Hua Nan Trading Pty Ltd v The Owners - Strata Plan No 32396 - [2024] NSWCATAP 192 - NSWCATAP 2024 case summary

NCAT Appeal Panel|2024-03-25

REASONS FOR DECISION

This appeal concerns whether the appellant's strata application to the Consumer and Commercial Division of the Tribunal was within time. The appellant (Hua Nan) is a lot owner in a strata scheme. The respondent is the owners corporation of that strata scheme (Owners Corporation). Hua Nan says its application was filed within time, whereas the Owners Corporation says it was not filed within time, there was no ability to extend time and even if there was the ability to extend time, there was nothing wrong with the Tribunal's decision not to extend time.

Procedural background

These appeal proceedings come after a number of earlier proceedings, which are important to explain.
Hua Nan's lot flooded between 7 and 10 February 2020.
On 2 February 2022 Hua Nan signed a Strata and Community Schemes Application which is the standard form used by parties in strata disputes to commence strata proceedings in the Tribunal. On the front page of the Strata Application (page 1) the second question under the heading "Dispute Details" was "Have you tried to settle this dispute through mediation?" Hua Nan ticked "No" to this question. The form then asked "What exemption are you relying on?" which Hua Nan answered in the following way (errors in the original, the emphasis is added): I making insurance claim. It has not been resolved yet. For the time bar is on, before 05/02/2022. Claim the insurance doesn't request it.

This appeal

Hua Nan is a company, represented by its director Mr Jack Mei. English is Mr Mei's second language and he was assisted by an interpreter throughout the appeal hearing. His appeal documents, including the Notice of Appeal and submissions provided in support of his company's appeal, were reflective of a self-represented litigant whose first language was not English. The Appeal Panel therefore had to explain a number of matters to Mr Mei throughout the hearing and had to do the best we could to understand the essence of the appeal.
The Owners Corporation was legally represented in this appeal, as it was in the proceedings below. The Appeal Panel granted the Owners Corporation leave to be legally represented in this appeal: Direction 2 made on 17 January 2024. The Owners Corporation did not bear any onus in these proceedings, however its submissions assisted the Appeal Panel to determine the real issues in dispute.

Grounds of Appeal

Under the heading "Grounds of Appeal", the Notice of Appeal asked Hua Nan to "List the orders that were made by the Tribunal that you want changed by the Appeal Panel". Hua Nan wrote (errors in the original): I want to have changed by the appeal panel the order that made by the Tribunal list below: 1. the application for an extension of time is refused to have changed to the application time never expired. 2. The application is dismissed to have changed to is not dismissed. 3. The respondent pay the total damaged goods $63,276.90. 4. The respondent paid the legal costing.
The Notice of Appeal next asked Hua Nan to "List below a short summary of each reason why you consider the Tribunal was wrong when it decided to make the order/s appealed from". Here Hua Nan wrote (as in the original): On 02-02-2022 I lodged the application to NCAT to seek the orders the NCAT file No. SC23/04591, but the NCAT Registrar in charge of the case keeps changing the judicial orders day and night; arbitrary violation of the equal judicial rights granted to citizens by the constitution awesome more detail. please refer the attachment of reason to NCAT appeal panel.
Hua Nan then attached several documents to the Notice of Appeal. Page 8 begins: The NCAT Senior Member D. Goldstein has made the decision on 17 November 2023 was not fair and not equitable and full of serious prejudices. And his decision does not base on the whole facts. Firstly, on 02-02-2022 I lodged the application in NCAT which the NCAT file number is: SC22/04591. The series proceeding following the 02-02-2022 NCAT application were the continuous proceedings…
On page 11 of the attachments Hua Nan stated that the strata schemes "only appointed plumber… was not trustworthy and has not fulfilled his duty of performance". However this is not stated to be a ground of appeal in the Notice of Appeal. If the plumber did, as Hua Nan alleged on page 11, "arbitrarily fail to fulfill contractual obligations as stipulated in the contract" this is a matter between the parties to the contract, namely the Owners Corporation and their tradesperson. It also does not appear the alleged breach of contract by the plumber was a matter raised by Hua Nan before the Tribunal. For these reasons we do not consider this a proper ground of appeal and have not therefore considered the submissions that concerned the plumber's actions.
Therefore, the only question raised by Hua Nan in the grounds of appeal is whether the Strata Application was lodged within time. Hua Nan submitted, on page 8, that "on 02-02-2022 I lodged the application" which was given file number SC22/04591 and that "[t]he series proceeding following the 02-02-2022 application were the continuous proceedings".
While Hua Nan did not express it in this way, putting it as fairly as we can for Hua Nan, we consider its ground of appeal can be put in the following way: 1. Part 1: Was the Tribunal wrong to find that the Strata Application which was the subject of this appeal was lodged on 4 April 2022,i.e outside the two year period prescribed by section 106(6) of the SSMA? This is a finding of fact so to the extent it can properly be raised in this second appeal Hua Nan would require leave to appeal (as it is not an error of law). Leave would only be granted if the Appeal Panel is satisfied that Hua Nan may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or was against the weight of evidence or significant new evidence is now available. 2. Part 2: If the Strata Application was lodged outside the two year period prescribed by section 106(6) of the SSMA, was the Tribunal wrong to not extend time pursuant to s.41 of the NCAT Act?

