Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Owners Corporation Strata Plan 64558 v Owners Corporation Strata Plan 64558 [2015] NSWCATCD 52 Hearing dates: 15 October 2014 Decision date: 21 April 2015 Jurisdiction: Consumer and Commercial Division Before: G Meadows, Senior Member Decision: 1. The application is dismissed in accordance with Section 185(3) of the Strata Schemes Management Act 1996 as the Applicant has withdrawn the application. 2. Each party is to pay their own costs. Catchwords: STRATA AND COMMUNITY SCHEMES—reallocation of unit entitlements—withdrawal of application—fundamentally flawed application—costs—misconceived application Legislation Cited: Consumer Trader and Tenancy Tribunal Act 2001 Civil and Administrative Tribunal Act 2013 Strata and Community Schemes Act 1996 Cases Cited: Anderson Stuart v Treleaven (2000) 49 NSWLR 88 Australian Securities Commission v Aust-home Investments Limited (1993) 44 FCR 194 Brisbane City Council v Mio Art Pty Ltd [2012] 2 Qd R 1 Challenger Property Asset Management Pty Ltd v Stonnington City Council (2011) 34 VR 445 Cocks MacNish v Biundo [2004] WASCA 194 Frederiksen v Port Stephens Veterans & Citizens Aged Care Limited [2014] NSWCATCD 547 Gosford Shire Council v Green (1980) 48 LGRA 201 Green v Schneller [2003] NSWSC 202 Huntsman Chemical Company of Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 Industrial Installations & Relocations Pty Ltd v Leiner Davis Gelatin International Ltd (No 2) [1998] NSWSC 177 Kandiah and Chandler Macleod Group Limited [2014] WASAT 96 Longworth v Cmr of Stamp Duties (1953) 53 SR (NSW) 342 Metro Chatswood Pty Limited v CRI Chatswood Pty Limited [2007] NSWSC 1120 Miller v Bury (1986) 4 NSWLR 716 Moweno Pty Ltd v OC SP 74481 (Strata and Community Schemes) [2013] NSWCTTT 308 ONE.TEL Ltd v Commissioner of Taxation (2000) 101 FCR 548 Owners Corporation of Strata Plan 4521 v Zouk & Anor [2007] NSWCA 23 PMT Partners Pty Ltd (In Liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 Rasmussen v State of NSW, NSW Police Force [2013] NSWADT 277 Riana Pty Ltd v The Owners—Strata Plan 22336 [2007] NSWSC 1033 Sorose Pty Ltd (In Liq) v The Owners—Strata Plan 80638, unreported, 23 October 2013, CTTT file number SCS 12/22798 Spencer v Commonwealth (1907) 5 CLR 418 Valero Holdings Pty Limited v OC SP33531 [2014] NSWCATCD 34 Category: Principal judgment Parties: Owners Corporation Strata Plan 64558 (applicants); Owners Corporation Strata Plan 64558 (respondent) A— Contradictor Representation: Counsel: Mr Kerr (applicants) Mr Knoll AM (respondent) Solicitors: Makinson d'Apice (applicants) David Le Page Lawyers (respondent) File Number(s): SCS 13/50814 Publication restriction: Nil REASONS FOR DECISION Background 1. On 24 September 2013 the applicant filed an application in the Tribunal seeking an order pursuant to section 183 of the Strata Schemes Management Act 1996 (SSM Act) for the reallocation of unit entitlements between the lots in the strata scheme. 2. The application was accompanied by a large bundle of documents headed by a document entitled "Applicant's Submission" to which were attached several documents or collections of documents usually attached to an application of this sort. In addition to copies of the strata plan, the strata roll and title searches among other documents, the bundle included at Tab 4 a "Valuation Report" prepared by Mr Darren M. Keen, Certified Practising Valuer, dated 03 June 2013. 3. At page 42 of that report, at item 8, was included "Certificate of Value and Unit Entitlement". At item 8.1 was written: "8.1 Market Value I am of the opinion and estimate that the current market value of the subject property as at 28th February 2001 being Lots 1—74 in Strata Plan 64558 at 18 and 36—48 " " Street Paddington NSW 2021 – fee simple in possession is as noted on the following table: …" 1. It appears to be undisputed that 28 February 2001 was the date of registration of the strata plan. 2. The proceedings were managed by the Tribunal in the usual way, including orders for the filing and service of evidence, and were set down for hearing over two days on 28 and 29 August 2014. On 26 August 2014 the applicant delivered to the Tribunal a completed "Request for withdrawal of application". On the same day I made the following orders: "The application is dismissed in accordance with Section 55(1)(a) of the Civil and Administrative Tribunal Act 2013 as the Applicant has withdrawn the application. The hearing of the 29/8/14 is vacated. Parties to attend on 28/8/14 for directions in relation to costs." 1. The parties were directed to and did file evidence and submissions in relation to an application for costs by the respondent parties, opposed by the applicant. 2. The application for costs was heard on 15 October 2014 and my determination was reserved. This is the determination and accompanying reasons. Where necessary, I refer to the original application as "the substantive application" and the current application as "the costs application". 3. For the reasons discussed below I find the respondent should not succeed in this application for costs. The Issues 1. The first issue to be dealt with concerns the order made by me on 26 August 2014. It is agreed by the parties that the order is defective because, as this application commenced prior to 01 January 2014, the legislation applicable was not the Civil and Administrative Tribunal Act 2013 (CAT Act) (as referred to in the orders) but the legislation as it applied as if the CAT legislation had not been passed: sections 6 and 7 of Schedule 1 Savings, transitional and other provisions of the CAT Act. Sub-section 3 of s 7 of the Schedule states: (3) For the purposes of subclauses (1) and (2): (a) NCAT has and may exercise all the functions that the relevant existing tribunal had immediately before its abolition, and (b) the provisions of any Act, statutory rule or other law that would have applied to or in respect of the proceedings had this Act and the relevant amending Acts not been enacted continue to apply. 1. That is, the original proceedings (of which these costs proceedings are still part) are governed by the now repealed Consumer Trader and Tenancy Tribunal Act 2011 (CTTT Act) and the SSM Act as it was prior to the amendments made by the Civil and Administrative Legislation (Repeal and Amendment) Act 2013 which, inter alia, repealed section 192 of the SSM Act. 2. The issue is: do I have the power to amend or vary or otherwise deal with the original order dismissing the proceedings and if so, what order should be made. 3. The next issue is whether I have the power to make a costs order pursuant to s 192 of the SSM Act and then, whether the power is discretionary and should be exercised in favour of the respondent. 4. The parties vigorously oppose each other in relation to the power to make and the discretion to make any costs order. There does not appear to be much dispute in relation to my power to amend the order made on 26 August 2014, although there is an issue in relation to the form and content of such amendment. Legislation 1. The parties made extensive submissions in relation to the relevant legislation and it is the interpretation and application of the relevant legislative provisions, as demonstrated and applied in previous decisions, which forms the central dispute between these parties. It will be helpful to set out various sections in order to consider my reasons. Strata Schemes Management Act 1996 183 Order for reallocation of unit entitlements (1) Tribunal may make order allocating unit entitlements The Tribunal may make an order allocating unit entitlements among the lots that are subject to a strata scheme in the manner specified in the order. (2) Circumstances in which order may be made An order may be made only if the Tribunal considers that the allocation of unit entitlements among the lots: (a) was unreasonable when the strata plan was registered or when a strata plan of subdivision was registered, or (a1) was unreasonable when a revised schedule of unit entitlements was lodged at the conclusion of a development scheme, or (b) became unreasonable because of a change in the permitted land use, being a change (for example, because of a rezoning) in the ways in which the whole or any part of the parcel could lawfully be used, whether with or without development consent. (3) Matters to be taken into consideration In making a determination under this section, the Tribunal is to have regard to the respective values of the lots and (if a strata development contract is in force in relation to the strata scheme) to such other matters as the Tribunal considers relevant. (4) Application to be accompanied by valuation An application for an order must be accompanied by a certificate specifying the valuation, at the relevant time of registration or immediately after the change in the permitted land use, of each of the lots to which the application relates. (5) Qualifications of person making valuation The certificate must have been given by a registered valuer under the Valuers Act 2003 authorised under that Act to make such a valuation (a qualified valuer). (6) Ancillary orders that may be made if original valuation unsatisfactory The Tribunal may, if it makes an order allocating unit entitlements that were not allocated in accordance with a valuation of a qualified valuer and, in the opinion of the Tribunal, were allocated unreasonably by a developer, also order: (a) the payment by the developer to the applicant for the order of the costs incurred by the applicant, including fees and expenses reasonably incurred in obtaining the valuation and the giving of evidence by a qualified valuer, and (b) the payment by the developer to any or all of the following people of such amounts as may be assessed by the Tribunal to represent any overpayments (due to the unreasonable allocation) for which liability arose not earlier than 6 years before the date of the order: the lessor of a leasehold strata scheme the owners corporation the owners of lots. (7) Recovery of amounts awarded An amount ordered to be paid under this section may be recovered as a debt. (8) Who may make application? An application for an order under this section may be made only by: (a) an owner of a lot (whether or not a development lot) within the parcel, or (b) the owners corporation, or (c) the lessor of a leasehold strata scheme, or (d) the local council, or by any other public authority or statutory body representing the Crown, being an authority or body that is empowered to impose a rate, tax or other charge by reference to a valuation of land. (9) Lodgment of order The owners corporation must ensure that a copy of an order made by the Tribunal under this section is lodged in the Registrar-General's office no more than 2 years after the order is made. Note. Section 209 contains provisions with respect to the lodgment of an order made under this section. (10) Nothing in this section prevents a person referred to in subsection (8) from lodging a copy of an order made under this section. 