Sayhoun v Owners Corporation Strata Plan 75123

NCAT Appeal Panel|2014-12-23

Introduction 1In this matter the appellants seek to appeal against a decision of the Consumer and Commercial Division of the NSW Civil and Administrative Tribunal (the Tribunal) of 28 July 2014. 2The first appellant was the first respondent in the proceedings before the Tribunal. He was the licensed builder of a property at Abbotsford New South Wales (the property). The second appellant, which was the second respondent in the proceedings before the Tribunal, was the developer. The respondent, which was the applicant in the proceedings before the Tribunal, is the successor in title of the property. 3The respondent sought damages for defective work. After a hearing lasting three days the Tribunal ordered the appellants, jointly and/or severally, to pay the respondent $201,725. On 28 July 2014 the Tribunal also ordered the appellants to pay the respondent's costs on a party/party basis, as agreed or assessed.

Notice of Appeal 4The Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) sets out the basis upon which appeals from decisions of the Tribunal may arise. Under s 80(2)(b) an appeal may be made as of right on any question of law, or with leave of the Appeal Panel, on any other grounds. 5The appellants' grounds of appeal are set out in Annexure B to the notice of appeal. There are 14 matters raised said to be errors of law. However the appellants also state that the Tribunal's decision was not fair and equitable. This is a reference to Schedule 4, clause 12(a) of the NCAT Act, which provides that an Appeal Panel may grant leave to appeal if satisfied the appellant may have suffered a substantial miscarriage of justice because the decision of the Tribunal under appeal was not fair and equitable. 6The characterisation of the ground of appeal as a question of law has significant consequences: a party may appeal as of right on a question of law; otherwise the party requires leave of the Appeal Panel.

Extension of time 7The appellants seek an extension of time in which to file the appeal. Pursuant to regulation 25(4)(c) of the Civil and Administrative Tribunal Rules 2014, unless the Tribunal grants an extension under s 41 of the NCAT Act, an appeal must be lodged within 28 days from the day on which the appellant was notified of the decision or given reasons for the decision (whichever is the later). 8The Tribunal published the decision under appeal on 21 May 2014. On 17 June 2014 the appellants appealed to the District Court of NSW. On 24 July 2014 the respondent filed a notice of motion in that appeal seeking to strike out the appeal. The appeal to the District Court was dismissed on 29 August 2014. The appeal to this Appeal Panel was filed on 2 September 2014. 9As noted, unless an extension of time is granted, appeals need to be filed within 28 days. The appellants have not submitted that they received notice of the decision at any time other than the date the decision was delivered. Accordingly an appeal to the Appeal Panel should have been filed by 18 June 2014. The notice of appeal having been filed on 2 September 2014, was filed almost 11 weeks out of time. 10In Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 the Appeal Panel considered the principles which govern the granting of an extension of time. The Appeal Panel stated at [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] NSWCA 369; (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] NSWCA 369; (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]. 11The appellants' submissions as to an extension of time are that:

