The Owners - Strata Plan No 2661 v Selkirk

[2024] NSWCATEN 4

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

The Owners - Strata Plan No 2661 v Selkirk [2024] NSWCATEN 4

Hearing dates:

On The Papers

Date of orders:

6 November 2024

Decision date:

06 November 2024

Jurisdiction:

Enforcement

Before:

Coleman SC ADCJ, Principal Member

Decision:

(1) That, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) the Tribunal dispenses with a hearing of this application.

(2) That, pursuant to s 60(4) of the Civil and Administrative Tribunal Act 2013 (NSW) the Owners Strata 2661 are restrained from applying any funds held to the credit of Simone Selkirk or payable by her to it towards or for the purposes of paying the Owners’ costs of or incidental to these proceedings.

Catchwords:

CONTEMPT - special circumstances warranting an order of costs – Civil and Administrative Act 2013 section 73 - contempt application withdrawn - unconditional withdrawal and dismissal of any application without a determination on the merits – both parties acted reasonably – Tribunal not satisfied that special circumstances have been established - discretion to award costs not enlivened.

Legislation Cited:

Civil and Administrative Tribunal Act 2014 (NSW)

Cases Cited:

DVT v Commissioner of Police (No. 4) [2020] NSWCATAD 299

Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249

Farah Bakht v Midas Australia Pty Limited [2006] NSWSC 1322

Lake Burrendong State Park Trust v Thompson [2011] NSWSC 1554

Turner v NSW Forensic and Analytical Science Service Sen/Ice [2017] NSWCATAD 181

Category:

Principal judgment

Parties:

The Owners – Strata Plan No 2661 (Applicant)
Simone Selkirk (Respondent)

Representation:

Counsel:
C Purdy (Applicant)
A Rizk (Respondent)

Solicitors:
Mills Oakley (Applicant)
Sachs Gerace Lawyers (Respondent)

File Number(s):

2024/00179339

REASONS FOR DECISION

Introduction

1. Consequent upon the Applicant (the Owners) withdrawing their application filed 14 May 2024 (contempt application) seeking to have the Respondent (Selkirk) dealt with for contempt of the Tribunal prior to its hearing, Selkirk applied for an order that the Owners pay her costs of and incidental to the contempt application.

2. In support of her application Selkirk filed comprehensive written submissions on 18 July 2024. The Owners resisted Selkirk’s application and, on 1 August 2024 filed comprehensive submissions in response to Selkirk’s submissions. On 15 August 2024 Selkirk filed submissions in reply.

3. The procedural directions made by the Tribunal provided that, if either party opposed to an order under s 50(2) of the Civil and Administrative Tribunal Act 2014 (NSW) (the CAT Act) dispensing with a hearing of Selkirk’s costs application that party should, when filing submissions with respect to the application, make submissions in support of any opposition to an order pursuant to s 50(2). Sensibly, neither party has filed submissions opposing an order pursuant to s 50(2) of the CAT Act dispensing with a hearing. The Tribunal will make an order dispensing with a hearing.

Selkirk’s submissions

4. Selkirk submitted, correctly, that the Owners’ contempt application sought that she be found guilty of contempt in the face of the Tribunal pursuant to s 73 of the CAT Act. Selkirk did not suggest that the Tribunal lacked jurisdiction to entertain the Owners’ application. Section 73(1) of the CAT Act provided such jurisdiction.

5. After setting out the background to the proceedings, which do not assume significance for present purposes, Selkirk identified, accurately, the principles governing her application, and particularly the principles emerging from the authorities with respect to s 60 of the CAT Act which articulates (s 60(1)) a presumption against costs orders in proceedings before the Tribunal, and invests (s 60(2)) the Tribunal with the discretion to award costs if the Tribunal is “satisfied that there are special circumstances warranting an order of costs”. The non-exclusive list of factors to which the Tribunal may have regard in determining whether there are special circumstances (s 60(3) of the CAT Act) were accurately identified in Selkirk’s submissions.

