Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Impala Kitchens Pty Ltd v Yunaev [2021] NSWCATAP 146 Hearing dates: 26 October 2020 Date of orders: 24 May 2021 Decision date: 24 May 2021 Jurisdiction: Appeal Panel Before: K Rosser, Principal Member G K Burton SC, Senior Member Decision: 1. Time for filing the notice of appeal is extended to and including 6 January 2020. 2. Leave to appeal is refused. 3. The appeal is dismissed. 4. Impala Kitchens Pty Ltd is to pay the costs of Mr and Mrs Yunaev of the appeal proceedings on the ordinary basis as agreed or assessed. 5. If either party seeks a different costs order, order 4 above ceases to have effect and the following orders apply: a. The party seeking a different costs order is to file and serve the application for a different costs order and evidence and submissions in support of the application not later than 14 days from the date of these orders. b. The other party is to file and serve any evidence and submissions in response to the costs application within 28 days of the date of the date of these orders. c. Any material in reply is to be filed and served within 35 days of the date of these orders. d Submissions are not to exceed five pages in length. e. All evidence and submissions are to be provided in hard copy. f. Subject to the parties' submissions on this point, the application for a different costs order will be determined without a hearing, on the basis of the written material provided. Catchwords: HOME BUILDING - effect of agreement during earlier proceedings and withdrawal of earlier proceedings Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW), Home Building Act 1989 (NSW) s 48I Cases Cited: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 Collins v Urban [2014] NSWCATAP 17 Johnson t/as One Tree Constructions v Lukeman [2017] NSWCATAP 45 Knox v Bollen [2018] NSWCATAP 106 Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Palme (2003) 216 CLR 212 NSW Land and Housing Corp v Orr (2019) 100 NSWLR 578 Oppidan Homes PL v Yang [2017] NSWCATAP 67 Pholi v Wearne [2014] NSWCATAP 78 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Soulemezis v Dudley (Holdings) PL (1987) 10 NSWLR 247 (CA) Wainohu v NSW (2011) 243 CLR 181 Texts Cited: None cited Category: Principal judgment Parties: Impala Kitchens PL (Appellant) Anatoly Yunaev (First Respondent) Lidia Yunaev (Second Respondent) Representation: P Mallia (Director) (Appellant) First Respondent (Self-Represented) A Yuneav (Second Respondent) File Number(s): 2020/00370571 (AP 20/00949) Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal NSW Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 27 November 2019 Before: P Boyce, Senior Member Reasons for decision Introduction 1. These are the reasons for decision in an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act (NSW) 2013 (the NCAT Act) against a decision made in the Consumer and Commercial Division of the Tribunal on 27 November 2019. 2. The Tribunal's decision concerned applications brought by both parties under the Home Building Act (NSW) 1989 (the HBA). In those proceedings, the Tribunal ordered the respondents to the appeal (the owners) to pay the appellant (the builder) $15,185 immediately. It also ordered the builder to deliver fabricated study cabinetry to the owners within 10 days of receipt of the payment. No order for costs was made, with the intention that the parties pay their own costs. 3. For the reasons set out below, we have refused leave to appeal, dismissed the appeal and ordered the builder to pay the owners' costs of the appeal. Factual and legal background to appeal 1. The owners own a residential lot in a strata scheme. The builder carried out renovation works for the owners within their lot. 2. That work was done under four written contracts each dated 25 October 2017 with an aggregate contractual amount of $150,000: 1. Supply and install joinery to kitchen, laundry and powder room $62,000; 2. Supply and install joinery and trade works to study $33,000; 3. Supply and install joinery and trade works to en suite bathroom $28,000; and 4. Supply and install joinery and trade works to main bathroom $27,000. 1. In their application to the Tribunal the owners said that work began on 23 March 2018 and was completed on 7 September 2018. 2. There was a number of agreed variations (signed manually or in texts by the owners apart from one) totalling $13,562.04: 1. 20 January 2018 - upgraded mirrored shaving cabinet -$990; 2. 6 April 2018 - curved floor cabinet in master wardrobe plus waste disposal - $3,396.80; 3. 6 April 2018 - re-locate intercom cabling, install zip heater and related works - $3,426.50; 4. 2 May 2018 (said in Tribunal's reasons for decision to be 2019) - upgrade robes graphite to 18mm -$2,420; 5. 3 May 2018 (same date issue but 2018 on copy of variation) - modify garage cabinets- $450; 6. 21 May 2018 (2019 on a summary sheet but 2018 on copy of variation and in the builder's written submission) - PVC rectification work in bathroom - $858; 7. 15 June 2018 (2019 on a summary sheet) - upgraded finish in robe bulkheads - $662.24; 8. 30 June 2018 - verbal agreement to pay half a shower screen -$1,358.50. 1. Together, we have called the original contracts and the above variations the "original agreement". We note that the reference to "2019" rather than "2018" on the variations was inconsistent across documents with which we were provided. It seems more likely in context that they were all 2018 not 2019, but if they were 2019 then it makes no difference to our decision on the appeal. 