McAdam v McAdam

Background.

1. Gregory McAdam has appealed against a decision made in the Consumer and Commercial Division (the CCD) of the Tribunal on 17 January 2024. That order required that he and his sister, Annete Kearton, as landlords, pay to their sister, Catherine McAdam, as tenant, $4,061.14. That order was made under the Residential Tenancies Act 2010 (NSW) (the RT Act). It related to a tenancy of their mother's home, which, upon her death, formed part of her estate. Gregory McAdam and Annete Kearton say they are joint executors of that estate, although no Grant of Probate has been produced.
2. They let the home to Catherine McAdam under a residential tenancy agreement in their own names, as landlords, rather than specifying that they acted in their capacity as executors of their late mother's estate.
3. Catherine McAdam, as tenant, commenced the Tribunal proceedings seeking a monetary order from Gregory McAdam, as landlord, after the tenancy ended. At the January hearing, the Tribunal joined Annete Kearton as a respondent when it found that she was also a landlord. She was in attendance when the Tribunal named her as a party. Gregory McAdam did not attend that hearing.
4. Catherine McAdam's claim was resolved by the making of consent orders, on the basis that Annete Kearton had authority to represent her brother. This is denied by Gregory McAdam.
5. Gregory McAdam filed his notice of internal appeal on 16 February 2024, some 16 days outside the time required by rule 24(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW) (the NCAT Rules). An extension of time is therefore required for the appeal to proceed.
6. In the notice of appeal, Gregory McAdam advised that the money order had been paid by the estate of his late mother to Catherine McAdam.
7. The notice of appeal did not name Annete Kearton as a party to the appeal. As she was named as a party in the proceedings before the Tribunal, she is a party to the appeal: see rule 29(b) of the NCAT Rules.
8. The appeal was listed for hearing before us on 26 April 2024.

Concerns raised by the Appeal Panel.

1. The hearing took place by audio-visual link (AVL). All parties including Annette Kearton participated.
2. At the commencement of the hearing, we observed that Ms Kearton was properly a party to the proceedings but had not been named as such. We inquired whether she had access to all relevant papers relating to the appeal. While she had not been formally served, Ms Kearton confirmed that she had seen and had access to all necessary papers. She was content for the appeal to proceed and to participate as a party to it.
3. Next, we confirmed with the parties that Gregory McAdam is a resident of Queensland, while Annette Kerton and Catherine McAdam are both residents of NSW.
4. This led us to explain to the parties our concern that NCAT did not have jurisdiction to hear Catherine McAdam's initial application. This was so because it involved the exercise of federal jurisdiction in adjudicating a dispute between residents of different States, which is a matter that falls within the original jurisdiction of the High Court: see s 75(iv) of the Commonwealth of Australia Constitution Act (The Constitution) (Cth).
5. Such disputes can be determined by State Courts in accordance with sections 38 and 39 of the Judiciary Act 1903 (C'th) (the Judiciary Act): see Burns v Corbett [2018] HCA 15 at [26] per Keifel CJ, Bell and Keane JJ. But NCAT is not a court of a State: Burns v Corbett at [39]. Further, in Attorney General for New South Wales v Gatsby (2018) 99 NSWLR 1; [2018] NSWCA 254 the NSW Court of Appeal confirmed that NCAT, when hearing and determining an application under the RT Act, is not a court of a State. It therefore cannot exercise federal jurisdiction to determine a dispute between residents of different States to which the RT Act applies.
6. We indicated to the parties that we proposed to give them time to seek advice and provide submissions on this jurisdictional issue, as it could determine the outcome of the appeal.
7. We proposed that we would then determine that issue without a further hearing. We asked for their views in writing as to whether we should proceed on the papers.
8. We made the following orders on that day: 1. The appellant (Gregory McAdam) and the first respondent (Catherine McAdam) are to provide to the second respondent (Annette Kearton), all material they have filed in the appeal, by 3 May 2024. The material may be provided by email. 2. The parties are to lodge with the Appeal Panel and to provide to the other parties any submissions on the jurisdictional issue on which they wish to rely by 10 May 2024. The submissions are to address the question of whether the jurisdictional issue should be determined on the basis of the material lodged with the Tribunal, without a further hearing on that issue. The submissions may be lodged with the Appeal Panel and given to the other parties by email. Notation 1. The Appeal Panel notes that Annette Kearton is a party to the appeal by operation of rule 29(b) Civil and Administrative Tribunal Rules 2014 (NSW). As she is not an appellant, she is the second respondent. 2. The jurisdictional issue, raised by the Appeal Panel, concerns the question of whether the Tribunal had jurisdiction to hear these proceedings in circumstances in which the appellant is a resident of Queensland and the first respondent is a resident of New South Wales. A similar issue was considered by the High Court in Burns v Corbett (2018) 265 CLR 304; [2018] HCA 15 and by the NSW Court of Appeal in Attorney General for New South Wales v Gatsby (2018) 99 NSWLR 1; [2018] NSWCA 254. The High Court held in Burns v Corbett that the Commonwealth Constitution precludes the parliament of a state from conferring jurisdiction in respect of a matter between residents of different states within s 75(iv) of the Commonwealth Constitution on a tribunal which is not one of the courts of the state.
9. The Tribunal (and an Appeal Panel) does have power to decide the question of whether or not it has jurisdiction to hear and determine a matter: see Griffin v Ingram [2014] NSWCATAP 5, citing Bailey v Owners Corporation of Strata Plan 62666 [2011] NSWCA 293 at [55]; and NSW Land and Housing Corporation v Diab [2014] NSWCATAP 8 at [13].