6. Selkirk submitted that the Owners’ contempt application was “misconceived and without merits”. It was submitted that, although the application was not determined, and did not need to be determined on its merits, the Tribunal could nevertheless determine that the application was wholly without merit, and was thus doomed to fail. Reliance was placed on the decision of Deputy President Hennessey LCM in Turner v NSW Forensic and Analytical Science Service Sen/Ice [2017] NSWCATAD 181 in which, by reference to earlier authority, her Honour held that, for the Owners’ contempt application to have any prospect of success, the email relied on by it as constituting the alleged contempt had to be “sufficiently proximate in time and space to the trial of proceedings then in progress or imminent so as to provide a present confrontation to the trial”. Selkirk sent her allegedly contemptuous email to the Owners approximately ten weeks before the hearing of other proceedings between Selkirk and the Owners.

7. The crux of Selkirk’s submission was that the Owners could not satisfy the Tribunal beyond reasonable doubt that, whatever its likely impact, Selkirk’s email was sufficiently proximate in time and space to the trial of the proceedings then in progress or imminent as to provide a present confrontation to the hearing. It is unnecessary to refer to other factual scenarios which the authorities have from time to time held to be capable or incapable of constituting this form of contempt. Each case turns on its own facts. The crux of Selkirk’s submission was that the email sent by her ten weeks before a hearing to a person who had “not even been confirmed to be a witness in a matter (or had a statement served) could (not) amount to contempt in the face of the Tribunal”. Selkirk submitted that the absence of authority in which circumstances of the kind relied upon by the Owners was held to be capable of amounting to contempt in the face of the Tribunal or of a court was supportive of its proposition.

8. Selkirk submitted that, by withdrawing the contempt application prior to a hearing, there could be no doubt that the Owners “capitulated”. The Tribunal agrees with that contention. It was submitted that the Owners’ capitulation warranted a finding of special circumstances and an order for costs. A number of authorities were cited in support of that proposition. It was further submitted, in substance, that the contempt application had been filed for an improper or collateral purpose, which was to impugn the credibility of Selkirk for the purpose of the hearing of the other proceedings which were pending between herself and the Owners. The Tribunal cannot accept that contention, in the absence of any admissible evidence in support of it.

Owners’ submissions

9. In reply, the Owners referred to other proceedings in the Tribunal and the Supreme Court between Selkirk and the Owners. The Tribunal does not have regard to those decisions. Nor would it accede to the Owners’ application to vary the directions of 4 July 2024 to allow the Owners the opportunity to adduce evidence relating to those decisions.

10. The Owners’ contempt application is a stand alone application in which the Owners alleged that, by reason of particular and identified conduct, Selkirk was in contempt of the Tribunal. What other Tribunals or Courts determined in other proceedings could not have impacted on the determination of the Owners’ contempt application. It is possible, but unnecessary to speculate, about whether, had the Owners successfully prosecuted Selkirk for contempt, those decisions may have had relevance in the context of determining the appropriate sanctions.

11. As did Selkirk, the Owners referred to what occurred in other proceedings and what other Tribunals and Courts found with respect to those matters. The Tribunal does not consider those matters to be relevant.

12. The Owners acknowledged that s 60(2) of the Act applied. The Owners submitted, correctly in the Tribunal’s view, that Selkirk did not submit, and could not have submitted that conduct of the kind alleged against her was not capable of constituting contempt. The decision of Brereton J in Farah Bakht v Midas Australia Pty Limited [2006] NSWSC 1322 to which the Owners referred provides support for that contention.

13. Speculation about whether the Owners’ contempt application could have succeeded in the circumstances of the case, and consideration of the “divide between a narrow and expansive view” as the authorities to which both parties have referred is unnecessary in this case. The latter issue turns very much on the findings of primary fact made after a hearing. With respect to capitulation, the Owners submitted that the authorities relied upon by Selkirk did not suggest that withdrawal of an application per se constituted special circumstances warranting an award of costs. Although capitulation is supportive of finding special circumstances, and could conceivably do so in an appropriate case, the Tribunal agrees with that proposition in the context of this case- more than capitulation is required.

14. The owners submitted that, in DVT v Commissioner of Police (No. 4) [2020] NSWCATAD 299 the Tribunal held that a prompt withdrawal of an application may not constitute special circumstances warranting an award of costs. The Tribunal does not understand that case to suggest that prompt withdrawal could never support a finding of special circumstances. The promptness of the withdrawal in this case is contested in any event.

