Sunaust Properties Pty Ltd v The Owners - Strata Plan No 64807 [2022] NSWSC 1643 | Case summary

Supreme Court of NSW|2022-12-01|Before: Rees J

These proceedings

On 30 October 2020, the Caretaker commenced proceedings in this Court, seeking monies said to be due under the Caretaker Agreement or, alternatively, damages or quantum meruit. When the proceedings were commenced, the amount said to be due was $216,106.22, being a modest figure in the Commercial List.
In December 2020, the OC filed a Commercial List Response, claiming inter alia to be entitled in equity to set off the amounts in a Cross-Claim. By Cross-Summons, the OC sought damages for monies paid for invoices rendered by the Caretaker, which the OC was not in fact obliged to pay.
In its response to the Cross-Claim, the Caretaker pleaded inter alia that the OC was estopped by convention. Further, the OC's claim for overpayment of money or damages was said to be statute barred by section 14(1) of the Limitation Act 1969 (NSW) or otherwise by analogy.

Application in the Tribunal

On 20 January 2021, the OC filed an application in the Tribunal seeking an order under section 72(1)(A) of SSMA 2015 terminating the Caretaker Agreement. The OC also sought an order requiring the Caretaker to pay compensation for overpayments made by the OC to the Caretaker. Obviously enough, this overlapped with the OC's Cross-Claim in this Court for damages. On 28 January 2021, the Caretaker's solicitors informed the Tribunal of the proceedings in this Court. On 12 February 2021, the Tribunal dismissed the proceedings insofar as the OC sought compensation for overpayments as the Tribunal did not have jurisdiction having regard to the relief sought by the OC by its Cross-Claim in this Court.
In May 2021, Hammerschlag J (as his Honour then was) fixed these proceedings for hearing for seven days on 28 February 2022.
In June 2021, the Tribunal listed the application for hearing for three days commencing 15 November 2021. In fact, the application was heard in the Tribunal over four days from 15 to 19 November 2021.

Tribunal decision

On 17 January 2022, the Tribunal gave its decision, terminating the Caretaker Agreement: The Owners - Strata Plan No 64807 v Sunaust Properties Pty Ltd [2022] NSWCATCD 20. On this application, the OC placed some emphasis on the Tribunal's conclusion that the Caretaker's conduct constituted gross misconduct: at [261]. The next day, the OC requested the Caretaker to return the keys to the property. The OC engaged a new Caretaker.
On 4 February 2022, the Caretaker filed an appeal to the NCAT Appeal Panel. The grounds of appeal included that the Tribunal had dealt with matters the subject of these proceedings, contrary to clause 5(7) of Schedule 4 of the NCAT Act.
On 9 February 2022, the proceedings in this Court came before Ball J, re-listed at the request of the OC. The transcript of the hearing records that both the Caretaker and OC wished to amend their pleadings but views differed as to whether this necessitated a vacation of the hearing then listed to commence on 28 February 2022. After submissions, His Honour vacated the hearing. The matter was later re-listed for four days commencing on 14 November 2022.
On 15 February 2022, the OC issued a direction to the Caretaker to cease performing any duties under the Caretaker Agreement.

