Wassef v Panagiotopoulos

NCAT Appeal Panel|2019-04-08

Introduction

This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (NCAT Act) against an interlocutory decision made in the Consumer and Commercial Division of the Tribunal on 21 December 2018. The decision was to allow the respondent to re-open his case and tender new evidence.
The Notice of Appeal was lodged on 23 January 2019.
For the reasons set out below, we have decided to dismiss the appeal.

Background

The substantive application before the Tribunal below is a claim under the Home Building Act 1989 for damages for breach of statutory warranty brought by the appellant as successor in title to the respondent, who was an owner builder. Expert evidence was provided by both parties and as a result of that expert evidence, a number of claimed defects - including defects to bathrooms - were agreed.

Submissions and evidence

In deciding the appeal, we have had regard to the following:

The Notice of Appeal lodged on 23 January 2019;
The Reply to Appeal lodged on 6 February 2019;
The parties' written and oral submissions;
The Tribunal's reasons for decision dated 21 December 2018; and
The affidavit of John Samuel Sheehy dated 19 October 2018, which annexed the affidavit of Jean Haddad (also known as John Haddad) dated 10 October 2018.

We note that Mr Sheehy's and Mr Haddad's affidavits were before the Tribunal at first instance on the application to re-open. We admitted the material on the appeal over the objection of the appellant, on the basis that we would deal with any prejudice to the appellant in the event that this was raised as an issue during the appeal hearing. The appellant did not submit during the hearing that any such prejudice was suffered.
We have not had regard to an affidavit of Mr Sheehy dated 1 April 2019, which was submitted with the respondent's written submissions. The material in the affidavit is evidence that would have been available at the time of the hearing before the Tribunal below. There is no basis for it to be considered on the appeal.

Scope and nature of internal appeals

Section 80 of the NCAT Act relevantly provides: 80 Making of internal appeals (1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made. Note. Internal appeals are required to be heard by the Tribunal constituted as an Appeal Panel. See section 27 (1). (2) Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds..

Grounds of appeal

It is not in dispute that, as the Tribunal made an interlocutory decision, the appellant requires leave to appeal.
The appellant sets out amended grounds of appeal in an attachment to his written submissions. The grounds of appeal are: 1. The Tribunal applied the wrong principle or asked the wrong question when it concluded that because the new evidence "may" diminish the respondent's exposure for the costs of rectification it was in the interests of justice to permit the respondent's application to re-open. 2. The Tribunal failed to give adequate reasons for its conclusion that it was in the interests of justice to permit the respondent's application to succeed such that it denied the appellant procedural fairness. 3. The Tribunal should have limited the leave granted to matters only pertaining to issues identified as the basis for the application to re-open, that being the question of whether the invoice issued by Mr Haddad was in respect of both the main bathroom and ensuite bathroom or something else.
The appellant seeks leave to appeal on the basis that: 1. The Tribunal's decision is inconsistent with established legal principle. 2. The Tribunal erred in finding that because the new evidence may be relevant to the question of the respondent's exposure for the rectification cost of the ensuite, the interests of justice required the respondent's application to succeed. 3. The Tribunal should have found that allowing the respondent to re-open his case to adduce evidence that contradicted the appellant's evidence on matters going to credit was a prejudice that could not be rectified and would deny the respondent procedural fairness. 4. The Tribunal failed to identify how the prejudice to the appellant could be redressed so as to preserve his right to procedural fairness. 5. The Tribunal failed to give adequate reasons by not addressing the appellant's arguments against the application, despite finding that the respondent's explanation as to why the material was not called at hearing was not satisfactory. 6. The Tribunal failed to take into account relevant considerations. 7. The Tribunal erred in putting no limit on the scope of leave granted to the respondent to re-open his case. The Tribunal should have limited the leave granted to the issue identified as the basis for the application to re-open, being the question of whether the invoice issued by Mr Haddad was in respect of both the main bathroom and the ensuite bathroom or something else.

