Titus v Eddington

[2019] NSWCATCD 93

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Titus v Eddington [2019] NSWCATCD 93
Hearing dates:	21 December 2018
Date of orders:	31 July 2019
Decision date:	31 July 2019
Jurisdiction:	Consumer and Commercial Division
Before:	S Thode, Senior Member
Decision:	Each party shall pay its own costs of the proceedings.
Catchwords:	COSTS – Strata Schemes – Reallocation of unit entitlement – Special circumstances
Legislation Cited:	Civil and Administrative Tribunal Act 2013 (NSW)
Cases Cited:	Gaynor v Burns [2015] NSWCA 150
Texts Cited:	Nil
Category:	Costs
Parties:	Stephen Titus and Joanne Titus (Applicants) Beverley Anne Eddington (Respondent)
Representation:	Solicitors: Carneys Lawyers (Applicants) Sachs Gerace Broome (Respondent)
File Number(s):	SC 18/23506
Publication restriction:	Nil

REASONS FOR DECISION

Background

1. Proceedings SC 18/23506 were commenced on 24 May 2018. The applicant sought orders pursuant to s 236 of the Strata Schemes Management Act 1996 for the reallocation of unit entitlement of Strata Plan SP 89341. The points of claim were prepared by a solicitor.

2. The application was dismissed and reasons were published to the parties on 17 May 2019.

3. The respondent seeks an order for costs.

4. I have received written submissions from the respondent dated 24 May 2019 and from the applicant dated 3 June 2019.

Orders sought

5. The respondent seeks an order that the applicants pay Mrs Eddington’s costs of the proceedings.

6. In the alternative, the respondent seeks an order that the applicants pay 60% of Mrs Eddington’s costs to compensate the applicant for the cost of responding to evidence filed by the applicants which was not relied upon.

The respondent’s submissions

7. The respondents submit that the Tribunal should find “special circumstances” pursuant to section 60 (3) of the Civil and Administrative Tribunal Act 2014 (the Act) warranting an award of costs. It is submitted that for the Tribunal to make an order under section 60 (2), it is sufficient that circumstances are “out of the ordinary”. They do not have to be extraordinary or exceptional (see Gaynor v Burns [2015] NSWCA 150 at [19]). It is submitted there are special circumstances in these proceedings which warrant the award of costs in Mrs Eddington’s favour. The applicant relied on an expert report of Mark Casemore supporting the application for reallocation of unit entitlements under section 236(4) of the Strata Schemes Management Act 2015 (the SSM Act). At paragraph 65(2) of the decision, the Tribunal concluded that the Casemore opinion did not comply with the principles in Makita v Sprowles (Australia) Pty Ltd [2001] NSWCA 305:

“Insofar as the opinion is based on facts observed by the expert it must be identified and admissibly proved by the expert, and so far as the opinion is based on assumed or accepted facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached”.

8. It is submitted that because the Makita principles have not been complied with and the Casemore report was ultimately given little weight, a finding of “special circumstances” can be made. As I understand the respondent’s submissions, it is argued that given the finding that the expert evidence was found not to be persuasive, the application had “no tenable basis in fact or law”, see section 60 (3)(c) of the Act.

9. The respondent further submits she incurred significant costs in responding to voluminous evidence served by the applicants which was not relevant and in large part was not relied upon and did not play a role in the written reasons handed down by the Tribunal. Including the

1. affidavit of Stephen Titus dated 6 July 2018;

2. affidavit of Joanne Leonard dated 29 June 2018;

3. affidavit of Adam McCall dated 18 June 2018;

4. affidavit of Gregory Norton dated 4 July 2018.

10. It is submitted that because the Casemore report did not comply with the Tribunal’s requirements for expert evidence and various voluminous affidavits were not relied upon, Mrs Eddington should be compensated for the cost she has incurred in responding to the evidence. The purpose of a costs order is to compensate or indemnify the successful party against the expenses to which it has been put. It is submitted that the reliance on voluminous material that was ultimately not relied upon added unnecessarily to the nature and complexity of the proceedings and this supports a finding that the applicants have conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings (see section 60 (3) (a)). By serving and filing voluminous affidavits of which were ultimately not relied upon, the applicants have failed to facilitate the just, quick and cheap resolution of the real issues in the proceedings and have failed to comply with the guiding principle of the Tribunal pursuant to section 36(3) of the Act.

11. Is further submitted that the evidence of Mr Leich, who gave a comprehensive explanation why he purposefully and carefully selected a unit entitlement of 45:55, was evidence which should have been subject of cross-examination. The failure to cross-examine Mr Leich was a contributing factor to the dismissal of the application and this is a relevant consideration that the Tribunal should take into account in awarding the respondent her costs of the proceedings.