185 Dismissal of application on certain grounds (1) (Repealed) (2) If the ground for an application for an order under this Part is: (a) the absence of a quorum at a meeting, or (b) a defect, irregularity or deficiency of notice or time, the Tribunal may, by order, dismiss the application if the Tribunal believes that no substantial injustice has resulted. (3) The Tribunal may, by order, dismiss an application for an order under this Part on any other ground that the Tribunal considers appropriate. (4) Without limiting the generality of subsection (3), the Tribunal may, by order, dismiss an application for an order under this Part if: (a) the application is frivolous, vexatious, misconceived or lacking in substance, or (b) a decision in favour of the applicant is not within the jurisdiction of the Tribunal, or (c) the applicant has unreasonably delayed the provision of information required by an Adjudicator, or (d) the application is made by an owner of a lot in the strata scheme concerned and the applicant has not paid all contributions levied and payable in relation to the lot under this Act. (5) The Tribunal may, by order, dismiss an appeal. 190 Tribunal may vary order to correct error, for clarification or to extend time limit (1) The Tribunal may vary an order, whether or not on application, for the purpose of correcting or clarifying it or extending a time limit and the order as so varied is taken to be the order instead of the original order. (2) An application under this section may be made by any of the following persons: (a) the owners corporation, (b) the lessor of a leasehold strata scheme, (c) the applicant for the original order, (d) any person who made a written submission on the application for the original order, (e) any other person who is required by the original order to do or refrain from doing a specified act. 191 Tribunal may vary or revoke order in certain circumstances (1) The Tribunal may, on application, make an order varying or revoking an order made by the Tribunal under this Part. (2) An application may only be made with the approval of the Registrar and within the prescribed time. (3) The Registrar must not give approval unless: (a) the Registrar is satisfied that there is sufficient reason to do so, or (b) the order was made in the absence of the applicant and the Registrar is satisfied that there were reasonable grounds for that absence. (4) An application under this section may be made by any of the following persons: (a) the owners corporation, (b) the lessor of a leasehold strata scheme, (c) the applicant for the original order, (d) any person who made a written submission on the application for the original order, (e) any other person who is required by the original order to do or refrain from doing a specified act. (5) An application under this section must be dealt with in all respects as if it were an application for an order under this Part required to be referred to the Tribunal. (6) An order made under this section has effect, and the provisions of this Act apply to it, in all respects as if it were an order made under the provision of this Act under which the original order was made. (7) However, an order made under this section may not be varied or revoked by another order made under this section. 192 Orders relating to costs The Tribunal may not make any order for the payment of costs except as specifically authorised by this Act or in relation to an order dismissing an application or appeal because: (a) the application or appeal is frivolous, vexatious, misconceived or lacking in substance, or (b) a decision in favour of the applicant or appellant is not within the jurisdiction of the Tribunal. 1. It is also necessary to refer to the CTTT Act. That Act was amended by the Strata Law (Miscellaneous Provisions) Act (No.2) 2011, which was assented to 16 November 2011 and commenced on 6 July 2012. That Act amended s 28(7) of the CTTT Act so that only sections 28(5)(g) and (i) were exempted from the provisions of the SSM Act. Section 28(5)(h) was removed from the exclusions prescribed under s 28(7). The effect of the amendment was to provide that, in respect of applications including applications pursuant to the SSM Act: 28 Procedure of Tribunal generally … (5) The Tribunal: … (h) must, if requested by the applicant, allow the applicant to withdraw the application, 1. Prior to that amendment, the legislation was silent in relation to withdrawal of proceedings brought pursuant to the SSM Act. Submissions 1. Both parties have meticulously prepared both written and oral submissions in relation to the issues above. Although I will attempt to provide summaries only of those submissions, this will necessarily be a lengthy process. Doing so will assist in understanding the reasons for my decision, given the clarity with which the parties have expressed their arguments. Respondent's Initial Submissions of 27 August 2014 1. Under the heading "Procedural History", the respondent notes that the applicant filed two reports of Mr Keen, the first with the application and the second on or about 06 June 2014. 2. On 16 January 2014 the respondent made a "settlement offer" on the basis of Calderbank v Calderbank to the applicant as follows: 1. the applicant consent to an order dismissing the application; and 2. each party pay their own costs. 1. The letter containing that offer noted that the "report" (that is, the report of Mr Keen attached to the application) was misconceived. After the second Keen report was received and considered by the respondent, a second offer was made in the same terms as the first. The letter containing the offer contained the opinion that the second Keen report "does not overcome the deficiencies in the earlier version". 2. Under the heading "A fatally flawed application", the respondent submits that Mr Keen "fundamentally misconceived his task", taking into account market activity which occurred after the relevant date (being the date of registration of the strata plan), as well as "substantial failures in compliance with the Tribunal's Expert Witness Code of Conduct". In addition, the original developer's asking prices were based a "not insignificant degree of market analysis". As well, the applicant should not have required service of the Hyam Report (the respondent's expert, although the report is in the nature of a critique of Mr Keen rather than an alternative valuation) to "re-emphasise" the misconceived foundation of the application. 3. For the reasons given by the respondent, it was submitted that s 192 of the SSM Act applies to this application in relation to an award of costs. 4. The respondent then provides detailed but summary submissions in relation to the application of s 192, the meaning of "misconceived" and then on the application of s 192 and the meaning of "misconceived" in a number of previous decisions both in this Tribunal (or its predecessors) and other jurisdictions. In Kandiah and Chandler MacLeod Group, for example, Sharp J in the State Administrative Tribunal of Western Australia said at [9]: "The term 'misconceived' connotes a misunderstanding of legal principle …" 1. In Rassmussen v State of New South Wales, NSW Police Force, the Administrative Decisions Tribunal found that the application that the applicant had been discriminated against in the provision of services to her was misconceived because to succeed the applicant had to prove there had been provision of services to her whereas the finding was that no such services had been provided to her. 2. Importantly, following those submissions, the respondent makes the following submission at paragraph 23: "Thus, the position now appears to be that when an application is heard, and the Tribunal finds that the Applicant's evidence was based on a valuation certificate that valued the lots at the wrong date, the Respondent can obtain a costs order, but where the application is not heard because the application is withdrawn after the Respondent points out to the Applicant that the Applicant's valuation certificate is based on the wrong date, the Respondent is not entitled to costs. The inequity of reaching a different results in circumstances where the application is heard as opposed to where it is withdrawn albeit by reason of exactly the fundamental flow [sic: flaw], is palpable." 1. The respondent then referred to the recent case of Frederiksen v Port Stephens Veterans & Citizens Aged Care Limited [2014] NSWCATCD 54, a decision, it is said, in which: "Senior Member D Goldstein indicated that section 192 of the Strata Schemes Management Act 1996: does not restrict the matters to be considered when determining whether a costs order should be made to findings that were made when the appeal was dismissed. It merely requires the appeal to be dismissed on one of the grounds stated in sub-paras (a) or (b) of the section. This suggests that a fresh argument can be put on the issue when an application is made for a costs order." 1. The respondent submits that Frederiksen is contemporaneous authority that a costs order can be made when an application is withdrawn, even if there is no hearing on the merits, and furthermore, that costs can be awarded on an indemnity basis in certain similar circumstances. 