The appellants (the homeowners) brought proceedings against the respondent (the builder) in 2019 alleging, inter alia, that a concrete driveway constructed at the homeowners' home by the builder was defective, and seeking that the builder pay the reasonable cost of rectification. The homeowners apparently submitted that the only way to rectify the defects in the driveway was the complete demolition and reconstruction of the driveway.
By decision delivered on 23 April 2021, the Tribunal ordered, inter alia, that the builder carry out two items of work:
"a) the demolition and reinstatement of the drive/verge crossover in order to comply with the Blue Mountains City Council requirements and all relevant Australian Standards, particularly as to the grade of the drive/verge crossover; and
b) repairs to the stairway shown at page 12 of 16 of the photographs to Mr Waddell's report to bring them into compliance with BCA requirements."
(The work orders)
The Tribunal also ordered:
"3 Mark Owen Archibald Scott must carry out the work referred to at [95] of this decision in accordance with the requirements of [96] and [97] of this decision.
4. Debra Stewart and Peter Meywes have leave to renew these proceedings if order 3 is not complied with within the period specified."
Paragraphs [95], [96] and [97] referred to in order 3 were as follows:
"95 The work which I have found to require either compensation as damages or rectification of by way of work orders is as follows:
(a) the demolition and reinstatement of the drive/verge crossover in order to comply with the Blue Mountains City Council requirements and all relevant Australian Standards, particularly as to the grade of the drive/verge crossover; and
(b) repairs to the stairway shown at page 12 of 16 of the photographs to Mr Waddell's report to bring them into compliance with BCA requirements.
96 I find that there is no reason why the builder should not be permitted to arrange for this relatively modest amount of work to be done, provided that it is carried out:
(1) within six weeks of this decision;
(2) by an contractor appropriately licensed under the Home Building Act;
(3) with due care and skill;
(4) in accordance with Blue Mountains City Council requirements;
(5) in accordance with all relevant Australian Standards; and
(6) in accordance with the Building Code of Australia.
97 I will also order that the work should be inspected and approved by Mr Dockrill at the builder's expense and if Mr Dockrill is unable to undertake this work such inspection and approval should be conducted by an engineer nominated by Mr Dockrill."
Both parties appealed. The builder's appeal related to an award of damages made in favour of the homeowners. The homeowners' appeal sought to set aside the work orders and substitute a money order.
Both appeals were heard together on 5 October 2021. By decision published on 22 October 2021 (Scott v Stewart [2021] NSWCATAP 326) the Appeal Panel dismissed both appeals. Accordingly, the Tribunal's orders of 23 April 2021 were not altered.
On 10 January 2022 the homeowner filed an application to renew the proceedings.
Clause 8 of schedule 4 to the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) provides:
8 Renewal of proceedings in respect of certain Division decisions
(1) If the Tribunal makes an order in exercise of a Division function in proceedings, the Tribunal may, when the order is made or later, give leave to the person in whose favour the order is made to renew the proceedings if the order is not complied with within the period specified by the Tribunal.
(2) If an order has not been complied with within the period specified by the Tribunal, the person in whose favour the order was made may renew the proceedings to which the order relates by lodging a notice with the Tribunal, within 12 months after the end of the period, stating that the order has not been complied with.
(3) The provisions of this Act apply to a notice lodged in accordance with subclause (2) as if the notice were a new application made in accordance with this Act.
(4) When proceedings have been renewed in accordance with this clause, the Tribunal -
(a) may make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined, or
(b) may refuse to make such an order.
(5) This clause does not apply if -
(a) the operation of an order has been suspended, or
(b) the order is or has been the subject of an internal appeal.
A "Division function" is a function allocated to the Consumer and Commercial Division of the Tribunal. Functions of the Tribunal in relation to the Home Building Act 1989 (NSW) (the HBA) are allocated to the Consumer and Commercial Division: Cl 3 of Sch 4.
The homeowner alleged that:
"No work has been undertaken by the respondent in relation to the work order that required completion within six weeks of 23 April 2021."