a significant injustice will be caused to them if an extension of time is not granted;
the length of the delay is not significant and is approximately 10 weeks;
the appeal to the District Court was filed within time;
the reason for the delay in bringing the internal appeal to the Appeal Tribunal was due to confusion as to the interpretation of clause 7 of Schedule 1 of the NCAT Act, "which remains untested in the District Court and no authority which binds the District Court";
the respondent has been aware of the grounds of appeal and the evidence relied on;
the appeal has substantial merits; and
there is no significant prejudice to the respondent. 12In summary the respondent submits that time should not be extended unless the application for leave to appeal has prospects of success: Jackamarra v Krakouer (1998) 195 CLR 516 at [7]. It submits that as the appellants do not have reasonable prospects of success in their application for leave to appeal, an extension of time should not be granted. 13In Jackson, the Appeal Panel, in considering whether or not to grant an extension of time, highlighted four matters. The first matter was the length of delay. In Jackson the delay was approximately five weeks. It should be noted that Jackson was an appeal in respect of a residential tenancy decision, where only 14 days is allowed in which to file an internal appeal; see rule 25(4)(b) of the Rules. The Appeal Panel considered that, in the circumstances of that case, the length of delay did not tell substantially in favour of either granting or not granting the extension of time sought. We are of the view here, where 28 days is allowed in which to file an internal appeal, that a delay of nearly 11 weeks weighs slightly towards an extension of time not being granted. 14The second matter was the explanation for the delay. Here, at all times the appellants were represented by legal practitioners. For whatever reason, an appeal was made to the incorrect forum, that is, to the District Court rather than the Appeal Panel. The District Court had ceased to hear appeals from the Tribunal on 1 January 2014. We do not understand or accept the appellants' submission that the reason for the delay in bringing the internal appeal to the Appeal Tribunal was due to confusion as to the interpretation of clause 7 of Schedule 1 of the NCAT Act. That clause deals with the consideration of pending proceedings before former tribunals at the time the NSW Civil and Administrative Tribunal came into existence. The appellants, no doubt on advice, simply made a mistake as to the appropriate forum. They did not correct that mistake even after the respondent wrote to them advising them that were in the wrong forum. 15We are not satisfied that the fact the appellants commenced their appeal in the wrong forum is an understandable explanation for the delay in filing this appeal. 16The third matter considered in Jackson was the prejudice to the respondent. Here the respondent rightly submits that it is being denied the fruits of the decision of the Tribunal handed down on 20 May 2014, together with the costs order in its favour on 5 August 2014. It further notes that, in addition to being awarded the costs of the proceedings in the Tribunal, the District Court ordered the appellants to pay its costs on an indemnity basis, as it was established that the respondent had instructed its solicitors to write to the appellants informing them that they had commenced proceedings in the incorrect jurisdiction. 17The appellants' submissions do not address the question of prejudice to the respondent. We are satisfied that the respondent would be prejudiced if an extension of time were granted. That prejudice may be addressed by an award of costs, although we note the remarks of the plurality in Aon Risk Services Aust Pty Ltd v Australian National University (2009) 239 CLR 175 at [100] that justice cannot always be measured in money and that a judge is entitled to weigh in the balance the strain the litigation imposes upon litigants; and their approval (also at [100]) of Bowen LJ's statement in Cropper v Smith [1884] 26 Ch D 700 that: Non-compensable inconvenience and stress on individuals are significant elements of modern litigation. Costs recoverable even on an indemnity basis will not compensate for time lost and duplication incurred where litigation is delayed or corrective orders necessary. 18The fourth and final matter considered by the Appeal Panel in Jackson was the appellants' prospects of success on appeal. In our view this is the most important of the matters required to be considered in this case. As noted above the appellants submit that the Tribunal made 14 errors. The appellants divide these errors into three groups, namely:

