Notaras v Dourmous

NCAT Appeal Panel|2024-03-11

Introduction

This is an appeal against an order of the Tribunal dismissing an application to set aside orders made on 27 September 2023 in Home Building proceedings HB 23/41285 (now application 2023/376348) (original application). In the original application, the applicant was Mr Dourmous (the respondent to this appeal) and the respondent was Ms Notaras (the appellant).
In the original application, the Tribunal made a money order in favour of the respondent in the amount of $6,150.00. In doing so, the Tribunal provided reasons for its decision (original decision). In short, the Tribunal made the following findings: 1. The appellant, who failed to appear at the hearing on 27 September 2023, "was served with a notice of hearing in accordance with the usual practice of the Registry which has not been returned undelivered. The respondent had an opportunity to attend and is offered no explanation for failure to attend". Consequently, the Tribunal was satisfied it should proceed to hear the matter in the appellant's absence: original decision at [2]. 2. The respondent had carried out handyman work and painting services for the appellant and had rendered 3 invoices which remained unpaid totalling $6,150.00: original decision at [4]. 3. As the evidence was uncontradicted, the Tribunal was satisfied the appellant had no defence and that the claims by the respondent were proved: original decision at [6].
The original decision was made at what is known in the Consumer and Commercial Division as a "group list". In this regard, 27 September 2023 was the first date the proceedings had been listed before the Tribunal. Consequently, the Tribunal had not made any directions for the filing and service of evidence. However, as made clear on the notice of hearing issued for these types of hearings, parties are required to attend with the documents in case the matter proceeds on that day. In this regard the notice of hearing states: Bring the relevant documents to the hearing. … If you do not attend the matter may be finalised in your absence.

Notice of Appeal and history of appeal proceedings

The Notice of Appeal was filed 15 November 2023. The appeal was filed in time. The appellant sought orders that the original decision be set aside because the amount of $6,150.00 was not payable to the respondent.
The grounds of appeal were in the following terms: Notaras was not notified of the court case and as a result did not attend the hearing which found against her. We have never seen invoices 60, 61, 62. We have not had the opportunity to respond to the Dourmous claims in court. Bad blood between the parties started with Notaras demanding return of overpayment. Dourmous refused. Dourmous wrote bodgie invoices in defence.
Leave to appeal was also sought. Under the headings "Decision was not fair and equitable" and "Decision of the Tribunal against the weight of evidence" the appellant again said she was unaware of the hearing and therefore did not attend. Consequently, she has not been afforded "due process".
The appeal was heard on 11 March 2023. Initially, the respondent did not appear. However, due to some uncertainty concerning service of the notice of hearing, he was contacted by telephone and subsequently attended the Tribunal in person, the hearing of the appeal finally commencing at approximately 12:35 pm.
The appellant was represented in the appeal by her friend, Mr Karkulahti, who was previously given leave to do so. The appellant was not in attendance.
The Appeal Panel explained the issues that appeared to arise from the Notice of Appeal and the documents attached and had a discussion with the parties to identify what were the real issues in dispute. The issues appeared to include: 1. Whether the appellant had failed to comply with directions to provide submissions concerning why the application to set aside was lodged out of time; 2. Whether, despite any failure by the appellant to comply with the Tribunal's directions concerning the filing and serving submissions in respect of the set aside application, the Tribunal nonetheless was in error in exercising its discretion and dismissing the set aside application due to a failure to consider the relatively short delay in lodging the set aside application and/or failing to consider the matters set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 (Jackson).
In doing so, the Appeal Panel noted that the respondent had not filed a Reply to Appeal or any submissions as directed by the Appeal Panel. After discussions with the respondent, he indicated to the Appeal Panel that he was content to proceed on the basis of the documents provided by the appellant in support of her position. Each party was then permitted to provide oral submissions to the Appeal Panel.

Consideration

A decision to dismiss a set aside application is an ancillary decision: Hammond v Ozzy's Cheapest Cars Pty Ltd t/as Ozzy Car Sales [2015] NSWCATAP 65 (Hammond) at [31]-[40].
Being an ancillary decision, there is a right of appeal on a question of law, otherwise leave to appeal is required: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).
Leave may only be granted if an appellant may have suffered a substantial miscarriage of justice because the decision is not fair and equitable, against the weight of evidence, or there is significant new evidence that was not reasonably available at the time of the original hearing: Sch 4, cl 12(1). The principles in Collins v Urban [2014] NSWCATAP 17 (Collins) are relevant to the question of whether leave should be granted.