Appeal panel

On 27 July 2022, the Caretaker's appeal was upheld and the matter remitted to the Consumer and Commercial Division for further orders: Sunaust Properties Pty Ltd v The Owners - Strata Plan No 64807 [2022] NSWCATAP 246. The Appeal Panel concluded that clause 5(7) operated to preclude the Tribunal from having jurisdiction to determine issues central to the application brought by the OC: at [6]. The Tribunal found that the parties had not agreed that the Caretaker could increase their fee annually by 5%, nor had the parties agreed to pay additional fees. These findings were significant factors in the Tribunal's ultimate decision that section 72 of the SSMA 2015 was satisfied such that the Caretaker's Agreement should be terminated: at [23]-[24]. However, a central issue in the proceedings before the Court is whether the Caretaker was entitled to claim such monies. The Court must determine whether the Caretaker's Agreement was varied. As such, there was a realistic risk of the Tribunal and the Court making concurrent and inconsistent findings: at [25]-[26].
The Appeal Panel considered that, if the Court were to find in the Caretaker's favour on these issues, "the result would be that a significant factual matter in support of the [OC's] claim in the Tribunal for termination of the Caretaker's Agreement would no longer exist, and to that extent, the [OC's] application would be substantially less meritorious. … The provisions of clause 5(7) were applicable such that the Tribunal did not have jurisdiction to determine the [OC's] application insofar as it required the Tribunal to determine issues also arising in the Court for determination": at [28]. However, the Appeal Panel considered that it was not appropriate to dismiss the application at first instance but rather for the OC to decide whether to withdraw the application and prosecute it again in the Consumer and Commercial Division without reliance on issues before this Court: at [32].
On 27 July 2022, the OC confirmed its direction to the Caretaker not to take any steps under the Caretaker's Agreement. The OC also applied under the slip rule for the Appeal Panel to rule on other grounds of appeal. The Caretaker opposed this course. On 28 July 2022, the Caretaker advised that it remained ready, willing and able to recommence work under the Caretaker Agreement and intended to do so. Access was sought to the common property. The OC declined on various bases.
On 23 September 2022, Ball J vacated the hearing in this Court as a key witness for the Caretaker had suffered a serious injury. The OC consented to the vacation of the hearing in the circumstances. As it happened, the parties also then wished to amend their pleadings and adjust their evidence in light of the outcome of the NCAT Appeal. Orders were made accordingly.
On 27 October 2022, the Appeal Panel acceded to the OC's application under the slip rule: Sunaust Properties Pty Ltd v The Owners - SP No 64807 (No 2) [2022] NSWCATAP 335. Specifically, the Appeal Panel dismissed the first and second grounds of appeal, in which it was suggested that the Tribunal had erred in making orders under section 72 of SSMA 2015 in relation to the Caretaker's Agreement: at [68]. (This turned on the application of transitional and savings provisions between SSMA 2015 and its legislative predecessor, the Strata Schemes Management Act 1996 (NSW) (SSMA 1996), where the Caretaker's Agreement was executed when the earlier legislation was in force.) The Caretaker filed a Notice of Intention to Appeal the decision.
OC promptly filed a motion to transfer these proceedings to the Tribunal. The Tribunal proceedings have been stood over for directions on 22 December 2022, to await the outcome of this motion.

