Inventbuild Pty Ltd v Tulemis

NCAT Appeal Panel|2024-03-28

Overview

This is an internal appeal from the decision of the Consumer and Commercial Division of the Tribunal made on 22 November 2023 concerning a dispute between the respondent, Asan Tulemis (Mr Tulemis) who is the owner of a property at Miranda in New South Wales (the property), and the appellant, Inventbuild Pty Ltd (Inventbuild), concerning building work at the property carried out by the builder. In the decision, the Tribunal by consent of the parties made a money order and a work order in favour of Mr Tulemis.
The substantial issues in the appeal have been whether the Tribunal failed to afford procedural fairness to Inventbuild in the hearing leading to the making of the consent money order or whether there is any ground on which the money order should be set aside.
As we have found that the Tribunal did not make an error in conducting the hearing or making the consent money order, we have decided to refuse leave to appeal and to otherwise dismiss the appeal.

The factual background

Mr Tulemis bought a townhouse off the plan and settlement for the purchase occurred in June 2022. Inventbuild had constructed the property. Shortly after settlement disputes arose between the parties as to alleged defective building works carried out by Inventbuild.
On 8 May 2023, Mr Tulemis commenced proceedings in the Consumer and Commercial Division of the Tribunal against Inventbuild by filing an application in which he claimed a money order and a work order in relation to defective works.

The appeal

On 20 December 2023, Inventbuild appealed to the Appeal Panel from those orders. In the grounds of appeal Inventbuild challenged the money order. There is no challenge to the work orders. In the appeal Inventbuild seeks to set aside the money order.
lnventbuild claims that it has suffered a substantial miscarriage of justice because the decision of the Tribunal was not fair and equitable and was against the weight of evidence.
In support of the appeal Inventbuild states that the Tribunal did not provide a proper hearing, instead the decision was imposed as a "reconciliation" and alleges that Inventbuild was misled by the Tribunal to believe that an agreement was better than the result would be if the matter was heard. In the Notice of Appeal Inventbuild states that the Tribunal "failed to follow procedure rules under s 25 of the Act". This would appear to be a reference to s 25 of the Civil and Administrative Tribunal Act 2013 (NCAT Act). It is unclear, however, what procedure Inventbuild is referring to.
In the Notice of Appeal Inventbuild also states that the Tribunal failed to accord procedural fairness by not hearing from the parties. In particular, it failed to consider that Inventbuild attempted to repair the damage but Mr Tulemis did not provide convenient access to the premise and failed to afford Inventbuild opportunities to rectify the defects. Inventbuild also states that the Tribunal failed to consider the fact that Mr Tulemis arranged certain repairs himself that resulted in unnecessary costs which Inventbuild has been ordered to pay. In general, Inventbuild states that the Tribunal failed to consider the submissions and evidence it had provided and failed to put weight on that evidence.

The scope and nature of internal appeals

Section 80(2) of the NCAT Act provides that an internal appeal from a decision of the kind in this appeal can be made as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are where it is satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision of the Tribunal under appeal was not fair and equitable, or the decision of the Tribunal under appeal was against the weight of evidence, or significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with): cl 12(1)(a), (b) and (c) of Sch 4 of the NCAT Act.
In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where there is a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
The onus is on the appellant to satisfy us on the balance of probabilities that he may have suffered a substantial miscarriage of justice: Pholi v Wearne [2014] NSWCATAP 78 at [31].

The issues for determination in the appeal

We are satisfied that the appeal was commenced within the time of 28 days prescribed under r 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NCAT Rules).
In Cominos v Di Rico [2016] NSWCATAP 5, at [13], the Appeal Panel noted that it may be difficult for self-represented appellants to clearly express their grounds of appeal. In Prendergast at [12] the Appeal Panel noted that, where an appellant is not legally represented, it is necessary for the Appeal Panel to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent. In such circumstances and having regard to the guiding principle in s 36 of the NCAT Act, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal.
The Tribunal was obliged to afford both parties procedural fairness: NCAT Act s 38(2). Procedural fairness generally requires that the decision-maker must act without bias or an appearance of bias and that the process is fair. A failure to afford a party procedural fairness is an error on a question of law: Italiano v Carbone & Ors [2005] NSWCA 177 at [85]-[87] ; Prendergast at [13]. In our view, the matters raised by Inventbuild concern an alleged denial of procedural fairness and thus raise a question of law.
Having regard to the principle in Cominos at [13], the following issues therefore arise for determination in this appeal: 1. whether the Tribunal failed to afford procedural fairness to Inventbuild in making the money order and if so whether the Tribunal made an error of law; and 2. whether Inventbuild should be granted leave to appeal against the money order, and if so whether the appeal should be allowed and that order should be set aside.
Before turning to these issues, we have made some general comments about the appeal.

Some general comments about the appeal

It is an established principle that an appeal does not provide a losing party with the opportunity to run its case again except in the narrow circumstances specified in s 80(2)(b) of the CAT Act: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10].
During the course of his oral submissions, we drew this principle to the attention of Mr Li who appeared at the appeal hearing on behalf of Inventbuild. However, the primary submissions made on behalf of Inventbuild largely consisted of general contentions as to why Inventbuild should have been successful if the proceedings had run to a contested conclusion, rather than the identification of errors made by the Tribunal.