We note that the Appeal Panel had not extended time for compliance with the work orders, but the homeowners did not file the renewal application until more than three months after the Appeal Panel had dismissed the appeals.
By the renewal application the homeowners claimed compensation in the sum of $50,000 in lieu of the work orders.
By letter dated 25 May 2022, from the builder's then solicitor, the builder sought to have a question of jurisdiction determined as a preliminary question. The Tribunal declined to determine the jurisdictional issue as a preliminary question, and the whole of the renewal application was listed for hearing on 23 June 2022.
At the hearing of the current appeal, we were informed that, pursuant to directions of the Tribunal, each party then filed submissions addressing the preliminary issues. Both sets of submissions were dated 21 June 2022 and were filed on or about that date. The builder's preliminary submissions raised two issues.
1. The first issue was whether the homeowners were "seeking relief on the basis of an extended scope of works beyond the decision" and "re-agitating issues that were expressly rejected by [the Tribunal] and on appeal".
2. The second issue was whether, as the decision of 23 April 2021 had been the subject of an internal appeal, cl 8(5)(b) of Sch 4 to the NCAT Act prevented the homeowners bringing a renewal application.
On 23 June 2022 the Tribunal received evidence and submissions in relation to the renewal application and reserved its decision. The decision was published on 3 February 2023.
The Tribunal accepted the builder's submission that cl 8(5)(b) of Sch 4 to the NCAT Act operated to prevent the homeowners pursuing any renewal application.
Because the Tribunal accepted the second submission, it did not determine the first issue, which remains to be determined when, as we have determined should happen, the application is remitted to the Tribunal for determination.
The Tribunal's reasons for concluding that cl 8(5)(b) precluded the homeowners from bringing a renewal application were set out in paragraphs [53] - [57]
"53 "Apply" in Schedule 4 clause 8(5) means "to bring to bear, put into practical operation, as a principle, law, rule etc to have a bearing or reference, be pertinent": Macquarie Dictionary.
54 In interpreting Schedule 4 clause 8 of the Act, I have regard to the principle of statutory construction that the grammatical or literal meaning of a term used in a statute is not the end of the enquiry, but that I must have regard to the context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction, and how to engage in construction where there are conflicting provisions within a statute: Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 per McHugh, Gummow, Kirby and Hayne JJ at pp. 381-2.
55 The literal or grammatical meaning of the text of Schedule 4 clause 8(5) is that Schedule 4 clause 8 "does not apply", as "the order" has been the subject of an internal appeal. I have had regard to each of the other matters which I have cited in the preceding paragraph of these reasons, and I see no reason for me to depart from the literal or grammatical meaning of Schedule 4 clause 8(5).
56 Schedule 4 clause 8(5) therefore has the effect that Schedule 4 clause 8, which is the provision relied upon by the Homeowners as the basis for the relief they seek before me, does not apply, as "the order" has been the subject of an internal appeal. Schedule 4 clause 8(2) provides for the person in whose favour the order was made to renew the relevant proceedings, by lodging the relevant notice, "within 12 months after the end of the period', stating that the order has not been complied with, but that 12-month period will not prevail if the clause in which it is provided for does not apply: Schedule 4 clause 8(5).
57 Accordingly, the application is not competent and I have no jurisdiction to make the order which the Homeowners now seek in the proceedings before me."
In so finding, the Tribunal appears to have overlooked the preliminary submissions filed by the homeowners, which referred to the Appeal Panel decision in Mehr v Lau [2022] NSWCATAP 15, in which, at [30] - [31] and [37] - [40], the Appeal Panel held:
"30 The appellants also submitted that the renewal proceedings could not have been brought because there had been an appeal in the past and relied on the terms of Clause 8 of Schedule 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act").
31 We do not accept this submission.
…
37 The effect of cl 8(5) is to prevent renewal proceedings where an order not complied with is suspended, is the subject of an appeal (and therefore may be set aside or varied for example) or has been varied by an Appeal Panel (and the renewal proceedings assert that the original, unvaried order, was not complied with).
