Zhou v Zhang

NCAT Appeal Panel|2023-11-15

Introduction

This appeal concerns home building proceedings HB 23/14262 (application). In those proceedings Mingshun Zhang (the respondent in this appeal) sought an order that Qingwen Zhou (the appellant in this appeal) pay Mr Zhang a total of $35,590.00 being damages for incomplete and defective work and loss of rent arising from work done under a building contract dated 25 July 2020.
In the application, under the heading Reasons for the Order/s", Mr Zhang said: This claim is for incomplete and defective works of the Applicants property located at ###, the subject of a renovation contract with the respondent dated 25 July 2020. This matter was the subject of NCAT applications HB 21/27152 and HB 21/22016. The parties entered into a deed of settlement in relation to HB 21/27152 HB 21/22016. The respondent has failed to fulfil any of the terms of settlement and is in breach of all of terms of the deed of settlement. The Tribunal made an order on 11/08/2021 '1(b) In the event of breach of the terms of this deed, the non-breaching party may apply to reopen this case or make a new application.' This application is made in accordance of the order (sic). A full statement of evidence will be provided by the applicant under separate cover.
On 8 September 2023, the building claim was withdrawn pursuant to s 48I of the Home Building Act 1989 (NSW) (HB Act) (decision). This occurred in circumstances where the Tribunal had received an application for withdrawal from Mr Zhang which had been listed prior to the date set for final hearing which was 29 September 2023. The order was in the following terms: 1. For the oral reasons provided at the hearing, the application is withdrawn pursuant to section 48I(2) of the Home Building Act 1989.
The appellant appeals the decision and says that the withdrawal was permitted "without taking into account the evidence [the appellant] had previously submitted to NCAT on 01/06/2023, and (sic) additional information on 17/08/2023 and the reasons why I want this case to be completed.

Notice of Appeal and history of appeal proceedings

The appellant filed a Notice of Appeal on 25 September 2023. The appeal was filed in time.
The orders sought on appeal were: 1. Relist the final hearing. 2. Proceed with a hearing where there is a determination made by who is in breach of the deed of settlement and release, examined the evidence and claims Mr Mingshun Zhang has provided on NCAT affidavits and evidence we have provided to determine if the applicant has committed perjury and act in accordance. 3. Reserve me the legal rights I am entitled to.
The grounds of appeal can be summarised as follows: 1. At the hearing, the Tribunal failed to enquire about the reasons for withdrawal from both parties or address the prior withdrawal request made by [Mr Zhang] which had already been requested twice. The Tribunal also permitted Mr Zhang to submit additional evidence for the future hearing scheduled on 29 September 2023. 2. The Tribunal's decision to allow Mr Zhang to request another withdrawal during the hearing was contrary to the purpose of the hearing itself. 3. The decision of the Tribunal was "inequitable" given the reason offered by Mr Zhang was that he "didn't want to spend further energy and money on this case". 4. The Tribunal failed to examine the basis of Mr Zhang's withdrawal request and the potential underlying motive, without considering [the appellant's] evidence that was already provided. In this regard, the appellant referred to "a $2500 fake invoice" and an alleged "attempt to scan $10,500" for lost rental. This, the appellant said was a contravention of s 71 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). 5. The Tribunal did not give due consideration to the significance of determining the party responsible for the breach and the privileges entitled to the non-party. Instead, the Tribunal "chose to dismiss the case in an effort to reduce future litigation costs". 6. The hearing was intended to assess the factors surrounding the withdrawal, which the Tribunal failed to do. This resulted in "an inequitable and unfair judgement". There was also a denial of an opportunity for the appellant to say why he opposed the withdrawal. 7. The Tribunal disregarded evidence concerning "contempt of court, false and misleading evidence submitted in affidavits, and potential breaches of the Crimes Act simply because [Mr Zhang] was seeking withdraw. 8. In making orders that the application be withdrawn, the Tribunal "did not consider the broader context of this case, which involves a Deed of Settlement and Release". This, the appellant said, extends beyond the provisions of the HB Act "solely under this Act is incorrect and leads to an unequal treatment of the matter".
Leave to appeal was also sought.
Insofar as the decision was said to be not fair and equitable, the appellant said: 1. the Tribunal did not understand the importance of determining "who breached the case and what privileges the non-breaching party is entitled to"; 2. the Tribunal did not examine the basis of Mr Zhang's withdrawal, the reasons of the appellant for rejecting the withdrawal and potential underlying motives for Mr Zhang; 3. evidence was not considered concerning whether withdrawal should be permitted and "an ample opportunity to express why [the appellant rejected] the withdrawal was not permitted; 4. the Tribunal disregarded the appellant's "allegations of contempt of court with supporting evidence simply because [the appellant] did not have an expert report nor incur costs together … evidence". This matter was repeated at item 7 of the reasons why leave to appeal should be granted; 5. the Tribunal did not consider that the claim made by Mr Zhang was a breach of the deed of settlement and that "the non-breaching party is entitled to legal indemnity in future issues". 6. The Tribunal permitted the late submission of documents for a hearing scheduled on 29 September despite non-compliance with directions; 7. the Tribunal did not "fully understand the case, its timeline and the extent of the desperation and underlying intent of [Mr Zhang's] withdrawal attempts"; 8. there were various errors in the oral reasons given by the Tribunal; 9. the Tribunal failed to examine evidence provided by the appellant.
The matter was listed for call over on 6 October 2023. Directions were made for the parties to file and serve evidence and submissions in support of their respective positions.
The appellant filed a bundle of documents on 26 October 2023, which included written submissions in support of his position and a typed transcript of exerts of the hearing on 8 September 2023. The respondent, Mr Zhang, failed to file a Reply to Appeal or any evidence and submissions as directed.
The matter was heard by the Appeal Panel on 15 November 2023. At that time the appellant said he did not object to the respondent providing any reply to appeal orally. The hearing proceeded on this basis, the appellant being represented by his wife and the respondent being represented by his son.
The parties provided oral submissions.
The appellant reiterated his position that there was an invalid invoice, asserting claims made by the respondent were false. The appellant said that respondent was trying to extort money from him. The appellant also said the purpose of the withdrawal was to evade responsibility for having provided false documents.
In reply, the respondent's submissions concerned the trust which the respondent said he had placed in the appellant and the assertion that the appellant had engaged in intimidating conduct.
When the Appeal Panel noted the question was whether the Tribunal had incorrectly permitted the application to be withdrawn, the respondent said that the proceedings had gone on too long and that he did not wish to occupy more public resources.

