The issue in this appeal is whether the Tribunal was correct when it decided not to reopen this matter as it considered itself functus officio, having given its substantive decision and made certain orders nearly two years previously. In the alternative, there is a challenge to the earlier decision and an application for leave to appeal out of time.
The substantive matter was decided on 24 May 2015 in Peter Hanna v Nelson Semaan, Badr Habib, George Semaan, Fadi Habib & Fawad Habib [2015] NSWCATCD 38. It was a claim by appellant (as applicant) against builders under the Home Building Act 1989. The proceedings were commenced in 2010 being application no HB 10/16205.
In short, Mr Hanna (the appellant) and his wife (the 'homeowners') purchased a house from Mr B Habib in 2005. The house had major defects. Mr B Habib and the other respondents who were joined, were alleged to be the builders and liable for the defects.
We note in passing that Mrs Hanna was not a party to the original proceedings and, consequently, not a party to this appeal. However neither party raised this as a relevant issue and nothing turns on this fact.
The Tribunal found that Mr B Habib, Mr N Semaan and Mr G Semaan were jointly and severally liable to compensate the homeowners (par 5 of decision). Messrs Fadi and Fawad Habib were found not liable (par 41). It stated that it would like to make orders reflecting the findings but there were difficulties (para 6).
Mr N Semaan died between the hearing and the giving of the decision. No application was made by the homeowners to amend the claim to substitute Mr N Semaan's Estate as a party. Mr N Semaan's representatives had asked the Tribunal to dismiss the claim against him on the ground he was deceased (par 7).
Mr G Semaan became bankrupt between the commencement of the proceedings and the start of the hearing. The Tribunal found that the claim could not proceed against Mr G Semaan as a result of s58 and s82 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) (par 9, 10).
The cost of rectification of defects was determined to be $265,765.00. Mr B Habib was ordered to pay that amount to the homeowners (par 44).
No order was made against Mr N Semaan as he was deceased and no application had been made to substitute the Estate (par 45). No order was made against Mr G Semaan due to the operation of the Bankruptcy Act (par 46).
The parties were given three weeks to make submissions on costs (par 47). No appeal was lodged. A costs order was made against Mr B Habib on 30 June 2015.
Nearly two years after the decision was given, on 2 March 2017, the homeowners asked the Tribunal to relist the matter to enable orders to be made against the Estate of Mr N Semaan.
On 13 April 2017 the Tribunal refused to relist the matter on the ground that it was functus officio.
There were a number of other pertinent facts. The homeowners knew that Mr N Semaan had died. They received copies of correspondence from the Estate to the Tribunal seeking dismissal of the proceedings on the grounds that Mr N Semaan had died. The homeowners filed submissions opposing the request. A little later a second request for dismissal was filed and dismissed.
Because the proceedings were not dismissed the homeowners had the opportunity to ask for a representative of the Estate to be substituted as a respondent. There was further time after the substantive decision was published and the costs decision being given for an application to be made.
The Administrator of the Estate of Mr N Semaan, Dali Semaan, was appointed on 9 May 2016. The application for Letters of Administration was lodged on 5 December 2014 and the homeowners were on notice of it from then. The Estate's solicitor contacted creditors of the Estate about claims in April 2016. The homeowners did not make a claim. The Administrator had insufficient assets and paid creditors 30% of the value of their debts (except for funeral expenses) (Statutory Declaration of Mr E Georges declared 18 October 2017).
The solicitors for Mr N Semaan and his Estate were creditors for legal fees. Mr N Semaan had an old costs order against Mr Hanna. The solicitors, in effect, took that debt in satisfaction of their claim. The solicitors then enforced the debt against Mr Hanna in the Local Court in Burwood and garnisheed his bank account. The debt has been partly satisfied by the garnishment and approximately $6,000.00 remains outstanding.
[2]
Grounds of appeal
The value to the homeowners of pressing their application to reopen this appeal is that if successful they will have a debt to set off against the costs order being enforced in the Local Court (par 23 Appellants' submissions).
