Jankovic v Chandershekar

Grounds of Appeal

1. The builder's grounds of appeal contend that the decision in relation to costs involved an error of law in that there was a failure to afford the builder procedural fairness. The question of costs should have been reserved as submitted on behalf of the builder so the parties could have an opportunity to present all relevant evidence, in accordance with the course adopted by the Tribunal on two previous occasions when hearing dates were vacated for the benefit of the owners.
2. The builder contended that if order 12 does not involve an error of law, leave to appeal should be granted on the basis that the builder may have suffered a substantial miscarriage of justice because the decision was not fair and equitable and significant new evidence has arisen that was not reasonably available at the time. That new evidence was identified to be an email dated 4 April 2016 to the owners' solicitor forwarding documents filed with the Tribunal on 1 April 2016.

Reply to Appeal

1. The owners' reply to the appeal contends that the Member had not made an error of law, and that leave to appeal should not be granted as the decision was reached in accordance with the legislation and rules and it is inappropriate to challenge the decision in circumstances where the matter has been listed for hearing.

The Appeal Hearing

1. At the appeal call over on 3 August 2017 directions were made for the builder to provide written submissions in support of the appeal by 10 August 2017, and for the owners to provide their written submissions in opposition to the appeal by 14 August 2017.
2. On 10 August 2017 the builder's representative provided written submissions and an affidavit sworn by Mr Jankov on 10 August 2017. On 15 August 2017 the builder's representative filed written submissions, an affidavit sworn by Mr Jankov on 15 August 2017, and a transcript of the hearing before the Member.
3. On 16 August 2017 the owners' representative provided written submissions and two affidavits sworn by Aanchal Kumar, a solicitor employed in the firm representing the owners, dated 16 August 2017, one of which annexed a copy of a transcript of the hearing. The owners' representative attempted to provide those documents by email to the Tribunal at 12.15pm, and provided hard copies for the Appeal Panel members at the beginning of the hearing at 2.15pm.
4. At the beginning of the hearing the Appeal Panel gave the parties an opportunity to discuss the issues, and encouraged them to consider whether they could reach an agreed resolution so as to avoid the incurring of further costs. That was not successful, and the hearing of the appeal proceeded.

Builder's submissions

1. The builder submits that the Member failed to afford procedural fairness by: 1. Failing to reserve the question of costs so that the builder could obtain evidence of service of the statement; 2. Failing to reserve the question of costs and require the builder to file an affidavit of explanation; 3. after not allowing the witness Wali Hakim to be interposed because a statement of what issues his evidence would be going to was not previously provided to the owners, failing to reserve the question of costs to allow the builder to provide evidence that the Tribunal had given leave for a summons to issue in circumstances where no directions were made or sought regarding the provision of such a statement prior to the hearing; 4. failing to allow the witness Wali Hakim to be interposed in circumstances where the owners' solicitors had advised that he was required for cross examination; and 5. failing to reserve the question of costs because the Member was not part heard and another member would be hearing the matter.
2. In support of the application for leave to appeal, the builder submitted that it was likely that costs would have been reserved had (1) the email of 4 April 2016, (2) correspondence regarding service of the schedule of evidence, and (3) the evidence generally in the affidavit of Mr Jankov, been available.
3. The builder's representative provided an affidavit sworn on 10 August 2017, in which he states: 1. On 1 April 2016 he filed documents with the Tribunal, and he served a copy of those documents on the owners' solicitor by email on 4 April 2016. The documents included a statement from the builder bearing the date 26 March 2016 which was not signed; 2. During the course of the proceedings he had corresponded with the various solicitors who have had conduct of the matter by email, using email address "admin@....", or the address of the solicitor he was dealing with. On 12 December 2016 he received a request from Mr Blaker that all communication be addressed to admin@..., which was the first time he was aware of any issue regarding the use of correct email addresses; 3. After the hearing commenced at 1pm he provided a copy of the builder's statement to counsel appearing for the owners. He was later able to locate a copy of the filing coversheet, and a copy of the statement was subsequently located on the Tribunal file; and 4. On returning to his office after the matter was adjourned he carried out a historical search of his emails and located the email serving the statement and other documents to the owners' solicitor on 4 April 2016.
4. In oral submissions on the appeal, Mr Jankov submitted that procedural fairness required that he should have been given an opportunity to provide an affidavit explaining why the statement he relied upon was not served. He submitted that in taking into account that he was not part heard, the Member took into account an irrelevant consideration because on the two previous occasions when the hearing was adjourned for the benefit of the owners, costs had been reserved. The denial of procedural fairness was said to be in not reserving costs. The issue was not that the owners had not received the statement, but that they had not received a signed copy.
5. Mr Jankov accepted that the proceedings had to be adjourned. He acknowledged that the two annexures referred to in the builder's statement were not served on the owners with the emailed statement, which he explained was because he was trying to comply with the direction that evidence be filed and served by 31 March 2016. The owners' representative prepared the court book, and he saw the schedule on the morning of the hearing; he accepted that a copy of the builder's statement was not in the court book.

