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[2026] NSWCA 188
respondent. Application for leave to appeal refused with costs.
The Court of Appeal agreed that the trial judge should have dealt with the repair-cost and interest claims. But that did not mean the applicant would have succeeded on either claim or that an appeal was justified. The repair invoices had serious problems connecting the claimed work to damage caused after the negligence began, and in showing the reasonable cost of repairing that damage. The interest claim had not been abandoned, but it was not properly quantified for the appeal. The amounts were modest, and the applicant gave no explanation for not asking the trial judge to correct or complete the judgment under UCPR r 36.16. The Court therefore refused leave to appeal and ordered costs.
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John Goubran & Associates Pty Ltd owned Apartment 7 in a strata building, and The Owners – Strata Plan 57150 was the owners corporation. The apartment sustained water ingress. The identified causes were a failed waterproofing membrane on the balcony of Apartment 12, directly above Apartment 7, and faulty flashing above Apartment 7’s external window. Both were common property for which the owners corporation was responsible [1], [3].
The applicant noticed water ingress from about September 2021 and notified the owners corporation that cracks had appeared on 21 November 2021 [3]-[4]. On 1 March 2022, its director, Mr Goubran, emailed that carpets and the kitchen had to be removed because of water damage [6]. A report supplied on 4 April 2022 identified water penetration and cracking in Apartment 7 and associated that cracking with the failed balcony waterproofing [7].
The case at trial was not that the owners corporation had negligently caused the waterproofing or flashing to fail. The pleaded and found negligence concerned delay: failing to take steps to rectify the causes of the ingress urgently after receiving notice [12]. The primary judge found that a reasonable owners corporation would have engaged qualified and licensed tradespeople within a fortnight after 4 April 2022, with the work capable of completion by about 14 May 2022 [13]-[14].
The District Court awarded $61,880 in lost rent for the period from 14 May 2022 to 23 January 2024 [15]. The applicant had also claimed $17,061 for work described in two invoices, including replacing cornice, removing carpet, repainting the apartment and installing laminate flooring [9]-[10]. The primary judge did not determine that repair-cost claim, mistakenly stating that it had not been pursued [18]-[19]. The judge also did not address the pleaded claim for interest [20]-[29].
The applicant sought leave to appeal on the basis that both omissions were errors. The Court of Appeal agreed that they were errors, but refused leave with costs [2], [72]-[74]. The liability findings in the negligence claim, and the rejection of the separate statutory claim as time-barred, were not under appeal [11].
The Court began from the discretionary nature of leave to appeal. The applicant did not argue that the proposed appeal raised a question of principle or public importance. Its case was that the failure to determine two claims amounted to a reasonably clear injustice [35]-[36]. The Court accepted that a judgment which omits a claim can involve error, but said error alone does not establish the injustice needed to justify leave. Whether the claim would have succeeded matters, as do the amount at stake and the practical value and proportionality of appellate review [39]-[42].
The proposed appeal concerned relatively small amounts. The repair invoices totalled $17,061. The interest claim was unquantified but, the Court reasoned, would likely be lower than the amount pleaded because the judgment sum was substantially less than the amount originally claimed [30]-[32]. The combined disputed amount was estimated at about $30,000, well below the $100,000 threshold for an appeal as of right under District Court Act 1973 (NSW) s 127(2)(c) [32]-[33]. The Court treated the monetary amount as a powerful, though not conclusive, factor [41].
A central consideration was the applicant’s failure to apply to the primary judge under UCPR r 36.16 to set aside or vary the judgment. The Court explained that the rule is not a way to reargue matters already decided. But it can be apt where a judge has misunderstood that a claim was not pressed or has overlooked a claim that was pressed [43]-[45]. The primary judge would already know the case and could decide whether the claim had been advanced and, if so, determine it. By contrast, appellate proceedings can require substantial preparation and public resources, and the Court of Appeal may not be in a position to decide the omitted claim itself [46]-[50].
The applicant knew by 2 March 2026 that there had been some type of error, within the 14-day period specified in r 36.16(3A), but did not provide an explanation for not applying to the primary judge [53]-[55]. The Court said that this failure and the lack of explanation weighed heavily against leave [55].
The repair-cost claim had additional evidentiary and causation problems. The breach found at trial could not have caused damage that had already occurred before the breach began. The March 2022 email reported removal of the carpets and kitchen before the earliest possible breach date of 18 April 2022. The applicant had not shown what relevant damage occurred after that date [57]. The invoices also did not reliably quantify a recoverable repair. The first did not separately itemise the costs of its different items. The second charged for laminate flooring, acoustic underlay and levelling, rather than a like-for-like carpet replacement, and did not separately identify the cost of replacing carpet [59]. The evidence did not show that repainting the whole apartment was necessary because of the water ingress [60]. The Court therefore held that the omission did not establish a reasonably clear injustice warranting leave on the repair issue [61].