Matter arising following hearing of the appeal

After the hearing of the appeal concluded, we determined that an issue of statutory construction arose concerning the entitlement of an applicant to withdraw an application under s 48I(2) of the HB Act.
We made directions to permit the parties to file and serve submissions on this topic. The orders were as follows: 1 On or before 12 February 2024 for the parties are to file and exchange any submissions on the following topics: a. whether s48I of the Home Building Act 1989 (NSW) (HB Act) permits an applicant who brings a building claim in the Tribunal to withdraw an application without leave (save as provided in s 48I(3). That is the Tribunal has no discretion to prevent withdrawal; b. whether s 55(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act impliedly repeals or regulates withdrawal of proceedings under s 48I of the HB Act, including providing to the Tribunal a discretion; and/or c. whether s 48I and 55(1)(a) provide separate means by which an applicant who has brought a building claim in the Tribunal to withdraw proceedings. 2 On or before 26 February 2024, the parties are to file and exchange any submissions in reply. 3 Submissions are to include submissions about whether an order should be made under s 50(2) of the NCAT Act dispensing with a further hearing. 4 Submission maybe filed with the Tribunal by email, such submissions not to exceed 10 pages.
Submissions were received from the appellant. No submissions were received from the respondent.
The appellant did not suggest that a further hearing was necessary. Rather, the appellant said: We have explained and highlighted all our points within written submissions throughout the course of these hearings and we believe that we have a strong case that is evident of our compliance and worth of dispensing a hearing for.
In the absence of submissions from the respondent, in our view a further hearing is unnecessary and the issues can be adequately determined in the absence of the parties. This will also avoid further and unnecessary costs. We will make an order under s 50(2) of the NCAT Act dispensing with a hearing.
As to submissions on the substantive issues raised, the appellant said: On the basis that this case was a Building Claim, the law does perhaps permit a withdrawal without leave. However, we would like to emphasise that this case is not appropriately constrained under the term of a "building claim" as defined by s 48I of the Home Building Act 1989 we are a building claim is defined as a claim that arises "from a supply of building goods or services". We strongly believe that this case should be considered as a standard Consumer Claim. The fundamental reason that the applicant filed the application was that they are alleging that we broke the terms of the deed and we are now thus owing them the "Breach caused by a party" benefits stated within the deed. We believe and have shown evidence that strongly indicates our compliance and that the applicant filed the application maliciously for monetary gain by using misleading dates, purposely failing to cooperate in order of getting Home Building Insurance and providing invalid invoices and date ranges to the Tribunal to maximise financial gain. The deed mentioned was signed to resolve a previous building claim. Given this reason, the Tribunal's main role was to decide if asked (the respondent) had breached the deed that resolved the original building claim and decide if the applicant receives rights listed under section 9 of the deed, "Breach caused by a party". We believe there is an error in using section 48I of the Home Building Act 1989 (NSW) to justify leave not being required for the withdrawal of this specific application. Additionally, S48I allowed for withdrawal by the applicant, however in this case, we are also alleging that the applicant had submitted misleading information to the Tribunal under oath for financial gain. S 48I does not state the procedure for such circumstances which is why we believe it is important for the Tribunal to assert discretion for the withdrawal in order to enforce s 71 NCAT Act.
Submissions were then made concerning s 55(1)(a) of the NCAT Act. Notwithstanding the earlier concession that the HB Act "does perhaps permit a withdrawal without leave", the appellant submitted that s 55(1)(a) "is an umbrella term for all disputes filed to NCAT which covers s 48I HN Act.
In making this submission the appellant said he "would also like to maintain that this case is not a building claim but rather an application to settle on which party is in breach of a deed". In doing so, the appellant maintained his position that he believes "that all cases of misconduct should be taken seriously and investigated, especially when strong evidence is provided" and that the Tribunal was in error in permitting the withdrawal and bringing the proceedings to an end.