Owners' submissions

1. The owners submit that the builder is required to establish that there was an error in the Member's exercise of the discretion to order costs. The builder's representative should have had the confirmation of service of the statement in the file at the hearing.
2. The owners rely on the second affidavit dated 16 August 2017 in which Aanchal Kumar states that she reviewed the office correspondence in relation to the matter and there is no record of the correspondence from Mr Jankov of 4 April 2016, nor any correspondence serving the builder's statement or the points of claim allegedly served on that date
3. In oral submissions the owners' representative accepted that counsel for the owners had put to the Member at the hearing that the builder's statement had not been served. It was submitted that the Member did not err in the exercise of discretion, and the builder's representative had seen the schedule of statement included in the court book and missed the fact that the builder's statement was not included.

Consideration

1. An award of costs in Tribunal proceedings is an ancillary decision as defined in s 4 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act). An internal appeal can be brought as of right on a question of law, and with the leave of the Tribunal on other grounds: s 80(2)(b) NCAT Act. For leave to be granted, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable, or was against the weight of evidence, or because significant new evidence has arisen being evidence that was not reasonably available at the time the proceedings were being dealt with: cl 12, Sch 4, NCAT Act. Further, even if an appellant satisfies the requirements of cl 12 of Sch 4, the Appeal Panel must still consider whether to exercise its discretion to grant leave to appeal: Collins v Urban [2014] NSWCATAP 17.

Whether there was an error of law

1. The builder contends that there was a denial of procedural fairness. If established, that would be an error of law: John Prendergast & Vanessa Prendergast v Western Murray Irrigation Limited [2014] NSWCATAP 69; Italiano v Carbone [2005] NSWCA 177.
2. As recorded by the Member in his reasons, the hearing did not start until 1.15pm, after the arrival of a Serbian interpreter. The transcripts provided indicate that the court book was tendered, and there was some discussion about whether evidence could properly be taken from Mr Hakim, who had not provided a statement and who had appeared under summons. Mr Jankov stated that he was relying on three statements from the builder, including one dated 27 March 2016. The builder's statement dated 27 March 2016 was not in the court book. Mr Jankov stated that he had had the builder re-sign the statement on 1 March 2017, and that he had served and filed it. Counsel for the owners stated that it had never been served. The Member stated that the matter would have to be adjourned, and counsel for the owners stated he would be asking for costs thrown away. Mr Jankov confirmed that he was relying on the statement, and the Member stated that he could not allow the hearing to go ahead without the other party having the full brief of statements relied upon. Mr Jankov confirmed that he understood that. The Member stated that he would have to adjourn the matter and costs thrown away by reason of the adjournment would need to be borne by the builder. Mr Jankov asked for costs to be reserved so he could substantiate what may or may not have gone wrong. The Member stated that if costs were reserved Mr Jankov would need to put on an affidavit. After further discussion between the Member and the parties' representatives as to which witnesses would need to be called, and how long an adjournment would need to be, the Member stated that he did not consider himself part heard. At that point Mr Jankov located the filing record for 1 April 2016 and the Member located the unsigned statement in the Tribunal file. The Member noted that half the day had been used by the parties to try and resolve the case and for the experts to meet, and the Tribunal had been unable to provide a Serbian interpreter until lunchtime, and that the owners had made out a case for 50% of their costs thrown away by reason of the adjournment.
3. Having regard to the transcript and the Member's reasons, the Appeal Panel is satisfied that there was no denial of procedural fairness. The builder's representative agreed that he had had the opportunity to see the schedule of documents in the court book in the morning and that the builder's statement was not included in the court book. He confirmed that he wished to rely on that statement, and agreed with the Member that in that case the hearing would have to be adjourned. The Member agreed with counsel for the owners that if he was not part heard, that was a reason why the costs issue should be dealt with on the day. In the circumstances where the Member took care to distinguish the time lost on the day because of the non-availability of a Serbian interpreter from the time lost because of the absence of the builder's statement, the likelihood that another member would hear the matter was not an irrelevant consideration. The builder's representative had the opportunity to make submissions that costs should be reserved in response to the Member's statement that the costs thrown away by reason of the adjournment would need to be borne by his client, and there was no denial of procedural fairness.
4. It was common ground that the amount in dispute in both proceedings, which include any interlocutory or ancillary steps in the proceedings (Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [37]), is above $30,000. As a consequence, rule 38 of the Civil and Administrative Tribunal Rules 2014 (the Rules) applies so that there is no requirement to establish special circumstances for there to be an award of costs under s 60 of the NCAT Act. The Tribunal Member in those circumstances had a general discretion in relation to the award of costs. The principles to be applied in considering whether a discretion has miscarried are set out in House v The King (1936) 55 CLR 499, at pp 504-505: It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. 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 result embodied in his order, but, if upon 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 reposes 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.
5. Mr Jankov's position at the hearing below was that he relied on the builder's statement dated 27 March 2016, and signed on 1 March 2017, as part of the builder's evidence. There was some dispute as to whether the unsigned version, without annexures, had been served on the owners. Mr Jankov accepted that the signed version, with annexures, had not been filed or served, and that he had not checked the court book in the morning to notice that it was not included. He accepted that the hearing could not proceed without the other party having the full brief of statements relied upon, and that the matter would have to be adjourned.
6. It is not necessary to resolve the issue of whether in fact the unsigned version of the statement had been served on the owners' representative in April 2016. The issue was whether, as contended by Mr Jankov, he should have been given an opportunity to substantiate that he had sent it. In our view, that would not have made a difference, as the owners had not been served with the signed statement and annexures. Mr Jankov accepted that in the absence of the signed statement in the court book, the hearing had to be adjourned. The Member's determination that the adjournment was made necessary by the builder's default and that as a consequence the builder was to pay a proportion of the owners' costs of the day by reason of that adjournment was a proper exercise of the discretion. The Member was not bound to reserve costs, even if that had occurred on the two previous adjournments. No error of the kind specified in House v R has been established.

