Promina Design & Construction Pty Ltd v The Owners - Strata Plan No. 97449 - [2023] NSWCATAP 122 - NSWCATAP 2023 case summary

NCAT Appeal Panel|2023-04-26

Summary

On 26 April 2023, I made directions in this appeal, which arises from a decision of the Consumer and Commercial Division to transfer proceedings before it under the Home Building Act 1989 (NSW) (HBA) to the District Court. I also heard the parties in respect of the appellant's application for a stay of that order pending determination of the appeal, and reserved my decision.
The applicant at first instance (the respondent) contracted with the appellant builder for what seems to have, uncontroversially, led to a building dispute. Those disputes are chiefly to be determined in this Tribunal: HBA, s 48L. The respondent had applied for a transfer to the Court on the basis that its claim has now been quantified in an amount over $500,000. It is, therefore, beyond the jurisdictional limit of the Tribunal unless the respondent wishes to submit to having its claim reduced to the jurisdictional limit: HBA, s 48K(1). Clearly, the respondent does not wish to do so. A transfer to the Court in those circumstances would, in the ordinary course, be uncontroversial but not automatically granted.
Here, however, the appellant sets out several bases upon which it argued at first instance that the transfer order ought not to have been made. Most importantly, it says that the respondent's claim does not fall within the jurisdiction of the Tribunal because it was made outside 3 years from the completion of the relevant work. On that basis, it says the Tribunal had no jurisdiction to even make the order transferring the proceedings to the Court.
A preliminary question arises as to whether this Appeal Panel can effectively stay an order of transfer to a Court once it has been made, and if so, whether that power has any temporal limitation.
I seek to expose my reasoning on that issue, which is by no means absolutely clear, below.
Had I been satisfied I had the power to meaningfully stay the decision, I would have done so. However, I am not satisfied I have the power to meaningfully grant a stay in these circumstances, and so the application should be dismissed. I note, though, that nothing prevents the parties asking the District Court to delay requiring them to take steps to prosecute the proceedings in that Court until this appeal is resolved.

Background

The Tribunal's decision at first instance succinctly sets out the relevant parameters of the jurisdictional dispute and its findings in that regard: 3. First, it was contended that this application was out of time because it was a "building claim relating to goods and services" which was governed by s 48K(3) of the Home Building Act 1989 (the HBA) which specifies a limitation period of 3 years. The response was that the applicant's case is based on breaches of the statutory warranties provided by s 18B of the HBA for which the limitation period specified in s 18E is 6 years for major defects. 4. The words "building claim", as defined in s 48A of the HBA, do not cover this application. As a result, s 48K does not apply. This is a claim for breach of the statutory warranties for which the specified limitation period set by s 18E is 6 years for major defects, otherwise 2 years. Even if it could be said that this application involves a "building claim" that is covered by the general limitation period set by s 48K, the specific provision prevails over the general provision. 5. Secondly, it was contended that the applicant's claim did not exceed $500,000 because it was not sufficient for an expert's report to suggest an amount exceeding that figure. Reference was made to what was said in The Owners - Strata Plan No. 70030 v Decon Australia Pty Ltd [2014] NSWSC 347 at [61]. However, the applicant has lodged Amended Points of Claim which seeks to recover damages and particularises the cost of rectifying defects by reference to an expert report which provides an estimate of loss of $711,590. As a result, while that amount if not specified in the Amended Points of Claim, that amount is claimed by reason of paragraph 22 alleging loss and damage by reference to that report and paragraph 37 claiming that loss. 6. Even if it could be said that was not sufficient, were this transfer application to be rejected on that basis, the applicant could then file Further Amended Points of Claim which did claim an amount greater than $500,000 and make another application for transfer which could not be then resisted on the same basis, namely that s 48K(3) of the HBA does not deprive the Tribunal of jurisdiction because the "the amount claimed does not exceed $500,000". Requiring the applicant to lodge Further Amended Points of Claim would be contrary to the Tribunal's guiding principle, established by s 36 of the Civil and Administrative Tribunal Act 2013, which sets the goal of the just, quick and cheap resolution of the real issues in the proceedings. 6.(sic) Thirdly, it was submitted that the applicant served the respondent on the day when the limitation period expired. The relevant dates contained in the written submissions are as follows: 2014 - construction commenced 28 October 2016 - interim occupation certificate issued 10 November 2016 - final occupation certificate issued 21 October 2022 - application filed 1 November 2022 - respondent served 7. It is not appropriate to make a final determination of an issue at a preliminary stage of proceedings unless the position is clear and the Tribunal is satisfied that the applicant, in this instance, has an arguable case in that (1) the application was lodged less than six years after the interim occupation certificate was issued, and (2) the respondent was served less than six years after the occupation certificate was issued. As a result, any contention as to the operation of the six-year limitation period is a matter that should not be determined at this early stage of the proceedings.
To be clear, what I understand the appellant will seek to agitate in this appeal is an argument, based predominantly on the construction of s 48K of the HBA, that no dispute can be brought to the Tribunal after 3 years, even in respect of a breach of statutory warranty relating to a major defect.