Issues

The issues to be determined are: 1. What principles apply to an application for leave to appeal an interlocutory decision? 2. What principles apply to an application to re-open a party's case? 3. Should the appellant be given leave to appeal?

What principles apply to an application for leave to appeal an interlocutory decision?

In Champion Homes Pty Ltd v Guirgis [2018] NSWCATAP 54 the Appeal Panel set out the principles relevant to a grant of leave to appeal an interlocutory decision: 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 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 at [84 (1)-(2)] are also relevant to the exercise of a discretion to grant leave.
The Appeal Panel's reference to "Collins" is a reference to Collins v Urban [2014] NSWCATAP 17, in which the Appeal Panel relevantly stated at [84]: [84] The general principles derived from these cases can be summarised as follows: (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: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (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, BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and the authorities cited there, SAB v SEM [2013] NSWSC 253 at [8] and [9] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; ……

What principles apply to an application to re-open a party's case?

In their submissions to the Tribunal below, both parties cited Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 (Nweizer) in relation to the principles to be applied to an application to re-open evidence.
Nweizer was an appeal from a decision to refuse the appellant leave to re-open its case. The application to re-open was made after the appellant's case was closed, but before the respondent's case had opened. The appellant wanted to call a further witness to give evidence. Counsel for the appellant had made a deliberate decision not to call the witness, on the basis that he considered that the witness's evidence only went to credit. He reconsidered that position and concluded that the proposed witness's evidence went to issues other than credit.
The appeal was allowed, even though the appellant had made a deliberate decision not to call a witness. Clarke JA (with whom Mahoney and Meagher JJA agreed) discussed various circumstances in which leave to re-open a case may or may not be granted. Clarke JA stated at page 478: The principle which should guide to the court in determining whether to grant an application for leave to re-open is whether the interests of justice are better served by allowing or rejecting the application as the case may be. No doubt it is relevant to take account of a number of matters such as likely prejudice to the party resisting the application and the reasons why the evidence was not led in the first place, but there is not, in my opinion, any hard and fast rule which requires the court to reject an application where the decision not to call the witness in the parties case was a deliberate one. Of course that does not mean that that is not a very relevant consideration. It is. Where, for instance, a decision was based on tactical grounds it may be difficult to resist the conclusion that the interests of justice were better served by the rejection of the application. But even in that circumstance there may be cases in which it is felt that the client whose application it is should not have to suffer for his or her counsel's deliberate decision. Where the decision is not made for tactical reasons and is based on a mistaken apprehension of the law or the facts of the case is more appropriately to be considered as one in which the Application has resulted from an era by counsel.
The appellant relies heavily on the Victorian Supreme Court's application of Nweizer in Matthews v SPI Electricity Pty Ltd & Ors (Ruling No 28) [2013] VSC 575; (2013) 42 VR 513 (Matthews) to argue that the Tribunal erred in allowing the respondent's application to re-open the evidence. In that case, Forrest J stated, at [20] - [21] (citations omitted): [20] The position in relation to re-opening a case after the close of final submissions or judgment has been delivered is clear. In Spotlight Pty Ltd v NCON Australia Ltd the Court of Appeal agreed with the opinion of Kenny J in Inspector-General in Bankruptcy v Bradshaw that there are four recognised classes of case in which a court may grant leave to re-open a party's case: The four classes (with which we respectfully