Background
In the primary judgment, the Court held that errors in registered consolidated by-laws for Strata Plan 3132 could be corrected under s 138 of the Real Property Act 1900 (NSW). The errors affected exclusive-use rights held by Warwick Laing Keay, owner of Lot 19, over storeroom 61 and car space 39.
The parties agreed on orders giving effect to the substantive relief but disputed costs. Mr Keay sought ordinary costs up to March or May 2026 and indemnity costs thereafter. The owners corporation sought staged or issue-based apportionment, or alternatively no costs order.
The Court’s Holding
Pike J ordered the owners corporation to pay Mr Keay’s costs on the ordinary basis. Mr Keay had obtained the substantive relief he sought, and it was not appropriate to divide the proceeding into a preliminary caveat stage and a later substantive stage. Although the original caveat lapsed and some relief was not obtained, the underlying dispute remained the same and the final hearing took one day.
The Court refused indemnity costs. The owners corporation’s position on the availability and scope of relief under s 138 was not hopeless, there was no authority directly resolving the point, and Mr Keay’s March 2026 email was not a Calderbank offer. The Court also ordered under s 90(2) of the Strata Schemes Management Act 2015 (NSW) that the costs be funded by contributions from lots other than Mr Keay’s lot.
Key Takeaways
- A successful party may recover ordinary costs despite not obtaining every form of relief sought.
- Indemnity costs require more than an opponent’s failure to accept a non-Calderbank proposal.
- In strata litigation, s 90(2) can prevent a successful lot owner from bearing part of an adverse costs liability through levies.
Why It Matters
The decision confirms that costs should be assessed by the practical outcome of the proceeding, rather than mechanically split according to amendments to pleadings or abandoned alternatives. It also illustrates that an agreed error in registered by-laws does not automatically make the opposing party’s litigation position unreasonable.