Sultan v The Owners - Strata Plan no 54721 - [2024] NSWCATAP 102 - NSWCATAP 2024 case summary

NCAT Appeal Panel|2024-03-22

Member File Number(s): 2023/00389760 and 2023/00394828

Background

This decision concerns an appeal lodged by a lot owner in a strata scheme constituted by the Respondent to this appeal, following a decision made by the Tribunal in the Consumer and Commercial Division published on 5 January 2024. The Tribunal was exercising its jurisdiction under the Strata Schemes Management Act 2015 (NSW) (the Strata Act).
The proceedings in the Consumer and Commercial Division commenced when the Appellant lodged an application on 15 May 2023. This was followed by an application lodged by the Respondent and ultimately both applications were heard together on 12 December 2023. The nature of the orders sought in each application will become apparent later in these reasons.
On 5 January 2024 the Tribunal published its written reasons and orders. The Appellant's application was dismissed and there was also an order that the Appellant pay the Respondent's costs. In respect of the proceedings commenced by the Respondent the Tribunal ordered the Appellant to pay the Respondent the sum of $15,105.62 and costs (subject to a proviso which we will set out later).
The Appellant has lodged an appeal in respect of all of the orders made.
In order to understand the basis of the appeal, it is necessary to summarise the reasons published by the Tribunal at first instance. This is done in the following paragraphs.