Errors as to jurisdiction 20The appellants' grounds of appeal on this issue are stated as follows: a. In circumstance where the appellants objected to the tribunal's jurisdiction in denying the appellants procedural fairness by denying them the right opportunity to choose evidence in relation to the jurisdiction of the tribunal. b. Declining to determine whether the respondents claim had been brought within time in accordance with the Home Building Act 1989 (NSW). c. Declining to permit additional or any evidence to be adduced as to the completion date of the subject building and thereby failing to determine upon proper legal grounds whether the tribunal had jurisdiction to hear and determine the Plaint. d. Pursuant to section 65 of the Consumer Trader and Tenancy Act (as then applicable to a matter commenced in the Tribunal prior to 1 January 2014) failed to determine on a proper basis the question of the tribunal's jurisdiction h. Denied the appellants procedural fairness in circumstances where the tribunal departed from its own normal course of pre-trial directions and did not require the appellants or either of them to file a defence or points of reply, denying the appellants aspects of their defences reasonably open to them on the evidence as filed well before hearing in accordance with the tribunal's orders. 21The appellants submit that on the first day of the hearing, 26 February 2014, they applied for an adjournment to 4pm that day to permit them to adduce further evidence on the question of jurisdiction, specifically whether the respondent's claim had been brought within the time required by s 48K of the Home Building Act 1989. They submit that in refusing that application the Tribunal abdicated its duty to determine jurisdiction. 22The appellants submit that this ground of appeal represents "an attempt to legitimately 'dress up' a refusal to grant an adjournment as a purported denial of procedural fairness." It submits that the appellants had more than a reasonable opportunity to prepare and serve evidence on the issue of jurisdiction, in fact more than two years. It submits that the Tribunal's refusal to permit further uncertain evidence on the first day of the final hearing was the correct decision based on any view of the authorities, including Aon Risk Services Aust Pty Ltd v Australian National University (2009) 239 CLR 175. 23The respondents further submit that on day one of the hearing it was apparent that the appellants were uncertain as to what evidence they would be leading on the jurisdictional issue, and that counsel for the appellants indicated that it would take a further 48 hours to obtain further documents. The appellants could not explain what documentary evidence would be obtained or how that evidence might be relevant to the issue of jurisdiction. 24In reply, the appellants submit that Aon Risk "is not a mantra preventing the true determination of matters actually in dispute but even more so when the principal matter is the very jurisdiction of the Tribunal purporting to apply Aon". They submit that the Tribunal must determine jurisdiction before embarking on any other examination of the matters in dispute, and to do otherwise is to act ultra vires. They emphasise that the Tribunal cannot give itself jurisdiction by a wrong decision: R v Small Claims Tribunal and Dean; Ex parte RACV General Insurance Pty Ltd [1981] VR 602. 25It is useful to set out the Tribunal's findings on this issue. The Tribunal stated: JURISDICTION 12 The respondent submitted that the Tribunal has denied it procedural fairness by "refusing to entertain the jurisdictional issue." However, the tribunal heard and determined the issue of jurisdiction. 13 On day one the [appellants] sought an adjournment to put before the tribunal further evidence as to jurisdiction. 14 The application for an adjournment was heard and leave to adjourn the three-day hearing was declined. 15 Oral reasons for the refusal to adjourn were delivered on the day. 16 The Tribunal then considered the issue of jurisdiction on the evidence tendered before it. 17 The uncontested evidence before it was that the occupation certificate was issued on 8 May 2005. The [appellants] had two years to file and serve evidence to rebut the presumption contained in section 3(B)(3)(c) of the [Home Building] Act that practical completion occurred upon issue of an occupation certificate. In the absence of any rebuttal evidence, the tribunal was entitled to presume that the date of practical completion was 8 May 2005. 18 The proceedings were commenced on 31 January 2012. 19 In the absence of any other evidence to the contrary, the tribunal determined that the application was brought inside the seven year time limit prescribed by section 48K(7) of the [Home Building] Act. 20 The tribunal was satisfied it has the requisite jurisdiction to hear and determine the issues between the parties. 26The appellants' were unable to specifically identify what further evidence it proposed to lead on jurisdiction and why it would take a further 48 hours to obtain whatever undisclosed documents were apparently relevant to the jurisdictional point. In those circumstances, the respondent submits that having regard to the principles set out by the High Court in Aon Risk, the Tribunal's refusal to adjourn the proceedings was an entirely proper and reasonable decision to make. 27We agree. As the plurality stated in Aon Risk: 94. . . . Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants. . . . 98. Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs. 28The appellants also assert that they were denied procedural fairness when the Tribunal refused to adjourn proceedings and permit further evidence. We accept the respondent's submission that there are authorities which support the general proposition that simple refusal to grant an adjournment, in circumstances where the party asserting a denial of procedural fairness wishes to rely upon late evidence and has not complied with directions, may be a denial of procedural fairness. 29But, in this case, it appears to the Appeal Panel that the appellants have misconstrued the Tribunal's finding as to jurisdiction. The appellants appear to submit that the Tribunal failed to actively consider whether or not it had jurisdiction to hear and determine the matter. As paragraphs [12] to [20] of the Tribunal's reasons make plain, the Tribunal did consider the question and made a decision based on the evidence before it. In the circumstances we are not satisfied that the merits of the "jurisdiction" ground of appeal favours an extension of time in which to appeal.

Errors as to the correct defendant 30The appellants' grounds of appeal on this issue are stated as follows: i. In excluding evidence as to the correct defendant. j. Denied the appellate procedural fairness in denying the appellants' counsel the right to re-examine the appellants' witness on an answer in cross-examination k. Denied the appellants procedural fairness in restricting the use of evidence correctly filed in accordance with the tribunal's orders and otherwise admissible. 31The Tribunal's findings on this issue are set out in paragraph [35] to [45] of the decision. The Tribunal noted that the first named respondent, Mr Sayhoun (here the first-named appellant) was the builder, and that the only evidence before the Tribunal naming him as the builder was a construction certificate attached to a statement of Mr Albert Abi-Khattar. The Tribunal accepted that, by reference to Mr Sayhoun's licence number appearing on the construction certificate, Mr Sayhoun had been correctly identified in his personal capacity as the builder. There was no other evidence to the contrary before the Tribunal. 32On the third and final day of the hearing counsel appearing for both appellants submitted that the builder had been wrongly identified. The appellants note that it was put to Mr Abi-Khattar in cross-examination that the builder was Mr Sayhoun. He agreed. The appellants wished to explore his response in re-examination, but the tribunal refused to allow this. They submit that the Tribunal erred in not permitting re-examination on this issue. 33The Tribunal considered that it would be contrary to the principles enunciated in Aon Risk to allow the appellants to amend their case on the final day and to run a case that had never previously been raised. 34The respondent submits that this ground of appeal lacks any merit as it overlooks the fact that the weight of the evidence demonstrated that Mr Sayhoun was the builder. It also submits that it cannot be said that any miscarriage of justice occurred as a result of the Tribunal refusing to allow re-examination on this issue. 35We agree. In the circumstances we are not satisfied that the merits of this ground of appeal favour an extension of time in which to appeal.

