Integrity Homes Pty Ltd v Staniland

Appeal Against Interlocutory Decision

1. The decision of the Member of 3 August 2014 was not a decision determining the renewal application filed by respondents. It was a decision as to the meaning of parts of an order made on 19 July 2013. It was an interlocutory decision of NCAT; not of the CTTT. Any rights to appeal are therefore provided by the Act.
2. It is an internal appeal from an interlocutory decision by a division of NCAT to an Appeal Panel of NCAT. Where such an appeal is from an interlocutory decision, leave of the Appeal Panel is required by S80(2)(a) of the Act.
3. The appellant made no application for leave in the notice of appeal. It appears that the appellant overlooked the requirements for leave. The requirement for leave was not recognised in the twelve pages submission for the appellant dated 16 April 2015. The question of leave was raised, though, in the submissions for the appellant dated 1 October 2015, less than 3 weeks before hearing of the appeal and 5 weeks after the appeal was filed.

Grounds of Appeal

1. The grounds of appeal in the Notice of Appeal are not concise. They extend over nearly 2 pages. They do not raise any objection to, or argument about, the interim orders themselves.
2. The builder relied upon the decision in Vero Insurance Ltd v Buckle; Reynell v Buckle [2008] NSWSC 73 and argued that the application under section 43 was incompetent because of that. In the same submission the builder conceded that at the hearing the builder "did not challenge the Applicant's ability to make an application under section 43".
3. But it seemed from the statement of the grounds of appeal that the builder was submitting that the Member erred by failing to adopt a submission that when the parties settled the home building claim on 19 July 2013, the orders of 19 July 2013 constituted a fresh "contract" between the parties for residential building work that superseded the original building contract. Whilst the terms of settlement would alone constitute an agreement or contract between the parties, It is questionable whether orders of the tribunal resolving an application (even if by consent of the parties or pursuant to terms of settlement, or worded the same as terms of settlement), would at law constitute a contract between the parties.
4. It seems that the builder was arguing that the "new contract" constituted by the consent orders of 19 July 2013 could not be enforced by the section 43 procedure and enforcement of the new contract would require a fresh home building application.
5. The statement of the grounds in the Notice of Appeal document relied particularly on passages of paragraphs [45] and [57] of the Vero Insurance decision, as follows: [45] Whilst the construction of the Terms of Settlement may not be an easy matter, the submission made in this appeal have accepted that the Terms of Settlement brought the building contract to an end. That is what was found by Mr O'Keefe and such a finding seems to be inevitable. [57]…... The Terms of Settlement brought the building contract to an end. As a consequence, it was the only contact remaining on foot and was one concerning the supply of building goods and services. (Vero Insurance Ltd v Buckle; Buckle v Reynell [2008] NSWSC 73 at [45] & [57]).
6. There are several important differences that distinguish the present case from that decision: 1. There were orders made by the Tribunal on 19 July 2013 in this case; not just terms of settlement as in the Vero Insurance decision. The absence of orders by the Tribunal in the Vero Insurance case was the reason the Tribunal had refused previously to entertain an application under s 43 of the CTTT Act. (This was stated at [11] of the decision.) The Court expressed no disagreement with that. 2. In the Vero Insurance case there was an issue of whether the claims came within the expression "home building claim" to provide jurisdiction to the Tribunal under the Home Building Act 1989. The owner's application in these proceedings does not rely upon the Home Building Act for jurisdiction; it relies upon section 43 of the CTTT Act.
7. The statement of Grounds in the Notice of Appeal says : The Tribunal erred in failing to find that the 19 July 2013 orders gave rise to a new contract between the applicants and the respondents for residential building work.
8. The Panel could find no reasons in the Notice of Appeal and submissions for the builder as to why such a finding was required in making the determination the Tribunal made or even relevant to that.
9. The statement of Grounds in the Notice of Appeal also says : Finally it is noted that the orders of 19 July 2013 reflected Terms of Settlement between that (sic) parties as evidence (sic) by the first line of the order which provides: 'in full and final settlement of all matters in dispute between the parties,…' This accords completely with an application of Buckle and Reynell without the illusory distinction of 'settlement' as opposed to 'orders'.
10. Because the application is made under section 43 of the CTTT Act; and it is about enforcement of an order of the Tribunal and can apply only if there is an order, terms of settlement of home building proceedings will not without an order provide a basis for an application under the section. In that regard, the distinction between terms of settlement and orders is clearly not illusory. It is critical.
11. In the Notice of Appeal the builder sought orders that "The renewal proceedings … be dismissed and the [owners] pay the costs of the [builder]."
12. The owners in their Reply filed 23 September 2015, gave notice that the appeal was opposed, and that it required leave, which was opposed. The owners provided concise response to the grounds of appeal, which are briefly: 1. The grounds of appeal are submissions, not grounds of appeal; 2. The proceedings were validly brought as renewal proceedings under the CTTT Act; and 3. By reason of the consent orders, the Tribunal has power to consider and determine renewal applications, including making any appropriate order it could have made when the matter was originally determined (as per s43(4)(a) of the CTTT Act) which includes the award of damages or monetary compensation.
13. Before the hearing the solicitors for the owners indicated to the Registry that the owners would rely upon their counsel's 17 page submission of 18 March 2015 in the hearing before the member. The builder's solicitors indicated that the builder would rely upon its solicitor's 12 page submission dated 16 April 2015 and filed in the hearing before the member. On 1 October 2015 the Appellant's solicitor provided a 4 page Outline of Submissions. And on 20 October the owners filed and served a 4.5 page outline of submissions by their counsel for the hearing.
14. The submissions for the builder of 16 April 2015 included an argument that the proceedings "are analogous to the circumstances in Buckle and Reynell", but that was untrue. There was no order of the Tribunal to enforce there, so s 43 could not apply. Here there was an order.
15. In addition the there was an argument (also raised at the hearing) relying upon the decision of Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248. It was submitted that the orders of 19 July 2013 constituted a new building contract, the contract is still on foot and in reliance on the Brewarrina Shire decision, and the Tribunal cannot yet deal with a damages claim.
16. Section 48O of the Home Building Act 1989 gives the Tribunal power to make an order for a person to pay money by way of damages. Section 43 of the CTTT Act gives the Tribunal in a renewed proceeding power to make any order that .it could have made when the matter was originally determined. The statutory provisions do not have any restriction such as that in the Brewarrina case.
17. This Brewarrina submission by the builder has no substance. The Brewarrina decision was an appeal from a decision which was not in relation home building. It was not about a home. It was not a claim to which the Home Building Act or section 43 of the CTTT Act could have applied. It was decided largely on interpretation of a sophisticated contract for a substantial commercial construction and the common law on building contracts and litigation about them. The submission ignored the special statutory provisions that apply to home building work dealt with previously by the CTTT, and now NCAT. Those submissions have no relevance to the decision of 3 August 2015.
18. The owners provided a substantial submission dated 19 October disputing numerous parts of the builder's submissions of 16 April. At the hearing the builder relied upon its solicitor's 5 page. Outline of Submissions and oral submissions.
19. The builder's outline of submissions was largely repetition or expansion of arguments already referred to above. At the end of the outline appears:

