Constantinou v Dipsellas; Dipsellas v The Owners Strata Plan No 20736 (No. 2)

[2022] NSWCATCD 149

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

Constantinou v Dipsellas; Dipsellas v The Owners Strata Plan No 20736 (No. 2) [2022] NSWCATCD 149

Hearing dates:

On the papers

Date of orders:

21 July 2022

Decision date:

21 July 2022

Jurisdiction:

Consumer and Commercial Division

Before:

D Charles, Senior Member

Decision:

1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 NSW, a hearing on the question of costs is dispensed with.

2. The application for his costs in the proceedings constituted by File Nos. COM 20/41088 and SC 21/13805 by the Lessor, Stanley Stephen Dipsellas, is dismissed.

3. No order as to costs, with the intent that all parties are to bear their own costs of the proceedings.

Catchwords:

COSTS – Rule 38(2) applies - multiple and interrelated issues in Lessee’s application and in Lessors’ cross application against Owners Corporation - varying degrees of success in both applications – the “event” is determined by the substance and reality of the outcome of the proceeding - proper exercise of discretion as to costs

Legislation Cited:

Strata Schemes Management Act 2015 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Retail Leases Act 1994 (NSW)

Civil and Administrative Tribunal Rules 2013 (NSW)

Cases Cited:

Calderbank v Calderbank (1975) 3 All ER 333

Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 at [24]

Williams v Lewer [1974] 2 NSWLR 91

Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327

Oshlack Richmond River Council [1998] HCA 11; (1998) 193 CLR 72

Thompson v Chapman [2016] NSWCATAP 6

Rekrut and Scott v Champion Home Sales Pty Ltd [2018] NSWCATAP 97

Nguyen v Perpetual Trustee Co Ltd; Perpetual

Trustee Co Ltd v Nguyen [2015] NSWCATAP 264

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304

Vella v Mir (No 3) [2020] NSWCATAP 17

Mendonca v Tonna [2017] NSWCATAP 176

Maitland Hospital v Fisher [No 2] (1992) 27 NSWLR 721

Multicon Engineering Pty Limited v Federal Airports Corporation (1996) 138 ALR 425

Hadid v Australis Media Ltd [1999] NSWSC 32

Rickard Constructions v Rickard Hails Moretti [2005] NSWSC 481

Jones v Bradley (No 2) [2003] NSWCA 258

Old v McInnes and Hodgkinson [2011] NSWCA 410

SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323

Miwa Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344

Nu Line Construction Group Pty Ltd v Fowler [2012] NSWSC 816

Hawkesbury District Health Service Limited v Chaker(No 2) [2011] NSWCA 30 at [10] - [11]

Category:

Costs

Parties:

Joanne Constantinou (Applicant in file no. COM 20/41088)

Stanley Stephen Dipsellas (Respondent in file no. COM 20/41088; Applicant in file no. SC 21/13805)

The Owners – Strata Plan No 20736 (Respondent in file no. SC 21/13805)

Representation:

Counsel:
L Katsanas (for Stanley Stephen Dipsellas)
H Altan (for The Owners – Strata Plan No 20736)

Solicitors:
Shad Partners (for Joanne Constantinou)
Shanahans Butlers Solicitors (for Stanley Stephen Dipsellas)
CKSD Lawyers (for The Owners – Strata Plan No 20736)

File Number(s):

COM 20/41088; SC 21/13805

Publication restriction:

Nil

REASONS FOR DECISION

Introduction

1. On 27 April 2022, I made various orders in the two proceedings constituted by File No COM 20/41088 (Retail Lease Claim) and by File No SC 21/13805 (Strata Claim).

2. In the Retail Lease Claim, the respondent, Stanley Stephen Dipsellas (Lessor), was ordered to pay to the applicant, Joanne Constantinou (Lessee), via a credit on the parties’ rent ledger, an amount of $2,754, as compensation by way of abatement of rent pursuant to s 36(1)(b) of the Retail Leases Act 1994 (NSW) (RL Act).

3. In the Strata Claim, The Owners – Strata Plan No 20736 (Owners Corporation) as respondent was ordered to indemnify the Lessor as applicant, for the Lessor’s liability to the Lessee in the Retail Lease Claim in the amount of $2,754.

