Peter Voutos and Irene Voutos v Michael Trajcevski and Snez Trajcevski

[2014] NSWCATCD 122

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Peter Voutos and Irene Voutos v Michael Trajcevski and Snez Trajcevski [2014] NSWCATCD 122

Hearing dates:

8 July 2014

Decision date:

16 July 2014

Before:

Jeffery Smith, Senior Member

Decision:

1 The applicants shall pay the respondents' costs in these proceedings as agreed or assessed on the ordinary basis within 14 days of agreement or assessment.

2 No order is made in relation to file HB 12/32193.

Catchwords:

Costs

Legislation Cited:

Civil and Administrative Tribunal Act 2013,
Consumer Trader and Tenancy Tribunal Act 2001

Category:

Principal judgment

Parties:

Decision on costs

Peter Voutos and Irene Voutos (applicants
Michael Trajcevski and Snez Trajcevski (respondents)

Representation:

Mr Mobellan for the applicants
Mr Birch for the respondents

File Number(s):

HB 13/66538

reasons for decisioN

APPLICATION

1. This renewal of claim was filed on 11 December 2013.

1. At the hearing on 24 March 2014 the application was withdrawn.

1. This is an application by both parties for costs.

1. Parties were invited to file written submissions and agreed to have the issue dealt with "on the papers".

APPLICANT'S CASE

1. The applicants made relevant submissions to the following effect.

1. On 12 July 2007 the applicants entered into a contract of sale for the purchase of "Lot 2 in an unregistered strata plan". The property was otherwise described in the contract as a duplex, which is consistent with the advertising of the property by the respondents.

1. The applicants were not advised by their solicitors that they were buying a lot in a strata scheme. The strata scheme was registered on 4 September 2007 and the purchase was completed on 8 October 2007.

1. At no time before 7 February 2014 did the applicants become aware that they had purchased a lot in a strata scheme.

1. In 2012 the applicants had commenced proceedings in the CTTT against the respondents. Those proceedings were settled by the respondents agreeing to carry out certain remedial works and consent orders were made by the CTTT on 23 April 2013 to give effect to that agreement.

1. When the respondents failed to carry out the agreed work these proceedings were commenced on 11 December 2013 as a renewal of claim.

1. It was not until 7 February 2014 that the respondents advised the applicants that the property was in fact a strata scheme and that they had no standing to bring an application in respect of what was the common property of the strata scheme.

1. Accordingly the respondents should pay the applicants costs of these proceedings on the ordinary basis up to 7 February 2014. After 7 February 2014 each party should pay their own costs.

RESPONDENT'S CASE

1. The respondents made relevant submissions to the following effect.

1. Far from the applicants being only likely to be aware of the possibility that they were buying into a strata scheme, the Tribunal should take the view that the applicants were fully on notice of that fact. That conclusion was said to be for the following reasons

• The applicants were at all times in the purchase of the property advised by their solicitors and there is no independent evidence from them supporting the applicants' contention. Accordingly the Tribunal should draw a Jones v Dunkel inference (Jones v Dunkel [1959] 101 CLR 298,

• Letters were sent from the applicants' solicitors on their behalf to the respondents' solicitors enquiring about the proposed by-laws and the expected date of registration of the strata plan,

• The respondents' solicitors reply to the requisition on title made reference to the proprietors of the strata plan,

• The report prepared for the applicants by Roger Khalil dated 13 June 2012 made reference to it being for SP 79417.

1. As a consequence of the above the applicants had commenced proceedings against an incorrect party which had resulted in the agreement reached on 23 April 2013 on application HB 12/32193. Further, the respondents contest the basis for the renewal of claim (HB 13/66538) and say those proceedings were commenced against an incorrect party.

1. The Tribunal has, pursuant to the transitional provisions under the Civil and Administrative Tribunal Act2013 (NCAT Act), and the provisions of the Consumer Trader and Tenancy Tribunal Act s 53 (CTTT Act) and Regulation 20(4) the discretion to award costs in matters involving an amount in dispute of more than $30,000.00.