2. Several additional brief, but important submissions are made. 3. First, the respondent submits as follows: "30. …, the appeal [sic] is lacking in substance and is fundamentally misconceived. It should be dismissed under section 185 of the [SSM] Act and costs of the Respondent ordered to be paid by the Applicant on an indemnity basis or alternatively as agreed or assessed pursuant to section 192 of the [SSM] Act. 31. The Responding Parties should not be at risk of a possibility of either the bringing of fresh proceedings or claiming the same relief in fresh proceedings: compare section 91 of the Civil Procedure Act 2005. A finding that the application was misconceived and lacking in substance should be made. 31. The orders should be as follows: (1) the application is dismissed as being misconceived and lacking in substance. (2) The Applicant is to pay the Respondent's costs on an indemnity basis; or (3) The Applicant to pay the Respondent's costs as agreed or assessed." The Applicants Submissions dated 5 September 2014 1. The applicant also sets out the factual background which overlaps to an extent with the "procedural history" of the respondent but contains some additional information. It appears to me that there is no real factual dispute between the parties in either account. 2. The applicant notes the service of the Keen reports and that 9 of the 10 owners in "Block F" of the scheme retained Le Page Lawyers to act on their behalf to oppose the application. The applicant also sets out the history of the service of the two offers made by the respondent, but notes that in each case the applicant's solicitors wrote back to the respondent's solicitors requesting information as to how the reports were misconceived and unlikely to be accepted, and that once those particulars were provided, "our clients will be in a better position to consider your settlement offer". 3. The applicant notes that the respondent's solicitors did not respond to either letter. 4. The applicant then sets out the brief history of developments immediately prior to the hearing dates of 28 and 29 August 2014, including the service of the report of Mr Hyam, being a critical analysis of the Keen reports. The applicant notes the dismissal of the claim and the orders made on 26 August 2014 and described above. 5. The applicant then submits in relation to applicable legislation, referring to s 28(5)(h) of the CTTT Act and s 192 of the SSM Act. 6. There then follow important submissions in relation to the respondent's submission that the application should be dismissed under s 185 of the SSM Act and that a finding that the application was misconceived and lacking in substance should be made, which in turn, the applicant submits, gives rise to two issues for consideration. 7. First, the dismissal order is already made. The applicant notes the error that the dismissal order was made pursuant to s 55(1)(a) of the CAT Act in circumstances in which the Tribunal did not have the power under that provisions to dismiss the proceedings, rather the dismissal should have been pursuant to s 185(3) of the SSM Act. Next, the applicant submits that s 189 of the SSM Act provides that an order made by the Tribunal cannot be varied or revoked by the Tribunal, unless that is provided for specifically by the SSM Act. Section 190(1) of the SSM Act, it is submitted, allows the Tribunal to vary an order, whether or not on application, for the purpose of correcting or clarifying it and the order so varied is taken to be the order instead of the original order. It is submitted that the Tribunal should so vary the order of 26 August 2014. 8. Second, the applicant submits that it is necessary to identify the precise power which the Tribunal is required to exercise in the circumstances. The applicant provides detailed submissions in relation to the administrative procedure by which an applicant requests withdrawal using a pre-prepared form. The applicant refers to my decision and reasons in Sorose Pty Ltd. (in liq) v The Owners—Strata Plan 80638 (not published on line: File Number SCS 12/22798). The applicant submits importantly as follows: "37. Once it is recognised that the Tribunal must dismiss proceedings when the applicant makes a request to withdraw its application then the Tribunal has no power to dismiss the proceedings on some other basis. Thus, the responding parties' submission that the Tribunal has power to dismiss the proceedings as being misconceived and lacking in substance (being a specific ground in s 185(4)) should be rejected." 1. The applicant then notes that the respondent's application for costs is made on the basis that the application was misconceived and lacking in substance within the meaning of s 192 of the SSM Act. (The applicant notes there is no argument or submission in relation to whether the application was frivolous or vexatious.) The applicant submits that the costs application should be rejected for four reasons. 1. Where an application is dismissed on a request by the applicant to withdraw the application, then "it is axiomatically not dismissed because it is misconceive or lacking in substance": Owners corporation of Strata Plan 4521 v Zouk [2007] NSWCA 23 per Ipp JA. The applicant submits that Zouk is authority for the proposition that in determining whether to make an order for costs under s 192 the Tribunal must consider and make a finding whether the application was in fact frivolous etc. which finding cannot be inconsistent with its reasons for dismissal (at [38] in Zouk). Earlier, the applicant submitted that at [35] and [37] in Zouk, the Court of Appeal held that an order for costs can be made under s 192 even though the application was not specifically dismissed under s 185(4) as frivolous etc. The applicant then submits: "Underlying the [proposition at [38]] is the fact that if the Tribunal has not made an order for dismissal under s 185(4)(a) on the basis that the application was 'frivolous, vexatious, misconceived or lacking in substance', then it can only determine whether an application was 'frivolous, vexatious, misconceived or lacking in substance' within the meaning of s 192(a) by having regard to its reasons for dismissal. Where the reasons for dismissal is that it was required, by legislative imprimatur, to do so as a consequence of a request to withdraw then there are no findings or reasons from which the Tribunal can conclude the application was 'frivolous, vexatious, misconceived or lacking in substance'. Consequently, the prerequisite for making an order under s 192 does not exist." 1. The applicant then submits in response to the respondent's submissions referring to Moweno Pty Ltd. v Owners corporation Strata Plan 74481 [2013] NSWCTTT 308, Sorose (supra) and Valero Holdings Pty Ltd. v Owners—Strata Plan 33531 [2014] NSWCATCD 34 as authorities for the proposition that the Tribunal has power to make an order for costs where an applicant has requested a withdrawal of the proceedings. The applicant submits that my decision in Sorose was a finding that s 185 is not a power which subsists "notwithstanding" a request to withdraw, as Member Ringrose had found in Moweno. Further, Sorose itself is not authority for that proposition because the current issue was not considered in Sorose. Similarly, Valero is not authority for the submission that an order for costs can be made where an applicant has requested an application be withdrawn. In Valero the application was heard and dismissed on its merits. Although the applicant filed a request to withdraw, that was not the basis for the dismissal. That is, Senior Member Rosser in Valero also did not consider the current issue. 2. Secondly, in the absence of a hearing on the merits, the applicant submits, the Tribunal cannot determine if an application was misconceived or lacking in substance, and refers to Metro Chatswood Pty Ltd. v CRI Chatswood Pty Ltd. [2007] NSWSC 1120, per Bergin SCJ (as Her Honour then was) at [35]. That paragraph notes that where proceedings are concluded without a "trial" on the merits it is inappropriate for a Court to try to determine the case on the merits, although it may be appropriate to determine whether an applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending the proceedings: see Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622 at 624-625. The applicant goes on to submit, in response to the respondent's submission in relation to "palpable inequity" referred to in paragraph 18 above, that there is no such inequity because hearing the matter allows the Tribunal to make a determination in relation to an application being misconceived or lacking in substance, whereas the Tribunal cannot do so if the application is withdrawn prior to a hearing. That, it is submitted, is the result "dictated by the legislation under which the Tribunal must act since 6 July 2012", a reference to the amendment to s 28 of the CTTT Act. 3. The third submission that the costs application should be rejected, is that even if the Tribunal does embark on an inquiry as to whether the application was misconceived or lacking in substance, it should not make that finding. First, referring to the reports of Mr Keen, it is submitted that for the same reasons I articulated in Sorose, having regard to the "flexible procedures" available in the Tribunal, any alleged defects in those reports could have been cured by further evidence. Second, the applicant submits that it is not necessary that an applicant demonstrate that the original unit entitlement allocation was not "endowed with reason". The test in s 183(2)(a) is an objective test (not subjective (as, it is said, the respondent's submissions "intimate"). The submission appears to be that the Tribunal must be able to find the original allocation unreasonable, no matter how the original allocation was made. Then, if it is found the allocation was unreasonable, the Tribunal must consider whether to make an order of reallocation (that is, a discretionary decision). Finally under this submission, the applicant submits that even if the respondent is correct in asserting that the Keen reports do not comply with the Expert Code of Conduct, the Tribunal is not bound by the rules of evidence (s 28(2) of the CTTT Act) and any such failure to comply goes to weight. Therefore, the Tribunal should not make any finding that the application was misconceived or lacking in substance. 