Summary of Decision at first instance

In broad terms the Appellant's application was for orders relating to alleged water intrusion into her lot. She sought work orders and compensation. The Respondent's application was for a monetary order to recover outstanding strata levies and other charges. The Appellant represented herself at the first instance hearing and the Respondent was represented by Mr Abbott, an employee of the strata managing agent for the Respondent.
From [16] of the decision under appeal (the Decision) there is a description of the Appellant's case. It concerns allegations that the Appellant's lot experienced "rooftop issues" involving a water "pooling" problem, resulting in carpet damage and the requirement to offer to the tenant a discount in the rent payable by the tenant. The evidence of the tenant (Nasser Sultan, the brother of the Appellant) is briefly summarised at [20]. His evidence was that he had been unsuccessfully trying to get the rooftop balcony fixed. He was not cross-examined. Indeed, the Appellant was not cross-examined nor was her other witness, Antoine Karam [5].
At [22] and [23] the Tribunal summarised the evidence of Mr Karam, who had provided a report dated 26 October 2023. His evidence was that there was cracking outside the unit on the floor of the balcony and that a water test has revealed that water does not fall to the drain. His report included a quotation to undertake remedial work in the sum of approximately $13,000 (inclusive of carpet removal and replacement).
From [24] the Tribunal outlined the evidence on behalf of the Respondent. One witness was Mr Abbott. His evidence was to the effect that the Appellant owed outstanding levies, interest and recovery costs to the Respondent. Mr Abbott gave oral evidence and was cross-examined by the Appellant.
The Respondent relied upon two reports from Diagnostech dated 13 April 2023 and 17 November 2023, authored by a Mr Slatter. Mr Slatter did not attend the hearing. The Appellant indicated her desire shortly after the hearing commenced to cross-examine Mr Slatter. We will say more about this later in these reasons.
From [31] the Tribunal summarised the evidence of Mr Slatter. He inspected the relevant lot and surrounding area on 29 September 2022 and his report stated that there were no signs of water ponding. His second report was a response to the report of Mr Karam. The Tribunal summarised the difference in the opinion of Mr Karam on the one hand and Mr Slatter on the other at [43] where the Tribunal said that the evidence of Mr Karam suggested that there is water penetration while that of Mr Slatter is to the contrary. From [44] the Tribunal found that there were "difficulties" with the evidence of Mr Karam. These difficulties were: 1. His evidence was that there were water ponds on the balcony floor but no supporting photos were provided. 2. His evidence was that there was water penetration but he did not provide any moisture meter readings that would have provided a basis for his opinion. 3. His evidence was that there was cracking in the tiles on the balcony floor, by reference to two photos, and that water is penetrating the unit and damaging the carpet. However, the photos do not clearly show that damage, and cracking alone would be insufficient to cause water ingress unless the waterproofing membrane had failed. 4. His evidence was that the water falls away from the drain and under the door of the Appellant's unit which suggests that cracks are not causing the water damage. The Tribunal stated that it is difficult to "reconcile the claim that water ponds with the claim that the water falls away from the drain rather than towards it."
At [45] the Tribunal stated that, if there was water ingress, then why did Mr Slatter find no evidence of that? The Appellant's answer to that question was that there was a difference in the inspection dates, namely 29 September 2022 for Mr Slatter and 6 October 2023 for Mr Karam. The Tribunal discounted that as a good reason because the Appellant's claim for compensation by reason of the reduction of the rent was expressed to date from January 2023 and there was no evidence of a prior complaint to the building manager or to the strata manager [45]. The Tribunal stated that the Appellant has the onus of proof, including that she had made a complaint to either the building manager or the strata managing agent, but that there was no such evidence.
At [46] the Tribunal stated that even if there were no difficulties with the evidence of Mr Karam, the Tribunal was left with the competing views of two experts, neither of whom was cross-examined. In the absence of valid criticisms of the evidence of Mr Slatter, the Tribunal found that it did not have any reason why the evidence of Mr Karam should be preferred to that of Mr Slatter. At [47] the Tribunal found that the Appellant had failed to prove her case on the balance of probabilities. The Tribunal concluded that, as there was no breach of the duty to maintain and repair common property (as imposed on the Respondent by s 106(1) of the Strata Act), there was no basis for either a work order or a money order.
At [48] the Tribunal considered the claim for the cost of replacing the carpet and rejected it on the basis of lack of supporting evidence. The claim for loss of rent was similarly rejected [49].
In the Appellant's application the Tribunal ordered the dismissal of the application (order 1) and ordered that the Appellant pay the Respondent's costs (order 2).
From [51] the Tribunal considered the Respondent's application for levy contributions ($14,974.30), interest ($131.32) and for costs incurred in recovery action ($3,770.50). From [53] the Tribunal referred to the evidence contained in the Respondent's ledger pages that had been tendered.
From [53] the Tribunal made findings of fact central to its decision to reject the Appellant's opposition to the Respondent's application and to make findings in favour of the Respondent. Those findings of fact may be summarised as follows: 1. The Tribunal referred to the Appellant's claim that she had never received an explanation for a charge made against her and that she had not been provided with supporting invoices. The Tribunal found that there was clear evidence to the contrary, and that the Appellant "cannot be considered a reliable witness, with the result that the Tribunal is not willing to accept her evidence unless it is reasonably corroborated". The Tribunal found that it was satisfied that the amount claimed (i.e. a charge of $2,732.59) was payable to the Respondent. 2. The Tribunal found that charges totalling $38.75 are recoverable as they relate to "the debt recovery process". 3. The Tribunal referred to further charges totalling $630 and found that each of the seven amounts making up that aggregate figure "relate to debt recovery" and are payable by the Appellant. 4. In the balance of paragraph [53] the Tribunal considered a number of charges and found each related to debt recovery and were recoverable against the Appellant. One of the amounts considered included costs incurred in relation to "these proceedings". The amount in question totals $1,864.50 and the Tribunal found that there are "special circumstances" which warrant an order for costs.
At [55] the Tribunal considered a dispute as to whether the Respondent had credited the Appellant with the sum of $3,327.60 in compliance with orders made by the Local Court on 14 November 2022. The Tribunal found that there was "unchallenged evidence" from Mr Abbott which supported the fact that the credit had been made in favour of the Appellant.
At [58] the Tribunal found that it was satisfied that the Respondent was entitled to an order that the Appellant pay $15,105.62.
From [59] the Tribunal dealt with the question of whether a costs order should be made. At [64] the Tribunal found that the Appellant's claims were lacking in substance and that the Tribunal was satisfied that there are special circumstances in relation to the proceedings: see s 60 of the Civil & Administrative Tribunal Act 2013 NSW (the NCAT Act). The Tribunal decided that the "practical course" was to make an order for the Appellant to pay the costs of the Respondent, but also to provide a regime for written submissions in the event that the Appellant seeks to have the amount of costs determined by the Tribunal.
In the result the orders of the Tribunal in respect of the Respondent's application were: 1. The Appellant is to pay the Respondent the sum of $15,105.62 immediately. 2. The Appellant is to pay the Respondent's costs on the ordinary basis, as agreed or assessed. 3. If the Appellant wishes to contend that the amount of costs be determined by the Tribunal, order 2 ceases to have effect and then follows directions for the lodgement of submissions by the parties in sequence.

