Ober­to Pty Ltd v The Own­ers Stra­ta Plan No 2004 No 2 [2026] NSW­CATCD 24 & Costs In Stra­ta Dis­putes – Rule 38 Of Civ­il And Admin­is­tra­tive Rules 2014

After a lot own­er was suc­cess­ful in its claim for dam­ages in an apart­ment build­ing as a result of an own­ers cor­po­ra­tion’s breach of statu­to­ry duty under sec­tion 106(1) of the Stra­ta Schemes Man­age­ment Act 2015, the Tri­bunal applied rule 38 of the Civ­il and Admin­is­tra­tive Rules 2014 (r38) to award costs despite the ulti­mate award being less than $30,000.

In the case of Ober­to Pty Ltd v The Own­ers Stra­ta Plan No 2004 No 2 (Ober­to), the respon­dent tried to argue against the appli­ca­tion of r38 on the ques­tion of costs because they had ​‘pre-paid’ some of the ulti­mate dam­ages award­ed to the appli­cant. The Tri­bunal did not accept this argu­ment. 

Giv­en that the claim made in Ober­to had exceed­ed $30,000, the Tri­bunal relied on cas­es that dealt with sim­i­lar cir­cum­stances being Allen v Tri­Care (Hast­ings) Ltd [2017] NSW­CAT­AP 25 and Own­ers SP 63341 v Mala­chite Hold­ings PL [2018] NSW­CAT­AP to con­firm that r38 is con­cerned with the amount claimed or in dis­pute, and not the val­ue of the rights affected.

The respon­den­t’s attempt to treat monies paid pri­or to the hear­ing as a ​‘sep­a­rate resolved issue’ in an effort to reduce the amount to be con­sid­ered on the ques­tion of costs under r38, that is, try­ing to bring the amount in ques­tion under $30,000, failed.

The Tri­bunal, agree­ing with the posi­tion of the appli­cant, did not believe the pay­ment was sep­a­rate and instead stat­ed that it was made with the intent that the respon­dent had sim­ply accept­ed that aspect of the claim. The pay­ment was not the prod­uct of nego­ti­a­tion, com­pro­mise, or a con­sent out­come regardless. 

The respon­dent had equal­ly sought to rely on two Calder­bank offers it had sent to the appli­cant, both amount­ing to sub­stan­tial­ly less than the amount claimed. The Tri­bunal had equal­ly dis­missed the notion of both Calder­bank offers as it high­light­ed that on nei­ther occa­sion had the Own­ers ade­quate­ly con­sid­ered the cur­rent cost posi­tion of Ober­to to the date of each offer and simul­ta­ne­ous­ly failed to show that non-accep­tance of the offers would be unreasonable. 

Link to the case: https://​www​.caselaw​.nsw​.gov​.au/​d​e​c​i​s​i​o​n​/​1​9​d​4​2​5​f​8​a​e​a​b​f​7​0​a​6​e​8​9f3ba

For further information please contact:

Michael Byrnes, Partner
Phone: + 61 2 9233 5544
Email: mjb@swaab.com.au

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