Smeaton v Valerius

Grounds of Appeal

1. The homeowners brought the appeal on two grounds. Firstly, that the decision to dismiss their application was not fair and equitable and against the weight evidence and that they should have been reimbursed $2,467.38 from the builder for additional works they were forced to undertake as a result of unauthorised works done by the builder. Secondly that the Tribunal failed to give sufficient reasons for the costs order and that the Tribunal failed to give the parties an opportunity to address it in relation to costs.
2. Both grounds relate to an "internally appealable decision" pursuant to sections 4 and 32(4) of Civil and Administrative Tribunal Act 2013 (the Act). A party may appeal an internally appealable decision on any question of law or with the leave of the Appeal Panel on any other ground pursuant to s 80(2)(b) of the Act.
3. Where, the decision the subject of the appeal is a decision of the Consumer and Commercial Division of New South Wales Civil and Administrative Tribunal, cl 12 of Schedule 4 of the Act limits the circumstances in which an Appeal Panel may grant leave to appeal. Clause 12 is in the following terms: 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80(2)(b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). Note: Under section 80 of this Act, a party to proceedings in which a Division decision that is an internally appealable decision is made may appeal against the decision on a question of law as of right.
4. Pursuant to rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW), the parties had 28 days to appeal from the day on which they were notified of the decision or given reasons for the decision, whichever is the later: The Tribunal made the orders on 12 December 2015, accordingly the appeal was made within time.

Was the decision to dismiss the homeowners claim a substantial miscarriage of justice?

1. In Collins v Urban [2014] NSWCATAP 17 at 77 its states (2) The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153].
2. It is unfortunate that the recording of the proceedings was unavailable. At the hearing before the Appeal Panel it was conceded by the homeowners that without the transcript or the recording it was difficult to establish the error in the Member's reasoning or based on any failure to have regard to the evidence or whether the decision was against the weight of the evidence and on that basis alone it was accepted that ground of appeal could not succeed. That ground was formally withdrawn as an appeal ground.