Notice of Appeal

The Notice of Appeal lodged on 15 January 2024 contains the following grounds of appeal: 1. The Tribunal erred at [55] by finding the Respondent's evidence was unchallenged when the Appellant presented unchallenged evidence to challenge it. 2. The Tribunal erred by denying the Appellant procedural fairness: 1. by making a finding for costs under s 60 when the Appellant was not on notice of such a claim and did not make submissions on such a claim; 2. by restricting or not giving the Appellant the opportunity to cross-examine the Respondent's witnesses; 1. by restricting or not giving a fair opportunity for the Appellant to make submissions.
Further, the Appellant sought leave to appeal upon the basis that the Decision was: 1. "Wrong and unfair and issues of legal principle arise". 2. Strata issues of repairs to common property and correct ledger charges are a matter of public importance as strata housing is growing in New South Wales. 3. The injustice of not allowing cross-examination or submissions is clear. 4. The Tribunal's fact-finding process and decision on costs are so unorthodox that it clearly produced an unfair result.
Further, the Appellant sought leave on the basis that the decision was not fair and equitable, was against the weight of evidence and relied heavily on an expert report when the Appellant was not given the opportunity to cross-examine that expert and where the Appellant, Mr Karam and Mr Nasser Sultan gave unchallenged evidence.
The Respondent filed a Reply opposing all grounds of the appeal. With respect to ground 1 the Respondent submitted that the ground is an appeal against a factual finding and leave to appeal should be refused. The Respondent submitted that the finding at [55] was available and that the Appellant had not put on any probative rebuttal evidence.
With respect to ground 2(ii) the Respondent denied that there was any procedural unfairness as the Appellant cross-examined Mr Abbott and the Appellant elected not to cross-examine the Respondent's expert witness.
With respect to ground 3 the Respondent submitted that the Appellant was given an ample opportunity to make submissions.
Subsequently, the Respondent filed an Amended Reply for two purposes. One concerned the inclusion of a Notice of Contention that the Appellant's damages claim could have also been dismissed on the basis that it was outside the two-year limitation period imposed by s 106(6) of the Strata Act. At the hearing of the appeal, that Notice of Contention was withdrawn on the basis that it reflected a misunderstanding of the Appellant's claim. The Appellant's counsel stated that the claim was not for the cost of purchasing a new carpet in 2018, but rather for damage to that carpet subsequently.
The second basis for seeking leave to file the Amended Reply was that the Respondent considered that the Appellant was not put on notice of potential costs orders in respect of the Appellant's application or in respect of the Respondent's application. The Respondent concedes that the costs order should be set aside, and costs remitted back to the same Senior Member for determination.