Material before the Appeal Panel.

1. Gregory McAdam and Annette Kearton have filed submissions responsive to our orders. Catherine McAdam has not.
2. In addition to those submissions, we had before us the following material: 1. Notice of appeal with attachments filed 17 January 2024. 2. Reply to the appeal with attachments filed by Catherine McAdam on 29 February 2024. 3. Two manilla files containing assorted documents, submissions, statements and transcript from Gregory McAdam. 4. Additional statements and submissions filed by Gregory McAdam on 15 April 2024. 5. The order made by the Tribunal on 17 January 2024. 6. Procedural orders made by the Appeal Panel leading up to the hearing of the appeal.
3. Among the materials filed by both Gregory and Catherine McAdam are evidentiary materials and statements going to the merits of the dispute, which were not among the material before the Tribunal below. These will only be admissible before the Appeal Panel if they comply with the requirements of cl 12(1)(c) of Sch 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), being significant new evidence that has arisen since the hearing (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

Should we proceed without a further hearing?

1. Section 50 (2) to (4) of the NCAT Act provide: (2) The Tribunal may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal. (3) The Tribunal may not make an order dispensing with a hearing unless the Tribunal has first: (a) afforded the parties an opportunity to make submissions about the proposed order, and (b) taken any such submissions into account. (4) The Tribunal may determine proceedings in which a hearing is not required based on the written submissions or any other documents or material that have been lodged with or provided to the Tribunal in accordance with the requirements of this Act, enabling legislation and the procedural rules.
2. In this case Catherine McAdam did not provide any submissions addressing the jurisdictional issues or whether we should dispense with a hearing, despite being invited to do so. In his submissions, Gregory McAdam did not express an opinion as to whether we should determine the matter without a hearing. Annete Kearton agreed that we should determine the appeal on the papers in her submissions.
3. Having reviewed all the materials we are satisfied that this is a matter that can be determined in the absence of the parties by considering the materials lodged by them. We will therefore dispense with a hearing.

Consideration.