2. It was common ground that the owners had paid $127,000 out of the claimed total contract price of $163,562.04. 3. The parties fell into dispute and commenced proceedings. 4. In HB 18/20795, filed on 7 May 2018, the builder sought payment of allegedly unpaid monies under the contract and variations totalling $35,459.54 plus contract interest. The builder stated that the cabinetry to complete the works was ready but the owners would not grant access to install it. In HB 18/28433, filed on 26 June 2018, the owners claimed for alleged defective and incomplete works under the statutory warranties in s 18B of the HBA. 5. At the first directions hearing both matters were withdrawn under HBA s 48I(2). 6. The proceedings from which this appeal is brought were filed respectively by the builder on 17 December 2018 (HB 18/53351) and by Mr Yunaev on 15 February 2019 (HB 19/08406). Mr Yunaev's application was treated as having been made on behalf of both owners. The builder claimed an unpaid balance of $34,054.50 including contractual interest. The owners claimed a money order of $78,100 for allegedly defective and incomplete works, which by the date of the hearing had risen to $93,379.43. The nature of each claim in the second set of proceedings was at first substantially similar to the nature of the contested claims in the original proceedings. 7. No party in either set of proceedings or in this appeal alleged that the proceedings were brought out of time or challenged the Tribunal's findings of jurisdiction as to time limits in [18]-[19] of the Tribunal's reasons. The proceedings were within the Tribunal's monetary jurisdiction limit under HBA s 48K(1) as was also found at [18]-[19]. There was no suggestion of any unlicensed or uninsured work. 8. At [37]-[38] of the reasons, the Tribunal found, having earlier recited the serial non-compliance with preparation orders by all parties, that the owners' expert estimated the completed works at $93,379.43 and defective work at $17,547.89. It was said to be unclear what the owners were seeking but that it appeared to be the difference between what had been paid and $93,379.43 without taking into account the cabinetry that was completed but not installed. 9. All but $142.23 of the claimed amount for alleged defective work related to alleged defective bathroom tiling fall. The Tribunal rejected this claim, preferring the expertise and findings of the builder's tiling expert. No appeal was brought against this finding. 10. The Tribunal, at [43] and following of the reasons, determined the balance of the proceedings on its interpretation of a document titled "Agreement between [the named parties] 16/7/2018" ("the second agreement"), which was in the builder's evidence in unexecuted form but was produced by the owners as executed by both builder and owners in a varied form. The Tribunal found that this document replaced the original agreement and rejected the builder's contention that it was but one attempt to manage completion of the project by negotiated steps (all said to be without prejudice). The Tribunal said that, even if the later discussions were without prejudice because they were not reflected in a completed agreement and were so marked, the second agreement was not so marked and, even if it was, constituted a concluded agreement: at [60]-[62]. 11. At [48] of the reasons, the Tribunal expressly found: The Settlement Agreement [the second agreement] was executed by the parties with the intention that it would resolve the issues that had been the basis of the causes of action in the first builder's application and the first owners' application. This was repeated and amplified in findings in succeeding paragraphs. 1. The terms of the second agreement and these findings are set out and discussed below. It was not disputed that the owners paid the first tranche of $30,000 under the second agreement on 17 and 18 July 2018 and the second tranche of $17,000 on 20 August 2018. The builder said these payments were due under the original agreement in any event. 2. The Tribunal's findings made the alleged breaches of the original agreement "essentially redundant": [54] of the reasons. The rights of the parties were to be determined by the second agreement. 3. Accordingly, the Tribunal at [65] and following found: 1. There was no evidence that the second agreement had been terminated; 2. Any work order for the balance of work under the second agreement was inappropriate because of the extent to which the relationship between the parties had soured; 3. The remaining instalment under the second agreement of $17,000 was due to the builder subject to deductions (which the Tribunal estimated) for the incomplete works for which that payment was consideration; 4. There was no provision for interest in the second agreement; 5. Each party should pay its own costs. (Only the owners were legally represented at the hearing.) 1. As noted above, the Tribunal ordered the owners to pay to the builder $15,185 immediately and the builder to deliver the completed study cabinetry to the owners within ten days of receipt of the monies, on not less than 72 hours' notice of date and time of delivery, with no costs order. Notice of Appeal 1. The builder's Notice of Appeal was filed on 6 January 2020. The builder said that it received the Tribunal's decision on 30 November 2019 and that it did not require an extension of time in which to do so. This is not the case. As the appeal was not filed within 28 days after the date of receipt of the Tribunal's decision, an extension of time is required. 