The interest claim was in a different position on whether it had been abandoned. The statement of claim expressly sought a fixed amount for interest, and the Court read the pleading as a claim for statutory interest under Civil Procedure Act 2005 (NSW) s 100. The lack of mention in submissions did not establish abandonment, and the judge’s reasons suggested that the claim had been overlooked [21]-[29]. Nonetheless, the applicant’s own presentation contributed to the omission, the sum was small, and the applicant failed to provide a figure for interest calculated on the judgment actually obtained [66]-[71]. That lack of quantification mattered because the applicant was seeking a final appellate resolution, rather than an order likely to require further calculation and expense.
The judgment does not announce a new statutory test for leave to appeal. It restates and applies the existing approach described in Weston Energy and Cheng: a grant of leave generally involves an issue of principle, a question of public importance or a reasonably clear injustice going beyond something merely arguable [35]. The Court emphasised that this formulation is not a statute or a set of rigid criteria. The factors are important, but neither exhaustive nor necessarily determinative. The ultimate question remains the interests of justice in the particular case [38]-[39].
The judgment’s practical contribution is its treatment of a first-instance omission. It identifies an application under UCPR r 36.16 as a potentially more proportionate way to address a claim that was overlooked or mistakenly treated as abandoned. An unexplained failure to use that procedure may affect whether the omission amounts to a sufficiently clear injustice and whether appellate intervention is justified [43]-[50]. The decision does not say that failure to apply under r 36.16 automatically bars leave. It says that the failure, and any explanation for it, can be relevant and may weigh heavily in the particular circumstances [46], [50], [55].
The Court also places the leave decision in the context of proportionality. It refers to Civil Procedure Act 2005 (NSW) s 60, which requires court practice and procedure to be implemented with the object of resolving issues at a cost proportionate to their importance and complexity [38]. It treats the small sum as significant, particularly where a less costly means of correcting the omission had been available [41]-[42].
On negligence, the judgment does not alter the governing law. It applies the trial judge’s unchallenged finding about when the breach began to the claimed losses. On those findings, negligence could not have caused damage already sustained before the breach [57]. The Court likewise does not decide any new rule about the strata legislation or authorisation for works. It expressly leaves that issue unresolved [62].
At [39], the Court says that even a judgment involving reasonably clear injustice does not automatically justify leave. In plain English, identifying an error is only part of the inquiry. The court still considers the nature of the problem, the amount at stake, how it could have been corrected and whether an appeal is a proportionate use of resources.
At [40], the Court observes that “the mere fact that a claim should have been determined says nothing about whether it would have succeeded”. This is central to the repair claim. The trial judge’s omission was accepted, but the applicant still had to show that the omitted claim had sufficient substance to make appellate intervention just.
At [45], the Court explains that r 36.16 can be appropriate where a judge has misunderstood that a claim was not pressed or has overlooked a claim that was pressed. In plain English, the rule can provide a route for asking the original judge to deal with an issue that was missed, rather than asking an appeal court to reconstruct the issue.
At [48]-[49], the Court contrasts the primary judge’s familiarity with the proceeding against the appellate court’s need to start from the record and prepared appeal materials. It also highlights the burden on the other party and on public resources. This explains why procedural efficiency formed part of the interests-of-justice analysis, rather than being merely a matter of convenience.
At [57], the Court states that negligence from 18 April 2022 could not have caused loss claimed for an earlier period. In plain English, a claimant needs to connect the particular loss to the period of negligence found. Earlier water damage may have existed, but the negligence found at trial was delay in remediation after notice, not causing the original failure.
At [59]-[60], the Court identifies problems with the invoices as evidence of loss. In plain English, an invoice for broader or upgraded work does not, without more, establish the reasonable cost of restoring the specific damaged item. The Court noted the absence of separate pricing, the change from carpet to laminate, and the lack of evidence that repainting the whole apartment was necessary.
At [70], the Court says it was incumbent on the applicant to quantify interest so the issue could be finally resolved without further wasted time and costs. The plain-English point is that a party seeking a final appellate remedy needs to put the calculation in a form that enables the court to decide what amount, if any, is sought.
The decision is most directly relevant where a party seeks leave to appeal because a primary judge failed to decide a pleaded or otherwise properly advanced claim. It is particularly pertinent where the omission appears to result from oversight or a misunderstanding about whether the claim was pressed, rather than an adverse decision on the merits [43]-[46].
It will also be relevant where the party knew of the omission soon after judgment, had a procedural avenue to ask the primary judge to set aside or vary the judgment, but did not use it or cannot explain why [50]-[55]. The judgment does not establish a universal rule that r 36.16 must always be used before leave can be sought. Instead, it identifies the availability of that remedy, its likely efficiency and the explanation for not using it as factors in the discretionary assessment.
The financial scale and practical resolvability of the proposed appeal are also important. Here, the amount was far below the statutory threshold for an appeal as of right, and the Court considered that the interest claim could have been calculated or agreed without a substantial appellate hearing [30]-[33], [64], [69]-[71].
For a damages claim, the decision illustrates the importance of linking the loss to the breach date and proving its amount. The repair claim faced difficulty because reported damage pre-dated the found breach, while the invoices did not separate potentially recoverable costs or establish like-for-like repair work [57]-[60]. These observations arose from the particular evidence and findings in this case, not from a general determination about all repair claims or all strata disputes.
