Dellagiacoma v Dragh [2017] NSWCATAP 147 | Case summary

Did the December decision in the original proceedings prevent the appellant from seeking to renew the proceedings on the basis that the work orders made on 4 May 2015 had not been complied with?

The central question is whether the Tribunal was correct to dismiss the appellant's renewal application on the basis that the December decision had previously determined this claim.
On 22 February 2017 the Tribunal provided the following reasons for doing so: Reasons for Decision: 1. In matter HB 15/04205 Dellagiacoma v Strauss and Dragh an order was made on 1-Dec-2015. The order was: "The second respondent is to pay the applicant the sum of $17,665.00 on or before 29 December 2015." 2. Pursuant to Schedule 4 Clause 8 of the Civil and Administrative Tribunal Act 2013 the applicant has lodged a renewal application against the previous second respondent Dragh. The application has been lodged within time and the Tribunal has jurisdiction to determine the matter. 3. The matter came before the Tribunal on 15-Nov-2015. Procedural directions were made which were later amended following an extension of time request. 4. In those procedural directions, the Tribunal noted that the above money order had been complied with. The Tribunal identified that at paragraph 66 of the original written decision the applicant's claim to amend the claim to include seeking costs for incomplete or defective works in relation to the Lalor Park property was dismissed. The Tribunal today follows that reading of the original decision, although no formal order was made at the time in the matter. The Tribunal is also satisfied that the final sentence in paragraph 66 identifies any claim was to be determined at the hearing and the reason for the amendment application being dismissed at the hearing was that the applicant did not produce evidence capable of proving any liability and/or quantum of such claims. 5. The matter was adjourned at the previous directions hearing for the applicant to provide written submissions in relation to whether this application may be maintained in view of the previous decision and the order made. The respondent was given an opportunity to reply. 6. Both parties sent in material in accordance with the process for the Tribunal to consider. Both parties sought the matter be determined by the Tribunal. The procedural directions identified that the decision was to be made on the papers. Section 50 of the Civil and Administrative Tribunal Act 2013 provides for such determination of a matter. After considering the matter and the submissions today, the Tribunal is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions and documents lodged with the Tribunal. The Tribunal has reached this decision following due and careful consideration of the legislation and the submissions and documents provided by the parties. 7. Schedule 4 Clause 8 of the Civil and Administrative Tribunal Act 2013 is set out as follows: Renewal of proceedings in respect of certain Division decisions (1) If the Tribunal makes an order in exercise of a Division function in proceedings, the Tribunal may, when the order is made or later, give leave to the person in whose favour the order is made to renew the proceedings if the order is not complied with within the period specified by the Tribunal. (2) If an order has not been complied with within the period specified by the Tribunal, the person in whose favour the order was made may renew the proceedings to which the order relates by lodging a notice with the Tribunal, within 12 months after the end of the period, stating that the order has not been complied with. (3) The provisions of this Act apply to a notice lodged in accordance with subclause (2) as if the notice were a new application made in accordance with this Act. (4) When proceedings have been renewed in accordance with this clause, the Tribunal: (a) may make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined, or (b) may refuse to make such an order. (5) This clause does not apply if: (a) the operation of an order has been suspended, or (b) the order is or has been the subject of an internal appeal. 8. The applicant is now claiming an additional sum of approximately $90,000.00. The respondent denies the claim and submitted that he has paid as per the previous order and understood that the matter was finalised. 9. The applicant's submission contains largely matters that the Tribunal considers are not relevant and not on point. The whole premise of a renewal application pursuant to Schedule 4 Clause 8(1) & (2) as set out above must be based on the fact that the previous order made by the Tribunal has not been complied with. In this matter, there is no dispute that the only order made by the Tribunal in matter HB 15/04205 has been complied with. The applicant has failed to make any meaningful submissions on this issue and thereby how the application can be maintained in such circumstances where the only order previously made by the Tribunal has been complied with. 10. The Tribunal's written decision in matter HB 15/04205 reflects at paragraph 25 that the applicant as part of that claim sought to amend the claim to pursue what the applicant is now essentially claiming in this claim. The Tribunal is satisfied that the issue was properly considered and determined at paragraph 66 with the application being dismissed at that time. The Tribunal is satisfied that there is no other alternative interpretation of the previous decision available. In those circumstances, the applicant cannot now seek to renew the issue by this application pursuant to Schedule 4 Clause 8 of the Act. The Tribunal accepts the respondent's submission that the order has been complied with and thereby all matters raised in the previous application are finalised. 11. The Tribunal finds that the application is misconceived and there is no basis for such a renewal application as the previous order made by the Tribunal has been complied with. The application is dismissed.