Selkirk’s reply submissions

15. In submissions in reply, Selkirk reiterated, correctly, that the Owners had pleaded their contempt application in the terms in which they did in circumstances where the conduct relied upon preceded the hearing of proceedings by approximately ten weeks, and involved a person who was not a witness in the proceedings and had not made a statement in the proceedings. It is unnecessary to engage with Selkirk’s submissions with respect to what other courses the Owners may have taken or to speculate about what might have happened had the Owners done so. The Tribunal determines the current application by reference to what actually occurred.

16. With respect to capitulation, it was submitted, correctly, that each case turns on its own facts and circumstances and that, in some circumstances capitulation may provide sufficient foundation for a finding of special circumstances whilst in other cases it may not. Selkirk submitted that the withdrawal of the Owners’ contempt application had not been “prompt in any sense” and as not “justified by any supervening event”.

The principles governing the present application

17. The principles governing the application are not in doubt or in dispute. In Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 the Appeal Panel held, consistently with extensive authority, from which there has been no subsequent departure, that special circumstances are “circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary”. As the authorities relied upon by both parties recognise, withdrawal of the Owners’ application may or may not constitute special circumstances. The Tribunal is not minded to find special circumstances on the basis that the contempt application was withdrawn. There was nothing out of the ordinary about that. To find that it was, without more, would be likely to discourage sensible decisions to withdraw contempt applications which may or may not have been problematic.

18. The Tribunal is not persuaded that the contempt application was necessarily doomed to fail. Superficially, unconditional withdrawal and dismissal of any application without a determination on the merits, or even the commencement of a hearing of the proceedings, implies a lack of confidence of success. Capitulation may, but does not necessarily mean that an application was doomed to fail, or eognised as such. Were this a jurisdiction where costs follow the event, the Owners’ capitulation would enliven the discretion to award Selkirk her costs. However costs do not follow the event, circumstances out of the ordinary are required to be demonstrated.

19. Other than because, presumably, there was no utility in persisting with it, in what way withdrawal of the Owners’ contempt application prior to the parties having to file submissions in support of or opposition to it was out of the ordinary is difficult to suggest. It is to be remembered that the “guiding principle to be applied to practice and procedure” in the Tribunal (s 36 CAT Act) is to facilitate the “just, quick and cheap resolution of the real issues in the proceedings”. For whatever reasons, the Owners withdrew the contempt application in a reasonably timely way, and before the parties were put to the expense of filing submissions in the application, or having it heard.

20. In Lake Burrendong State Park Trust v Thompson [2011] NSWSC 1554 Hallen AsJ (as Hallen J then was) considered the authorities with respect to costs applications in proceedings which were resolved without a hearing. Although the case involved proceedings in a Court which were settled, His Honour’s Judgment is instructive for present purposes. The authorities which His Honour reviewed in Lake Burrendong, omitting citations, established the following propositions:

1. The (Tribunal) has a wide discretion with respect to costs, albeit that discretion must be exercised judicially, that is, according to relevant considerations, and taking account the contextual features and facts of the litigation. The discretion must not be exercised arbitrarily or capriciously;

2. It is important that litigants be encouraged to settle their disputes. If litigants know that, in a case such as this, no order for costs is likely to be made because there has not been a hearing, that may constitute a disincentive towards settlement. The converse is also true;

3. The purpose of a costs order is to compensate or indemnify the party in whose favour it is made, not to punish the party against whom it is made;

4. The overriding consideration is whether there is some circumstance that justifies a costs order, so as to do justice between the parties, remembering that, for present purposes, there is a statutory requirement that special circumstances be demonstrated;

5. In an appropriate case (one in which special circumstances are demonstrated) the (Tribunal) may make an order for costs even though there has not been a hearing on the merits, and the moving party no longer wishes to proceed with its claim;

6. The (Tribunal) cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement they had avoided. In some cases however, the Court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action;

7. In some cases the (Tribunal) may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried;

8. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the (Tribunal) will not make the requisite finding of special circumstances, and thus make no order as to the cost of the proceedings;