2. However, the owners did not argue that the appeal was not filed within time. Given the relatively short delay in filing the appeal and the lack of prejudice to the owners, and taking into account the Christmas break, we extend time for filing the notice of appeal to and including 6 January 2020 under s 41 of the NCAT Act. Grounds of appeal 1. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12] the Appeal Panel stated that, in circumstances where an appellant is not legally represented, it is appropriate for the Tribunal to look at the grounds of appeal generally and to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations in favour of the respondent. We have done so in this case. 2. Part of the Notice of Appeal was unreadable. We were invited to look instead at the written submissions, which appeared on both sides to have been prepared with some legal assistance. From both documents, the grounds of appeal we discern are as follows and appear to be confirmed by the terms of the Notice of Reply filed and the written submissions: 1. The Tribunal ought to have found that the second agreement was "nothing more than a payment arrangement … a summary of works and payments still required to complete the contracts", which on its objective intention did not replace the original agreement as the Tribunal found, and gave inadequate reasons for not so finding. 2. The builder was not accorded procedural fairness as the second agreement was introduced at the last moment. 3. The further evidence of subsequent negotiations that the builder put forward showed the characterisation of the second agreement as that for which the builder contended. 1. A money order in favour of the builder in the amount specified at the hearing before the Tribunal was sought. According to the Notice of Appeal, the sum sought is $38,275.83. 2. Somewhat confusingly, the builder's written submissions said that the alleged mischaracterisation of the second agreement was an error of law but then referred to the alleged error - characterising that agreement as in effect an accord and satisfaction - as an error of fact. 3. We have taken the alleged absence of reasons and alleged absence of procedural fairness to raise alleged errors of law, with other grounds requiring leave to raise alleged errors of fact. 4. Having identified from the written submissions the apparent grounds of appeal, we leave the supporting argument to be considered below. Further documents 1. Attached to the builder's written submissions are the further documents on which the builder seeks to rely. These documents are: 1. An unexecuted Deed of Settlement and Release dated May 2019; 2. A text message sent on 25 July 2018 and a photograph showing a cardboard box cutout and a sketch which appears to relate to a shelf; 3. Text messages sent on 1 and 2 August 2018 which concern the resolution of a fridge door issue and the installation of laundry shelves; 4. An email drawing concerning three inner drawers supplied in lieu of a bin. The original email was sent to the builder's director on 15 August 2018; 5. Amended study plans signed on 29 August 2018. 1. The builder argued that these documents demonstrate that the second agreement was merely supplementary and did not replace the original agreement. Applicable legal principles for appeals 1. Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2) NCAT Act. 2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it. 1. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. 1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b). 2. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. Consideration Characterisation of the second agreement 1. The real focus of this appeal is whether the second agreement between the same parties replaced or simply supplemented the original agreement. 2. On the ordinary principles of contract interpretation, if there is ambiguity in the contract provisions, the determination of this issue involves discerning the objective intention of the parties from the contract provisions in the commercial context in which the agreement is made. The commercial context or surrounding circumstances will reveal the commercial objective of the contract to derive a meaning which, unless it is against the plain words, is consistent with that objective. 3. Applying the principles of contract interpretation to particular terms and (as necessary) contextual circumstances to derive the effect of the second agreement on the original agreement seems to us to be a question of fact or of mixed fact and law. 4. In the Tribunal's reasons for decision at [48]-[56], [63] and [65], the Tribunal's conclusions on contract interpretation set out the basic test of contract interpretation but did not set out how the test was applied to reach the conclusions. 5. When giving reasons for decision, it is essential to expose the reasons for resolving a point critical to the contest between the parties: Soulemezis v Dudley (Holdings) PL (1987) 10 NSWLR 247 (CA) at 259, 270-272, 280-281; Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Palme (2003) 216 CLR 212 at [40]; Wainohu v NSW (2011) 243 CLR 181 at [58]; NSW Land and Housing Corp v Orr (2019) 100 NSWLR 578, [2019] NSWCA 231 at [65]-[77]; NCAT Act s 62(3). 