2025.
38. On 9 November 2025, Mr Zhao and Ms Fan filed their written submissions opposing the strata company's application for costs.
39. On 10 November 2025, I reserved my decision on the strata company's application for costs.
40. In summary, this case has been in the Tribunal almost two years and during this time numerous directions hearings were held by the Tribunal in order to get the matter to a final hearing. Twenty-eight orders were issued by the Tribunal during the two years.

1. The parties adduced additional evidence in relation to the issue of costs. The evidence broadly relates to various offers to settle made by the strata company prior to the final hearing and the response from Mr Zhao and Ms Fan.
2. The following is a summary of that evidence.

1. On 26 August 2024, GV Lawyers, for the strata company, wrote to Mr Zhao and Ms Fan with the following offer (August Offer):[6]

In an attempt to resolve this matter amicably, our client proposes the following offer for your consideration:

(i) you agree to pay our client the sum of $30,614.57 for the outstanding strata levies;

(ii) upon payment, our client will credit all accrued interest and debt recovery fees that have been applied to your lot; and

(iii) upon completion of the above:

1. Strata Administration Services will resign as the strata manager for the strata scheme;
2. we will discontinue the Magistrates Court claim GCLM 3847/2023 without orders as to costs; and

1. you will discontinue the State Administrative Tribunal proceedings without orders as to costs.

Additionally, we confirm that the Owners of 7 Wimbledon Street Beckenham Strata Scheme 40694 have agreed to apply a credit of 9% to all electricity charges contained in your application, on the provision that a separate Western Power Meter is installed for the strata scheme.

We enclose a copy of the quote to carry out this work.

This offer is a genuine attempt by our client to settle the State Administrative Tribunal and Magistrates Court proceedings, and is open for acceptance until 4:00pm Monday 2 September 2024[.]

1. Mr Zhao and Ms Fan did not reply to the August Offer.

1. On 9 October 2024, GV Lawyers, for the strata company, wrote to Mr Zhao and Ms Fan. The strata company refers to this letter as an offer to settle (October Offer):[7]

We confirm that we continue to act on behalf of [the strata scheme].

We further confirm that on 9 October 2024 at our office you met with Warren Kiddle, Koebie Forward, both of Strata Administration Services, and Pino Monaco.

The following was agreed:

1. You accept the resignation of Strata Administration Services as the Strata Manager of the strata scheme;
2. You accept the resignation of GV Lawyers as the solicitors for the strata scheme;
3. You agree to pay:

(a) Electricity accounts if Warren Kiddle from Strata Administration Services can satisfy you that the electricity accounts sent to you relate to your property and in this regard, you have agreed to a site visit with Warren Kiddle at ....

(b) Insurance premiums plus GST on the premium, but you will not pay the broker fee, stamp duty or any commission paid to Strata Administration Services

1. You are not prepared to pay for the Strata Administration Services fees for work done and administration costs.

Depending on whether or not you can reach an understanding and agreement with respect to the electricity, the only matters then that require a decision by the Tribunal are as follows:

1. Your liability to contribute to the payment of any insurance broker fee, the stamp duty on insurance policies or any commissions paid to Strata Administration Services;
2. Your liability to contribute payment of the work done and administration costs rendered by Strata Administration Services to the strata scheme.

We thank you for meeting with us and arriving at the above as it has significantly narrowed the issues for determination by the State Administrative Tribunal (SAT). Having said that, by the time you calculate your contribution to the disputed items the amount in issue is relatively small and given that you are the owners of a commercial property we consider that you should agree to pay the full amount claimed with respect to the disputed items as no doubt you have claimed those expenditures as a tax deduction.

1. Mr Zhao and Ms Fan replied to the October Offer by letter, undated, as follows:

We refer to our attendance at your office on 9 October 2024 and your letter of the same date.