agree) are: (i) where fresh evidence, unavailable or not reasonably discoverable before, becomes known and available; (ii) where there has been inadvertent error; (iii) where there has been a mistaken apprehension of the facts; and (iv) where there has been a mistaken apprehension of the law. These classes are not closed; but the present case shares with Bradshaw the distinction that it falls into none of them, and no applicable new category is suggested. The overriding principle is that the court consider whether, taken as a whole, the justice of the case favours the grant of leave to reopen. We are satisfied that, in the present, it does not. 21. This year Sifris J dealt with an application by a plaintiff to re-open its case in Nicholson v Hilldove Pty Ltd & Ors. In that case the application was made after the trial of the proceeding and reasons for judgment had been handed down. His Honour reviewed the authorities and said: The authorities establish that the existence or discovery of fresh evidence alone is not sufficient to re-open the case. If this were not so decisions would be "of a provisional character only". Rather, public policy requires a more "stringent rule". Accordingly a party seeking to re-open a case on the grounds of fresh evidence is required to show "that there was no lack of reasonable diligence on his part and that it is reasonably clear that the fresh evidence would have produced an opposite verdict".
The appellant submitted that unless one of the "four recognised classes of case" referred to in Matthews applies, an application to re-open a party's case cannot be granted. The appellant also submitted that the Tribunal erred in finding that the interests of justice warranted the application to re-open being granted, given that the Tribunal had found that: 1. The respondent had not demonstrated that there was no lack of reasonable diligence on his part in seeking to contact Mr Haddad, that Mr Haddad was unavailable before the hearing or that his evidence was not reasonably discoverable before the hearing. 2. The effect of allowing the application would be that the hearing would be of a provisional nature only. 3. Mr Haddad's evidence "may" go to whether the amount he invoiced was for the main bathroom and the ensuite bathroom.
In the appellant's submission, the Tribunal erred by not having regard to the authorities concerning the facts and circumstances recognised by courts as bases for reopening and giving primacy to the maxim that decisions must be made in the interests of justice. In relation to this, the appellant said that the Tribunal's discretion to allow the application was not unfettered and had to be exercised judicially and in accordance with established legal principle.
We agree that the Tribunal's discretion must be exercised judicially and in accordance with established legal principle. However, we are not persuaded that the proper application of the principles set out in Nweizer requires that for an application to re-open to succeed, it must fall within one of the four classes of cases referred to in Matthews. In our view, this would be unduly restricting the exercise of the discretion to allow an application to re-open. Further, a consideration of recent authorities indicates that the categories of cases in which an application to re-open may appropriately be granted are not as defined as the appellant appeared to submit.
For example, in In the matter of St Gregory's Armenian School Inc [2015] NSWSC 1042, Black J considered an application to re-open evidence and, in applying Nweizer, stated: [28] ….. In Urban Transport Authority of NSW v Nweiser (1982) 28 NSWLR 471 at 478, Clarke JA (with whom Mahoney and Meagher JJA agreed) pointed to the relevance, in an application to reopen, of the question whether the interests of justice are better served by allowing or rejecting the application. His Honour observed that: "The principle which would guide the Court in determining whether to grant an application for leave to reopen is whether the interests of justice are better served by allowing or rejecting the application as the case may be. No doubt it is relevant to take account of a number of matters such as likely prejudice to the party resisting the application and the reasons why the evidence is not led in the first place." [29] In Jesseron Holdings Pty Limited v The Middle East Trading Consultants Pty Ltd (No 2) (1994) 122 ALR 717, Young J, (as his