WHETHER TO TRANSFER

The OC submitted that the proceedings in this Court and in the Tribunal each raised issues that depended on the outcome of the other and should be heard together. Further, the Tribunal was the most cost-effective, efficient and appropriate forum. Where the Caretaker's claim was a simple contract claim of relatively small quantum, the Tribunal was the appropriate forum in any event: Coastline Constructions (Aust) Pty Ltd v Kakavas [2008] NSWSC 388 at [18]. The Caretaker now claims a debt of $519,863.43 or, alternatively, quantum meruit in the event that the Court accepts the OC's contention that the Caretaker Agreement terminated automatically on 31 March 2019 by operation of section 40B(2) of SSMA 1996: Australia City Properties Management Pty Ltd v The Owners - Strata Plan No 65111 [2021] NSWCA 162 at [330]-[349]. The OC intended to re-prosecute its application for termination of the Caretaker Agreement. The 'gross misconduct' of the Caretaker in overcharging the OC was something the OC would want to rely on, but could not do so until these proceedings were determined. Further, if this Court determined that the Caretaker Agreement terminated by operation of law on 31 March 2019, then there was nothing for the Tribunal to terminate.
The OC submitted that the quantum of the Caretaker's claim for damages in this Court depended on whether the Tribunal makes an order terminating or varying the term of the Caretaker Agreement and the date on which that termination or variation takes effect: SSMA 2015, sub-sections 72(1)(a) or (c). Without knowing the outcome, the Court cannot assess the contractual damages, if any. (To this, the Caretaker submitted that the Tribunal had no power to terminate the Caretaker Agreement retrospectively, nor had the Caretaker terminated the agreement and nor did it seek damages for future payments). Whilst the Tribunal could stay its proceedings to await determination of the "issues", this would result in significant delay and would not solve the problem that this Court would not know the period for which any damages should be assessed. Conversely, staying these proceedings until after the Tribunal has determined whether to terminate (or vary the term of) the Caretaker Agreement would mean that the Caretaker's suggested overcharging could not be considered by the Tribunal.
The OC submitted that the obvious solution was for the whole of the controversy between the parties to be determined in the one forum at the same time. As to which forum should deal with the dispute, it was submitted that the power to terminate or vary a building manager agreement was granted solely to the Tribunal: SSMA 2015, section 72. Conversely, the Tribunal had jurisdiction under section 232(1)(c), which imbues the Tribunal with jurisdiction over disputes concerning agreements appointing building or strata managing agents, to grant the relief sought in this Court: Vickery v The Owners - Strata Plan No 80412 (2020) 103 NSWLR 352; [2020] NSWCA 284 at [26]-[58] (per Basten JA), [116] (per White JA). Although Vickery concerned a claim for damages under section 106 of SSMA 2015, it was submitted that there was nothing to suggest that the Tribunal's power to award damages was limited to section 106: Coscuez International Pty Ltd v The Owners - Strata Plan No 46433 [2022] NSWCATAP 147 at [123].
The OC submitted that it was appropriate to refer these proceedings to a specialist tribunal designed to hear such matters: The Owners - Strata Plan No 54026 v Ternes [2019] NSWSC 1579 at [48]-[51] (per Parker J); The Owners - Strata Plan No 30695 v Stratacorp Management Services Pty Lrd [2005] NSWSC 405 at [20], [23] (per McDougall J). This would prevent any further appeals on the question of jurisdiction under Clause 5(7). The Tribunal was said to be suited to resolving this dispute cost effectively, where section 38 of the NCAT Act directs the Tribunal to "act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms" (section 38(4)) and where the Tribunal "is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice" (section 38(2)).
The Caretaker submitted that the OC chose to bring its Cross-Claim in this Court. The OC's subsequent claim for compensation in the Tribunal under section 72 of the SSMA 2015 was dismissed for lack of jurisdiction. The OC was thereby issue estopped from bringing a claim for compensation in the Tribunal: Blair v Curran (1939) 62 CLR 464, at 531-532 (per Dixon J). I do not think that follows. The Tribunal dismissed the claim for compensation on the basis that this Court had jurisdiction, where the issue had been first raised in this Court. I do not see how such a dismissal would preclude this Court nonetheless transferring these proceedings to the Tribunal for determination under Clause 6(2) were it otherwise appropriate to do so.
Further, the Caretaker submitted that there was a real question whether the Tribunal has jurisdiction to make the orders sought in these proceedings. Whilst Vickery permits section 232(1) to apply to a breach of statutory duty case arising pursuant to section 106(1) or (2), the Caretaker submitted that there was presently no authority that section 232(1)(c) bestows power on the Tribunal to award general damages, or equitable compensation, arising from an application under section 72. As such, transferring these proceedings to the Tribunal would likely give rise to an appeal by the unsuccessful party in relation to jurisdiction. No such issue arose if the proceeding remained in this Court. In addition, the proceedings in this Court were said to be complex and of a size that would pose difficulties for the Tribunal.