In regards to the items that you claim was agreed on:

1. Warren Kiddle mentioned that he on behalf of Strata Administrative Services wanted to resign as the strata manager of the Strata Company. We have always claimed that Strata Administrative Services never had a proper written contract with the Strata Company therefore although Mr Kiddle can claim that Strata Administrative Services is resigning our opinion is that Strata Administrative Servies was never the strata manager (at least from 2020). Furthermore, regardless of any attempted resignation it does not absolve Strata Administrative Services from any past actions.
2. Similar to paragraph 1 above - we have never admitted that you act for the Strata Company. From day 1 our claim has always been that you have either acted for Strata Administrative Services since you continue to receive instructions from them or following receipt of the purported contract of legal services between yourselves and the Strata Company (the Cost Agreement) - that you act for the owners of Lot 1 - Lyn Dawson. Again, similar to item 1 nothing in this purported resignation absolves GV Lawyers of any of the issues which occurs prior to the purported resignation.
3. We never agreed to pay for anything that hasn't been properly calculated and attributed to the right entities. For example, the split of electricity fees firstly between Strata Scheme 40694 and the Strata Company. As we currently understand Strata Administrative Services acts as the strata manager for Strata Scheme 40694 however we have nothing of this in writing - we have no knowledge if Strata Scheme 40694 would agree on a certain percentage split nor do we know who to contact should there be disagreements moving forward in regards to the shared utility bills. Secondly, we are but one of the owners of the Strata Company we cannot exceed our authority to act by agreeing to bind the Strata Company to that certain percentage without first consulting on such issue with the other owner.
4. Similar to electricity fees we cannot as merely one of the owners of the Strata Company bind the entire Strata Company to the payment of certain insurance fees and premiums to the exclusion of others. The issue of what fees are payable and what fees are not is not something that we can unilaterally agree by ourselves consider insurance affects the common areas and that is something that needs to be considered with the owner of Lot 1.
5. We have no issues with paragraph 4 of your letter.
6. In relation to what is still up for contention - we do not agree that those are the only issues. For example,

(a) the issue of legal fees and whether GV Lawyers has authority to act for the Strata Company and whether either a strata manager (or merely one of the owners of a strata scheme can bind the entire strata scheme);

(b) the conduct of Strata Administrative Services and whether they had a contract for the provision of strata management services under the Strata Titles Act 1985.

1. The above are also not the only items of expenditure that we have issues with as se have provided a fuller detailed itemised list previously.
2. I now turn to consider the sole issue for determination as set out above at [4]. That is, whether in the particular realities or circumstances of this case, is it fair and reasonable that the strata company should be reimbursed for the costs it incurred, and if so, in what amount?

1. I start by considering the August Offer and the October Offer.
2. Offers to settle are a relevant consideration to the Tribunal's discretion to make an order for costs.
3. Section 87(5) of the SAT Act provides that the SAT Rules may deal with the effect of certain offers to settle, and responses, if any, to the offer, on the making of an order for the payment by a party of the costs of another party.
4. The relevant rules are r 40, r 41 and r 42 of the SAT Rules. They are set out in full below.
   1. Settlement offers

(1) An offer to settle a proceeding that is before the Tribunal may be made -

(a) with prejudice, meaning that any party may refer to the offer, or to any terms of the offer, at any time during the proceeding; or

(b) without prejudice, meaning that the Tribunal is not able to be told of the making of the offer until after it has made its decision in respect of the matters in dispute in the proceeding (other than in relation to the making of orders in respect of costs).

(2) If an offer does not specify whether it is made with or without prejudice, it is to be treated as if it had been made without prejudice.

(4) If an offer provides for the payment of money, the offer must specify the amount of money to be paid and when and how that money is to be paid.

(1) An offer may be open for acceptance for any period. However, an offer must be open for acceptance until the commencement of the hearing or until the expiry of a specified period after the offer is made, whichever is the shorter period.

(2) The minimum period that can be specified is 14 days.

(3) An offer cannot be withdrawn while it is open for acceptance without the permission of the Tribunal.

(4) In deciding whether to give permission, the Tribunal may examine the offer, even if it was made without prejudice.

(5) If the offer was made without prejudice, a member of the Tribunal who examines it for the purposes of subrule (4) must take no further part in the proceeding after determining whether or not to give permission.

(6) A party can only accept an offer by giving the party who made it a signed notice of acceptance.

(7) A party may accept an offer even though the party has made a counter-offer.

1. Order for costs if settlement offer is rejected

(a) a party to a proceeding (other than a proceeding in the Tribunal's review jurisdiction) gives another party to the proceeding an offer in writing to settle the proceeding; and

(b) the other party does not accept the offer within the time the offer is open; and

(d) in the opinion of the Tribunal, the orders made by the Tribunal in the proceeding are not more favourable to the other party than the offer.

(2) If this rule applies, the Tribunal is to, in determining the costs that may be awarded, take into account that the party did not accept an offer more favourable than the Tribunal's order.

(3) In determining whether its orders are or are not more favourable to a party than an offer, the Tribunal -

(a) must take into account any costs it would have ordered on the date the offer was made; and

(b) must disregard any costs it ordered in respect of any period after the date the offer was received.

