HIA Insurance Services Pty Limited trading as Home Owners Warranty v Kostas & Ors

HIA Insurance Services Pty Limited T/as Home Owners Warranty (First Applicant) PARTIES: Peter Kostas (First Respondent) Christine Kostas (Second Respondent) Consumer Trader & Tenancy Tribunal (Third Respondent)

COUNSEL: Mr MS Jacobs QC / Ms F Clark (Applicants) Mr DF Jackson QC / Mr R J Carruthers (Respondents)

SOLICITORS: Mills Oakley Lawyers(Applicants) Pryor Tzannes & Wallis (Respondents)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40816/07 SC 30049/05

Wednesday 26 November 2008 HIA Insurance Services Pty Limited T/as Home Owners Warranty v Peter Kostas & Ors Judgment 1 BELL JA: The applicant, HIA Insurance Services Pty Ltd (HIA), by notice of motion claims an order striking out the Notice of Contention filed on the respondents' behalf on the ground that it, "discloses no reasonable basis in law, and as such is an abuse of the Court".

2 HIA appeals under s 101 of the Supreme Court Act 1970 (NSW) (the SCA) from the whole of the decision of Rothman J: Kostas v HIA Insurance Services Pty Ltd T/as Home Owners Warranty [2007] NSWSC 315. The proceedings before his Honour were by way of appeal under s 67(I) of the Consumer Trader and Tenancy Tribunal Act 2001 (the CTTT Act). 3 The proceedings before the Consumer Trader and Tenancy Tribunal (the Tribunal) arose out of a residential building dispute. By agreement of the parties the Tribunal determined a separate question, which was whether the respondents had validly terminated the building contract. The Tribunal found that the respondents had not validly terminated the contract (judgment delivered on 25 May 2005). This decision was the subject of the appeal before Rothman J. 4 Rothman J allowed the appeal and made orders setting aside the "findings and orders" of the Tribunal made on 25 May 2005 and remitting the matter to the Tribunal to hear and determine any remaining issues in accordance with his Honour's orders and the reasons. His Honour found that the Tribunal had erred in law, including by making findings of fact crucial to its determination for which there was no evidence (Red 83.B-E; [161]). 5 By its Amended Notice of Appeal, filed on 14 August 2008, HIA challenges the decision on grounds that include: … 6. None of the matters set out in paragraph 170-(vii) of Rothman J's judgment, all pivotal to the learned judge's judgment, and/or grounds (a)-(g), (i), (j), (m)-(q) of the Schedule to the Summons were decisions on questions with respect to a matter of law, in that, at their highest, they were matters of mixed fact and law. 7. None of the grounds of appeal set out in the Schedule to the Summons dated 22 June 2005 and, in particular, those set out in paragraphs (h), (k) and (l) clearly identified errors of law. 8. There were no decisions by the Tribunal on the questions listed below with respect to a matter of law: the clause 27 point (paragraph [67], [68], [69], [95], [97], [99], [121] and [160] (i) and [165] of the judgment). … 11. The issues canvassed in his Honour's holdings in paragraph [102], [103], [104], [106], [124], [125], [126], [127], [128], [129] and [170] (i), (ii), (iii), (iv), (v), (vi) and (vii), were not Grounds of Appeal taken by the Respondents. … 13. His Honour held that no "evidence" points were decisions with respect to matters of law within the provisions of s 67(1) of the Act. 14. His Honour, contrary to his powers on appeal under sec 67(1), embarked on fact-finding exercises in respect of the matters in paragraphs [104], [132], [144], (iv), [160], (v) and [160] (vi). … 16. His Honour held in paragraph [104], [106], [112], [144] (ii) and [144] (xi) that there was no evidence before the Tribunal to support its findings referred to in those paragraphs. 6 The Notice of Contention was filed on 2 July 2008. The respondents contend that the decision should be affirmed on grounds other than those relied upon by the primary judge, namely: 1. A "question with respect to a matter of law" in s 67(1) of the Consumer Trader and Tenancy Tribunal Act 2001 (NSW) includes a question of mixed fact and law, and accordingly if (which is denied) his Honour based his decision on determinations of fact as well as of law, his Honour was permitted to do so under that provision. 2. Alternatively, if a "question with respect to a matter of law" in s 67(1) of the Consumer Trader and Tenancy Tribunal Act 2001 (NSW) is limited to a question of law, the Supreme Court is entitled, if error of law on the part of the Tribunal is established to determine any other question of fact or of law or mixed question of fact and law as in its opinion would enable it to make orders under s 67(3)(a) of that Act.

