Parry-Husbands v Roffe

[2023] NSWCATCD 167

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Parry-Husbands v Roffe [2023] NSWCATCD 167

Hearing dates:

06 November 2023

Date of orders:

01 December 2023

Decision date:

01 December 2023

Jurisdiction:

Consumer and Commercial Division

Before:

G. Sarginson, Senior Member

Decision:

(1) The proceedings are transferred to the District Court of NSW and continue before that court as if the proceedings had been instituted there.

(2) Order 1 is stayed until determination of the costs application arising from the transfer application, or further or other order of the Tribunal.

(3) The respondents are to file with the Tribunal and serve on the applicants costs submissions and documents by 7 days from the date of this decision.

(4) The applicants are to file with the Tribunal and serve on the respondents costs submissions and documents in response to the respondents costs application and in support of any costs application by the applicants by 14 days from the date of this decision.

(5) The respondents are to file with the Tribunal and serve on the applicants all costs submissions in reply by 21 days from the date of this decision.

(6) The costs submissions of the parties are to include reference as to whether they agree to the issue of costs being determined without a further oral hearing, and if not, why not.

(7) Subject to consideration of the submissions of the parties, the Tribunal may determine it appropriate to dispense with a further oral hearing on the issue of costs under s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW).

(8) Any application to vary the timetable for costs submissions and documents must be made by no later than the date of compliance with the timetable obligation.

(9) Costs submissions and documents must be filed with the Tribunal in hard copy.

Catchwords:

CIVIL PROCEDURE---Transfer of proceedings---From NCAT to District Court---Jurisdiction of Tribunal under Home Building Act 1989---Claim for damages exceeding jurisdiction limit---Further and separate claim involving sale of premises---Whether grounds established for transfer

Legislation Cited:

Australian Consumer Law 2010 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Civil Procedure Act 2005 (NSW).

Evidence Act 1995 (NSW)

Home Building Act 1989 (NSW) (HB Act)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Beetson v Charnwood Constructions Pty Ltd [2021] NSWCATCD 142

BKB Constructions Pty Ltd v Sawan [2022] NSWCATAP 103

Breecass Pty Ltd v The Owners-Strata Plan No 61419; The Owners-Strata Plan No 61419 v Breecass Pty Ltd [2019] NSWCATCD 23

Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588

Gregg v R [2022] NSWCCA 245

Grygiel v Baine [2005] NSWCA 218

Owners-Strata Plan No 730030 v Decon Australia Pty Ltd [2014] NSWSC 347

Promina Design & Construction Pty Ltd v The Owners-Strata Plan No 97449 [2023] NSWCATAP 252

Wilson v Chan and Naylor Parramatta Pty Ltd [2020] NSWCA 213; (2020) 103 NSWLR 140

Wood v Balfour [2011] NSWCA 382

Texts Cited:

Nil

Category:

Procedural rulings

Parties:

Howard Keith Parry-Husbands (First Applicant)
Sharyn Ann Parry-Husbands (Second Applicant)
Danielle Phillipa Geraldine Roffe (First Respondent)
Yair Nassi (Second Respondent)

Representation:

Counsel:

J. Pokoney (Applicants)
P. Wiggins (Respondents)

Solicitors:

CCS Legal Pty Ltd (Applicants)
SGJ Law (Respondents)

File Number(s):

2023/00400405 (Previously HB 23/16800)

Publication restriction:

Nil

REASONS FOR DECISION

1. This is an application to transfer Tribunal proceedings brought under the Home Building Act 1989 (NSW) (HB Act) to the District Court of NSW under Cl. 6 (1) of Sch. 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).

2. The application was listed for an interlocutory hearing on 6 November 2023. Mr Pokoney of Counsel appeared for the applicants. Mr Wiggins of Counsel appeared for the respondents.

BACKGROUND

3. At all relevant times, the parties have been legally represented in the proceedings.

4. Both parties had filed and served an outline of written submission on the transfer application. The applicants had also served a proposed Statement of Claim if the proceedings are transferred.

5. The proceedings were commenced in the Tribunal on 11 April 2023. The applicants sought damages of $500,000 (the jurisdictional limit of the Tribunal under s 48K (1) of the HB Act).