What is the position of strata company regarding the offers?

1. The strata company makes the following submissions, in summary, about the August Offer and the October Offer:[8]

(a) the offers are valid offers for the purposes of the SAT Act and the SAT Rules;

(b) both offers were made significantly before the final hearing (which was on 7 and 8 April 2025) thereby affording Mr Zhao and Ms Fan sufficient opportunity to give consideration to each offer;

(c) Mr Zhao and Ms Fan had sufficient relevant facts and law upon which to make a decision as to whether or not to accept the offers. Mr Zhao and Ms Fan were aware of the arguments against them and should have given due consideration to each offer;

(d) Mr Zhao and Ms Fan did not seek any extension of time in which to consider either or both offers;

(e) both offers are a significant compromise of the issues and were unreasonably rejected by Mr Zhao and Ms Fan based on the factors set out in Lo Presti at [16] to [23]; and

(f) the terms of each offer are sufficiently clear and Mr Zhao and Ms Fan did not seek any clarification of either of the offers.

What is the position of Mr Zhao and Ms Fan regarding the offers?

1. Mr Zhao and Ms Fan, while acknowledging that the strata company made the August Offer and the October Offer, reject that either offer complies with r 40 and/or r 41 of the SAT Rules. Further, they reject that either offer is a Calderbank offer.
2. The reasons given by Mr Zhao and Ms Fan may be summarised as follows:[9]

(a) the offer requires Mr Zhao and Ms Fan to pay the outstanding strata levies but does not specify when and how the moneys are to be paid;

(b) the offer was not open for 14 days (it was only open for seven days);

(c) the strata company has no power to include in its offer that the strata manager, SAS, is to resign;

(d) the strata company has no power to include in its offer that a non-party, 'Strata Scheme 40694', will apply a credit of 9% to electricity charges; and

(e) the offer does not state that it is made with regards to the principles outlined in Calderbank including that the offer does not provide reasons why the offer should be accepted and if the offer is rejected that an application for indemnity costs will be made.

(a) it is not an offer to settle. It merely confirms certain things that were discussed at the meeting on 9 October 2024;

(b) the offer does not contain all the necessary information to properly resolve the dispute including that words such as 'offer', 'settlement' or 'settle' were not used;

(c) the offer is not marked 'without prejudice save as to costs' and does not state that it is made with regards to the principles outlined in Calderbank; and

(d) the offer does not provide any timeframe for acceptance, nor does it provide any reasons why the offer should be accepted, it does not state that if the offer is rejected then an application for indemnity costs will be made and therefore is not a Calderbank offer.

1. Mr Zhao and Ms Fan contend that neither of the offers comply with r 40 and/or r 41 of the SAT Rules and therefore neither offer is capable of acceptance, regardless that they did not accept either offer. Because of this, Mr Zhao and Ms Fan submit, following Evans and Gumtown Pty Ltd (trading as Imperial Pools) [2020] WASAT 113 at [75] to [76] that the Tribunal is not obliged to consider either offer, nor their non-acceptance under r 42 of the SAT Rules.
2. Further, Mr Zhao and Ms Fan submit that it was not unreasonable for them to reject both offers. The reasons given may be summarised as follows:[10]

(a) their claims were of sufficient merit given the nature of the 'novel situation' in question;

(c) the August Offer did not offer any substantial compromise, especially in relation to the sum sought by the strata company that they would be required to pay if they 'lose' the case;

(d) neither offer is sufficiently clear as to be capable of acceptance;

(e) the August Offer contains two provisions which the strata company is claiming concessions from third parties, SAS and 'Strata Scheme 40694';

(f) the October Offer does not contain terms nor time frames that a reasonable person would accept; and

(g) the term 'credit all accrued interest and debt recovery fees' in the August Offer is unclear because the strata company has not charged debt recovery fees and the offer goes on to state that 'each party will bear their own costs'.

1. In addition, Mr Zhao and Ms Fan submit that the August Offer is very similar to the final orders made by the Tribunal on 26 August 2025 with the consequence, in their view, that the August Offer does not comply with r 42(1)(d) of the SAT Rules. In other words, Mr Zhao and Ms Fan contend that the August Offer is no more favourable than the final orders made by the Tribunal in the substantive decision.
2. In summary, Mr Zhao and Ms Fan, submit:[11]

(a) the final orders of 26 August 2025 provide that the strata company is authorised to perform the designated function of operating and administrative fund which requires all the lot owners including Mr Zhao and Ms Fan to make contributions (strata levies);

(b) the $30,614.57, as set out in the August Offer, is in effect the sum payable by Mr Zhao and Ms Fan under the final orders of 26 August 2025 for contributions (strata levies); and

(c) the strata company's 'win' in the Tribunal means the Magistrates Court matter for the recovery of strata levies is resolved.

