Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Pollack v The Owners – Strata Plan No 2834; The Owners – Strata Plan No 2834 v Pollack (No 2) [2019] NSWCATAP 293 Hearing dates: On the papers Date of orders: 05 December 2019 Decision date: 05 December 2019 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President M Anderson, Senior Member Decision: The application for an order for costs of the appeals is refused. Catchwords: Costs on appeal Legislation Cited: Civil and Administrative Tribunal Act 2013 NSW Cases Cited: None cited Texts Cited: None cited Category: Costs Parties: AP 19/21640: Joseph Pollack (First Appellant) Denise Solden(Second Appellant) The Owners – Strata Plan No 2834(Respondent) AP 19/27290: The Owners – Strata Plan No 2834 (Appellant) Joseph Pollack (First Respondent) Denise Solden (Second Respondent Representation: AP 19/21640: Counsel: J Emmett (First and Second Appellant) Solicitors: Sachs Gerace Broome Lawyers (First and Second Appellants) JS Mueller & Co (Respondent) AP 19/27290: Counsel: J Emmett (Respondent) Solicitors: JS Mueller & Co (Appellant) Sachs Gerace Broome Lawyers (First and Second Respondents) File Number(s): AP 19/21640;AP 19/27290 Publication restriction: Unrestricted Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 12 April 2019 Before: D Charles, Senior Member File Number(s): SC 18/29386, SC 18/29379 and SC 18/32819 REASONS FOR DECISION Introduction 1. This decision concerns a claim for costs brought by the Owners Corporation arising out of a decision we published on 16 September 2019. The other party, Dr Pollack and Ms Solden (Lot Owners), submit that there should be no order as to costs of the appeals. 2. By way of background we note: 1. Both the Owners Corporation and the Lot Owners lodged appeals from a decision made in the Consumer & Commercial Division. Both appeals were heard together. 2. At first instance the Tribunal decided that an exclusive use bylaw had come to an end and that, contrary to the Lot Owners' contention, could not be amended or added to without the consent of the Owners Corporation. At first instance the Tribunal ordered the Lot Owners to seal a hole in the floor as a consequence of the exclusive use bylaw coming to an end. 3. On appeal the Owners Corporation was successful in its interpretation of the bylaw but the Appeal Panel set aside the order that the Lot Owners were to seal the void in the floor. Instead, the Appeal Panel decided that the Owners Corporation should do so. 4. In the proceedings at first instance, the Lot Owners were ordered to pay compensation to the Owners Corporation for use of the disputed area beyond the period that the bylaw ceased to have effect. On appeal, the Owners Corporation was successful in maintaining that order. The Lots Owners were ordered to pay an amount of $3,970 per month from 1 July 2018. 5. In substance the orders at first instance were affirmed, with the exception that the obligation to seal the void was reversed on appeal. 1. Following the publication of our decision and pursuant to directions made by us, the parties have made submissions with respect to costs of the appeals. The substance of these submissions is set out below. Owners Corporation's Submissions on Costs 1. The Owners Corporation seeks an order that the Lot Owners pay one third of the costs of the Owners Corporation of and incidental to both appeals on the ordinary basis in an amount to be agreed or as assessed. The Owners Corporation consents to hearing on costs being dispensed with pursuant to s 50(2) of the Civil & Administrative Tribunal Act, 2013 (NCAT Act). 2. The Owners Corporation submits that the Lot Owners gave an undertaking as to damages at first instance and the result of the first instance proceedings was that they were ordered to pay an amount of money in the sum of $3,970 per month from 1 July 2018 until compliance with orders of the Tribunal. At first instance, the Owners Corporation had sought an order for compensation. At the time the Consumer & Commercial Division published its orders on 12 April 2019, the order for compensation had the effect of requiring the Lot Owners to pay the Owners Corporation an amount which equalled at least $35,730. At the time the Appeal Panel delivered its reasons the amount of money payable by the Lot Owners to the Owners Corporation pursuant to the order at first instance had increased to an amount no less than $55,580. In the circumstances there was an amount claimed or in dispute in the first instance proceedings and in the appeal that was more than $30,000. 3. The NCAT Act provides that the general rule is that each party pay its own costs: see s 60. However, rule 38 of the Civil & Administrative Tribunal Rules (the Rules) provides otherwise in the circumstances set out in that rule. The rule effectively states that despite s 60, the Tribunal may award costs even in the absence of special circumstances warranting such an award if the amount claimed or in dispute in the proceedings is more than $30,000. The Owners Corporation submits that rule 38 applied to the first instance proceedings. By rule 38A the provisions concerning costs described in rule 38 also applies on appeal (for appeals lodged on or after 1 January 2016). Rule 38A(2) provides that, despite s 60, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding to award costs in relation to the appeal. In short, by operation of rule 38A, rule 38 applies to the costs of the appeal proceedings. 4. The Owners Corporation submits that the Appeal Panel has a general discretion to award costs and the starting point is that in exercising that discretion the usual order for costs applies, namely that the successful party should be entitled to an order for costs in its favour. Costs normally follow the event, namely the practical outcome of the proceedings by posing the question who, as a matter of substance, has won? 5. The proceedings on appeal involved three key questions. The first question was the proper construction of the bylaw and the Owners Corporation was successful on that issue both at first instance and on appeal. The second issue concerned the responsibility for sealing the hole in the floor. The Owners Corporation was successful at first instance but not on appeal. The third issue concerned the question of whether the Lot Owners should pay compensation for use of the disputed area after the expiry of the bylaw. It is this last issue that engages rule 38. The Owners Corporation was successful on that issue. The issue occupied about one third of the time of the appeal proceedings and the Appeal Panel should consider it appropriate for an order to be made that the Lot Owners pay one third of the costs of the Owners Corporation of and incidental to the appeal. The Submissions of the Lot Owners 1. The Lot Owners submit that there should be no order as to costs. They submit that where there are multiple issues in a case, the court generally does not attempt to differentiate between the issues on which a party was successful and on those on which it failed. Here each party enjoyed significant success. There is no basis for a more precise costs order than to make no order as to costs. There were two central issues that took substantial time being the construction of the bylaw (in respect of which the Owners Corporation was successful) and the responsibility for sealing the hole(ie the void) (in respect of which the Lot Owners were successful). The whole appeal was dealt with in a single half day hearing. Very little time was taken up with the so-called third issue relied upon by the Owners Corporation namely the claim for compensation. The various issues substantially overlapped in relation to the underlying facts and no issue was clearly dominant. Decision 1. We agree with the Owners Corporation that, in the circumstances of these appeals, rule 38 applies by virtue of rule 38A(2). This is so because there was an amount claimed or in dispute in the appeal proceedings of an amount more than $30,000. 2. However, rule 38 still gives to the Appeal Panel a discretion as to award costs and the issue is whether we should exercise that discretion in the manner contended for by the Owners Corporation. 3. In our view, this is not an appropriate case to exercise our discretion to award costs. The issue concerning the claim for compensation was a matter which took up very little time and did not, in our view, appreciably add to the costs of the parties. The substantial issue was the proper construction of the bylaw and the consequential responsibility for sealing the hole. We agree with the submission of the Lot Owners that they were the two central issues and we do not share the implicit view of the Owners Corporation that the costs were increased by one third on account of the presence of the issue concerning the claim for compensation. 4. In the light of this reasoning, we do not propose to make an order for costs of the appeals. The formal order will be that 1. The application for an order for costs of the appeals is refused. ********** 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: 05 December 2019