Conclusion

Clause 6(2) confers a discretionary power to be exercised having regard to the circumstances of the case and so that justice is best served between the parties; the party seeking the transfer bears the onus: Anvic Holdings v Constable [2002] NSWSC 747 at [13] (per Master Malpass).
Given the procedural history of this dispute in both this Court and the Tribunal, my primary concern is to bring the disputes to final resolution as soon as possible, where it appears that the parties have been slogging it out for two years in two fora for no obvious benefit and with no end in sight.
As to whether the Tribunal has jurisdiction to determine this dispute, a review of the pleadings indicates that the following issues arise in the proceedings in this Court: 1. the proper construction of the Caretaker Agreement; 2. whether the agreement was varied; 3. whether the agreement was terminated, including by operation of SSMA 1996 and, if so, when; 4. whether the OC is entitled to damages in respect of invoices paid which were not payable; 5. whether the OC is entitled to a set off in equity; and 6. whether the OC's claim for damages is precluded by an estoppel by convention or is time barred.
There does appear to be a live controversy as to whether the Tribunal has jurisdiction to determine all of these issues. Under SSMA 1996, there was no power to award damages for breach of the statutory duty to maintain common property: The Owners - Strata Plan 50276 v Thoo [2013] NSWCA 270 at [198]-[222]. Although SSMA 2015 now does so in section 106(5), no similar provision for damages was inserted into section 232(1). In Breecass Pty Ltd v The Owners - Strata Plan No 61419 [2019] NSWCATCD 23, the Tribunal raised that "there would be a jurisdictional issue as to whether the Tribunal [had power] to make an award of damages for contractual breach; or liquidated sums under the contract, or compensation for unjust enrichment under s 232 of SSMA 2015 ... ": at [28]. Both parties then sought to transfer the proceedings to this Court, to which the Tribunal acceded. At [40]: There is a real prospect that the Tribunal may find that no such power exists, in circumstances where (i) there was no power to make an order under the SSMA 1996; and (ii) the legislature did not clearly provide for such a power under s 232 of the SSMA 2015, but provided ins 106 (5) of the SSMA 2015 that a Lot owner could sue an owners corporation/or damages arising from breach of statutory duty of the owners corporation regarding the state of repair of common property. If the Tribunal does not transfer the proceedings, [the building manager] may fail in its claim for lack of jurisdiction to make an award of damages where a court clearly has jurisdiction to make such an order.
Further, the Tribunal was not satisfied that the building manager's claim could be dealt with under section 72 of SSMA 2015 as a claim under that section could only be brought by an owners corporation and did not appear to extend to awarding damages or compensation to a building manager for breach of the service agreement by the owners corporation: at [44].
I do not consider it appropriate on a transfer application to express a concluded view on questions of jurisdiction. However, transferring these proceedings to the Tribunal may undermine my primary goal of quelling disputation between these apparently entrenched parties at the earliest opportunity. The party which loses in the Tribunal may appeal this issue; leaving the proceedings in this Court removes that risk.
As to the quantum of the claim and Cross-Claim, I was informed by the Caretaker's senior counsel that the perhaps modest figures in the Summons belies the quantum of the claim as the figure continues to increase as the term of the Caretaker Agreement continues and further monies become due but unpaid. The unpaid fees now stood at $750,000 with a further three years to run on the contract. I was also informed that, following amendments to the Caretaker's pleadings made during the course of the hearing of this application, further expert evidence will be served in respect of loss of profits said to have been suffered as a consequence of the OC's conduct, in the order of $3 million. In particular, it will be contended that the Caretaker's business has suffered damage to its reputation, which had affected its ability to enter into other contracts. I was informed by the OC's counsel that the amounts sought by the Cross-Claim exceed $1 million. I am not in a position on this application to assess whether these figures are realistic or aspirational, save to say that the suggested quantum points to the Court being an appropriate forum.
Finally, a practical consideration presents itself. The Caretaker's solicitor opined that the hearing time required for these proceedings is between eight and ten days whilst the hearing of the remaining Tribunal proceedings was one day. The OC did not agree. I do note, however, that on 8 August 2022, the OC's solicitors advised the Caretaker's solicitors that they now considered the hearing time required in this Court was seven days and proposed to write to the List Judge.
I note also that, in October 2021, the Caretaker sought to vacate the hearing before the Tribunal as the allotted three-day hearing was considered inadequate, where six days was said to be required. The application was heard by Principal Member K Rosser, who refused the application and, in the course of doing so, informed the parties that the Tribunal would generally only list a matter for up to two days, with a three-day hearing considered something of an indulgence. The parties were expected to 'cut their cloth' accordingly. If the parties agreed that the matter would take five or six days, then the Principal Member was open to transferring the proceedings to this Court. In light of the comments of Principal Member K Rosser, transferring these proceedings to the Tribunal does not appear appropriate given the estimated hearing time, noting that the Caretaker now also intends to serve expert evidence in support of its claim for loss of profit.
While the Caretaker submitted that it would lose the presumption of an entitlement to a costs order in the matter was transferred, I consider this to be a matter which may equally favour the Caretaker depending on the outcome of the proceedings, and affects both parties equally.
Having regard to these considerations, being uncertainty as to the jurisdiction of the Tribunal to determine all issues in these proceedings, quantum and length of hearing - and with some regret - I decline to make the orders sought by the OC.
Although I was informed by senior counsel that relations between the parties are acrimonious and settlement is "just not going to happen", I encourage the parties to give serious consideration to alternative dispute resolution where both parties have a lot to lose, depending on the potential outcomes of these proceedings and the remitted application in the Tribunal.