Appellant's Submissions

In the following paragraphs we summarise the Appellant's submissions. We record that the hearing at first instance was conducted by phone and, further, that we have been provided with a transcript of the hearing.
The Appellant submitted that cross-examination of the expert witness of the Respondent (Mr Slatter) should have been permitted and that his evidence should not have been allowed or given any weight in circumstances where he was not available for cross-examination. The Appellant referred to the fact that, prior to the first instance hearing, the Tribunal had made a direction to the effect that witnesses are to attend the hearing and be available for cross-examination unless the other party gives written notice that a witness is not required. The transcript reveals that the Senior Member drew the nature of the directions to the attention of the representative of the Respondent (namely, Mr Abbott). The transcript reveals that the Appellant (who represented herself) informed the Tribunal that she wished to cross-examine both Mr Slatter and Mr Abbott. Mr Abbott indicated that he did not wish to cross-examine the Appellant's witnesses.
With respect to ground 1, the Appellant submitted that the Tribunal erred at [55] in finding that the Respondent's evidence was unchallenged. The Appellant filed evidence which included her statutory declaration, the evidence of the tenant, Nasser Sultan, and the evidence of Mr Karam.
The Appellant's further submission was that her cross-examination of Mr Abbott was "unfairly restricted" by the Tribunal and in the circumstances, it was not open for the Tribunal to make the finding at [55] that the evidence of Mr Abbott was not challenged, in particular, in circumstances where the statements that were filed by the Appellant challenged each and every contention made by Mr Abbott.
The Appellant further submitted that the Tribunal erred by not considering the evidence of Mr Nasser Sultan who gave unchallenged evidence that the common property balcony leaks were causing water to enter the relevant lot and causing the carpet to be water damaged during heavy rain.
The Appellant made submissions concerning the Tribunal's finding that there were special circumstances for making a costs order. As the Respondent has conceded that this issue should be remitted, we will not elaborate upon the Appellant's submissions.
With respect to ground 2(ii) concerning the alleged failure to allow cross-examination, the Appellant's counsel submitted that she should have been allowed to cross-examine all witnesses. The Appellant referred to the Appeal Panel decision in White v Alto Artarmon Pty Ltd [2017] NSWCATAP 164. In that decision at [27] an Appeal Panel stated that the authorities acknowledge that the right to cross-examination is important and that restricting it can constitute a breach of procedural fairness. The Appeal Panel cited, with approval, the statement made in Gallo v Duflou [2014] NSWCATAP 115 that a failure to allow a party to cross-examine was a "practical injustice" which prevented the Appellant from having a reasonable opportunity to be heard. These principles were referred to, with approval, in Nova Home Developments Pty Ltd v Manzala [2021] NSWCATAP 287 where the Appeal Panel said the focus of the law in an enquiry about procedural fairness is not on fairness in an abstract sense but rather on avoiding practical injustice [53]. This statement was acknowledged to have been derived from what the High Court said in Re Minister for Immigration and Multicultural and Indigenous Affairs: ex parte Lam [2003] HCA 6; (2003) 214 CLR 1.
The Appellant submitted that the Tribunal must have relied upon the unsupported emails provided by the Respondent from its lawyers, Grace Lawyers. Their correspondence made assertions that the Appellant had been in arrears "for years" and their evidence should not have been allowed or given little to no weight. The Tribunal found that the Appellant was in arrears for years, in accordance with the assertion made in the Grace Lawyers emails, during a period where the only Respondent witness that was available for cross-examination (i.e. Mr Abbott) was not working for the Respondent.
The Tribunal's reasoning for preferring the Respondent's expert due to the Appellant's expert not referring to the Expert Code of Conduct was procedurally unfair. At [22] of the Decision, the Tribunal noted that the report of Mr Karam contained no reference to the Tribunal's Code of Conduct for expert witnesses. This is to be compared with the Tribunal's reference in [31] to the first report of Mr Slatter. The Tribunal noted that that report did not refer to the Tribunal's Code of Conduct and stated that presumably this was because the report was obtained prior to the commencement of the Tribunal proceedings. The Appellant's submission was that the standard applied by the Tribunal at [22] was inconsistent with the standard applied at [31]. The Appellant referred to the decision of an Appeal Panel in Vidler v Lee t/as Northern Rivers Landscaping [2023] NSWCATAP 52 at [40] where the Appeal Panel made comment about the fact that the Tribunal in that case had failed to apply "the same or equally relevant and rigorous considerations when making findings with respect to the expert evidence of one of the parties compared with the expert evidence relied upon by the other party".
With respect to ground 3 concerning the alleged failure to allow the Appellant to make submissions, the Appellant submitted that the Tribunal cut the Appellant off while she was making a submission, and she was thereby denied a fair opportunity to make submissions.
The Appellant's submission was that the appeal should be allowed, the orders made set aside and that the proceedings should be remitted to the Tribunal, freshly constituted, for a rehearing.
In oral submissions, counsel for the Appellant pointed to the evidence of the Appellant's brother, Nasser Sultan. His evidence is contained in a statutory declaration dated 26 October 2023. In paragraph 3 of his statutory declaration he stated that "For the last year I have been trying to get strata to fix the rooftop balcony joined to the unit. They won't let me fix and they refuse to fix it. There is water leaking into the unit whenever we have heavy rain". At paragraph 5 he stated that he had spoken to "the maintenance person named Craig Smith" who told him that "they won't fix anything for you".
At [45] of the Decision the Tribunal found that there was no evidence of a complaint having been made to either the building manager or the strata managing agent. That finding is inconsistent with the unchallenged evidence of Mr Nasser Sultan.