7 HIA relied on the affidavits of Stephen Aroney, that were sworn on 1 and 17 October 2008. Mr Aroney states that at the hearing before the primary judge counsel for the respondents tendered a bundle of documents over objection, which are identified in annexure "B" to his first affidavit. Mr Aroney goes on to say that if the Notice of Contention is struck out it will not be necessary to include the material identified in annexure "B" in the appeal books. In his second affidavit Mr Aroney estimates that 1380 pages of affidavits, exhibits and transcript will need to be included in the appeal books in the event the Notice of Contention remains on foot. This opinion is based on the grounds in the written submissions prepared by counsel. 8 A judge of appeal may exercise the powers of the Court of Appeal under s 46(1)(b) of the Supreme Court Act 1970 (the SCA) to dismiss an appeal or other proceedings for a cause specified in the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR). If in any proceedings it appears to the Court that in relation to any claim for relief in the proceedings the proceedings are frivolous or vexatious or an abuse of the process of the Court, the Court may order that the proceedings be dismissed in relation that claim: r 13.4(1)(a) and (c) of the UCPR.

9 The Notice of Contention is concerned with the nature of the appeal provided by s 67(1) of the CTTT Act, which relevantly provided at the date of the appeal: 67(1) If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the Supreme Court against the decision. … (3) After deciding the question the subject of such an appeal, the Supreme Court may, unless it affirms the decision of the Tribunal on the question: (a) make such order in relation to the proceedings in which the question arose as, in its opinion, should have been made by the Tribunal, or (b) remit its decision on the question to the Tribunal and order a rehearing of the proceedings by the Tribunal. 10 Mr MS Jacobs QC, who with Ms F Clark appears for HIA, contends that the jurisdiction of a judge hearing an appeal from the Tribunal under s 67(1) of the Act is limited to decisions "in respect to pure points of law". He submits that so much is clear beyond argument. The contention in par 1 of the Notice of Contention that Mr DF Jackson QC, who with Mr RJ Carruthers appears for the respondents, seeks to argue depends upon the interpretation of the words "a question with respect to a matter of law". It is an argument that draws on the wide import of the phrase "with respect to". I express no opinion on the merit of the argument as developed in Mr Jackson's written submissions filed in the appeal and the written submissions filed on the motion. For present purposes it is sufficient to note that some of the authorities on which Mr Jacobs relied are concerned with appeals under other statutes and may be distinguished. Comcare v Etheridge [2006] FCAFC 27; 227 ALR 75 was concerned with the appeal provided by s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act), which speaks of an appeal "on a question of law from the decision of the Tribunal". Patrick Operations Pty Ltd v Comcare [2006] NSWCA 142 was concerned with the appeal under s 32 Dust Diseases Tribunal Act 1989 (NSW) (the DDT Act); which speaks of a party dissatisfied with a decision of the Tribunal "in point of law or on a question as to the admission or rejection of evidence". The recent decision in B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187 was concerned with the appeal provided by s 119(1) of the Administrative Decisions Tribunal Act, which confers a right of appeal on a question of law against any decision of the Appeal Panel. The detailed discussion of the right of appeal provided in a number of statutes (some on a "a question of law" others "in point of law on a question of law" and the like) in B & L Linings does not address the point of construction that is sought to be raised with respect to the formulation of the right conferred by s 67(1) of the CTTT Act. 11 In Kalokerinos v HIA Insurance Services [2004] NSWCA 312 a bench of two judges dealt with a motion to strike out a purported appeal under s 67(1) of the CTTT Act as incompetent. Bryson JA (Santow JA agreeing) considered the nature of the appeal at [39]-[57]. His Honour observed that judges of the Supreme Court and the Court of Appeal have consistently treated the appeal as confined to a question of law, and not as giving any wider right of appeal. The point that is sought to be argued was not addressed in that case. It was not addressed in Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150. It is to be noted that in Bahadori the appeal under s 67(1) was overtaken by the appellants' summons for relief of a prerogative character. 