6. Whether the second agreement between the same parties replaced or simply supplemented the original agreement required an analysis of the provisions of the second agreement that exposed why the wording favoured, as the Tribunal found, that the second agreement replaced the original agreement rather than supplementing or amending it. If the Tribunal found ambiguity in the terms of the second agreement, then the commercial context or surrounding circumstances should have been examined. 7. Neither of those steps of analysis and examination was exposed in the reasons as having been undertaken. Nor was what relevantly emerged from such analysis. In our view the absence of such reasoning to identify what the Tribunal regarded as relevant or irrelevant considerations means that the Tribunal's reasons were inadequate. 8. In these circumstances, we have considered whether, on the basis of the material provided by the parties, the Tribunal erred in finding that the second agreement replaced the first agreement. 9. In undertaking this task, we have considered the text of the second agreement (which is annexed to the owners' submissions) and the parties' written submissions on the characterisation of the written agreement. We have also considered the oral submissions made at the appeal hearing. 10. In addition, we have considered the further documents on which the builder seeks to rely in support of the appeal. We do not consider that material constitutes "significant new evidence" in the c 12 Schedule 4 sense as it was available at time of hearing before the Tribunal. If the builder had wanted to rely on it in the Tribunal hearing, it would have made an application to the Tribunal to include the evidence (even if an adjournment was required) once it was clear what its relevance was. 11. However, we are satisfied that it is appropriate for us, given the inadequacy of existing reasons, to consider the further documents in order to construe the second agreement under s 80(3) of the NCAT Act. That provision permits the Appeal Panel to decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for appeal warrant a new hearing, and to permit fresh evidence. 12. It seems to us to be plain on the basis of the first two paragraphs of the second agreement that replacement of the original agreement was intended. There was no qualification that the amount agreed "after bilateral variations and discount" was what was then totally owing to the builder irrespective of disputes concerning what had previously been paid or was alleged to be payable. This amount was agreed "In order to complete renovations" on the dwelling. The works to be completed as part of the agreement on price were specified, including defect remediation that was expressly stated to have been discussed prior to drawing up the final list. The agreed total payment was split into instalments, two of which were dependent on the completion of specified works. In those circumstances the first payment could readily be inferred to be what was accepted as owing for existing work; accordingly, the overall amount was not disproportionate to work still to be done. 13. The builder argued that "as per contract" in para 1(g) of the second agreement and other references to the original agreement indicated the continuance of the original agreement. We disagree. Parties frequently incorporate a description or reference to an existing contract by way of shorthand. This makes it a term of the new contract; it does not of itself preserve the old contract. 14. The first two payments were made and there was no evidence before us that the second payment was in any way qualified by the pre-condition for payment (demonstrated completion to right specifications for study cabinet) not having occurred (if that was the case). That is congruent with the unchallenged finding by the Tribunal on the evidence before it, at [57(2)] of the Tribunal's reasons. 15. It could be argued that the third paragraph of the second agreement, which provided for withdrawal of the then-existing original proceedings on completion of the works in the second agreement and full payment, indicated that the second agreement supplemented or amended the original agreement. 16. We do not agree. One frequently encounters what is intended to be a resolution of a dispute on an existing agreement in existing proceedings by a compromise agreement which, if performed, ends the matter but which, if not performed, recognises that the original dispute revives on the terms of the original agreement. The extent of revival is a matter for interpreting the second agreement. 17. It does not follow that such a potential characterisation keeps the original agreement in place with the second agreement acting as an amendment to it. 18. In any event, it appears that the parties varied the second agreement by withdrawing and having dismissed original proceedings on the original agreement, and that they did so without awaiting the complete performance of the second agreement. This reinforces the stand-alone replacement status of the second agreement. There was no indication before us, in the words of the second agreement or other evidence, that the parties treated withdrawal and re-commencement as effective performance of the second agreement or as performance of the second agreement as varied (by a variation for which there was no evidence before us). 19. As the Tribunal pointed out at [67] of the reasons, there was no evidence that the second agreement had been terminated for non-performance by the builder of the remaining works for the remaining payment tranche. 