4. While the Lessee’s claims for compensation or damages (whether under the general law or under the RL Act) were otherwise dismissed, the Retail Lease Claim was not restricted to relief by way of order(s) to pay money. The Lessee also sought orders of the Tribunal that water ingress issues affecting the retail shop premises be promptly rectified in a proper and workmanlike manner.

5. Because any works order made by the Tribunal for the rectification of the water ingress issues the subject of the Lessee’s Retail Lease Claim, would affect the common property of the strata scheme within which the retail shop premises were located, this meant orders of the Tribunal under the Strata Schemes Management Act 2015 (NSW) (SSMA) against the Owners Corporation were required in the Strata Claim. In any case, the Lessor as applicant in the Strata Claim had sought to be indemnified by the Owners Corporation in respect of any liability the Lessor had to the Lessee for rectification works addressing the water ingress issues.

6. Accordingly, although not a party to the proceeding which constituted the Strata Claim, the following orders were made in that proceeding, in essence, for the benefit of the Lessee:

[4] Also in the proceeding constituted by file no SC 21/13805, pursuant to s 229(a), 232(1)(e), 240 and 241 of the Strata Schemes Management Act 2015 NSW, within 28 days of the date of these orders, the Owners Corporation is to engage appropriately qualified professionals, such as building consultants, licensed plumbers and engineers (which may, but does not have to, include Whitehouse Plumbing) to assess, investigate and report as regards the rectification and remedial measures now required, including a scope of works, so that the common property of the strata scheme is properly maintained and kept in a state of good and serviceable repair, as follows: to address all issues in respect of water ingress into the Lessor’s lot property the subject of a retail lease between the Lessor and the Lessee.

[5] For the purposes of carrying into effect Order 4, which may require invasive inspections of lot property, the parties are to liaise co-operatively so as to ensure that proper and adequate access is given to the professionals in respect of Lot 14 of the strata scheme and that reasonable notice of inspection times is provided to the Lessee.

[6] Within 56 days of the date of these orders, or such later time as may be agreed between the parties, the Owners Corporation is to obtain at least three (3) quotations for the remedial/rectification works to the common property of the strata scheme within the scope of works recommended in the report of the professionals as referred to in Order 4 above.

[7] The Secretary of the Owners Corporation is to instruct the strata agent of the strata scheme to convene an extraordinary general meeting of the scheme (to be held within 90 days of the date of these orders) for resolution on acceptance of a quotation for the said remedial/rectification works.

[8] The agenda of the extraordinary general meeting of the strata scheme must also include an item to consider the means of funding for the remedial/rectification works to be carried out pursuant to the acceptable quotation, including, if appropriate, whether a special levy is raised and/or a strata loan facility is used.

7. I gave written reasons with the orders made on 27 April 2022 (Final Decision). The Final Decision also included directions (orders [9] – [12]) which enabled any party seeking its costs in the proceedings to make an application for costs with supporting written submissions, for written submissions in response by a costs’ respondent, and for any written submissions in reply from a costs’ applicant. The direction in order [12] made on 27 April 2022 required the parties’ written submissions to address whether the parties objected to any application for costs being dealt with ‘on the papers’, that is, for an order to be made dispensing with a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).

8. By written submissions dated 10 May 2022 (received by the Tribunal on 11 May 2022), the Lessor sought orders for its costs of both proceedings against the Lessee and the Owners Corporation, respectively.

9. 9 Following the hearing of both proceedings on 4 November 2021, the Lessor’s solicitors had sent a letter dated 18 November 2021 to the Lessee’s solicitors, containing an offer to settle the proceedings which was marked ‘Without Prejudice Save as to Costs’ and was said to have been made in accordance with the principles in Calderbank v Calderbank (1975) 3 All Er 333 (Calderbank Offer). Relevantly, the terms of the Calderbank Offer were:

1. That the Lessor is to provide an abatement of rent of six weeks totalling $3,500, against all outstanding rent to date.

2. No order as to costs with the intention for each party to pay their own costs.

3. Notation – The Tribunal notes that the Owners Corporation is attending to the repair of the awning and will use its reasonable endeavours to complete the repairs in accordance with s 106 of the SSMA.

4. Notation – The Lessor and the Lessee note that there is still a dispute between them in relation to outstanding rent owed to the Lessor between March 2020 to date. Both parties acknowledge that these proceedings and their settlement have not determined and finalised the outstanding rent issue between them and that is still to be resolved or determined.

