Costs in Strata Matters in the Civil and Administrative Tribunal

Section 60 of the Civil and Administrative Tribunal Act (the Act) deals with costs in proceedings before the Tribunal.

The usual rule is that each party should pay its own costs.

The Tribunal may, however, award costs if it is satisfied that there are special circumstances warranting an award of costs.  This discretion is exercised sparingly and generally only in clear cases.

The upshot is that, in the great majority of strata disputes, each party is required to bear its own costs.

There is, however, a special rule for matters in the commercial and consumer division of the Tribunal.  This is the division that deals with strata disputes.  Rule 38 of the Civil and Administrative Tribunal Rules prescribes that the Tribunal may award costs in the absence of special circumstances if the amount claimed or in dispute in the proceedings is more than $30,000.00.

This means that, in strata matters where there is a claim for payment of money exceeding $30,000.00, then either party is entitled to make a claim for costs without having to show special circumstances.  Claims of this magnitude are not common in strata matters but can definitely arise if there is a claim for damages under section 106(5) of the Strata Schemes Management Act, namely a claim for damages flowing from an Owners Corporation’s failure to repair or maintain the common property.

If rule 38 applies, then the Tribunal generally starts with the proposition that a successful party should be entitled to an order for costs in its favour.  That is because it is appropriate to reimburse the party for costs caused by the other party.  It is meant to compensate the successful party, not punish the unsuccessful party.

In exercising its discretion, the Tribunal will have regard to:

• Whether the successful party is engaged in any “disentitling conduct” – delay, non-compliance with Tribunal orders etc;
• Whether there has been relative success of the parties on different issues and the time taken to determine those issues; and
• Whether, by reason of the nature of the proceedings, the usual rule should be displaced wholly or partially.

Parties who commence proceedings to resolve strata disputes in the Tribunal should be mindful that, if there is a claim for damages that exceeds $30,000.00, even if that claim is entirely misconceived and is brought along with claims for other non-monetary orders, then the proceedings fall within rule 38 and the Tribunal is required to determine costs by reference to rule 38 and not by reference to section 60 of the Act.

In recent proceedings in the Tribunal, Sachs Gerace Lawyers represented an owner who sued an Owners Corporation seeking orders that work be done to comply with section 106 of the Strata Schemes Management Act.  We also claimed that the Owners Corporation reimburse rent paid by the owner for other premises during the period that the lot was uninhabitable and until the repairs were completed.  Because we won the case and the claim for rent exceeded $30,000.00, the Tribunal made an order for costs against the Owners Corporation and in favour of the owner.  If the owner’s claim had been limited to seeking an order that the Owners Corporation carry out repair and maintenance work, then one imagines that, absent special circumstances, each party would have been ordered to pay its own costs.