Summary 23 The determination made on 3 August 2015 failed to consider the submissions of the [builder] in first instance in particular paragraphs [40] to [51] (inclusive). 24 The decision ignores the rationale of Buckle v Reynell and attempts to authorise the making of orders for damages where it was prohibited from doing so by Brewarrina Shire Council. 25 The substantial miscarriage of justice was that the {owners] refused to seek a rectification order, which the builder consented to, but rather sought an outrageous quantum of damages more than double the costs quantified by their own independent expert.

1. With regard to item 23 in that summary, the submissions referred to were in the submissions of 24 April 2015 and comprised argument relying upon decisions of Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248 and also Vero Insurance Ltd v Buckle [2008] NSWSC 73; Those arguments have already been discussed in these reasons.
2. Item 25 in that summary seems to have no relevance to the current appeal, which is against the interlocutory order only. It should be said though, that it is common ground that the builder was by the orders of 19 July 2013 ordered to do rectification work by 30 August 2013, but has not carried out items 4 and 5 more than 2 years later. Section 43 enables the owners to seek payment of the builder of an amount of money sufficient to pay a different builder to do the work. The hearing has not yet concluded and it seems premature or unwise of the solicitor, before the outcome, to refer to "the substantial miscarriage of justice".
3. The oral submissions by the builder's solicitor, including questions and interactions with the Panel Members lasted about an hour. The solicitor for the builder was unable to identify any authority for the proposition that consent orders constitute a contract between the consenting parties. The solicitor informed the panel that the Appellant builder was not submitting that the Member did not have jurisdiction under section 43 or that the interlocutory decision he made was not open to him. The solicitor for the builder also conceded that the orders of 19 July 2013 were made by consent and were capable of enforcement under section 43 of the CTTT Act.
4. The Tribunal concluded that the proposed appeal had no merit. Leave to appeal was therefore refused, the appeal was dismissed and directions made for the section 43 hearing. Those orders were made on 23 October 2015.