ORDERS

I make the following orders: 1. Dismiss the defendant's motion filed on 27 October 2022. 2. Make no order as to the costs of the motion. 3. The defendant is to file and serve a Commercial List Response within 21 days after any Further Amended Commercial List Statement is filed and served. 4. Any Reply is to be filed and served within 21 days after any Commercial List Response is filed and served. 5. Grant leave to the parties to serve expert evidence relating to the further amendments made in the Further Amended Summons and/or Further Amended Commercial List Statement. 6. The plaintiff/cross-defendant to serve by 28 February 2023: 1. any further lay or expert evidence relating to the further amendments made in the Further Amended Summons and/or Further Amended Commercial List Statement; and 2. reply evidence to the evidence served by defendant/cross-claimant on 2 September 2022. 1. The defendant to serve any further lay or expert evidence by 11 April 2023 in response to the further amendments to the pleadings and/or the evidence served by the plaintiff under Order 6. 2. The plaintiff is to serve by 9 May 2023 any further lay or expert evidence in reply to the evidence served by the defendant under Order 7. 3. Vacate the directions hearing on 31 March 2023. 4. List the matter for directions before the Commercial List Judge on 26 May 2023.

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: 09 December 2022

Consumer, Trader and Tenancy Tribunal Act 2001(NSW)

Strata Schemes Management Act 1996(NSW)