The appeal grounds upon which the homeowners rely can be summarised as follows:
1. The Tribunal erred in holding itself to be functus officio and refusing to relist the matter to make an order, as no 'order' had been made against Mr N Semaan or his Estate in the substantive proceedings. This was procedurally unfair to the homeowners.
2. In the alternative, the Tribunal erred in failing to make an order against the Estate of Mr N Semaan in the substantive proceedings. This would constitute an appeal and leave would be required to appeal out of time.
No leave is sought to appeal on other grounds.
In light of the death of Mr N Semaan, Dali Semaan as the administrator of the deceased's estate is a necessary and proper party to the appeal.
[3]
Consideration
The crisp point of the first ground is whether the Tribunal made a decision that concluded the proceedings in relation to Mr N Semaan in the substantive decision. If the answer is 'yes', the Tribunal clearly could not re-open the proceedings, except under the slip rule (s.63 of the Civil and Administrative Tribunal Act, 2013, (CAT Act)).
If the answer is 'no' then there is the question of whether the Tribunal is functus officio.
Finally there is a raised question of whether the proceedings against Mr N Semaan were validly dismissed on the basis that the NSW Trustee and Guardian had stepped into his place on his death.
The appellant in submissions drew our attention to the decision of the Court of Appeal in Athens v Randwick City Council [2005] NSWCA 317; (2005) 64 NSWLR 58 where Santow JA discussed the relationship between the reasons for decision and the orders. He noted "the primacy of that judgement [ie reasons] as a source of interpretation of the order". His Honour stated at [133] that he preferred the strong line of authority to the effect that "the meaning of words in an order should, in an appropriate case, be considered by reference to the reasons for judgement, themselves finding their context in the overall proceedings." (par 78)
Having noted at [7] that "(N)o application has been made by the applicant in relation to Mr Nelson Semaan's demise" the Tribunal said at [45]:
No order is made in relation to Nelson Semaan as he is deceased and no order has been made to substitute the estate.
The respondent argued that the wording used by the Tribunal should be read as a dismissal of the claim by refusing to make an order against Mr N Semaan since the applicant had not availed itself of the opportunity of substituting the Estate.
Section 5 of the CAT Act defines a 'decision' as follows:
5 MEANING OF "DECISION"
(1) In this Act,
"decision" includes any of the following:
(a) making, suspending, revoking or refusing to make an order or determination,
(b) giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission,
(c) issuing, suspending, revoking or refusing to issue a licence, authority or other instrument,
(d) imposing a condition or restriction,
(e) making a declaration, demand or requirement,
(f) retaining, or refusing to deliver up, an article,
(g) doing or refusing to do any other act or thing.
Thus a decision to refuse to make an order is a decision that can determine proceedings even in the absence of a formal order to that effect.
In our view, the decision of the Tribunal recorded in its reasons was a decision to make no order in respect of the claim against the late Mr N Semaan.
We reach this view, taking into account the plain words used by the Tribunal in par 45; its statement in par 6 that it would 'like to make an order' but for difficulties; the context of the reasons for judgement in the overall proceedings; the surrounding relevant facts (including the death of Mr N Semaan and the refusal of the Tribunal to dismiss proceedings against him for that reason); and the stated reason for the "no order" statement (no application to substitute the Estate as a party).
The question then arises as to whether the Tribunal was correct to hold itself to be functus officio where no order had been made. In the circumstances, we are of the opinion that the Tribunal was correct. The effect of the decision was that no order would be made by the Tribunal and that the claim against Mr N Semaan would be finalised on this basis. There are good policy reasons for ensuring that there is finality to litigation. Had the homeowners moved more quickly, perhaps the position may have been different. As a practical matter the Tribunal cannot regard a matter as 'open' indefinitely without good reason and an order to that effect.