Respondent's Submissions

The Respondent's submissions are summarised in the following paragraphs.
The Respondent's submissions state that the Respondent seeks the following orders: 1. That the Respondent has leave to amend its Reply in accordance with the Amended Reply attached to it submissions. 2. Leave to appeal be refused in respect of ground 1. 3. The costs orders in both proceedings be set aside. 4. The question of costs be remitted to the Tribunal at first instance as originally constituted for determination. 5. The appeal be otherwise dismissed.
In respect of ground 1, the Respondent submitted that this ground is misconceived. The finding of fact being challenged by the Appellant was that there was unchallenged evidence from Mr Abbott that the Respondent had credited the Appellant with $3,327.60 in compliance with the orders made by the Local Court on 14 November 2022. That finding was open on the evidence.
During the hearing of the appeal we were taken to page 249 of the Appellant's appeal book. That page contained a copy of the ledger maintained by the Respondent in respect of monies levied and/or received from the Appellant. It showed that on 23 November 2022 two credits were posted for the amount in dispute. Further, the Respondent submitted that the Appellant did not challenge Mr Abbott's evidence in this respect, either in written submissions or during cross- examination.
In respect of ground 2(i) concerning costs, it has already been noted that the Respondent concedes that the issue of costs should be remitted.
With respect to ground 2(ii) the Respondent submitted that the Appellant's contention that the Appellant was unfairly restricted in cross-examining Mr Abbott should be rejected. In any event, the Appellant is unable to point to instances of being interrupted in a manner that would ground any basis for appeal. A fair reading of the transcript reveals that the Tribunal did not unduly interrupt the Appellant's cross-examination but made rulings on two occasions. They were designed to encourage the Appellant to ask a question rather than to make a speech.
With respect to ground 3 which concerns the alleged failure to allow the Appellant to make submissions, the Respondent submitted that the Appellant's submissions are directed towards disputing the merits of the decision made by the Tribunal rather than identifying instances where procedural fairness was not offered to the Appellant.
The Respondent submitted that the actual ratio decidendi for the dismissal of the claim for breach of s 106(1) of the Strata Act is contained at [44] and [47], namely that the report of Mr Karam considered independently failed to establish any water ingress, failed to establish that, if there was water ingress, it was caused by a common property defect, and was internally inconsistent. It was open to the Tribunal to reject the opinions of Mr Karam and dismiss the Appellant's claim for failing to discharge the burden of proof.
With respect to the absence of Mr Slatter, the Respondent submitted that it was open to the Appellant to make submissions about the weight or admissibility of Mr Slatter's report in final submissions. The Appellant did not do so.
The Respondent submitted that the Appellant has failed to identify or establish that the way in which the hearing was run resulted in a denial of procedural fairness. The matters identified by the Appellant were all matters that could have been put to the Tribunal in final submissions but were not.
The Respondent submitted that the Appellant has failed to establish a substantial miscarriage of justice. The report from Mr Karam is patently inadequate and it was open to the Tribunal to reject it without the need to refer to Mr Slatter or any other evidence. The Respondent relied upon the decision in Szeto v The Owners - Strata Plan no 1418 [2023] NSWCATAP 105 in which the Appeal Panel dismissed an appeal against the Tribunal's decision dismissing a claim for damages pursuant to s 106(5) of the Strata Act due to the failure of expert evidence to comply with the Tribunal's Code of Conduct.