The Tribunal appears to have dealt with the renewal application on the basis that the appellant sought renewal of the proceedings in respect of the orders made 1 December 2015 and not in respect of the work order made on 4 May 2015. This is evident from the fact that the Tribunal has concluded at [2] that the renewal application was made in time, the order identified being the order for compensation of $17,665.00 made on 1 December and the statement made at [9] that "there is no dispute that the only order made by the Tribunal in matter HB 15/04205 has been complied with".
This conclusion seems at odds with the renewal application which identifies the date of the order which is the subject of the renewal application being 4 May 2015 and the details at item 12 of the renewal application setting out the substance of the complaint. Having said that, the Appeal Panel notes that item 10 of the renewal application appears to identify the orders made on 1 December, namely "loss of rent and costs" as the orders being the subject of the renewal application.
In any event, the Tribunal concluded at [4] of the renewal decision that the application for leave to amend had been dismissed on 1 December 2015 because the evidence provided by the appellant was insufficient to prove any liability or loss or damage for incomplete or defective works.
In reaching this conclusion, the Tribunal (at [4]) accepted and adopted the notation made by Senior Member Meadows at the directions hearing of the renewal application held on 15 November 2016. There the Senior Member noted: NOTES In application HB 15/04205 Member S Smith ordered the respondent builder to "complete granny flat at… Lalor Park in accordance with plans and specifications". The works were ordered to be completed by 30 May 2015 in a proper and workmanlike manner. The respondent was also ordered to repay the sum of $35,000 being a refund of a deposit for a second granny flat. The parties agree that sum was refunded to the applicant. The applicant asserts the work was not done and brings this renewal proceeding. However, 15/04205 was determined following a hearing on 3 September 2016 by Member Titterton. The Member ordered the respondent to pay the applicant the sum of $17,665.00. It is agreed that payment has also been made. According to paragraph 66 of Member Titterton's decision on 1 December 2015, the applicant's claim in relation to incomplete or defective work in relation to the Lalor Park property was dismissed. On the face of that decision, this renewal application cannot be maintained and must be dismissed. However, the matter was listed for directions today and the Tribunal was not in a position to hear detailed argument by the parties who were also not in a position to make such arguments. Therefore, the opportunity is granted to the parties to make written submissions on this issue. The decision will be made on the papers.
In short, the Tribunal found the December decision had previously determined the same issues raised in the renewal application.
A resolution of the aspect of the appeal requires a consideration of the December decision, what occurred in the original proceedings including the directions made prior to the hearing on 3 September 2015 to which the December decision relates and, consequently, whether the Tribunal was correct to conclude in the renewal decision that the December decision had resolved the substantive issues of non-compliance with the work order against the appellant.
It is convenient to set out a chronology of events, including the orders made by the Tribunal in the original proceedings.
The proceedings were initially listed for directions on 4 May 2015. At this time three things occurred.
Firstly, by consent the Tribunal made a work order (order 2) in the following terms: By consent, the Tribunal orders the respondent (as): JOHN IGON STRAUSS & PIERRE DRAGH … are to carry out the following work on or before 30 May 2015 and a proper and workmanlike manner: Details of Work order; complete granny flat at… Lalor Park in accordance with plans and specifications.