4. Finally, the applicant submits that the Tribunal retains a discretion under s 192, even if it finds the application was misconceived or lacking in substance, whether to make an order for costs. The applicant refers to a number of decisions in regard to costs where a respondent has acted in such a way as to make it appropriate not to award costs. The applicant refers to, inter alia, Green v Schneller [2003] NSWSC 202. The applicant submits that the respondent's actions in "keeping their points up their sleeve" (a reference to the respondent's failures to answer the requests for details following the applicant's letters to the respondent following the two offers, as described above) resulted in the incurring of further significant costs. Also, the applicant submits, the actions of the respondent were not in compliance with sections 3(c) and 28(5) of the CTTT Act, that is, that the objects of the CTTT Act are to determine proceedings in an informal, expeditious and inexpensive manner and it is the duty of the parties to enable the Tribunal to comply with those objects. 1. Finally, the applicant submits, any order in relation to s 229 of the SSM Act (in relation to levies) will only arise if an order pursuant to s 192 is made, in which case the applicant does not oppose the making of an order pursuant to s 229 of the SSM Act (although not in the form suggested by the respondent). Respondent's submissions in Reply dated 11 September 2014 1. I will not repeat submissions already made, but the reply submissions for the respondent do raise additional issues. 1. The manner of the application for withdrawal suggests the applicant's solicitor considered the applicant did not have an arguable case. 2. Under the heading "Duties and consequences", the respondent submits that the applicant's solicitor should have realised, when the application was filed, that it did not comply with Spencer v Commonwealth [1905] 7 CLR 418, 440-441. An abandonment of a claim, without explanation, would, in a Court, ordinarily attract an indemnity costs order. If there was any inadequacy of warning (which is denied by the respondent), that goes only to the issue of whether costs should be on an indemnity basis or otherwise: Industrial Installations and Relocations Pty Ltd. v Leiner Davis Gelatin International Ltd. (No 2) [1998] NSWSC 177 per Rolfe SCJ. 3. In relation to the Tribunal's powers, the respondent submits, by reference to various sections of the CTTT Act, that the Tribunal must give the parties an opportunity to be heard and to call evidence in support of its claim that the application was misconceived or lacking in substance. Further, it is submitted that the submission of the applicant in paragraph 31(1) above is wrong. The Tribunal, pursuant to s 185(3) of the SSM Act gives the Tribunal power to dismiss an application "on any other ground that the Tribunal considers appropriate". Further, and more importantly, an order under s 192 does not have to be made at the same time as the order dismissing the application. That is because the costs order merely has to be "in relation to" the dismissal order. If the applicant is right in its submission that if an application is dismissed because of a request to withdraw the application it is "axiomatic" that it is not dismissed because it was misconceived etc. then the result would be that no respondent could seek costs where a misconceived application was withdrawn at the eleventh hour. The respondent says that "flies in the face of the plain meaning of SSMA section 192". That is, the s 192 decision is effectively made before a s 192 application is even heard. The Tribunal should reject such contentions. 4. The respondent next submits in relation to the question: was the application misconceived? It is submitted that the applicant's submissions do not engage with the essential issue of whether the application could have succeeded on the basis of Mr Keen's first report or the supplemental report. It is said the applicant's submission that the defect(s) in the reports may have been cured by further evidence. However, the applicant did not seek leave to adduce such further evidence. The respondent suggests that the applicant would have had to abandon its existing evidence and adduce different evidence, in compliance with Spencer. 5. Under the heading "Should the discretion under section 192 be exercised?" the respondent submits that Green v Schneller is authority for the proposition that a respondent is not required to draw "obstacles" to the applicant's attention, but in fact, it is submitted, the respondent did just that in this case. Two warnings were given, "squarely" identifying the applicant's problem: its case was misconceived. These warnings, it is submitted, mean the situation in these proceedings is different to that in Green, where the respondent was "silent as to the ground of their objection". The applicant's solicitors should have been able to discern the clear absence of a proper basis for the application. 6. The respondent renews and amplifies its submission that, if successful in its application for costs, the respondent parties (being the owners of specific Lots in the scheme) should not be levied in relation to costs and that the costs should not be paid out of the sinking fund, the administrative fund or other existing assets of the scheme. The respondent finally submits that s 229 is engaged in this case: Moallem v CTTT [2013] NSWSC 1700. 7. The respondent finally sets out the form of the orders they request. The Oral Submissions 1. Despite that lengthy recital of the written submissions, it is necessary to briefly refer to counsel's oral submissions at the hearing of this matter, which, in my opinion, further extend the submissions made in writing. I will limit this recital to those extensions. I note in doing so that although I note the parties' referrals to a number of previous decisions, I do not give the full citation of each case. The citations (and others to which I have referred) can be found in Annexure One to these reasons as well as the covering schedule above. 2. There were some preliminary objections to the case sought to be presented by the respondent, which highlighted the nature of the statutory construction issue which forms the essence of this costs application. The respondent sought to tender Mr Fagan's affidavit dated 27 August 2014 (with its exhibits) and Ms Hoskisson-Green's affidavit date 05 September 2014 (with its exhibits). I set out the parties' submissions in relation to the objection in detail. 1. The applicant objected to the admission of the supplementary report of Mr Keen on the basis of relevance. The applicant objected that the Tribunal should not retry the withdrawn case. The respondent is seeking to run a case which has been withdrawn, to the effect that the valuation reports would not have supported the application. 2. The respondent submitted that the Tribunal has a duty to hear the parties on an application before it, and where the application is that the application was misconceived, the Tribunal has to have before it the material on which the applicant proposed to rely, in order to determine whether or not the application was misconceived. The Tribunal has to understand what the content of the original application was and has to understand what the content of the costs application is, so the evidence the respondent proposes to rely on is the evidence the applicant chose to rely on for the purpose of the application which it chose to withdraw. This costs application is only dealing with that aspect: demonstrating misconception of the original application. 3. The applicant replied that by their letter to the Tribunal dated 26 August 2014 the applicant sought to withdraw the application. The Tribunal, on the same date, by order dismissed the application (albeit not pursuant to the appropriate power), so that dismissal order must be varied to an order pursuant to the appropriate power. Once dismissed (under s185(3)), the basis for dismissal is withdrawal, not involving any investigation into the merits of the case. The Tribunal is not required to investigate the reasons the applicant sought to withdraw. The power under s 192 of the SSM Act does not arise: it arises only in relation to an order dismissing an application because the application is misconceived etc. On this costs application, it not relevant to consider any evidence because the dismissal order did not consider whether the substantive application was misconceived etc. 4. The respondent replied that no valid order was made dismissing the proceedings, so this application is starting from the point of what should be the "correct" order. If the respondent is wrong in that regard, then in any event ss190 and 191 of the SSM Act are plenary. Furthermore, the respondent asked to be heard before the order was made. The applicant is seeking to use an invalid order. The question before the Tribunal today is: is it only necessary to refer to the correct statute, or is it necessary (or permissible) to refer to correct statute and to find misconception. If the latter the Tribunal will need to see the evidence to see if there was misconception. 5. I asked Mr Knoll: the original order was in response to a request to withdraw. Isn't the respondent therefore correct: is the Tribunal permitted to change the order as well as correct the order? 6. The respondent replied that it is perfectly permissible under the SSM Act: s 190. The respondent's application must be dealt with in all respects as an application under this part required to be referred to the Tribunal. The respondent's costs application was made before the dismissal order was made. As for the proposition that the only basis for the dismissal order is "withdrawal", in both Moweno and Sorose that proposition was rejected. The SSM Act does not restrict the making of such an order, nothing suggests the power in s 185(3) is not plenary as it refers to "any other ground", not simply on ground of withdrawal. Section 192 does not require that the costs order be simultaneous with order dismissing the application. In summary, the Tribunal: 1. must hear the parties; 2. has power to vary the order; but 3. even so, the Tribunal is specifically empowered under the statute to make the finding of misconception on the application for costs; and 1. Therefore the respondent must be given the opportunity to demonstrate the substantive application was misconceived. 