38 The words "has been the subject of an appeal" in cl 8(5)(b) do not mean that the order not complied with was merely considered in an appeal. If that were correct, then a party could fail to comply with an order and then prevent the bringing of renewal proceedings (and further orders) by bringing an unsuccessful appeal from that (original) order.
39 The words "has been the subject of an appeal" mean that if an order is varied or set aside or otherwise changed by an Appeal Panel, then renewal proceedings cannot be brought in relation to non-compliance with the original order for the obvious reason that the original order is no longer operative. However, if an order is considered by an Appeal Panel and is left undisturbed, then it has not relevantly been the subject of an appeal.
40 Further, if an Appeal Panel varies an order, then that varied order (which is the operative order) is not the "subject of an internal appeal". It follows, that if the varied order is not complied with, renewal proceedings may be commenced (with leave)."
That the Tribunal had not taken the homeowners' preliminary submissions into account is tolerably clear from paragraphs [62] and [63] of its decision, which state relevantly:
"62 A feature of the Homeowners' written submissions is that they say nothing about Schedule 4 clause 8(5) of the Act …
63 On 25 May 2022, by way of the two-page letter referred to above, the Builder had objected to the competency of the renewal proceedings and had expressly relied upon Schedule 4 clause 8(5) of the Act in that letter. By the Homeowners' letter dated 31 May 2022, it appears that the Homeowners were aware of the 22 May 2022 letter. ... I am satisfied that the Homeowners were sufficiently on notice of Schedule 4 clause 8(5) of the Act and its potential relevance to these proceedings."
The parties provided to the Appeal Panel a transcript of the hearing on 23 June 2022. That transcript included the following exchanges:
"Senior Member: All right. And the respondent, as I understand it, raises the preliminary point. How do you propose that we deal with that? Do we deal with everything, effectively, together? Because it seems like if I reserve, how do you propose to deal with the respondent's preliminary point?
Mr Klooster: My preference would be to hear the matter today and then make fulsome submissions on all issues, including the preliminary point. There were some preliminary submissions. I don't know if the member found them.
Senior Member: I've been given them, yes. I believe I have. I haven't ticked off everything, but I believe I have.
Mr Klooster: Yes. And credit to Mr Gunning, he's tried to deploy every argument he can to prevent my client from obtaining a money order. One of the issues was whether or not the appeal that was brought prevents the renewal application now before the tribunal. There is some appeal panel authority directly on that point, which I've directed the tribunal's attention to. The effect of that is, unless the appeal panel disturbs orders, or varies orders, then there is nothing preventing a renewal application subsequently being made after that appeal has been disposed of. I understand that's one of the issues that Mr Gunning deploys against me. I think the second issue is a straight up and down issue estoppel argument, which would be the factual findings made at first instance by the senior member, and what effect, if any, they have when one considers the orders that were made.
…
Mr Gunning: No, I think that is an appropriate course, Senior Member. The one thing I will say, though, now, if I can take this opportunity on the preliminary point, because it is important and, in my submission, it's fairly clear, the reason why there aren't any authorities on point is that the schedule 4, clause 8, under which this application is made, doesn't remove or defeat the law of issue estoppel. And that, in my submission, explains why there isn't any authority that says otherwise. The short point is this: there are key aspects of the reasons for the decision and the work order from the tribunal at first instance that bind the parties. And those key paragraphs are paragraphs 70, 75, 76, and the work order itself in paragraph 95. And there are some ancillary orders, giving effect to that work order, in 96 and 97." [Emphasis added.]
Mr Klooster, who appeared for the homeowners both at first instance and on the appeal, submitted that the hearing had proceeded on the basis that the application of cl 8(5)(b) was not an issue. However, in the absence of Mr Gunning, who appeared for the builder before the Tribunal but not before the Appeal Panel, we do not consider that that is a safe inference to draw.
In light of the Tribunal's conclusion that cl 8(5)(b) precluded the homeowners from maintaining a renewal application, the Tribunal dismissed the application. The Tribunal made provision for the exchange of submissions concerning the costs of the application. We were informed that submissions had been exchanged but, at the time of the appeal hearing, no decision had been published.