1. In his submissions, received 10 May 2024, Gregory McAdam submitted that he is a resident of Queensland, while Catherine McAdam, who commenced the original claim against him, is a resident of NSW. As they are residents of different States, he argued that the orders made by the Tribunal are outside its jurisdiction. He also made submissions going to the substance of the dispute, which are not relevant to our consideration of whether the Tribunal had jurisdiction.
2. In her submissions, Annette Keaton spent some time addressing the substance of the dispute, rather than the jurisdictional issue. She then submitted that the "original decision". i.e. the consent orders, were made between herself and Catherine McAdam, who are both residents of NSW. She also argued that, as a resident of Queensland, Gregory McAdam has no standing to lodge an appeal.
3. Ms Kearton's submission about the original decision only involving herself and her sister, does not withstand the weight of analysis. The order made by the Tribunal required both Gregory McAdam and Annette Kearton to pay Catherine McAdam money. It was not simply a matter between the sisters.
4. Similarly, Ms Kearton's submission that Gregory McAdam had no standing to lodge the appeal must also fail. Section 80(1) of the NCAT Act provides that as a party to the decision below Gregory McAdam can bring an appeal. It says: (1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made.
5. He therefore had standing to lodge the appeal. Whether the Tribunal had jurisdiction to hear the initial application is a different question.
6. There is no dispute that Gregory McAdam is a resident of Queensland, while his sisters are residents of NSW. The dispute between them was one under the RT Act relating to property in NSW. As such, it required an adjudication between residents of different States of a dispute in accordance with the RT Act. This required an exercise of judicial power vested in the courts of NSW by the Judiciary Act and an exercise of federal jurisdiction. NCAT is not a court of NSW and cannot exercise federal jurisdiction: Burns v Corbett and Attorney General for New South Wales v Gatsby. The Tribunal therefore had no power to hear and determine the initial application and should have dismissed it for want of jurisdiction. The failure to do so is an error of law.
7. It is to be noted that following the decision by the NSW Court of Appeal in Burns v Corbett; Gaynor v Burns [2017] NSWCA 3, which was essentially confirmed by the High Court, on appeal in Burns v Corbett, the NSW Parliament amended the NCAT Act by introducing Part 3A, "Federal Proceedings". This introduced sections 34A to 34D, into the NCAT Act: see the Justice Legislation Amendment Act (No 2) 2017 No 44 (NSW) Sch 1.2 [3]. and the Justice Legislation Amendment Act (No 3) 2018 No 87 (NSW) Sch 1.6 [2]. Those amendments make provision for situations in which applications to NCAT require an exercise of federal jurisdiction, and provide a means for person wishing to bring such applications to seek leave to apply to a court instead.
8. Given our conclusion with respect to the Tribunal's jurisdiction, we have not considered the substance of the appeal as initially framed, or whether we should admit new evidence going to the merits in the appeal. It is not necessary to do so.

Should the Tribunal extend time to allow the appeal to be made?

1. The appeal was made 16 days late. Gregory McAdam seeks an extension of time in which to make the appeal, so that it can proceed. He explained the delay as being due to difficulties in obtaining legal advice from his legal representative until 14 February 2024, and then the delays inherent in posting the application from Queensland to the Tribunal. The notice of appeal was received by the Tribunal on 17 February 2024.
2. The principles to be applied by the Appeal Panel in applications for an extension of time in which to appeal were considered in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22. 22 The considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a Notice of Appeal include: (1) The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant - Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38]; (2) The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision - Jackamarra v Krakouer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success - Jackamarra at [7]; (3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: (a) The length of the delay; (b) The reason for the delay; (c) The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and (d) The extent of any prejudice suffered by the respondent (to the appeal), - Tomko v Palasty (No 2) (2007) 71 NSWLR 61at [55] (per Basten JA) but note also [14], Nanschild v Pratt [2011] NSWCA 85 at [39] to [42]; and (4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] - [59].
3. In the present case the delay is 16 days over and above the 14 days allowed by rule 24(4)(c) of the NCAT Rules. It is not a long delay, but is not short when considered in the context of the limited time allowed for appeals to be made from decisions in residential proceedings. The time limits are meant to be complied with.
4. Gregory McAdam's explanation for the delay is a reasonable and understandable one. We note Catherine McAdam's argument that Gregory McAdam could have sought legal advice from any lawyer, rather than waiting for his preferred lawyer. While this is undoubtedly true, we do not think it unreasonable, in the particular context, for Gregory McAdam to endeavour to contact his own lawyer.
5. Most importantly, we think it clear that Gregory McAdam's appeal will succeed if we grant him an extension of time. That is not because of the grounds he initially relied on, but because the Tribunal did not have the jurisdiction to make the order it did against him. To not allow him an extension of time would result in the order, which the Tribunal had no power to make, being on the record. That would be an injustice to him.
6. Countering that, if the appeal were to proceed and succeed, Catherine McAdam might face the prospect of action being taken to recover the money she has been paid in accordance with the Tribunal order. Given that the order was beyond the Tribunal's power to make, we have difficulty in concluding that the prejudice to Catherine McAdam, if we were to grant an extension of time, warrants the refusal of an extension.
7. In all the circumstances we consider that we should grant Gregory McAdam an extension of time in which to lodge his notice of appeal until 17 February 2024. The appeal was lodged within that time.