9. Although, even though there has not been a hearing or determination on the merits the (Tribunal) may infer that the party not pursuing the action has refrained from doing so because that party has achieved the relief sought in the action;

10. It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a (Tribunal) determining how the costs of the proceedings should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial;

11. In determining the question of costs it is appropriate for the (Tribunal) to determine whether the applicant acted reasonably in commencing the proceedings, and whether the respondent acted reasonably in defending them. When proceedings are brought to an end without a determination after a trial, the (Tribunal) may find it difficult, even impossible, to make an award of costs, and if doing so, it will generally be because the (Tribunal) is satisfied that one party has had a substantial victory and the other a substantial loss, or that there has been a marked difference in the reasonableness of the actions taken by the parties, so that one party should be rewarded for its reasonable actions and the other party should suffer a detriment in costs.

21. His Honour concluded his review of the authorities, to which the Tribunal has referred without citation of those authorities, by saying:

“Thus, it seems to me, if it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled, or its further prosecution became futile, the proper exercise of the costs discretion will usually mean the court will make no order as to costs of the proceedings.”

22. Accepting that numerous, but not all of the matters identified above have application for present purposes, the Tribunal is satisfied that both parties acted reasonably. The Tribunal is unable to find that the Owners’ contempt application lacked reasonable prospects of success. Their capitulation has not been shown to have been “out of the ordinary”. The Tribunal is unable to find that the Owners unreasonably delayed their decision to withdraw their contempt application. There is a statutory presumption against awarding costs in the Tribunal, and a requirement that special circumstances be established to enliven the discretion to do so. The Tribunal is not satisfied that special circumstances have been established and, accordingly, the discretion to award costs is not enlivened.

A further matter

23. In her submissions for costs, under the heading “Quarantining Order” Selkirk advanced reasons why, if costs were awarded, the Owners should not be permitted to satisfy such order out of contributions to the Owners’ funds from levies on all Lots in the Owners’ Strata Scheme, including those referable to Selkirk’s Lot. Considerable and compelling authority was advanced in support of both the power (s 232(1) of the CAT Act) and the practice of the Tribunal to make such orders.

24. As Selkirk submitted, such an order would mean that Selkirk had to contribute to the payment of costs incurred by the Owners in proceedings against her which they did not pursue. The Applicant’s submissions did not respond to those contentions. Although, for the reasons recorded above, the Tribunal is not persuaded that special circumstances exist such as to enliven the discretion to award Selkirk her costs of successfully defending the Owners’ contempt application, having successfully resisted the Owners’ contempt application, it would be surprising if Selkirk nevertheless had to contribute through her Strata Lot levies to the costs of her unsuccessful adversary.

25. The Tribunal perceives there to be no impediment to finding, in the circumstances of this case, that there are special circumstances warranting an award of costs in favour of Selkirk, to th extent that she is not liable to contribute through her Strata Lot holding to the Owners’ costs of its unsuccessful contempt application, or is undemnified by the Owners with respect to any sum which she is otherwise obliged to pay.

23. Section 60(4)(a) of the CAT Act provides that, if costs are to be awarded by the Tribunal, the Tribunal may “determine by whom and to what extent costs are to be paid” and the basis upon which they are to be paid. Presumably the Owners’ lawyers will bill them on a solicitor/client basis, as they would be entitled to. In the circumstances, the simplest means of giving effect to the justice of the case is to order that the Owners be restrained from applying any funds paid or payable to the Owners with respect to Selkirk’s Lot in the Owners’ strata for or towards the Owners’ costs of these proceeding.

24. To decline to make an order in those terms would be unjust and inequitable in circumstances where, self-evidently, Selkirk was not a willing party to any decision by the Owners to bring contempt proceedings against her which, for whatever reason, she successfully resisted.

Orders

1. That, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) the Tribunal dispenses with a hearing of this application.

2. That, pursuant to s 60(4) of the Civil and Administrative Tribunal Act 2013 (NSW) the Owners Strata 2661 are restrained from applying any funds held to the credit of Simone Selkirk or payable by her to it towards or for the purposes of paying the Owners’ costs of or incidental to these proceedings.

**********

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: 12 November 2024