POWER TO TRANSFER TO NCAT

The first issue is whether the Court has power to transfer the proceedings to the Tribunal, where this Court has jurisdiction by reason of Clause 5(7) of Schedule 4 to the NCAT Act.
The Tribunal comprises four Divisions, including the Consumer and Commercial Division: sections 16(1). The Tribunal has such jurisdiction and functions as may be conferred by the NCAT Act or other legislation: section 28(1). The functions of the Tribunal in relation to the Strata Schemes Management Act 2015 (NSW) (SSMA 2015) are allocated to the Consumer and Commercial Division: clause 3(1), Schedule 4.
Schedule 4 of the NCAT Act provides for the composition and function of the Consumer and Commercial Division, including special requirements in relation to the powers of, and the practice and procedure to be followed by, the Tribunal in relation to proceedings in the Division: section 17. The provisions of Schedule 4 prevail to the extent of any inconsistency with the NCAT Act: section 17(3); clause 5(10), Schedule 4.
Clause 5 of Schedule 4 deals with proceedings commenced in the Tribunal and courts in respect of Tribunal functions allocated to the Consumer and Commercial Division. Clause 5 was succinctly explained by the Explanatory Note for the predecessor provision, being section 22 of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW): (emphasis added) [The clause] provides for determining the proper forum when a court or another tribunal has concurrent jurisdiction with the Tribunal in a particular matter. A person bringing a claim or seeking to have the Tribunal review the decision of any person or body may generally choose whichever forum the person prefers (the proper forum being determined by where the proceedings are first commenced).
Sub-clauses 5(3) to (6) of Schedule 4 to the NCAT Act address the Tribunal's jurisdiction where proceedings are commenced in the Tribunal before proceedings are commenced in a court. In that event, sub-clause 5(3) provides: (3) Effect of application to Tribunal or court If, at the time when an application was made to the Tribunal for the exercise of a Division function, no issue arising under the application was the subject of a dispute in proceedings pending before a court, a court has no jurisdiction to hear or determine such an issue.
In such circumstances, the Tribunal has jurisdiction and the court in question does not, "furthering the statutory purpose of cl 5 … that if an issue arising under the application can be dealt with either by a court or the Tribunal, the issue should be determined by the court or tribunal in which proceedings are first commenced": Steak Plains Olive Farm Pty Ltd v Australian Executor Trustees Ltd [2015] NSWSC 289; (2015) 18 BPR 35,471 at [105] (per White J, as his Honour then was).
Where the Tribunal proceedings were commenced after court proceedings, sub-clauses 5(7) and (8) provide: (emphasis added) (7) Effect of pending court proceedings on Tribunal If, at the time when an application is made to the Tribunal for the exercise of a Division function, an issue arising under the application was the subject of a dispute in proceedings pending before a court, the Tribunal, on becoming aware of those proceedings, ceases to have jurisdiction to hear or determine the issue. (8) Subclause (7) ceases to apply to the extent to which the proceedings concerned are dismissed or quashed by the court, or by another court, for want of jurisdiction or without deciding the issue on its merits, or withdrawn.
That is, consistently with sub-clauses 5(3) to (6), where a court is where "an issue arising under the application" is first agitated, then that court is the forum where the "issue" will be determined. In either scenario, identification of the "issues" is not to be approached narrowly but by focusing on the substance of the real legal and factual issues and with the statutory purpose in mind, being to avoid concurrent proceedings and a risk of inconsistent findings: Steak Plains Olive Farm at [104]-[105]; The Owners Corporation - Strata Plan 64807 v BCS Strata Management Pty Ltd [2020] NSWSC 1040 at [45] (per Williams J).
As to the circumstances in which proceedings may be transferred between the Tribunal and a court, clause 6(2) of Schedule 4 provides: (emphasis added, substantive amendment to predecessor legislation underlined) 6 Transfer of proceedings to courts or to other tribunals (1) If the parties in any proceedings for the exercise of a Division function so agree, or if the Tribunal of its own motion or on the application of a party so directs, the proceedings are - (a) to be transferred to a court (in accordance with the rules of that court) that has jurisdiction in the matter, and (b) to continue before that court as if the proceedings had been instituted there. (2) If the parties in any proceedings that have been instituted in a court so agree, or if the court of its own motion or on the application of a party so directs, the proceedings are, if the proceedings relate to a matter for which the Tribunal has jurisdiction to exercise a Division function - (a) to be transferred to the Tribunal in accordance with the procedural rules (if any), and (b) to continue before the Tribunal as if the proceedings had been instituted in the Tribunal.
Here, the Caretaker commenced proceedings in this Court before the OC commenced related proceedings in the Tribunal. The Caretaker submitted that there was no jurisdictional basis for this Court to order a transfer as there is no provision for jurisdiction to be reinstated to the Tribunal.
There is no authority squarely on point. In Di Liristi v Matautia Developments Pty Ltd [2021] NSWCA 163, Brereton JA identified, but did not resolve, "a number of complications" in the intersection between clause 5(7) and clause 6(2): at [21]ff. His Honour dealt with the problem by case management, restraining prosecution of proceedings in the Tribunal until resolution of an appeal in view of the apparent complexity of the argument: at [24].
In construing Clause 6(2), the aim is to determine and give effect to the intention of the Parliament as disclosed by the language used in the statute: Herzfeld and Prince, Interpretation (2nd ed, 2020, Thomson Reuters) at [1.30]; Dixon v Todd (1904) 1 CLR 320 at 326; Amalgamated Society of Engineers v Adelaide Steamship Co (1920) 28 CLR 129 at 161-162 (per Higgins J); Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 346 (per McHugh J). The Court must consider the text of the provision in the context of the instrument as a whole, including material extrinsic to the instrument: Federal Commissioner of Taxation v Consolidated Media Holdings (2012) 250 CLR 503; [2012] HCA 55 at [39]; SAS Trustee Corporation v Miles (2018) 265 CLR 137; [2018] HCA 55 at [64] (per Edelman J). The Court will not prefer an interpretation that would result in absurdity or otherwise create internal conflict within the instrument. As McHugh, Gummow, Kirby and Hayne JJ observed in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 335; [1998] HCA 28 at [70]: A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions…
The Explanatory Note for the predecessor provision, section 23 of the Consumer, Trader and Tenancy Tribunal Act, simply states: (emphasis added) [The clause] provides for the transfer of proceedings from the Tribunal to a court that has jurisdiction in the matter or from a court to the Tribunal so long as it has jurisdiction.