Whether leave to appeal should be granted

1. The builder has not established an error of law. As noted above, in considering whether leave to appeal should be granted requires the builder to establish that he may have suffered a substantial miscarriage of justice for one of the reasons in cl 12 of Sch 4 to the NCAT Act. As explained in Collins v Urban at [76], that requires the Appeal Panel to be satisfied that there was a significant possibility, or a chance that was fairly open that a different or more favourable result would have been achieved had the relevant circumstance in paragraphs (a) or (b) not occurred or if the fresh evidence under paragraph (c) of cl12 had been before the Tribunal at first instance.
2. The builder relies on paragraph (c), which requires that the new evidence is significant, and that it was not reasonably available at the time the proceedings below were being heard. That is an objective test, and requires that the evidence be unavailable because no person could reasonably have obtained it; a party's incapacity to procure that evidence is not sufficient: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111. The email of 4 April 2016, as a document in the possession of the builder's representative, was not in our view evidence that no person could reasonably have obtained at the time.
3. The builder has not established that there was a failure in the way the matter was conducted or decided which deprived him of a chance that was fairly open of achieving a better outcome than occurred, such that there may have been a substantial miscarriage of justice under cl 12(1) of Sch 4 to the NCAT Act. That conclusion means that it is not necessary to consider whether in the exercise of discretion leave to appeal should be granted.
4. There being no error of law, and no grant of leave to appeal, the appeal must be dismissed.

Costs of the Appeal

1. The owners sought costs of the appeal in the event that they were successful. The builder opposed any order for costs of the appeal, on the basis that the owners had not complied with the directions for exchange of documents on the appeal, and had provided all their evidence and submissions on the day of the appeal hearing.
2. The appeal was lodged after 1 January 2016. The proceedings involve a claim for more than $30,000. Accordingly, by reason of rules 38A and 38 of the Rules, despite s 60(2) of the NCAT Act, the Appeal Panel has the discretion to award costs without needing to be satisfied there are special circumstances.
3. In considering whether the builder should be ordered to pay the owners' costs of the appeal, the appropriate starting point for the exercise of the discretion is the well-established position at common law; that is, that the purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, this means that a party who is successful is entitled to an order for costs in its favour: Latoudis v Casey [1990] 170 CLR 534; Oshlak v Richmond River Council [1998] HCA 11. However, as discussed by the Appeal Panel in Thomson v Chapman [2016] NSWCATAP 6 at [71], where there is a general discretion for costs there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party, and nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party.
4. In submissions opposing any costs order on the appeal, the builder relied on the late provision by the owners of their submissions and supporting affidavits. Based on an email to the Tribunal by the builder's representative on 15 August 2017, it appears that some of that delay may be attributable to the timing of the provision to the owners' representative of the sound recording, which he had received on 11 August 2017, on 14 August 2017. Neither party complied fully with the directions made on 3 August 2017. The builder did file written submissions and an affidavit on 10 August 2017, however supplementary submissions and further affidavit evidence was not filed until 15 August 2017. The owners did not provide their submissions and supporting affidavit until the day of the appeal hearing. A further factor in considering whether to order costs of the appeal is that the transcripts establish that counsel for the owners stated to the Member that the unsigned statement had not been received, and that the builder's representative had been sent a proposed index for the court book and invited to add his material to it. As noted above, there was some doubt as to the first statement, given the evidence of the builder's representative that the statement had been provided to the Tribunal and sent by email. As to the second point, email correspondence dated 28 June 2017 from the owners' representative to the builder's representative, annexed to Mr Jankov's affidavit of 15 August 2017, confirms his evidence that on the afternoon before the hearing he was asked to provide a list of statements on which he intended to rely, and the email did not include an index to the court book. We note that that sequence of events does not explain why Mr Jankov did not check the court book on the morning of the hearing to establish that the builder's statement of 27 March 2016 was not included, however it is relevant in considering the broader context of whether to award costs of the appeal.
5. In all of the circumstances we consider that each party bears some responsibility for the circumstances leading to this appeal and that accordingly there should be no order as to the costs of the appeal.

Orders The orders of the Appeal Panel are: 1. Leave to appeal refused. 2. Appeal dismissed. 3. No order as to costs.

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: 29 September 2017