Was the Strata Application lodged within time?

In the 2022 Decision the Tribunal found that the Strata Application was lodged on 4 April 2022.
The Appeal Panel found in the First Appeal Decision that the Strata Application was lodged on 28 April 2022, after the parties had participated in a mediation session with Fair Trading on 22 April 2022.
Hua Nan did not grapple with the question of leave about this finding of fact, either in its Notice of Appeal, or in its written or oral submissions. Nor was the question ventilated whether it would be an abuse of process for Hua Nan to be permitted to raise in a second appeal a question which had been determined adversely to it in a first appeal.
As it was not argued, we have not considered the question of abuse of process. However we are comfortably satisfied that the application which is the subject of this appeal was lodged outside the two year period prescribed by section 106(6) of the SSMA and that leave to appeal on this ground should not be granted.
The Strata Application that the Tribunal considered on 9 November 2022, while it may have been in similar or identical terms to the application lodged in February 2022, was in fact SC22/19375 which was lodged with the Tribunal in April 2022.
Hua Nan's submissions on this issue were extensive. It alleged a violation of "the constitutional provisions", discrimination, unfairness, that if the registrar who closed SC22/04491 did so on the basis of Mr Mei's "race, my background, my occupation or, only I am not lawyer, it will be criminal offence": page 10 attached to Notice of Appeal. However, the essence of Hua Nan's contention was that its Strata Application which was the subject of the 2022 Decision, the First Appeal Decision, and the 2023 Decision, were in fact decisions which determined the application which it lodged in February 2022 as SC22/04491. This is not so.
SC22/04491 was not accepted by the Tribunal and was accordingly dismissed on 4 February 2022.
If Hua Nan wanted to appeal the dismissal of that Strata Application, it could have appealed that decision within 28 days of the decision. It did not do so.
The only Strata Application before the Tribunal was that heard on 9 November 2022, and again after remittal from the Appeal Panel, on 20 September 2023. Those hearings concerned the Strata Application lodged in April 2022. That application was the subject of this appeal. This was not "continuous proceedings" from 2 February 2022 as submitted by Hua Nan.
This aspect of the ground of appeal is not made out and leave to appeal is refused.

Was the Tribunal wrong to not extend time to lodge this application under section 41 of the NCAT Act?