6. On 15 May 2023, the proceedings were listed for a directions hearing in the Tribunal before Robertson SM. Robertson SM made procedural directions for the parties to file and serve Points of Claim; Points of Defence, and the lay and expert evidence they were relying upon. The applicants were directed to file and serve Points of Claim by 29 May 2013. The Points of Claim were to include “the basis upon which it is alleged the Tribunal has the jurisdiction to make the orders sought.” The applicants’ lay and expert evidence was to be filed and served by 11 July 2023.

7. On 8 September 2023, the applicants (without having sought an extension of the procedural timetable) filed and served what were referred to in a covering letter as “Points of Claim” (but were in the form of a Statement of Claim in a Court to which the provisions of the Uniform Civil Procedure Rules 2005 (NSW) apply and with specific reference to the document being filed in “the District Court of NSW”) and expert report of Mr Winton with a Scott Schedule.

8. The applicants also filed and served on 8 September 2023 expert reports of Mr Winton, building consultant, dated 21 April 2023 and Mr Brennan of C & M Management Services dated 30 June 2023.

9. No lay evidence was filed and served.

10. On 11 September 2023, the proceedings were listed for a directions hearing at the Tribunal before Sarginson SM. At that directions hearing, the applicants were represented by Mr Huang, Solicitor, and the respondents represented by Mr Wiggins of Counsel.

11. The applicants stated that there would be a transfer application made for proceedings to be transferred to the District Court. The respondents stated that the application was opposed.

12. The Tribunal made procedural directions for parties filling and serving of evidence and submissions on the transfer application, and for that issue to be listed for an interlocutory hearing in respect of the application to transfer. As discussed previously, that interlocutory hearing occurred on 6 November 2023.

13. The applicants purchased a residential dwelling from the first respondent in November 2021.

14. The ‘Statement of Claim’ alleges that the second respondent is a licenced builder and the first respondent is his wife who was the owner of the property. It is alleged that the second respondent, in his capacity as a licensed builder, contracted with the first respondent to perform residential building work (being renovations and alterations of the premises) in the period between November 2018 to August 2011 under various contracts. In two of the contracts, the second respondent had taken out home warranty insurance under the provisions of the HB Act.

15. Against the second respondent the applicants plead that they are entitled to the statutory warranties under s 18B of the HB Act as successors in title and that the works performed by the second respondent are defective.

16. Against the first respondent, the applicants plead the torts of deceit and negligent misstatement in respect of alleged representations made in the advertisement for the property and contract of sale about the underfloor heating system of the property.

17. Despite the procedural directions of 15 May 2023, the ‘Statement of Claim’ does not identify how the claim against the first respondent is a claim to which the Tribunal has jurisdiction under the HB Act.

18. The relevant issues regarding jurisdiction of the Tribunal are set out in ss 48K and 48A of the HB Act. In essence, the claim needs to be a “building claim” involving the provision of “building goods or services” (see the discussion of the applicable principles in Grygiel v Baine [2005] NSWCA 218 and subsequent authorities that refer to that decision).

19. The damages sought in respect of the alleged deceit in respect of the underfloor heating system are identified as the cost of replacing the underfloor heating system and “the increased sale price paid by the applicants or the loss of value of the land.” No expert evidence was served in respect of the alleged “loss of value” of the premises, or “increased sale price.” The ‘Statement of Claim’ gives no particulars as to the amount of damages sought against the first respondent.

20. In respect of defects in the premises, the applicants’ expert evidence served on 8 September 2023 includes an expert report of Mr Winton, building consultant, dated 21 April 2023.

21. Mr Winton asserts there are a number of defects, that involve water ingress into the premises from the roof of the premises, and roof of the garage. His report has a Scott Schedule. There is a scope of works and costing to rectify defects. No reference is made in the report to the issue of underfloor heading. Mr Winton asserts that the cost of rectifying the defects identified is $486,585.79. Mr Winton’s report set out that he has read, and abides by, NCAT Procedural Direction 3 for Expert Witnesses. Mr Winton’s report and Scott Schedule contains a relatively detailed discussion of his opinion on the issue of defects; the method of rectification; and the cost of rectification.

22. A second report filed and served on 8 September 2023 is a report from Mr Brennan of C & M Management Services Pty Ltd t/as CMB dated 30 June 2023. That report is in respect of the sliding doors installed on the top floor of the residence. Mr Brennan asserts that the sliding doors “will not meet the water penetration performance requirements of AS 2047 which is called upon (sic) in the NCC”. The references to “AS” and “NCC” are clearly references to Australian Standards and the National Construction Code.

