Appeal refused: lot owner keeps only 51% of her costs in long-running strata repair fight (NCAT, 2026)

What happened

The lot owner bought a unit in a Sydney strata scheme in about 2010, lived in it until 2013 and then rented it out. The scheme had a special by-law that banned short-term accommodation, and made the owner responsible for costs and indemnify the owners corporation for any breach. In November 2020 water was found to be leaking from the bathroom of her lot into the lot directly below, and her tenants moved out in early December 2020.

In December 2020 the lot owner sent the owners corporation a one-year written tenancy agreement at $1,750 a week to support her claim for lost rent. The Tribunal later found that document was not genuine. The owners corporation obtained waterproofing quotes in December 2020 of $385 and $2,403.50 and its committee approved the larger quote in February 2021. The lot owner opposed those works as inadequate and not to Australian Standards, and obtained her own reports and a quote of $20,777.90. Her claim on the owners corporation's insurer was rejected in March 2021, and a later complaint to the Australian Financial Complaints Authority was withdrawn.

In October 2022 an inspector engaged by the owners corporation recommended the entire bathroom be stripped out and redone, and quoted $27,249.62. In late August and early September 2023 the lot owner engaged that same firm to carry out what she described as an invasive investigation, which stripped the bathroom of tiles, fittings and fixtures and extended into brickwork. She paid $23,504.77 for that work, and her expert then said restoring the bathroom would cost about $35,000.

The litigation ran for years. Proceedings begun in the Supreme Court in July 2021 were moved to the Tribunal and became claims for repair orders and damages under sections 106 and 232 of the Strata Schemes Management Act 2015. The Tribunal dismissed her claims in August 2023; she appealed successfully in February 2024; the owners corporation then succeeded in the Supreme Court in June 2024, which sent the matter back to the Tribunal. In December 2024 the Tribunal decided the re-heard case, awarding her compensation for lost income and making two work orders, though both orders rested on concessions the owners corporation had made. On 27 February 2026 the Tribunal decided who should pay the legal costs of those hearings, and that costs decision is what she appealed.

What each side wanted

On costs, the lot owner argued she was the successful party on one overarching claim under section 106 and should get 85 per cent of her costs, saying damages and work orders were two forms of relief for the same breach rather than separate issues that could be split up. The owners corporation argued she was only partly successful, that her conduct had prolonged the case, and that once its own costs were set off she should recover far less, suggesting about one-sixth. On the appeal she argued the Tribunal had applied the wrong test from the leading costs case, had treated the compensation claim and the work order claim as separable when they were not, and had let a credibility finding and an undetermined issue colour the discount. The owners corporation asked for the appeal to be dismissed and for its costs of the appeal.

What the tribunal decided

The Tribunal's costs decision was that the owners corporation pay 85 per cent of 60 per cent, that is 51 per cent, of the lot owner's costs up to and including the date of the costs orders made for the initial hearing, and 60 per cent of her costs of the remitted proceedings. The 40 per cent discount was meant to reflect the time taken by the issues she lost, plus a small further reduction for the costs caused by the false tenancy agreement.

The Appeal Panel ordered: "(1) Leave to appeal is refused (2) Appeal dismissed (3) Costs of the appeal are reserved". It also set a timetable: a party seeking costs of the appeal must file and serve written submissions of no more than 7 pages within 21 days of the decision; a party opposing costs must file and serve submissions of no more than 7 pages within 42 days; any reply of no more than 3 pages is due by 49 days. The submissions must also address whether the parties consent to the costs of the appeal being decided on the papers under section 50(2) of the Civil and Administrative Tribunal Act 2013.

Why the tribunal decided it that way

In NCAT, section 60 of the Civil and Administrative Tribunal Act 2013 is the starting point: each party normally pays their own costs unless there are special circumstances. Rule 38(2)(b) of the Tribunal's Rules is an exception. Where the amount claimed or in dispute is more than $30,000, the party asking for costs does not have to prove special circumstances first, and the Tribunal simply exercises its ordinary discretion on costs. The Tribunal held that this rule looks at the proceedings as a whole, not at each separate claim inside them, so once the rule applied it applied to every claim in the case.

On how to split costs, the Tribunal applied the Court of Appeal's approach in Bostik Australia Pty Ltd v Liddiard (No. 2). Courts and tribunals usually do not pick through a case issue by issue; the successful party normally gets its costs. But where a party loses on issues that took up a significant part of the hearing or the preparation, it can be deprived of part of its costs. Where the outcome is mixed, apportionment is a matter of discretion and, as the Tribunal put it, a broad brush rather than a mathematical exercise.

The Tribunal found the lot owner was ultimately successful because she obtained orders the owners corporation had not offered, and the owners corporation failed in its argument that the short-term letting by-law meant she was entitled to nothing. But she was not wholly successful. She lost on her claim for a work order requiring the full rectification of the bathroom, on whether she would have let the unit at market rent for the whole period, and on whether her own destructive investigation in September 2023 broke the chain of causation. The false tenancy agreement was also treated as relevant, not because it extended the hearing, but because it made the owners corporation spend money proving the document was not signed.

An internal appeal to the Appeal Panel under section 80 of the Act can be brought on a question of law, or otherwise only with leave. The Panel set out the well-settled rules for challenging a discretionary decision: it is not enough that the appeal body would have decided differently; the appellant must show a wrong principle, irrelevant matters, a mistake of fact, a failure to consider something material, or a result that is plainly unjust. It also noted that appeal courts are slow to give leave for an appeal only about costs, because costs decisions are discretionary and the original decision-maker is usually best placed to weigh them. The published text we have ends partway through the owners corporation's submissions, so the Panel's full reasoning on each ground of appeal is not included, although its orders are.

What this means if you are in a similar position

If you are in a similar position as a lot owner or an owners corporation in a strata dispute, this decision shows two things about costs at NCAT. First, the usual rule that each side pays its own costs can fall away once the amount in dispute passes $30,000, and the Tribunal has looked at that threshold across the proceedings as a whole rather than claim by claim. Second, winning overall does not automatically mean recovering all of your legal costs. Where a party loses on issues that took up real hearing time, or where its own conduct has made the other side spend money, the Tribunal can award a percentage instead, and that percentage is a judgement call rather than a calculation.

The decision also shows how hard it is to overturn a costs order. An appeal is not a second go at the same arguments; it needs an error of principle, a mistake of fact, something material left out, or a result that is plainly unjust, and appeal bodies are reluctant to grant leave for costs-only appeals. Here the Panel refused leave and dismissed the appeal, and left the question of who pays for the appeal itself to be decided later on written submissions.

In disputes about repairs to common property, most people start by putting the problem to the owners corporation or its strata committee in writing: what the defect is, what damage it is causing, what they want done and by when, with the photos, reports and quotes attached. If that does not resolve it, the next step people usually take is an application to the tribunal in their state.

How to apply: our step-by-step guide to a NCAT application. More decisions: NCAT cases and strata and body corporate.

Source: Selkirk v The Owners-Strata Plan No 2661 [2026] NSWCATAP 299 (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.