The 2023 Decision by the Tribunal to not extend the time set by section 106(6) of the SSMA for the bringing of Hua Nan's action for damages under section 106(5) of the SSMA was premised on the Tribunal having the power to so do (based on the First Appeal Decision). In the 2023 Decision the Tribunal concluded that, as a matter of discretion, time should not be extended. In light of the recent decision of a differently constituted Appeal Panel in Pickard, an issue which requires consideration is whether the Tribunal does have the power, by virtue of section 41 of the NCAT Act, to extend the time set by section 106(6) for bringing an action in the Tribunal for damages under section 106(5) of the SSMA.
The relevant provisions of section 106 of the SSMA provide: (1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation. (2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation. … (5) An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as result of the contravention of this section by the owners corporation. (6) An owner may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss.
Section 41 of the NCAT Act, which is in Part 4 of the NCAT Act headed "Practice and procedure" provides : (1) The Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation. (2) Such an application may be made even though the relevant period of time has expired.
Part 4 of the NCAT Act commences with section 35, which provides that "Each of the provisions of this Part is subject to enabling legislation and the procedural rules."
In Pickard, the Appeal Panel held that section 41 of the NCAT Act did not confer power on the Tribunal to extend the period of two years specified in section 106(6) of the SSMA principally because: 1. Following the approach taken by the High Court in David Grant &Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265, the provisions of section 106(5) and (6) of the SSMA are to be read together, and the right to bring the action under section 106(5) is available only if brought within the time required by section 106(6); the time limit in section 106(6) is an integer or element of the right created by section 106(5): Pickard at [79]-[84]; 2. This means that the phrase "may not bring" in section 106(6) defines the scope of the cause of action and thus precludes the Tribunal from having jurisdiction to apply section 41 of the NCAT Act; to use the language of the Tribunal in Boutenko v The Owners- Strata Plan No 77480 [2022] NSWCATCD 166, section 106(6) is a "jurisdictional time limit": Pickard at [80],[84]; 3. The provisions of Part 4 of the NCAT Act do not create or modify causes of action which give rise to the Tribunal having jurisdiction to determine disputes. In particular, section 41 permits the Tribunal to extend time "for the doing of anything under any legislation", but this is then qualified to limit the Tribunal's power to legislation "in respect of which the Tribunal has jurisdiction". Where, as here, the Tribunal does not have jurisdiction, because the application is based on a statutory cause of action limited to the period specified in that statute, then there is no jurisdiction in respect of which the Tribunal has power to extend time: Pickard at [85]-[87]; 4. The Appeal Panel in the First Appeal Decision concluded that section 41 of the NCAT Act should be treated as the "dominant provision" and any limitation in the legislation which conferred general jurisdiction (in this case section 106(6) of the SSMA) should be treated as the "subordinate provision": see the First Appeal Decision at [95]-[96]. However that view is contrary to section 35 of the NCAT Act, which provides that each of the provisions of Part 4 of the NCAT Act is subject to enabling legislation (in this case, the SSMA): Pickard at [85]-[89]; 5. Section 41 of the NCAT Act is concerned with extending the time "for the doing of anything" under legislation. It does not allow the Tribunal to modify the effect of a statutory provision providing that a person "may not bring" proceedings after a fixed time. The phrase "may not bring" is specific and couched in negative terms: Pickard at [90]; and 6. The decision of the NSW Court of Appeal in The Owners-Strata Plan No.74232 v Tezel [2023] NSWCA 45 supports an interpretation that section 41 of the NCAT does not permit the Tribunal to extend time under section 106(6) of the SSMA. That case concerned the question of when time commences to run under section 106(6). The Court of Appeal emphasised the relatively short limitation period of two years, directed to ensure that a lot owner cannot delay taking proceedings in circumstances where the people having to make good the loss are also lot owners, and the passage of time may affect their ability, through the owners corporation, to recover that loss from other persons : Pickard at [91]-[93].
We consider the reasoning of the Appeal Panel in Pickard explaining why the Tribunal has no power to extend the time limit prescribed by section 106(6) of the SSMA to be compelling. In particular, sections 106(5) and 106(6) were new provisions introduced to the SSMA in 2015. Prior to their introduction, in 2013, the NSW Court of Appeal in Owners Strata Plan 50276 v Thoo [2013] NSWCA 270 had decided that section 62(1) of the Strata Schemes Management Act 1996, the legislative predecessor to section 106(1), did not give rise to an action for breach of statutory duty sounding in damages. The purpose of section 106(5) of the SSMA was to reverse the effect of Thoo: Vickery v The Owners Strata Plan No. 80412 (2020) 103 NSWLR 352;[2020] NSWCA 284 at [11] (Basten JA),[96] (Leeming JA) and [161] (White JA); Tezel at [37]. The Explanatory Note to the Strata Schemes Management Bill 2015 relevantly stated: an owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention by the owners corporation of proposed section 106, but any action must be taken within 2 years of becoming aware of the loss (proposed section 106).
The context in which sections 106(5) and 106(6) were introduced, together with the Explanatory Note to the Bill, indicate that section 106(6) was an integral part of a legislative scheme to permit actions for damages by lot owners against an owners corporation in defined circumstances. To adopt the language of Gummow J in David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265; [1995] HCA 43 at [26], the temporal requirement in section 106(6) of the SSMA operates to define the jurisdiction in respect of an action for damages under section 106(5) of the SSMA.
For these reasons we consider the better view to be that the Tribunal has no power under section 41 of the NCAT Act to extend time in an action for damages arising out of a breach, or alleged breach, of s.106(5) of the SSMA However we have decided that it is neither appropriate nor necessary to decide the appeal on this basis. It is not appropriate to do so because the issue has not been raised formally before us as a ground of appeal. Moreover a differently constituted Appeal Panel dealing with this specific dispute reached the contrary view in the First Appeal Decision. It is also unnecessary to decide the appeal on this basis as we are comfortably satisfied that the Tribunal made no error in the 2023 Decision in its exercise of its discretion not to extend time, assuming such a discretion existed. We turn now to consider this issue.
As the Owners Corporation set out in its written submissions at paragraph 18, an error in the exercise of a discretion was addressed by the High Court in House v The King (1936) 55 CLR 499. The Owners Corporation included the following quotation from that decision at 505: If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the conclusion embodied in his order, but, is up on the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law re poses in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
We agree with the Owners Corporation's submission at paragraph 20 that Hua Nan's general complaint is that the 2023 Decision was "simply wrongly decided". Hua Nan did not argue that the Tribunal acted upon a wrong principle, allowed extraneous or irrelevant matters to guide or affect it, or did not consider some material consideration. We have already concluded that the Tribunal did not mistake the facts.
In deciding whether to extend time, the Tribunal in the 2023 Decision correctly considered the merits of Hua Nan's Strata Application. This is a relevant consideration when a decision maker is considering extending time, and comes from the seminal Appeal Panel decision of Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22. The Tribunal acknowledged this at [3] of the 2023 Decision. At [22] in Jackson the Appeal Panel held: The considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a Notice of Appeal include: (1)The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant - Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38]; (2)The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision - Jackamarra v Krakouer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success - Jackamarra at [7]; (3)Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: (a)The length of the delay; (b)The reason for the delay; (c)The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and (d)The extent of any prejudice suffered by the respondent (to the appeal), - Tomko v Palasty (No 2) (2007) 71 NSWLR 61at [55] (per Basten JA) but note also [14], Nanschild v Pratt [2011] NSWCA 85 at [39] to [42]; and (4)It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] - [59].
The Tribunal considered the merits of the Strata Application from [19] to [43] inclusive and then concluded in [44] that "the applicant has not shown that its case has more substantial merit than merely being fairly arguable." We respectfully agree with the Tribunal's analysis that Hua Nan's claim was weak, and this is a relevant matter for the Tribunal to take into account when exercising its discretion not to extend time.
Accordingly the appeal must fail. To the extent required, leave to appeal is refused. The appeal is dismissed.