Legislative Foundation and Principles Relating to Granting a Stay

The lodgement of an internal appeal does not affect the operation of the decision appealed from. Nonetheless, under s 43(3) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) the Tribunal has discretion to stay the operation of a decision or make another order affecting the operation of the decision pending the determination of the appeal.
That discretion must be exercised judicially and the general principles that apply in relation to the exercise of that discretion are derived from the terms of s 43(3) itself. Additional guidance can be obtained from the considerations applied by the courts in deciding whether or not to grant a stay pending an appeal, summarised in a decision of the Appeal Panel constituted by the former President of the Tribunal, Justice Wright, in Bentran v Sabbarton [2014] NSWCATAP 37. The applicability of those principles was not in dispute between these parties.
The distinction between an order staying the operation of a decision and another order affecting the operation of the decision is a meaningful one.
As Basten JA noted in AVS GROUP OF COMPANIES PTY LTD v COMMISSIONER OF POLICE [2010] NSWCA 81 (AVS), at [16]: What the applicants required, in order to continue their licensed operations, was an order reinstating their licences. That cannot be achieved in terms by a "stay", a somewhat imprecise term which is usually understood to refer to a future event, which has not yet taken place: see McBride v Walton (Unrep, NSWCA, 27 August 1993) (Handley JA).
Also in AVS, Campbell JA stated at [95] and [110]: 95. I accept that there is the difference to which Mr Gray points between the present situation and that in McBride v Walton. However, that difference does not detract from the fact that the revocation had already taken place, as soon as the notice was served. It is possible to stay an order, if that order is one that, absent the stay, would have an effect in the future. However I doubt that it is correct to say that one can stay an action that has already taken place in the past. A different type of order to a stay is needed if one is to prevent an action that has already taken place in the past from having some particular effect in the future. … 110. If a literal meaning is given to the word "stay", the whole of the proceedings in the Tribunal seeking a "stay", the decision of the Appeal Panel relating to whether section 29(3) applied in an application for a "stay" of an order that had revoked a licence, and the later decision of Deputy President Hennessy that granted a "stay" were total exercises in futility, because a "stay", in the literal sense, of such a decision would be legally of no effect. In all these circumstances the order of the Deputy President should be construed as though "stay" meant, in substance, an order that the licence be treated as on foot for all purposes pending the determination of the appeal. It is a matter for the parties whether they see any occasion to ask the Tribunal to correct the terms of its order under section 87 ADT Act to accord with the evident intent of the order.
Having regard to those comments, and the fact that the appellant's Application for a Stay simply sought that the Tribunal's order transferring the proceedings to the District Court be "stayed", I sought written submissions from the appellant in advance of the hearing in the following specific terms: Such submissions must include, but are not limited to, how the order can be stayed when it took effect when made and the Registry file was transferred to the District Court well prior to the lodgment of the appeal and application for a stay: see the comments of Basten JA in AVS GROUP OF COMPANIES PTY LTD v COMMISSIONER OF POLICE [2010] NSWCA 81.
In answer to that issue, the appellant submits that: The fact that the papers have been sent to the District Court does not mean a stay is any less necessary for securing the effectiveness of the appeal. The administrative act of sending papers from one decision-making body to another is not the act which effects a transfer of proceedings. If that were correct, it would mean that registry officers have the power to obviate a statutory right to seek leave to appeal transfer orders simply by emailing or posting the Tribunal's file to a court. It would also mean that any act of a registry officer in sending papers to a court - even accidental ones - clothe that court with jurisdiction over the proceedings. In truth, the act which effects a transfer of proceedings is an operative order from one decision-making body to transfer proceedings to another. That being so, if the Transfer Order is stayed, then the District Court will lack any basis for having jurisdiction over the proceedings until the Transfer Order comes into operation again. Thus, if the Appeal Panel stays the Transfer Order, then what is likely to occur is that when the matter is listed for directions, the appellant will tell the District Court that the Transfer Order has been stayed, notwithstanding administratively the proceedings have been "transferred'. In this scenario, the District Court will likely allow the proceedings to sit in abeyance unless and until the Transfer Order comes into effect. The Appeal Panel should not give the administrative act of sending a file legal significance that it does not deserve. To do so would work injustice to the appellant, who has a statutory right to seek leave to appeal the Transfer Order and who exercised that statutory right within the required period. If the view is taken that the conduct of the registry of the Tribunal is determinative, then it would Create a situation whereby the statutory right to seek leave to appeal against transfer orders is meaningless, because it can be ousted by what appears to be the ordinary practice of the Tribunal's registry of sending the papers to the transferee court very soon after an order is made. That result should be avoided.
In answer to questions from me in argument, counsel for the appellant confirmed that its position was that the order could be "stayed" with the effect that the District Court would be rendered legally unable to proceed with the determination of the proceedings, even if the stay was granted after the District Court had actively seised itself of the matter by making orders to move the proceedings forward after the transfer had been effected.
With respect, I think the appellant's submissions focus too heavily on the second aspect of my direction - i.e., that the Registry file was transferred to the District Court well prior to the lodgment of the appeal and Application for a Stay - and insufficiently on whether the order took effect when made, meaning that, in the words of Campbell JA in AVS, the transfer arising from the order had already taken place in the past, so that a stay would be an exercise in futility.
Whilst the respondent opposed the stay and submitted that, in accordance with the reasoning in AVS, the transfer had already taken place meaning that there was nothing to stay, its submissions did not further elucidate the issue.