Consideration of the August Offer and October Offer

1. The reality of the circumstances involved in this case leads to the conclusion that Mr Zhao and Ms Fan were unsuccessful on all four issues in the substantive decision. Notwithstanding the conclusion, as stated in Questdale at [50], the important principle commonly referred to as the 'usual order as to costs' (under which the successful party is prima facie entitled to its costs) has no application in proceedings in the Tribunal given the starting point in s 87(1) of the SAT Act is that each party is to bear its own costs. However, as set out earlier in these reasons, that does not exclude the possibility of an award of costs by the Tribunal: s 87(1) of the SAT Act.
2. In my view, the August Offer does not comply with the requirements of r 40 and r 41 of the SAT Rules for at least two reasons. First, the minimum period that the offer may be open for is 14 days (and the August Offer was only open for seven days). Second, in regards to the payment required to be made by Mr Zhao and Ms Fan, the offer does not specify when and how the $30,614.57 is to be paid.
3. If the October Offer is an offer to settle the proceeding, it does not comply with the requirement of r 40 of the SAT Rules because in relation to the insurance premium to be paid by Mr Zhao and Ms Fan it does not specify the amount to be paid, and when and how the amount is to be paid. Further, the October Offer does not set out a period of time for which the offer is open.
4. The consequence of having made the finding that neither the August Offer nor the October Offer comply with the requirements of r 40 and r 41 of the SAT Rules, is that r 42 of the SAT Rules provides that neither of the offers have to be taken into account by the Tribunal in determining the costs that may be awarded. However, in Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S) (Ampezzo), a case which concerned an application for costs by the owners against the builder where written without prejudice offers to settle were made, the Tribunal indicated that it is in the public interest that non-complying offers of settlement be given careful consideration by the parties and the Tribunal in exercising its discretion on costs. The Tribunal put it this way at [37]:

It is nevertheless in the public interest that offers of settlement that do not comply with the SAT Rules should be given careful consideration, so that settlement of disputes is encouraged[.]

1. In Ampezzo at [38] and [39], the Tribunal referred to the criteria relevant to the consideration of Calderbank offers under the practice of the Supreme Court of Western Australia as set out in Lo Presti at [19] and added the need, within the practice of the Tribunal, to have regard to the nature of the particular jurisdiction being exercised and the cost rules normally applied by the Tribunal to the particular type of case. The Tribunal put it this way at [39]:

[T]he principles referred to above are relevant to the Tribunal's taking into account an offer of settlement which does not comply with the relevant SAT Rules. Even in the case of a complying offer, the Tribunal retains a discretion under r 42: see Clifford and Shire of Busselton [2007] WASAT 89 (S) and the above criteria [as set out in Lo Presti] may be relevant, together with the nature of the particular jurisdiction being exercised and the cost rules normally applied by the tribunal to the particular type of case.

