NCAT Strata Costs Applications: How to Respond After Losing

Written by Michael Pobi, Principal, Pobi Lawyers

Losing an NCAT strata case does not automatically mean you must pay the other party’s legal costs. If you receive a costs application, check your response deadline and identify whether the application relies on section 60, rule 38 or another costs provision. Your response should address the legal test, the allegations against you and the order sought.

Finding out the other party is seeking their costs after an unsuccessful case can add significant financial pressure. If you represented yourself, a focused response supported by the relevant documents is particularly important. Simply repeating why you believe the original decision was wrong will rarely answer the costs question.

When can NCAT award costs in a strata dispute?

The starting point under section 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) is that each party pays their own costs. NCAT may depart from that usual position where special circumstances justify a costs award.

However, special circumstances are not required in every case. In the Consumer and Commercial Division, rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) permits NCAT to award costs without establishing special circumstances where:

• the amount claimed or in dispute exceeds $30,000; or
• that amount exceeds $10,000 but does not exceed $30,000, and NCAT has made an order under Schedule 4, clause 10(2) of the NCAT Act concerning conduct that unreasonably disadvantaged another party.

Even where rule 38 applies, a costs award remains discretionary. It does not automatically entitle the successful party to recover their entire legal bill.

Identifying the correct costs provision from the outset is essential. The orders sought and the amount claimed or in dispute require careful examination. The market value of an apartment does not, by itself, establish that the rule 38 threshold is met.

What are special circumstances under section 60?

Section 60(3) identifies matters NCAT may consider, including:

• Conduct that unnecessarily disadvantaged another party;
• Responsibility for unreasonably prolonging the proceedings;
• The relative strength of the parties’ claims, including whether a claim lacked a tenable factual or legal basis;
• The nature and complexity of the proceedings;
• Proceedings that were frivolous, vexatious, misconceived or lacked substance;
• Failure to cooperate with NCAT, participate in its processes or comply with its directions and orders; and
• Other relevant circumstances.

A costs application should therefore be examined against the Tribunal’s findings and the actual conduct of the proceedings. Describing an unsuccessful case as unreasonable does not establish that description. Equally, a claim need not have been untenable for other circumstances to justify a costs order.

Does representing yourself protect you from a costs order?

Representing yourself does not prevent NCAT from making a costs order against you. Self-representation may be relevant to the Tribunal’s discretion, but it does not excuse every procedural failure or justify continuing an untenable case.

Adverse findings must be addressed candidly. Your costs response should explain their significance to the costs application without attempting to relitigate the substantive dispute.

How do you respond to an NCAT strata costs application?

A focused response usually addresses four questions:

1. What legal power is relied on e.g. section 60, rule 38 or another provision? If special circumstances are required, address whether they have been established.
2. What allegations need an answer? Respond to each material allegation using the Tribunal’s findings and relevant documents.  
3. Why should NCAT not make the order or limit it e.g. exercise of discretion?  
4. What precisely is being sought? Check whether the other party seeks all costs, a proportion, costs for a particular period or a fixed sum. Address the actual order requested.

The objective is to give NCAT a clear, supported explanation of the order you say it should make.

Can you dispute the amount of costs claimed?

Whether you should pay costs and how much you should pay are separate questions. Under section 60(4), NCAT may determine the extent of liability and direct how the amount is to be established. Costs may be agreed, assessed or fixed by the Tribunal.

Consider the supporting evidence and calculations, the work covered and any grounds for limiting recovery. Do not assume that the amount will necessarily be considered in a later assessment.

How long do you have to respond to a costs application?

Check the Tribunal’s directions in your matter immediately. They will commonly set the deadline and requirements for your response. If no timetable has been made, promptly clarify the position with the Registry rather than assume that no response is required.

NCAT can determine a costs application from written material without another oral hearing. Prepare your response on the basis that your submissions and evidence may be your opportunity to explain your position.

Follow the directions about filing, service and supporting documents. If you need more time, seek an extension promptly. Do not assume it will be granted.

A costs response is separate from an appeal. Preparing one does not extend the deadline for challenging the original decision.

What documents should you have ready?

For an initial assessment, gather:

• The orders, decision and reasons for decision, including costs directions and relevant procedural orders;
• The other party’s costs application, submissions and supporting evidence;
• Your original application or response and relevant material filed in the proceedings; and
• Relevant correspondence, costs calculations and details of the response deadline.

Providing the complete costs application and relevant procedural history helps identify both the available arguments and the risks.

For a general introduction, see What are Costs in the NSW Civil and Administrative Tribunal.

Need help preparing your NCAT costs submissions?

Pobi Lawyers advises lot owners and owners corporations on NCAT strata disputes and costs matters across NSW. We can review the decision and costs application, advise on your position and prepare written submissions supporting or opposing a costs order. We can assist even if we did not act in the original proceedings.

Our engagement can be limited to the costs response. Any appeal, hearing appearance or subsequent costs assessment would be subject to a separately agreed scope.

To enquire about assistance, send us the decision, costs application and Tribunal directions, and identify your response deadline. We can then confirm our availability, proposed scope and fees.

Enquire about an NCAT costs response before your response deadline.

About the author

Michael Pobi is the Principal of Pobi Lawyers. He advises lot owners and owners corporations across NSW on strata disputes and represents clients in NCAT proceedings.

Disclaimer

This article is provided for general information purposes only. It does not constitute legal advice and should not be relied upon as such. Pobi Lawyers accepts no responsibility or liability for any loss arising from reliance on the information contained in this article.