10. The Lessor now relies upon the Calderbank Offer to support his application for costs on the indemnity basis against the Lessee from 18 November 2022; otherwise, the Lessor seeks an order for his costs of the proceedings against the Lessee and the Owners Corporation, respectively, on the ordinary basis, as agreed or as assessed.

11. By written submissions in reply dated 13 May 2022, the Lessee responded to the Lessor’s submissions on costs dated 10 May 2022. The Owners Corporation also sent in written submissions dated 25 May 2022 in reply to the Lessor’s costs submissions of 10 May 2022 and the Lessee’s costs submissions of 13 May 2022.

12. These Reasons (Costs Decision) deal with the Lessor’s application for costs following the Final Decision of 27 April 2022. The issues in the application for costs are as follows:

1. Whether an order should be made pursuant to s 50(2) of the NCAT Act dispensing with a hearing of the costs’ application.

2. What are the relevant principles governing the current costs’ application?

3. Should the Tribunal exercise its discretion to make an order for costs and if so, should the Tribunal make an order for costs on the ordinary basis, or on the indemnity basis, or a combination of both bases?

13. This Costs Decision must be read with the Final Decision.

Should an order be made dispensing with the hearing of the costs’ application?

14. The Lessor and the Owners Corporation consented to the issue of costs being determined by the Tribunal on the papers. The Lessee made no submission on that matter.

15. I am satisfied that the issue of costs in the proceedings can be adequately determined in the absence of the parties by considering the written submissions referred to. I find that making an order under s 50(2) of the NCAT Act would avoid the parties being put to the unnecessary expense of an oral hearing on the question of costs.

16. Accordingly, I find that this is an appropriate case to exercise the Tribunal’s discretion under s 50(2) of the NCAT Act to dispense with a formal hearing requiring the parties to be present and to proceed to determine the application for costs in the proceedings on the papers.

What are the relevant principles governing the Lessor’s application for costs in both proceedings?

17. The starting point in any application for costs is that parties to proceedings in the Tribunal are to pay their own costs: see s 60(1) within Part 4 ‘Practice and Procedure’ of the NCAT Act. Subsection 60(2) provides costs are awarded only if the Tribunal is satisfied that there are: “special circumstances warranting an award of costs”. Subsections 60(3)(a) – (g) of the NCAT Act then set out various matters which the Tribunal may have regard to in determining whether there are special circumstances warranting an award of costs.

18. Each of the provisions of Part 4 of the NCAT Act is subject to enabling legislation and the “procedural rules”: NCAT Act, s 35. As defined in s 4 (1) of the NCAT Act, “procedural rules” means the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules).

19. Rule 38 of the NCAT Rules relates to costs in this Division of the Tribunal, the Consumer and Commercial Division. Rule 38(2) says that despite s 60 of the NCAT Act the Tribunal may award costs in the absence of special circumstances warranting such an award if the amount claimed is more than $10,000.00 but not more than $30,000.00 and the Tribunal has made an order under cl 10(2) of Sch4 of the NCAT Act in relation to the proceedings, or the amount claimed or in dispute in the proceedings is more than $30,000.00.

20. Accordingly, the usual position under s 60 of the NCAT Act is modified by r 38 of the NCAT Rules and the Tribunal may award costs without “special circumstances”.

21. The discretion to award costs generally is broad and unfettered, save that it must be exercised on a principled and judicial basis, avoiding arbitrariness and serving the need for consistency: see, for example, Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 at [24], and also “according to rules of reason and justice, not according to private opinion … or even benevolence … or sympathy”: Williams v Lewer [1974] 2 NSWLR 91 at [95]. The Tribunal’s power is ‘unfettered’ in the manner described in Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327 at [36]:

A power conferred in these terms is “unfettered” in the sense that the Tribunal may make such order as it thinks appropriate, so long as it acts in accordance with the subject matter, scope and purpose of the power. In relation to the award of costs in litigation, the accepted purpose is where costs are awarded in favour of one party, to compensate that party for the expense incurred in respect of the litigation.

22. An award of costs is made, not for the benefit of a losing party, but for the successful party. In Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, McHugh J (in dissent but with the tacit agreement on this issue with other members of the Court) said at [67]:

The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended by, the unsuccessful party the successful party would not have incurred the expenses which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.