20. The absence of provisions that made clear a clean break from the original agreement, such as one would expect competent lawyers to draft into the document, was submitted to be an indication against clean break. Again, we do not agree. The drafting of the second agreement bespoke that it was done by persons without legal skills. 21. If one finds relevant ambiguity in the terms of the second agreement, then the surrounding circumstances in our view reinforce the above interpretation. The second agreement was born in the circumstances of resolution of existing proceedings on the original agreement. It seems curious at the least to resolve those proceedings by an agreement which, as the builder contends, provides for a partial way ahead but leaves the underlying dispute unresolved. 22. An agreement which resolved on a stand-alone basis the existing dispute also was consistent with any doctrine (not debated in the primary proceedings) that might preclude revival of original rights. 23. The existence of the further documents the builder seeks to rely on does not assist characterisation of the signed second agreement. They appear at best to be further attempts to resolve ongoing issues after, it appears, the final obligations in the second agreement were not performed or were said to be defectively performed. They do not sufficiently reflect the terms of the second agreement to be characterised as attempts to record in a formal document what was until that point a less formal agreement, particularly when the later documents were privileged, unexecuted and inconsistent drafts. If the variations that were dated 2019 were truly so dated (which we do not think is the case), that indicated distinct later work which does not affect the status of the second agreement. 24. If the second agreement was intended to resolve on a compromise competing contentions about rights and obligations under the first agreement, that of itself was sufficient consideration. To the extent that the second agreement did not of itself comply with the requirements of HBA s 7, that was a problem for the builder rather than an indication that the existing contract was preserved. 25. The builder called in aid the parties' focus in the current proceedings from which the appeal was brought, until the heel of the hunt, on alleged defects arising out of the original agreement and its performance. This is not admirable in terms of competence, but often a flash of insight occurs to parties and their legal representatives as minds are concentrated on the likely outcome at the final hearing. Here any prejudice arising from the lateness has been cured as all the arguments have been put for the purposes of our consideration of the second agreement. In terms of characterising an earlier agreement, conduct of proceedings such as has occurred does not in itself assist the characterisation as a surrounding circumstance unless it constitutes an admission, which it does not here. 26. It was not argued before us, and in our view could not be argued on the structure of the payment terms in conjunction with the earlier terms of the second agreement, that the entire $64,000 payment was dependent on entire performance of the second agreement. 27. The owners did not appeal against the money order. We therefore express no opinion on its basis as it is not subject to challenge. However, we note that, although the builder volunteered that $1,100 of the $17,000 second tranche was for installation of the study cabinet, the wording of what was required for that payment to be obligated under the second agreement did not include installation as it was included in the third tranche. 28. We conclude that the second agreement replaced the original agreement. As we have concluded that the Tribunal correctly concluded that the second agreement replaced the original agreement, this ground of appeal fails. Denial of procedural fairness 1. The builder claims that it was denied procedural fairness by the owners' late introduction of the second agreement into the Tribunal proceedings. 2. We are not satisfied that there was a denial of procedural fairness. An unexecuted copy of the second agreement was included in the builder's material. The builder must have known that there existed an executed copy. To the extent that the builder had not appreciated the significance of the second agreement, it was open to the builder to seek an adjournment for the purpose of providing further evidence relevant to whether the second agreement replaced the original agreement. There is nothing in the material before us to suggest that the builder did so. 3. In any event, to the extent that the significance the second agreement assumed during the Tribunal hearing caught the builder by surprise, no practical injustice arises. This is because we have taken into account the builder's submissions and the builder's further documents when characterising the second agreement. 4. This ground of appeal fails. Builder's further documents 1. As stated above, we are not satisfied that the builder's further documents constitute new evidence in the cl 12 Schedule 4 sense. These documents were available at the time of the hearing before the Tribunal. To the extent that the builder did not appreciate their significance, it was open to the builder to seek to have them admitted into evidence, even if that meant applying for an adjournment. 2. However, even if the builder could argue that it may have suffered a substantial miscarriage of justice on the basis that the documents were not before the Tribunal, we have taken them into consideration when deciding the first ground of appeal. 