Appellant's submissions in reply

In summary, the Appellant submitted in reply that the Respondent had not established that it had complied with the order made by the Local Court under s 90 of the Strata Act that costs incurred by the Respondent should only be paid from contributions levied in respect of lots other than the Plaintiff's lot. It should be noted that the Appellant was not able to identify evidence which disclosed non-compliance with s 90. The Appellant's position was rather that there was no evidence tendered by the Respondent that s 90 had been complied with, and that Mr Abbott's evidence should be treated with care as he was not the strata manager for all of the relevant period. During the course of the appeal hearing, we were informed that the Appellant's lot represented approximately half of 1% of the total number of unit entitlements allocated to the lots. An adjustment of the relevant levy or charge, having regard to the exclusion of one half of 1% was likely to alter the overall charge to the Appellant by a very small amount.
In respect of ground 2(ii), the Appellant's submissions in reply point to the directions for hearing made by the Tribunal prior to the final hearing. The Appellant submitted that the Tribunal should have taken steps to protect procedural fairness, such as attempting to have Mr Slatter give evidence by telephone and delay the hearing until he was available. Alternatively, the Tribunal could have called for submissions as to what weight, if any, ought to have been given to Mr Slatter's report.
In respect of the contention that the Tribunal denied the Appellant a fair opportunity to cross-examine Mr Abbott by cutting her off, the Appellant relied upon pages 10 and 11 of the transcript. The transcript there reveals that Mr Abbott gave evidence that no one had inspected the roof since September 2022. The Appellant then made a short speech criticising Mr Abbott and querying how long he had been "there". The Tribunal cut that off and requested that the Appellant ask a question.
We note that the transcript reveals that, after the above exchange, the member inquired whether the Appellant had any further questions to ask Mr Abbott and the Appellant replied: "That's good your Honour, thank you for that one, that's fine" (transcript page 11).
A further submission made by the Appellant was that at [45] the Tribunal found that there was no evidence of any complaint to either the strata manager or the building manager and that such evidence was inconsistent with the evidence given by Mr Nasser Sultan.
Before moving away from the transcript, we note that after Mr Abbott stood down the Tribunal enquired whether the parties wished to make submissions. Mr Abbott went first (transcript page 11) and then the Appellant was invited to speak (transcript page 12). Then followed an exchange between the Appellant and the Senior Member concerning the claim for outstanding levies and charges. That exchange went on until page 15 of the transcript. Then Mr Abbott was invited to make submissions in reply and he did so. Shortly afterwards the hearing came to an end.
Our review of the transcript discloses that at the latter stages of the hearing after the cross examination of Mr Abbott had concluded, the hearing concentrated on the levies and charges claim and did not appear to consider submissions on the matters raised by the Appellant in her application. The Tribunal did not expressly invite the parties to make such submissions and nor did the parties expressly indicate that they wished to make such submissions.
Towards the end of the hearing of the appeal, counsel for the Appellant made submissions concerning the factual findings made by the Tribunal in relation to the claim brought by the Respondent against the Appellant for the outstanding levies and other charges. It was not possible to fully hear either party in relation to this issue and so written submissions were sought to be provided after the hearing limited to this issue.
The Appellant's written submissions are to the effect that the full sum of $15,933.26 is disputed. There also appears to be a submission that had the Appellant not been required to pay a share of certain legal charges, she would not have been invoiced for a sum calculated at $174.67.
The Respondent's submissions in reply to the Appellant's submissions are to this effect: 1. The Respondent submitted that the leave granted to make a post-hearing submission was limited to providing a short submission identifying the total amount being challenged for the purpose of applying the fact that the Appellant has a 0.56% unit entitlement and that therefore she is entitled to a reduction in the amount charged on the basis that she is entitled to be excluded from that charge by reason of s 90 of the Strata Act. The Respondent's submission is that the Appellant's submission goes well beyond that limited leave and should not be entertained. 2. With respect to the adjustment, the Respondent disputes that the correct amount is $174.67 and the Respondent submits that the correct calculation is $143.75. However, the Respondent submits that the Tribunal should apply the principle de minimis non curat lex.