23. The Tribunal may determine by whom and to what extent costs are to be paid and may order costs on either the ordinary basis or an indemnity basis: s 60(4) of the NCAT Act.

24. In the exercise of the discretion, the usual position is that costs “follow the event”: see, for example, Thompson v Chapman [2016] NSWCATAP 6 at [69] – [72]; Rekrut and Scott v Champion Home Sales Pty Ltd [2018] NSWCATAP 97 (Rekrut) at [20] – [23]. However, notwithstanding whether r 38 of the NCAT Rules applies in any proceedings, the Tribunal retains the discretion as to whether (or not) it will award costs even in circumstances where costs ordinarily follow the event: see Nguyen v Perpetual Trustee Co Ltd; Perpetual Trustee Co Ltd v Nguyen [2015] NSWCATAP 264 where the Tribunal’s Appeal Panel stated at [95]:

While the discretion to award costs under Rule 38 is unfettered, in our view costs should generally ‘follow the event’ recognising however that factors may exist that militate against the successful party recovering all of its costs: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [134]. Fairness dictates that the unsuccessful party typically bears the liability for costs unless it is demonstrated that some other order is appropriate…

25. Where there are multiple issues in a case a court generally does not differentiate between issues on which a party was successful and those upon which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between issues on which that party was successful and those upon which it failed: see, for example, Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 (Bostik) at [38].

26. Where there are separable issues, the Appeal Panel in Rekrut at [24], referring to the Court of Appeal in Bostik, summarised the relevant principles, as follows:

“• If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27].

• Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed).

• A separable issue can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34].

• Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261 at 272."

27. Also relevant is Vella v Mir (No 3) [2020] NSWCATAP 17 where the Appeal Panel succinctly stated some further propositions in relation to dominant or separable issues. The Appeal Panel said:

28. The Tribunal may also determine by whom and to what extent costs are to be paid and may order costs on either the ordinary basis or an indemnity basis: s 60(4) of the NCAT Act.

29. Further, the Tribunal’s discretion to award indemnity costs is exercised in limited circumstances and it must be the subject of careful reasoning: see Mendonca v Tonna [2017] NSWCATAP 176 at [59] – [60], [62] – [64] and the cases cited therein by the Appeal Panel.

30. A basis on which an order for indemnity costs may be made is where during the proceedings an offer of compromise is made which was no worse than the result ultimately achieved by the party against whom the indemnity order is sought: Maitland Hospital v Fisher [No 2] (1992) 27 NSWLR 721; Multicon Engineering Pty Limited v Federal Airports Corporation (1996) 138 ALR 425; Hadid v Australis Media Ltd [1999] NSWSC 32.

31. An offer of compromise may be in the form of a ‘Calderbank’ letter. The general function of a Calderbank letter is to promote settlement of disputes, in addition to its more particular application in claims for indemnity costs: Rickard Constructions v Rickard Hails Moretti [2005] NSWSC 481, [12].

32. Furthermore, the making of an offer in a Calderbank letter (referred to as “Calderbank offer”) does not automatically result in a favourable costs order, even if the ultimate judgement of the Tribunal is more favourable to the party making the offer than the terms of the offer. The party making a Calderbank offer still carries the onus of satisfying the Tribunal that it should exercise the costs’ discretion in that party’s favour: Jones v Bradley (No 2) [2003] NSWCA 258, [5]; Old v McInnes and Hodgkinson [2011] NSWCA 410, [22].

27. Moreover, in determining whether to make a costs order on the indemnity pursuant to a Calderbank offer, the Tribunal is to have regard to the relevant principles identified in SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323, Miwa Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344, and Nu Line Construction Group Pty Ltd v Fowler [2012] NSWSC 816. Such principles are:

1. There must be a real and genuine element of compromise.

2. The refusal must be unreasonable.

3. The reasonableness in rejecting an offer must be considered at the time the offer is made, not with the benefit of hindsight.

4. Relevant factors in relation to whether the rejection was reasonable include the stage of the proceedings at which the offer was received, the time allowed to consider the offer, the extent of compromise offered, the offeree’s prospects of success (assessed at the date of the offer), the clarity with which the terms of the offer were expressed and whether the offer foreshadowed an application for indemnity costs in the event of rejection.