The judgment itself contains no later judicial treatment of this decision. It is dated 9 September 2026, and the material provided includes no subsequent decisions discussing or applying it. Its future treatment therefore cannot be assessed from this source.
The judgment does identify the earlier authorities on which its reasoning drew. It cites Weston Energy and Cheng for the familiar leave-to-appeal formulation [35]. It relies on Mohareb for the proposition that the usual factors are not exhaustive or necessarily determinative, and that the interests of justice remain the ultimate question [38]-[39]. It refers to Be Financial for the relative character of injustice and the relevance of proportionality [40], and Johnson v Mackinnon (No 2) for the limited, finality-sensitive use of r 36.16 [44].
The Court mentions Owners – Strata Plan 32735 v Lesley-Swan because the respondent relied on it in relation to authorisation under strata legislation. However, the Court did not decide whether that authority or the statutory provisions affected the applicant’s negligence claim. It expressly left the point unresolved [62]. Accordingly, the judgment should not be described as adopting a rule on the recoverability of unauthorised strata works.
The Court did not determine whether the Strata Schemes Management Act 2015 (NSW) required the applicant to obtain authorisation before undertaking the works, or what consequence the absence of authorisation would have for a negligence claim [62]. The respondent’s argument relied on a decision concerning rights under an earlier strata statute, and the precise principle said to affect tort recovery was not developed in argument.
The Court also did not decide the amount of interest that would have been payable under s 100. It accepted that the claim had not been abandoned and had been overlooked, but the applicant had not provided a calculation based on the judgment sum and the different dates on which rent would have been lost [28], [69]-[70]. Nor did the Court decide whether interest would ultimately have been awarded, given that the statutory power is discretionary [64].
Finally, the judgment does not establish a fixed consequence for a failure to apply under r 36.16. It treats the omission, together with the absence of an explanation, as a significant factor in this particular leave application [46], [50], [55]. How much weight that factor carries in another case would depend on the circumstances, including the nature of the omitted issue, the timing and availability of the procedural remedy, the explanation for not using it, the amount at stake and the practical utility of an appeal.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on or relying on this analysis, have a qualified Australian lawyer check it.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: John Goubran & Associates Pty Ltd v The Owners – Strata Plan 57150 [2026] NSWCA 188
Hearing dates: 31 August 2026
Date of orders: 09 September 2026
Decision date: 09 September 2026
Before: McHugh JA at [1]
Free JA at [73]
Price AJA at [74]
Decision: Application for leave to appeal refused with costs.
Catchwords: APPEALS – Leave to appeal – whether primary judge erred by failing to address claims for the cost of repairs and interest – primary judge erred in failing to address each claim – claim for the cost of repairs faces basic problems – small quantum in dispute –failure to apply to the primary judge under UCPR r 36.16 to set aside or vary judgment – primary judge’s omission contributed to by the applicant – leave to appeal refused
Legislation Cited: Civil Procedure Act 2005 (NSW), ss 60, 100
District Court Act 1973 (NSW), s 127
Strata Schemes Management Act 2015 (NSW), s 106
Uniform Civil Procedure Rules (2005) (NSW), rr 36.16, 36.17
Cases Cited: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164
Cheng v Motor Yacht Sales Australia Pty Ltd t/a Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118
Johnson v Mackinnon (No 2) [2022] NSWCA 22
Mohareb v Local Court of New South Wales [2024] NSWCA 235
Owners – Strata Plan 32735 v Lesley-Swan [2012] NSWSC 383; (2012) 1 STR (NSW) 545
Weston Energy Pty Ltd v National Ceramic Industries Australia Pty Ltd [2026] NSWCA 7; (2026) 400 FLR 323
Category: Principal judgment
Parties: John Goubran & Associates Pty Ltd (Applicant)
The Owners – Strata Plan 57150 (Respondent)
Representation: Counsel:
R McCaw (Applicant)
M Forgacs (Respondent)
Solicitors:
Shohmelian Legal (Applicant)
Bannermans Lawyers (Respondent)
File Number(s): 2026/120480
Publication restriction: Nil
Mc****HUGH JA**:** John Goubran & Associates Pty Ltd (the applicant) owns apartment number 7 (Apartment 7) in a four-storey apartment building in Burwood for which the respondent is the owners corporation. In the District Court of New South Wales, the applicant successfully sued the respondent in respect of damage alleged to have been suffered in relation to the ingress of water into Apartment 7: John Goubran & Associates Pty Ltd ACN 070 974 819 v The Owners – Strata Plan 57150 (PJ). However, the applicant complains that the primary judge, Cole DCJ, did not address two elements of the applicant’s claim: a head of damage for the cost of repairs to the apartment (repairs claim), and a claim for interest (interest claim). The applicant seeks leave to appeal with respect to those issues.