23. Mr Brennan asserts that the sliding doors on the top floor are defective and require replacement.

24. Mr Brennan’s report does not contain any opinion on the cost of replacing the upstairs sliding doors.

25. The applicants also filed and served on 26 September 2023 a quotation of HoverCo Building Service Australia Pty Ltd dated 18 September 2023.

26. The total amount of the quotation is $84,390.84.

27. The quotation is in respect of two different types of work. The first is removal and replacement of sliding doors on “Level 1” of the residence. The second is in respect of bathroom waterproofing and tiling.

28. The cost of the removal and replacement of sliding doors (excluding home warranty insurance cost and GST) is $51,256.95. The cost of bathroom waterproofing and tiling (excluding the cost of home warranty insurance and GST) is $23,961.99.

29. The report of Mr Winton dated 21 April 2023 contains no reference to any defects in the first floor sliding doors. His report does refer to failed waterproofing membrane in the first floor bathroom and master bedroom ensuite. The cost of performing repairs to the bathroom and ensuite (and method of rectification) are referred to in the report and Scott Schedule of Mr Winton.

30. In the transfer application, the applicants relied upon an affidavit of Ms Parry-Husbands dated 8 September 2023.

31. That affidavit refers to Mr Brennan being a “windows and doors expert.” The affidavit assert that the applicants obtained a report from Mr Brennan in addition to the report of Mr Winton. The affidavit also refers to the applicants having engaged “a licensed plumber, Michael (sic) of Prouds Plumbing (sic)” who attended the property in the period between June 2022 to May 2023 on multiple occasions to “fix two showers that had stopped regulating temperatures”.

32. Ms Parry-Husbands asserts that the plumber orally told her than plumbing in the premises was defective; and that the applicants are “presently obtaining a quotation for rectification costs, which will be the subject of further evidence”.

33. The report of Mr Winton does not make reference to any plumbing defects in the premises.

34. No explanation is provided in the affidavit of Ms Parry-Husbands as to whether or not Mr Winton was instructed to provide a report on all purported defects in the residential premises, or only some. No reference is made as to whether the applicants are engaging Mr Winton to provide a further report. No reference is made as to why the applicants have chosen to obtain a separate report from Mr Brennan (other than the reference to him apparently having special expertise in sliding doors) rather than Mr Winton addressing the issue of the sliding doors.

35. The report of Mr Winton states that one of reference documents he was provided with was “owners documents recording defects undated.” That document has not been attached to his report. No reference is made in Mr Winton’s report to the expert having been provided with a letter of instructions from the applicants’ Solicitor.

PARTIES SUBMISSIONS ON TRANSFER

36. The written submissions of the applicants are dated 19 September 2023. They were supplemented by oral submissions of the applicants’ Counsel at the interlocutory hearing on 6 November 2023.

Applicants

37. The submissions of the applicants are summarised as follows:

1. The claim for damages for the cost of rectifying allegedly defective works performed by the second respondent may significantly exceed the jurisdictional limit of the Tribunal under s 48K (1) of the HB Act ($500,000). That is because:

1. If Mr Winton’s evidence is accepted (and an order for damages is made rather than an order to rectify defects) the costs of rectification will be $486,585.79. When the additional defects in respect of the first floor sliding doors are taken into account, the jurisdictional limit is exceeded. There are also likely to be further expert reports and evidence in respect of (a) plumbing defects; and (b) the cost of rectifying underfloor heating.

2. The claims against the first respondent in tort are not obviously claims to which the Tribunal has jurisdiction.

38. The applicants relied upon the Appeal Panel decision in BKB Constructions Pty Ltd v Sawan [2022] NSWCATAP 103 (Sawan) at [76] that an important consideration in any transfer application is whether there is a “significant risk” the jurisdictional limit of the Tribunal will be exceeded, or whether the Tribunal has jurisdiction at all.

Respondents

39. The respondent’s written submissions are dated 25 September 2023. They were orally supplemented on 6 November 2023. The respondent also relied upon an affidavit of its Solicitor Mr Hamilton dated 25 September 2023 attaching correspondence between the legal representatives of the parties.

40. The respondent’s submissions are summarised as follows:

1. To determine the transfer of proceedings, the applicants need to establish that the Tribunal should grant leave to amend the application to make claims that exceed the jurisdictional limit or otherwise make claims to which the Tribunal has no jurisdiction to consider.

2. There is no basis for the Tribunal to grant leave to amend the application because:

1. No lay evidence has been filed and served by the applicants.

2. There has been previous failures of the applicants to comply with Tribunal procedural directions.

3. The report of Mr Brennan is not in a form that would be regarded as admissible expert evidence. It does not clearly set out his area of expertise; methodology; assumptions; nor adopt an Expert Witness Code of Conduct.

4. The quotation of HoverCo Building Service Australia Pty Ltd is not expert evidence, nor is it lay evidence. It is not attached to any witness statement or report. Even if the document is admissible, it would be given limited, if any, evidentiary weight.

5. Delay in the applicants filing and serving their complete lay and expert evidence has meant the respondents have not engaged an expert to inspect the property and prepare a report, because to do so would be premature without the applicants’ evidence in chief being finalised. No adequate explanation has been provided for why the applicants’ have not complied with Tribunal procedural directions made on 15 May 2023 to file and serve all of their lay and expert evidence by 11 July 2023. The applicants’ seek, in substance, to avoid this obligation by transferring proceedings to the District Court, where they will be able to avoid the consequences of their failure to comply with procedural directions by having the benefit of a further “leisurely” timetable, and further costs will be incurred by the respondents.

6. There is no reason why, if the Tribunal does not have jurisdiction in respect of the claims in tort against the first respondent, the Tribunal could not hear the proceedings against the second respondent and the applicants withdraw the proceedings against the first respondent. If the applicants sought to pursue this claim, they could do so in the Local Court. The underfloor heating claim was not likely to exceed $20,000 (although the respondent did not have any evidence on this issue) and pursuing the claim in tort was not a sufficient reason to transfer the proceedings to the District Court.

41. The respondent relied upon the authorities of The Owners-Strata Plan No 730030 v Decon Australia Pty Ltd [2014] NSWSC 347 (Decon) and Beetson v Charwood Constructions Pty Ltd [2021] NSWCATCD 142 to argue that the Tribunal must grant leave to amend the application to make a claim for damages above $500,000; no application to amend has been made; and leave to amend should not be granted.

Applicant-Submissions in Reply

42. In reply, the applicants submitted that debates about whether or not evidence will be admitted in the District Court at the hearing, or what the fresh evidence will be obtained and relied upon, are not salient to the issue of transfer. The applicants have established sufficient reasons to transfer proceedings. If the applicants are confined to running their case in the Tribunal, there is a real risk that the Tribunal would not be able to hear and determine part of their case; and the applicants would not be able to be awarded the full amount of damages claimed.

CONSIDERATION

43. Cl. 6 of Sch. 4 of the NCAT Act states as follows:

6   Transfer of proceedings to courts or to other tribunals

(1)  If the parties in any proceedings for the exercise of a Division function so agree, or if the Tribunal of its own motion or on the application of a party so directs, the proceedings are—

(a)  to be transferred to a court (in accordance with the rules of that court) that has jurisdiction in the matter, and

(b)  to continue before that court as if the proceedings had been instituted there.

(2)  If the parties in any proceedings that have been instituted in a court so agree, or if the court of its own motion or on the application of a party so directs, the proceedings are, if the proceedings relate to a matter for which the Tribunal has jurisdiction to exercise a Division function—

(a)  to be transferred to the Tribunal in accordance with the procedural rules (if any), and

(b)  to continue before the Tribunal as if the proceedings had been instituted in the Tribunal.

44. In respect of the jurisdiction of the Tribunal, reference has been made previously to ss 48K and 48A of the HB Act. Those provisions relevantly state:

48K   Jurisdiction of Tribunal in relation to building claims

(1)  The Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with this Part in which the amount claimed does not exceed $500,000 (or any other higher or lower figure prescribed by the regulations).

(2)  The Tribunal has jurisdiction to hear and determine any building claim whether or not the matter to which the claim relates arose before or after the commencement of this Division, except as provided by this section.

(3)  The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that have been supplied to or for the claimant if the date on which the claim was lodged is more than 3 years after the date on which the supply was made (or, if made in instalments, the date on which the supply was last made).

(4)  The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that are required under a contract to be supplied to or for the claimant on or by a specified date or within a specified period but which have not been so supplied if the date on which the claim was lodged is more than 3 years after the date on or by which the supply was required under the contract to be made or, if required to be made in instalments, the last date on which the supply was required to be made.

(5)  The fact that a building claim arises out of a contract that also involves the sale of land does not prevent the Tribunal from hearing that building claim.

(6)  The Tribunal does not have jurisdiction in respect of a building claim arising out of a building cover contract required to be entered into under this Act if the date on which the claim was lodged is more than 10 years after the date on which the residential building work the subject of the claim was completed.

(7)  The Tribunal does not have jurisdiction in respect of a building claim arising from a breach of a statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by section 18E).

(8)  The Tribunal does not have jurisdiction in respect of a building claim relating to—

(a)  a contract for the supply of goods or services to which none of subsections (3), (4), (6) and (7) applies, or

(b)  a collateral contract,

if the date on which the claim was lodged is more than 3 years after the date on which the contract was entered into.

(9)  This section has effect despite clause 5 (Relationship between Tribunal and courts and other bodies in connection with Division functions) of Schedule 4 to the Civil and Administrative Tribunal Act 2013.

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 dispute means a dispute that has been notified as referred to in section 48C.

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.

…

45. It is also pertinent to set out s 48L of the HB Act. That provision states as follows:

48L   Tribunal to be chiefly responsible for resolving building claims

(1)  This section applies if a person starts any proceedings in or before any court in respect of a building claim and the building claim is one that could be heard by the Tribunal under this Division.

(2)  If a defendant in proceedings to which this section applies makes an application for the proceedings to be transferred, the proceedings must be transferred to the Tribunal in accordance with the regulations and are to continue before the Tribunal as if they had been instituted there.

(3) This section does not apply to matters arising under sections 15, 16 or 25 of the Building and Construction Industry Security of Payment Act 1999.

(4)  This section has effect despite clause 6 (Transfer of proceedings to courts or to other tribunals) of Schedule 4 to the Civil and Administrative Tribunal Act 2013

46. There are a plethora of authorities in respect of the applicable principles for transfer of proceedings from the Tribunal to a Court. Most of those authorities arise in the context of proceedings involving the HB Act. The most recent and detailed examination of the relevant principles is contained in the Appeal Panel decision in Promina Design & Construction Pty Ltd v The Owners-Strata Plan No 97449 [2023] NSWCATAP 252 (Promina).

47. As discussed previously, the respondents submit that the decisions in Decon and Beetson v Charnwood Constructions Pty Ltd [2021] NSWCATCD 142 are authority for the proposition that, to the extent the transfer application relies upon making a claim for damages above the $500,000 jurisdictional limit, the Tribunal must grant leave to amend the proceedings as a precondition to granting the transfer of the proceedings.

48. That issue has been dealt with in Promina at [89]-[103]. The Appeal Panel held that Decon is not authority for the proposition that the Tribunal must grant leave to amend the application to make a monetary claim that takes the proceedings outside the jurisdiction of the Tribunal as a precondition to transfer.

49. Rather, as the Appeal Panel stated at [96] and [101]:

The decision in Decon at [65] is authority for the proposition that the Tribunal may decline to transfer proceedings where the party seeking the transfer would be denied leave to make an amendment to their case, for reasons other than the fact that the amendment would take the case outside the Tribunal’s jurisdiction. See also The Owners Strata Plan 83405 v Ralan (Culworth) Pty Ltd [2019] NSWSC 578 at [64] – [65] and [98].

…

An applicant seeking to transfer proceedings to a court on the basis that they have identified that their claim is likely to exceed the monetary limit of the Tribunal’s jurisdiction must do more than simply make that assertion. Some evidence that the claim will exceed the monetary jurisdiction will be necessary, but, as the respondent submits, it would not be consistent with the guiding principle for the Tribunal to be required to undertake a detailed examination of that evidence. A fortiori it would not be consistent with the guiding principle for the Tribunal to hold a contested hearing into the evidence.

50. In Promina, the Appeal Panel also referred (at [88]-[89]) to the principles set out in Sawan without criticism. Such principles reflect the legal authorities dealing with the analogous power to transfer proceedings from a lower Court to a higher Court under s 140 of the Civil Procedure Act 2005 (NSW).

51. As the Appeal Panel stated in Sawan at [76]:

In making a decision whether or not to transfer proceedings, there is a wide discretion to take into account any relevant matter (Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924 at [4)]. The fundamental consideration is whether there is ‘sufficient cause;’ ‘sound ground;’ or ‘good reason’ for the transfer to be made. That permits a wide range of discretionary considerations. Those considerations may be impressionistic and evaluative (Australian Timber Supplies Pty Ltd v Agia [2014] NSWSC 1308 at [2]). Where there is a significant risk the jurisdictional limit will be exceeded; or whether the Tribunal has jurisdiction at all, are important considerations (BOC v MDL [2019] NSWSC 278 at [17]-[19]; Hua Shan v Fairfield City Council [2020] NSWSC 681 at [14]; Breecass Pty Ltd v The Owners-Strata Plan No 61419; The Owners-Strata Plan No 61419 v Breecass Pty Ltd [2019] NSWCATCD 23).

Is There A Sufficient Cause, Sound Ground or Good Reason to Transfer the Proceedings?

52. The Tribunal is satisfied that the applicants have demonstrated a sufficient basis for transferring the proceedings to the District Court.

53. The application to transfer was first identified at a relatively early stage of the proceedings (immediately before the second directions hearing) and before the proceedings had been set down for final hearing.

54. The applicants made a claim for damages in the application that was filed with the Tribunal on 11 April 2023. They now assert, and have provided, evidence that it is arguable that their claim for damages is likely to exceed the jurisdictional limit of the Tribunal under s 48K (1) of the HB Act. That does not involve a fresh cause of action, but further quantification of an existing cause of action.

55. Although there appear to be deficiencies in the form of the report of Mr Brennan that may make the report inadmissible in the District Court where rules of evidence apply (s 79 of the Evidence Act 1995 (NSW) and the principles set out in Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588), it is sufficiently arguable on the basis of that report considered in addition to Mr Winton’s report and the quotation of HoverCo Building Service Australia Pty Ltd that the applicants’ claim for damages for the cost of rectifying allegedly defective residential building work may exceed $500,000.

56. The respondents submit that the quotation of HoverCo Building Service Pty Ltd is not in the form of an affidavit or expert report that would make it admissible in District Court proceedings (as distinct from NCAT proceedings, where, by reason of s 38 (2) of the NCAT Act, rules of evidence do not strictly apply). However, it is arguable that document may be able to be tendered as evidence as a business document under s 48 of the Evidence Act 1995 (NSW) (see the discussion regarding s 48 of the Evidence Act 1995 (NSW) in Gregg v R [2022] NSWCCA 245 at [362]-[369]).

57. As was pointed out in Promina at [102] , it is not the role of the Tribunal to conduct a detailed examination of the merits of the evidence and whether or not that evidence will ultimately be admitted if the proceeding are transferred to a Court. What is important is what is reasonably arguable, as distinct from claims that are entirely speculative and obviously without merit.

58. Further, the proceedings are at a relatively early stage, in the sense that there have been two procedural directions hearings in the Tribunal. The have not been listed for hearing. If the proceedings are not transferred, there is no reason why the Tribunal would not exercise its discretion to amend the procedural timetable for the filing and serving of evidence. If the proceedings are transferred, there is no obvious reason why the District Court would not set down a procedural timetable to allow the applicants to seek to rely upon the documentary evidence that has been filed in the Tribunal and served to date, even in circumstances it has been filed and served outside Tribunal procedural directions. Previous timetable defaults by the applicants may have cost consequences in the District Court proceedings.

59. There is also no obvious reason why, if proceedings were transferred, the District Court would not allow the applicants to file and serve further evidence. Previous failure to comply with Tribunal procedural directions is one matter to take into account regarding the exercise of that discretion, but it is not the only matter. To the extent there is prejudice to the respondent by reason of the applicants having not completed the filing and serving of their lay and expert evidence in accordance with previous Tribunal directions, that will be a relevant issue in respect of costs orders that may be made.

60. The applicants assertion that the claim for damages will likely exceed the jurisdictional limit is also not a matter that has only been raised immediately prior to the hearing of the matter, or in a manner that indicates that it is an attempt to avoid likely defeat at an imminent hearing and obtain and adjournment. The facts in Decon and Beetson v Charnwood Constructions Pty Ltd [2021] NSWCATCD 142 (Beetson) both involved applications to transfer proceedings which were made in close proximity to the hearing date. In both Decon and Beetson the purported evidence that the claim for damages would exceed the jurisdictional limit of the Tribunal was based upon oral discussions with experts by the Solicitor for the applicant, unsupported by documentary evidence or additional (or supplementary) expert reports.

61. The evidence that the applicant’s claim for damages for defective work against the second respondent may exceed the jurisdictional limit of the Tribunal under the HB Act is, in the circumstances of this matter, a sufficient or good reason for the Tribunal to transfer the proceedings to the District Court.

62. Strictly, it is unnecessary to consider the second basis of the transfer application. However, for the sake of completeness, the Tribunal will do so.

63. The second basis raised by the applicants to support the transfer application is the claim against the first respondent in tort. The applicants submit that aspect of the proceedings is beyond the jurisdiction of the Tribunal under the HB Act.

64. The Tribunal accepts that, even when the wide interpretation of s 48A of the HB Act adopted by the Court of Appeal in Grygiel v Baine & Ors [2005] NSWCA 218 (Grygiel) is considered, it is difficult to envisage how a claim by a purchaser of residential premises against the vendor of for alleged misrepresentations (pleaded in tort rather than under the provisions of the Australian Consumer Law 2010 (NSW)) “arise from the supply of building goods and services” because they do not obviously relate to the terms on which a builder supplied building services (Grygiel at [57]-[63]).

65. The respondents submit that the applicants can withdraw that aspect of the proceedings under s 55 (1) (a) of the NCAT Act and proceed separately against the first respondent in the Local Court. No limitation issue has been identified in the tort proceedings against the first respondent as preventing the applicants from withdrawing the application against the first respondent and only proceeding against the second respondent.

66. A difficulty with that approach is that it leads to the possibility of separate concurrent proceedings in different jurisdictions involving additional costs and the potential of different and inconsistent findings in both sets of proceedings (Breecass Pty Ltd v The Owners-Strata Plan No 61419; The Owners-Strata Plan No 61419 v Breecass Pty Ltd [2019] NSWCATCD 23 at [57]).

67. Weighed against that difficulty is the fact that the applicants (via their legal representatives) chose to bring the tort proceedings against the first respondent in the Tribunal in the first place in conjunction with the proceedings against the second respondent, and if the Tribunal had no jurisdiction in the proceedings against the first respondent, the applicants could have (and arguably should have) commenced the proceedings against both respondents in a court that clearly had jurisdiction.

68. The possibility that there will be two sets of proceedings in different jurisdictions is not an outcome that compels the Tribunal to order the transfer of proceedings. However, it is a relevant matter to take into account when determining whether the proceedings should be transferred. It is a matter that the Tribunal gives some weight to, but the critical issue is that the claim against the second respondent may exceed the jurisdictional limit of the Tribunal under the HB Act.

69. If the proceedings against the second respondent are being transferred to the District Court; and it is arguable that the Tribunal does not have jurisdiction to hear and determine the proceedings against the first respondent (but the District Court would have jurisdiction), there is no logical basis to only order that the proceedings against the second respondent be transferred.

70. The Tribunal expresses no view on the merits of the applicants proceedings against the first respondent. Tort claims in deceit and negligent misstatement against vendors of residential premises are not straightforward (see, for example, Wood v Balfour [2011] NSWCA 382).

71. Accordingly, it is appropriate to order that the entire proceedings involving the parties be transferred.

THE ISSUE OF COSTS

72. Both parties seek to be heard on the issue of the costs arising from the transfer of the proceedings. Both parties seek that the Tribunal determine the issue of costs before the proceedings are transferred, rather than making a future costs application to the District Court.

73. Although Sch. 4 Cl. 6 (b) refers to proceedings being continued in the court they are transferred as if the proceedings were transferred there, that does not deprive the Tribunal of jurisdiction in determining costs issues in the proceedings whilst they were before the Tribunal, including the costs of and incidental to the transfer of the proceedings. The District Court would also have jurisdiction to consider any costs issues since the commencement of the proceedings, because once transferred the proceedings continue as if they were originally commenced in the District Court.

74. Section 29 of the NCAT Act states:

29   General jurisdiction

(1)  The Tribunal has general jurisdiction over a matter if—

(a)  legislation (other than this Act or the procedural rules) enables the Tribunal to make decisions or exercise other functions, whether on application or of its own motion, of a kind specified by the legislation in respect of that matter, and

(b)  the matter does not otherwise fall within the administrative review jurisdiction, appeal jurisdiction or enforcement jurisdiction of the Tribunal.

Note—

The general jurisdiction of the Tribunal includes (but is not limited to) functions conferred on the Tribunal by enabling legislation to review or otherwise re-examine decisions of persons or bodies other than in connection with the exercise of the Tribunal’s administrative review jurisdiction.

(2)  The Tribunal also has the following jurisdiction in proceedings for the exercise of its general jurisdiction—

(a)  the jurisdiction to make ancillary and interlocutory decisions of the Tribunal in the proceedings,

(b)  the jurisdiction to exercise such other functions as are conferred or imposed on the Tribunal by or under this Act or enabling legislation in connection with the conduct or resolution of such proceedings.

(3)  A general decision of the Tribunal is a decision of the Tribunal determining a matter over which it has general jurisdiction.

(4)  A general application is an application made to the Tribunal for a general decision.

(5)  Nothing in this section permits general jurisdiction to be conferred on the Tribunal by a statutory rule unless the conferral of jurisdiction by such means is expressly authorised by another Act.

75. Section 4 of the NCAT Act relevantly states:

ancillary decision of the Tribunal means a decision made by the Tribunal under legislation (other than an interlocutory decision of the Tribunal) that is preliminary to, or consequential on, a decision determining proceedings, including—

(a)  a decision concerning whether the Tribunal has jurisdiction to deal with a matter, and

(b)  a decision concerning the awarding of costs in proceedings.

76. The power to award costs is set out in s 60 of the NCAT Act. Relevantly, by reason of s 60 (5) (a) of the NCAT Act, the definition of “costs” includes “the costs of, or incidental to, the proceedings in the Tribunal”.

77. The Tribunal had jurisdiction in the substantive dispute under the HB Act, including the power to determine whether or not it had jurisdiction (Wilson v Chan and Naylor Parramatta Pty Ltd [2020] NSWCA 213; (2020) 103 NSWLR 140 (Wilson) at [12]-[13] and [86]). The Tribunal has jurisdiction to determine costs issues of the proceedings in which it has jurisdiction (including the costs of the transfer application), with the only exception being costs orders that are consequent upon or linked to the adjudication of aspect of the matter which are in federal jurisdiction (Wilson at [5]).

78. This is not a dispute where there is any issue involving the exercise of federal jurisdiction.

79. The difficulty is not the Tribunal determining the costs application. The difficulty is the mechanics of doing so.

76. Once the proceedings are transferred the Tribunal file moves to the District Court and the proceedings are technically ‘finalised’ from the perspective of the Tribunal. This has the potential of creating a difficulty in making and entering the orders determining the costs dispute between the parties.

77. The appropriate solution to this is the following course of action:

1. Making an order that the proceedings are transferred to the District Court.

2. Granting a stay of that order until the issue of costs of and incidental to the transfer application are determined.

3. Making procedural directions for the filing and serving of costs submissions and documents, with a view to determining the issue of costs ‘on the papers.’ Once the issue of costs is determined, the stay will be lifted.

82. It is not in the interests of any party to prolong the filing and serving of costs submissions, nor should the fact that the transfer order is stayed delay the parties in further preparing the matter, so that the proceedings may continue expeditiously in the District Court. Preparation of costs submissions should not be dependent upon Counsel or Solicitors going on holiday.

ORDERS

1. The proceedings are transferred to the District Court of NSW and continue before that court as if the proceedings had been instituted there.

2. Order 1 is stayed until determination of the costs application arising from the transfer application, or further or other order of the Tribunal.

3. The respondents are to file with the Tribunal and serve on the applicants costs submissions and documents by 7 days from the date of this decision.

4. The applicants are to file with the Tribunal and serve on the respondents costs submissions and documents in response to the respondents costs application and in support of any costs application by the applicants by 14 days from the date of this decision.

5. The respondents are to file with the Tribunal and serve on the applicants all costs submissions in reply by 21 days from the date of this decision.

6. The costs submissions of the parties are to include reference as to whether they agree to the issue of costs being determined without a further oral hearing, and if not, why not.

7. Subject to consideration of the submissions of the parties, the Tribunal may determine it appropriate to dispense with a further oral hearing on the issue of costs under s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW).

8. Any application to vary the timetable for costs submissions and documents must be made by no later than the date of compliance with the timetable obligation.

9. Costs submissions and documents must be filed with the Tribunal in hard copy.

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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

Decision last updated: 08 August 2024