The applicants’ submissions

12. The applicants rely on written submissions filed by the first applicant dated 3 June 2019.

13. The applicants submit that there was no delinquency in the filing and service of voluminous statements in support of the application. For example it was only in the statement of George Leich dated 15 August 2018 that information was provided of how the developer came to allocate a 45:55 unit entitlement. It was necessary to counter that evidence and to put on affidavit evidence in response. It is further submitted that to the best knowledge of the applicants, this application was the first application since the Tribunal handed down the decision in Sahade, where it was considered whether the original allocation in a two lot strata scheme was unreasonable, and where the issue of control had to be considered by the Tribunal. In Sahade there had not been any evidence led by the applicants setting out the reasons for the initial 50:50 unit entitlement, and it was also necessary to set out the history of the dispute between the parties to persuade the Tribunal to exercise its discretion pursuant to s236 of the Strata Schemes Management Act 2015.

14. The applicants state there is no force in the submission that because the applicants filed 4 voluminous affidavits, the applicants conducted the proceedings in a way that unnecessarily disadvantaged the respondent, or unnecessarily prolonged the proceedings (s60(3)(b)). The proceedings were conducted in a fashion whereby they were concluded within half a day on the day of the hearing. There were written submissions that were provided to the Tribunal setting out the issues in dispute and there was no lengthy cross-examination. The material filed necessarily set out the history of the purchase of the property, the dealings with the previous owner and his former wife, as well as the dealings concerning a privacy screen which resulted in the application being made. It is submitted that while the Tribunal did comment on matters raised by Mr Leich and the fact that he was not cross-examined, Mr Titus was likewise not cross-examined about his evidence in response to that of Mr Leich and Mr Keene, the valuer.

15. It is submitted there are no special circumstances that warrant a costs order. The application was a usual application for reallocation of unit entitlements, not unusual in a two lot strata scheme. There are no special circumstances to change the predominant position pursuant to section 60, that each party pay its own costs.

16. There can be no suggestion that the parties have not complied with the obligation under section 36(3), to facilitate the disposal of proceedings in a just, quick and cheap manner.

Jurisdiction

17. Section 60(1) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) requires parties to pay their own costs unless the Tribunal is satisfied that special circumstances warrant an award of costs: s 60(2) of the NCAT Act.

Costs

(1) Each party to proceedings in the Tribunal is to pay the party’s own costs.

(2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.

(3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following:

(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,

(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,

(d) the nature and complexity of the proceedings,

(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,

(f) whether a party has refused or failed to comply with the duty imposed by section 36 (3),

(g) any other matter that the Tribunal considers relevant.

(4) If costs are to be awarded by the Tribunal, the Tribunal may:

(a) determine by whom and to what extent costs are to be paid, and

(b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis.

(5) In this section:

costs includes:

(a) the costs of, or incidental to, proceedings in the Tribunal, and

(b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.

18. Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) provides that despite s 60, the Tribunal may award costs in proceedings if the amount claimed or in dispute is more than $30,000. This is not such a claim.

Should an order for costs be made in the respondent’s favour?

19. As noted above, the application was dismissed.

20. I am not persuaded that this application was conducted in a way that unnecessarily prolonged the proceedings. The matter was listed for directions on only three occasions. The application was filed in May 2018 and heard in December 2018, with Mr Fernando mentioning the appearance of the respondents on 5 September 2018. I am not persuaded that the applicants conducted the litigation that prolonged the proceedings.

21. The fact that the applicants filed four affidavits does not, in my view, amount to special circumstances. It is entirely reasonable for parties to litigation not to respond to evidence they consider irrelevant. If the respondent’s legal representatives considered that the acrimonious history between the parties was irrelevant to the real issues in dispute, it was open to the respondent not to file affidavit evidence in response and/or to object to the affidavits at the time of tender on the grounds of relevance. No such objection was taken. On balance I am not persuaded that the respondent has established misconduct on behalf of the applicants, merely by reason of reliance on voluminous affidavits.

22. Similarly, the finding that the expert evidence that did not comply with the principles of Makita does not amount to special circumstances. Indeed, it is statutory threshold requirement that the applicant file and serve a valuation report that complies with s236(4). In the absence of a valuation report the application would have been at risk of dismissal for non-compliance with the requirements of the section. The fact that some aspects of the Casemore expert report were not afforded any weight does not give rise to special circumstances.

23. There is nothing in the submission provided by the respondent to suggest that the applicants have engaged in deleterious conduct that amounts to special circumstances.

24. In the absence of established misconduct the appropriate order is that each party pay its own costs of and incidental to the proceedings.

25. As the application for costs has been unsuccessful, it is unnecessary to determine an amount of payable, and or whether 60% of the respondent’s costs is an appropriate recoverable amount.

Orders

26. I make the following orders:

1. Each party shall pay its 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

Decision last updated: 29 March 2022