The respondent concedes that her Honour erred in failing to address the repairs claim. For reasons that will be explained, her Honour also erred in failing to address the interest claim. However, in the circumstances described below, particularly given (a) the small amounts in issue; (b) the applicant’s unexplained failure to apply pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) rr 36.16 or 36.17 to set aside or vary the primary judgment in order for the primary judge to address either claim; and (c) basic difficulties with the repairs claim in light of her Honour’s other findings, leave to appeal should be refused.
From around September 2021, Mr John Goubran, a director of the applicant, noticed that there was water ingress into Apartment 7. This was ultimately found to have been caused by the failed waterproofing membrane of the balcony of apartment number 12 in the complex (Apartment 12), which was directly above Apartment 7, as well as faulty flashing above the external window of Apartment 7**.** Both were areas of common property for which the respondent was responsible.
Mr Goubran notified the respondent that cracks had appeared in Apartment 7 on 21 November 2021.
On or around 16 January 2022, the respondent engaged Landlay Consulting Group Pty Ltd to inspect Apartment 7 and to investigate the cause of the cracking. Landlay was also engaged to undertake an assessment of potential water penetration to all units within the building.
On 1 March 2022, Mr Goubran sent an email to the respondent which included the following: “please be advised today we had to remove the carpets and the kitchen due to water damage”.
On 4 April 2022, Landlay provided a report to the respondent which indicated that all of the balconies in the strata scheme needed to be re-waterproofed. Specifically as to Apartment 7, the Landlay report said that the apartment had suffered water penetration, causing water damage. The report referred to cracking throughout Apartment 7, including in the living room, kitchen and bedroom. The report said that the cracking had resulted from the failed waterproofing membrane of the balcony of Apartment 12.
After a protracted process which the primary judge recounted at PJ[40]-[56], remediation works to the apartment building carried out on behalf of the respondent reached practical completion on 18 December 2024, and Landlay issued a project completion report.
In the meantime, the applicant had engaged two contractors to carry out works to Apartment 7.
By an invoice dated 21 September 2023, one contractor charged the applicant $10,120 (including GST) for works described as follows:
“Remove and replace cove cornice due to water damage
Remove and dispose of carpet
Repaint complete unit”.
“Supply Install Kronoswiss Laminate: 12mm for whole unit includes trims matching colour …
Supply green acoustic underlay 5 stars
Supply install self-levelling ardit including prime”.
Relevantly for present purposes, in the proceedings in the District Court the applicant claimed two distinct heads of damage:
Loss of rent, on the basis that Apartment 7 had been rendered uninhabitable by reason of the water ingress.
The costs of the works that were the subject of the two invoices referred to above. The works were said to be repairs to parts of the apartment that had been damaged by the water ingress.
The applicant advanced two causes of action against the respondent: one under s 106(5) of the Strata Schemes Management Act 2015 (NSW) (SSMA), and the other in the tort of negligence. After a trial that proceeded over two days, the primary judge rejected the cause of action under the SSMA by reason of a time bar, but upheld the cause of action in negligence. There is no appeal against either conclusion in respect of liability.
Importantly, the negligence alleged (and found) was not with respect to the failure of the waterproofing or the flashing. Instead, the particulars of breach in the amended statement of claim all concerned a failure to take steps to rectify the causes of the water ingress “with urgency and without delay” once the respondent was on notice of the issue.
That was the negligence the primary judge found at PJ[86]:
“I have found that the owners corporation knew that the failed waterproofing of the balcony of No 12 and the faulty flashing above the external window of No 7 required remediation by, at the latest, 4 April 2022. A reasonable entity in the position of the owners corporation would have taken steps to engage a qualified and licensed person to undertake the waterproofing of the balcony to No 12 and the replacement of the flashing over the window to No 7 within a fortnight of 4 April 2022. The work could then have been completed by, say, 14 May 2022.”
The applicant’s claim for loss of rent at trial was put on the basis that Apartment 7 was unable to be leased from 14 December 2021 to 23 January 2024 (the latter date being the date from which the apartment had in fact been let). The primary judge found that, had there been no damage, Apartment 7 “could have been rented … over the whole period … from 14 May 2022 to 18 December 2024 (the date of the practical completion of the remediation works)”: PJ [90], [91]. The primary judge awarded damages for loss of rent for the period “from 14 May 2022 to 23 January 2024, a period of 88 weeks and two days. The total loss of rent is $61,880”: PJ[91]. Her Honour gave judgment in that sum.
Although her Honour did not say so in terms, she plainly reasoned that, in light of the date of the breach and the minimum period necessary to complete the waterproofing work, any loss of rent (i.e. any damage) suffered before 14 May 2022 was not recoverable. Any such damage could not have been caused by negligence on the part of the respondent. It is equally clear that her Honour reasoned that no loss of rent was suffered after 23 January 2024, because the apartment was tenanted from that date.
No challenge is sought to be made to her Honour’s reasoning in respect of the claim for loss of rent, including as to quantum. There is thus no challenge to the date from which the claim for loss of rent (i.e., the damage) ran, which was the date of breach.
As to the repairs claim, the primary judge said at PJ[85]: “Additional claims for the cost of the repairs to [Apartment 7] undertaken by the [applicant] and legal and expert costs were not pursued.”
