What happened
Peter and Christine Kostas entered a standard-form home building contract with Sydney Construction Company Pty Ltd in August 1999 for renovation works at their Blakehurst residence, valued at $330,000 with a 30-week completion period. Clause 6 permitted the builder to claim extensions of time for specified delaying events by written notice within 10 working days, while cl 24 allowed the owners to issue default notices for suspension without reasonable cause, failure to proceed diligently or uncorrected defective work, followed by termination if not remedied within 10 working days. Clause 27 prescribed methods of service, including certified post or facsimile, with deemed receipt after three working days.
By early 2000 works were delayed. The builder sent two extension-of-time claims dated 31 March 2000 and 23 May 2000. The owners asserted they never received them. On 4 May 2000 and 12 May 2000 their solicitors sent default notices listing 42 incomplete items, suspension of work and lack of diligence. A termination notice followed on 29 June 2000. The builder's solicitors replied on 4 July 2000 treating the termination as repudiation.
The owners claimed under the home owners warranty insurance policy issued by HIA Insurance Services Pty Limited. Proceedings were commenced in the Fair Trading Tribunal (predecessor to the Consumer, Trader and Tenancy Tribunal) in September 2000. The builder was joined and cross-claimed. After multiple adjournments spanning more than four years, the parties agreed in November 2004 that the Tribunal would determine as a preliminary issue whether the owners had validly terminated the contract. Counsel indicated that only limited further evidence would be called; a tender bundle was provided but the builder's principal's affidavits (which asserted sending the claims but did not detail mode of service for the critical dates) were not read or tendered for this hearing. The owners filed submissions and excerpts of evidence they relied upon, expressly noting absence of proof of service.
On 25 May 2005 the Tribunal found the termination ineffective. It made a general adverse credibility finding against the owners, stating it would not accept their evidence unless corroborated. At [11] and [66] it concluded the extension claims had been "sent" and "validly served", that the owners had not disputed them as required, and that the completion date was therefore extended to the end of September 2000. On that footing the 4 May and 12 May default notices were premature. The 12 May notice was also defective for failing to specify the defects. The termination notice was therefore invalid and itself a repudiation. No reference was made to cl 27 service requirements or to the fact that the only documents in evidence were the unsigned claims themselves.
The owners appealed to the Supreme Court under s 67 of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW). Rothman J delivered judgment on 30 October 2007 after a further substantial delay. His Honour held that the Tribunal had decided questions with respect to matters of law, including the "no evidence" point. There was no material before the Tribunal capable of proving service in accordance with the contract. He set aside the Tribunal's orders, declared the termination lawful and effective, and remitted the balance of the claim.
HIA appealed to the Court of Appeal. On 16 September 2009 that Court (Spigelman CJ, Allsop P, Basten JA) allowed the appeal, holding that the primary judge lacked jurisdiction because the Tribunal had not decided any "question with respect to a matter of law". Basten JA in particular concluded at [137] that a "no evidence" ground, while available on judicial review, did not engage the statutory appeal. Special leave was granted by the High Court. On 29 September 2010 the High Court (French CJ; Hayne, Heydon, Crennan and Kiefel JJ) unanimously allowed the appeal, restored the primary judge's orders and held that the "no evidence" contention did raise an appealable question of law.
Why the court decided this way
The High Court reasoned that s 67(1) is not confined to expressly articulated questions of pure law. Both French CJ at [34] and the joint judgment at [10] emphasised that a "decision" for appeal purposes includes steps necessarily implicit in the Tribunal's reasoning. The Tribunal could not lawfully find service of the extension claims unless it first concluded that material before it was capable of supporting that finding. Whether any such material existed is quintessentially a question of law.
The Court drew on long-standing authority that absence of any evidence to support a factual finding constitutes an error of law. French CJ cited Australian Broadcasting Tribunal v Bond at [61]. The joint judgment at [90] quoted Dixon CJ in Gurnett v Macquarie Stevedoring Co Pty Ltd (No 2) and at [91] affirmed that a tribunal deciding a fact on "no evidence" makes an error of law. On the facts, the tender bundle contained only the bare claims; the builder's affidavits had not been tendered for the preliminary issue; there was no evidence of compliance with cl 27; and the owners' evidence was that they never received the documents. The Tribunal's positive finding of service at [11] and [66] therefore lacked any foundation in admissible material.