[2]
The Notice of Appeal
The homeowners filed their Notice of Appeal against the Tribunal's decision on 3 March 2023. The Notice of Appeal sought that the orders dismissing the application be set aside and that "the Appeal Panel re-determine the matter on the evidence and material before it under sections 80(3)(a) and 81(1)(c) of the [NCAT Act]"
[3]
Scope and Nature of Internal Appeals
Internal appeals against decisions of the Tribunal, other than interlocutory decisions, may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: NCAT Act s 80(2).
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law:
1. Whether there has been a failure to provide proper reasons where they are required;
2. Whether the Tribunal identified the wrong issue or asked the wrong question;
3. Whether a wrong principle of law had been applied;
4. Whether there was a failure to afford procedural fairness;
5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations;
6. Whether the Tribunal took into account an irrelevant consideration;
7. Whether there was no evidence to support a finding of fact; and
8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited by cl 12(1) of Sch 4 to the NCAT Act. In such cases, the Appeal Panel must first be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that:
1. the decision of the Tribunal under appeal was not fair and equitable; or
2. the decision of the Tribunal under appeal was against the weight of evidence; or
3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) in Sch 4 may have been suffered where:
" … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance."
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
In Collins v Urban, the Appeal Panel stated at [84] that:
"(1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact, … [and]
(2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve:
(a) issues of principle;
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;
(d) a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed."
By virtue of s 80(2)(a) of the NCAT Act, internal appeals from interlocutory decisions of the Tribunal may be made only by leave of the Appeal Panel.
In Champion Homes Pty Ltd v Guirgis [2018] NSWCATAP 54 the Appeal Panel held, at [34] - [35]:
"34 … there is no specification in the NCAT Act as to the circumstances in which leave should be granted in respect of interlocutory decisions. Rather, there is a discretion to be exercised and general principles apply to the grant of leave to appeal such decisions.
35 As stated in various decisions of the Tribunal and its predecessor, the Administrative Decisions Tribunal, the principles to be applied are to be derived from the principles applicable to leave applications in courts: see for instance, Johnston v Department of Education and Training (GD) [2007] NSWADTAP 6 and BHM v BHN & Ors [2014] NSWCATAP 26. These principles include the following:
(1) It is unnecessary and unwise to lay down rigid rules of practice or exhaustive criteria governing the grant of leave to appeal: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 175; [1981] HCA 39;
(2) However, the requirement for leave is a filter restricting access to the appeal process: Coulter v R (1988) 164 CLR 350; [1988] HCA 3 at 359 per Deane and Gaudron JJ;
(3) Leave should only be granted where there are substantial reasons to allow an appellate review: Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] 104 FCR 564;
(4) Circumstances justifying leave may be an error of principle resulting in substantial injustice: Minogue v Williams [2000] FCA 125. However, these concepts may not be cumulative;
(5) There is a difference between the exercise of a discretion concerning a matter of practice and procedure and an exercise of a discretion that determines substantive rights: Adam P Brown per Aickin, Wilson and Brennan JJ at 177 citing with approval Jordan CJ in In re Will of FB Gilbert (dec) (1946) 46 SR (NSW) 318 at 323;
(6) Where an interlocutory decision effectively determines the substantive rights of the parties, that may be a significant factor in favour of granting leave to appeal: Eltran Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 195 per Spender J at [14]-[15], referring to Ex parte Bucknell (1936) 56 CLR 221 at 225-6;
(7) In connection with a matter of practice and procedure, restraint should be applied in reviewing such decisions, especially if an application for leave is made during the course of a hearing: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [21], referring to Adam P Brown and in In re Will of FB Gilbert (dec);
(8) Leave should not be granted unless a substantial injustice would result and the decision is attended with sufficient doubt to warrant it being reconsidered by the appeal body. What is sufficient is dependent on the particular case: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-9;
(9) Lastly, subject to the above, the matters set out in Collins [Collins v Urban] at [84 (1)-(2)] [see [30] above] are also relevant to the exercise of a discretion to grant leave."