2. Following these submissions, in relation to the original objection to the tender described in paragraph 35 above, I found that the only way the issues could be heard was to admit the evidence on a "provisional" basis, so as to permit the parties to fully present their cases. As I indicated to the parties (although not in exactly these words): if in making my final determination I found that the legislation as construed in the relevant decisions tendered by the parties required a finding that I may not consider, in relation to s 192 of the SSM Act any issues other than the request to withdraw, then the evidence sought to be tendered would be rejected. However, to get to that point, it is necessary to consider the arguments of the parties and therefore to consider their evidence on that "provisional" basis. 3. The respondent continued to present its submissions generally in similar terms to its written submissions. However, this additional point was made by Mr Knoll: the substantive application was misconceived from the beginning, that is, at the point of filing the application, and once commenced being misconceived it would have to be withdrawn and restarted: that is because any evidence remaining to be filed or if leave is given to file further evidence cannot correct the application: reply evidence cannot have the effect of amending the application. Furthermore, the respondent submitted that in this case no further evidence remained to be filed at the point of withdrawal, unlike the situation in Sorose. Furthermore, this difficulty could not be fixed in oral evidence. The applicant would not be permitted to lead additional evidence and no counsel would cross examine a witness so as to permit that witness to attempt to correct the original application. Also, this is a legal issue and an expert could not be heard on the point. Finally, all expert evidence was already so in practice the misconceived application couldn't be fixed. Mr Knoll described that as an alternative way of dealing with the "Sorose point". 4. The respondent continued on in relation to the meaning of "misconceived" and the issue that the precise nature of the misconception was not brought to the attention of the applicant following the two offers already described. It is not necessary to repeat those submissions. I should note two things: first, Mr Knoll addressed the Tribunal in relation to a spreadsheet prepared by him and included with the written submissions, analysing the double error in Mr Keen's reports in relation to the post-dated sales of a number of units in the scheme and also the selection of inappropriate comparable sales. Secondly, there was further analysis of the decision of Simpson SCJ in Green v Schneller, supporting the submission that the applicant cannot be heard to complain that it was not advised of matters which should have been obvious to it. I also note that the report of Mr Hyam was tendered and admitted, subject to the same objection and "provisional" tender referred to in paragraph 36 above. 5. The withdrawal of the substantive application following the receipt by the applicant of the Hyam report should, it was submitted, be treated as an act of "surrender" by the applicant. In that regard, reference was made to a number of prior decisions, including Huntsman and Industrial Installations, especially per Rolfe SCJ in relation to indemnity costs in such situations. 6. Without intending any disrespect to the respondent, the final submissions illustrating the application of the legal and statutory construction submissions made previously do not require summarising here, in my opinion. Indeed, Mr Knoll's peroration was both impressive and persuasive. 7. The final oral submission I should refer to is that the respondent contends that the substantive application should be dismissed on the basis that it was misconceived not only because the respondent submits their s 192 application should succeed, but also to prevent the applicant seeking to correct their application and file it as a new application. The respondent wishes "to close the door on us having to go through this expensive exercise again". Although recognising that the Civil Procedure Act does not apply to this Tribunal, the respondent nevertheless refers to that Act in this regard. 8. Equally without intending any disrespect to the applicant, it is not necessary to summarise the oral submissions made by Mr Kerr which closely followed the already extensive and clear written submissions provided. I do note some points emphasised by the respondent. 9. In relation to the request by the applicant for details following the respondent's two offers, it is noted that there was simply no reply to these requests at all. 10. The applicant agrees that the original order of 26 August 2014 dismissing the substantive application is pursuant to the SSM Act s 185, while the power to order costs is confined to the power obtained from s 192 of the SSM Act. In relation to s 191 of the SSM Act, the applicant points out that section is only enlivened on the making of an application by a person and subject to the approval of a Registrar, which is not the case in this application. The power to correct the original order must therefore be pursuant to s 190. 11. In relation to the respondent's submission that the issue before the Tribunal is a legal issue, not an evidentiary issue, the applicant submits that no authority is provided for the submission that the valuation certificate must comply in all respects in order to have a valid application. Therefore, the applicant says, the Tribunal should reject any submission that the substantive application was misconceived from the start. Furthermore, it was suggested, the fact that the respondent consented to the filing of a supplementary report by the applicant recognised that errors could be corrected, otherwise, why did the respondent not make an application at that point or prior to that point that the substantive application be struck out for misconception? 12. The applicant also submitted, but rather diffidently, in my opinion, that analysing the respondent's spreadsheet of the data used by Mr Keen indicates that not all lots were "infected" and that there are degrees of "infection". 13. Finally, the applicant submitted that Ipp JA's findings at [38] in Zouk establish that any findings made in relation to a s 192 application cannot be inconsistent with the reasons for dismissal. Consideration and Determination 1. At all times this case concerns an application for an order under Part 5 of the SSMA, sections 182 to 201 inclusive. 2. The original application was for an order pursuant to s 183 for reallocation of unit entitlements Correcting or varying the dismissal order of 26 August 2014 1. The parties agree my order of 26 August 2014 was made in error pursuant to the CAT Act. It is also agreed that this application is to be determined pursuant to s 28(5)(h) of the now repealed CTTT Act and the relevant sections of Part 5 of the SSM Act. 2. Section 28(5)(h) of the CTTT Act provided that the Tribunal must, if requested by the applicant, allow the applicant to withdraw the application. In contrast to s 55(1)(a) of the CAT Act, s 28(5)(h) of the CTTT Act did not provide any power to dismiss or in some other formal manner determine the application sought to be withdrawn. In Sorose (at [33]-[34]) I found that the Tribunal must undertake some formal procedure to achieve the withdrawal and that the only source of power for such an order is contained in s185 of the SSM Act. 3. I still have to find a power to change the order of 26 August 2014. Section 190 of the SSM Act provides the power to vary an order for the purpose of correcting or clarifying it or extending a time limit and the order as so varied is taken to be the order instead of the original order. I agree with the respondent's submissions that this is sufficient power to both correct or to clarify it (the respondent used the term "plenary power"). Such a general power would permit me to substitute an order dismissing the application "on any other ground" (s 185(3) pursuant to the applicant's request to withdraw the application, or, submits the respondent, to vary the order so as to dismiss the application on the ground that it was misconceived: s 185(4)(a), at least as I understand the respondent's submission. However, the ground for the original dismissal order was quite clearly expressed in its terms: "as the Applicant has withdrawn the application". I do not consider amending the order to include as a ground "misconceived" is for the purpose of correcting or clarifying it. That would be substituting an entirely different order prior to any hearing from the parties in relation to such an amendment. 4. I therefore vary the order made on 26 August 2014 for the purpose of correcting the statutory reference to: "The application is dismissed in accordance with Section 185(3) of the Strata Schemes Management Act 1996 as the Applicant has withdrawn the application. The hearing of the 29/8/14 is vacated. Parties to attend on 28/8/14 for directions in relation to costs." Does the order of 26 August 2014 finally dispose of the application? 1. In my opinion it does not. I reject the applicant's submissions to that effect. In my opinion the Tribunal may make an order dismissing an application but then list the matter to hear and determine an application by one of the parties for costs, pursuant, in this case, to s 192 of the SSM Act. That power is subject to the restrictions referred to by Ipp JA in Zouk, to which I now refer. 