34. I now proceed to apply these general legal principles as to costs to the particular facts of each proceeding.

Consideration of the Tribunal’s discretion as to costs

35. In each proceeding, the amount in issue clearly exceeded $30,000.00: see the Final Decision at [23] and [76] as to the Retail Lease Claim, and at [34] and [100] as to the Strata Claim. I am satisfied that r 38(2)(b) of the NCAT Rules applies. It is therefore not necessary for “special circumstances” to exist for the Tribunal to exercise its discretion to order costs in both proceedings. I find that the second basis (NCAT Act, s 60(2)) upon which the Lessor put his application for costs is therefore not applicable in the proceedings.

36. The Lessor argued that in the exercise of the Tribunal’s costs’ discretion under r 38 I should find in each instance, that costs “followed the event” and that there are no factors militating against a costs’ order in the Lessor’s favour in both proceedings. The “event”, so the Lessor’s solicitor submitted, is that the Lessor was “largely successful” in the Retail Lease Claim, and that the Lessor was “very successful” in the Strata Claim.

37. I do not agree with the Lessor’s submissions that the “event” in both proceedings went against the Lessee and the Owners Corporation, respectively. As was stated by the Court of Appeal in Hawkesbury District Health Service Limited v Chaker (No 2) [2011] NSWCA 30 at [10] - [11], the substance and the reality of the outcome of the proceeding is the key consideration as to who is the successful party “in the event”.

38. In my opinion, the correct position as to the “event” is that all parties “had mixed success (and failure) on the various issues”: Final Decision at [109]. While it is the case that the Lessor successfully defended the Lessee’s damages claim for loss of chance (i.e., loss of revenue in coffee sales – see Final Decision at [72] – [89]) in an amount of up to $740,520, I also determined that:

1. The Lessor had breached the covenant of quiet enjoyment by not addressing the water ingress issues affecting the retail shop premises, which had been ongoing since March 2017,

2. The Lessee was entitled to rental abatement for diminishment of use, and

3. (To address the ongoing water ingress issues), the Lessee was entitled to orders made under the SSMA requiring rectification works to be undertaken and carried into effect in a timely manner.

39. Significantly, my finding of breach of the covenant of quiet enjoyment by the Lessor was that the Lessor could, and should, have taken positive action to address the ongoing issues with water ingress in the retail shop premises as such issues had been communicated since 2017 to the Lessor’s property agents and to the Owners Corporation’s strata managing agent: Final Decision at [70].

40. The principal matters for determination in the proceedings were the Lessee’s claims for compensation and damages, the Lessee’s requirement that rectification works must be undertaken promptly and in a proper and workmanlike manner to address water ingress issues in the premises which had been frequent and ongoing since March 2017, and the Lessor’s claims to be indemnified for any liabilities to the Lessee whether in an order of the Tribunal for the payment of money or in orders of the Tribunal for rectification works to be carried out. These matters were all interrelated and were not separable.

41. The Lessor disputed the nature, extent, and frequency of the water ingress issues, as put in the Lessee’s case. I did not accept the evidence that the water leaks into the premises had been rectified and/or that the leaks were caused by the bi-fold windows the Lessee had installed near the area where awning works had been carried out by the Owners Corporation.

42. Moreover, the Lessor did not lead any expert evidence on the question of the Lessee’s claim for damages by way of loss of revenue for coffee sales. In many respects, the Lessor left the running to the Owners Corporation as regards a response to that issue. The Lessor’s evidence primarily dealt with whether there were water leaks into the premises, whether the Lessor had breached the retail lease and the RL Act, and whether the Lessee was entitled to a rental abatement for diminishment of use of the premises.

43. I infer that even if the Lessee had not pursued a claim for damages by way of loss of revenue for coffee sales, it is reasonably likely that the proceedings would still have been run in a similar manner and within a similar timeframe. The Lessee’s principal witness in support of the loss of revenue case, Mr Maklouf, gave oral evidence (subject to cross examination) over a time which was relatively shorter to the time taken during the hearing on all other issues.

44. While the Lessee may not have succeeded in her damages claim for loss of revenue (because she was unable to prove her loss in fact or in law), she did establish other substantive rights which were of equal weight and significance to her case for orders of the Tribunal, a rental abatement award, a works order for rectification of the water ingress issues, and ancillary relief to ensure that the works order made by the Tribunal is properly carried into effect.