The respondent accepts that this statement was mistaken, and that the failure to address the head of damages claimed for repair costs was an error.
The primary judge did not address any claim for interest. The applicant contends, but the respondent disputes, that this was an error.
Under the heading “Relief Claimed” in the amended statement of claim, the applicant sought the following orders:
“1 Judgment for the Plaintiff in the amount of $100,579.18
2 Interest in the amount of $14,031.91
3 Costs.”
Although there was no reference to the Civil Procedure Act 2005 (NSW) in order 2, the obvious basis on which to understand the words, “[i]nterest in the amount of $14,031.91”, is as a claim pursuant to s 100 of that Act for interest up to judgment.
However, the respondent points out that at pars 27 and 40 of the amended statement of claim, the applicant pleaded that it was entitled to recover from the respondent “damages … comprising of the following …” There followed, among other things, “a. loss of rent …”, “c. costs of the Repairs”, and “e. interest.” The respondent submits that this created confusion as to the basis upon which interest was claimed. Was it statutory interest pursuant to s 100, or a claim for damages based on a liability for interest actually incurred? If it was the latter, since there was no evidence to support the claim and no submission made to advance it, the claim would properly be understood (so the argument runs) to have been abandoned.
The respondent’s submission should be rejected. The amended statement of claim does not provide particulars of any such interest claimed by way of damages, and the respondent did not seek any further and better particulars of this aspect of pars 27 and 40. That being so, and in circumstances where the lion’s share of the damages claim was for loss of rent (as opposed to expenditure incurred), it is tolerably clear that the pleading was claiming statutory interest pursuant to s 100.
The interest claim was never expressly abandoned. On the other hand, as the respondent further points out, nothing was said about interest in any written or oral submissions made on behalf of the applicant. Moreover, in final oral submissions, the applicant’s counsel summarised its case as follows:
“Your Honour, what [the expert] has set out in terms of what he estimates for the costs of all these things, the rectification work and lost rent, is far higher than what the plaintiff has actually claimed. The plaintiff is not being greedy or even bold with respect to the quantum of damages it seeks, it’s merely seeking the costs of those works that it undertook in September 2023 and the lost rent that flowed from being unable to rent the property. Your Honour, unless I can assist your Honour further, those are the submissions for the plaintiff.”
Tcpt 11/11/2025 at 48.13-19.
In this Court, counsel for the respondent submitted: “In light of that statement and in the absence of any reference whatsoever to interest in either the written or the oral submissions, in my submission the trial judge was entitled to proceed on the basis that any claim for interest wasn’t being pressed and the failure to award interest doesn't amount to an error.”
One difficulty with that submission is that there is nothing in her Honour’s reasons to suggest that she was “proceed[ing] on the basis that any claim for interest wasn't being pressed”. It appears instead that the claim was simply overlooked. Another difficulty is that the applicant’s submission at trial quoted above was directed to “the quantum of damages it seeks”. Once the interest claim is understood as a claim under s 100, rather than a claim for damages, the applicant’s submission at trial about damages says nothing about the applicant’s claim for interest.
The interest claim was thus not abandoned. The primary judge’s failure to determine that claim was error.
However, as will be seen, the applicant’s failure to prosecute the interest claim in a clearer manner is relevant to the question whether to grant leave to appeal.
The maximum amount in issue on the appeal with respect to the repair costs is $17,061, being the total of the two invoices referred to above.
The amount in issue on the appeal with respect to the claim for interest up until judgment (which was given on 25 February 2026) was not quantified. But the figure is likely less than the $14,031.91 claimed in the amended statement of claim (which was filed on 14 July 2025). That was the figure claimed for interest in respect of the claimed judgment sum of $100,579.18. But the claimed $100,579.18 was substantially more than the amount the primary judge in fact awarded ($61,880). Even if the applicant succeeded on appeal in varying the judgment sum by the additional figure of $17,061 on account of the repairs claim, the total figure on which interest would be calculated would still be well below $100,579.18.
The total amount at issue on the appeal if leave were granted would thus be somewhere in the order of $30,000 — far below the threshold for an appeal as of right.
The applicant accordingly seeks leave to appeal, as it must in light of the $100,000 threshold in s 127(2)(c) of the District Court Act 197**3 (NSW).
The applicant wishes to advance one ground of appeal, contending that the primary judge erred by failing to address (and uphold) its claims for rectification costs and interest. Although there are distinct issues with respect to the two claims, there are also issues relevant to the application for leave to appeal which are common to both claims.
Section 127(2) of the District Court Act, like s 101(2) of the Supreme Court Act 1970 (NSW), does not specify any criteria by which the discretion to grant leave to appeal is to be exercised. But as the Chief Justice, giving the judgment of the Court, recently said in Weston Energy Pty Ltd v National Ceramic Industries Australia Pty Ltd [2026] NSWCA 7; (2026) 400 FLR 323 at [93] (quoting Cheng v Motor Yacht Sales Australia Pty Ltd t/a Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118 at [15]): “As has regularly been pointed out in decisions of this Court, a grant of leave to appeal generally requires the identification of an issue of principle, a question of public importance or a reasonably clear injustice going beyond something that is merely arguable …”.