[4]
Grounds of Appeal
The homeowners attached to their notice of Appeal a schedule listing three grounds of appeal and also seeking leave to appeal on the ground that the decision was not fair and equitable because the decision:
"Deprived the Appellants of the opportunity of obtaining a money order for the demolition and reconstruction of the driveway slab, being a significant possibility or a chance that was fairly open to achieving a different and more favourable outcome".
The homeowners' first ground of appeal was that the Tribunal "appl[ied] an incorrect principle of law" and "failed to properly construe and apply clause 8(5) of Schedule 4".
The homeowners' second and third grounds of appeal were, respectively, that the Tribunal had failed to provide "reasons or adequate reasons" why it did not follow the decision in Mehr v Lau, and that the Tribunal had made findings without evidence in stating (at [62]) that the homeowners' written submissions said "nothing about Schedule 4 clause 8(5) of the NCAT Act".
The builder filed a Reply to Appeal, raising by way of contention:
1. That, because the appellants' renewal application sought to expand the scope of work beyond the work the subject of the original work orders, the renewal application conflicts with the findings made by the Tribunal and clearly infringes the principles of res judicata and issue estoppel;
2. That, the homeowners having unsuccessfully appealed against the work order, the homeowners were foreclosed from further pursuing the issues raised in the renewal application; and
3. That, because the Blue Mountains City Council had certified that the drive/verge crossover as previously completed was satisfactory for its requirements and in compliance with relevant standards, no further modification or change was required.
The first and third issues raised by the builder in his Reply to Appeal are properly a matter for determination as part of the renewal application. They are not issues which would require dismissal of the renewal application. Those issues could only affect the orders made on the renewal application, for example by reducing (wholly or partially) the assessed rectification costs. The second issue merely re-states the basis for the Tribunal's decision.
At the commencement of the hearing of the appeal, Mr Klooster properly acknowledged that the second and third grounds of appeal added nothing to his argument, in that, if the Appeal Panel were to conclude that the decision in Mehr v Lau was not correct, and declined to follow it, the appeal would fail, regardless of the fact that the Tribunal did not refer to that decision or recognise that the homeowners had made submissions concerning the application of cl 8(5).
Accordingly, it is only necessary to consider the first ground of appeal.
[5]
Was the decision an interlocutory decision?
It is first necessary to deal with a preliminary point. The builder submitted that the decision was an interlocutory decision so that the homeowners required leave even to raise a question of law.
"Interlocutory decision" is defined in s 4 of the NCAT Act. It includes "the summary dismissal of proceedings".
In our view, the decision of the Tribunal in relation to the renewal application was not a summary dismissal of the renewal application. The application was dismissed after a full hearing on all issues. The fact that the application was dismissed for want of jurisdiction does not render the dismissal of the application a summary dismissal.
In the NCAT Act, the term "summary dismissal" may be taken to refer to dismissal pursuant to s 55 of the NCAT Act, which provides:
55 Dismissal of proceedings
(1) The Tribunal may dismiss at any stage any proceedings before it in any of the following circumstances -
(a) if the applicant or appellant (or, if there is more than one applicant or appellant, each applicant or appellant) withdraws the application or appeal to which the proceedings relate,
(b) if the Tribunal considers that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance,
(c) if the applicant or appellant (or, if there is more than one applicant or appellant, each applicant or appellant) has failed to appear in the proceedings,
(d) if the Tribunal considers that there has been a want of prosecution of the proceedings.
(2) The Tribunal may reinstate proceedings that have been dismissed under subsection (1)(c) if the Tribunal considers that there is a reasonable explanation for that failure.
The application of s 55 was considered by the Appeal Panel in The Owners - Strata Plan No 63731 v The Bunker Pty Ltd [2021] NSWCATAP 119 at [11] - [14]. At [14] the Appeal Panel referred to an order dismissing proceedings pursuant to section 55 as a "summary dismissal".
In our view, the appeal is not an appeal from an interlocutory order but from a final order and, accordingly, the homeowners are entitled to appeal as of right on a question of law.
[6]
Does cl 8(5)(b) preclude a renewal application in respect of an order which has been the subject of an appeal but not varied?
