When strata disputes settle, who pays the costs? NCAT principles under the spotlight

Barrister at 13 Wentworth Chambers, mediator and expert determiner Sydney Jacobs has outlined how costs disputes increasingly become the real battleground in NCAT strata matters, particularly when proceedings settle before a final hearing. Drawing on recent cases and practical experience, he argued that lawyers must prepare for costs arguments from the outset, not after the merits have fallen away.

Speaking at the UNSW EDGE Property Law Intensive, Jacobs examined how NCAT approaches costs where proceedings become moot through settlement, undertakings or changing circumstances. Central to the discussion was the Federal Court authority of Lai Qin [1997] now frequently applied in strata disputes, alongside the “special circumstances” threshold under section 60 of the NCAT Act. Jacobs said the tribunal will not conduct a hypothetical trial to determine who might have succeeded simply to resolve costs, placing greater emphasis on questions of reasonableness, proportionality and whether one party effectively capitulated by conceding relief at the last moment.

Jacobs also focused on litigation strategy, urging practitioners to think about costs long before a hearing begins. He encouraged lawyers to keep evidence proportionate, avoid excessive document production and make realistic early settlement proposals that reflect the relief genuinely sought. Referring to recent NCAT decisions including Cornucopia [2024] and a strata dispute involving access to a penthouse terrace for building maintenance, Jacobs said carefully framed undertakings and reasonable correspondence could later become decisive in persuading the tribunal to award costs after proceedings resolve without a final determination.

If this topic interests you, you can learn more and receive a CPD point in Substantive Law here