Secondly, the Tribunal made an order for a refund of a deposit for work in respect of works to be carried out at the property at Blacktown, a matter not relevant to this appeal.
Thirdly, the Tribunal made directions for the filing and service of evidence. The directions did not precisely identify what issues remain to be resolved at any hearing of the original proceedings.
However, the directions made on 4 May 2015 were not in respect of the provision of documents for the purpose of determining whether or not the works were incomplete or defective. Rather, these directions could only have been made for the purpose of allowing the parties to provide evidence and submissions in respect of the consequential loss claims which at that time were unresolved. This is clear from the fact that: 1. a consent work order was made which resolve the issues of incomplete or defective work on terms that the Tribunal ordered such work be performed by 30 May 2015 (Such a work order could be made by the Tribunal under s48O of the Home Building Act); and 2. Order 4 of those directions, which related to the appellant providing her submissions and evidence, required her to state "the basis of the damages claim she wishes to make relating to delay of the works. This was the finding of the Tribunal in the December decision at [8]-[9].
The directions of 4 May 2015 required the appellant (as applicant) to file her evidence by 22 May 2015. The appellant filed written submissions on 20 May 2015 pursuant to these directions, a matter to which we will return below.
The directions of 4 May 2015 also required the respondent to file his documents by 5 June 2015. Apparently this did not occur. Consequently, the original proceedings were again listed for directions before the Tribunal on 16 June 2015. At this time, further directions were made in anticipation of a hearing, including in respect of the respondent providing documents upon which he intended to rely by 23 June 2015.
In making these directions, the Tribunal also made the following notations: NOTES Despite consent orders being made on 4 May 2015, the respondent has not complied with those orders to complete the works on one project, and to return the $35,000 deposit from the other project, apparently because of disputes in relation to some of these items claimed by the applicant and/or a dispute in relation to the reasonable costs of finishing that project the respondents were to complete by consent. It is not clear how those disputes prevented the consent orders from being complied with. The respondents also failed to comply with orders for service of evidence. No reasonable excuse was provided in that regard, except that the respondents have commissioned a report on damages, which should in any case had been filed in accordance with the orders. The respondents are to provide all the evidence by 23 June 2015. The respondents (and indeed all parties) are advise that no further extensions of time or adjournments will be permitted. Any evidence not already filed or filed in compliance with the orders above may not be relied upon by the party in default. The hearing will proceed on the date set by the Registry.
By this time, the period to complete the works, which were the subject of the work order, had expired. However, the directions made on 16 June 2015 did not permit the appellant to file and serve any further evidence to address the issue of non-compliance with the work order identified in the Notes. To the contrary, the notations recorded that evidence was to be limited to evidence "already filed or filed in compliance with the orders above".
As indicated above, the appellant had previously made written submissions as required by the above directions. At [34] of those submissions the appellant (applicant in the original proceedings) said: The applicant applies for leave to claim the following costs to be met by the respondent: 34.1 Completion costs, except for the outstanding amount owed by the applicant. 34.2 Cost to inspect and report on compliance of the dwelling with relevant legislation and statutory warranties. 34.3 Cost of rectification of any building defects arising from the building inspection. 34.4 Cost of any further and as yet undiscovered breaches of statutory warranties arising from the agreement to build a second dwelling at… Lalor Park.
These submissions, according to their terms, sought leave to make an additional claim in relation to the costs of completing the work and rectifying defects at the hearing of the original proceedings. They were not, on their face, an application to renew the original proceedings.
However, it is necessary to consider whether, in making the December decision, the Tribunal treated the application in the submissions as a renewal application for the purpose of cl 8 of Sch 4 and/or whether the December decision prevented the subsequent lodgement of the renewal application in September 2016.
