Middleton v Wrona

NCAT Appeal Panel|2023-12-22

Introduction

On 14 June 2023 the Appeal Panel allowed in part an appeal by the appellant/builder (builder) against orders made in favour of the respondents/homeowners (Wronas). We published reasons for our decision: Middleton v Wrona [2023] NSWCATAP 158 (Primary Decision).
We set aside an order that the builder pay to the Wronas the amount of $65,280.59. We dismissed the appeal in respect of a work order made against the builder requiring demolition and reconstruction of a garage in accordance with the contract between the parties. We made directions for the parties to file and serve any submissions in respect of costs, including on the issue of whether we should make an order for costs in respect of the proceedings at first instance.
On 4 September 2023 we made orders in connection with costs of the proceedings and published reasons for decision: Middleton v Wrona (No 2) [2023] NSWCATAP 251 (Costs Decision). The orders we made in respect of costs were as follows: 1. The Tribunal dispenses with a hearing of the application for costs pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. In applications HB 20/12879 and HB 21/11458, the respondent (builder) is to pay the applicants (homeowners) seventy percent (70%) of the applicants' costs of both proceedings, as agreed or assessed on an ordinary basis. 3. In this appeal, the respondents (homeowners) are to pay the appellant (builder) fifty percent (50%) of the appellant's costs of the appeal, as agreed or assessed. Those costs are to exclude the costs of the application for stay dealt with by the Appeal Panel on 28 October 2023. 4. The costs to be agreed or assessed in respect of orders 2 and 3 exclude the costs of the costs application to the Appeal Panel in respect of each proceedings.
Following publication of the Costs Decision, an application from the respondents, Linda and Richard Wrona to correct order 3 made 14 September 2023.

Consideration

The application to correct the decision is made under s 63 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). That section provides: 63 Power to correct errors in decisions of Tribunal (1) If, after the making of a decision by the Tribunal, the President or the member who presided at the proceedings is satisfied that there is an obvious error in the text of a notice of the decision or a written statement of reasons for the decision, he or she may direct a registrar to alter the text of the notice or statement in accordance with the directions of the President or the member. (2) If the text of a notice or statement is so altered, the altered text is taken to be the notice of the Tribunal's decision or the statement of its reasons, as the case may be, and notice of the alteration is to be given to the parties in the proceedings in such manner as the President or member may direct. (3) Examples of obvious errors in the text of a notice of a decision or a statement of reasons for a decision are where - (a) there is an obvious clerical or typographical error in the text of the notice or statement, or (b) there is an error arising from an accidental slip or omission, or (c) there is a defect of form, or (d) there is an inconsistency between the stated decision and the stated reasons, or (e) there is an inconsistency between the name of a person stated in the text of the notice or statement and the name stated on the person's birth certificate or other form of identification.