Did the order take effect when it was made?

Section 61 of the NCAT Act provides, relevantly, that: 61 When decision determining proceedings takes effect A general decision or a decision determining an external or internal appeal takes effect on the date on which it is given or such later date as may be specified in the decision.
I am satisfied the decision at first instance was a "general decision" (see the definition in NCAT Act, s 29) or at least purportedly a general decision, subject to the issue of jurisdiction being resolved. It did not specify a later date on which it was to come into effect. Prima facie, then, it came into effect when it was made.
The Tribunal's power to transfer proceedings to the Court in these circumstances should also be considered. It is contained in Sch 4, cl 6(1) of the NCAT Act, in the following terms: 6 Transfer of proceedings to courts or to other tribunals (1) If the parties in any proceedings for the exercise of a Division function so agree, or if the Tribunal of its own motion or on the application of a party so directs, the proceedings are - (a) to be transferred to a court (in accordance with the rules of that court) that has jurisdiction in the matter, and (b) to continue before that court as if the proceedings had been instituted there.
Notably, there is no requirement on a court to "accept" the transfer before it is effective. Rather, cl 6(2) provides: (2) If the parties in any proceedings that have been instituted in a court so agree, or if the court of its own motion or on the application of a party so directs, the proceedings are, if the proceedings relate to a matter for which the Tribunal has jurisdiction to exercise a Division function - (a) to be transferred to the Tribunal in accordance with the procedural rules (if any), and (b) to continue before the Tribunal as if the proceedings had been instituted in the Tribunal.
On that basis, the transfer order appears to me to be effective when made and then spent, even prior to the administrative act of the transfer of the Tribunal's physical file taking place.
So that it is not thought that I have overlooked it, I note that the provisions regarding transfers between courts are contained in the Civil Procedure Act 2005 (NSW) at Pt 9, Divs 1 & 2. There, ss 141(1) and 147(1) provide that transfer orders take effect when they are made. However, the provisions of the Civil Procedure Act do not bind this Tribunal and the insertion of ss 141(1) and 147(1) is, prima facie, equally consistent with either codifying what was already the case, or modifying what was not already the case. In the absence of submissions, I do not find those provisions helpful in determining the issue before me.
Having regard to those considerations, I do not think that the decision at first instance is one which the Appeal Panel has any meaningful power to stay. Further, having given the, legally represented, appellant the opportunity to consider the issue in advance of the hearing, I do not think it necessary to decide whether I could make another order affecting the operation of the decision which would achieve the outcome the appellant seeks.
For those reasons the application should be dismissed. It was agreed, in that event, that the respondent's costs should be the subject of further directions for submissions.