Denial of procedural fairness

Under s 37 of the NCAT Act the Tribunal is required to use resolution processes such as conciliation and mediation to resolve or narrow issues between the parties. It was in this context that an agreement was reached and consent orders made by the Tribunal.
The principles applicable to setting aside a consent order were outlined by an Appeal Panel in McDonald v McDonald [2016] NSWCATAP 252 (McDonald) at [59]: "[59] A review of the authorities dealing with when a consent order can be set aside can be found in the recent Appeal Panel cases of Prenc v Stojcevski [2016] NSWCATAP 244 at [43]-[45], [53]-[57] and Yuen v Thom [2016] NSWCATAP 243 at [36]-[54]. From those cases, the following principles can be discerned (omitting authorities): (1) At common law, a consent order may be set aside on the same basis as the underlying agreement may be set aside; (2) Whether the agreement constituting the compromise can be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence and the like; (3) In order to set aside a consent order on one of the above bases, it must be possible to point to some contumelious conduct on behalf of the respondent for instance: (a) with respect to duress, it must be shown that illegitimate pressure was placed on the appellant such that there was no reasonable alternative but for her to submit; (b) with respect to undue influence, not only must there be a source of power to deprive the other person of free and voluntary consent, but it must be shown that the agreement was the result of the actual influence; (4) With respect to mistake: (i) the misapprehension must arise in relation to a fact, law or circumstances that affects the substance of an obligation or the mistaken party's motives for entering into the contract; (ii) a common mistake arises when the mistaken belief is held by both parties; (iii) a unilateral mistake is where one party is mistaken but where there are no other vitiating circumstances, such as misleading or deceptive conduct, fraud or misrepresentation, a unilateral mistake will not generally constitute a basis for setting aside an agreement unless the mistake is a serious mistake in relation to a fundamental term of the agreement and the other party knew of, or contributed to, the mistake. (5) With respect to other doctrines which may be applicable, such as unconscionable dealing, it must be shown that one party to the transaction was at a special disadvantage in dealing with the other party because of illness, ignorance, inexperience, impaired faculties, financial need or other circumstances that affect their ability to conserve their own interests, and the other party takes unconscientious advantage of the opportunity. It must be emphasised that the disadvantage must be "special" to disavow any suggestion that the principle applies whenever there is some inequality of bargaining power between the parties. What must be present is some disabling condition or circumstance which seriously affects the ability of the innocent party to make a judgment in their own interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party. (6) There may be other factors which arise such as non est factum which defence would arise in very limited circumstances to persons who, through circumstances such as blindness or illiteracy, are unable to have any understanding of the meaning of the document evidencing the agreement and who signed it in the belief it was radically different to what was in fact signed."
We also note that Rule 37 of the NCAT Rules requires the Tribunal, in deciding whether to give effect to a settlement, to take into account the interests of a "vulnerable person" as that term is defined, namely, a person who is totally or partially incapable of representing themself in proceedings before the Tribunal because of a disability. Mr Li does not submit that he is such a person and there is no evidence to suggest that he suffers from a disability.
Inventbuild has stated that the agreement it made in respect of the money order should be overturned as it was misled into believing that a settlement would achieve a better result than a determination through a hearing.
The evidence of both Mr Li and Mr Tulemis is that on the day in the question, 22 November 2023, the application came before the Tribunal for final hearing. Directions had previously been made by the Tribunal for the filing and serving of evidence, including expert reports, and submissions and the parties had complied with those directions. Mr Tulemis attended the hearing with his wife and expert witness. Mr Li attended on behalf of Inventbuild. The expert who had provided a report in the proceedings for Inventbuild did not attend.
Mr Li states that shortly after the commencement of the hearing the Tribunal Member stated that he would give the parties an opportunity to hold discussions in an attempt to resolve their dispute. Mr Li, Mr Tulemis, his wife and the expert then went to a conciliation room where they engaged in some discussions. After a time the Tribunal Member came to the room and, in an informal way, assisted with the negotiations between the parties. The evidence of both Mr Li and Mr Tulemis is that one of the matters raised by the Tribunal Member was that, if the matter proceeded to a formal hearing, each party would incur further costs and may not get a favourable result. Ultimately, the parties reached the agreement as set out above and the agreement was reflected in the orders made by the Tribunal.
Mr Li stated that he was stressed by the litigation and that he was outnumbered in the room, felt backed into a corner and therefore agreed to the settlement. However, he stated that the Tribunal Member informed both parties of the risks they may encounter in proceeding to hearing. He also acknowledged that he was aware that the matter would proceed to a hearing if the parties did not reach an agreement.
We accept that Mr Li may have been stressed by the Tribunal proceedings and the claim made against the company by Mr Tulemis. However, his own evidence at the appeal was that the settlement negotiations were undertaken informally, that the Member alerted both parties to the risks of proceeding to a hearing in that each may not obtain the result they sought and that both parties were aware that a hearing would be held if the parties failed to settle. There is no evidence before us that illegitimate pressure was placed upon Mr Li to settle or that he was misled or that he entered into the agreement through some misunderstanding or mistake. Indeed, there is no evidence that the agreement between the parties as to the money order was made in any of the circumstances specified in McDonald at [59].
It follows that the appellant has not established that the Tribunal made an error of law in conducting the hearing or making the money order and accordingly the appeal on this ground is dismissed.

Leave to appeal

There is also no basis upon which Inventbuild might be given leave to appeal to seek to set aside the consent orders. It cannot be said that the making of the consent orders was not fair and equitable or against the weight of evidence. Accordingly leave to appeal must be refused.

Orders

We make the following orders: 1. leave to appeal is refused; 2. the appeal is otherwise dismissed.

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 April 2024

At a glance

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Judgment (10 paragraphs)

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Cases Cited (9)

Cited By (3)