Costs: SP91684 v Liu (No 2)
The Owners – SP No 91684 v Liu (No 2); The Owners – SP No 90189 v Liu (No 2) [2022] NSWCATAP 74
In short
Costs awarded to the respondent lot owner following the owners corporations’ unsuccessful appeal.
“Special circumstances” arose due to the nature and complexity of the proceedings.
Background
The respondent lot owner owns a lot in each of the neighbouring appellant owners corporations. The lot owner challenged the same short-term letting by-law made in each scheme and was successful at first instance and on appeal. The respondent sought its costs of the appeal on an ordinary basis.
Relevantly, the Appeal Panel discussed whether specific circumstances should be characterised as “special” within the meaning of section 60(3) of the Civil and Administrative Act 2013.
The law
Section 60 of the NCAT Act provides that each party is to bear its own costs unless the Tribunal is satisfied that there are special circumstances warranting an order for costs.
Cost decision
The respondent submitted that special circumstances arose for two reasons:
the owners corporations could have convened a general meeting to make new short-term letting by-laws that complied with the SSMA; and
the nature and complexity of the proceedings.
The Tribunal rejected the first submissions but accepted the second submission.
On the first limb, the Appeal Panel noted that many types of litigation might be avoided if certain steps were taken at a general meeting. Secondly, the owners corporations were entitled to test the Tribunal’s first instance decision on appeal. Thirdly, the outcome of a vote at a general meeting is uncertain. Fourthly, the appellants’ case was arguable.
On the second limb, the Appeal Panel found that the legal issues raised were not simple or straight forward and included the proper test for the application of section 150 described by the NSW Court of Appeal in Cooper as “fraught with difficulty”. Secondly, the use of extrinsic materials and application of the Interpretation Act 1987 added to the complexity. Thirdly, it would have been impractical to conduct the appeals without legal representation. Fourthly, the appeals involved the first known application of short-term letting amendments in Fair Trading Amendment (Short-Term Rental Accommodation) Act 2018.
Having found that special circumstances exist, the Appeal Panel considered its discretion to award costs, noting principles that costs are compensatory and that an unsuccessful party bears the costs of the successful party.
The discretion is to be exercised judicially having regard to the principle that parties in the Tribunal are to ordinarily bear their own costs.
The Appeal Panel decided to exercise its discretion to award costs due to the complexity of the proceedings.