Principles concerning extending time and setting aside a decision

As to the principles to be applied in connection with extending time, in Jackson at [22] the Appeal Panel said: 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].
As to how the discretion under reg 9 of the Civil and Administrative Tribunal Regulation 2022 (NSW) is to be exercised, the Appeal Panel said in Hammond at [76]-[81]: 76 The central question in exercising the discretion is whether there is a real likelihood that it would be unjust to let the decision sought to be set aside stand. If so, it should be set aside on such terms as will minimise the possibility of injustice to the party which had obtained the original decision in its favour. See, for example, CMT [2014] NSWCATGD 11 at [67] and [68(e)]; Northey v Bega Valley Shire Council [2012] NSWCA 28 at [16]; Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR NSW 239 at 243-4 - these latter two cases are both authorities dealing with r 36.16(2)(b) in the Uniform Civil Procedure Rules 2005 (NSW), or its predecessor, equivalent to cl 9(1)(b). 77 Justice generally requires that parties against whom orders are made must be given a reasonable opportunity of appearing and presenting their case: Cameron v Cole (1944) 68 CLR 571 at 589. In the Tribunal, s 38(5)(c) of the Act provides: (5) The Tribunal is to take such measures as are reasonably practicable: … (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. 78 If a party has been given such an opportunity, however, and has deliberately not taken it, there may well be no relevant injustice if the decision is allowed to stand: see, for example, CMT [2014] NSWCATGD 11 at [68(a)]. In this regard, the issue of why the party was absent from the hearing may be very significant: see, for example, Homeark Constructions v Hillside Excavations [2014] NSWCATAP 77 at [37], [39] and [40]. 79 Injustice will only be likely to result if the party seeking to set aside the decision has an arguable defence or an arguable case that a different decision could have been reached. If not, setting aside the decision would be futile. See, in a different but related context, Kyriakou v Long [2013] NSWSC 1890 at [33] and [55], approved on appeal in Kyriakou v Long [2014] NSWCA 308 at [18]. Section 38(4) of the Act is consistent with this approach, in that it requires the Tribunal to act according to the substantial merits of the case without regard to technicalities or legal forms. 80 In summary, when exercising the discretion conferred by cl 9(1)(b), the Tribunal should direct its attention to whether there would be a real likelihood of injustice if the decision was allowed to stand. Relevant considerations will generally include: (1) Why the party was absent and whether the absent party had a reasonable opportunity to be heard or otherwise have its submissions considered in the proceedings; and (2) Whether the absent party has an arguable defence or an arguable case that a different decision could have been reached. 81 Setting aside a decision will naturally involve a degree of prejudice to the party which was initially successful. As part of the exercise of the discretion, the Tribunal should also consider how that prejudice can be cured or reduced, for example by the framing of any set aside order or by the imposition of suitable conditions on that order. Conditional orders can be made in the Tribunal under s 58 of the Act.