3. This ground of leave to appeal fails. Leave to appeal 1. In addition to the builder's argument concerning the further documents, the builder also argued that leave to appeal should be granted on the basis that the decision was not fair and equitable and that it was against the weight of the evidence. In both cases, the builder puts forward this argument on the basis that the Tribunal wrongly characterised the second agreement. As we have concluded that the Tribunal's characterisation of the second agreement was correct, we are not satisfied that any basis for leave to appeal has been established. 2. Even if the builder has established one of the grounds required for leave to appeal, we would not grant leave to appeal as we are not satisfied that this is a case that falls within one of the categories identified by the Appeal Panel in Collins v Urban. 3. Leave to appeal is therefore refused. Costs of the appeal 1. Rule 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) applies the same costs rules as applied in the Division when there is a departure under the Division rules (such as under rule 38) from NCAT Act s 60. 2. Rule 38 applies when the amount claimed or in dispute in the proceedings exceeds $30,000. In Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [37]-[38], the Appeal Panel found that: '[P]roceedings' refers to the process set in motion, or commenced, by lodging an application or notice of appeal. That process includes the steps taken by the Tribunal to hear and determine whether to grant the relief sought in the application or notice of appeal, as well as any interlocutory or ancillary steps. Proceedings are defined by the subject matter raised in the application or notice of appeal. The participants in proceedings are limited to the parties determined in accordance with [NCAT Act s 44 and the Rules]. 1. In Knox v Bollen [2018] NSWCATAP 106 at [67]-74], the Appeal Panel explained that the Allen decision was in a context where a number of proceedings against the same respondent were heard together, consistent with the guiding principle in NCAT Act s 36. The decision in Allen that, absent consolidation, two proceedings between the same parties, effectively being defences to each other's claims and cross-claims against each other, remained separate proceedings did not prevent their characterisation for the purposes of rule 38 and rule 38A as part of the same proceedings. This was particularly the case where, as found in Allen at [57], the test for whether the amount in dispute was more than $30,000 depended upon: whether there is a realistic prospect that in each appeal the wealth of the [relevant] party would be changed by more than $30,000 or, put another way, whether the right claimed by the [relevant] party, but denied by the decision at first instance, prejudices that party to an amount in excess of $30,000. 1. In this case, rule 38 applied to the proceedings below, as the amount in dispute in those proceedings exceeded $30,000. The amount in dispute on the appeal also exceeds $30,000. Rule 38A means that rule 38 applies to the appeal proceedings. This is the case even though the Tribunal ordered the parties to pay their own costs of the Tribunal proceedings, 2. The starting point for exercise of costs discretion on the usual principles is that costs follow the event. "The event" is usually the overall outcome of the proceedings. If there are distinct issues on which the party seeking relief did not succeed, that may be taken into account in the exercise of costs discretion. 3. Appeal Panel decisions have made no order as to costs, with the intent that each party paid its or their own costs of the appeal, where there has been a measure of success on both sides: Johnson t/as One Tree Constructions v Lukeman [2017] NSWCATAP 45 at [25]-[29]; applied in Oppidan Homes PL v Yang [2017] NSWCATAP 67. 4. Here the builder has been unsuccessful on the appeal. To the extent that they have costs of the appeal, those costs should be recovered by the owners. In our view, costs should be ordered on the ordinary basis as agreed or assessed. 5. We have made procedural directions which will apply in the event that either party seeks a different costs order. Orders 1. The orders we accordingly make are as follows: 1. Time for filing the notice of appeal is extended to and including 6 January 2020. 2. Leave to appeal is refused. 3. The appeal is dismissed. 4. Impala Kitchens Pty Ltd is to pay the costs of Mr and Mrs Yunaev of the appeal proceedings on the ordinary basis as agreed or assessed. 5. If either party seeks a different costs order, order 4 above ceases to have effect and the following orders apply: 1. The party seeking a different costs order is to file and serve the application for a different costs order and evidence and submissions in support of the application not later than 14 days from the date of these orders. 2. The other party is to file and serve any evidence and submissions in response to the costs application within 28 days of the date of the date of these orders. 3. Any material in reply is to be filed and served within 35 days of the date of these orders. 4. Submissions are not to exceed five pages in length. 5. All evidence and submissions are to be provided in hard copy. 6. Subject to the parties' submissions on this point, the application for a different costs order will be determined without a hearing, on the basis of the written material provided. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 May 2021