2. I extract the relevant paragraphs from His Honour's decision. I confess that initially I found His Honour's reasoning difficult to follow but properly considered the principles are clear and authoritative, in my respectful view. [33] By s 181(3), the Tribunal may revoke an order appealed against and, by s 185(5), may dismiss an appeal. There is no provision in regard to these sections (or the Act as a whole) that requires the Tribunal to make specific findings (such as those set out in s 185(4)) when making an order, in an appeal, for revocation or dismissal. [34] Thus, if the Tribunal dismisses an application under s 185(4)(a) it is required to state that it is doing so because it finds that the application is "frivolous, vexatious, misconceived or lacking in substance". On the other hand, no such provision applies to an order revoking an order appealed against or an order dismissing an appeal. This is a further ground for inferring that the legislature intended that the Tribunal, when considering whether it should order the payment of costs under s 192 (following the dismissal of an appeal), could consider afresh whether a finding falling within the category of those set out in sub-paras (a) and (b) of s 192 should be made. [35] This reading is literally available but it is not the ordinary and natural reading of s.192. There is in my view, no such close tie because it may well be the case that deciding whether or not the application or appeal should be dismissed did not require the question whether the application or appeal was frivolous etc (as in (a)) or the question of jurisdiction (as in (b)) to be considered. In my reading, "because" and subparas (a) and (b) state the cases for which an order for payment of costs may be within the exception, and do not state characteristics which the order dismissing the application or appeal must have if an order for costs is to be made within the exception. I see no legislative purpose for limiting the exception to cases where the matters in (a) or (b) state the cases for which an order for payment of costs may be within the exception, and do not state characteristics which the order dismissing the application or appeal must have if an order for costs is to be made within the exception. I see no legislative purpose for limiting the exception to cases where the matters in (a) or (b) were considered and articulated when the dismissal order was made. My reading is assisted by the contrast between s.185(4)(a) which expressly empowers dismissal of applications on the ground that they are frivolous etc and s.185(5) which relates to appeals and does not expressly refer to that ground. The question whether an application, appeal or decision fell within subpara (a) or subpara (b) arises for consideration when the Tribunal is asked to make a costs order and it may well be that it is only when the reasons for the dismissal order are known that it could be known that there are reasons to consider the application of subpara (a) or subpara (b). [36] In my opinion, the Tribunal is empowered by s 192 – at least within a reasonable time after dismissing an appeal – to make an order for the payment of costs. Its powers are not limited to making such an order when dismissing the appeal. [37] Further, the Tribunal may make an order for costs under s 192 even though, in its judgment dismissing the appeal, it has not said expressly that the appeal is dismissed because of one of the grounds set out in sub-paras (a) or (b) of s 192. [38] In determining whether to make an order for the payment of costs, the Tribunal must consider (and make a finding) whether the appeal was frivolous, vexatious, misconceived or lacking in substance, or whether a decision in favour of the appellant was not within its jurisdiction. On general principle, that finding cannot be inconsistent with the reasons given by the Tribunal for the dismissal of the appeal. The law would not tolerate inconsistent findings by the same tribunal relating to the same subject matter in dispute. 1. First, in my opinion paragraph [33] of His Honour's decision applies equally to the dismissal of an application (rather than an appeal), with reference to s 185(3). 2. Secondly, it follows that His Honour's words in [34], appropriately amended, also apply to this matter: This is a further ground for inferring that the legislature intended that the Tribunal, when considering whether it should order the payment of costs under s 192 (following the dismissal of an application), could consider afresh whether a finding falling within the category of those set out in sub-paras (a) and (b) of s 192 should be made. [Emphasis added] 1. Third, in my opinion His Honour is stating, following his analysis of the apparent statutory intention in [35] and as applied to an application rather than an appeal, to be stating that: 1. within a reasonable time after dismissing the application the Tribunal may make an order for the payment of costs; 2. the powers of the Tribunal are not limited or the Tribunal is not required by Part 5 of the SSM Act to making a costs order at the same time as making the dismissal order; 3. in a later application for costs (subject to (1) above) the Tribunal may make an order for costs even if it did not expressly dismiss the application on one of the grounds in s 192(a) or (b); and 4. that is true even if those grounds were not raised or considered by the parties at the time the dismissal order was made; but 5. in the application for costs or in considering the appropriate order for costs, if any, the Tribunal must consider (and make a finding) whether the appeal was frivolous, vexatious, misconceived or lacking in substance, or whether a decision in favour of the appellant was not within its jurisdiction; and 6. that finding cannot be inconsistent with the reasons given by the Tribunal for the dismissal of the application at the earlier time. 1. I can see nothing in the words of s 185 or 192, or in His Honour's analysis, that would suggest the principle does not apply equally to an application as to an appeal under the SSM Act nor is there any issue in relation to the amendment to s 28(5)(h) of the CTTT Act referred to above, although the decision in Zouk was prior to that amendment. 2. Equally, I can see nothing in the factual situation before His Honour and the facts in this application suggesting Zouk should (or could) be distinguished and no such submission was made to me in that regard. 3. Therefore, I find that the Tribunal has the power to entertain this application by the respondent for an order that the applicant pay the costs of the respondent, on an indemnity basis or otherwise, pursuant to s 192 of the SSM Act and that the Tribunal may make findings as appropriate in accordance with the terms of that section. 4. I should note also that I accept the respondent's submission that to find otherwise would be a "palpable inequity". In other words, to accept the applicant's submission would in my opinion require clear words of the Parliament. 5. It follows, in my view, that the evidence "provisionally" admitted above, should be admitted. 6. I do not consider any of the matters just discussed and the finding in the previous paragraph contradict or are at odds with anything I said in Sorose. Was the substantive application "misconceived"? 1. Assuming that Mr Keen's certificate did not comply with legal requirements and that such non-compliance is a question of law, the respondent asserts that the application cannot be amended or corrected (as set out above) and that therefore, as a matter of law, the application was misconceived. 2. Referring again to Sorose, I found in that case that the evidence was not complete and there had been no hearing on the merits. In those circumstances, I state that given "the Tribunal's relatively informal procedures or rather relatively flexible procedures in permitting late amendments of an application and the admission of additional evidence, subject only to the requirements of natural justice" the applicant may have been able to address the issues raised in relation to the applicant's expert's report. 3. The respondent has raised two separate submissions seeking to distinguish this application from that in Sorose, despite the issue in both matters being alleged errors or defects in the expert valuation evidence. 4. The respondent submits first that this application, as filed, was misconceived. It did comply with required s 183(4) of the SSM Act, as the application was not accompanied by a certificate specifying the valuation, at the relevant time of registration or immediately after the change in the permitted land use, of each of the lots to which the application relates. 5. As I understand the respondent's submission, that is a legal issue, not an evidentiary issue. The respondent says that, in considering this application, a valuation expert cannot correct that situation because such an expert cannot provide opinions on legal issues. Furthermore, that legal issue cannot be corrected by the provision of further evidence by the applicant (as was hypothesised by me in Sorose) because in this case the applicant's evidence was complete and no leave had been sought to adduce additional evidence. In that regard, it seems to me, the respondent was suggesting that the situation in this application was similar to that in Valero: although the latter case had a hearing on the merits and of course there was no such hearing in this matter, nevertheless because the application was misconceived and there was no possibility of that problem being corrected by additional evidence, it is a reasonable proposition that the Tribunal can made a finding that costs can be awarded pursuant to s 192. Perhaps I am taking the respondent's submission a little too far but it appeared to me that was the effect. 6. There was, at least as I recollect the oral submissions, a tendency by the parties to refer to the need for a "valid" application or a "valid" certificate of valuation. Section 183 does not use that term, it merely says that the application must be accompanied by a certificate specifying the valuation of each of the lots (which I take to mean every lot separately) as at the date the strata plan was registered. Mr Keen's certificate purported to do just that in this case—see paragraph 3 above. However, it was conceded by the applicant that at least in relation to some of the lots, the certificate did not comply with the rule in Spencer v The Commonwealth of Australia, as considered in Anderson Stuart. The relevant passage in Spencer is in the judgment of Isaacs J: In the first place the ultimate question is, what was the value of the land on 1st January 1905? All circumstances subsequently arising are to be ignored. Whether the land becomes more valuable or less valuable afterwards is immaterial. Its value is fixed by Statute as on that day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on 1st January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was H. C. or A. adapted. The plaintiff is to be compensated ; therefore he is to receive the money equivalent to the loss he has sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he 'would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property. 