Both judgments rejected the Court of Appeal's narrower taxonomy of appeal provisions. French CJ at [39]-[43] distinguished the earlier Commercial Tribunal line of authority (including Kalokerinos) on the basis that those statutes required legally qualified chairmen and used more restrictive language. The phrase "with respect to a matter of law" is deliberately broad and can embrace mixed questions where law and fact are intertwined. The joint judgment at [84]-[89] cautioned against rigid categorisation, insisting that the statutory text must be the starting point.
Once jurisdiction was engaged, the Supreme Court could exercise ancillary powers under s 75A(6) of the Supreme Court Act 1970 (NSW). French CJ at [53]-[58] and the joint judgment at [9] accepted that the primary judge was entitled to examine the largely uncontradicted evidence already before the Tribunal, conclude that the builder had suspended works without reasonable cause and failed to proceed diligently, and determine that the default notices were effective and the termination lawful. This approach avoided further delay and cost, consistent with the Tribunal Act's objects in s 3 and the observations of Spigelman CJ in Thaina Town (cited at [54] and [56]).
The Court also noted at several points that the Tribunal is not bound by the rules of evidence yet must act rationally and observe procedural fairness. A finding on no information at all is incompatible with that obligation. The "no evidence" error here was not a mere factual disagreement but a legal threshold failure.
Before and after state of the law
Before Kostas, New South Wales authority on s 67 and its predecessors was unsettled and often narrow. Decisions such as Kalokerinos v HIA Insurance Services Pty Ltd [2004] NSWCA 312, Grygiel v Baine [2005] NSWCA 218 and Bahadori v Permanent Mortgages Pty Ltd (2008) 72 NSWLR 44 treated the provision as limited to questions of law where facts were undisputed or expressly decided. Basten JA's taxonomy in the Court of Appeal judgment reflected this line, distinguishing "no evidence" errors as suitable only for judicial review under s 69 of the Supreme Court Act rather than statutory appeal. Earlier Commercial Tribunal cases had emphasised that only legally qualified members could decide legal questions, influencing a restrictive reading.
The High Court held that this approach paid insufficient regard to the wider language of s 67, the Tribunal's non-legal composition, and the statutory objects of informality and expedition. French CJ at [35]-[43] and the joint judgment at [88]-[89] made clear that the appeal right is not confined to pure questions of law or expressly formulated issues. Implicit decisions, including the implicit acceptance that evidence exists to support a finding, are reviewable. The "no evidence" ground was placed firmly within the statutory appeal mechanism.
After Kostas, the scope of s 67 (and its successor provisions) is broader than the Court of Appeal had allowed. Tribunals must ensure that critical factual findings have some evidentiary foundation in material properly before them. Appellate courts can correct such errors without the artificiality of pretending the point was never decided. The ancillary powers under s 75A are available to finalise matters on undisputed material, reducing the need for repeated remittals. The decision reinforces that limited appeal rights still capture fundamental legal errors that would otherwise leave parties without practical remedy in an informal tribunal system.
Key passages with plain-English translation
French CJ at [34]: "On its face it extends to decisions which were necessary steps in the Tribunal's reasoning, whether or not made explicit by the Tribunal."
Plain English: Even if the Tribunal never wrote down "we have decided there is evidence of service", the fact that it went on to rely on service means it must have decided that point. That decision can be appealed if it is wrong in law.
Joint judgment at [90]: "Whether there was no evidence to support a factual finding is a question of law, not a question of fact."
Plain English: Asking "was there anything at all in the evidence that could support what the Tribunal said happened?" is a legal question for a judge, not a factual debate. If the answer is "no", the Tribunal has made a legal mistake.
French CJ at [43]: "The words 'question with respect to a matter of law' are wide enough to encompass a question of mixed law and fact. Questions of fact and law are often closely intertwined."
Plain English: The appeal section is not limited to pure legal textbook questions. Where law and facts cannot sensibly be separated, the Supreme Court can still hear the appeal.
Basten JA in the Court of Appeal (quoted and rejected at [137]): "The preferable view is that while a 'no evidence' ground may support judicial review, it does not form a basis for a statutory appeal under s 67(1)."
Plain English: The Court of Appeal thought you could only use judicial review for "no evidence" mistakes, not the special appeal route. The High Court said that is too narrow.