As to the operation of s 63, Basten JA (Meagher JA agreeing) said in Sunaust Properties Pty Ltd t/as Central Sydney Realty v The Owners - Strata Plan No 64807 [2023] NSWCA 188 (Sunaust) (at [153]-[158]): 153 The argument put forward by the owners corporation and accepted by the Appeal Panel was that the Panel had power to alter its written statement of reasons to correct an error, pursuant to s 63 of the Tribunal Act. (The section is set out in full at [46] above.) The criterion contained in s 63(1) is the existence of "an obvious error", which may appear in the "written statement of reasons for the decision". Much of the debate in this Court was as to whether that criterion should be given a broad or a narrow construction. 154 A number of factors suggest that it should not be treated as wide enough to permit the reopening of a decision in order to address substantive issues which had not previously been addressed. First, there is the language of s 63(1) itself. The fact that, a member presiding at proceedings may direct a registrar to alter the statement of reasons in accordance with his or her directions, suggests that it was not intended to apply to substantive issues. If there were a failure to deal with a substantive issue, it is quite unlikely that (i) the existence of the error would depend upon the satisfaction of the member presiding; (ii) the error would be corrected by a direction to a registrar to alter the text; and (iii) there would be no provision for a further hearing. 155 Further, a substantive error would not readily be described as an obvious clerical or typographical error (subs (3)(a)) or a defect in form (subs (3)(c)). It is also, in that context, unlikely to constitute an error of some undisclosed kind, but arising from an accidental slip or omission (subs (3)(b)). On the other hand, it is true that a broader range of errors could arise from an accidental slip or omission, and that an inconsistency between the decision and the reasons (subs (3)(d)) may have a substantive flavour. 156 Some support for a broader interpretation was derived from judgments dealing with the provision in the Uniform Civil Procedure Rules 2005 (NSW) for the correction of a judgment or order and referred to as the "slip rule". That rule provides: 36.17 Correction of judgment or order ("slip rule") If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error." 157 A review of the older cases is no longer appropriate: as stated by Spigelman CJ (with the agreement of Santow JA and Handley AJA) in Newmont Yandal Operations Pty Limited v The J Aron Corporation & The Goldman Sachs Group Inc, in courts bound by s 56 of the Civil Procedure Act 2005 (NSW) the "overriding purpose" requires that such rules be construed so as to facilitate the just, quick and cheap resolution of the real issues in the proceedings. A similar obligation, described as the "guiding principle", is to be found in s 36 of the Tribunal Act. Further, and importantly, s 38 relevantly provides: 38 Procedure of Tribunal generally (1) The Tribunal may determine its own procedure in relation to any matter for which this Act or the procedural rules do not otherwise make provision. (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. … (4) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. 158 While the criteria of engagement in s 63 and r 36.17 are similar, their mode of operation is not. Rule 36.17 is authority for the court to correct a mistake or error; s 63(1) provides a different mechanism of operation, namely by the Tribunal, or a single member of a multimember panel, directing the registrar to alter the text of a statement of reasons. Section 63 is not consistent with the exercise of discretion on the part of a member potentially changing the outcome of a determination. Yet it is clear that the course undertaken by the Tribunal following its July decision was to exercise the substantive powers conferred upon it in order to determine an appeal. The October decision did not purport to be an alteration to the text of the July decision; it was a new decision. It involved the determination of grounds of appeal going to the question of jurisdiction, which had not been addressed in the earlier decision. It was 70 paragraphs in length.