Consideration

There is a right of appeal on a question of law, otherwise leave to appeal is required: s 80(2)(b) NCAT Act.
Leave to appeal may only be granted in connection with an appeal from a decision in the Consumer and Commercial Division of the Tribunal if the appellant can show they may have suffered a substantial miscarriage of justice because the decision was not fair and equitable, against the weight of evidence or there was significant new evidence not reasonably available at the time of the original hearing: Sch4 cl 12(1) NCAT Act. The principles applicable to the grant of leave are set out in the decision of Collins v Urban [2014] NSWCATAP 17.
Two questions arise out of the Notice of Appeal which appear to be questions of law.
First, is whether the appellant was denied procedural fairness in the hearing of the application to withdraw.
Second, is the question of whether there is a discretion concerning the withdrawal of home building proceedings. If so, whether that discretion miscarried in a manner identified by the High Court in House v The King (1936) 55 CLR 499; [1936] HCA 40 (House v The King) at 504-5, by the Tribunal failing to take account of relevant considerations or otherwise.
In addition, there is an anterior question raised by the appellant, namely whether the proceedings are in fact a building claim. This question appears to be a mixed question of fact and law. For convenience, we will deal with this issue last.
In relation to the issue of denial of procedural fairness, the problem with this submission is that we have not been provided with a full transcript of the hearing before the Tribunal on 8 September 2023. We were only provided with the disc plus a transcript of exerts from the hearing. This is despite directions been made at the call over for a full transcript to be provided if it was relied upon.
In any event, what has been provided to us (being Attachment 6 to the appellant's submissions) shows that submissions were made by the appellant to the Tribunal on the issue of "illegal actions" and the need for Mr Zhang to be "punished by the law" and these matters were considered by the Tribunal in permitting the proceedings to be withdrawn.
In these circumstances, the procedural fairness ground is not made out.
The second question of law requires a consideration of s 48I of the HB Act. That section provides: 48I Application for determination of building claim (1) Any person may apply to the Tribunal for the determination of a building claim. (2) A building claim may be withdrawn by the claimant at any time. (3) If, immediately before a building claim was made, the claimant was subject to the requirements of a rectification order under Division 2, the building claim may not be withdrawn except with the leave of the Tribunal. (4) When granting leave to the withdrawal of a building claim referred to in subsection (3), the Tribunal may restore the rectification order referred to in that subsection.
The ability to withdraw an application under s 48I of the HB Act is different to, or at least in addition to, the ability of a party to apply to withdraw proceedings under s 55(1)(a) of the NCAT Act. Section 55(1)(a) provides: 55 Dismissal of proceedings (1) The Tribunal may dismiss at any stage any proceedings before it in any of the following circumstances - (a) if the applicant or appellant (or, if there is more than one applicant or appellant, each applicant or appellant) withdraws the application or appeal to which the proceedings relate, …
Under s 55(1)(a), the Tribunal "may dismiss" proceedings "if the applicant … withdraws the application". That is, the Tribunal brings the proceedings to an end by making an order for dismissal consequence upon a request to withdraw. However, making such an order is discretionary, the power to dismiss being qualified by the word "may".
Section 48I is in different terms.
As is evident from the text of that section, a building claim "may be withdrawn by the claimant at any time" (emphasis added). That is, regardless of the stage proceedings have reached, including if they are fixed for final hearing or have been heard and not determined, a building claim may be withdrawn by the applicant.
Unless circumstances exist of the type set out in s 48I(3) of the HB Act, namely immediately before the building claim was made "the claimant was subject to the requirements of a rectification order under Division 2", leave is not required.
Absent a requirement for leave, there is no suggestion in s 48I that: 1. an order of the Tribunal is required to withdraw a building claim or 2. that the Tribunal has a discretion to exercise, let alone to prevent an applicant from withdrawing an application under that section.