In this regard, we note that insofar as this application was to be treated as the appellant lodging a "notice with the Tribunal… stating that the order has not been complied with" in terms contemplated by cl 8(2) of Sch 4: 1. the provisions of the NCAT Act applied to such notice "as if the notice were a new application made in accordance with this Act": see cl 8(3) and, 2. proceedings can only be renewed with leave of the Tribunal: cl 8(1).
Neither party provided a copy of the sound recording of the hearing on 3 September 2015 to which the December decision relates. Accordingly, the nature of the application and the decision made by the Tribunal must be considered in the context of the written submissions provided by the appellant (particularly at [34] to which we have referred above) and the December decision itself.
The Tribunal provided a summary of the claims which it was dealing with at [22]- [25] of the December decision. At [25] the Tribunal said: Finally, the applicant also seeks leave to amend her application so as to claim: (1) Completion costs. (2) Cost to reinspect and report on compliance of the dwelling. (3) Costs of rectification of any building defects arising from that inspection. (4) The costs of any further and as yet undiscovered breaches of statutory warranty in respect of the Lalor Park property.
The Tribunal made the following findings in the December decision: 1. A consent order had been made on 4 May 2015 requiring the respondent to complete the granny flat at Lalor Park in accordance with plans and specifications: December decision [8 (2)]. 2. The Lalor Park work was completed to lock-up stage: December decision [32 (12)]. 3. The work that remains to be completed is the internal walls, kitchen, flooring, ceiling, plumbing, electrics and back deck or stairs: December decision [32 (12)].
The Tribunal also recorded a submission from the respondent that "there were planning issues which delayed the building of the granny flat" and that the work commenced before Council approval had been obtained: December decision [46] and [50].
The issue of the application to amend was then dealt with at [66] of the December decision in the following terms: As to the applicant's application to amend the claim to also seek completion costs, the costs to reinspect and report on compliance with the dwelling, the costs of rectification of any building defects arising from that inspection and the cost of any further and as yet undiscovered breaches of statutory warranty in respect of the Lalor Park property, the application is dismissed. Any claim must be determined at the hearing and they are all indeterminate and unquantifiable claims.
As is evident from the reasons at [25] and [66] of the December decision, the Tribunal was dealing with an application to amend the proceedings HB 15/04205. It was not, at least by reference to the December decision, dealing with a renewal application. In these circumstances, there is no basis to conclude the Tribunal in the December decision was treating the application to amend as a request to renew proceedings pursuant to cl 8 of Sch 4 of the NCAT Act. Rather the Tribunal simply dismissed the application to amend.
In our view, the Tribunal was correct to do so. This is because the application to amend sought to claim in the original proceedings an award of compensation in circumstances where a work order had already been made on 4 May 2015. It was not open to the Tribunal to do so in that circumstance, unless the work orders were set aside. Rather, all that could have been done in the original proceedings was to enforce the original work orders made by consent
However, the Tribunal did not make an order on this basis in the December decision. Rather, it purported to dismiss the application to amend because any claim for compensation "must be determined at the hearing and they are all indeterminate and unquantifiable claims".
The respondent says this conclusion amounts to a decision which finally resolves the appellant's entitlement to claim compensation in respect of any non-compliance with the work orders. The respondent also says that because the December decision is not the subject of the present appeal and has not been challenged the appellant cannot now succeed in her challenge of the renewal decision or otherwise seek to renew the proceedings under cl 8.
There are six answers why these submissions should be rejected.
First, as stated above, the Tribunal had no power to make an order to permit the amendment to the original application to allow the appellant to seek compensation as a work order had already been made. That is, the issue of what orders should be made for incomplete or defective work had been resolved by the consent orders.
Secondly, and in any event, the December decision was made in the context of an application to amend the original application, not in the context of an application for leave to renew proceedings under cl 8 of Sch 4 of the NCAT Act. An application to amend raises an "interlocutory issue" and therefore is a "interlocutory decision" within the definition found in s 4(1) of the NCAT Act. The decision which was made refused leave to amend. The reason for doing so was an absence of evidence to justify the grant of leave to amend.