Submissions

Both parties accepted that the application under s 63 of the NCAT Act could be dealt with on the papers, without a hearing. We will make that order.
As to the application for correction, the Wronas contend there is an obvious error, being an inconsistency between the stated reasons and order 3 of the Costs Decision. This order relates to the costs of the appeal proceedings.
In respect of order 3 of the Cost Decision the Wronas submitted in their original application dated 27 September 2023: … the Appeal Panel determined that in relation to the costs of the Appeal, the builder should be entitled to some of its costs in bringing the Appeal however that allowance should be made for the success of the homeowners in resisting the Appeal in connection with the garage. The Panel of course determined in paragraph 78 that the parties had relatively equal success in relation to the Appeal. So, whereas the Appeal Panel determined that both the builder and the homeowners had relatively equal success in the appeal, paragraph 3 of the orders does not reflect this. The effect of paragraph 3 of the Orders is that the builder enjoyed greater success on the Appeal then the homeowners. It is in this that the inconsistency between the stated decision and the stated reasons as contemplated by Section 63(3)(d) of the Act arises.
In doing so the Wronas said: In our submission, in order for the Orders to enjoy consistency with the stated decision of the Appeal Panel, order 3 ought to be amended as follows: "In this appeal, the respondents (homeowners) are to pay the appellant (builder) fifty percent (50%) of the appellant's costs of the appeal, as agreed or assessed. Those costs are to exclude the costs of the application for stay dealt with by the Appeal Panel on 28 October 2022. Further, in this appeal, the appellant (builder) is to pay fifty percent (50%) of the respondents (homeowners) costs of the appeal, as agreed or assessed."
In making these submissions, the Wronas referred to paras [71]-[82] of the Cost Decision.
In their subsequent submissions dated 10 October 2023, the Wronas proposed a different form of order. In their October submissions they said at paras 5-6: 5. In order that the inconsistency between the stated decision and the stated reasons is remedied, the homeowners submit order 3 made 4 September 2023 should be amended to read as follows: "In this appeal, save as to the costs of the application for stay dealt with by the Appeal Panel on 28 October 2022, which order is not disturbed, each party pay their own costs of the appeal". 6. The proposed wording here contained comes with the advantage, at least in relation to the appeal costs, preventing the parties from embarking upon a course that will likely involve more costs in getting to a final outcome.
Having set out their views as to the effect of the decision in Sunaust, the Wronas continued (at para 11 of their October submissions): … Although the homeowners seek to change the outcome of a determination, what the homeowners seek is not a fresh exercise of a discretion but to correct an obvious error; the sort of error directly contemplated by subsection (3)(d) (which subsection is submitted below, was not the focus in Sunaust.
The Wronas then set out the comments of Basten AJA in Sunaust at [155] where His Honour said: "On the other hand, it is true that a broader range of errors could arise from an accidental slip or omission, and that an inconsistency between the decision and the reasons (subs (3)(d)) may have a substantive flavour."
By parity of reasoning with the observations of Basten AJA in Sunaust, the Wronas said: … there is clear jurisdiction for the Tribunal to reopen the order so as to eliminate the prevailing inconsistency. If the situation were otherwise subsection (d) would have no work to do.
As to "amending the reasons to note that the two parties did not enjoy relatively equal success on the Appeal", the Wronas said this "… would be incongruous because the two parties did in fact enjoy relatively equal success, with both being successful on one issue each". In this regard the Wronas said the builder did not enjoy greater success on the appeal then the Wronas.
Finally, the Wronas submitted: … the practical effect of the orders is that the homeowners, despite having been determined by the Appeal Panel to have had with the builder relatively equal success, are liable to pay 100% of their own costs of the Appeal as well as 50% of the cost incurred by the builder. The builder, on the other hand, is liable to pay only 50% of his own costs and 0% of the costs of the homeowner. .
In response, having noted no application was made on the basis of the examples in s 63(3)(a)(b) or (c), the builder said: 1. there was no obvious error within the meaning of s 63(3)(d) of the NCAT Act; and 2. "The apportionment of costs of the appeal reflected and is consistent with the Panel's expressed findings at [79] and [80] which qualified any conclusions on cost as indicated by the words 'Having said this …' at the start of paragraph [79].
In reply, the Wronas reiterated their earlier submissions that the Appeal Panel found the parties had had relatively equal success in relation to the appeal. They said the builder's submission, if accepted, would be "to accept that the Appeal Panel intended to reward the builder for bringing the appeal (even though he lost on one of the two issues) and to penalize the homeowners for not making an offer that did not make the appeal proceedings unnecessary". The Wronas continued: Such finding would be prejudicial to the homeowners not least because the reasons establish the homeowners were not rewarded for the necessity of having to bring the home building application to NCAT nor was the builder penalised on costs in the first instance proceedings for failing to make an offer that did not make the first instance proceedings unnecessary.
The Wronas then said there was further inconsistency between the Appeal Panel's decisions concerning the proceedings at first instance. However, it was not suggested that our orders in connection with costs of the proceedings at first instance should be altered to correct any error.
In short, the Wronas said that the finding of equal success should meant that an order should have been made that both parties should be entitled to 50% of the costs, as agreed or assessed. Alternatively, "the Tribunal ought be inclined to correct the order in relation to costs of the appeal so that the effect is that each party pays their own costs".

