D’SILVA & Anor v Canberra Strata Pty Ltd & Anor (Unit Titles)
[2022] ACAT 79
•5 October 2022
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
D’SILVA & ANOR v CANBERRA STRATA PTY LTD & ANOR (Unit Titles) [2022] ACAT 79
UT 35/2021
Catchwords: UNIT TITLES –application from owners corporation for costs under section 48 of the ACT Civil and Administrative Tribunal Act 2008 – whether the applicants caused obstruction or unreasonable delay in the proceedings – application dismissed
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 32, 48
Unit Titles (Management) Act 2011 s 31
Cases cited:Barker v Plunkett & Anor [2018] ACAT 9
Carew-Neill v Bower [2016] ACAT 54
CIC Australia Ltd v Australian Capital Territory Planning and Land Authority [2013] ACTSC 96Lanfranchi v Owners of Units Plan 86 [2011] ACAT 83
Mainore Pty Ltd v ACT Planning and Land Authority & CIC Australia Pty Ltd [2011] ACAT 24
Russell v The Owners Corporation UP 585 Kingston [2020] ACAT 101
Smith v J&C Whyte Family Trust & Anor [2016] ACAT 132
Tribunal:Senior Member Prof P Spender
Date of Orders: 5 October 2022
Date of Reasons for Decision: 5 October 2022
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) UT 35/2021
BETWEEN:
ALASTAIR D’SILVA
First Applicant
RUTH ELLISON
Second Applicant
AND:
CANBERRA STRATA PTY LTD
ACN 652 727 207
First Respondent
THE OWNERS – UNITS PLAN NO 3941
Second Respondent
TRIBUNAL:Senior Member Prof P Spender
DATE:5 October 2022
ORDER
The application for interim or other orders filed by the second respondent on 22 March 2022 is dismissed.
………………………………..
Senior Member Prof P Spender
REASONS FOR DECISION
The reasons below explain why the Tribunal has made the orders set out above. In the reasons below, a reference to ‘ACAT’ or ‘tribunal’ refer to the ACT Civil and Administrative Tribunal generally, whereas ‘Tribunal’ refers to the presently constituted tribunal.
This decision concerns the application for interim or other orders filed on 22 March 2022 (Application for Costs)[1] on behalf of the second respondent in this matter, The Owners, Units Plan No 3941 (Owners). The second respondent sought an order that the applicants in the proceedings (applicants) pay the reasonable costs of the Owners pursuant to section 48 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) arising from the obstruction or unreasonable delay caused by the applicants in the proceedings. No application was made under section 31 of the Unit Titles (Management) Act 2011 (UTMA).
[1] Second respondent’s application for interim or other orders dated 22 March 2022
In the Application for Costs, the Owners sought costs in the sum of approximately $11,000 from the applicants on the basis that the Owners had put considerable time and expense in defending (with the exception of two of 27 orders sought across various iterations of the application) a frivolous and futile action by the applicants.
The tribunal has power to award costs in circumstances that constitute unreasonable delay or obstruction under section 48(2) of the ACAT Act.
The applicants filed an application in the tribunal on 7 September 2021 (Original Application). After several directions hearings and other interlocutory events, the matter was heard on 15 March 2022 (final hearing). By the time of the final hearing, there were six grounds that were relied upon by the applicants. After a discussion with the Tribunal during the final hearing where some of the grounds were withdrawn by the applicants, the Tribunal dismissed Grounds 1 to 5. Ground 6 concerned the costs of the proceedings, so the Tribunal made a timetable for the filing of the Application for Costs and submissions by the parties.