1. It is to be observed that Isaac's words refer to the test or rule that value is to be determined by "a hypothetical prudent purchaser", and that in coming to the determination of that value, "[t]he facts existing on 1st January 1905 are the only relevant facts …". Bearing in mind the hypothetical prudent purchaser's price, a matter of fact to be established by a jury, has been replaced by the a qualified, certified valuer, an expert subject to all the procedural requirements of the modern law, I am not at all certain that the certificate does not comply with the rule in Spencer. Does the modern law still insist that only "[t]he facts existing on [the relevant date] are the only relevant facts …"? If the opinion of a qualified and experienced valuer is that certain facts occurring after the relevant do assist in determining the value of the object (the lots, in this case) as at the relevant date, why should the Tribunal not give that opinion proper weight according to the principles in Makita v Sprowle? I can see nothing in Anderson Stuart which holds to the contrary. 2. Furthermore, in my opinion it may have been arguable that Spencer itself should be distinguished. As was stated by Basten JA in Sahade v The Owners - Strata Plan 62022 [2014] NSWCA 208: [32] The principles in Spencer deal with the appropriate compensation payable by a public authority for a compulsory acquisition of privately held land; they do not dictate how land is to be valued in all statutory contexts. Where an Act, such as the Valuation of Land Act provides separately for an assessment of the "improved value of strata" (s 7A) and the "land value of strata" (s 7B), a valuation must be undertaken in accordance with the requirements of those provisions. Nor is it self-evident on which basis the land value was to be calculated for the purposes of s 183(3).[Emphasis added] 1. However, the case was presented by both parties agreeing the certificate does not comply (subject to the restrictions by the applicant as to the exact nature of the concession made by it) and I am content to accept that proposition. 2. But even with that acceptance, in what way was the application misconceived according to the respondent? It appears to be the submission extracted in paragraph 21 above: "the Applicant's evidence was based on a valuation certificate that valued the lots at the wrong date". 1. That does not appear to me to be accurate. The certificate states in terms that in the opinion of the valuer the lots are respectively valued at the date of registration of the strata plan, which is exactly what is required. The valuation may, as a matter of fact, be flawed because of the data used, but that is a different issue, and, in my opinion, for the reasons given in the previous few paragraphs, may be an arguable issue of fact rather than a matter of law. 2. For those reasons, I do not make a finding that the application should be dismissed, or would have been dismissed, on the basis that it was misconceived. Therefore, I do not make an order pursuant to s 192 of the SSM Act dismissing the costs application because the application is frivolous, vexatious, misconceived or lacking in substance. 3. I consider this issue further in relation to my findings below when discussing the offers made by the respondent for the applicant to accept dismissal of the substantive proceedings, but at this point, assuming that my finding in relation to "misconceived" may be wrong, I consider the issue whether in that case (that is, that the application was in fact misconceived) resolves the costs application in favour of the respondent. If "misconceived", is that the end of the application? 1. To the extent that the respondent submits that the application cannot be corrected, I do not agree with that submission. As the applicant pointed out, the respondent provides no authority for their submission. For the same reasons I gave in Sorose, I consider that in a suitable case it would be open to the Tribunal to give an applicant leave to amend the application by providing a compliant report to accompany it. Indeed, as the applicant also pointed out, that can be inferred from the leave given to the applicant in this case, by consent, to file a supplementary report. In my view, this Tribunal, in compliance with sections of the CTTT Act (now sections of the CAT Act), would have little difficulty in granting leave, subject to procedural fairness, to an applicant to do just that. It may be a matter of law to find that the expert valuation certificate is flawed, but it is also a matter of law to find that additional or different evidence could have repaired that damage. There is no reason, in this Tribunal, in my opinion, that an application begun as misconceived, could not be corrected prior to a formal hearing, apart from practical issues such as time permitting. 2. The respondent submits that in this case the evidence was complete and no further evidence could be obtained. It is not clear to me on the Tribunal's file that such was the situation, but in any case in appropriate circumstances the Tribunal (as indeed do the superior Courts—in appropriate circumstances) will allow additional evidence even, sometimes, where to do so means vacating a hearing already set down for some days. A party seeking such indulgence may face a stiff battle but hypothetically and in practice, that has occurred. Therefore, I reject the respondent's submission that the "misconception" alleged in this case could not, as a matter of law, be corrected. Could the application in this case have been saved? 1. In one sense, of course, the application could not have been saved because the applicant elected to withdraw the application. In my experience it is neither required nor usual for an applicant to give reasons for such withdrawal. However, I consider it is necessary to decide this point in order to determine if this application is similar to that in Sorose: that is, if the application could have been "repaired" would it be appropriate to order costs? 2. In my opinion, as a matter of practicality, it is unlikely, but possible, that the applicant could have successfully sought leave to obtain and file additional evidence and have the hearing vacated. The time element is critical to this issue. As noted previously, the matter was set down for two days (unusually lengthy, in my experience at least, for a hearing in relation to this type of application) commencing on 28 August 2014. It was as late as two days prior to that, that the applicant requested the matter be withdrawn. If instead, the applicant had, on 26 August 2014, requested leave to amend the application and obtain additional evidence (there being no such evidence already in the possession of the applicant, as I infer) and also requested that the hearing be vacated, I am comfortably satisfied that absent extraordinary circumstances those requests would have met with a positive response from the Tribunal. As a matter of Tribunal practice, those requests would have been forwarded to me as the Member allocated to preside at the hearing. I am confident the request would have been refused, always, as just stated, in the absence of extraordinary circumstances. I have referred to the Tribunal's flexible procedures but that would have been a bridge too far for the applicant. 3. I therefore find that I cannot decide this matter on the same basis as my decision in Sorose. Should there be an award of costs in favour of the respondent? 1. I am satisfied that for the reasons given above, I have the power to correct the original order dismissing the application without referring in that order to the elements contained within s 192 (a) or (b). I am also satisfied that I have the power to consider the submissions and evidence of the parties in this separate application by the respondent for costs pursuant to s 192 and in doing so to make any findings, on the basis of that evidence and those submissions, that the application was, relevantly in this application, misconceived. I am also satisfied that the application was misconceived on the conceded basis that the expert valuer's certificate had regard to "circumstances subsequently arising", to use Isaacs J's elegant phrase. The application could not have succeeded, or rather, as it was put by the respondent, the Tribunal could not have made the order sought by the applicant, because the application was based on an expert valuation certificate, the conclusion of which was misconceived, as a matter of law, being based on, or partly on, data which must be disregarded. 2. Nevertheless, I am satisfied, as a matter of discretion, that I should not make an order for costs. My reason for coming to that conclusion arises from the course of events to do with the making of the offers by the respondent as summarised in the parties' submissions above. 3. Putting it in as stark terms as I can, at the date of writing these reasons, the application was filed about 80 weeks ago. The respondent's first offer and advice that the application was misconceived was made just over 63 weeks ago. The applicant quickly sought further information as to the nature of the "misconception", which was not answered by the respondent. I am not able to infer why that request was not answered (nor the second such request following the second offer). I do infer, however, that the applicant, had it been made aware of the nature of the misconception, would most likely have immediately reacted, as it did when it finally did receive the information it sought, on the serving of the Hyam report. 4. The applicant, as at January 2014, could have withdrawn the application then by accepting the offer, with no order as to costs. Alternatively, the applicant could have obtained a supplementary report which did relevantly comply with Spencer and the matter would have proceeded to hearing. It is an obvious inference, but it is not necessary to draw it in coming to my decision, that the latter possibility is why the applicant's request for information went unanswered. 5. Whether that is sufficient to refuse an application for costs requires consideration of Green v Schneller and the objects and procedures of the CTTT Act. 6. In relation to the objects and procedures of the CTTT Act, I extract the following sections: 3 Objects of Act The objects of this Act are as follows: (a) to establish a Consumer, Trader and Tenancy Tribunal to determine disputes in relation to matters over which it has jurisdiction, (b) to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair, (c) to enable proceedings to be determined in an informal, expeditious and inexpensive manner, (d) to ensure the quality and consistency of the Tribunal's decision-making. 