12 The contention in par 2 is that once error of law is established, the Court has power to open up questions of fact and law that are connected to the error to enable it to make orders in the proceedings that ought to have been made by the Tribunal. Mr Jackson acknowledged that the contention is contrary to statements in Kalokerinos and Bahadori. He submits that the point was not necessary to the decision in either case. He noted that in Scicluna v NSW Land and Housing Corporation [2008] NSWCA 277 Hodgson JA's agreement with the judgment of Basten JA did not extend to the discussion of the power conferred by s 67(3) in pars [20] - [34]. Mr Jackson seeks to argue that s 75A (4), (6) and (10) of the SCA confers power on the Court to make findings of fact in an appropriate case once error of law is demonstrated and that for the reasons explained by Spigelman CJ in Thaina Town (On Goulburn) Pty Ltd v Sydney City Council [2007] NSWCA 300; 156 LGERA 150 at 174 - 176 it is desirable that the Court have power to dispose of issues or the whole case in circumstances in which it is expedient to do so. The contention is that absent very clear statutory language s 75A should not be restricted by implication unless such restriction is necessary. 13 In B & L Linings at [79] Allsop P (Giles JA agreeing at [120]) observed: To the extent that Thaina Town ( Thaina Town (On Goulburn) Pty Ltd v Sydney City Counci l [2007] NSWCA 300; 156 LGERA 150 at 174-176) and the reservations in Vetter and Amaca may throw up the possibility that the Supreme Court Act , s 75A may widen the powers of the Court to encompass the finding of facts, they only raise that possibility in the context of assessing the power of the Court if an examination of a question of law reveals an error of law. That possibility need not be decided in this case, because for the reasons expressed in the next section, the Appeal Panel's decision reveals no error of law. 14 I raised with Mr Jacobs the difficulty of dismissing the contention based on s 75A of the SCA as unarguably wrong given the way the matter was left in B & L Linings at [79]. His answer was to refer to the judgment of Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 130, in which his Honour observed that argument, even of an extensive kind, may be necessary to demonstrate that a plaintiff's case is so clearly untenable that it cannot possibly succeed. Mr Jacobs submitted that the overriding purpose of the Civil Procedure Act 2005 (NSW) and Rules (stated in s 56) commended that I entertain the argument and, if persuaded that the contentions are without merit, strike out the Notice of Contention, thus saving significant costs in the preparation and conduct of the appeal. Mr Jackson acknowledged that a single judge of appeal has power to strike out a Notice of Contention under r 13.4(1)(a) and/or (c). He submitted that the discretion was one to be exercised with circumspection, noting that propositions for which there is a want of authority, on occasions, succeed on appeal.

15 If the contentions are arguable, the fact that agitating them may involve additional costs in the preparation and presentation of the appeal, is not a reason to deprive the respondents of the opportunity to rely on them. I should say that I am not persuaded that the Notice of Contention will occasion the significant increase in the cost of preparing and presenting the appeal that was mooted. The errors of law that Rothman J found included that the Tribunal had made findings for which there was no foundation in the evidence: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321. It is reasonable to expect that HIA will seek to demonstrate that, contrary to his Honour's conclusion, there was a foundation in the evidence for the impugned findings that are challenged in the grounds set out at [5] above. It is not clear that some considerably greater amount of material will need to be included in the appeal books in order to permit the proper ventilation of the issues raised by the Notice of Contention. 16 In my opinion neither of the contentions contained in the Notice of Contention is to be characterised as being not reasonably arguable and it follows that the respondents should be permitted to rely on them. The motion is dismissed. **********

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