In this case, the applicant does not suggest that there is any issue of principle or any question of public importance at stake. Instead, the applicant says that, in circumstances where it presented two claims (for repair costs and for interest) which were not determined by the primary judge, there has been a reasonably clear injustice going beyond something that is merely arguable, and that that injustice warrants the grant of leave to appeal.
Two points should be noted.
First, the familiar formulation referred to in Weston Energy should not be treated like a statute. As Kirk JA and I said in Mohareb v Local Court of New South Wales [2024] NSWCA 235, after referring to cases adopting substantially the same formulation as that in Weston Energy:
“[25] … It is commonly sufficient to refer to those factors in deciding whether to grant leave to appeal. But as is implicit in the use of “usually” and “generally”, whilst those factors are important they are neither exhaustive nor necessarily determinative. Thus this Court has also said, for example, that “leave should be granted only where there are substantial reasons to allow an appellate review … such as where there is an error of principle which, if uncorrected, will result in substantial injustice”: Collier v Lancer (No 2) [2013] NSWCA 186 at [7] (citations omitted); see also Rodi v Gelonesi [2012] NSWCA 424 at [24]; DEF v Trappett [2017] NSWCA 163 at [25].
[26] There are no “rigid and exhaustive criteria” as the “circumstances of different cases are infinitely various”: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 177. The ultimate issue is the interests of justice, taking into account both the circumstances of the particular case and broader interests in resolving matters of public importance and clarifying the law. A range of considerations may be relevant.
[27] For example, it has often been said that particular caution is called for in granting leave to appeal a decision pertaining to practice and procedure: eg Adam P Brown at 177; PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 at [3].
[28] As with any exercise of a discretionary power by a court, the utility of what is sought may be significant.
[29] The Court has also been cautious about granting leave to appeal where only small monetary sums are involved: see eg Daily Examiner Pty Ltd v Mundine [2011] NSWCA 126 at [4]-[5]; Rodi at [25]; Toth v State of New South Wales [2022] NSWCA 185 at [6]-[14]. The Court said the following in Toth:
[14] Leaving aside cases raising issues of principle or public importance, it will be rare that justice will require that an application for leave to appeal involving a small amount will merit the expenditure and use of resources in having an appeal determined by this Court.
[30] As referred to in Toth at [9], s 60 of the Civil Procedure Act 2005 (NSW) may be relevant. It requires that “the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute”.
[31] More broadly, the matters addressed in ss 56-58 of the Civil Procedure Act may also be pertinent. …”
It follows that even in cases where it can be said that the judgment or order from which leave to appeal is sought gave rise to a reasonably clear injustice, it does not automatically follow that leave will be granted. Other factors may militate against the grant of leave, and may be determinative in a particular case.
Secondly, the existence of error of the kind which occurred in this case will not necessarily amount to an injustice for present purposes in any event. Partly that is because the mere fact that a claim should have been determined says nothing about whether it would have succeeded (a matter which, as will be seen, is highly relevant to the repairs claim here). But it is also because, as Basten JA said in Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164, in the course of a much quoted passage at [36]-[39], in this context “questions of injustice are relative”. Particularly relevant for present purposes are his Honour’s observations about the role of s 60 of the Civil Procedure Act in that context. That provision’s emphasis on the proportionality of costs “has an important operation in respect of leave applications involving amounts below the statutory threshold”.
The amount in issue on the proposed appeal is small. As the Chief Justice said in Weston Energy at [93]: “The monetary amount at stake is a key factor in determining whether to grant leave to appeal.” Although not determinative on its own, it is a powerful factor in the circumstances.
The small amount at stake has particular significance in this case because of the issue addressed under the next heading. There was an avenue open to the applicant (an application to vary or set aside the judgment pursuant to UCPR r 36.16) which would have saved the parties the additional costs of a concurrent hearing in the Court of Appeal. While it is true that those costs have now been incurred, that fact does not diminish their significance for the question of leave to appeal.
36.16 Further power to set aside or vary judgment or order
(1) The Court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.
…
(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.
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The power in r 36.16 is, unfortunately, sometimes invoked by disappointed litigants wanting to relitigate the same issues that have been determined adversely to them. That misconceives the purpose of the power, which is not to invite judges to change their mind about issues that have already been decided. The public interest in maintaining the finality of litigation means that the power is to be exercised only in special circumstances: see Johnson v Mackinnon (No 2) [2022] NSWCA 22 at [5].
However, among the clearest occasions of special circumstances calling for the exercise of the r 36.16 power are cases where the Court has positively misunderstood that a claim was not pressed (which is the applicant’s submission as to the repairs claim here), or overlooked an issue which was pressed (which is the applicant’s submission as to its claim for interest).