1. The August Offer was made on 26 August 2024, almost one year after Mr Zhao and Ms Fan made their application to the Tribunal and after the parties had participated in mediation at the Tribunal for the second time on 15 August 2024. Further, the August Offer was made some seven months before the application was finally heard in April 2025.
2. Even though the time allowed for Mr Zhao and Ms Fan to consider the August Offer was short, that is for seven days, in my view, by 26 August 2024, the parties would have had a good understanding of the four issues in dispute which are set out in the substantive decision at [4] and which the parties had filed their respective SIFC and bundle of documents.
3. While Mr Zhao and Ms Fan filed further supplementary documents after 26 August 2024, the strata company did not. Consequently, as at the date of the August Offer, Mr Zhao and Ms Fan were in possession of the strata company's SIFC and the documents on which the strata company was relying on, and therefore, in my view, they were in a position to assess that their prospect of success in regards the issues, as compared to the August Offer, was marginal at best.
4. For example, in relation to the issue of whether Mr Zhao and Ms Fan are required to pay contributions (administrative levies), even though the strata company (correctly) conceded that there is no by-law requiring the strata company to set up an administrative fund for this two lot scheme, it was nevertheless entirely appropriate for the strata company to have an administrative fund in order to levy owners in order to receive funds so that it could pay for the expenses of the strata company including insurance and electricity usage of the common property, which it had done so for the past 20 years or so and which benefits Mr Zhao and Ms Fan as a lot owner.
5. In my view, the extent of the compromise offered by the strata company by its August Offer was significant. The reasons for this are as follows.
6. First, a credit of 9% would be applied to all electricity charges contained in the application to the Tribunal for Mr Zhao and Ms Fan.
7. Second, there would be no order as to costs (which would have prevented the strata company making its current application for costs of $20,240 in the Tribunal).
8. Third, although the amount of interest accruing on outstanding strata levies was not expressly stated nor was the amount for debt recovery fees, the strata company made a significant compromise by offering to forgo these amounts in order to settle the proceeding.
9. Fourth, there is an extraneous term in the August Offer - the resignation of SAS. While it is common ground that Mr Zhao and Ms Fan originally sought an order requiring the strata company to terminate the contract with SAS, by April 2024, when the Tribunal made orders listing the four issues to be determined, the issue concerning SAS was limited to whether there was a strata management contract in force. In that sense, the August Offer made by the strata company to effect the resignation of SAS was extraneous to the current matter (though relevant to the associated matter Zhao and Packer). In considering such extraneous terms that go beyond the issues raised for determination in the proceeding before the Tribunal (in this case the four issues set out in the substantive decision at [4]), it is necessary for the Tribunal to give careful consideration to the clarity of the offer and whether the offeree was able to comprehend the scope of the offer, in an objective sense and whether the inclusion of the extraneous term complicates or renders impossible the assessment of whether the non-acceptance of the offer was unreasonable and whether the offeree would have been better off if the offeree had accepted the offer, relative to the outcome achieved through the Tribunal.
10. While Mr Zhao and Ms Fan contend the terms of the August Offer were not clearly stated, in my view, objectively viewed, while the offer lacked dates and amounts, and so was not capable of immediate acceptance, it could have been subject to further negotiation between the parties about dates and amount. Further, in my view, the August Offer clearly provided a way for matters in both the Tribunal and in the Magistrates Court to be settled without orders for costs. Objectively, a reasonable person would have understood the extraneous term, that is for SAS to resign as the strata manager without the need to work through the complex requirements set out in the ST Act for the removal of the strata manager, was beneficial for Mr Zhao and Ms Fan. Mr Zhao and Ms Fan would have been better off if they had accepted the August Offer as far as the resignation of SAS is concerned, as the conclusion reached in the substantive decision was that the strata management contract is in force and the conclusion reached in the Zhao and Packer matter is that the strata company did not unreasonably refuse to make an application to the Tribunal under s 198(1) of the ST Act to have SAS removed as the strata manager.
11. The August Offer, however, fails to expressly foreshadow that an application for costs will be made by the strata company in the event that Mr Zhao and Ms Fan reject the offer.
12. In conclusion, the August Offer, while it does not comply with r 40 and r 41 of the SAT Rules, following Ampezzo, it is in the public interest that non-complying offers of settlement be given careful consideration by the parties and the Tribunal in exercising its discretion on costs. In my view, the August Offer was more favourable to Mr Zhao and Ms Fan than the outcome in the substantive decision in at least two aspects. First, Mr Zhao and Ms Fan would have had a reduction of 9% in electricity charges. Second the interest and debt recovery charges would be waived by the strata company and the strata company would not have sought its costs.

1. The October Offer was made on 9 October 2024, just after Mr Zhao and Ms Fan sought to again have SAS re-joined as a respondent to the proceeding and shortly before the Tribunal listed the matter for a final hearing for 15 January 2025 (which was later vacated and relisted to April 2025). The form of the offer was by way of letter summarising what was discussed at a meeting between the parties and representatives of SAS on 9 October 2024. The letter does not suggest it is an offer of settlement. Rather, it sets out what Mr Zhao and Ms Fan agreed to, what they stated they would not pay for and the two matters that remain without resolution.
2. In my view the letter is not an offer to settle the proceeding in the Tribunal but rather, the letter is a record of what happened at the meeting on 9 October 2024 from the strata company's perspective. Consequently, in my view, there was no offer for Mr Zhao and Ms Fan to accept or reject on 9 October 2024. In any event, Mr Zhao and Ms Fan wrote to GV Lawyers, undated, refuting much of what was stated in the letter.
3. For the forgoing reasons, in conclusion, I find the letter by GV Lawyers dated 9 October 2024 is not an offer to settle and it was not unreasonable for Mr Zhao and Ms Fan not to accept it.