As the Tribunal recognised, the literal words of cl 8(5) would preclude the lodgement of any application to renew proceedings whenever an appeal had been filed against the Division decision the subject of the application, regardless whether that appeal was successful and regardless whether the appeal was filed by the party seeking renewal or the other side, that is the party subject to the work order.
However, as the Appeal Panel noted in Mehr v Lau, that interpretation would have impractical consequences which could not have been intended. Section 33 of the Interpretation Act 1987 (NSW) provides:
33 Regard to be had to purposes or objects of Acts and statutory rules
In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.
The purpose or object of cl 8 of Sch 4 is to enable a party to proceedings in the Consumer and Commercial Division, who has obtained the benefit of an order requiring the carrying out of work or other action, to return to the Tribunal for alternative orders if the party required to carry out the work or other action fails to do so.
As the Appeal Panel noted in Johnson v Dibbin; Gatsby v Gatsby [2018] NSWCATAP 45, at [83]:
"The terms of subcll (1) and (2) [of cl 8 of Sch 4] indicate that the renewal right only arises if the order in question is not complied with within the period specified by the Tribunal. As we read it, cl 8 of Sch 4 is an additional, simple and practical method of enforcing, and promoting timely compliance with, orders. Clause 8 does not deprive Tribunal orders of finality."
In Blessed Sydney Constructions Pty Ltd v Vasudevan [2018] NSWCATAP 98 the Appeal Panel stated, at [27]:
"The renewal procedure is often used where there has been non-compliance with an order requiring work to be done or repairs to be made. In the context of orders requiring work to be done in performance of a contract, cl 8 of Sch 4 can be seen as analogous to the power that a Court with equitable jurisdiction has to make alternative orders, including awarding damages, where there has been non-compliance with an order for specific performance of a contract. …"
It is logical that a party should not have a right of renewal in respect of an order requiring the performance of work while the work order has been suspended, or while it is the subject of an appeal which has not been determined, or where the order has been set aside on appeal. There is no logical reason why a party should be denied the right of renewal just because an unsuccessful appeal has been brought against the work order.
To avoid the illogical and anomalous results which would flow from the interpretation of cl 8(5)(b) of Sch 4 to the NCAT Act adopted by the Tribunal at first instance in these proceedings, the term "the subject of an internal appeal", when applied to an appeal which has been concluded, should be construed, as it was in Mehr v Lau, as meaning "the subject of a successful internal appeal".
We note that cl 8 of Sch 4 to the NCAT Act reflects the provisions of s 43 of the Consumer Trader and Tenancy Tribunal Act 2001 (NSW). That section provided: "(5) this section does not apply if the operation of an order has been suspended", but made no reference to an order being or having been the subject of an appeal. Section 67 of that Act provided for an appeal, initially to the Supreme Court and from 1 September 2008 to the District Court, against a decision of the Consumer Trader and Tenancy Tribunal which had decided "a question with respect to a matter of law".
There is no reference in the Explanatory Memorandum or the Second Reading Speech in relation to the Civil and Administrative Tribunal Amendment Act 2013 (NSW), which inserted cl 8 into Sch 4, to the terms of cl 8 or the inclusion in cl 8 of reference to an order having been the subject of an internal appeal.
If the interpretation adopted by the Tribunal is correct, a party obtaining the benefit of a work order under s 48O of the HBA or s 79N(b) of the Fair Trading Act 1987 (NSW) (or another order under paragraphs (c), (e), (f) or (g) of s 79N of the Fair Trading Act) which is not complied with, would have no remedy other than proceedings for contempt, if an appeal had been brought, unsuccessfully, against the order, even when the appeal had been lodged by the party against whom the order had been made.
Section 78 of the NCAT Act makes effective provision for the enforcement of any Tribunal order requiring the payment of money.
It would be anomalous if a party could be left with only the remedy of proceedings for contempt just because a work order, which has not been complied with, was the subject of an unsuccessful appeal. This is particularly so where the appeal was lodged by the party required to carry out work by the order.
The builder submitted as follows:
"1.1 The Respondent submits that the findings of [the Tribunal], regarding the application of Schedule 4 clause 8(5) of the Act (pertaining to the application as advanced by the Appellants), were both sound and correct.
