Case Notes ~ Recovering Legal Costs

COSTS ORDERS AGAINST AN OWNERS CORPORATION - TWO JURISDICTIONS, TWO PERSPECTIVES

KIRK v THE OWNERS – UNITS PLAN NO 2992 (Unit Titles) [2017] ACAT 102

Although in this case the ACAT found the Owners Corporation had been negligent and had breached its duty of care to the applicant who suffered internal damage from water ingress to her unit as a result of the failure of the Owners Corporation to maintain the common property, the Tribunal emphasised that the ACAT was a no costs jurisdiction and it was not prepared to make a costs order in favour of the applicant.

The Tribunal referred to section 48 of the ACT Civil and Administrative Tribunal Act 2008 that provides:

  (1)  The parties to an application must bear their own costs unless this Act otherwise provides or the tribunal otherwise orders.

  (2) However—

     (a)  if the tribunal decides an application in favour of the applicant, the tribunal may order the other party to pay the applicant––

        (i)   the filing fee for the application; and

       (ii)   any other fee incurred by the applicant that the tribunal considers necessary  for the application;

The ACAT was “not satisfied that there is any basis on which it can order the respondent pay the applicant’s legal costs” pursuant to section 48 (1) but ordered the Owners Corporation to pay the filing fee pursuant to section 48(2)(i).

NOTE: A more liberal application of the discretionary power to award costs by the NSW Tribunal is evident in the following more recent decision of the NCAT in THE OWNERS STRATA PLAN No 7468 v JACINTA INVESTMENTS PTY LTD (No 2) [2022] NSWCATAP 11. Again this case arose from a damages claim against the Owners Corporation by an owner who suffered damage arising from the failure of the Owners Corporation to maintain the common property. The Tribunal awarded damages and costs. The decision was upheld on appeal.

On the costs issue, the Tribunal referred to the NSW Civil and Administrative Tribunal Act 2013 in which section 60 provides:

(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.

However, subject to Rule 38(2) of the Civil and Administrative Tribunal Rules that applies to costs of proceedings in the Consumer and Commercial Division gives the Tribunal a general discretion on costs where the amount in dispute exceeds $30,000, as in the present case. The Tribunal took the view that costs should follow for the successful party.