Clause 5 of Schedule 4 to the NCAT Act governs which forum has jurisdiction to determine a matter. Clause 6 governs the procedure for transferring the case from one forum to the other. The clauses should be read and construed so as to work together in a coherent manner and, where possible, to give effective operation to both.
The application of clause 6 is straightforward where there is only one proceeding on foot, being in either the Tribunal or a court, and the transfer is made from one forum to the other. In that situation, it will obviously be critical to ensure that the forum to which the proceedings are being transferred has jurisdiction to deal with the matter.
The application of clause 6 becomes more complicated where there are proceedings on foot in both the Tribunal and a court and, by operation of clause 5, the forum in which proceedings were first commenced has jurisdiction in respect of "issues" while the other forum does not. Such a situation is not uncommon. Parties endeavour to have their disputes resolved in their preferred forum by promptly filing an application or commencing proceedings in that forum. Not infrequently, the other party to the dispute may have commenced an action in a different forum at about the same time. After sorting out which forum has jurisdiction and in respect of what "issues", the later applications or proceedings may nonetheless continue to deal with residual issues. In some cases, this difficulty has been addressed by staying one proceeding while the other determines the "issue": Steak Plains Olive Farm at [111].
As concurrent proceedings progress, however, it may become apparent that the disputes between the parties would be better resolved by being determined in the same forum, requiring the transfer of proceedings from one forum to the other.
Similarly, where the Tribunal has jurisdiction to determine the "issues" and this Court does not, it may become appropriate to transfer the proceedings from the Tribunal to this Court where, for example, the quantum of the claim or the complexity of the issues suggests that the Court may be better equipped to deal with the matter, or at least the parties would prefer that the Court did so.
Likewise, where this Court has jurisdiction in respect of the "issues", it may emerge that, in reality, the case is better suited to the Tribunal's procedures to resolve the real issues with as little formality as possible: section 3(d), NCAT Act.
Clause 6(2) of Schedule 4 does not require the Tribunal to have jurisdiction in respect of the "issue" but, rather, for the proceedings to "relate to a matter for which the Tribunal has jurisdiction to exercise a Division function". The italicised text does not appear in the predecessor legislation. These additional words together with the preceding text which I have quoted indicate that, in order for the Court to transfer a proceeding to the Tribunal, it is sufficient that the proceedings concern the type of matter which falls within the functions allocated to the Consumer and Commercial Division. That is all that is needed to enable a matter to be transferred to the Tribunal if it is otherwise appropriate to do so. There is a difference of language between clause 5 and clause 6 which makes the distinction tolerably clear.
Further, clause 6(2)(b) provides that the transferred proceedings will continue before the Tribunal as if the proceedings had been instituted in the Tribunal. This embraces the situation where the Court had jurisdiction in respect of the "issues" but the Court transfers the proceedings to the Tribunal to determine those "issues". In transferring the proceedings to the Tribunal under clause 6(2), the Court divests itself of jurisdiction to determine the "issues". The transferred proceedings will continue in the Tribunal as if it was the proper forum from the outset. Once transferred, the Court no longer has jurisdiction in respect of the "issue" and nor is the Tribunal deprived of jurisdiction by clause 5.
Were it otherwise, clause 6 would be devoid of operation wherever there was more than one proceedings on foot. In that event, even if the parties agreed to transfer proceedings, they could not do so and would be compelled to prosecute parallel proceedings in the Court and Tribunal. Even if it emerged during the progress of the matter in this Court that the "issues" could best be determined in the Tribunal, the proceedings would have to remain in this Court. I do not consider that determination of the proper forum under Clause 5 holds for all time if justice is best served by the dispute being determined in another forum. Such a construction does not conflict with the statutory purpose of clause 5. The vice to which clause 5 is directed is to prevent concurrent proceedings and the risk of inconsistent findings. That vice does not re-emerge if proceedings are transferred from one forum to the other under clause 6 as the result of the transfer is that only one forum will be exercising jurisdiction.
As far as I can ascertain, the issue raised by the Caretaker has not been regarded as a problem when dealing with transfer applications. For example, in Australian Executor Trustees Ltd v Steak Plains Olive Farm Pty Ltd [2014] NSWCATCD 248, a related proceedings to the matter heard by White J, proceedings were first commenced in the Tribunal and later proceedings were commenced in this Court. An application to transfer the proceedings from the Tribunal to the Court was twice refused. On refusing the second transfer application, the Tribunal Member listed the matters to be considered on such an application as including, at [27]: Matters to be considered include: (a) The fact there are claims made in other proceedings that cannot be determined in the Tribunal, (b) The history of the Tribunal proceedings and the conduct of the parties, (c) Whether the Tribunal is a convenient forum and has power to make orders to resolve particular controversies, (d) Whether or not a different form of relief is available in another forum, (e) Whether resolution of particular issues within the jurisdiction of the Tribunal will be delayed, (f) The objects of the NCAT Act including those found in section 3(b)(i) and 3(d).
The Principal Member applied these considerations but did so on the basis that the proceedings could be transferred to this Court. The Tribunal Member did not appear to consider that, where proceedings had been commenced first in the Tribunal, this Court did not and could not have jurisdiction to hear a transferred matter.
Here, as the proceedings in this Court were commenced before the OC filed an application in the Tribunal, the Tribunal does not have jurisdiction to the extent that "an issue arising under the [Tribunal] application [is] the subject of a dispute in [these] proceedings". Those issues have been identified by the Tribunal (and the Appeal Panel). There is no suggestion that the proceedings in this Court meet the description in clause 5(8) or are likely to do so before judgment. Notwithstanding this, I consider that the Court has power to transfer these proceedings to the Tribunal if the parties agree or it is otherwise appropriate to make such an order. To make that assessment, one must turn to the facts.

(2020) 103 NSWLR 352

Sunaust Properties Pty Ltd v The Owners - Strata Plan No 64807

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