Costs

1. The owners sought an order for costs. They made some oral submissions. The solicitor for the builder wanted time to prepare written submissions. She asked for 5 weeks because she would be travelling overseas for a month and leaving the day after the hearing. She was given till 27 November and the owners were given 7 days to reply.
2. Section 60 of the Act provides that each party to proceedings is to pay the party's own costs but the Tribunal may award costs if there are special circumstances warranting an award of costs. Subsection 60(3) provides a list of matters the Tribunal may consider in deciding whether there are special circumstances.
3. It was at or before 11.30m on the hearing day that the orders were made dismissing the leave application and the appeal. Counsel for the owners then made the oral application for a costs order against the builder and made some submissions relying on the lack of merit of the grounds and the offer of settlement made by the owners 4 days before the hearing that the builder had rejected. Then the Tribunal took a short adjournment. At about 11.35 am the solicitor for the builder asked for time to provide written submissions rather than provide oral submissions that day. Five weeks were sought because the solicitor was going overseas the next day and would be away 4 weeks. That request was granted and directions made for the builder's submissions on costs to be filed and served by 27 November and the owners to have 7 days after service of those for any reply.
4. As it transpired the builder's written submissions on costs were not filed till 27 November. Those submissions, apart from quoting section 60, comprised less than 2 pages and the parts that repeated arguments about the merit of the appeal were such that the costs submissions could easily have been made orally on the hearing day without putting the parties to the expense of written submissions. There could have been an adjournment of an hour or even 75 minutes for preparation and delivery of relevant oral submissions on behalf of the builder and any oral reply on behalf of the owners. This would have avoided the cost of written submissions. In this regard the builder conducted the proceedings in a way that caused unnecessary costs and delay to the owners. This is a relevant matter under para 60(3)(a) of the Act in deciding whether there are special circumstances.
5. By failing to recognise the requirement of leave to appeal and failing to make an application for leave until late before the hearing, the builder caused the owners unnecessary costs and inconvenience of having to raise the issue and add that issue to their Reply and their submissions. This too is a relevant matter under para 60(3)(a) of the Act.
6. A significant matter is the finding that the proposed appeal had no merit. It had no tenable basis in fact or law. That is a matter under para 60(3)(c) of the Act. The appeal was also misconceived and without substance and that is a matter under para 60(3)(e) of the Act.
7. It appears the lack of merit in the arguments brought by the builder was not recognised or acknowledged by the builder or the builder's legal representatives despite extensive reasons and submissions by the owners in their documents that were served on the builder. That conduct of or on behalf of the builder unreasonably prolonged the time taken to complete the proceedings. This is a consideration under para 60(3)(b) of the Act.
8. Subsection 36(1) of the Act provides that the guiding principle for the Act and the procedural rules in their application to proceedings in the Tribunal "is to facilitate the just, quick and cheap resolution of the real issues in the proceedings". Subsection 36(3) requires that a party and an Australian legal practitioner representing a party are under "a duty to co-operate with the Tribunal to give effect to the guiding principle …..". By the raising of spurious and clearly unmeritorious grounds of appeal the builder through its legal representatives, did not co-operate with the Tribunal to give effect to the guiding principle. That is a failure to comply with the duty imposed by section 36(3) and therefore a relevant matter under para 60(3)(f) of the Act, as was the unnecessary failure to co-operate by providing oral submissions regarding costs.
9. A further significant relevant matter is the failure of the builder to agree to the settlement offer made by the owners on 19 October 2015. The offer was for the appeal to be withdrawn and for there to be an order for the builder to pay the owner's costs of the appeal. The hearing of the section 43 application would have continued in the Tribunal. The result that was obtained from refusing the settlement offer was a worse result for the builder because the builder incurred the subsequent costs of preparation for the appeal hearing, the appeal hearing itself and written submissions on costs. That could all have been avoided by the builder agreeing to the proposed settlement. This decision of the builder resulted in both parties incurring considerable unnecessary costs after 19 October. It prolonged the appeal proceedings. It unnecessarily disadvantaged the owners. This is a very significant factor under paras 60(3)(a), (b) and ((f) to be taken into account in deciding whether there are special circumstances that justify a costs order.
10. The Tribunal is satisfied that there are special circumstances that justify the builder being required to pay the owners' costs of the appeal and for those costs incurred after 19 October to be on an indemnity basis.

Orders.

1. Accordingly the orders of the tribunal are as follows: 1. Leave to appeal against the interlocutory decision of 3 August 2015 is refused; 2. The appeal filed 27 August 2015 is dismissed; 3. The application to renew proceedings filed 24 September 2013 is to be listed by the Registrar of the Consumer and Commercial Division for directions; 4. The Appellant must by 27 November 2015 file and serve any submission opposing the costs application of the respondents; 5. Within 7 days of service of those submissions the Respondent must file and serve any submissions in reply; and 6. The Appellant must pay the costs of the Respondents of, or incidental to the appeal, as agreed or as assessed, with the costs after 19 October 2015 to be on an indemnity basis.

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: 24 December 2015