The Owners’ Submissions
Relevantly, the Owners’ Application for Costs confined the conduct that constituted the alleged unreasonable delay or obstruction to the conduct of the applicants set out in paragraph 3.1 of that application. In particular, the Owners said that the applicants sought 20 orders in the Original Application and only order 1 concerned the Rule Infringement Notice issued to the applicants on 24 June 2021 (Relevant RIN) that was ultimately pressed. The Owners said that on 27 October 2021 the applicants were put on notice of numerous issues with the Original Application by way of letter from lawyers acting for the Owners, Minter Ellison. The applicants were further put on notice of the issues with the Original Application at the directions hearings on 29 October and 19 November 2021. The Owners contended that the applicants refused to amend the Original Application.[2]
[2] Second respondent’s application for interim or other orders filed 22 March 2022 at [3.1(b)-(c)]
On 19 November 2021, the applicants applied for a subpoena that was issued by the tribunal on 23 November 2021. On 8 December 2021, the Owners via their solicitors invited the applicants to consent to the subpoena being set aside and noted that orders 2 and 3 of the Original Application were not available or appropriate orders for the tribunal to make. The Owners contended that the applicants refused to consent to the setting aside of the subpoena.[3] On 17 December 2021, the applicant filed and served an amended application (Amended Application) which retained the orders sought in the Original Application and included one additional order, which the Owners submitted was not ultimately pressed.[4] On 25 January 2022, the applicants filed and served a further amended application (Further Amended Application) which the Owners contended was an entirely new application save for order 1 from the Original Application or Amended Application.[5]
[3] Second respondent’s application for interim or other orders filed 22 March 2022 at [3.1(e)]
[4] Second respondent’s application for interim or other orders filed 22 March 2022 at [3.1(f)]
[5] Second respondent’s application for interim or other orders filed 22 March 2022 at [3.1(g)]
In its response dated 25 February 2022, the Owners said they “put the applicants on notice” of the reasons why orders 2, 3 and 4 of the Further Amended Application could not be made by the tribunal.[6] On 4 March 2022, the applicants and representatives of the Owners attended a settlement conference, and the Owners made a settlement offer (First Settlement Offer). On 9 March 2022, the Executive Committee of the Owners Corporation (EC) passed a resolution providing for the withdrawal of the Relevant RIN, the reimbursement of fees charged in respect of the Relevant RIN and the withdrawal of associated warnings (EC Resolution). On 10 March 2022, by letter from Minter Ellison, the Owners notified the applicants of the EC Resolution, summarised why the balance of the Further Amended Application was futile and offered to settle the proceeding on the basis that the Further Amended Application be dismissed with each party bearing their own costs (Second Settlement Offer).[7] On 11 March 2022, the applicants rejected the Second Settlement Offer. As stated above, at the final hearing on 15 March 2022, the Tribunal dismissed grounds 1 to 5 of the Further Amended Application and made a timetable for submissions regarding the Application for Costs.
[6] Second respondent’s application for interim or other orders filed 22 March 2022 at [3.1(h)]
[7] Second respondent’s application for interim or other orders filed 22 March 2022 at [3.1(k)]
The Owners contended that had the applicants filed the Further Amended Application when commencing the proceedings or amended the Original Application when first notified of its deficiencies, the Owners would not have needlessly incurred the following legal costs:
(a)responding to the Original Application and the Amended Application;
(b)[in] relation to the subpoena; and
(c)appearing at the directions hearings on 29 October 2021, 19 November 2021, and 17 December 2021.[8]
[8] Second respondent’s application for interim or other orders filed 22 March 2022 at [3.2]
The Owners further contended that had the applicants accepted the Second Settlement Offer, under which they would have obtained the same outcome as they did by pressing Further Amended Application at the final hearing, the Owners would not have needlessly incurred legal costs in preparing for and attending the final hearing.[9]
[9] Second respondent’s application for interim or other orders filed 22 March 2022 at [3.3]
The Owners argued that the extent of the legal costs incurred by them was a direct result of the demonstrably unreasonable and unjustified conduct of the applicants.[10] They commented that the tribunal has made costs orders in the past where a party had failed to accept a settlement offer, exemplified by Lanfranchi & Owners of Units Plan 806[11] (Lanfranchi).
The Applicants’ Submissions
[10] Second respondent’s application for interim or other orders filed 22 March 2022 at [3.4]
[11] [2011] ACAT 83
In response to the Owners’ submissions and referring to Russell v The Owners Corporation UP 585 Kingston,[12] the applicants said that as soon as they were directed by the tribunal to amend their documents, they did so and they made appropriate efforts in “constructing the matter and proceeding to the Directions Hearings and did not knowingly engage in anything that might be classed as ‘sharp practice’ or conscious delay”.[13] The applicants said that the discussion in Smith v J&C Whyte Family Trust & Anor[14] (Smith) makes it clear that “it is not inexperienced clumsiness in drafting an application that will trigger a finding of ‘delay or obstruction’ on the part of the self-represented litigant”.[15]
[12] [2020] ACAT 101
[13] Applicants’ submissions dated 4 April 2022 at [29]
[14] [2016] ACAT 132
[15] Applicants’ submissions dated 4 April 2022 at [29]
In response to the Owners contentions about the letter sent on 27 October 2021 the applicants said that they did not have time before the hearing on 29 October 2021 to seek legal advice but had responded at various points to the suggestions of the members at interlocutory proceedings.[16] Regarding the First Settlement Offer, the applicant said that they asked to see the draft consent orders before accepting the First Settlement Offer, but the Owners did not enter into any further correspondence with the applicants until the letter dated 10 March 2022. This assertion by the applicants was not challenged by the Owners in its reply to the submissions dated 13 April 2022.