Errors as to evidence 36In this group of errors, the appellants raise two matters. The first is a misunderstanding of the principles of Makita v Sprowles [2001] NSWCA 305 by excluding admissible evidence and admitting inadmissible evidence. The second is that the Tribunal erred in finding, without evidence, that the first appellant's solicitor was the brother of the appellants' expert. 37The appellants' grounds of appeal on the first issue are stated as follows: e. In the application of Makita v Sprowles failed to exclude evidence that was not admissible. f. Admitting evidence while at the same time finding that such evidence did not comply with the rule in Makita v Sprowles. g. Placing reliance on evidence that failed to comply with Makita v Sprowles. 38These particular grounds are not developed in the appellants' submissions. Accordingly we do not consider that these grounds favour an extension of time within which to file the appeal. 39The appellants' grounds of appeal on the second issue are stated as follows: l. In finding without evidence that the appellants' expert was the [first] appellant's solicitor's brother. m. In finding, wrongfully and contrary to evidence, that the [first appellant's] expert's evidence was partial by holding, without evidence, that the [first appellant's] solicitor was the experts brother. n. By finding, even if the facts were true that the [appellants'] expert was the brother of the [first] appellant's] solicitor (which is not true that such was a basis for discrediting the [appellants'] expert's evidence. 40In brief submissions the appellants submit that the Tribunal erred in finding partiality in the appellants' expert witness in circumstances where there was no evidence to support that conclusion and where that finding was based on a totally incorrect premise. They submit that the Tribunal's finding at paragraph 52 of the reasons that Mr Shamir's brother was the solicitor acting for the appellants "clearly taints" the reasons for the decision. They submit that on this point alone the Appeal Panel should reconsider or order the rehearing of the proceedings. They submit that the conclusion made by the Tribunal was the conclusion that a reasonable Tribunal could not reach. 41The respondent submits that on the issue of quantum, the evidence of the respondent's expert was largely uncontested by the appellants' expert, particularly in relation to disputed fact items that were found by the Tribunal to exist. Therefore they submit there was no basis for appealing this aspect of the decision, particularly in circumstances where the appellants object to the respondent's expert evidence on quantum. 42The respondent further submits that, in relation to liability, the tribunal outlined detailed reasons why, in respect of each defect item found to exist, it preferred the evidence of the respondent's experts over the evidence of the appellants' expert. The respondent submits that in those detailed reasons there was no reference to the fact of Mr Shamieh being the brother of the solicitor acting for the appellants and no basis to assert that the reasons of the Tribunal, or the reason supporting each finding of defects, was tainted by an earlier reference to the two gentlemen being brothers. Finally the respondent submits that the appellants have failed to explain how the reasons were tainted by such a reference. 43For the reasons put by the respondent, ware not satisfied that the merits of this ground of appeal favour an extension of time in which to appeal.

Consideration 44It appears to the Appeal Panel that the appellants have little if any prospects of success in an appeal based upon any of the grounds set out in the Notice of Appeal. Given that some of the other considerations also weigh against an extension of time being granted, it may be thought that the appellants should satisfy the Appeal Panel that their case has more substantial merit than merely being fairly arguable. In Tomko v Palasty (No 2) [2007] NSWCA 369, Hodgson JA, with whom Ipp JA agreed, stated at [14]: there may be circumstances where it is appropriate to go further into the merits of the case of a person seeking an indulgence such as this, than to ask whether or not the case is fairly arguable. If such a person has a reasonable explanation of delay and the opponent does not have a strong case of prejudice, then a fairly arguable case is sufficient. However, if the explanation for the delay is less than satisfactory, or if the opponent has a substantial case of prejudice, then it may be relevant that the person seeking the indulgence shows that his or her case has more substantial merit than merely being fairly arguable. 45This principle was followed and applied by the Administrative Decisions Tribunal of NSW in Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58]. 46In the Appeal Panel's view the reason for the delay was less than satisfactory and there is obvious prejudice to the appellants. But even if that were not the case, we do not consider that the appellants' appeal has more substantial merit than being fairly arguable.

Orders 47For these reasons, the Appeal Panel makes the following orders: (1)The application for an extension of time in which to appeal is refused. (2)The appeal is dismissed. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 23 December 2014

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