Thirdly, the Tribunal did make a finding at [32 (13)] that various aspects of the work were not complete. In these circumstances, the interpretation of the reasons at [66] of the December decision proposed by the respondent, namely that the Tribunal finally determined at [66] the substantive issue and concluded that the works required by the work order were (at least) complete, cannot be correct.
Fourthly, assuming it was possible to amend the original proceedings to claim compensation despite the fact that a work order remained in effect, [66] of the December decision is no more than a refusal of leave. The findings of fact which the appellant contends were made were not necessary findings in order to dismiss the application for leave and are not otherwise findings which might be inferred from the reasons for decision. As such no res judicata or issue estoppel could arise.
In Pearson v Clark [2016] NSWCATAP 134, the Appeal Panel explained that the operation of the principles of res judicata and issue estoppel in the following terms at [63]-[66]: 63 In order to understand the correctness of the October Decision it is necessary to understand the circumstances in which the principle of res judicata apply. In Effrem Foods v Trawl Industries 115 ALR 337 the Full Court of the Federal Court of Australia Northrop and Lee JJ said at p380 line 10: In principle, res judicata is a defence to a claim in a legal proceeding. Traditionally it is a technical defence allowing no discretion in the court. The defence, if made out, is a complete bar to the claim. Unfortunately lack of a clear dichotomy between the defence of res judicata and similar defences based upon estoppel can give, and has given, rise to confusion in Australia, England and the USA. 64 There Honours, at p380 then referred to the High Court decision in Jackson v Goldsmith (1950) 81 CLR 446 in which the principles of res judicata and issue estoppel arose for consideration. In that case, Fullagar J set out the applicable rules of law. As noted by Northrop and Lee JJ in Effrem, "(a)lthough Fullagar J dissented in the judgement of the High Court, his exposition on this aspect of the matter can be treated as authority since his dissent was based upon the application of the principle to the facts of that case". 65 In Jackson, Fullagar J said at 466-8: The rule as to res judicata can be stated sufficiently for present purposes by saying that, where an action has been brought and judgement has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. This rule is not, to my mind, correctly classified under the heading of estoppel at all. It is a broad rule of public policy based upon the principles expressed in the maxim "all" (sic). The rule as to issue estoppel is generally stated in the words of Lord Ellenborough in Outram v Morewood (1803) 3 East 346 at 355; 102 ER 630 at 633. His Lordship said that the parties and privies are "precluded from contending to the contrary of that point, or matter of fact, which having been once distinctly put in issue by them … has been, on such issue joined, solemnly found against them". This is I think, a true case of estoppel, analogous to estoppel by deed and estoppel by representation. The same rule was concisely stated by Dixon J in Blair v Curran (1939) 69 CLR and 531 where his Honour said "A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies." It is unnecessary here to discuss these two principles further beyond noting two points. In the first place, if A sues B to judgement and in subsequent proceedings between them a plea of res judicata is raised, the primary question is whether the cause of action in the later proceedings is the same as that which was litigated in the former proceedings. This was the question which arose in the well-known case of Brunsden v Humphrey (1884) 14 QBD 141. It was held there that the causes of action were not the same. The injuria was the same but the damnum was different, and, since damage was "of the gist" of the particular action, the causes of action were not the same. The plea therefore failed. On the other hand, if A sues B to judgement and in subsequent proceedings between them a plea of issue estoppel is raised, the plea may succeed although the causes of action in the two cases are entirely different. The question will be whether an issue of fact or law which is raised in the later proceedings was an issue of fact or law which was also raised in the earlier proceedings and therefore determined. In the second place, it follows from the very nature of the difference between the plea of res judicata and the plea of issue estoppel that different materials are relevant in each case. Where the pleas of res judicata, only the actual record is relevant. Where the plea is of issue estoppel, any material may be looked at which will show that issues were raised and decided. Reasons given for the judgement pronounced are likely to be particularly important for this purpose: see Ord v Ord [1923] to KB 432 at 440 and Marginson v Blackburn Borough Council [1939] 2 KB 4 to 6 at 437. Both those cases were cases of issue estoppel and were clearly treated as such, though I think, with great respect, that both illustrate the unfortunate absence of a clear legal terminology, to which I have already referred. It should perhaps be added that, as Dixon J said in Blair v Curran [1939] 62 CLR at 532, the estoppel, so far as it applies to the facts, is confined to ultimate facts. It does not extend to mere evidentiary facts. 66 In relation to the reference by Fullagar J to the decision of Dixon J in Blair v Curran (1939) 62 CLR 464 , it is useful to set out in full the principle stated by Dixon J. At 531-532 Dixon J explained that: A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgement, decree or order necessarily established as the legal foundation or justification of its conclusion. … Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue- estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established."