[16] Applicants’ submissions dated 4 April 2022 at [3]-[6]
As noted above, the EC passed a resolution withdrawing the Relevant RIN, reimbursing the fees charged in respect of the Relevant RIN and the withdrawal of the associated warnings at its meeting on 9 March 2022. Regarding the question about the applicants’ conduct in proceeding to the final hearing rather than accepting the Second Settlement Offer, the applicants said that the decision not to agree to withdraw the matter from hearing on 15 March 2022 was motivated by belief that orders 2 and 3 of the Amended Further Application would be heard and they believed the process of issuing an RIN would be examined as well as the behaviour and conduct of the EC. The applicants also submitted that the Second Settlement Offer was only given two days before the 15 March 2022 hearing, and they are unable to seek legal advice within that timeframe.[17] The applicants asserted that they chose to proceed with the hearing because they thought there was still a chance of a further finding in their favour.[18]
The Owners’ Reply
[17] Applicants’ submissions dated 4 April 2022 at [36]
[18] Applicants’ submissions dated 4 April 2022 at [37]
In reply, the Owners said that it took almost three months for the amendments to the Original Application to be made and that the majority of the costs incurred by the Owners related to orders other than those concerning the Relevant RIN and unnecessary steps in the proceedings such as directions hearings and responding to the subpoena.[19] The Owners also said that pursuing the application to hearing simply to have ACAT scrutinise the conduct of the EC is not conduct aimed at quickly and efficiently resolving disputes.[20] Further, because the EC Resolution only impacted orders 1 and 5, and this effect should have been readily apparent, the submission that there was only limited time period to consider the Second Settlement Offer should not be accepted.[21]
Consideration
[19] Second respondent’s reply dated 13 April 2022 at [5.5]
[20] Second respondent’s reply dated 13 April 2022 at [5.12]
[21] Second respondent’s reply dated 13 April 2022 at [5.13]
The tribunal in Smith noted the general proposition in section 48(1) that the parties “must bear their own costs” and the exceptions to that proposition in section 48(2) must be construed in the context of the ACAT Act as a whole. In particular, two of the objects of the ACAT Act in sections 6(b) and (c) must be taken into account. They state as follows:
b. to ensure that access to the tribunal is simple and inexpensive, for all people who need to deal with the tribunal; and
c. To ensure that applications to the tribunal are resolved as quickly as is consistent with achieving justice.[22]
[22] Smith at [122]
The Presidential Member in Smith noted that the concept that parties must bear their own costs, in the ordinary course, is intended to make justice more accessible. Quoting Maylor (No 2) v Mid North Coast Area Health Service,[23] the Presidential Member further stated that the informality of procedures and the removal of the disincentives of costs orders in the ordinary run of cases are intended to introduce into the proceedings a measure of fairness and equality which is not generally to be found in traditional courts.[24] The Presidential Member concluded that s48(2)(b) states the circumstances in which the tribunal may depart from the general rule as to costs when sections 6(b) and (c) and 48(2)(b) of the ACAT Act are read together. A party is expected to participate in tribunal proceedings in a manner that promotes the objects in section 6(b) and (c) and parties may be ordered to pay another party’s costs if they do not do so.