Honour then was) referred to Urban Transit Authority (NSW) v Nweiser above and noted that the test for leave to reopen at the final address stage was what was just in that situation, and would normally be close to that applied on appeal. His Honour allowed reopening in the facts of that case. In Australian Securities and Investments Commission v Rich [2006] NSWSC 826; 235 ALR 587 at [18], Austin J in turn pointed to matters relevant to an application to reopen including the nature of the proceeding, whether the occasion for calling the further evidence ought reasonably to have been foreseen, considerations of fairness in respect of the defendant's notice of the case they have to meet, the importance of the issues as to which the further evidence is sought to be adduced to the issues in the case, the degree of relevance and probative value of the further evidence, the prejudice to the defendant in terms of delay and the completion of the proceedings and consequential costs, the public interest in the timely conclusion of the litigation, and the explanation offered by the applicant for not having called the evidence-in-chief. In Gaskin v Ollerenshaw [2010] NSWSC 788, Garling J provides a helpful summary of these principles. His Honour noted the source of the Court's power to reopen under r 2.1 of the Uniform Civil Procedure Rules 2005 (NSW) or alternatively UCPR 29.5 and also drew attention to the relevance of the question of prejudice to the other party arising from reopening.
In Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 18) [2018] NSWSC 1828, in applying Nweizer Beech-Jones J stated at [57], that the overriding principle "is what the interests of justice require". He went on to state: [57] ………..The various factors affecting an assessment of the interests of justice include the following. [58] First, the nature and significance of the evidence sought to be adduced (Nweiser at 477; ASIC v Rich [2006] NSWSC 826 at [18(e), (h) and (i)]). [59] Second, the timing of the application in the context of the litigation as a whole (The Movie Network Channels Pty Ltd v Optus Vision Pty Ltd [2009] NSWSC 132 at [4]). [60] Third, the circumstances surrounding the failure to adduce the evidence at an earlier stage in the proceedings (CPA; s 58(2)(b)(iv) ASIC v Rich at [16] and [18((b),(d) and (i)]) including any delay in making the application (CPA; s 56(2)(b)(ii) and (iii)). In particular, if there was a deliberate decision made not to call the evidence then "ordinarily that will tell decisively against the application" (Smith v New South Wales Bar Association (1992) 176 CLR 256 at 266-7). On the other hand, if the necessity to call the evidence could not have been reasonably foreseen then that will favour the application (Nweiser at 479 to 480) although if the evidence was not called through mistake or inadvertence then "the justice of the case may well point to the granting of the application" (Nweiser at 476). Any failure or compliance by a party with its under obligations under s 56(3) of the CPA bears upon the exercise of the power to reopen (CPA; s 58(2)(iv)). [61] Fourth, the degree of injustice or prejudice to the party resisting the tender both in terms of the decisions they have made in the course of the litigation to that point, and the additional cost, expense and inconvenience occasioned to that other party (CPA s 56(2)(b)(vi); ASIC v Rich at [18(g)]; and generally, Aon Risk Services Australia Ltd v ANU (2009) 239 CLR 175; [2009] HCA 27; "Aon"). [62] Fifth, the public interest in the timely resolution of proceedings including the impact on other litigants of delays in the resolution of these proceedings (CPA s 58(2)(a) and s 57; Aon; ASIC v Rich at [18(h)]).
In our view, the authorities support a conclusion that no single factor or group of factors is determinative in deciding whether to grant an application for leave to re-open. The primary consideration must be what the interests of justice require in a particular case, not whether the case falls within a defined category.
This approach is consistent with the Tribunal's obligation under s 36(2) of the NCAT Act to give effect to the "guiding principle" under s 36(1) of the NCAT Act; that is to facilitate the "just, quick and cheap resolution" of the real issues in the proceedings. It is also consistent with The Tribunal's obligation under s 38(6)(a) of the NCAT Act "to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings".