Consideration

Appeals lodged with respect to a decision made in the Consumer and Commercial Division of the Tribunal are regulated by s 80 and sch 4 of the NCAT Act. Essentially that means that the Appellant may appeal as of right on a question of law but otherwise requires leave in accordance with the provisions of cl 12 sch 4 of the NCAT Act.
We will deal first with the appeal from the order that the Appellant pay to the Respondent $15,105.62. Earlier we have set out the findings of fact which led the Tribunal to make this order.
Ground 1 is misconceived insofar as it relies upon the assertion that the Tribunal decided that there was no unchallenged evidence that the Appellant owed the Respondent a sum totalling $15,105.62. The Appellant relied upon [55] of the Decision for that assertion. The Tribunal clearly held in that paragraph that what was unchallenged was the Respondent's evidence that it had credited the Appellant with the sum of $3,327.60. We agree with the Respondent that that finding was open on the evidence and that the Appellant has not demonstrated that a question of law arises, or that there is a basis for granting leave to appeal.
With respect to the Appellant's post-hearing submissions which submitted that the Tribunal erred in not taking into account a calculation which would have reduced the Appellant's liability by $174.67, we are not satisfied that the evidence clearly demonstrates that such an allowance should have been made. No question of law arises and as the Appellant's contention is in fact a contention concerning a question of fact, leave to appeal is necessary. There are no grounds for the granting of leave. In particular, we are not satisfied that an injustice has occurred by reason of any of the matters requiring consideration under cl 2 sch 4 of the NCAT Act.
Accordingly, ground 1 of the appeal is dismissed.
Ground 2(i) concerns costs. Both parties agree that the costs order should be set aside and that the question of costs should be remitted for reconsideration. An order to that effect will be made.
Ground 2(ii) concerns the contention that the Tribunal denied the Appellant procedural fairness by not giving the Appellant an opportunity to cross-examine the Respondent's witnesses.
Insofar as this ground concerns an assertion that the Appellant was unfairly restricted in cross-examining Mr Abbott, this ground is rejected. Our review of the transcript of the hearing shows that the Appellant did not appear to understand what she was able to do during the period she was ostensibly cross-examining Mr Abbott. Her questions were often preceded or followed by statements or her own evidence. The Senior Member correctly intervened and restricted her to asking questions. At the end of this process, the Appellant confirmed that she had no more questions: see the earlier reference to page 11 of the transcript. This aspect of ground 2(ii) is rejected.
However, in insofar as ground 2(ii) concerns the contention that the Appellant was unable to cross-examine Mr Slatter, we agree with the Appellant that the Appellant has been denied procedural fairness. Our reasons for this conclusion follow.
The procedural directions made by the Tribunal were clear in requiring Mr Slatter to be present at the hearing for cross-examination. The directions contained provision for the Appellant to notify the Respondent if Mr Slatter was not required. No such notification was given. The transcript reveals that the Tribunal was aware of these directions and that the Appellant wished to cross-examine Mr Slatter. The transcript reveals that the Tribunal sought Mr Abbott's explanation for the non-appearance of Mr Slatter. He said that he misunderstood the directions. No attempt was made to contact Mr Slatter.
The transcript does not contain any further reference to what might follow as a result of Mr Slatter's absence.
Inconsistently with what the Tribunal stated at the hearing, the Decision reveals that the Tribunal appears to have proceeded upon the basis that Mr Slatter was not required unless notice had been given to him by the Appellant before the hearing. For example, at [6], the Tribunal stated that "Mr Slatter was not available, no prior notice having been given". At [43] the Tribunal noted that Mr Slatter had a contrary view to that of Mr Karam and that "neither of those two experts was cross-examined." At [46] the Tribunal stated that in the "absence of valid criticisms of the evidence of Mr Slatter, the Tribunal does not have any reason why the evidence of Mr Karam should be preferred to that of Mr Slatter".
The suggestion by the Tribunal at [6] that no notice had been given requiring the presence of Mr Slatter may explain why, during the hearing, the Tribunal did not invite submissions about what weight should be given to Mr Slatter's evidence in the light of his nonappearance. One could be critical of the Appellant for not initiating submissions about the effect of Mr Slatter's absence but she is a lay person and her failure to make such submissions does not, in our view, overcome the fact that procedural unfairness has occurred to her disadvantage.
Mr Slatter's evidence was critical to the issues being determined and the Tribunal was influenced by his statement in rejecting the evidence of Mr Karam. Mr Karam's evidence of water ingress when he inspected the lot on 6 October 2023 was not accepted. Mr Slatter's evidence was contained in a report dated 13 April 2023 recording the results of his inspection of the lot on 29 September 2022 (i.e. 13 months before Mr Karam's inspection). Mr Slatter's report referred to the fact that at the time of the inspection, there were no signs of water ponding "due to the dry weather conditions". Yet the Tribunal said at [45] that Mr Slatter's inspection was at the end of a significant period of wet weather. The source of this finding is unclear, but it is a matter that may have been clarified if Mr Slatter had been present and cross-examined.