1.2 The Respondents' understanding is that cl 8(5) is a mechanism that safeguards the benefits of the party in whose favour the original decision was made. This safeguard allows for the 'losing' party (of the original decision) to appeal the decision without impeding upon the rights granted to the benefitting party.
1.3 If, however, the party who benefitted from the original decision elects to appeal against the original decision, then their right to seek a renewal of the proceedings is limited accordingly."
To the extent that the builder suggests that cl 8(5)(b) operates differentially depending upon whether an appeal was brought by the party having the benefit of the work order or the party the subject of the work order, there is no support for such a distinction in the words of cl 8. Nor is there any logical reason why the filing of an appeal by a party who has obtained the benefit of a work order should involve an election to surrender the possibility of renewing the proceedings in the event the appeal fails and the work order is not complied with.
Mr Johnston, who represented the builder at the appeal hearing by leave, referred in oral submissions to paragraphs [89] and [102] of the first Appeal Panel decision, which relate to the homeowners' appeal seeking a money order rather than a work order.
Paragraph [89] appeared under the heading "Homeowners' submissions". In that section of the decision, which commenced at [87], the Appeal Panel stated:
"87 We summarise the Builder's [sic] submissions as follows.
…
89 Secondly, an ancillary question is whether it is in fact possible for the parties to comply with the work order as made. The difficulty in this respect arises because:
the Builder has been charged with carrying out works in a particular way to obtain compliance;
Mr Dockrill has provided an unchallenged opinion that the works the Builder has been ordered to carry out cannot obtain compliance;
Mr Dockrill is the person who must inspect and certify that compliance has been obtained, and 'it is fairly obvious this cannot occur'."
Paragraph [102], which appeared under the heading "Consideration", was as follows:
"102 As to Submission Two, we agree that Mr Dockrill's opinion that the entire driveway needed to be demolished and reconstructed, and that it was not possible to 'rectify the change in grade of non-compliance of the driveway access without a complete demolition and reconstruction of the entire driveway', was not supported by Mr Dockrill's report, and at no stage did Mr Dockrill expressly conclude that the whole of the driveway needed to be demolished and replaced."
Mr Johnston submitted that the Appeal Panel had thereby altered the outcome of the original decision and accordingly cl 8(5) precluded a renewal application.
It is clear that the Appeal Panel did not alter the outcome of the original decision. The orders made by the Appeal Panel in both appeals were that leave to appeal is refused and the appeal is dismissed.
Mr Johnston's submissions proceed on a misunderstanding of the Appeal Panel decision. Paragraph [89] did not reflect findings of the Appeal Panel, but rather a summary by the Appeal Panel of the homeowners' second submission.
To the extent that the Appeal Panel at [102] rejected the homeowners' second submission, that may have significance for the determination of the substantive issues raised by the homeowners' renewal application. It has no significance to the application of cl 8(5)(b) in the circumstances of this case.
We note that we have not had the benefit of submissions from any person with legal training in contradiction of Mr Klooster's submissions. Nevertheless, we are not persuaded that the decision in Mehr v Lau was clearly wrong and indeed we consider that it was correct, and therefore that we should follow that decision.
Accordingly, we find that the Tribunal made an error with respect to a question of law, being the proper interpretation of cl 8(5)(b). The present appeal must be upheld and the order dismissing the renewal application must be set aside.
It is not strictly necessary to consider the grant of leave to appeal. However, against the possibility that we are incorrect in concluding that the decision under appeal is not an interlocutory decision, we record that we consider that the error of principle in the decision will, if not corrected, result in substantial injustice to the homeowners who will be denied the opportunity to have the renewal application determined on its merits.
Accordingly, we would grant leave to appeal, if necessary.
[7]
Appropriate orders
The question then arises whether the Appeal Panel should determine the renewal application for itself, as the homeowners submit that we should, or remit the application to the Consumer and Commercial Division for determination
When the Appeal Panel pointed out to Mr Klooster that the entirety of the evidence had not been filed with the Appeal Panel, so that the Appeal Panel would not be in a position to determine the application, Mr Klooster responded that, because the evidence filed in the hearing at first instance exceeded 1,500 pages, his clients had not provided copies in advance of the hearing, but that he had the evidence available at the hearing if required.