Costs 1. The Owners Corporation claimed its costs of the appeal: para 30 of its written submissions. 2. The cost rule applicable in the Tribunal proceedings applies to these appeal proceedings: Rule 38A NCAT Rules. As Hua Nan claimed more than $30,000 in the Tribunal proceedings it follows that Rule 38 of the NCAT Rules applies. 3. Therefore our provisional view is that costs should follow the event. We propose an order that Hua Nan pay the Owner's Corporations costs of the appeal, on the ordinary basis. 4. Should either party seek an order different to that which we propose, they must make that cost application on or before 4pm on 18 October 2024. If no cost application is made, the proposed cost order will be confirmed. 5. ORDERS: (1) Amend name of the respondent to "The Owners - Strata Plan No 32396". (2) Remove second respondent "Jack Mei". (3) To the extent required, leave to appeal is refused. (4) The appeal is dismissed. (5) The appellant is to pay the respondent's costs, as agreed or assessed, on the ordinary basis. (6) If either party wishes to apply for a cost order different to Order 5: (a) they must make that cost application with supporting written submissions by 18 October 2024. (b) the other party may respond to that application with written submissions filed and served by 1 November 2024. (c) Parties may provide cost submissions in reply if they wish, on or before 8 November 2024. (d) In any cost application or cost submissions, parties must indicate their attitude to the Tribunal deciding the question of costs on the papers (that is, dispensing with a hearing on costs). (e) in the event any party makes an application pursuant to Order 6(a), Order 5 lapses. 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: 03 October 2024

(2020) 103 NSWLR 352

Hua Nan Trading Pty Ltd v The Owners - Strata Plan No 32396

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Judgment (7 paragraphs)

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