The homeowners had ample and numerous opportunities to apply to substitute a legal personal representative of Mr N Semaan in the proceedings which they did not take and to proceed against the representative. They did not, until now, lodge an appeal against the refusal to make an order for the payment of damages. They waited nearly two years to apply to re-open. Circumstances had changed while they delayed (although this may not have been known to the Tribunal it was an available inference).
It was therefore correct for the Tribunal to find, two years after it had given its decision in the substantive matter without any intervening action in the Tribunal by the homeowners that it no longer had power to make further orders.
As to the argument that the NSW Trustee and Guardian stepped into the shoes of Mr N Semaan as legal personal representative under s 61 of the Probate and Administration Act 1898 (PA Act) it was submitted by the respondent (Respondents Further Submissions received 14 November 2017) that the Tribunal did not have power to make an order against Mr N Semaan after he had died and that it was necessary for an application to be made to substitute the Estate.
In addition, respondent's counsel properly drew our attention to s 2 of the Law Reform (Miscellaneous Provisions) Act 1944 concerning the survival of actions against deceased parties. He also drew our attention to the provisions of the Uniform Civil Procedure Rules 2005 dealing with joinder, removal or rearrangement of parties and appointment of representatives of a deceased estate (UCPR 7.10).
The respondent's counsel also cited GEL Custodians Pty Ltd v the Estate of the Late Geoffrey Francis Wells [2013] NSWSC 973 to the effect that where a party dies the Public Trustee needs to be joined as a party. Otherwise, the respondent submitted, any order made against the deceased would be a nullity. The appellant's position is that the NSW Trustee and Guardian automatically stepped into the shoes of the deceased.
It would seem to us that proceedings commenced against a person when alive are not rendered a nullity upon death and, having been commenced by a party who is able to sue against a party who is able to be sued, the Tribunal was able to make orders finalising the extant proceedings. In GEL Custodians, the situation was different, in that those proceedings were commenced after the death of the owner of the property and the Court concluded that an "estate" was not a party capable of being sued.
Whatever is the correct position, it is now far too late to re-open the matter and seek an order against the Estate. The homeowners have had ample opportunities to do so and did not take them.
Further, the homeowners having commenced an application and the matter having proceeded to a hearing, the Tribunal had power to make orders finalising the proceedings one way or another. It is clear from the reasons that the Tribunal was of the view that it was necessary for the personal representative to be appointed, and in the absence of such an appointment to make no order. Even if it might be concluded from the authorities to which Davies J referred in GEL Custodians, that the joinder of the personal representative was unnecessary because of s 61 of the PA Act, the Tribunal made a decision and refused to make any order.
A similar approach must be applied to the alternative argument put by the appellants which in effect challenges the original decision to make no order and seeks leave to appeal out of time.
Further, we do not consider that leave should be granted to extend the time to appeal. The delay is excessive. The explanation is inadequate. The appellant had legal representatives (although there was some difficulty with the first solicitor). As the reasons for decision of 24 March 2015 reveal, he was represented by the same Counsel in the proceedings at first instance as appeared at the hearing of the appeal. He and his representatives knew of the material facts and the terms of the original decision. He did not appeal or indicate that he would until March 2017. There is prejudice to the Estate, which has advertised for creditors and has now been distributed. Further, we are not persuaded that the appellant has suffered a miscarriage of justice. He is responsible for the position in which he finds himself.
[4]
Costs
The appellant was unsuccessful in the appeal. The amount in issue was greater than $30,000. Therefore r 38A and, consequently r 38 of the Civil and Administrative Tribunal Rules, 2014 applies to this appeal. Costs should follow the event and an order should be made that the appellant pay the costs of the Estate.
[5]
Orders
The Appeal Panel makes the following orders:
1. Leave to appeal is refused and the appeal is dismissed.
2. The appellant is to pay the costs of Dali Semaan as the Administrator of the Estate of the late Nelson Semaan, as agreed or assessed.
[6]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 17 January 2018
Parties
Applicant/Plaintiff:
Hanna
Respondent/Defendant:
Semaan as the Administrator of the Estate of the late Nelson Semaan