Where an applicant for leave to appeal complains that the primary judge failed to address a claim that was properly before the Court, the assessment of the degree of any injustice suffered at first instance and whether that injustice requires appellate intervention may be affected by the applicant’s failure to apply pursuant to r 36.16 (or, if applicable, the slip rule in r 36.17). That is because any injustice at first instance might well have been remedied if the applicant had applied to the primary judge to set aside or vary the judgment. Much may turn on the reason, if any, why no such application was made.
One obvious practical advantage of taking up with the primary judge a claim which should have been but was not determined is that the primary judge will have an intimate knowledge of the matter, having already given judgment in it. The primary judge will be well placed to decide whether the claim was in fact pressed and, if it was, to adjudicate upon it.
By contrast, an appellate bench will be starting from scratch as to all aspects of the case. Even if the Court of Appeal determines in an applicant’s favour that a primary judge should have determined a claim which remains unresolved, there are many reasons why the Court may not be in a position to adjudicate upon the claim itself. Even in cases where that is not so, the costs of getting up a proceeding in this Court, including the preparation of appeal books and submissions, will invariably be greater than the costs of a r 36.16 notice of motion. The effect is to impose a significant and unnecessary burden on a respondent who may have had no part in causing the error complained of.
There are also interests at stake beyond the parties’ private interests in resolving their dispute justly, quickly and cheaply. Even assuming that the judgment from which leave to appeal is sought involves error, another consideration relevant to the grant of leave concerns the efficiency and proportionality of the means adopted to remedy the error. If the proposed appeal would involve the unnecessary use of limited public resources by convening three judges of this Court to address a problem more efficiently taken up with a single judge at first instance, that is a strong reason for refusing leave.
In its written submissions on the appeal the respondent raised the applicant’s failure to apply to the primary judge to set aside or vary the judgment as a matter weighing against the grant of leave, but only with respect to the interest claim.
At the hearing of the appeal, the respondent expanded its reliance on the applicant’s failure to apply to the primary judge to set aside or vary the judgment. The respondent submitted that the failure was relevant not only with respect to the interest claim, but also with respect to the repairs claim.
The Court raised with counsel for the applicant whether it wished to advance any explanation for the applicant’s failure to apply pursuant to r 36.16. At first, counsel for the applicant suggested that the explanation might have been a delay in obtaining a transcript of the proceeding before the time limit in r 36.16 had passed.
However, after a short adjournment counsel very properly informed the Court: “… I need to just correct something that I put earlier, lest there be any doubt about the relevant timing of things. It’s clear that by 2 March the applicant was aware that there had been some type of error by the primary judge.” (Tcpt 31/8/2026, at 23.44) The primary judge gave judgment on 25 February 2026. The applicant’s awareness of error by 2 March 2026 was well within the 14 days provided by subrule (3A). Counsel’s statement as to the timing of events was thus an acceptance that any delay in obtaining the transcript (i) had not prevented the applicant from determining whether or not the primary judge had erred, and (ii) was therefore no explanation for the applicant’s failure to apply to the primary judge pursuant to r 36.16.
The applicant did not advance any other explanation for failing to apply to the primary judge pursuant to r 36.16 on account of either the repairs claim or the claim for interest. The application for leave to appeal should be determined on that basis. The failure to apply pursuant to r 36.16 and the absence of explanation weigh heavily against the grant of leave to appeal in this case.
There are several basic problems with the applicant’s repairs claim.
On the primary judge’s findings, there was no negligence before, at the earliest, 18 April 2022. However, Mr Goubran’s email of 1 March 2022 (“please be advised today we had to remove the carpets and the kitchen due to water damage”) made clear that the damage to the carpets in the kitchen had already occurred, well before the breach date. The applicant’s claim in negligence for damages in respect of any such damage suffered before the date of breach was therefore not maintainable, just as the applicant’s claim for loss of rent in respect of the period from 14 December 2021 up until the earliest breach date of 18 April 2022 also failed. The negligence on and from 18 April 2022 simply could not have caused the loss claimed before that date. At the very least, the applicant here failed to show what, if any, damage to the kitchen or the carpets occurred after the breach date. On that basis, the claim for repair costs fails at the threshold.
Secondly, even if the applicant had been able to establish that the respondent’s negligence had caused the applicant loss, the respondent submitted that what the invoices disclosed was not repairs but a renovation. There may be some force in that submission. But whether or not the works carried out amounted to a renovation, the mismatches between the damage claimed and the works disclosed in the invoices present insuperable hurdles to using the invoices to quantify any loss.
While it may have been open to the applicant to establish the quantum of any damages in respect of the kitchen or carpets or other parts of the apartment by proving the reasonable cost of replacing each item of damaged property “like-for-like”, the invoices on which it relied largely failed to do so. As to the 21 September 2023 invoice, the separate costs of the various items were not itemised. It follows that if any aspect of the work identified in the invoice is not recoverable, it would be difficult, if not impossible, to determine the cost of any other aspect of the work that might have been recoverable. As to the 19 September 2023 invoice, installing a hardwood floor, involving acoustic underlay and the need to level the floor, was not a like-for-like replacement of carpet. There was no attempt separately to identify the costs of replacing the carpet, or to show that hardwood floor was required in mitigation of loss.