In reaching this view we have considered the statement of the Appeal Panel in Spicer v Owners Corporation SP 64558 [2016] NSWCATAP 11 (Spicer). At [111]-[112] the Appeal Panel said: 111 However there is an express power for a person to withdraw a claim. Section 48I of the Home Building Act, 1989 (HB Act) provides: 48I Application for determination of building claim (1) Any person may apply to the Tribunal for the determination of a building claim. (2) A building claim may be withdrawn by the claimant at any time. (3) If, immediately before a building claim was made, the claimant was subject to the requirements of a rectification order under Division 2, the building claim may not be withdrawn except with the leave of the Tribunal. (4) When granting leave to the withdrawal of a building claim referred to in subsection (3), the Tribunal may restore the rectification order referred to in that subsection. 112 In this case, the CTTT still made an order that the application is withdrawn but did so under s48I of the HB Act. Unlike s28(5)(h), the HB Act does not require that the Tribunal to allow a building claim to be withdrawn and, in the case of an application to which subs 48I(3) applies, leave is required in any event.
That statement was made in the context of the Appeal Panel considering a request to withdraw proceedings seeking reallocation of unit entitlements under the now repealed Strata Schemes Management Act 1996 (NSW) (repealed) (CTTT Act). There, the Appeal Panel considered whether the right to withdraw was governed by s 55(1)(a) of the NCAT Act or s 28(5)(h) of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (repealed) and determined the CTTT Act permitted withdrawal of any application to which the Consumer, Trader and Tenancy Tribunal was Required to accede.
Section 28(5)(h) of the CTTT Act provided: (5) The Tribunal: ….. (h) must, if requested by the applicant, allow the applicant to withdraw the application,
However, subs 28(8) of the CTTT Act provided: Subsection (5)(h) does not apply in relation to proceedings on a building claim arising under Part 3A of the Home Building Act 1989.
In Spicer s 48I was not the subject of detailed analysis, nor was this analysis part of the reasoning necessary to resolve which of the NCAT Act and CTTT Act applied to withdrawal of the strata proceedings.
However, the fact the section "does not require the Tribunal to allow a building claim to be withdrawn" does not mean, on its proper construction, leave of the Tribunal is required or there is a discretion to be exercised where an applicant withdraws their application under s 48I. Rather, because leave is only required if the application to withdraw is made by a claimant that was "subject to the requirements of a rectification order under Division 2", the absence of any reference to the Tribunal in subs 48(2) suggests the Tribunal has no authority to prevent withdrawal.
At this point we should note that, unlike s 28(8) of the CTTT Act, there is no such provision in s 55 of the NCAT Act that excludes its operation in respect of building claims.
At first blush, the absence of a provision such as s 28(8) of the CTTT Act would suggest that the ability to withdraw proceedings under s 48I is nonetheless subject to a discretion of the Tribunal in all circumstances, not just in circumstances contemplated by s 48(3) of the HB Act.
The problem with this construction is that prior to the NCAT Act there was an express and separate right in the HB Act for a claimant to withdraw proceedings at any time. It was not subject to any requirement for an order of the tribunal (then the CTTT), except in circumstances where leave was required.
There is no reason to construe the general power given to the Tribunal under s 55(1)(a) to dismiss proceedings when withdrawn by an applicant, and the discretion attached thereto, as limiting or derogating from the separate pre-existing right given under s 48I to an applicant to withdraw proceedings without the need for leave in circumstances other than those in s 48(3) of the HB Act: see eg Goodwin v Phillips (1908) 7 CLR 1 [1908]; HCA 55 per O'Connor J at 14 and Maybury v Plowman (1913) 16 CLR 468 [1913] HCA 43 per Barton ACJ at 473-4. Rather, it should be seen as an additional basis upon which a party can apply for dismissal of any proceedings in the Tribunal, including building claims under the HB Act.
That is not to suggest that, where proceedings are withdrawn, the Tribunal cannot make ancillary orders, including orders for costs. However, the making of such other orders is not the subject matter of this appeal.
The final matter to consider on this topic is whether the proceedings are a building claim for the purpose of s 48I.
Ground 8 of the Notice of Appeal stated that the dispute concerning the deed of settlement and release "extends beyond the provisions of the Home Building Act 1989" … and that "categorising this case solely under [the HB Act] is incorrect and leads to an unequal treatment of the matter". This submission and those made after the hearing of the appeal on 15 November 2023 make clear the appellant contends the present proceedings were not a building claim and therefore any ability to withdraw the application was not governed by s 48I of the HB Act.
This submission should not be accepted.