French CJ at [56], endorsing Spigelman CJ in Thaina Town: "This Court must be concerned that the course of administration of justice in this State does not impose unnecessary cost burdens on parties by adopting a narrow interpretation of statutory powers..."
Plain English: Judges should interpret appeal powers sensibly so that parties are not forced to run up huge bills and suffer years of delay just to fix obvious errors.
What fact patterns trigger this precedent
Kostas is triggered whenever a tribunal makes a positive finding of fact on a matter critical to the outcome and there is literally no material properly before it capable of supporting that finding. Typical scenarios include: (a) reliance on an affidavit or document never tendered for the relevant issue (as occurred with Mr Turrisi's affidavits here); (b) assertion of service or receipt of notices where the contract prescribes a method (cl 27) and no evidence shows compliance; (c) credibility findings used to reject uncontradicted expert or documentary evidence without any countervailing material; or (d) extension or variation of contractual time bars based on unproven communications.
The precedent applies only where the "no evidence" point is dispositive or a necessary step in the reasoning. It does not open the door to re-litigating every factual disagreement. Because the Tribunal is not bound by the rules of evidence, the test is whether any information lawfully before the decision-maker (including material obtained under s 28(2)) rationally supports the finding. The error must be one of law, not weight. Subsequent cases will turn on careful identification in the notice of appeal of the precise implicit legal decision said to have been made without evidentiary foundation.
How later courts have treated it
Although the source judgment itself cannot cite subsequent cases, its treatment of prior authority signals how later courts should approach similar provisions. The High Court distinguished the Kalokerinos line at [39]-[42], noting that those decisions rested on differently worded statutes requiring legally qualified chairmen. Later courts are therefore expected to treat Kostas as settling that s 67 (and analogous provisions) are broader than the earlier Commercial Tribunal authorities suggested. The joint judgment's acceptance at [10] that the "no evidence" ground "may form a basis for a statutory appeal under s 67(1)" directly reverses the Court of Appeal's holding at [137] and restores the understanding expressed in earlier cases such as Custom Credit Corporation Ltd v Commercial Tribunal (NSW) (1993) 32 NSWLR 489 that rational decision-making according to law is required.
The endorsement of limited fact-finding under s 75A(6) at [53]-[58] to avoid remittal aligns with the objects in s 3 of the Tribunal Act and the observations in Thaina Town. Courts after Kostas must therefore read the appeal power and the ancillary powers together as a coherent remedial scheme, not as narrowly compartmentalised. The decision reinforces that procedural fairness and rationality requirements survive the Tribunal's freedom from the rules of evidence.
Most practitioners do not realise that the "with respect to" language was intended to capture implicit legal thresholds inside factual findings. Many appeals still fail at the jurisdictional threshold because counsel do not expressly frame the "no evidence" complaint as an implicit decision on a matter of law. Kostas shows that careful drafting of the summons and grounds can overcome that barrier and allow the Supreme Court to bring finality on the materials already served. In long-running building disputes this can be the difference between another three years of hearings and a conclusive outcome.
Still-open questions
The High Court left several issues unresolved. First, the precise boundary between a "no evidence" error and a complaint about the weight of evidence remains open; only the former engages s 67. Second, the extent to which s 75A(5)'s rehearing language can apply to a limited s 67 appeal was expressly not decided. French CJ noted at [52] that it "seems at odds with the nature of the jurisdiction" but found it unnecessary to reach a final view because the primary judge's findings were supportable under s 75A(6).
Third, the interaction between s 67 and the privative provision in s 65 was not explored, nor was the availability of prerogative relief under s 69 where s 67 is unavailable. The joint judgment at [9] recorded that the insurer ultimately accepted that if a s 67 error was shown the primary judge's orders should stand, so the Court did not have to decide the full scope of remedial powers once jurisdiction is engaged. Later cases will need to test whether an appeal court can decide entirely new mixed questions not argued below.
Finally, the decision assumes the material "properly before" the Tribunal can be identified with certainty. In informal tribunal proceedings where directions are given orally and bundles are exchanged informally, disputes about what was tendered may themselves generate further "no evidence" or procedural fairness points. The judgment does not prescribe a bright-line test for that identification exercise. These open questions mean that while Kostas widened the gateway, careful forensic preparation remains essential.