Consumer ordered to pay insurer’s costs after appeal to a tribunal with no power to hear it (NCAT, 2026)

What happened

The dispute was between a consumer and Resolution Life Australasia Ltd, a life insurer. The consumer's application turned on the interpretation and application of section 9A of the Life Insurance Act 1995, a Commonwealth (federal) law. On 18 February 2026 a Senior Member in NCAT's Consumer and Commercial Division dismissed the application for want of jurisdiction, meaning the Tribunal had no legal power to decide it because the application expressly raised a question of federal law. The Tribunal put it plainly in that decision: the consumer had, again, come to the wrong place.

It was not the first time. The same issue had earlier been brought in NCAT's Administrative and Equal Opportunity Division and dismissed for want of jurisdiction, and the finding that the Tribunal had no power was upheld on appeal. The consumer then appealed the Consumer and Commercial Division decision as well.

On 29 July 2026 the Appeal Panel dismissed that appeal, also for want of jurisdiction. In its reasons the Appeal Panel found the dismissals at first instance were clearly correct, that the appeal was misconceived, that there was nothing of substance in any of the grounds of appeal, that the grounds were repetitive, that no clear or rational ground of appeal had been advanced, and that the consumer had been told on at least three occasions that the Tribunal had no power to deal with his applications and appeals. It found he was entirely unsuccessful.

The Appeal Panel then made directions for written submissions if the insurer wanted its costs. The insurer, represented by HWLE Lawyers, filed submissions on 5 August 2026. The consumer filed none. Neither side objected to the costs question being decided "on the papers", that is, on the written material without a further hearing.

What each side wanted

The insurer asked for its costs of the appeal. It argued that the usual rule in NCAT is that each side pays its own costs, but that costs can be awarded where there are "special circumstances", and that those circumstances existed here: the appeal had no tenable basis in fact or law, it was misconceived and lacking in substance, it was vexatious because the consumer had already been told repeatedly that the Tribunal had no power to decide the federal law question, and it was unjust to make the insurer spend money again on issues that had already been settled. The consumer did not file any submissions opposing the costs application.

What the tribunal decided

The Appeal Panel dispensed with a hearing under section 50(2) of the Civil and Administrative Tribunal Act 2013 and decided the costs question on the written submissions.

It made one order: "The appellant is to pay the respondent's costs as agreed or as assessed in accordance with the applicable costs legislation." No dollar figure was set. That form of order means the two sides can agree on the amount, and if they cannot, the amount is worked out under the costs assessment process in the relevant costs legislation.

Why the tribunal decided it that way

Section 60 of the Civil and Administrative Tribunal Act 2013 sets the starting point: each party to NCAT proceedings pays its own costs. The Tribunal can only award costs if it is satisfied there are "special circumstances" that warrant it. Section 60(3) lists things the Tribunal may look at, including the relative strength of each side's case and whether a claim has no tenable basis in fact or law, whether the proceedings were frivolous, vexatious, misconceived or lacking in substance, and any other matter the Tribunal considers relevant.

The Appeal Panel set out the established approach to "special circumstances": they are circumstances out of the ordinary, though they need not be exceptional or extraordinary; a costs order does not follow automatically just because one of the listed matters is made out; the party asking for costs has to persuade the Tribunal that the circumstances are strong enough to depart from the usual rule; the discretion must be exercised judicially; and whether the test is met is a question of fact decided case by case.

The Appeal Panel accepted the insurer's submissions in full. It found the appeal was without substance, misconceived, and bordered on vexatious, given how many times the consumer had already been told that the Tribunal had no power to decide the matter he wanted to argue. That established the basis for a costs award.

Finding special circumstances is only the first step; the Tribunal then has a discretion about what order, if any, to make. Applying earlier Appeal Panel reasoning, the Panel noted the general principles that costs are compensatory and that an unsuccessful party ordinarily bears the successful party's costs, and that the discretion must be exercised in a way that is fair and reasonable in the particular case, while keeping in mind that parties normally bear their own costs. Given that special circumstances were established and the appeal lacked merit, the Panel decided it was appropriate for the consumer to pay the insurer's costs of the appeal.

What this means if you are in a similar position

If you are in a similar position, this decision shows two things about how the rules are applied. The first is that NCAT can only deal with matters it has been given power over. Where a dispute turns on the interpretation of a Commonwealth law, the Tribunal may find it has no jurisdiction, and that is a complete answer regardless of the merits of the underlying complaint. A dispute about a life insurance policy is not automatically a tribunal matter.

The second is that the usual "each side pays its own costs" rule in section 60 is not absolute. Where a tribunal finds that a case or an appeal had no tenable basis, was misconceived or lacking in substance, or re-ran a point that had already been decided, it can find special circumstances and order the losing party to pay the other side's legal costs. Here that order was made against a self-represented person who had been told three times that the Tribunal had no power to decide his question, and who did not respond to the costs application.

For an insurance dispute, the step most people take first is a written complaint to the insurer setting out the claim, what was decided and why they say it is wrong, followed by escalation to the external complaints scheme, the Australian Financial Complaints Authority, if the insurer does not resolve it.

How to apply: our step-by-step guide to a NCAT application. More decisions: NCAT cases and other civil disputes.

Source: McNally v Resolution Life Australasia Ltd (No 2) [2026] NSWCATAP 285 (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.