Section 48A of the HB Act defines a building claim as follows: 48A Definitions (1) In this Part - building claim means a claim for - (a) the payment of a specified sum of money, or (b) the supply of specified services, or (c) relief from payment of a specified sum of money, or (d) the delivery, return or replacement of specified goods or goods of a specified description, or (e) a combination of two or more of the remedies referred to in paragraphs (a)-(d), that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods or services, but does not include a claim that the regulations declare not to be a building claim. … building goods or services means goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services - (a) supplied by the person who contracts to do, or otherwise does, that work, or (b) supplied in any circumstances prescribed by the regulations to the person who contracts to do that work. goods, services and supply have the same meanings as in Part 6A of the Fair Trading Act 1987.
It is clear from the application and the deed of settlement that the claim for the payment of money in these proceedings "arises from the supply of building goods and services whether under a contract or not or that arises under a contract that is collateral to a contract for the supply of building goods or services". That is, the application was in respect of a building claim.
The application stated that the appellant "failed to fulfil any terms of the settlement. The deed, which contained the terms of settlement, provided for the appellant (as builder): 1. to apply for Home Owners Warranty Insurance as require by the HB Act and provide a certificate of insurance to the respondent (as home owner); and 2. to provide as constructed drawing for the work carried out by the appellant, recording the work carried out by the appellant;
Finally, the deed provided: (g) The Homeowner [respondent] will give entrance to the Property for the electrician hired by the Builder [appellant] to do a final safety check for the purpose of issuing the CCEW referred to in clause 2e(iii) above.
The CCEW certificate was to confirm "electricity works have been tested and complied with the regulation". Electrical work is "specialist work": see Sch 1 cl 1 Definitions, HB Act. There was no suggestion that the electrical work to be performed was not within this definition.
Clearly the deed required the supply of building goods and services. These goods and services were supplied or to be supplied "for or in connection with residential building work". The fact they were supplied or to be supplied under a deed which resolved a larger dispute does not detract from this fact that the proceedings are a building claim to which s 48I applies.
Finally, the fact that assertions were made by the appellant in the proceedings in the Tribunal that the respondent had misconducted himself and/or provided false evidence to the Tribunal in connection with the proceedings does not alter this nature of the claim, which is a building claim to which s 48I applies. In this regard, any action to be taken in respect of an alleged contravention of s 71 of the NCAT Act (which provides a criminal sanction for false and misleading statements to the Tribunal) is to occur in separate proceedings to those in which, as here, the Tribunal is exercising its general jurisdiction under s 29 of the NCAT Act to resolve a building claim.
It follows, on the proper construction of s 48I of the HB Act, the Tribunal was obliged to permit the applicant to withdraw the home building claim. Insofar as the Tribunal thought it had a discretion to exercise in connection with the applicant withdrawing his proceedings under s 48I, it was wrong to so conclude. However, this error is of no significance.
Finally, even if we are wrong on our construction of s 48I of the HB Act, that is there was a discretion to be exercised by the Tribunal in order for the application to be withdrawn, there is no basis to conclude the Tribunal's exercise of discretion miscarried. The exert of the transcript we were provided shows the Tribunal evaluated the circumstances of each party and the issues raised and determined it was not appropriate force the applicant to continue with his case "merely to satisfy the [appellant's] desire to be successful".
As to the issues of alleged misconduct of Mr Zhang and asserted contraventions of s 71 of the NCAT Act, these matters do not provide a basis for the Appeal Panel to prevent the application from being withdrawn.
No House v The King error is established.
Having regard to our decision above, the application for leave to appeal should be refused and the appeal dismissed.

Orders

the Appeal Panel makes the following orders: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), an order is made dispensing with a further hearing. 2. The application for leave to appeal is refused and the appeal is otherwise dismissed. .

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: 08 March 2024

Consumer, Trader and Tenancy Tribunal Act 2001(NSW)

Strata Schemes Management Act 1996(NSW)

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Judgment (6 paragraphs)

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