[23] [2001] NSWADT 118, cited with approval in Appellants v Council of the Law Society of the ACT and The Legal Practitioner [2011] ACTSC 133 at [92]
[24] Smith at [124]
The words ‘delay and obstructs’ are not defined in the ACAT Act, the tribunal has previously applied the ordinary definitions of these words in various cases. For example, Smith stated the following:
‘Obstruct’ is defined in the Macquarie Dictionary as follows:
1. to block or close up, or make difficult of passage, with obstacles, as a way, road, channel, or the like. 2. to interrupt, make difficult, or oppose the passage, progress, course, etc., of 3. to come in the way of or shut out (a view etc)[25]
[25] Smith at [144] (footnotes omitted)
In Auburn Municipal Council v Ivanoff,[26] Maguire J said:
The verb ‘obstructs’ of course can, in various contexts, have different shades of meaning, but a common and natural meaning of the verb ‘to obstruct’ is to impede or hinder, to retard or to oppose the activities of, or to oppose the course of conduct of a person who is seeking to achieve a particular purpose.[27]
[26] (1964) 10 LGRA 258 at 260, cited in Boon v Maher (1986) 7 NSWLR 232 at 236
[27] Smith at [147]
The decision in Smith referred to a particular description of ‘unreasonable delay’ or ‘obstruction’ as “sharp practice, withholding relevant information, half-truths, ambush, surprise or delay.”[28] The Presidential Member further discussed the need for each party to:
bring the dispute to the table as quickly as practicable with all of the relevant facts, evidence and arguments they bear so that the dispute can be resolved as quickly and as inexpensively as the case permits. The tribunal’s power to order costs under section 48(2)(b) is engaged where a party does not participate in this way.[29]
[28] Smith at [127]
[29] Smith at [127]
In the present case, the Owners relied upon further definitions of ‘delay’ and ‘obstruction’ in their submissions, for example, in Barker v Plunkett[30] (Barker) where delay was defined as “make (someone or something) late or slow” and “postpone or defer an action” and ‘obstructs’ was defined as “prevent or hinder (something or someone) in motion” and “deliberately make (something) difficult”. However, the Tribunal considers that the definitions used in Smith are closer to the ordinary meaning of the words.
[30] [2018] ACAT 9 at [33]
The Presidential Member in Smith found that the relevant parties had engaged in obstruction by withholding a crucial fact until the close of hearing in a de novo appeal. If this fact had been disclosed at an appropriate time it would have averted the need for an original hearing, multiple events and evidence that flowed from the lack of disclosure.[31]
[31] See the discussion in Smith at [134]
Smith also interpreted the meaning of delay in section 48(2)(b), commenting that “delay can sometimes be minor or occur unintentionally and/or unavoidably. A party should not be penalised with a costs order in such a circumstance”.[32] The Tribunal notes the reliance of the Owners upon Lanfranchi where the tribunal awarded costs based on the refusal of a party to accept a settlement offer but that case in turn relied upon a fairly wide interpretation of section 48 given by the tribunal in Mainore Pty Ltd & Act Planning and Land Authority & CIC Australia Pty Ltd[33] and this interpretation was narrowed on appeal to the ACT Supreme Court in CIC Australia Ltd v ACT Planning and Land Authority, Mainore Pty Ltd and ACT Civil and Administrative Tribunal (CIC).[34] There was no discussion of ‘unreasonable delay’ or ‘obstruction’ in Lanfranchi because the reasoning was based on a broader understanding of the ambit of the costs power than was eventually established by Penfold J in CIC.
[32] Smith at [140]
[33] [2011] ACAT 24
[34] [2013] ACTSC 96 per Penfold J
The Tribunal must distinguish between the costs power in section 48(2) and the general power to strike out applications as frivolous and vexatious under section 32 of the ACAT Act. The Tribunal notes that the Presidential Member in Smith did not agree with the views of the tribunal expressed in Carew-Neill v Bower[35] that delay or obstruction in section 48(2) encompasses bringing an unmeritorious action because conduct of that kind is dealt with separately under section 32 of the ACAT Act.[36] This approach was followed in Barker[37] and the Tribunal agrees with this analysis.
[35] [2016] ACAT 54 at [22]
[36] Smith at [142]
[37] Barker at [35]
The Tribunal finds that the owners have not established that the conduct of the applicants amounted to unreasonable delay or obstruction for the purposes of section 48(2). In deciding whether the conduct of the applicants amounts to obstruction or unreasonable delay, the Tribunal must weigh up the objects of the ACAT Act in particular that access to the tribunal is simple and inexpensive for all the people that need to deal with the tribunal and to ensure that applications to the tribunal are resolved as quickly as is consistent with achieving justice.