Should the appellant be given leave to appeal?

We are not satisfied that the appellant should be given leave to appeal.
First, the decision to allow the application to re-open was a decision made in the exercise of a discretion. The appellant therefore needs to demonstrate an error in the House v The King sense. Such an error may be demonstrated if the Tribunal acted on a wrong principle, made a material error of fact, failed to have regard to material considerations or reached a conclusion which was, on the facts, "unreasonable or plainly unjust": House v The King [1936] HCA 40; 55 CLR 499 at 505; Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at [45] (Heydon JA; Sheller JA and Studdert AJA agreeing).
It is clear from the reasons for decision that the Tribunal considered both the authorities to which it was referred by the parties and the parties' submissions. We are not satisfied that it acted on a wrong principle, made a material error of fact, failed to have regard to material considerations or reached a conclusion which was unreasonable or plainly unjust.
As noted above, the Tribunal was satisfied that Mr Haddad's evidence may go to whether the amount he invoiced was for the main bathroom or the ensuite bathroom. The Tribunal was satisfied that if that were the case, the respondent's liability for rectification costs of the ensuite bathroom may be diminished. It is clear from the Tribunal's reasons for decision that the nature of Mr Haddad's evidence and its possible impact on the respondent's liability was the crucial factor in granting leave to re-open. In our view, the evidence goes to a central issue in the case - the respondent's liability for building works done in breach of statutory warranty - and not just to the appellant's credibility.
In these circumstances, we are not satisfied that the Tribunal's discretion miscarried when it decided that the interests of justice required the application to re-open to succeed. We reach this conclusion notwithstanding the Tribunal's findings concerning what was described as "unsatisfactory elements" of the application to re-open, including in relation to whether Mr Haddad's evidence was reasonably discoverable before the hearing.
We consider that the decision the Tribunal made was open to it on the evidence provided by the respondent, on a consideration of how the interests of justice would be served in this particular case and taking into account the Tribunal's obligations under s 36(2) and s 38(6) of the NCAT Act. We acknowledge that another Tribunal Member may have reached a different conclusion. However, that is not the test.
Second, we conclude that the reasons for decision are adequate. In relation to this issue the Courts and the Appeal Panel have considered the requirements for adequate reasons on many occasions. In summary, the reasons for decision must identify relevant evidence, explain how it has been evaluated and what findings have been made, identify the relevant law and apply the law to the facts as found. The purpose of this is to enable an affected party to understand the decision which has been reached and to provide a sufficient explanation to enable a party to exercise any right of appeal: Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 per Meagher JA at 441 and following. In this case, while we accept that the Tribunal could have written more extensive reasons for decision, we conclude that the Tribunal articulated the basis for its decision - both in relation to the facts and the applicable law - and the appellant understood the basis for the decision.
Third, we are not satisfied that the appellant was denied procedural fairness. The appellant had an opportunity to make submissions on the application to re-open and those submissions were taken into account.
Fourth, while the orders made by the Tribunal allowing the application to re-open did not limit the scope of the new evidence that the respondent could provide, on the basis of the submissions made by the respondent at the appeal hearing, we accept that the respondent does not propose to put on further expert evidence. In the event that the respondent attempts to broaden the scope of the evidence to include issues beyond those raised in Mr Haddad's affidavit, that can be the subject of submissions at the hearing below.
Fifth, taking into account the principles set out in Champion Homes Pty Ltd v Guirgis set out above, we are not satisfied that the appellant has demonstrated that any substantial injustice results from the Tribunal's decision. In relation to this, the decision does not affect the appellant's substantive rights. Further, Mr Haddad's evidence is of limited scope and we are not satisfied that the admission of his evidence will cause unreasonable prejudice to the appellant, given that he will have an opportunity to respond to Mr Haddad's evidence and to cross-examine him at the hearing.

Conclusion

We are not satisfied that leave to appeal should been granted. Leave is accordingly refused.
We have made orders to facilitate the hearing of the matter before the Tribunal below. If any further issues arise prior to the hearing, it is open to the parties to seek the listing of a directions hearing.
At the hearing, the parties agreed to deal with costs of the appeal by way of written submissions. It is not in dispute that the amount at issue arising from Mr Haddad's evidence is in the region of $12,000 to $17,000. In any event, it is less than $30,000. In such circumstances, we conclude that the effect of rule 38A of the Civil and Administrative Rules 2014 is that s 60 of the NCAT Act applies to costs of the appeal. Special circumstances would need to be established to warrant an order for costs.

Orders 1. Leave to appeal is refused. 2. The matter is to be listed for hearing before the Consumer and Commercial Division of the Tribunal, constituted by Senior Member Goldstein. 3. The appellant is to provide unavailable dates for both parties to the Registry within seven days of the publication of these orders. 4. If either party seeks an extension of time to comply with procedural directions made by Senior Member Goldstein on 18 January 2019, an application should be made to the Registry, in writing, within seven days of the publication of these orders. 5. Any costs application is to be provided to the Tribunal and the other party within fourteen days of the publication of these orders and is to be supported by submissions not exceeding five pages in length. 6. Submissions in response to the costs application are to be provided to the Tribunal and the other party within fourteen days thereafter. 7. Any submissions in reply are to be provided to the Tribunal and the other party within seven days thereafter. 8. Subject to the parties' submissions, costs will be determined on the papers.

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: 26 April 2019

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