In case I am found to be wrong

Had I been satisfied that I could meaningfully make the order sought by the appellant, I would have exercised my discretion to do so. I will give truncated reasons for that here, in case it becomes useful elsewhere.
I would have treated the appeal as arguable, despite it having what I consider to be significant obstacles to its success on the following bases: 1. Firstly, on current jurisprudence (to the extent decisions of this Tribunal meet that description), the decision of the Tribunal may be found to be an interlocutory one, meaning the appellant will need leave to appeal: Reid & Robinson Builders Pty Limited trading as John Robinson Elite Constructions v Cleal [2021] NSWCATAP 348; 2. Secondly, and as the appellant acknowledges, the Tribunal's finding that a claim for breach of statutory warranty in respect of a major defect is within jurisdiction if brought within six years is also consistent with current jurisprudence: see, for example, Diao v Rawson Homes Pty Ltd [2021] NSWCATAP 273; 3. Thirdly, and perhaps most importantly, the currently expressed view of the Appeal Panel is that Sch 4, cl 6 of the NCAT Act may provide the Tribunal with jurisdiction to consider a transfer to a court even if it has no jurisdiction otherwise: Wilson v Chan & Naylor; Wilson v Chan & Naylor Parramatta Pty Ltd atf Chan & Naylor Parramatta Trust [2018] NSWCATAP 311 (Wilson) at [56].
However, the appellant, with the assistance of both senior and junior counsel, intends to argue the appeal in respect of jurisdiction on a principled method of statutory interpretation. Furthermore, the tentative view expressed by the Appeal Panel in Wilson was not brought into contest in the subsequent appeals in those proceedings, meaning that there is no Supreme Court authority that I am aware of which is determinative of that issue in the Tribunal. That, itself, may have an impact on the issue of leave to appeal, if that is required. I am also mindful of the necessarily attenuated process before me and of what was said by Megarry J in John v Rees [1970] Ch 345 at 402, that: "[a]s everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not…".
Clearly, if a stay is not granted the appeal may not be rendered nugatory but a significant objective of the appellant in bringing the appeal will be stifled, because the proceedings will proceed in a forum where strict pleadings will be required and the rules of evidence will apply. Those factors will, in all likelihood, increase the cost of the proceedings for the parties.
In terms of the balance of convenience, I understand the factual issues surrounding the question of jurisdiction to be relatively settled and I listed the appeal for determination on 30 May 2023, meaning the delay in having the appeal decided should be relatively minor compared to the overall history of the dispute between the parties. The respondent may also incur unnecessary costs prosecuting the proceedings in the District Court if a stay is not granted and the appeal succeeds.
Weighing those considerations, I would have granted a stay had I thought there was any meaningful basis for doing so.

Orders

My Orders are as follows: 1. The application for a stay is dismissed; 2. Should the respondent seek an outcome other than there being no order made as to costs, then it is to lodge submissions and evidence in support of its costs application with the Appeal Registry and give them to the appellant within 14 days of the publication of these orders; 3. Any submissions and evidence in response to the costs application are to be lodged with the Appeal Registry and given to the respondent within 14 days thereafter; 4. Submissions on the application for costs are not to exceed five pages in length; 5. The Appeal Panel may dispense with a hearing and determine any application for costs on the basis of the written submissions and evidence provided. If the parties oppose this course they should make submissions on this issue when complying with the directions as to their submissions on the substantive costs application.

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: 04 May 2023

Promina Design & Construction Pty Ltd v The Owners - Strata Plan No. 97449

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Judgment (7 paragraphs)

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Legislation Cited (3)

Cases Cited (6)

Cited By (3)