28 Procedure of Tribunal generally (1) The Tribunal may, subject to this Act, determine its own procedure. (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of procedural fairness. (3) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. (4) The Tribunal is to take such measures as are reasonably practicable to ensure that the parties in any proceedings understand: (a) the nature of the assertions made in the proceedings and the legal implications of those assertions, and (b) the procedure of the Tribunal and any decision or ruling made by the Tribunal that relates to the proceedings. (5) The Tribunal: (a) is to act as expeditiously as is practicable, and (b) is to ensure, as far as practicable, that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings, and (c) may require evidence or argument to be presented in writing and decide on the matters on which it will hear oral evidence or argument, and (d) in the case of a hearing—may require the presentation of the respective cases of the parties in proceedings to be limited to the periods of time that it determines are reasonably necessary for the fair and adequate presentation of the cases, and (e) may require a document to be served outside the State, and (f) may adjourn proceedings to any time and place (including for the purpose of enabling the parties to negotiate a settlement), and (g) may dismiss any proceedings if the applicant fails to attend a hearing, and (h) must, if requested by the applicant, allow the applicant to withdraw the application, and (i) may dismiss any proceedings if it considers the proceedings to be frivolous or vexatious or for any other reason that appears to it sufficient, and (j) may order that any proceedings are to be stayed. (6) The Registrar or Deputy Registrar is to give any party in proceedings that have been stayed under subsection (5) (j), and who was not present or represented when the proceedings were stayed, notice that the proceedings have been stayed. (7) Subsection (5) (g) and (i) does not apply in relation to proceedings arising under the Strata Schemes Management Act 1996 or the Community Land Management Act 1989. (8) Subsection (5) (h) does not apply in relation to proceedings on a building claim arising under Part 3A of the Home Building Act 1989. Note. The withdrawal of building claims is dealt with in section 48I of that Act. 32 Amendments and irregularities (1) The Tribunal may, in any proceedings, make any amendments to any document (for example, an application) filed in connection with the proceedings that the Tribunal considers to be necessary in the interests of justice. (2) Any such amendment may be made: (a) at any stage of the proceedings, and (b) on such terms as the Tribunal thinks fit, but may only be made after notifying the party to whom the amendment relates. (3) If a provision of this Act or the regulations is not complied with in relation to the commencement or conduct of proceedings, the failure to comply is to be treated as an irregularity and does not nullify the proceedings or any decision in the proceedings unless the Tribunal otherwise determines. (4) The Tribunal may, however, in dealing with any such irregularity, wholly or partly set aside the proceedings or a decision in the proceedings. 1. Section 3(c) is expanded by s 28(3) and s 28(5)(a). It is the duty of legal practitioners to assist the Tribunal in achieving those objectives. In my opinion, that duty extends to working with other parties to achieve the same objectives and, of course, the other objectives contained within those two sections. 2. I disagree with two specific submissions of the respondent: first, that the nature of the misconception should have been obvious to the applicant, and, second, that the applicant should not be heard to complain that it was not advised of matters that should have been obvious to it. In my opinion, for whatever reason or reasons, it was apparent that the nature of the misconception was not obvious to the applicant or rather, the reasons why the respondent considered the application misconceived were not obvious to the applicant, which is a different issue. That was reinforced because the parties went through the same offer routine twice. In my opinion again, in compliance with the sections extracted above and referred to in the previous paragraph, the respondent had a duty to assist the Tribunal by responding with appropriate explanations to the applicant when requested for further particulars. 3. If I am wrong in that regard, then in any case the respondent is subject to the same risk adverted to by Simpson SCJ in Green v Schneller: "where legal representatives keep to themselves and obvious and deadly point, they run the risk that costs will not be awarded in their favour" (at [32]). It is important to note those two words "obvious" and "deadly". They each apply to the current situation. Her Honour's remark is the answer to the respondent's submission that the issue should have been obvious to the applicant. In the event, the alleged "misconception" was deadly: it persuaded the applicant to withdraw. 4. Further in relation to Green, the respondent submitted that the situation there was different to the current matter. In Green, the respondent stayed silent, not drawing to the attention of the applicant even the possibility of the issue that leave was required, whereas here the respondent did advise the applicant of the issue of misconception. In my view, that submission itself is misconceived and merely further emphasises the nature of the respondent's failure to promote the objectives of the CTTT Act. It was said in Green that the respondent did not raise the issue at all because the point seemed so plain to the respondent. Here, the respondent did raise the issue but in such a fashion that the applicant was not certain of the actual content of the issue and sought further information. Here, the respondent cannot be heard to say that it seemed so obvious that it did not raise the issue at all. Here, the respondent could have been in no doubt that it was not obvious to the applicant. I consider the respondent should not be taking credit for its actions compared to those of the respondent in Green. 5. As the respondent pointed out, Her Honour in Green also stated that "I accept it is not a function of the defendant's legal representatives to draw the attention of the plaintiff's legal representatives to an obstacle in their path in pursuit of an application". First, that is subject to the proviso Her Honour raised in the following sentence in reference to the risk referred to in paragraph 84 above. Second, the fact is that the respondent did draw the attention of the applicant's legal representative to such an obstacle but in such a fashion as not to enlighten the applicant to the knowledge of the respondent. 6. I previously considered the issue of whether the substantive application was, as a matter of law, misconceived. I raise the issue again at this point for the purpose of suggesting that while the issue that the application was misconceived may have been "an obvious and deadly point", whether the application was misconceived may not have been so obvious to the applicant. Of course there is no evidence before me as to the applicant's views in that regard on receiving either offer from the respondent, but in my opinion it is certainly possible that the applicant may have differed from the respondent's opinion. It would therefore have been quite reasonable for an applicant in that position to request further information. At least, in my finding, it is not correct to state or assume that the respondent's submission in its offers was unarguably correct. Therefore, it was (possibly) reasonable for the applicant to request further information and in my view unreasonable of the respondent to simply ignore both requests. 7. For the reasons discussed in paragraphs 71 and 72 above, in my opinion the respondent is not entitled to its costs up to the date of the first offer. That is because even if the application was initially misconceived it could have been amended and rectified. For the reasons discussed in the preceding paragraphs, in my opinion the respondent is not entitled to an award of costs in its favour from the date of the first offer. 8. The application is dismissed on the basis of the corrected order of 26 August 2014 with no order as to costs. G Meadows Senior Member Civil and Administrative Tribunal of New South Wales 21 April 2015 Annexure One Cases (Oral Submissions) Anderson Stuart v Treleaven (2000) 49 NSWLR 88 Australian Securities Commission v Aust-home Investments Limited (1993) 44 FCR 194 Brisbane City Council v Mio Art Pty Ltd [2012] 2 Qd R 1 Challenger Property Asset Management Pty Ltd v Stonnington City Council (2011) 34 VR 445 Cocks MacNish v Biundo [2004] WASCA 194 Frederiksen v Port Stephens Veterans & Citizens Aged Care Limited [2014] NSWCATCD 547 Gosford Shire Council v Green (1980) 48 LGRA 201 Green v Schneller [2003] NSWSC 202 Huntsman Chemical Company of Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 Industrial Installations & Relocations Pty Ltd v Leiner Davis Gelatin International Ltd (No 2) [1998] NSWSC 177 Kandiah and Chandler Macleod Group Limited [2014] WASAT 96 Longworth v Cmr of Stamp Duties (1953) 53 SR (NSW) 342 Metro Chatswood Pty Limited v CRI Chatswood Pty Limited [2007] NSWSC 1120 Miller v Bury (1986) 4 NSWLR 716 Moweno Pty Ltd v OC SP 74481 (Strata and Community Schemes) [2013] NSWCTTT 308 ONE.TEL Ltd v Commissioner of Taxation (2000) 101 FCR 548 Owners Corporation of Strata Plan 4521 v Zouk & Anor [2007] NSWCA 23 PMT Partners Pty Ltd (In Liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 Rasmussen v State of NSW, NSW Police Force [2013] NSWADT 277 Riana Pty Ltd v The Owners—Strata Plan 22336 [2007] NSWSC 1033 Sorose Pty Ltd (In Liq) v The Owners—Strata Plan 80638, unreported, 23 October 2013, CTTT file number SCS 12/22798 Spencer v Commonwealth (1907) 5 CLR 418 Valero Holdings Pty Limited v OC SP33531 [2014] NSWCATCD 34 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: 07 July 2015