45. Therefore, in my view, it cannot be said that the “event” in the proceeding constituted by File No. COM 20/41088 went against her. Having regard to my findings in the Final Decision that the water ingress issues were ongoing, and that the Lessor did not take reasonable steps to ensure the Lessee had quiet enjoyment of the premises by rectifying the problem in a timely manner, in the exercise of the Tribunal’s discretion as to costs, I do not think it would be fair or just for the Lessee to be required to pay any costs to the Lessor. The proceedings might well have been avoided altogether if the Lessee (and the Owners Corporation) had taken reasonable and timely steps to address the water ingress problems in the Lessee’s premises.

46. By his Calderbank Offer of 18 November 2021, the Lessor may have offered the Lessee a higher amount ($3,500) than the amount awarded to the Lessee in the Final Decision for rent abatement ($2,754); but even if I had been satisfied for other reasons (which I am not) that a costs’ order in the Lessor’s favour would be the appropriate order under r 38, I find that the Calderbank Offer is not a real and genuine compromise. Critically, it does not provide an offer to the Lessee of relief in respect of all issues in dispute, but particularly relief by way of orders for rectification works, which must be undertaken promptly and in a proper and workmanlike manner. The notation put forward in the Calderbank Offer is not an enforceable order. Absent orders made under the SSMA, the parties’ disputes on addressing the water ingress issues may well have been prolonged if the Calderbank Offer had in fact been accepted by the Lessee. Accordingly, regardless of the other matters in respect of the exercise of the Tribunal’s discretion as to costs, the Lessor’s Calderbank Offer cannot be a proper basis on which to award costs on the indemnity basis from 18 November 2021.

47. The Lessor also sought costs on the ordinary basis against the Owners Corporation, but his solicitor’s submission does not elucidate how any such costs, if awarded, ought to be apportioned. In both proceedings, as I have observed, there was a significant overlap of evidence on the different issues with no party enjoying success on a dominant or on a separable issue.

48. The Owners Corporation took the lead, especially in its counsel’s cross examination of the Lessee’s witness, Mr Maklouf, in the response to the Lessee’s claim against the Lessor for loss of revenue damages. That claim (in an amount of up to $740,520) was ultimately dismissed. The Owners Corporation also led evidence and made submissions which assisted the Lessor in his defence to the Lessee’s claim against the Lessor for a rent abatement award over a continuous period of 220 weeks. These were all significant matters in the conduct of the hearing on 4 November 2021, and then subsequently in the parties’ closing written submissions following the hearing. In my view, they outweigh the lesser time and effort that was spent on the question in the Strata Claim of whether the Lessor’s claim under s 106(5) of the SSMA was time barred.

49. Furthermore, with all parties enjoying success on some issues only, in my opinion, an apportionment of costs in both proceedings would be difficult and uncertain. In these proceedings, the issues in dispute between the parties substantially overlapped. In my view, there were no dominant issues in the proceedings, that is, a particular issue which could be separated from other issues, and which could be identified, discretely, as to the time taken during the hearing on 4 November 2021 and in the parties’ closing written submissions following the hearing, relative to all other issues in dispute. It is reasonably likely that during a costs’ assessment process, the costs assessed for a party in respect of issue(s) on which that party succeeded (i.e., followed the “event”) might well be cancelled by that party’s liability for the costs assessed for other parties where those parties had succeeded on other issue(s). It is then in the interests of the just, quick, and cheap resolution of the real issues as to the parties’ costs’ dispute (NCAT Act, s 36), to avoid the delay and the further expense to the parties of a costs’ assessment and to proceed to bring finality to the parties’ dispute by making no order as to costs with the intent each party is to bear their own costs.

Orders

50. For the foregoing reasons, the orders of the Tribunal are:

1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 NSW, a hearing on the question of costs is dispensed with.

2. The application for his costs in the proceedings constituted by File Nos. COM 20/41088 and SC 21/13805 by the Lessor, Stanley Stephen Dipsellas, is dismissed.

3. No order as to costs, with the intent that all parties are to bear their own costs of the proceedings.

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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

Amendments

22 September 2023 - Formatting amendments.

Decision last updated: 22 September 2023