To use the words of Dixon J (as he then was) in Blair, there were no "matters … necessarily established as the legal foundation or justification" in dismissing the application for leave to amend nor were there findings of "ultimate facts which form the ingredients in the cause of action" in the December decision which could give rise to a res judicata and issue estoppel in the present case.
Fifthly, the December decision did not set aside the work order which had been made on 4 May 2015 or otherwise affect its operation. Having been made, prima facie the work order remained in effect at the time of the December decision.
Whether or not the work order could then be enforced was not a matter considered or resolved by the December decision. Whether it can now be enforced and/or alternative orders made if leave is granted to renew the proceedings under cl 8, is a matter to be determined in the future.
In these circumstances, the submission that the work order has "merged" in the December decision is misconceived.
As stated by the High Court in Chamberlain v Deputy Commissioner of Taxation [1988] HCA 2; (1988) 164 CLR 504, a subsequent claim may be barred if it amounts to "further proceedings in respect of the same cause of action". This is because the cause of action merged on judgement.
As we indicated above, this is the reason why an application to obtain a different remedy for the same cause of action by way of an application to "amend" could not be sustained unless and until: 1. the order disposing of the particular claim is set aside; or 2. the proceedings are renewed, a matter specifically authorised by cl 8 of the NCAT Act.
However, the principle in Chamberlain does not mean that an order made that determines a claim, whether or not that order is by consent, ceases to have any effect merely because a party unsuccessfully seeks leave to amend the original claim to seek an alternative or additional remedy in respect of a claim already resolved.
Sixthly, neither party submitted in the present appeal that the Tribunal in the December decision was in fact determining whether leave should be granted to renew the proceedings.
Renewal is a specific statutory power granted to the Tribunal to "may make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined": see cl 8(4). Whether the power is one of enforcement or a statutory provision expressly entitling the making of an alternative order in circumstances where final orders previously made have not been complied with is unnecessary to determine in the present case.
It is sufficient for present purposes to note a review of the history of the original proceedings demonstrates the application to amend could not have been an application to renew the proceedings. This is because the application to amend the claim was made in the submissions of 20 May 2015. This was before the time by which the respondent was required to comply with the work order. Therefore, the provisions of cl 8(2) could not then be enlivened.
Further, such a submission cannot succeed because: 1. the directions originally made on 4 May 2015 could only have related to a hearing of the damages claim for loss of rent and other consequential damage; and 2. the appellant otherwise had no opportunity afforded by the directions made in the original proceedings to provide submissions and evidence in support of any application for leave to renew the proceedings and/or to prove any relevant loss or damage.
Consequently, in our view the Tribunal was incorrect in concluding in the renewal decision that the findings made by the Tribunal in the December decision prevented the appellant from making a renewal application.
In reaching this conclusion, we note that the nature of the orders made is akin to summary dismissal of the renewal application. As such, it is an interlocutory decision which requires leave to appeal. In the Notice of Appeal, the appellant sought leave however this particular issue was not addressed by either party.
In the circumstances, we are satisfied that it would be appropriate to grant leave and to the extent necessary we do so.

Dellagiacoma v Dragh

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