In our view the volume of evidence involved militates against the Appeal Panel determining the renewal application.
The appropriate course is to remit the application to the Consumer and Commercial Division for determination. Given that the application was fully argued at first instance, it would be advantageous to all parties if the proceedings could be listed before the same member, who is already familiar with the matter.
The homeowners submitted that the Appeal Panel should direct that the application should be determined on the evidence tendered at the initial hearing. The builder suggested, both in his written submissions and through Mr Johnston, that he may seek to rely upon further evidence, but did not indicate what that evidence might be.
In circumstances where the matter was dealt with as a final hearing on 23 June 2022, there does not appear to be any reason why the application should not be able to be determined on the basis of the evidence and submissions previously filed. Nevertheless, we think it best to leave that question to the Consumer and Commercial Division and the member to whom the application is assigned on remitter.
For the same reasons, although Mr Klooster suggested that the application could be determined on the basis of the existing material, and without a further hearing, and there do appear to be good reasons for that course, we will leave that question also to the Consumer and Commercial Division and the member responsible.
We are not aware whether any decision in respect of the costs of the proceedings at first instance has been delivered since the hearing of the appeal. Clearly, if a decision has been published, it should be set aside, and we will make an order to that effect.
[8]
Costs
Both parties sought an order for the costs of the appeal in the event that they were successful.
Mr Klooster acknowledged that, although the amount the homeowners had sought in the renewal application was specified as $50,000, the rectification costs assessed by the experts in their joint report were less than $30,000. Accordingly, the amount claimed or in dispute on the appeal does not exceed $30,000. Mr Klooster accepted that he could not submit that rules 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) operated in this case to remove the need for there to be special circumstances before the Appeal Panel could make an order in respect of the costs of the appeal.
Mr Klooster submitted, however, that there were special circumstances. He submitted that the error made by the Tribunal was an "error of the clearest kind" and that the respondent should not have opposed the appeal.
We are not persuaded that the error in the Tribunal's decision was an error of the clearest kind. The decision of the Tribunal accorded with the literal meaning of the words of cl 8(5)(b). It is only by reference to the considerations referred to in Mehr v Lau, and those we have identified above, that it becomes apparent that the clause cannot be given its literal meaning. The Appeal Panel is not bound to follow Mehr v Lau and, although we have concluded we should do so, it cannot be said that the argument to the contrary had "no tenable basis in fact or law" or that the builder's resistance to the appeal was "misconceived or lacking in substance."
The Appeal Panel indicated, at the conclusion of the appeal hearing, that, in the event the appeal was dismissed, or the Appeal Panel was minded to make an order for costs against the builder, we would give the builder an opportunity to file submissions concerning costs. However, we have not dismissed the appeal and, as we are not persuaded that the builder's maintenance of opposition to the appeal does constitute special circumstances, we do not propose to make a costs order in respect of the appeal. Accordingly, it is not necessary to make orders providing for the filing of further submissions by the builder.
There will be no order in relation to the costs of the appeal.
[9]
oRDERS
Our orders are:
1. Appeal upheld
2. Order 1 made by the Tribunal on 3 February 2023 in proceedings HB 22/01038 is set aside, together with any orders in relation to costs made by the Tribunal consequent upon the dismissal of the appellants' renewal application.
3. The proceedings are remitted to the Consumer and Commercial Division of the Tribunal for determination consistent with these reasons.
4. The questions whether further evidence should be permitted and whether a further hearing will be required are left for determination by the Consumer and Commercial Division.
5. There will be no order in relation to the costs of the appeal.
[10]
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: 17 October 2023
Parties
Applicant/Plaintiff:
Stewart
Respondent/Defendant:
Scott
Legislation Cited (8)
Civil and Administrative Tribunal Amendment Act 2013(NSW)
Consumer Trader and Tenancy Tribunal Act 2001(NSW)