1. A relevant consideration to the Tribunal's exercise of its discretion to make an order for costs, is the nature of the dispute. In considering the nature of the dispute this will require a consideration of the history of the dispute as well as the complexity of the dispute.
2. Mr Zhao and Ms Fan submit that 'one of the primary issues' in this matter is whether or not they are required to contribute to strata levies. Mr Zhao and Ms Fan contend that is was common ground that no member of the strata company had made an application under s 140(3) of the ST Act (or the previous s 103A of the ST Act) for the creation of an administrative fund. Because of this, Mr Zhao and Ms Fan say there was no requirement for them to make any contribution to any administrative fund. Further, they say they could not be said to be 'unfinancial' as there was no requirement to have an administrative fund. Mr Zhao and Ms Fan say their claim was reasonable having regard to the information available at the time and their claim was 'novel' in that there is no precedent on the application of s 140(3) of the ST Act.
3. In regards their claims against SAS and GV Lawyers, after restating their position that they had not signed any contract, nor was any meeting held with them, Mr Zhao and Ms Fan submit that this issue is novel because 'we could not find any legal authorities that look at the execution of contracts and whether s 118 is affected by 'unfinancial' members and contracts which are signed only by one member of a two-lot scheme'. Mr Zhao and Ms Fan assert their claim was reasonable having regard to the information available to them at the time.
4. In my view, it was reasonable for Mr Zhao and Ms Fan to bring the proceeding in the Tribunal. Their application raised a number of complex issues including whether the strata company is authorised to levy contributions (for example to pay expenses of the strata company for insurance and expenses to do with the common property) when an administrative fund for a two-lot scheme is not permitted unless required by a scheme by-law, and the execution of contracts by the strata company in a two-lot scheme when one lot owner is 'unfinancial' or has not contributed to the costs of the strata company.
5. It was open and appropriate, in my view, for the strata company to participate in the proceeding and to defend its position with legal representation in relation to the appointment of the strata manager, SAS, the requirement for Mr Zhao and Ms Fan to pay contributions (administrative levies), the requirement for Mr Zhao and Ms Fan to pay for strata manager fees, electricity, insurance brokerage, stamp duty and GST and the appointment of GV Lawyers. The substantive decision, where Mr Zhao and Ms Fan were unsuccessful on all issues supports the position that it was entirely appropriate for the strata company not to concede any of the issues and to have legal representation to defend its position.

1. The conduct of parties to the proceeding is also a relevant consideration to the Tribunal's exercise of its discretion to make an order for costs. In this regard, it is necessary to consider, whether, and to what extent a party has established that the conduct of the other party has impaired the attainment of the Tribunal's objectives as set out in s 9 of the SAT Act - that is to have the proceedings determined fairly and in accordance with the substantial merits, with as little formality and technicality as possible, and in a way which minimises the costs to the parties.
2. Mr Zhao and Ms Fan describe themselves as self-represented litigants.
3. The strata company engaged legal representation from early in the proceeding.
4. Mr Zhao and Ms Fan, ultimately, were unsuccessful on all contentions that they advanced at the final hearing. However, that in itself does not, without more, signify that they acted inconsistently with the objectives of the Tribunal as set out in s 9 of the SAT Act.
5. I do not accept the position of Mr Zhao and Ms Fan that, despite being self-represented litigants, they did not unduly delay the proceeding, nor did they act in a manner to cause unnecessary costs to the strata company. This is because the Tribunal on many occasions had to consider requests and to make orders regarding the proceeding where Mr Zhao and Ms Fan requested:

(a) a number of requests to extend the time to comply with orders made by the Tribunal to file documents; and

(b) a number of requests to join the strata manager, SAS, as a respondent to the proceeding when the Tribunal had explained early in the proceeding, at the first directions hearing on 29 September 2023, that the strata manager is not a 'scheme participant' as that term is defined in s 197(2) of the ST Act and therefore could not be joined as a party to an application made under s 197(4) of the ST Act.