Similarly, the evidence did not establish that the water ingress had made it necessary to “[r]epaint complete unit”, as opposed to some parts of it. It follows that even if the cost of repainting the complete unit had been separately itemised in the invoice, it still would not be possible to quantify any recoverable loss with respect to the cost of painting by reference to the invoice.
All that being so, and given both the small value of the repairs claim and the applicant’s unexplained failure to apply to the primary judge pursuant to r 36.16, the applicant cannot establish a reasonably clear injustice going beyond what is merely arguable arising out of the primary judge’s error in failing to address the repairs claim. Leave to appeal should not be granted with respect to that issue.
The position is less straightforward in respect of the claim for interest.
The principal reasons in favour of the applicant’s assertion that the primary judge’s failure to adjudicate that claim gave rise to a reasonably clear injustice are as follows.
The claim was not abandoned, and the failure to address it was an error.
Although the power to award pre-judgment interest pursuant to s 100 is discretionary, the respondent did not advance any reason why the primary judge would not have awarded interest if she had adjudicated the issue.
Counsel for the respondent accepted that there should be no difficulty in calculating the appropriate figure for interest. No question of evidence would arise and the matter could be dealt with in this Court on the basis of a figure agreed between the parties.
In the circumstances of this case, leave to appeal should nevertheless be refused.
First, although the interest claim was not abandoned, the applicant must bear some responsibility for the primary judge’s error in overlooking the claim. Not only did the applicant’s submissions make no mention of that claim, what was said in closing address about the modesty of the applicant’s claim (quoted at [25] above) had the tendency to distract attention away from any claim not expressly referred to — including the claim for interest.
Secondly, the amount in issue is small. As explained above, that weighs heavily against the grant of leave.
Thirdly, the unexplained failure to apply to the primary judge pursuant to r 36.16 to set aside or vary the judgment is particularly significant. The second and third reasons noted above in support of the proposition that the applicant has suffered a reasonably clear injustice (i.e., the absence of any reason not to award interest, and the ease of calculating the figure) are both strong reasons why an application to the primary judge should have been pursued. In those circumstances, a r 36.16 application may easily have been determined on the papers by the primary judge. Instead, there has been a concurrent hearing in this Court of oral argument with respect to leave to appeal and the appeal itself (were leave to be granted).
Fourthly, the applicant did not put before this Court what the figure for s 100 interest should be in the event that its repairs claim failed but its interest claim succeeded. That would require the calculation of interest on the loss of rent claim as it succeeded at trial, bearing in mind that the period over which interest would have to be calculated would be different for each lost payment of rent. That should be a mechanical exercise, and it may well be that the figure could be agreed between the parties, as the respondent fairly accepted. But agreement is not certain. And even if the figure were agreed, the process of checking figures and reaching agreement would necessarily involve the incurring of further costs on both sides.
“The parties should be in a position to address the Court as to all matters necessary for the Court to determine for itself, if possible, all issues concerning liability and quantification of the claim for rectification costs and interest.”
Notwithstanding the conclusion reached above that the primary judge erred in failing to adjudicate both the repairs claim and the interest claim, the order I propose is:
Application for leave to appeal refused with costs.
FREE JA: I agree with McHugh JA.
PRICE AJA: I agree with McHugh JA.
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John Goubran & Associates Pty Ltd
The Owners – Strata Plan 57150
(2022) 108 NSWLR 342
(2026) 400 FLR 323
(1981) 148 CLR 170
Application for leave to appeal refused with costs.
It follows that where an applicant for leave to appeal complains that the primary judge failed to address a claim that was pressed by reason of a misunderstanding or oversight, the question whether such error gives rise to a reasonably clear injustice, and the broader question whether to grant leave, may well fall to be answered in light of (i) any failure on the part of the applicant to apply pursuant to r 36.16 to have the judgment or order set aside or varied, and (ii) any explanation for so failing.
Finally, it should be noted that the respondent submitted that various provisions of the SSMA required the applicant to obtain the respondent’s authorisation before carrying out much of the work referred to in the two invoices, and that in the absence of authorisation the amounts expended in carrying out the work were not recoverable in the tort of negligence. The precise reason why that might be so as a matter of principle was not explored in argument. The respondent relied on *Owners – Strata Plan 32735 v Lesley-*Swan [2012] NSWSC 383; (2012) 1 STR (NSW) 545, especially at [165] and [196]. But, as the respondent frankly acknowledged, that was a case concerned with rights arising under the Strata Schemes Management Act 1996 (NSW), rather than in the tort of negligence. It is not necessary to determine this issue, and it is preferable not to do so in the circumstances.
The applicant was seeking leave to appeal in circumstances where the amount of interest in dispute was small and far below the $100,000 threshold set by s 127(2)(c) of the District Court Act. The applicant was seeking to have the Court grant leave and make an award of interest on rehearing. In the circumstances it was incumbent on the applicant to quantify the claim for interest in a way which would allow the issue to be resolved on a final basis without further time and costs being wasted. The applicant failed to do so, notwithstanding that the Court had written to the parties in advance of the hearing specifically advising as follows: