The Owners Strata Plan 83405 v Ralan (Culworth) Pty Limited

1. [1]

   HER HONOUR: This is an application for leave to appeal a decision of an Appeal Panel of the Civil and Administrative Tribunal of NSW (“NCAT”) pursuant to s 83 of the Civil and Administrative Tribunal Act 2013 (NSW) (“the CAT Act”). Alternatively, it is an application for judicial review pursuant to s 69 of the Supreme Court Act 1970 (NSW).

2. [2]

   By amended summons filed 23 February 2018, the plaintiff seeks firstly, that the decision of Senior Members Burton and Currie dated 6 December 2017 in proceedings numbered AP 17/40943 (“the Appeal Panel’s decision”) be set aside; secondly, that the decision and orders of Principal Member Rosser dated 18 September 2017 in proceedings numbered HB 16/55982 (“the Principal Member’s decision”) to transfer the proceedings to the Supreme Court be restored; and thirdly, in the alternative, that the proceedings be remitted to Principal Member Rosser to determine the application for transfer applying the test for an adjournment, after each party is afforded the opportunity to file and serve an evidence in support of this application.

3. [3]

   The plaintiff is the Owners Corporation Strata Plan 83405 (“Owners Corporation”). The first defendant is Ralan (Culworth) Pty Limited (“Ralan”). The second defendant is NCAT, who has filed a submitting appearance. The Owners Corporation relied upon the affidavit of Thomas Courtenay Bacon dated 12 April 2018. Both the Owners Corporation and Ralan relied upon their joint court book.

Background

1. [4]

   On 21 December 2016, the Owners Corporation commenced proceedings for breach of statutory warranties under the Home Building Act 1989 (NSW) in the Home Building Division of NCAT, concerning building work that was completed on 22 December 2009. This was one day before the expiry of the seven year limitation period.

2. [5]

   The substantive proceedings involve a claim for alleged defective works on a strata development at Killara, New South Wales by a builder engaged by Ralan, a developer. The builder was insolvent at the time of the commencement of the proceedings.

3. [6]

   It is convenient that I briefly refer to some relevant provisions of the CAT Act and the Home Building Act, including the provisions concerning the transfer of proceedings and the jurisdiction of the Tribunal.

4. [7]

   Clause 6 of Sch 4 of the CAT Act relevantly reads:

5. [8]

   Section 36(1) of the CAT Act reads:

6. [9]

   Section 38 relevantly reads:

7. [10]

   Section 48K of the Home Building Act reads:

The Principal Member’s decision

1. [11]

   On 18 September 2017, the Principal Member gave reasons for her decision and made an order transferring the proceedings to the Supreme Court as the quantum in the matter exceeded the limit of NCAT’s jurisdiction.

2. [12]

   At the commencement of the hearing, the Principal Member stated:

3. [13]

   There was no application by either party for an adjournment.

4. [14]

   The Principal Member, in the reasons for her decision, stated at [20]-[30]:

5. [15]

   On 18 September 2017, the Principal Member made an order that the proceedings be transferred to the Supreme Court of New South Wales and continue before that Court as if the proceedings had been instituted there. The Principal Member made two costs orders: first, that the Owners Corporation pay Ralan’s costs thrown away of the transfer, as agreed or assessed, on the ordinary basis; and second, that the Owners Corporation pay Ralan’s costs thrown away of the vacated hearing on 20 September 2017, as agreed or assessed, on an indemnity basis.

6. [16]

   Section 80 of the CAT Act reads:

7. [17]

   Section 82 of the CAT Act reads:

8. [18]

   As the appeal concerned whether leave should be granted to the Owners Corporation to rely upon an expert’s report (the “Lemon report”), which is an interlocutory decision, leave to appeal was required in accordance with s 80(1) of the CAT Act.

9. [19]

   Two cases which deal with the principles governing leave to appeal are Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 (“Das”) and Lee v New South Wales Crime Commission (2012) 224 A Crim R 94; [2012] NSWCA 262 (“Lee”).

10. [20]

    In Das, the Court of Appeal set out the principles to be considered in deciding whether leave to appeal should be granted. At [32], [33] and [35], Basten JA stated:

11. [21]

    Similarly, in Lee, Bathurst CJ at [12] outlined the principles relevant to the granting of leave as follows:

12. [22]

    In Coulter v R [1988] HCA 3; 164 CLR 350 at 359, Deane and Gaudron JJ noted the requirement for leave:

13. [23]

    I might add that this Court must also consider whether it should grant leave to appeal, and the authorities referred to above are equally applicable in these proceedings.

14. [24]

    In its decision dated 6 December 2017, the Appeal Panel firstly determined the appeal and then addressed the issue of leave to appeal at [45]-[47]. They read:

15. [25]

    The principles according to which this court is to decide whether the Appeal Panel’s discretionary decision to allow a party to reply upon an experts report constitutes an error of law, are stated definitively in a short passage in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505. It is, I think, useful to re-state them as follows:

The Appeal Panel’s decision

1. [26]

   On 22 September 2017, Ralan filed a notice of appeal with NCAT challenging the procedural orders made by the Principal Member on 18 September 2017. Ralan’s grounds of appeal were as follows:

2. [27]

   Ralan sought orders that:

3. [28]

   Section 81 of the CAT Act reads:

4. [29]

   On 21 November 2017, the application was heard by an Appeal Panel comprised of Senior Members G K Burton SC and J S Currie (“the Appeal Panel”). There is no dispute that the claim brought by the Owners Corporation was a building claim.

5. [30]

   The Appeal Panel at [3]-[6], [11], [14]-[15], [17], [20], [24]-[43], [49], [52]-[53] stated:

6. [31]

   The Appeal Panel allowed the appeal; refused leave for the Owners Corporation to rely upon the Lemon report dated 13 September 2017; ordered that the proceedings be remitted to the Consumer and Commercial Division and listed for an expedited hearing date; and so far as costs were concerned, ordered that in addition to the costs orders made by the Principal Member, the Owners Corporation was to pay Ralan’s costs of the appeal as agreed or assessed on an ordinary basis.

Whether leave to appeal should be granted in this Court

1. [32]

   The first issue to be determined is whether the Owners Corporation should be granted leave to appeal in this Court pursuant to s 83(1) of the CAT Act. Section 83(1) of CAT Act provides that the Owners Corporation requires leave from the Supreme Court and may only appeal on a question of law. Ralan opposes the granting of leave.

2. [33]

   Section 83 of the CAT Act relevantly reads:

3. [34]

   The Owners Corporation referred to the decision of Hamill J in The Owners - Strata Plan 73943 v Gazebo Penthouse Pty Ltd [2014] NSWSC 1536 (“Gazebo Penthouse”) as authority on the matters which must be considered when assessing whether leave should be granted pursuant to s 83 of the CAT Act. Hamill J at [18] stated:

4. [35]

   The Owners Corporation submitted that leave pursuant to s 83 of the CAT Act should be granted firstly, on the basis that the alleged errors of law involve the proper construction of provisions of the Home Building Act and the CAT Act; secondly, the alleged errors of law also involve the proper test and matters to be considered in an application for transfer of proceedings from NCAT to a court of appropriate jurisdiction; thirdly, that there is a public interest in ensuring that NCAT acts according to law; and finally, that the decision represents an injustice which is more than merely arguable.

5. [36]

   The manner in which the Owners Corporation drafted its amended summons is more than confusing. It contains 35 grounds of appeal, loosely collected within headings A through F, followed by 10 questions of law under heading G. Ralan complained that there was a real problem in the way the Owners Corporation conducted its appeal. An appeal on a question of law is not merely a qualifying condition to the right of appeal, but the question of law is the subject matter of the appeal: see Davis v NSW Land and Housing Corporation [2016] NSWCA 325 per McColl JA at [77]. Questions of law are not to be distilled from the grounds of appeal itself, but should be clearly identified: see Osland v Secretary to the Department of Justice (No 2) (2010) 241 CLR 320; [2010] HCA 24 per French CJ, Gummow and Bell JJ at [21]. Questions of law should not simply be statements to the effect that the Tribunal made legal errors, but should state questions of law to support the orders sought on appeal: see Australian Securities & Investments Commission v Saxby Bridge Financial Planning Pty Ltd (2003) 133 FCR 290; (2003) 202 ALR 450 per Branson J at [47].

6. [37]

   As the Owners Corporation has a right to appeal on a question of law, but only with leave, I shall address the matters set out under headings A through F when I determine whether the appeal is more than merely arguable.

7. [38]

   As stated above, in addition to its 35 grounds of appeal under headings A through F, the Owners Corporation submitted under heading G that the present appeal concerns 10 questions of law. These are as follows:

   1. (1)

      What is the test to be applied by NCAT in relation to a transfer of proceedings application from NCAT to the Supreme Court of New South Wales?

   2. (2)

      What is the test to be applied by NCAT in determining an application for leave pursuant to s 80(2) of the CAT Act?

   3. (3)

      Are the considerations by NCAT for an adjournment application the same are those to be undertaken in relation to a transfer application?

   4. (4)

      Does s 36 of the CAT Act apply in the circumstances of a transfer application pursuant to s 48K of the Home Building Act?

   5. (5)

      Did the Appeal Panel fail to consider or properly consider s 48K of the Home Building Act?

   6. (6)

      Did the Appeal Panel fail to consider or properly consider cl 6 of Sch 4 of the CAT Act?

   7. (7)

      Did the Appeal Panel fail to consider or properly consider s 38 of the CAT Act in making its decision?

   8. (8)

      Did the Appeal Panel fail to apply or properly apply s 38 of the CAT Act in making its decision?

   9. (9)

      In the event NCAT does not have jurisdiction, is it able to determine or hear an adjournment application?

   10. (10)

       In exercising s 81 of the CAT Act, was the Appeal Panel empowered to refuse leave for the Owners Corporation to rely upon the Lemon report in circumstances where no such application was made?

8. [39]

   In the alternative, the Owners Corporation sought judicial review pursuant to s 69 of the Supreme Court Act.

9. [40]

   Ralan submitted that leave to appeal should be refused for the following reasons. Firstly, there is no question of principle or question of general public importance in this appeal, but rather a question of practice and procedure. The principles under which courts and tribunals grant leave to serve late evidence are well established. There is no reason for the Court to grant leave under these circumstances. To do so risks encouraging other litigants, who have been denied leave to rely on late evidence, to appeal.

10. [41]

    Secondly, the Owners Corporation’s complaint is entirely of its own making. Its position is the product of its own repeated breaches of NCAT’s orders. This is not the sort of case in which the Court should grant leave. This is the sort of case where the balance contained in s 58 of the Civil Procedure Act 2005 (NSW) favours leave being refused.

11. [42]

    Furthermore, Ralan submitted that the proceedings were set down to be heard on 20 September 2017, more than seven years after the development finished. It is only because of the Owners Corporation’s own conduct that the proceedings were not heard on that day. If leave is refused, the proceedings will be set down to be heard on an expedited basis. If leave is granted and the appeal is allowed, there will be substantial further delay while Ralan’s experts consider the Owners Corporation’s new evidence, prepare a further report and then engage in joint conclaves. That will cause further expense and amplify the prejudice to Ralan.

12. [43]

    Ralan submitted that with regards to the Owners Corporation’s application for judicial review, s 34(1)(c) of the CAT Act provides that the Supreme Court may refuse to conduct a judicial review of a decision of the Tribunal if an internal appeal or an appeal to a court could be, or has been, lodged against the decision. Ralan submitted that this provision appears to apply in addition to the usual common law principle that where alternative remedies are available, courts have a discretion to refuse judicial review: see Mark Aronson, Matthew Groves and Greg Weeks, Judicial Review of Administrative Action and Government Liability (6th ed, 2017, Lawbook Co) at [17.90].

13. [44]

    Ralan further submitted that through s 83 of the CAT Act, Parliament made a deliberate choice to limit appeal rights to questions of law with leave. The Owners Corporation failed to identify any reason why, in light of that deliberate choice, this Court should engage in any broader review. Absent any such identification, Ralan argued that the Court should, pursuant to s 34(1)(c) of the CAT Act, refuse to conduct a judicial review. The Court should be all the more inclined to refuse judicial review in circumstances where the basis for review is born out of the applicant’s own breach.

14. [45]

    The Owners Corporation has failed to clarify in its submissions how the 35 grounds of review and 10 questions of law in its amended summons relate to one another and to s 83 of the CAT Act and/or its juridical review. Many of the appeal grounds and stated questions of law are redundant or concern substantially the same issues.

15. [46]

    Section 34 of the CAT Act relevantly reads:

16. [47]

    Under my discretion pursuant to s 34 of the CAT Act, I refuse the Owners Corporation’s application for judicial review of its 35 grounds of appeal pursuant to s 69 of the Supreme Court Act.

17. [48]

    In relation to an order for this Court to grant leave in relation to the Owners Corporation’s appeal under s 83 of the CAT Act, the relevant factors that I should consider are those set out by Campbell JA (with Young and Meagher JJA agreeing) in Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]. Specifically, these are whether the present proceedings concern an issue of principle, a question of general public importance or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable, that the primary decision was in error: see also Bathurst CJ, Macfarlan and Barrett JJA in Lee.

18. [49]

    One relevant but discretionary factor to be considered by this Court is the size of the claim. Even when relatively small amounts are involved, leave ought not to be denied where there has been a clear injustice: see He v Yeung [2015] NSWCA 392 at [49] per Bergin CJ with Beazley P and Meagher JA agreeing.

19. [50]

    There are several factors in the present proceedings which weigh against leave being granted. To date, the proceedings have been subject to significant delay due in large part to the Owners Corporation. The Owners Corporation had ample opportunity to provide the Lemon report, but only did so on 14 September 2017, more than six weeks after the final date of compliance on 27 July 2017. The Owners Corporation has provided no satisfactory explanation for its failure to comply with NCAT’s orders. As was also stated in the Principal Member’s decision dated 18 September 2017, the Owners Corporation did not raise the fact that the quantum claimed might exceed the jurisdiction until three weeks after the quantum evidence was due to be filed and served (at [27]). If leave to appeal is granted and the Lemon report is accepted into evidence, there will be further delay in the resolution of the dispute. There will also be an increased expense for both parties. In particular, Ralan will require time to respond to the report by acquiring its own experts and preparing conclave evidence. The case is not one of public importance nor does it concern an issue of principle. Whether an expert’s report should be permitted to be filed late such that the matter exceeds the jurisdiction of the Tribunal is not an issue of principle to be determined in this Court. This is a matter that falls to the Tribunal to decide.

20. [51]

    However, these factors must also be balanced against those which favour leave. The evidence in the Lemon report, if accepted, suggests that the rectification costs may exceed $800,000, which is far from a trivial sum. It is also a far greater sum than was initially contemplated when proceedings were commenced within NCAT. A further relevant consideration that I need to consider is whether the Owners Corporation’s amended summons raises questions of law which are more than merely arguable.

21. [52]

    I will now turn to consider whether the 10 questions of law in the Owners Corporation’s amended summons are more than merely arguable. Because many of the questions consider substantially the same submissions, I will consider the questions grouped in the following order: firstly, questions one, four and five; secondly, question two; thirdly, questions three and nine; fourthly, question six; fifthly, questions seven and eight; and finally, question ten.

22. [53]

    Questions one, four and five concern the test which is to be applied by NCAT when considering applications to transfer proceedings pursuant to s 48K of the Home Building Act.

23. [54]

    In its amended summons filed 23 February 2018, the Owners Corporation pleaded that these three related questions of law are, firstly, what is the test to be applied by NCAT in relation to an application to transfer proceedings from NCAT to the NSW Supreme Court; secondly, does s 36 of the CAT Act apply in the circumstances of a transfer application based on jurisdiction; and finally, in making its decision, did the Appeal Panel fail to consider or properly consider s 48K of the Home Building Act? As these questions of law concern substantially the same issues, it is convenient that I consider them together.

24. [55]

    It is noted that although the Owner’s Corporation set out the 10 questions of law within heading G of its amended summons, it made no submissions specifically in relation to each question. It also failed to present arguments as to what the answer to the questions should be, or why those questions would impact on the orders which this Court might make. Under headings A through F of its amended summons in relation to its application for judicial review, the Owners Corporation made various submissions which touched upon the questions of law. It is those submissions which I consider in relation to each question.

25. [56]

    The Owners Corporation submitted that the Appeal Panel failed to consider and apply s 48K(1) of the Home Building Act, which defines the jurisdiction of NCAT in relation to building claims.

26. [57]

    In interpreting s 48K, the Owners Corporation pointed to well-established principles of statutory interpretation from Amalgamated Society of Engineers v Adelaide Steamship (1920) 28 CLR 129 (“Engineers Case”) and Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 (“Project Blue Sky”), including that the duty of the court is to give the words of a statutory provision the meaning intended by the legislature. That meaning will ordinarily correspond with the grammatical meaning of the provision, informed by the words in context, the consequences of the literal or grammatical construction and the purpose of the statute or the cannons of construction: see Project Blue Sky per McHugh, Gummow, Kirby and Hayne JJ at [78]. The Owners Corporation submitted that the effect of s 48K is that once NCAT is satisfied that the amount claimed is in excess of $500,000, it cannot continue to hear and determine the claim.

27. [58]

    The Owners Corporation submitted that the Appeal Panel ignored s 48K of the Home Building Act and failed to apply the principles of the Engineers Case and Project Blue Sky in considering whether Principal Member Rosser had correctly determined the jurisdictional issue and the transfer application. The Appeal Panel erred in focusing on what they thought the outcome of the transfer application should have been. It based its decision upon matters of discretion, rather than a consideration s 48K of the Home Building Act and whether NCAT had jurisdiction to hear the claim. The Owners Corporation submitted that discretionary factors have no relevance to a transfer application based on jurisdiction.

28. [59]

    Ralan submitted that in relation to question one, the general test for a transfer application is whether the transfer will give effect to the guiding principle under s 36 of the CAT Act, namely whether it will facilitate a just, quick and cheap resolution of the real issues in the proceedings. That would make the test consistent with the test applied by this Court to a substantially similarly worded provision under s 140 of the Civil Procedure Act. This test was accepted as correct by the Owners Corporation on the hearing before the Appeal Panel.

29. [60]

    Ralan submitted that the argument the Owners Corporation raised in these proceedings was wrong. Section 48K(1) of the Home Building Act provided that NCAT had jurisdiction to hear and determine any building claim in which the amount claimed did not exceed $500,000. It is a provision which did no more than set out the jurisdictional limit of NCAT. It did not mandate the circumstances in which a claim could be amended to engage the jurisdictional limit.

30. [61]

    At the time of the Owners Corporation’s application, it did not plead a claim in excess of $500,000, nor did it have evidence which it was permitted to adduce in the substantive proceedings of a claim of more than $500,000. Its home building application expressly stated the total value of the claim as “$500,000”. The Owners Corporation would only be permitted to make a claim in excess of the NCAT’s jurisdiction if, pursuant to s 36 of CAT Act, the Tribunal granted the Owners Corporation leave either to amend its claim, or in the substantive proceedings, to rely on the late-served Lemon report. The Tribunal’s decision regarding whether to grant leave needed to be balanced against the countervailing considerations. The Appeal Panel was therefore correct in determining that the test in s 36 of CAT Act needed to be applied.

31. [62]

    Ralan submitted that the Owners Corporation’s claim only exceeded the jurisdiction of the Tribunal if it was granted leave to rely on the Lemon report, or if it was granted leave to amend its claim. Both those questions engaged s 36 of the CAT Act. Taken to its logical extreme, the Owners Corporation seemed to suggest that it would be entitled at any time to amend its claim in excess of NCAT’s jurisdictional limit and thereby automatically have the proceedings transferred. For example, if after having opened the case but before the evidence was closed, the Owners Corporation was not satisfied with the way the proceedings were conducted, it could at that point assert that it had new evidence causing its claim to be greater than the jurisdictional limit of the Tribunal and be automatically entitled to a transfer. Such an approach is not permitted because of s 36 of CAT Act. Even absent s 36, Ralan submitted that the Court should not permit s 48K of the Home Building Act to be given such an absurd and unworkable construction.

32. [63]

    Section 48K(1) provides that the Tribunal has jurisdiction to hear and determine any building claim brought before it which does not exceed $500,000. At the time the Owners Corporation brought its claim, it stated the value of the claim to be $500,000, within the Tribunal’s jurisdiction. To then demonstrate that the Tribunal lacked jurisdiction to hear the claim, the Owners Corporation required leave either to amend its claim or to rely on the Lemon report, which was served out of time. It was the issue of whether to grant leave which the Principal Member determined, and for which the Appeal Panel substituted its own decision.

33. [64]

    These three questions of law submitted by the Owners Corporation reflect a fundamental misunderstanding of the nature of the Appeal Panel’s decision. The Appeal Panel stated at [30] and [32]:

34. [65]

    In the circumstances of this case, the relevant test to be applied in relation to s 48K of the Home Building Act was whether, taking into consideration s 36 of the CAT Act, the Owners Corporation was allowed to amend its claim, and/or have leave to rely on new evidence, which would then exceed the jurisdictional limit of the Tribunal. Given the reasoning of the Appeal Panel set out above, namely at [30], [32] of its decision, it is my view that questions one, four and five are not more than merely arguable.

35. [66]

    The second question of law submitted by the Owners Corporation asks, what is the test to be applied by NCAT in determining an application for leave pursuant to s 80(2) of the CAT Act?

36. [67]

    The Owners Corporation made no submissions which directly relate to this question of law.

37. [68]

    Ralan submitted that the test for leave is well established in NCAT guidelines and by the Tribunal in Collins v Urban [2014] NSWCATAP 17 (“Urban”). Moreover, the question does not seriously arise on this appeal and would have no impact on the outcome.

38. [69]

    NCAT’s Guideline 1 provides information and guidance to parties who seek to appeal appeal from a decision of the Tribunal to an internal Appeal Panel. Clause 23 of the guideline states:

39. [70]

    In Urban, the Appeal Panel set out the principles concerning granting leave to appeal at [80]-[84]:

40. [71]

    At [45] of its judgment, the Appeal Panel in these proceedings stated:

41. [72]

    The NCAT Guideline and decided authorities above outline the test to be applied by NCAT in determining an application for leave pursuant to s 80(2) of the CAT Act. The Appeal Panel made reference to and applied the relevant principles in its decision. It is my view that this question of law is not more than merely arguable.

42. [73]

    The third and ninth questions of law submitted by the Owners Corporation ask firstly, whether NCAT must have regard to the same considerations when considering an adjournment application and a transfer application; and secondly, whether in the event NCAT lacks jurisdiction, it is able to determine or hear an adjournment application.

43. [74]

    In its application for judicial review, the Owners Corporation made various submissions which relate to these questions of law. Firstly, it submitted that the Appeal Panel erred by incorrectly treating the matter before it as an application for an adjournment rather than an application for transfer pursuant to s 48K of the Home Building Act. The Owners Corporation submitted that because the application before NCAT was a transfer application based upon jurisdiction, the Appeal Panel erred in finding that the Owners Corporation had not provided evidence in support of an application for an adjournment, which it had not sought.

44. [75]

    Secondly, the Owners Corporation argued that Principal Member Rosser did not finally determine an adjournment application and did not find that an adjournment application would have failed. The Appeal Panel therefore erred in formulating its decision to allow the appeal upon the basis of the finding that the adjournment application would have failed. The Owners Corporation argued that this finding was irrelevant in the determination of a transfer application based upon jurisdiction.

45. [76]

    The Owners Corporation submitted that Principal Member Rosser did not finally determine an adjournment application, and did not definitively find that the adjournment application would have failed. On this point, Ralan submitted that the Appeal Tribunal recognised that the Principal Member considered it “unlikely” that the Tribunal would have adjourned the hearing. However, the Appeal Panel went on to find that had the Principal Member considered the question properly through the correct test, the Primary Member would not have granted an adjournment. In light of the transcript of the hearing before the Principal Member now in evidence, the Appeal Panel’s interpretation of what the primary member would have done had there been an adjournment application was clearly correct. In any event, Ralan submitted that the issue is immaterial, as it gives rise to no appealable question of law.

46. [77]

    The Owners Corporation further submitted that the application before NCAT was a transfer application, not an application for adjournment, and that it should not have been criticised for not leading evidence in support of an adjournment application. Ralan submitted that the relevant criticism made by the Appeal Panel was that there were a number of evidentiary matters that militated against permitting a transfer, including the lack of an explanation for why the expert report was served so late. That criticism was relevant both to an adjournment and a transfer application.

47. [78]

    Moreover, Ralan submitted that the Owners Corporation failed to make any submissions as to why NCAT had no jurisdiction to determine or hear an adjournment application. It submitted that NCAT and the Appeal Panel plainly had jurisdiction to hear the application before it.

48. [79]

    This case did not involve an adjournment application. The Owners Corporation’s submissions in relation to these questions of law misunderstand the Appeal Panel’s comments on the relevance of an adjournment application to this case.

49. [80]

    The principles relevant to question nine are helpfully set out in in the case of The Owners – Strata Plan 70030 v Decon Australia PL [2014] NSWSC 347 (“Decon”), to which the Appeal Panel in these proceedings referred in its decision at [23]. Decon involved a building claim before the Tribunal for $329,005. Late in the proceedings, the Owners Corporation made an application for transfer to the Supreme Court of NSW, on the basis of a new expert report which evaluated the claim at $1.8 million. When the Tribunal struck out the claim, the plaintiff argued that pursuant to s 48K of the Home Building Act, the Tribunal lacked jurisdiction to make such orders.

50. [81]

    In Decon, Schmidt J stated at [59]-[62]:

51. [82]

    Question nine in these proceedings supposes that, upon an application for transfer pursuant to s 48K of the Home Building Act, NCAT automatically lacks jurisdiction to hear the claim. For the reasons outlined in Decon and in relation to question one, this question is misguided and does not arise out of the circumstances of this case. The Tribunal had jurisdiction to hear the application before it, which was an application for leave to rely on the late-served Lemon report. In my view, this question of law is not more than merely arguable.

52. [83]

    To address question three, it is necessary to consider the comments of the Principal Member and the Appeal Panel in relation to adjournment applications.

53. [84]

    As [23]-[25] of its decision, the Appeal Panel stated:

54. [85]

    The Owners Corporation argued that the Appeal Panel erred in basing its decision to allow the appeal on its determination that an adjournment application would have failed. The Owners Corporation emphasised that the Primary Member never made such a determination. The Appeal Panel was therefore wrong to characterise her decision in that way.

55. [86]

    At [38] of the primary decision, the Principa Member stated:

56. [87]

    It was the Appeal Panel’s position that the effect of the Principal Member’s words, in the context of her findings about the unsatisfactory conduct of the Owners Corporation, was that she would not have granted the application if it had been for an adjournment. Specifically, the Appeal Panel stated at [28]-[35]:

57. [88]

    As the above paragraphs make clear, the Appeal Panel at [33] characterised the Principal Member’s comments as relating to the “likely conclusion on adjournment”. It did not represent her as having made a determination on the subject. Moreover, the purpose of the Appeal Panel’s consideration of the issue was to note that the Principal Member failed to articulate why the reasoning between an adjournment and transfer application would be different under the circumstances, which was an error of law.

58. [89]

    The Appeal Panel did not decide to allow the appeal on the basis that an adjournment application would have failed. It merely considered that in a case where a late-served expert report provides the basis for an application for an adjournment, or an application for transfer, both needed to satisfy the same test: whether that report would be permitted to be relied upon ([32]). The fact that the Principal Member indicated that she would have treated an application for adjournment and an application for transfer differently was illustrative of her misapplication of that test. It was for that purpose that the Appeal Panel considered the issue of an adjournment application.

59. [90]

    As such, question three again represents a misunderstanding of the function of s 48K of the Home Building Act in these proceedings. In this case, the considerations which were relevant for NCAT to consider were the considerations relevant to the granting of leave to rely on the late-served Lemon report. In my view, question three is not more than merely arguable.

60. [91]

    This question of law asks whether in making its decision, the Appeal Panel failed to consider or properly consider cl 6(1) Sch 4 of the CAT Act.

61. [92]

    The Owners Corporation submitted that pursuant to cl 6(1) of Sch 4 of the CAT Act, NCAT had power to transfer proceedings to a court that had jurisdiction either by the consent of the parties, of its own motion or by application of a party. The application before Principal Member Rosser was a transfer application to the Supreme Court of New South Wales made by the Owners’ Corporation, on the basis that the current claim exceeded the jurisdictional limit of NCAT. The application was grounded in the Lemon report’s evidence of the quantum of the claim. The question for determination was whether NCAT had jurisdiction to hear a building claim for that amount.

62. [93]

    At no time before Principal Member Rosser did Ralan object to the Lemon report being relied upon by the Owners Corporation in support of its transfer application. Nor did Ralan submit to the Appeal Panel that Principal Member Rosser erred in relying upon the Lemon report. Instead, counsel for Ralan submitted before the Appeal Panel by reference to the Lemon report (Aff, Bacon 12 April 2018, Annexure TCB-2, 15 at 39-41):

63. [94]

    The Owners Corporation submitted that once Principal Member Rosser accepted the Lemon report and its contents, she correctly found that the claim was in excess of the jurisdictional limit and therefore “provided a basis for the transfer of the application” (Aff, Bacon 12 April 2018, Annexure TCB-7, 138 at [24]).

64. [95]

    The Owners Corporation submitted that on the basis of cl 6(1) Sch 4 of the CAT Act, once it was determined that NCAT lacked jurisdiction to hear the application pursuant to s 48K of the Home Building Act, the proceedings had to be transferred to a court of the appropriate jurisdiction.

65. [96]

    Ralan submitted cl 6(1) Sch 4, which is substantially similar to s 140 of the Civil Procedure Act, is to be applied subject to s 36 of the CAT Act. Clause 6(1) Sch 4 does not have the effect that a transfer application pursuant to s 48K of the Home Building Act is entitled to an automatic transfer, without consideration of the guiding principle.

66. [97]

    Clause 6 Sch 4 relevantly reads:

67. [98]

    The regulation in cl 6 Sch 4 states that Tribunal may direct for proceedings to be transferred to the Supreme Court of New South Wales, either of its own motion or on the application of a party. Nothing in this regulation requires a Tribunal Member to make a mandatory decision in relation to an application for transfer. It merely provides for that transfer if the Tribunal so directs. This, if it is actually a question of law, is not more than merely arguable.

68. [99]

    These questions of law ask whether in making its decision, the Appeal Panel failed to consider or properly consider, or failed to apply or properly apply, s 38 of the CAT Act.

69. [100]

    The Owners Corporation argued that even if it was open for the Appeal Panel to exercise discretion under s 36 of the CAT Act when considering the transfer application, it was required to do so in a way which upheld the interests of justice. In State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146; (1997) 141 ALR 353, Dawson, Gaudron and McHugh JJ stated at 357:

70. [101]

    The Owners Corporation identified the interests of justice in these proceedings to include the quantum of the claim, and the necessity to transfer in reliance upon the Lemon report. The Owners Corporation submitted that in the event that s 36 of the CAT Act did apply, it should have been balanced by s 38, which provides for a level of flexibility in the application of procedural rules. The Appeal Panel erred in not applying s 38 of the CAT Act, and in the weight it gave to the history of the Owners Corporation’s non-compliance when balanced against the prejudice it would suffer in not being able to seek the entire quantum of its claim.

71. [102]

    Ralan understood the Owners Corporation’s position to be that in the event that s 36 of the CAT Act applied, it should have been balanced by s 38, which provides flexibility in applying the procedural rules. The Owners Corporation asserted that the Appeal Panel erred in not applying s 38.

72. [103]

    On a proper construction of the CAT Act, the power in s 38 must be exercised pursuant to the guiding principle in s 36. That is made plain by s 36(2)(b). The Appeal Panel should not have made any order under s 38 which would be contrary to the guiding principle. Further, other than asserting that the Appeal Panel should have applied s 38, the Owners Corporation did not explain with any clarity what the Appeal Panel should have done, or why anything that could be done under s 38 would have had any impact on the result of the Appeal Panel’s decision.

73. [104]

    Section 38 of the CAT Act relevantly reads:

74. [105]

    In relation to this question of law, the Owners Corporation submitted that if the Appeal Panel was permitted to exercise the discretion under s 36 of the CAT Act, it was required to do so in a way which upheld the interests of justice. The Owners Corporation seemed to suggest that the effect of s 38 is that the Tribunal should have considered the merits of the case over technicalities, such as a party’s delay in serving evidence.

75. [106]

    The Owners Corporation referred to J L Holdings. J L Holdings was considered in Aon Risk Services Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 (“Aon”), where the Court stated at [96], [98]-[99], [101]-[103]:

76. [107]

    Similarly to r 21 of the Court Procedure Rules 2006 (ACT) in Aon, s 36 of the CAT Act in this case emphasises that the relevant procedural rules are to be applied to facilitate the just, quick and cheap resolution of the real issues in the proceedings. However, as Aon makes clear, the requirement to do justice to the “real issues” of a case does not provide license to a party to disregard procedural rules on payment of costs.

77. [108]

    A relevant consideration to the Appeal Panel in reviewing the Principal Member’s exercise of the discretion under s 36 was, as in Aon, the behaviour of the Owners Corporation and whether it was able to provide a reasonable explanation for its delay. It was the Appeal Panel’s determination at [37], [39]-[41], [43], [52]:

78. [109]

    It was the Appeal Panel’s determination that the prejudice imposed by granting the Owners Corporation leave to rely on its late evidence could not be sufficiently compensated by an order for costs. In its reasoning, the Appeal Panel clearly took into account not only the Owners Corporation’s extreme lateness and history of non-compliance with technical requirements, but also its failure to provide reasons for the delay.

79. [110]

    The Owners Corporation has failed to demonstrate in its submissions how the effect of s 38 of the CAT Act should have materially altered the Appeal Panel’s decision such that it failed to consider or properly consider the provision. Even under the most generous interpretation of the Owners Corporation’s arguments, it cannot be said that the Appeal Panel had regard to technicalities and not the substantial merits of the case. In my view, this ground of review is not more than merely arguable.

80. [111]

    This question of law asks whether, under s 81 of the CAT Act, the Appeal Panel has the power to refuse leave for the Owners Corporation to rely on the Lemon report in circumstances where no application was made.

81. [112]

    The Owners Corporation submitted that the Appeal Panel’s jurisdiction is limited by the combined disposition of s 80(2) and cl 12 Sch 4 of the CAT Act, which confer jurisdiction to determine, in this case, whether the Principal Member made an error of law. It was open to the Appeal Panel to determine whether the Principal Member had applied the appropriate test once the Lemon report was let in. However, it was not open to the Appeal Panel to determine whether the Lemon report should be let in. By doing so, the Appeal Panel attempted to review the merits of the decision by stepping into the shoes of the Principal Member Rosser, in excess of its jurisdiction. The Owners Corporation argued that by then refusing leave for the Owners Corporation to reply upon the Lemon report, the Appeal Panel again exceeded its jurisdiction and denied the Owners Corporation natural justice.

82. [113]

    The Owners Corporation further submitted that the Appeal Panel erred in denying the Owners Corporation reliance upon the Lemon report in circumstances where:

    1. (1)

       no such application was before the Appeal Panel;

    2. (2)

       Ralan did not seek to raise the fact the Lemon report had been let in as an appeal point;

    3. (3)

       at no time did Ralan make such an application or take an objection to the reliance upon the Lemon report by the Owners Corporation before Principal Member Rosser;

    4. (4)

       no such application was ever made during the Appeal Panel hearing; and

    5. (5)

       the Owners Corporation was not afforded an opportunity to meet such an application by providing submissions on this point.

83. [114]

    The Owners Corporation submitted that the evidence before the Court established that Ralan did not object to the Lemon report being relied upon, and also did not seek to appeal the decision of the Principal Member to allow the Owners Corporation to rely on it. Ralan argued that this submission was wrong and required correction. Ralan did not, because it had no right to, object to the Lemon report being relied on by the Owners Corporation for the purposes of its transfer application. The Owners Corporation was entitled to rely on any admissible evidence it wished to in support of its application. However, that is not to say that Ralan did not object to the Lemon report being relied on by the Owners Corporation in the substantive proceedings. There can be no question that Ralan objected to the Lemon report being relied on in the substantive proceedings. That was the primary basis of Ralan's opposition to the Owners Corporation’s application. The transcript of the application before the Principal Member records that the very first thing that counsel for Ralan said in opposition to the application was:

84. [115]

    Further, there is no question that Ralan’s objection was understood by Principal Member Rosser:

85. [116]

    Ralan submitted that its application was expressly made in its notice of appeal, and that the issue was addressed by both parties in written and oral submissions before the Appeal Panel. Ralan clearly sought for the Appeal Panel to exercise its power under s 81 of the CAT Act to refuse leave for the Owners Corporation to rely on the Lemon report.

86. [117]

    The Owners Corporation further submitted that it was not open to the Appeal Panel to determine whether the Lemon report should have been “let in” because it did not have jurisdiction to determine that question. Ralan submitted that this argument was wrong. The Appeal Panel recognised that under s 81 of the CAT Act, it had the power to substitute its decision for that of the primary member. Section 81 gave the Appeal Panel broad powers to “make such orders as it consider[ed] appropriate in light of its decision on the appeal.” Further, pursuant to s 81(2), the Appeal Panel had the power to “exercise such functions on grounds other than those relied upon at first instance.” That provision plainly gave the Appeal Panel the power to order that the proceedings be remitted and listed for an expedited hearing and in order to facilitate that order, to refuse the Owners Corporation leave to rely upon the Lemon report. The Appeal Panel clearly stated that it made its decision because it had the necessary material to exercise the discretion, and it wanted to ensure that the process was not prolonged.

87. [118]

    Section 81 of the CAT Act states:

88. [119]

    Section 81(1) of the CAT Act confers upon the Appeal Panel broad powers to “make such orders as it considers appropriate in light of its decision”. Section 81(2) further provides that the Appeal Panel “may exercise all the functions that are conferred or imposed by this Act…on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.” Those functions include granting or refusing to grant leave for a party to rely on late-served evidence.

89. [120]

    It was the Appeal Panel’s determination that it should substitute its own decision to refuse to grant leave in place the decision of Principal Member Rosser, especially as it had before it all of the material to exercise the discretion itself ([49]). The Appeal Panel explained that its orders were “the most economical and expeditious means of progressing the proceedings to a final hearing and resolution that also accords with justice” ([49]). The Appeal Panel’s decision to refuse leave to the Owners Corporation to rely on the Lemon report was clearly within the broad powers outlined in s 81 of the CAT Act. In my view, this question of law is not more than merely arguable.

90. [121]

    I have considered the 10 questions (some of which do not appear to be questions of law) set out by the Owners Corporation in its amended summons. In my view, none of them are more than merely arguable. Furthermore, the Owners Corporation was responsible for the unexplained delays in producing the Lemon report on which it sought to rely. In these circumstances, the plaintiff has failed to demonstrate that these proceedings concern an issue of principle or a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable, that the primary decision was in error.

91. [122]

    Overall, in the exercise of my discretion, I refuse to grant leave to appeal.

92. [123]

    The result is that the plaintiff’s application for leave to appeal the decision of the Appeal Panel dated 6 December 2017 pursuant to s 83 of the CAT Act fails. The plaintiff’s application for judicial review pursuant to s 69 of the Supreme Court Act also fails. The plaintiff’s amended summons filed 23 February 2018 is dismissed.

Costs

1. [124]

   Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendant’s costs on an ordinary basis.

   1. (1)

      The plaintiff’s application for leave to appeal the decision of the Appeal Panel of the Civil and Administrative Tribunal dated 6 December 2017 in proceedings numbered AP 17/40943 pursuant to s 83 of the Civil and Administrative Tribunal Act 2013 (NSW) is refused.

   2. (2)

      The plaintiff’s application for judicial review pursuant to s 69 of the Supreme Court Act 1970 (NSW) is refused.

   3. (3)

      The plaintiff’s amended summons filed 23 February 2018 is dismissed.

   4. (4)

      The plaintiff is to pay the defendant’s costs on an ordinary basis.