Decision in this appeal

In her set aside application, the appellant indicated in the relevant space that no extension of time was sought. At the hearing of the appeal, the appellant accepted that she had failed to comply with the Tribunal's directions in the set aside application to provide submissions explaining the reason for delay in making the application and why an extension of time should be granted. In this regard, the appellant's representative said to us that the appellant was an elderly lady, 87 years old, and of Greek descent who did not have a detailed knowledge of the law and that he was helping her. Mr Karkulati is not himself a lawyer.
However, the appellant maintained her position that she had not received notice of the hearing and said that the documents she had provided in support of her set aside application demonstrated a strongly arguable case that the original decision was incorrect. The evidence in the set aside application included her statement that: 1. she had not been provided with invoices 60, 61 and 62, the non-payment of which formed the basis of the Tribunal's original decision; and 2. she was owed $2,400.00 in overpayments.
It should be noted at this point that no submissions were provided to the Tribunal at first instance by the respondent in response to the set aside application, a matter acknowledged by the respondent to the Appeal Panel at the hearing of the appeal.
In addition to her set aside application and the documents attached thereto, the appellant provided to the Appeal Panel a chronology and additional documents on which she sought to rely. There is no evidence these documents were provided to the Tribunal in support of the set aside application. However, the appellant seeks leave to rely on this new evidence.
The documents included a "quotation" provided by the respondent dated 24 April 2023 (a date after his services were terminated) which recorded "Total Owing $4,600.00". They also included bank statements suggesting that duplicate payments of the same amount had been made by the appellant to the respondent. These documents were said to show the original claim of $6,150.00 was exaggerated.
On their face, they are all documents that were reasonably available to the appellant at the time the set aside decision was made. Consequently, this new material should not be permitted: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [23] and following.
It is against the above background that this appeal is to be determined.
As noted above, the Tribunal provided written reasons in respect of the set aside decision. Those reasons were as follows: The application was made out of time and neither party has addressed the question as to why leave should be granted to extend the time to make the set aside application.
The correctness of this decision needs to be considered in light of the following uncontested facts before the Tribunal on the set aside application: 1. The original decision was made at a group list, in circumstances where the matter had not previously been listed before the Tribunal and in circumstances where no directions had been made for the filing and service of evidence. 2. The appellant did not receive the notice of hearing and therefore was not informed that the matter could be dealt with in her absence and/or that she was required to attend and "bring [her] relevant documents to the hearing". 3. There was a statutory declaration attached to the set aside application noting that the invoices, the subject of the claim, had not been seen by the appellant. In addition, the written application stated that the invoices referred to in the decision were, in any event "for non-existent work to avoid paying back an amount of $2400 which [had been] paid twice". 4. Otherwise, the appellant said in her set aside application that she did not receive notification from the respondents about the documents upon which he intended to rely. 5. The respondent provided no evidence or submissions in response to the set aside application, despite being given an opportunity to do so. 6. The set aside application was 6 days out of time - the decision of the Tribunal being made 27 September 2023 and the set aside application (which was required to be lodged within 7 days of receipt of the decision) being lodged 10 October 2023.
As noted in Jackson, in the exercise of its discretion in deciding whether to extend time and set aside the decision, the Tribunal was required to: 1. consider the length of the delay and any explanation for delay in making the application, and 2. if there is no adequate explanation, the Tribunal may need to "go further into the merits of [the case] if the explanation for delay is less than satisfactory".
As demonstrated by the reasons for the set aside decision, these matters were not considered or, if considered, the reasons do not show why the discretion was exercised in the way it was. These matters lead to one or both of the following conclusions: 1. The discretion of the Tribunal miscarried in the sense explained in House v The King (1936) 55 CLR 499 at 504-5; [1936] HCA 40; or 2. The reasons were inadequate as not revealing how the evidence concerning the strength of the appellant's defence was taken into account: New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 per Bell P (as he then was) at [73]-[77] and [79].
The next question is what should be done, the powers of the Appeal Panel being those set out in s 81 of the NCAT Act.
It is clear from the original decision that it was made in the appellant's absence. It is also clear that the appellant's absence has resulted in her case not being adequately put to the Tribunal. The question is whether the discretion should be exercised in her favour to set aside the original decision, notwithstanding the appellant's failure to provide an explanation of delay. This requires a consideration of the substance of her defence and the length of the delay.
The defence of the appellant contained in the set aside application includes that: 1. she did not receive the invoices which the Tribunal found to be unpaid following demand: original decision (at [5]); and 2. she erroneously made duplicate payments to the respondent which were not taken into account by the Tribunal in its award and for which she has not received a refund.
The appellant's representative, who assisted the appellant both in making the original set aside application and in this appeal, was unable to advise the Appeal Panel of the precise date on which the original decision was received. The application to set aside shows that the original decision must have been received on or before 3 October 2023, being the date Mr Karkulati signed the application. It was lodged on 10 October 2023.
The application was made 6 days late, time under reg 9(3) running from when the decision was made, not when the decision was received. This appears a minor delay, albeit unexplained in the set aside application, but probably, in part, arising from the fact the notice of the original decision was sent to the appellant by post.
In our view, despite the set aside application being lodged late, the proper exercise of discretion is to extend time, set aside the decision made by the Tribunal on 27 September 2023 and to remit these proceedings for rehearing. This is because: 1. the appellant had no notice of the proceedings or what was required to participate until she was advised of the decision sometime between 27 September and 3 October 2023; 2. the delay in lodging the application was relatively short and the appellant required assistance to do so; 3. the matters raised by the appellant, if her evidence is accepted at any rehearing, would result in either the respondent's claim being dismissed or, at least, reduced by the amount of any double payments for which the appellant might be entitled to a refund; 4. aside from needing to attend a further hearing, there appears no real or substantial prejudice to the respondent. 5. In the absence of the appellant being afforded an opportunity to be heard, orders should be made to permit this to occur.

Orders

Whether the errors we have identified are in respect of questions of law, it is clear the appellant may have suffered a substantial miscarriage of justice because there is "a 'significant possibility' that a different, more favourable result would have been achieved by the appellant if she had notice of the hearing and was afforded the opportunity to appear and present her evidence: Collins at [65] and following. Therefore, to the extent necessary, we grant leave to appeal.
Accordingly, we make the following orders: 1. To the extent necessary, leave to appeal is granted and the appeal is allowed. 2. The order made on 1 November 2023 in application HB 23/45687 (now application 2023/372393) is set aside and in lieu thereof the following order is made: "1. The time to lodge the application to set aside is extended to 10 October 2023. 2. The order made by the Tribunal and application HB 23/41285 (now application 2023/376348) is set aside." 1. The proceedings are remitted to the Consumer and Commercial Division for rehearing.

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: 21 March 2024

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