1. Applying the usual principles for awarding of costs, that is that costs should be awarded to indemnify the successful party, the Tribunal should order the applicants to pay the respondents costs.

DECISION

1. I am satisfied that the applicants were clearly on notice that they were purchasing a lot in a strata scheme. It is true that the strata scheme was not registered at the time of contract execution and that the property was also described in the contract as "Duplex".

1. In regard to the latter description it was no more than crossing a box provided on the contract document. It is likely that the incorrect box was crossed. Perhaps a better description of the property being purchased would have been a home unit for which a box was provided. However, the reality is that none of the boxes provided clearly described a strata lot being one of two duplexes.

1. However, the reference to address, plan details and title reference on the contract clearly contemplated purchase of "lot 2 in an unregistered strata scheme". Subsequent to the execution of the contract the applicants' solicitors sought clarification of the proposed by-laws and the date for registration of the strata scheme. The completion was delayed some three months for the completion of registration of the strata scheme.

1. Other than the self-serving statement of the applicant there is no evidence that the applicants were unaware that they were purchasing a lot in a strata scheme. Further, the applicants' own expert (Mr Khaldis) referred to the strata scheme and gave it the correct identification of SP 79417, which also put the applicants on notice of the nature of their title.

1. I am therefore satisfied that it is more likely than not that the applicants had actual knowledge, at least by the time of completion of the purchase in October 2007 that they had purchased a lot in strata scheme SP 79417.

1. The applicants incorrectly commenced proceedings HB 12/32192 against the owner builder(s). (At least it appears that Mrs Trajcevski was an owner builder and Mr Trajcevski may have acted as her agent in respect of having the work done.) It is not disputed that all of the work for which orders were sought at that time relate to what is now conceded to be the common property of the strata scheme. Accordingly the applicants, Mr and Mrs Voutos, had no standing to bring that application. However, nothing flows from that or the agreement that was made on 23 April 2013.

1. This application, for renewal of claim, is clearly misconceived and had no chance of success as it is brought by parties who are not entitled to pursue the warranty enjoyed by the Owners Corporation, as successor in title, in respect of any defects in the common property. The applicants' legal advisers saw that and appropriately sought to withdraw the application at the hearing on 24 March 2014.

1. As correctly submitted by the parties, the Tribunal has power pursuant to the NCAT transitional provisions to consider a costs application pursuant to the CTTT Act s 53 and Regulation 20.

1. It is well established law (see for example, Latoudis v Casey [1990] 170 CLR 534, at 566, 7 per McHugh J.) that in exercising the Tribunal's discretion to award costs it must do so "judicially" and that the basis for a costs award as mentioned in the respondent's submission is to indemnify the successful party rather than to punish the unsuccessful party.

1. These proceedings were misconceived from the outset. They could never have succeeded. The applicants were legally represented at the time of lodgement of the renewal of claim and since. Both parties were legally represented at the hearing.

1. I am satisfied that the respondents are entitled to a costs order in respect of the costs incurred in these renewal proceedings. No submission was made by the respondent on the issue but I am satisfied the costs should be awarded on the ordinary basis.

VACATION OF ORDERS ON HB 12/32193

1. The parties were also invited to make submissions on the issue of whether the orders of the Tribunal made in HB 12/32193 on 23 April 2013 could (or should) be now set aside.

1. The respondents made no submission on the issue.

1. The applicants' submission was that the Tribunal is functus officio and unable to make any further orders.

1. I am satisfied the applicants' submission is correct. The Tribunal (NCAT) does not have power to deal with the 2013 orders as they are not "pending proceedings" for the purposes of the NCAT Act Schedule 1, Division 3.

Jeffery Smith

Senior Member

Civil and Administrative Tribunal of New South Wales

16 July 2014

**********

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

Decision last updated: 04 September 2014