Decision

In dealing with an application under s 63 to correct the order for costs, in circumstances where written reasons have been provided, it is not appropriate that we provide further reasons for making the Costs Decision or provide an explanation about what the reasons we have already provided mean: see eg Sunaust at [158]. Rather, a correction of the type identified in s 63(3)(d) is only permissible if there is an obvious inconsistency between the text of the notice of decision and the reasons given for the decision, in which case the President or the presiding member (here Deputy President Harrowell) may direct the Registrar to correct the relevant text.
As stated by the Court of Appeal in Sunaust, s 63 does not permit changes to a substantive decision or to make a new decision. Rather, it is concerned with correcting "an obvious error in the text of a notice of the decision or a written statement of reasons for the decision". This is subject to the comments of Basten AJA at [155] to which the Wronas referred above.
The circumstances contemplated by His Honour, permitting alteration in a substantive manner, may include where reasons for decision reflect that particular relief should be granted but the orders made do not contain such relief or are in a form not consistent with the reasons for decision.
The present application is to correct the text of the notice of the decision which is said to be inconsistent with the reasons in the Costs Decision.
As stated in order 3, the Wronas are to pay 50% of the builder's costs of the appeal. No order was made in their favour permitting them to recover a portion of their costs in the appeal.
Our reasons for order 3 included the following: Costs of appeal proceedings 71 As indicated in the Primary Decision, there were two issues raised by the builders' appeal. One was a challenge to the order for restitution. The other concerned the work order requiring the demolition and reconstruction of the garage. There was no challenge to order 2 made 1 September 2022, by which the Tribunal made a rectification order for various defects concerning the residential premises (as opposed to the garage). 72 The two issues each involved challenges to the factual analysis carried out by the Tribunal in making its decision under appeal. However, these factual challenges were relatively discrete. There were also discrete legal issues to be resolved in connection with the restitution claim. 73 The builder was successful in the appeal in relation to one of these issues, restitution. This concerned the challenge to the money order for $65,280.59 which we set aside. As stated above, there was an amount claimed or in dispute in the appeal which was more than $30,000 and r 38 displaces the obligation of the builder to demonstrate there are special circumstances warranting an order for costs: cf s 60 NCAT Act. Consequently, the starting position is that costs should follow the event. 74 However, consistently with the principles expressed by the Court of Appeal in Bostik set out above, it seems to us that the success of the homeowners in resisting the challenge to the work order made in connection with the garage is a circumstance which makes it appropriate to deprive the builder of costs or a portion of the costs of the appeal referrable to this issue. This is because the issues were discrete and each issue took up a significant part of the appeal, both in terms of submissions made and the time spent hearing the appeal. 75 Having formed this view, in our opinion an order for costs based on issues should not be made. The reason for this is that we were provided with the evidence and transcript of the original proceedings, it being evident that the parties in the appeal proceeding paid careful attention to ensure that all material from the original proceedings was provided to the Appeal Panel in circumstances where each of the issues required an analysis of the reasons of the Tribunal at first instance, evidence (including expert reports) filed in the proceedings and a consideration of what occurred in the hearing at first instance. Any assessment of costs based on orders for costs of particular issues would be difficult. It would likely lead to further debate between the parties. 76 Rather, in this case we think the proper exercise of the discretion requires us to determine the relative success of the parties by considering the proceedings as a whole and make a proportional order for costs. 77 We do not think it appropriate to undertake this assessment based on value. While the order requiring demolition and rebuilding of the garage will likely be a greater cost of the builder then the money award, from which the builder has been relieved, analysing success by dollar value in this case distracts from the nature of an award for costs being to compensate a successful party for costs incurred. 78 Having regard to the time spent in dealing with each separate issue and having regard to the nature and extent of written submissions and evidence needing to be considered in respect of each issue, it seems to us that the parties have had relatively equal success in relation to the appeal. 79 Having said that, it was necessary for the builder to bring its appeal in order to correct the error which we have found in relation to the award for restitution. There was no offer of which we are aware that would have rendered the appeal proceedings unnecessary. 80 In these circumstances, the builder should be entitled to some of its costs in bringing the appeal, allowance being made for the success of the homeowners in resisting the appeal in connection with the garage. This award should be a percentage of the builders' costs of the appeal. 81 Having regard to these considerations we think that the builder should be entitled to 50% of his costs of the appeal, as agreed or assessed. These costs should exclude the costs of the stay application as these were the homeowners' costs in the cause pursuant to the order made by the Appeal Panel on 28 October 2022. 82 As to the costs of the costs application, each party should pay their own costs because each has had some success. These costs will be excluded from any assessment.
The matters identified by the Wronas are not matters of "inconsistency" as that expression is used in s 63(3)(b). Rather, as reflected in the text which the Wronas' propose for any "corrected" order 3, they are matters of substance. This is because, to make an alteration to the text of the notice of decision as proposed by the Wronas would: 1. In the case of the original form of proposed order, grant a substantive right which would permit the Wronas to recover some of their costs of the appeal from the builder; or 2. In the case of the second form of proposed order, deprive the builder of a right to recover any of its costs.
To make either form of order would be inconsistent with paras [80]-[81] of the Costs Decision. In this regard there was no determination that the builder should pay to the Wronas any of their costs in respect of the appeal.
Otherwise, and while the application was not based on s 63(3)(b), there is no accidental slip or omission in the text of the notice of decision that would permit us to make the correction sought. In this regard there is no determination in the Costs Decision that the Wronas are entitled to recover any of their costs of the appeal from the builder, as opposed to taking account the relative success of the parties in the proceedings in exercising a discretion in favour of the builder as appellant. Consequently, there was no omission from the text of order 3, accidental or otherwise.
For these reasons, there is no error to be corrected under s 63 of the NCAT Act and the application should be dismissed.

Orders

The Appeal Panel makes the following orders: 1. The Tribunal dispenses with a hearing of the application to correct the decision of 4 September 2023 pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. The application to amend the orders made 4 September 2023 is dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 December 2023

At a glance

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Judgment (6 paragraphs)

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Legislation Cited (3)

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