At [44] of the Decision the Tribunal critiqued the evidence of Mr Karam and stated that it was difficult to reconcile the claim that water ponds with the claim that the water falls away from the drain rather than towards it. It appears to us that the evidence that the water ponds came from Mr Slatter's evidence. He stated that he had "no doubt that water does pond on the terrace tiles". The Tribunal also stated that there was no evidence of the Appellant complaining to either the building manager or the strata managing agent [45]. Putting aside the evidence of the tenant (whose statement contains an assertion that he did make such complaints) the first report from Mr Slatter states that the Appellant had reported issues with water (prior to the inspection on 29th September 2022).
In our view, the reports of Mr Slatter were significant in the Tribunal's decision to conclude that the Appellant had not proved her case on the balance of probabilities [47].
We are of the opinion that had Mr Slatter been present and had he been cross-examined, there was a realistic prospect that the Appellant may have been able to prove her case, namely that the Appellant's lot was, and had been, experiencing water ingress and that the likely cause was that there were defects in the common property.
In coming to the conclusion expressed in the above paragraph, we have considered whether Mr Karam's evidence, when considered alone and assuming that there was no evidence at all from Mr Slatter, could have led to a finding that the Appellant had proved her case on the balance of probabilities. The Tribunal was critical of Mr Karam's evidence because he did not refer to or acknowledge the Tribunal's procedural direction addressed to experts retained to provide opinion evidence. Essentially that procedural direction requires the expert to acknowledge that they have a paramount duty to the Tribunal and are not to be a mere advocate for the party engaging them. Mr Karam's report contained no such reference and therefore the content of the report must be considered with a greater level of scepticism than might otherwise be the case. However, part of his report was factual and not opinion evidence. His report stated that water is penetrating the unit, that water falls away from the drain and goes inside the unit (under the door). He stated he observed existing damage to the carpet and noticed the smell of damp water on the damaged carpet. Mr Abbott was present and chose not to cross-examine him. In the absence of contrary evidence, this evidence may have been sufficient to justify an order in the Appellant's favour. However, the Tribunal was influenced in its critique of Mr Karam's evidence by Mr Slatter's reports.
Further, there were aspects of Mr Slatter's report that supported the Appellant. The report of 13 April 2023 acknowledges reports of issues with water by "the unit resident" (presumably the Appellant's tenant). The report also states that Mr Slatter has "no doubt that water ponds on the terrace tiles, as localised ponding is common on most of the private terraces throughout the building". He also refers to a "past recommendation to the Executive Committee to budget for life-cycle replacement of the terraces and roof area" when the water proofing membrane has reached its serviceable life-cycle. Questions as to what initiated that past recommendation might have yielded information supportive of the Appellant's contentions.
In conclusion, it is our view that the failure of Mr Slatter to be available for cross-examination and the influence of his reports in the Tribunal's determination of the force of Mr Karam's report, has resulted in the Appellant failing to be afforded procedural fairness. Accordingly ground 2(ii) is upheld.
A failure to afford procedural fairness is an error of law: John Prendergast and Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13(4)].
Given our conclusion that ground 2(ii) should be upheld, it is necessary to remit the Appellant's application to the Tribunal to be reheard and reconsidered. The Tribunal was critical of the reliability of the Appellant as a witness and accordingly, it is appropriate that the Tribunal hearing the matter on remittal should be differently constituted. We will not make any direction concerning the evidence which is to be permitted to be led on the remittal. We leave that for determination by the Consumer and Commercial Division.
In the circumstances, it is not necessary to consider ground 3.
The following orders are made: 1. The appeal in respect of order 1 in proceedings 2023/00394828, requiring the Appellant to pay $15,105.62 to the Respondent, is dismissed. 2. Order 1 in proceedings 2023/00394828 is affirmed. 3. Order 2 in proceedings 2023/00394828 is set aside and in its place costs at first instance will be included in the matters for reconsideration on the remittal. 4. The appeal in respect of proceedings 2023/00389760 is upheld and the order dismissing that application is set aside. 5. Proceedings 2023/2300389760 are remitted to the Consumer and Commercial Division of the Tribunal for the purposes of being reheard and determined by a Tribunal differently constituted with such remittal to include reconsideration of the costs orders that should be made with respect to costs incurred by the parties at first instance. 6. If either party seeks costs of the appeal, they must file and serve submissions within 14 days of the publication of these orders. 7. If either party files and serves submissions with respect to costs of the appeal in accordance with the above order, the other party has a further period of 14 days to file and serve submissions in opposition. 8. Submissions with respect to costs should include submissions concerning whether or not an order should be made pursuant to s 50 of the Civil and Administrative Tribunal Act, 2013 (NSW) dispensing with a hearing of the relevant application for costs.

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: 03 June 2024

Administrative Tribunal Act 2013(NSW)

Sultan v The Owners - Strata Plan no 54721

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