Disposition of the appeal.

1. The initial proceedings before the Tribunal required an exercise of federal judicial power which is vested in the courts of NSW by the Judiciary Act, and an exercise of federal jurisdiction. NCAT is not a court of this State and cannot exercise federal jurisdiction. The Tribunal should not have heard it. The appeal is therefore allowed.
2. We will quash the orders made by the Tribunal on 17 January 2023, 2023/00379630, and substitute for it an order that the proceedings are dismissed for want of jurisdiction.
3. We note that Gregory McAdam asserts that the Tribunal's money order was paid by his mother's estate, not him. It is therefore the estate that would have to take action to recover those moneys, not Gregory McAdam. The joint executors of the estate are not a party to these proceedings in that capacity. Given the opposing positions taken by them, it is not clear whether or not the estate would seek to recover the money paid. That is not a dispute the Tribunal could resolve.
4. We will not make an order for the refund to Gregory McAdam of money paid in accordance with the quashed order because it was paid by his mother's estate, not him.

Costs

1. In this case s 60 of the NCAT Act applies to any application for costs of this appeal: see also rule 38A of the NCAT Rules. It provides that each party is to bear their own costs of proceedings unless there are special circumstances warranting an award of costs. Parties should therefore think carefully before applying for costs as they will have to demonstrate special circumstances and that this case is an appropriate one in which to exercise our discretion to make a costs order. Both matters that are not obvious here.
2. We will, however, make provision in our orders for the procedure to be followed if a party does seek costs.

Orders

1. The Appeal Panel makes the following orders: 1. Time for the appellant to lodge the notice of appeal is extended to 17 February 2024. 2. A hearing of the appeal is dispensed with. 3. The appeal is allowed. 4. The orders made by the Tribunal on 17 January 2024 are quashed and the following order is made in substitution: Application 2023/00379630 is dismissed for want of jurisdiction: it requires an exercise of federal jurisdiction which is beyond NCAT's power. 1. In the event a party wishes to apply for costs, we make the following orders. 1. Any costs application (of no more than 2000 words) must be lodged in the Appeal Division of the Tribunal and served on the costs respondent within 21 days of the date of these orders either attaching or referring to any documents relied upon in support of the application. 2. The costs respondent will have 21 days after the date it receives the application referred to in the preceding paragraph to lodge in the Appeal Division of the Tribunal and serve on the costs applicant its submissions (of no more than 2000 words) in response to the costs applicant's costs application, such submissions either attaching or referring to any documents relied upon. 3. The costs applicant will have 14 days after the date it receives the cost respondent's submissions to lodge in the Appeal Division of the Tribunal and serve on the costs respondent its submissions, if any, in reply (of no more than 1000 word), such submissions either attaching or referring to any documents relied upon. 4. The parties' submissions should address the question of whether the Appeal Panel should determine the issue of costs without a hearing, based on the materials and submissions provided in accordance with s 50 of the Civil and Administrative Tribunal Act 2013 (NSW).

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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: 20 May 2024