1. Each time the Tribunal was required to deal with requests from Mr Zhao and Ms Fan that caused the legal representative of the strata company to have to prepare for, and to attend the directions hearing or respond to the request made by Mr Zhao and Ms Fan. This is reflected in the Schedule of Legal Costs Claimed by the strata company filed with the Tribunal on 3 October 2025 (schedule).
2. The strata company generally complied with the orders of the Tribunal in a timely manner and thereby assisted the Tribunal to achieve its objective of acting speedily in the resolution of the proceeding and to minimise the costs to the parties. In addition, the strata company did not object to any of the extension of time to file documents made by Mr Zhao and Ms Fan. In the circumstances, I am satisfied and find that the strata company acted reasonably in its conduct in the proceeding.
3. In conclusion, while I accept that the role of the Tribunal is to provide accessibility to justice, in my view, the following conduct by Mr Zhao and Ms Fan unnecessarily prolonged the final hearing and incurred unnecessary costs for the strata company:

(a) the number of requests to extend the time to comply with orders of the Tribunal to file documents and then the late filing of documents without any explanation; and

(b) the number of requests to join the strata manager, SAS, as a respondent when the Tribunal explained why SAS could not be a respondent and had removed SAS from the proceeding at the first directions hearing on 29 September 2023.

1. As already stated, and repeated here, in assessing costs, the Tribunal takes a relatively broadbrush approach as a matter of impression and without any attempt at mathematic precision. In doing so, the costs awarded are compensatory and not punitive.
2. In assessing what is fair and reasonable as to the amount of costs, I have had regard to:

(e) the conduct of Mr Zhao and Ms Fan and the strata company in the proceeding; and

(f) the outcome where Mr Zhao and Ms Fan were unsuccessful on all four issues.

1. In my view, it was entirely appropriate and reasonable for the strata company to engage legal representation to make submissions to defend its position. The fact that Mr Zhao and Ms Fan were unsuccessful on all their contentions put forward at the final hearing supports a finding that the strata company had a strong basis for challenging the application made by Mr Zhao and Ms Fan.
2. Further, in my view, the conduct of the strata company was reasonable and appropriate in the conduct of the proceeding and therefore did not impair the attainment of the objectives of the Tribunal as set out in s 9 of the SAT Act. Further, in my view, the strata company made a reasonable offer by its August Offer to settle the proceeding.
3. On the other hand, in my view, the conduct of Mr Zhao and Ms Fan impaired the attainment of the Tribunal objectives, as set out in s 9 of the SAT Act, which weighs in favour of an award of costs for the strata company. In particular, the matters set out above at [107] - [110] unnecessarily prolonged the final hearing and incurred unnecessary costs for the strata company.
4. As stated in Questdale at [58], the legislative purpose of the SAT Act will be served by the claimant in an application for costs receiving its reasonable costs of obtaining the compensation that is the claimant's due. However, it is still necessary, to consider, in all of the particular circumstances or the realities of the case, whether it would be fair and reasonable for the 'successful' party to be deprived of its costs, or part of its costs.
5. In summary, Mr Zhao and Ms Fan submit that:

(a) their claims were entirely appropriate and reasonable;

(c) it cannot be said that their case was entirely unmeritorious as they had reasonable grounds for making the application to the Tribunal; and

(d) their application is not an abuse of power, not vexatious or for an improper purpose.