The decision in relation to costs

1. The homeowners made submissions that the Tribunal gave insufficient reasons for making the costs order it did. They suggested that the costs order was made against the weight of evidence and before the Tribunal published its decision on liability.
2. In relation to the evidence the homeowner's stated that the Tribunal failed to give sufficient weight to the fact that the builder was caught out lying under cross examination and was given an opportunity to settle and that he had rejected the offer. Also, they submitted that the parties at the hearing only addressed the Tribunal on liability and were awaiting that decision before making submissions on cost. They contended that no opportunity was offered to address the Tribunal on costs.
3. The builder made submissions that no finding of 'lying' was made by the Member. The builder made submissions that the costs order was uncontroversial and a logical conclusion of the decision on liability that was open to the Member to come to and was in accordance with the costs principals contained in s 60 of the Act.
4. Section 60 of the Act generally establishes that each party is to pay its own costs. The Tribunal may only award costs if it is satisfied that there are "special circumstances" warranting an award of costs (s 60(2) of the Act). Section 60(3) of the Act provides a non-exhaustive list of factors the Tribunal may consider having in determining whether there are special circumstances warranting an order for costs as follows: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36(3), (g) any other matter that the Tribunal considers relevant
5. If established, it is our view that a failure to allow parties an opportunity to make submissions in relation to costs and the discretionary issues contained in s 60 of the Act may constitute a failure to accord procedural fairness.
6. A failure to accord procedural fairness is an error of law, in respect of which leave to appeal is not required. As Deane J said in Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 367 If a statutory tribunal is required to act judicially, it must act rationally and reasonably. Of its nature, a duty to act judicially (or in accordance with the requirements of procedural fairness or natural justice) excludes the right to decide arbitrarily, irrationally or unreasonably ... When the process of decision-making is disclosed, there will be a discernible breach of the duty if findings of fact upon which a decision is based are unsupported by probative material and if inferences of fact upon which such a decision is based cannot reasonably be drawn from such findings of fact. Breach of a duty to act judicially constitutes an error of law which will vitiate the decision.
7. The duty to accord a person procedural fairness arises because the power involved is one which may "destroy, defeat or prejudice a person's rights, interests or legitimate expectations": Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 at 598; 97 ALR 177; (1990) 65 ALJR 167; 21 ALD 651. The content of the duty in a particular case depends upon the circumstances of the case and the nature of the power being exercised: Kioa and Ors v West [1985] HCA 81; (1985) 159 CLR 550 at 585 and at 612-615; (1985) 62 ALR 321; (1986) 60 ALJR 113; 9 ALN N28.
8. In Kioa, Gibbs CJ stated that: if the rules of natural justice were applicable, the appellants were entitled to a fair opportunity to correct or contradict any relevant material prejudicial to them." Mason J also acknowledged that a fundamental rule of natural justice required that a party "is entitled to know the case sought to be made against him and to be given an opportunity of replying to it", and "if in fact the decision-maker intends to reject the application by reference to some consideration personal to the applicant on the basis of information obtained from another source which has not been dealt with by the applicant in his application there may be a case for saying that procedural fairness requires that he be given an opportunity of responding to the matter". Brennan J similarly observed that "[a] person whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters to his interests which the repository of the power proposes to take into account in deciding upon its exercise."
9. Although Kioa was determined in the context of the exercise of ministerial power, a fundamental requirement of procedural fairness is that a party subject to the possibility of an adverse determination to be made on the basis of particular documents or material, should know the case against it, and relevantly in this case, be afforded an opportunity to respond.
10. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, at paragraph [13], the Appeal Panel considered that a failure to afford procedural fairness may establish a question of law that would give rise to an appeal as of right. We find that the Members consideration of the issue of cost without allowing the parties the opportunity to make submissions on the discretionary factors contained in s 60 of the Act and the failure to address how he arrived at his decision in relation to costs has resulted in an error of law.
11. In respect of procedural fairness in hearings before the Tribunal, and s 38(5)(c) of the Act, Collins v Urban [2014] NSWCATAP 17, commencing at [40], held that the Tribunal must; take such measures as are reasonably practicable ... to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings
12. In this case the parties were not invited to make submissions as to costs. The Appeal Panel Tribunal finds that no submissions were made in relation to costs at the hearing of the matter before the Tribunal. We accept that in the usual course of things, submissions as to costs, in particular in relation to settlement negotiations that may have occurred between the parties, are not made until the substantive decision on liability is decided, so as not to influence the Member's decision. The homeowners have provided detailed submissions about factors they would have put forward in relation to submissions in relation to the costs application had they been given the opportunity. They include issues relating to the credibility of witnesses at the hearing and settlement discussions that had occurred. The Member decided the issue of costs before allowing those submissions to be made. We find that they would have been relevant in weighing up the discretionary factors contained in s 60 of the Act. We also find that in this regard there has been a denial of procedural fairness.
13. Although, in light of the decision of the Appeal Panel in respect of the failure to accord procedural fairness to the homeowners, it is not strictly necessary to decide this issue in allowing the appeal, the Appeal Panel makes the following observations in respect of this ground.
14. An appeal in respect of an allegation that the Tribunal Member failed to give adequate reasons, is also a question of law, in respect of which leave is not required: Pettit v Dunkley [1971] 1 NSWLR 376; Papps v Police (2000) 77 SASR 210; Perkins v County Court of Victoria (2000) 2 VR 246; Byrnes v Barry (2004) 150 A Crim R 471; Mountford v Magistrates Court of South Australia (2006) 95 SASR 103.
15. Adequate reasons facilitate a litigant, who may be aggrieved, exercising rights he or she may have to appeal and thus ensures that any appeal right is not rendered nugatory or illusive - Pettitt v Dunkley [1971] 1 NSWLR 376 at 387 and failure to do so promotes "a sense of grievance" and denies "both the fact and the appearance of justice having been done", thus working a miscarriage of justice: see Keith v Gal [2013] NSWCA 339 at [109], citing Mifsud v Campbell (1991) 21 NSWLR 725 at 728; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 442.
16. Collins v Urban [2014] NSWCATAP 17 deals with the Tribunal's duty to publish reasons. Commencing at [47] the Appeal Panel set out a number of relevant principles with respect to the Tribunal's duty to give reasons, but more relevantly in this case, what those reasons must include, as follows: Section 62 (3) of the Act provides: (3) A written statement of reasons for the purposes of this section must set out the following: the findings on material questions of fact, referring to the evidence or other material on which those findings were based, the Tribunal's understanding of the applicable law, the reasoning processes that lead the Tribunal to the conclusions it made. (4) Nothing in this section prevents the Tribunal from giving oral reasons or a written statement of reasons for a decision it makes even if it has not been requested to do so by a party; Section 62 of the Act does not, define exhaustively when there is a duty to give reasons or the extent of that duty; The findings of fact and legal reasoning of the decision maker at first instance must be discernable within the reasons to facilitate any appeal: Collins at [49], citing Pettitt v Dunkley [1971] 1 NSWLR 376 at 387 (per Moffitt JA, Manning JA agreeing). Any such decision ought include not only the evidence, and the decision arrived at, but also the reasons for arriving at the decision: Collins at [50] citing Pettit and Carlson v King [(1947) 64 WN (NSW) 6] per Jordan CJ in delivering the decision of the Full Court. Failure to provide sufficient reasons promotes "a sense of grievance" and denies "both the fact and the appearance of justice having been done", thus working a miscarriage of justice: Collins at [53] citing Keith v Gal [2013] NSWCA 339 (per Gleeson JA at [109]), Mifsud v Campbell (1991) 21 NSWLR 725 at 728; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 442 per Meagher JA. If, however, the parties have the right to request written reasons but do not do so, this basis for generally requiring reasons to be given may be of less significance but it continues to apply: Collins at [53]. Those duties to produce reasons in that form apply not only to Courts but also to other judicial or quasi-judicial tribunals or bodies: Collins at [52] citing for example Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67 NSWLR 372; and particularly to bodies such as the Tribunal: Sydney Supermarkets Pty Limited v Xu [2009] NSWADTAP 28 as cited in Collins at [54].
17. In all the circumstances, and where the Tribunal provided no reasons for the order for costs being made in its terms, it is likely that the Appeal Panel would have also upheld this ground of appeal had it been necessary to do so.

Orders 1. The appeal is allowed 2. The matter is remitted for reconsideration on the issue of costs only by a reconstituted Tribunal

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

Amendments 16 October 2015 - Coversheet - representation field corrected. 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: 16 October 2015