Most of the evidence relied upon by the Owners for the alleged unreasonable delay or obstruction consists of letters sent by lawyers acting for the Owners which asserted certain things about the merit of the application. There was clearly discussion about the application at various events. There is no direct evidence of what was said and done at these various events, nor would the Tribunal expect such evidence to be led because of the disproportionate cost associated with obtaining such evidence.
Was there obstruction by the applicants in the proceedings?
The Tribunal finds that there was no obstruction by the applicants in the proceedings. As interpreted by Smith, obstruction requires conduct that blocks, creates obstacles, makes difficult, impedes, hinders, retards or opposes the activity of a person who is seeking to achieve a particular purpose. The Tribunal also notes the definition in Barker that the word ‘obstructs’ refers to the ‘deliberate’ conduct of the party in question but is not necessary for the Tribunal to further consider whether section 48(2) requires that the conduct be deliberate, merely to find that the Owners have not established conduct that amounts to obstruction on the ordinary meaning of that term.
The subpoena seems to have been unnecessary but there is no evidence that is constituted obstruction. The applicants were concerned about what they regarded as the excessive use of rule infringement notices by the EC and some of the orders sought were based on this wider concern. The Owners objected to the subpoena, but it was issued by the tribunal and the subpoenaed material was “accepted into evidence” in the orders made at the directions hearing on 17 December 2021.
Similarly, the behaviour of the applicants in not accepting the First Settlement Offer has been explained by them because the Owners did not send draft consent orders and the Owners did not enter into any correspondence with the applicants until the letter of 10 March 2022.[38] Regarding the Second Settlement Offer, the applicants frankly stated in their submissions that they proceeded with the hearing due to inexperience and a misunderstanding about what might transpire at the hearing.[39] This conduct does not constitute obstruction for the purposes of section 48(2).
[38] Applicants’ submissions dated 4 April 2022 at [8]
[39] Applicants’ submissions dated 4 April 2022 at [37]
The behaviour of the applicants in this proceeding is readily distinguishable from the conduct of the relevant parties in Smith which was found to amount to obstruction. As noted by the Presidential Member in Smith, the conduct needs to be considered in the context of the objects of the ACAT Act and a relevant consideration is that the EC Resolution (that delivered the relief sought by the applicants) was passed very close to the final hearing. The question then becomes whether the applicants unreasonably delayed in accepting that the EC Resolution resolved the dispute, as discussed below.
Was there unreasonable delay by the applicants?
The Tribunal notes that there was some delay by the applicants in amending their application so that it was more responsive to the tribunal’s jurisdiction. The Tribunal also notes that infelicities in the various versions of the application were pointed out by solicitors acting for the Owners. In weighing up the submissions made by the parties on this point, the Tribunal finds that when they were directed by the tribunal to amend their application, the applicants did so. They may not have gone about this task with the alacrity of an experienced and efficient legal practitioner, but the Tribunal accepts the applicants’ submissions that it is not “inexperienced clumsiness” in drafting an application that will trigger a finding of unreasonable delay on the part of the self-represented litigant. The Tribunal concludes that the applicants’ delay in amending the application was not unreasonable.
The Tribunal notes that the Second Settlement Offer was sent shortly before the hearing. The applicants said that this offer to settle was given only two days before the hearing and they were unable to seek legal advice within that timeframe and they essentially misunderstood what might occur at the hearing.[40] The Owners challenged this submission on the basis that it is not conduct that is aimed at quickly and efficiently resolving disputes.[41] Certainly the EC Resolution delivered the remedy that was primarily sought by the applicants and therefore had they accepted Second Settlement Offer the Owners would not have been put to the expense of the hearing. However, the Tribunal finds that even if there was some delay in appropriately dealing with the proceedings in the light of the EC Resolution, it was not unreasonable delay for the purposes of the imposition of costs under section 48(2).
Conclusion
[40] Applicants’ submissions dated 4 April 2022 at [35]-[36]
[41] Second respondent’s reply dated 13 April 2022 at [5.12]
Having found that the applicants’ conduct did not amount to unreasonable delay or obstruction within the meaning of section 48(2) of the ACAT Act, the Tribunal has dismissed the second respondent’s application for costs.
………………………………..
Senior Member Prof P Spender
Date of hearing: | 15 March 2022 |
| Applicants: | In person |
| First Respondent: Solicitor for the Second Respondent: | Mr J Giugni Mr D Buckley, Minter Ellison |
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