1. I accept that Mr Zhao and Ms Fan's application was not an abuse of power, nor vexatious or for an improper purpose when the application was originally filed with the Tribunal in September 2023. However, that position cannot be maintained in relation to the numerous attempt by Mr Zhao and Ms Fan in seeking for SAS to be re-joined as a respondent in the proceeding, when it was explained to the parties at the first directions hearing on 23 September 2023, and at subsequent directions hearings, that SAS is not a 'scheme participant' as that term is defined in s 197(2) of the ST Act and therefore could not be a party to the application made by Mr Zhao and Ms Fan under s 197(4) of the ST Act. In my view, such continued requests by Mr Zhao and Ms Fan can only be described as an abuse of power and for an improper purpose. Further, those continued requests by Mr Zhao and Ms Fan incurred unnecessary costs for the strata company.
2. The strata company claims costs (legal fees and disbursement) of $20,240 for the period 2 October 2023 to 27 May 2025 inclusive on the basis of the maximum hourly rate of $440 for a Senior Practitioner. The breakdown of the legal costs is provided in the schedule.
3. The Legal Profession (State Administrative Tribunal) Determination 2022 with erratum (1 July 2022 to 30 June 2024) (Prior Determination) sets the maximum allowable hourly rate for a senior practitioner as $429. The Legal Profession (State Administrative Tribunal) Determination 2024 (1 July 2024 onwards) (Current Determination) sets the maximum allowable hourly rate for a senior practitioner as $484. As stated in McLerie at [22], the determinations are used as a guide by the Tribunal because they reflect the maximum rates which may be charged by various legal fee earners and counsel in the absence of a written costs agreement. There is no scale of costs applicable to the Tribunal.
4. In my view, the Prior Determination and the Current Determination are an appropriate guide in this case having regard to the nature of the application under the ST Act before the Tribunal. Further, in my view, it is appropriate that the maximum hourly rate for a senior practitioner is to be used in this case in calculating the costs to be awarded.
5. The total claimed by the strata company is $20,240. However, the schedule reflects 36 hours of work at $440 per hour, or a total of $15,840. It is not clear if 10 hours of work at $440 per hour (or a total of $4,400) were inadvertently omitted from the schedule. However, as there is nothing in that schedule or in the written submissions filed by the strata company explaining the difference in figures, it is reasonable to use the total of $15,840 as the starting point for the amount claimed and from there make any necessary adjustments.
6. In my view, the following adjustment are required to the amount claimed of $15,840 (as set out in the previous paragraph).
7. First, for the period 2 October 2023 to 30 June 2024, the amount claimed per hour was $440 where the Prior Determination provides the maximum allowable rate for a senior practitioner is $429 per hour. This results in an adjustment of downwards of $121.
8. Second, for period from 1 July 2024 to 27 May 2025, the amount claimed per hour was $440 when the Current Determination provides the maximum allowable for a senior practitioner is $484 per hour. While the Current Determination states that determination is not to be seen as providing a minimum charge for any work, I am satisfied that the legal representative for the strata company, Mr Monaco, is a very senior practitioner. This results in an adjustment upwards of $1,540.
9. The overall result is that the amount claimed for costs is adjusted to $17,259 (that is, $15,840 - $121 + $1,540) rather than the amount of $20,240 as set out in the schedule.
10. On balance, in my view, taking into consideration all the circumstances of this case including the conduct of the parties, the nature of the dispute, and the August Offer, the legislative purpose of the SAT Act will be served by the strata company receiving its reasonable costs after making adjustments in the particular circumstances of this case where it would be fair and reasonable for the strata company to be deprived of part of its costs: Questdale at [58].
11. Taking a relatively broadbrush and pragmatic approach looking at the realities of the case where there is no itemised schedule of costs for each of the four issues, and as a matter of impression and without any attempt at mathematical precision, I am satisfied, in assessing what is fair and reasonable, that a total amount of $11,000 (out of total costs of $17,259) ought to be recovered by the strata company from Mr Zhao and Ms Fan.

1. In conclusion, having regard to the objectives of the Tribunal and in the interests of justice, it is fair and reasonable, for all of the forgoing reasons, that Mr Zhao and Ms Fan be ordered to pay a contribution of the strata company's costs fixed in the amount of $11,000 pursuant to s 87(2) of the SAT Act within 30 days of these orders, or as otherwise agreed in writing by Mr Zhao and Ms Fan and the strata company.

1. Pursuant to s 87(2) of the State Administrative Tribunal Act 2004 (WA), the applicants must pay to the respondent a contribution of the respondent's costs fixed in the amount of $11,000 to be paid within 30 days of these orders, or some other timeframe as agreed in writing by the applicants and the respondent.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

[1] Applicant's submissions with respect to costs orders filed on 9 November 2025, para 24.

[2] Prior to 1 May 2020, the Tribunal could not make an order for the payment of costs concerning a proceeding under the ST Act except in two circumstances. The first circumstance arose where the applicant was given leave by the Tribunal to amend their application to compensate persons (for example, the respondent) for time unnecessarily spent in connection with the application. The only other circumstance was concerning a variation to unit entitlements. Following the major amendments to the ST Act, which came into operation on 1 May 2020 under the Strata Titles Amendment Act 2018 (WA), the Tribunal is now not so limited in making orders for the payment of costs concerning a proceeding under the ST Act.

[3] Applicants' submissions with respect to costs orders filed on 9 November 2025 (14 pages).

[5] The factors to consider remain unchanged as set out in the current version of Civil Procedure Western Australia, LexisNexis Australia, at [24A.11.3].

[6] Letter dated 26 August 2024 from GV Lawyers acting for the strata company to Mr Zhao and Ms Fan (One page with attached quote).

[7] Letter dated 9 October 2024 from GV Lawyers to Mr Zhao and Ms Fan (two pages).

[8] Respondent's amended costs submissions filed on 3 October 2025 (eight pages).