Why are we paying a special levy to cover costs in a tribunal case that we won?

Unless there is something I am unaware of in NSW legislation specifying a separate resolution for funding legal action, I can’t see why the up-coming AGM could not include a proposed Admin Fund budget for the coming year (as it always would) that includes a line for legal expenses with a sufficient amount to pay the managing agent for their services representing the OC at the Tribunal. If anyone objects, you can explain that the OC is obliged to pay since it has already received those services (and won). The lot owners who lost might vote against the motion but I assume they are a small minority so it would not matter.

Thirsty wrote:

Not sure if they would be defined as legal expenses.

Costs can include legitimate charges for professional advice – but not for your time spent away from work, for instance.  It doesn’t have to be legal advice. The strata manager is entitled to charge for their time but if they were planning to do so they should have advised you to apply for costs at the tribunal

You need the strata manager to tell you, preferably in writing or via an email, why a special levy is required when the there are sufficient funds in the kitty.  Sounds to me like somebody screwed up and there’s some backside covering afoot.

Here’s another thought – Section 90 of the strata Act establishes the potential for the tribunal to order that the owners corporation in a dispute with lot owners should pay their costs, and that the other side – individual lot owners – be excluded from the payment, for whatever reason.

In that case the strata scheme is ordered to raise a special levy to cover the costs, as paying from strata funds would effectively mean the individual lot owners in the case were contributing to the costs.

So perhaps the Tribunal decided that although the Owners Corp won the argument in terms of the law, the way they conducted the case wasn’t quite right.

Thus one party could win the legal fight but still have the costs are awarded against them and only them.  Generally speaking, NCAT likes both sides in a dispute to pay their own costs.  But it will award costs in “exceptional” circumstances, such as those listed here (from its own factsheet).

6. Section 60(3) of the Act explains the types of special circumstances in which the Tribunal can
decide that someone else should pay another party’s costs. They are:

a) A party has conducted their case in a way that unnecessarily disadvantages another party
b) A party has been responsible for unreasonably making the case take longer
c) The relative strength of a party’s case or whether the case was hopeless
d) The nature and complexity of the case
e) A party’s case was frivolous, vexatious or misconceived
f) A party has not cooperated with the Tribunal in providing a just, quick and cheap resolution of the real issues in dispute
g) A party has not followed Tribunal orders or directions
h) Any other matter the Tribunal thinks is relevant.

7. Rule 38 allows the Tribunal to make an order for costs where:

a) The claim is more than $10,000 but no more than $30,000 and an order is made under clause 10 of Schedule 4 of the Act because a party has conducted the proceedings in a way that unreasonably disadvantaged another party in the proceedings;
b) The claim is more than $30,000.

More than half of the conditions listed above could result in the “winning” side having costs awarded in a way that excluded the “losing” owners.

Either way – or for a different reason entirely – you’re entitled to a “please explain” to your strata manager.