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Forum: How you can lose even when you win

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The headline on one of our posts this week, says it all: “It’s as if I’m paying to sue myself.”

The situation is pretty common.  The strata committee takes an owner to NCAT over an alleged breach of by-laws or strata law and hires lawyers to argue their case.

Now, NCAT is supposed to be a low-cost tribunal where owners and tenants are encouraged to fight their corners themselves.

However, it seems a lot of Members – the people who adjudicate – are getting tired of seeing people who have a good case but no idea how to present their evidence or argue their point of view.

Or have no case at all and lack even a basic understanding of strata law or how it works (or is supposed to).

As a result, lawyers are now welcomed into the Tribunal. However, NCAT operates from a default that all parties pay their own costs – and that’s where an owner can find they are paying a share of the cost of suing themselves.

Those legal fees will come out of your Admin fund and you will have paid your share so, yes, you are paying to prosecute yourself.

However, Section 60 of the Civil And Administrative Tribunal Act allows costs to be awarded against one party under certain “special circumstances”.  These include (but are not limited to):

  • If one side has conducted the proceedings in a way that unnecessarily disadvantaged the other side,
  • If one side has been responsible for unreasonably prolonging the time taken to complete the proceedings
  • The relative strengths of the claims, including if one side has made a claim that has no factual or legal basis
  • Whether the proceedings were “frivolous or vexatious or otherwise misconceived or lacking in substance”
  • Any other basis that the Tribunal thinks is relevant

Now, if the Tribunal does award costs against the owners corporation, this is where it gets interesting.

Under Section 90 of the NSW strata Act, the Tribunal can order that costs be paid and who should pay them – specifically, one might assume, not the person who’s been dragged to NCAT and won.

Those costs must be paid out of a special levy that takes money only from the persons specified in the order.  And that’s another reason why it’s worthwhile talking to an experienced strata lawyer.

You can read more about the specific case mentioned above, HERE.

Also in the Forum:

  • Should we have QR code registration for visitors and tradies to our strata blocks?  That’s HERE.
  • Is there a legal way of preventing deadbeat committee members from being re-elected?  That’s HERE.
  • Our strata manager has just announced that future strata meetings will be held in their offices.  Can they do that?  That’s HERE.
  • And a follow-up to the question about who to call if you are worried about an elderly person in your block.  We have a number HERE.

There’s a whole stack of follow-up posts and other new questions on the Forum.

The easiest way to keep up to speed with the discussions is to register, log in and “subscribe” (it’s free) to the topics that interest you and you’ll be alerted when new posts come in.

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